The Tribune, Chandigarh, India

SEBI to revamp IPO process to check price manipulation

New Delhi, November 15
Market regulator Securities & Exchange Board of India said Tuesday it was looking at revamping the initial public offering (IPO) norms and putting in place a common ‘know your customer” (KYC) regulation for financial sector intermediaries.

"Whenever we find instances of violation (IPO norms), we will take deterrent action. It also calls for a relook at our entire IPO process. So we are doing that as well," SEBI chairman UK Sinha told reporters on the sidelines of an ANMI event here.

He said very soon a regulation for centralised KYC (Know Your Customer) would be put into place for making the process easy. "We have decided to have a thorough review of our risk management system as the current system is more than 10 years old," Sinha said.

Earlier this year, the market regulator had decided to introduce a new short and simple form for IPO investors for increasing retail participation in the stock markets.

In the first half of the current fiscal, 30 companies have raised fund totalling over Rs 5,000 crore through IPOs.

Sources in the know of the move say that the market regulator is considering expediting the clearance of IPO offer documents. Companies have a one-year time to come out with public offers from the date of SEBIclearance.

Sinha further said that Sebi takes quick, effective and non-discriminatory action in case of market manipulation.

Speaking on the occasion, National Stock Exchange of India chairman & MD Ravi Narain said: "We want to have more products. But we are not interested in speculative products. However, any product which manage volatility and eliminate systems risk are welcome."

Sinha said the cost of trading has gone up in the country and that SEBI has taken up the issue with the government. "It is now time for having a relook at the securities transaction tax (STT). SEBI has taken it up with government," he said.

The government had introduced STT in 2004 on transactions in different types of securities. The rate presently varies from 0.025% to 0.25% depending upon the type of security traded and transaction — whether sale or purchase.

Sinha further supported the call for bringing the investments of the Employees' Provident Fund Organization (EPFO) and retirement fund to the stock market. "I would recommend that we engage the labour leader and the trustees of such fund to tell them how the market functions," he said.

Echoing similar view, Narain said, "We should look at new pension scheme (NPS) and Employee Provident Fund to increase participation in the markets." — PTI

Stamp duty may be imposed on stocks

The government may impose a stamp duty of Rs 300 per crore (0.003%) on transactions in commodities, stocks and other derivatives, with the finance ministry moving a proposal to the cabinet for taking the final call, sources said. Despite strong opposition from the consumer affairs ministry, the finance ministry has placed the proposal before the cabinet, they added. Barring one or two states like Maharashtra, no other state governments have imposed stamp duty on commodity derivatives, they said. — Agencies

Rupee slides to 32-mth low; further downslide expected

New Delhi, November 15
The Indian rupee fell to a 32-month low against the dollar on Tuesday as worries about Europe's debt crisis and a worsening domestic economy pushed up demand for the US currency.

The rupee fell nearly a percentage point to hit 50.70 to the dollar in morning trade — its weakest since March 2009.

"The currency is suffering from global risk aversion which is likely to increase rather than decrease, as well as from weakening domestic macroeconomic fundamentals," Dariusz Kowalczyk, economist at Credit Agricole, told AFP.

The rupee is already Asia's worst performing major currency this year, having tumbled by close to 12% against the dollar so far in 2011.

The currency was hovering in a range Tuesday between 50.40 and 50.70 and analysts say the rupee could test the 51 to the dollar mark soon if the euro weakens further. A jump in Italian borrowing costs has raised fresh worries that Europe's debt crisis will spread. The rupee's slump comes at a bad time for India which is battling near double-digit inflation. — AFP

RBI not to step in

The Reserve Bank of India said Tuesday it would not be intervening aggressively to shore up the rupee against the US dollar even as the Indian currency fell to Rs 50.70 per dollar. "We intervene when there is a very strong movement in a particular direction or extreme volatility and the objective is to smooth that volatility and not fix a rate," RBI deputy governor Subir Gokarn said. — TNS

India still rising, but isn’t shining

Mumbai, November 15
The World Economic Forum — best known for its Davos shindig — has held a summit in Mumbai for the first time. The rhetoric from participants suggests the "India Shining" story is still burning brightly. But the refrain is failing to resonate. The numbers tell a different tale.

At the summit Mukesh Ambani, chairman of Reliance Industries and India's richest man, said: "People think India is a land of billion problems. But India is a land of billion opportunities. India is ready to take off." This mood was echoed by Commerce Minister Anand Sharma and countless other speakers.

