Mumbai, February 11
The much-hyped IPO of Reliance Power from the Anil Ambani stable today fell more than 17 per cent on its very first outing, causing investors to lose crores of rupees.

Reliance Power listed at the BSE for Rs 430, Rs 20 below its offer price. After touching a high of Rs 599.90, it fell to a low of Rs 355.05 before closing at Rs 372.50 amidst huge volumes. On the BSE, volumes stood at 63,875,520 while the volume on the Nifty was 134,392,178 shares.

A business news channel, which has been highlighting the grey market premium on Reliance Power in the run-up to the close of the IPO, was on the defensive today.

It carried a poll which said none of the brokers it polled expected the share to list below its issue price. According to the channel, 53 per cent of the brokers it spoke to, expected Reliance Power to list at Rs 550-600.

"Retail investors who were allotted 16 or 17 shares at the rate of Rs 430 each stand to lose little in the IPO," says Amit Sanghvi, a Mumbai-based broker. His advice: hold on to the shares till the market sentiment improves.

Reliance Power is expected to earn its first revenues from 2009 and earn its first profits only from the following year from the several Ultra-Mega Power Projects it is setting up across the country.

Still despite its poor fundamentals, media-fuelled hype ensured that the Reliance Power IPO was subscribed by nearly 82 times.

However unlike retail investors, high net worth individuals (HNIs) are likely to be the biggest losers. Most of them had borrowed huge amounts of money to subscribe to the IPO in the hope of making a profit on listing.

"Nearly 80 per cent of the HNIs had borrowed money to subscribe to the IPO," says Sanghvi. Reports say, the interest costs on the loans alone would amount to as much as Rs 125 to Rs 140 per share, depending on the quantity of shares allotted to them. The interest costs would be higher if the number of shares allotted were lower and vice versa.

These HNIs would have made profits only if the shares were sold above Rs 590 each on listing, say market observers. Now most of the HNIs will have to incur a loss of nearly Rs 190 per share held by them.

More than 40 per cent of the 41 lakh investors, who have been allotted shares in Reliance Power, had subscribed in the hope of making listing gains, say observers.

In other words, one can expect the price of the scrip to be hammered down every time there is a small increase as investors rush to cut their losses.

New York, February 11
Yahoo! today rejected the $44.6-billion takeover offer of software giant Microsoft saying the bid “substantially undervalues the company, including its global brand and worldwide audience”.

Microsoft on February 1 had made an unsolicited $44.6 billion in cash and stock takeover bid to Yahoo!. Microsoft had offered $31 per share.

The board of directors of Yahoo!, after carefully reviewing Microsoft’s offer with the company’s management team, financial and legal advisers concluded that the proposal is "not in the best interests of the firm and its stockholders”, Yahoo! said in a statement today.

"After careful evaluation, the board believes that Microsoft’s proposal substantially undervalues Yahoo!, including our global brand, large worldwide audience, significant recent investments in advertising platforms and future growth prospects, free cash flow and earnings potential, as well as our substantial unconsolidated investments,” the statement said.

Microsoft is pursuing the Internet firm for a competitive edge in the fast growing online search advertising market, which is dominated by Google. — PTI

Mumbai, February 11
Emerging economies are not immune to global risk of slowdown pertaining to US economy recession, though they are having a high growth rate, International Monetary Fund (IMF) managing director Dominique Strauss Kahn echoed here today.

Delivering a lecture at Reserve Bank of India here today, Kahn said the linkages between financial and real sectors have developed and emerging markets are much more complex than they were before.

''Linkages to the present global turmoil is also significant because if the US economy slows down by 1 per cent, the emerging economy would experience a slow down in between a range of 0.5 per cent to 1 per cent depending on their trade links,'' he pointed out.

Kahn emphasised that decoupling was a very strange and misleading idea. The economic slowdown in the US will be significant and will last for some time.

