New Delhi, October 24
A number of foreign acquisitions by India Inc, especially the latest of Corus Group by the Tatas, for over $8 billion may result in FDI outflow exceeding inflow this year.

The acceleration in investment activity abroad by Indian firms has given steam to FDI outflow which have exceeded the total foreign inflow into the country this year. Overseas acquisitions by few major domestic companies this year alone amounted to over $10 billion.

A report by Crisil Centre for Economic Research says the rising tide of Indian investment overseas reflects the imperatives of operating in a globalised market place. Indian firms are now driven by the need to seek the cheapest resource mix and locate operations, where these are available.

The acquisitions by domestic firms abroad is part of a strategy to establish Brand India across the globe and are not limited to a few sectors but spread across a wide array of industries ranging from pharmaceuticals, telecom, automobiles and ancillaries to IT.

Tata Steel's recent announcement to buy out Anglo-Dutch steel major Corus for $8.04 billion and country's largest electronics firm Videocon acquiring South Korean Daewoo Electronics for $700 million highlight corporate India's increasing global foothold.

The Tata Group has been a frontrunner in other global acquisitions as well with Tata Tea's acquisition of US-based Energy Brands Inc for $677 million, Tata Steel's buyout of Singapore's Natsteel for $486 million and Tata Coffee's buyout of Eight O'Clock Coffee for $220 million this year. Romanian pharma firm Terapia had also been acquired by Ranbaxy for $324 million earlier this year.

Globalisation, which exposed the Indian markets to foreign shores had led the domestic companies to transcend geographical barriers and find a foothold in developed markets. Changes in the international regulatory environment, particularly developments in the intellectual property rights (IPR) regime have also been critical drivers for India Inc's forays abroad, the report by Crisil 'Creating The Indian MNC' stated.

Though, as per data available with the Department of Industrial Policy and Promotion, FDI inflows have doubled during January-July 2006 touching $4.74 billion as compared to the same period in 2005, FDI outflow have also been on an upward climb and are set to overtake the inflow by the year-end.

The increase in the outflow from the country have gathered momentum on the back of the accommodative role played by the government, particularly the RBI, in line with its strategy of 'internationalisation' of the Indian corporate sector, the Crisil report said.

As foreign exchange reserves have piled up, (forex reserves stand at over $165.33 billion as on August, 2006), the RBI has progressively relaxed the controls on outbound investments, making it easier for Indian companies to acquire or invest abroad.

A slew of amendments to the RBI guidelines have effectively raised permissible investment limits and streamlined processes.

But besides the much-hyped takeovers and buyouts, joint ventures with overseas companies and strategic investments have also been on an upswing and have contributed to the rise in outbound investments from the country. — PTI 

New Delhi, October 24
The government today extended the last date for filing IT and FBT returns for corporates, barring those in Gujarat, by a month till November 30. Corporates now have to necessarily file these returns online.

The date has been extended following representations from some sections of taxpayers and professionals that they may not be able to complete their filing process by October 31, an official statement said. No further extension will be granted beyond November 30.

The corporates in Gujarat can file these returns by December 31 as the state was in the grip of floods as per earlier official statement.

Claiming a positive response from the corporate tax-payers in filing returns electronically despite initial glitches, Finance Ministry officials said the department was making efforts to streamline the process, besides expediting clearance of refunds.

As of today, approximately 19,000 companies have already filed the returns, including Hero Honda Motors Ltd., HDFC Ltd. and Tata Consultancy Services Ltd. A large number of small companies have also filed their returns electronically. 

New Delhi, October 24
With increasing interest rates and more alternative investment avenues, public and private sector banks have witnessed a sharp increase in short-term deposits.

“Although 1-2 year maturity deposits schemes have always remained among the favourite choices for depositors, these have become the most popular avenues for depositors to park their money in the recent past. Their percentage in the total bank deposits touched 23.41 per cent in 2004-05 from 22.52 per cent in 1998-99,” said Assocham chief Anil K. Agarwal while releasing a paper on bank savings.

The volatility in the interest rate has had the maximum impact on the short-term deposit schemes ranging between 91 days to six months. Their percentage share in the total bank deposits has almost doubled from 5.82 per cent in 1998-1999 to 10.51 per cent in 2004- 2005, he said.

Even the three-month deposits have shown a marked increase as compared to long-term schemes five years and above. The percentage share of saving schemes up to 90 days in the total bank deposits has increased from 8.55 per cent in 1998-1999 to 13.91 per cent in 2004-05.