Examination of the Indian economy reveals a less rosy outlook — in the short term at least.

A poll of more than 20 economists, surveyed by Reuters during October, showed that most had cut their growth forecasts. Admittedly, GDP will still expand at rates that much of the developed world can only dream about. But September industrial output numbers saw growth of just 1.9 percent year on year, the slowest pace in two years. The figures fell well below market expectations, too.

India's fiscal deficit has pushed over 5 percent while its trade deficit widened more in October than at any time in the last 17 years. That adds pressure on the rupee, Asia's worst performing currency this year. Inflation also remains around 10 percent in spite of 13 interest rate rises by the central bank over the past year and a half.

Ambani et al may be wary of criticizing the New Delhi government in public, and that may explain why things are presented in such an upbeat way. Concerns were expressed — as is usual at such forums in India — about corruption and creaking infrastructure.

But they don't tell the whole story. Wide structural problems are impacting growth. The twin fiscal and trade deficits and persistently high inflation are concerns for Indian businesses.

While the eurozones woe is the global preoccupation at present, India has also lost its shine. — Reuters

British Columbia trade team in Punjab to seek investments
Prabhjot Singh/TNS

Chandigarh, November 15
Accompanied by one of the biggest ever trade and education delegations, the Premier of the western Canadian province of British Columbia, Christy Clark, will arrive in Amritsar on Wednesday on a two-day visit to Punjab and Chandigarh.

After a tour of China, Clark along with her Health Minister, Mike de Jong, arrived in India on November 10 to focus on mining investments, life sciences, technology, green energy, international education and forestry.

"The delegation that visited China and is now in India is the largest in the province's history and represent the widest range of sectors to ever participate in a provincial trade mission," Clark said in a statement. "We're setting out with three goals in mind: strengthening our existing relationships in the Asia-Pacific region; opening new doors; and setting the stage for future opportunities with China and India."

In addition to expanding trade and commerce opportunities between British Columbia and the two important Asian markets, the jobs and trade mission will seek to attract new investments into the province as well as promote it as a destination for international students and tourists.

Also in Clark's delegation are representatives from some British Columbia universities that are offering various vocational and higher education courses to Indian students in general amd Punjabi students in particular. Canada now has the largest number of Indian students after Australia, New Zealand and the United Kingdom.

Clark also participated in a panel session with some chief ministers at the World Economic Forum - India Summit recently held in Mumbai. She also visited Bangalore and will visit New Delhi before returning home on November 18. She will also be in Chandigarh to lay the foundation stone of the British Columbia Academy in Mohali.

India would be impacted by newer regulations: RBI

Mumbai, November 15
Reserve Bank of India governor D Subbarao said Tuesday emerging economies like India would be impacted by newer regulations being discussed globally.

"What concerns us is that these global standards are going to be applied uniformly but their implications for emerging market economies will be different, given the different stages of our financial sector development," Subbarao said here.

Speaking at a global seminar, organised by the central bank’s research and learning body CAFRAL and the Bureau of International Settlements, Subbarao said the financial sector in the country is still under development.

Following the recession of 2008-09, a slew of norms have been either suggested or are in the process of being made to ensure financial stability like the Financial Stability Board and the Basel Committee on Banking Supervision (BCBS).

One of BCBS' suggestions — the Basel-III norms calling for additional capital adequacy of banks--is one of the most debated issues at present.

Subbarao cited studies done by multiple bodies which talk of affecting growth following implementation of Basel-III and said the country will also get affected by it even though a majority of banks have healthy capital buffers.

With high growth, credit demand is going to be healthy in the days ahead and banks will have to expand their balance sheets which will in turn require them to raise capital, Subbarao explained.

"The concern is that this will raise the cost of credit and hence militate against growth," he observed. — PTI

Sugar mills upset over hike in state cane price
Vibha Sharma/TNS

New Delhi, November 15
Decrying the increase in cane state advised price (SAP) for 2011-12 announced recently by the Uttar Pradesh government, the sugar industry has claimed the move would prove detrimental for farmers and consumers alike.

ISMA, the apex industry body for private sugar mills, said Tuesday the move by the leading cane producing state would cause “havoc”, putting finances of mills under tremendous stress and adversely affecting their capacity of timely payment to farmers.

In the season of bailout requests by their counterparts in other businesses, the sugar industry also wants the government to step in for help. The industry claims that while cost of raw material, in this case SAP of sugarcane, increased by leaps and bounds, the government “artificially” kept price of final product- sugar- under control.