The one to two years’ schemes had garnered deposits up to Rs. 99119.7 crore in 1998-99, which rose to Rs. 249090.8 crore by March, 2005, claiming an increase of 23.41 per cent.

Schemes ranging six months to one year also showed a marginal increase in their deposits from 12.44 per cent in 1998-99 to 14.95 per cent in 2004-05. Likewise, the growth in the share of deposits of 91 days to 6 months duration also went up from 5.82 per cent on 1998-99 to 10.51 per cent in 2004-05.

Similarly, less than 91-day deposits, which were 8.85 per cent in 1998-99, accounted for 13.91 per cent in 2004-05.

However, in longer gestation schemes like scheme of five years & above, deposits were 11.79 per cent of all commercial banks’ total deposits in March 1989-99. These declined to 8.43 per cent by March 2004-05. Similarly, three to five-year deposits schemes, which accounted for 22.75 per cent in 1998-99, fell to 18.10 per cent in March 2004-05.

Likewise, the share of deposits of two to three-year schemes also went down from 15.82 per cent on 1998-99 to 10.69 per cent in 2004-05.

New Delhi, October 24
In the ongoing patent battle over atorvastatin, Pfizer Inc claimed that the US Federal Court had denied Ranbaxy’s petition for rehearing of an August 2 decision, upholding exclusivity of the main patent covering the active ingredient in cholesterol-lowering drug Lipitor.

“The court has declined to further review the August 2 decision,” a statement on Pfizer’s website said quoting its Senior Vice-President and Associate General Counsel Peter Richardson.

The main patent covering atorvastatin is supposed to expire in March, 2010.

“As we noted in our response to the rehearing petition, the issues in this case were straightforward, the lower court’s decision was consistent with prior law and it raised no matters of exceptional importance requiring that they be revisited again,” Mr Richardson added.

Pfizer said it planned to go back to the US Patent office to seek to correct a technical defect in a second patent covering the calcium salt of atorvastatin. The second patent, expiring in June 2011, was ruled invalid by the court on technical grounds.

Ranbaxy officials were not available for comment.— PTI

London, October 24
Anglo-Dutch oil giant Royal Dutch Shell took a new step in streamlining global operations today, bidding for a minority share of Shell Canada which it does not already own.

Shell launched a cash offer of 7.7 billion Canadian dollars for a 22 per cent share of Shell Canada.

Outright ownership of Shell Canada would further simplify operations, according to Shell, which underwent a massive restructuring last year after an internal crisis triggered by miscalculation of its oil and gas reserves.

“The proposed acquisition (of Shell Canada) follows the successful unification of the group in 2005 and is a further step in simplifying the group structure,” Shell said in a statement.

Last year, Royal Dutch Shell had moved to a more traditional single-board structure with one Chairman and one Chief Executive, scrapping its dual-Board arrangements in Britain and the Netherlands.

“Once Shell Canada Limited is fully combined with the group, the business will benefit from a simplified organisation, additional economies of scale and portfolio development in the context of the group’s global strategy,” the statement added.
— AFP

Karnal, October 24
Lamenting the poor availability of power in the state causing a daily loss of crores of rupees to industrialists, the Haryana Chamber of Commerce and Industry (HCCI) sought a subsidy on diesel to run factories. Industrialists were forced to use generator sets as the government had failed miserably in securing electricity from surplus states.

HCCI President Rajinder Nath claimed that major industrial houses, including Escorts and Honda, had started looking for expansion in other states due to the poor infrastructure in Haryana.

About Chief Minister Bhupinder Singh Hooda’s attempts to invite overseas investors, the HCCI chief said they might be keen on investing due to the state’s proximity to the national Capital, no one would stay here without basic infrastructure.

The HCCI President said earmarking any place as an SEZ would not encourage the industry unless basic facilities were provided. 

Mumbai, October 24
ICICI Bank has posted a 30 per cent jump in its net profit at Rs 755 crore in Q2 FY 07 as against Rs 580 crore in the corresponding period last fiscal.

Its total income also rose steeply to Rs 7,039.56 crore for the quarter ended September 30 this fiscal as against Rs 4,440.88 crore for the same period last year.

Net interest income grew by 47 per cent at Rs 1,577 crore as against Rs 1,070 crore last year.

Operating in 14 countries presently, ICICI Bank has now launched remittances services to Sri Lanka and the Philippines through its US and Canada subsidiaries. ICICI Bank UK’s unaudited PAT for H1 FY 07 stood at around Rs 74-crore, translating into a return on equity of 21 per cent.