“Taking into consideration the average minimum cane price of Rs 245 per quintal in UP, the average cost of production of sugar in UP works out to Rs 34 per kg,” said ISMA director general Abinash Verma. The present ex-mill price of sugar in UP is around Rs 29 per kg.

If this price does not improve or the government keeps the prices down artificially through its powers to release monthly sugar quota that each mill is required to sell every month, it is feared that cane price arrears may build up sooner than expected, he adds.

The poll-bound UP government recently fixed SAP for the 2011-12 sugar season at Rs 250 per quintal for early varieties, Rs 240 for normal varieties and Rs 235 per quintal for rejected varieties.

Tech Mahindra Q2 net up 60%

Mumbai, November 15
Tech Mahindra, India's fifth largest software services company, on Tuesday said net profit for the quarter to end-September rose 60 per cent from a year ago to Rs 240 crore($47.7 million).

Tech Mahindra, saw margins decline in the quarter to end-September due to salary hikes and a decline in revenue from the firm's largest client BT Group Plc, CEO Vineet Nayyar said Tuesday.

London-listed telecom firm BT Group holds a roughly 30 per cent stake in the software firm.

The company expects a sustained growth momentum in its non-BT business. It added 807 employees in Q2.

Last week, Mahindra Satyam saw net profit for the quarter beat estimates.Mahindra Satyam's merger with parent firm Tech Mahindra will take place next year, its Nayyar said. — Agencies

Maruti to double driving schools

New Delh, November 15
Limping back to normalcy after the crippling strike at its Manesar plant, the country's largest car maker, Maruti Suzuki India Ltd, said it plans to more than double its driving schools to 400 over the next 2-3 years.

The firm is looking at investing in the training schools with the idea of imparting safe driving techniques to a larger number of people.

After opening its first driving training school, the company has already trained one million people in the last decade.Maruti Suzuki managing executive officer (marketing & sales) Mayank Pareek said: “We’ve now targeted to double the network of Maruti driving schools to 400 in the next 2-3 years”.

The company has a network of six Institutes of Driving and Traffic Research (IDTR) and 192 Maruti driving schools. — TNS

TRAI to spell out new consumer redressal norms

New Delhi, November 15
The Telecom regulatory Authority of India (TRAI) is working on coming out with new consumer complaints redressal guidelines which would help customers resolve grievances against telecom companies.

The new norms are expected to be out by the end of this month which would give the consumers greater right. They would help resolve consumers grievance against telecom companies in more appropriate way. They would also make the telecom operators more accountable and would be based generally on the draft regulations brought out by TRAI earlier in the year.

The guidelines stress on consumer protection and redressal framework to protect the interest of telecom users besides the need for timely redressal of their problems. — TNS

Eurozone sinking into recession

Brussels, November 15
The latest growth data indicated Tuesday that the eurozone is sinking into recession, thanks to a vicious circle of sharp cutbacks in government and household expenditure, and reduced bank lending.

Saved on this occasion by a summer pick-up in German consumer spending, EU figures showed just a 0.2% expansion for the debt-burdened 17-nation eurozone between July and September.

While that meant no change from the previous three months, output in Italy and the Netherlands shrank -— the former is caught in a debt crisis spiral and the latter is a gilt-edged model eurozone economy. — AFP

Kingfisher Q2 loss doubles on fuel costs

Mumbai, November 15
Debt-ridden Kingfisher Airlines today reported that its net loss doubled to Rs 468.66 crore in the quarter ended September 30, 2011, as higher fuel prices depressed operating margins.

The debt-ridden carrier had reported a net loss of Rs 230.81 crore in the same period last year, Kingfisher Airlines said in a regulatory filing to the Bombay Stock Exchange.

The company's income from operations, however, rose by 10.5% to Rs 1,528.16 crore in the July-September quarter from Rs 1,382.72 crore in the year earlier period. Kingfisher had suffered a loss of Rs 1,027 crore in 2010-11 and is estimated to have debt of over Rs 7,000 crore. — PTI

Steel demand growth down to 2.8% in H1

Hyderabad, November 15
Growth in domestic steel demand dipped to 2.8% in the first half of this fiscal from 8.8% in the first four years of the 11th Five-Year Plan, steel secretary PK Mishra said. He felt this would pose a challenge to meet 12th Plan production targets.

Mishra also said the country needed some policy corrections to ensure the promised private sector investments in the sector become a reality. He added the first four years of the 11th Plan witnessed a slowdown in domestic steel supplies. — PTI