He said, ''Last month, the IMF cut its forecast for world growth for the year in the face of continued stress in global credit markets, and warned that economic activity could slow even further.'

 The international capital market department lowered its global 2008 growth projection to 4.1 per cent from 4.4 per cent, reflecting a marked slowdown from the 4.9 per cent pace achieved last year.

IMF has also cautioned that the main risk to the global outlook was the ongoing turmoil in financial markets, which would further reduce domestic demand in advanced economies and create more significant spillovers into emerging markets and developing economies, Kahn asserted.

Kahn remarked that it was not a surprise for IMF that the growth results in emerging markets are good and as per the forecast economies like China and India will have a growth of more than 8 per cent and 10 per cent, respectively.

''Nevertheless, one cannot completely decopulate these economies from the global turmoil, which might reflect into high commodity prices and if not major than at least a fractional decline in their growth rate,'' he opined. — UNI

Chennai, February 11
Pepsi has roped in Bollywood's hottest sensations and emerging young faces, Ranbir Kapoor and Deepika Padukone, as its brand ambassadors.

The duo would be seen with Shah Rukh Khan in Pepsi's first campaign of 2008, a company release said today.

This was the first time ever that Shah Rukh Khan, Ranbir and Deepika would feature together in a Pepsi advertisement.

Ranbir and Deepika join Pepsi's brand ambassadorial team comprising of Bollywood's mega film stars, Shah Rukh Khan, John Abraham as well as India's leading cricketers, Mahendra Singh Dhoni, Yuvraj Singh, Sreesanth and Robin Uthappa. — UNI

Guwahati, February 11
The volume of export of Indian tea recorded a slump by 62 million kilograms last year compared to the figure of 2006, pressing the panic button in the industry.

Secretary, Tea Association India (TAI), Assam branch, Dipanjal Deka, informed that the decline in tea export was due to the ever-increasing competition it has faced in the international market from brands from Sri Lanka and Kenya.

The country exported only around 156.7 million kilograms of tea last year compared to 218.7 million kilograms in the previous year, recording a shortfall of 62 million kilograms (mnkgs).

According to figures available, around 98.81 million kilograms of north Indian tea (basically tea produced in Assam and West Bengal) was exported in the 2006 and the figure slumped to 84.05 million kilograms last year.

Similarly, 119 million kilograms of south Indian tea was exported in the 2006 and the volume declined to 72.65 million kilograms last year much to the worry of the industry.

Decline in tea production in the country last year compared to the production figure of 2006 is one of the reasons that are being attributed for decline in export volume given that overall global tea production increased last year compared to the previous year.

The country produced 944.68 million kilograms of tea till December, 2007, compared to 955.91 million kilograms produced in 2006.

Moreover, Indian tea industry is yet to find a proportionate international market to compensate for loss of a huge export market in the wake of breaking up of the erstwhile USSR that used to import about 140 million kgs of tea from India. Now, only Russia imports average 60 million kgs of tea from India.

Meanwhile, Sri Lankan and Kenyan tea brands have pushed out Indian tea from some of its traditional international markets.

The unique selling point (USP) for Sri Lankan and Kenyan tea is that these varieties are sold at cheaper rates in the international market because of lower cost of production back home.

The TAI official informed that cost of production of tea in India is much higher than in Sri Lanka and Kenya, the two main competitors in the market.

The labour cost amounts to around 50 per cent of the total cost of production in the country. The cost of production of tea in Kenya is around 30 per cent less than in India.

Moreover, tea companies of Sri Lanka and Kenya have been able to woo more international buyers by offering credit for a much longer period compared to Indian tea companies that are suffering from cash crunch.

New Delhi, February 11
Consumer durable and consumer goods sector could expect sops in the form of excise cuts ranging from 4 to 8 per cent in the 2008-09 Budget with the Prime Minister’s panel on manufacturing sector pitching for fiscal measures to reverse deceleration in growth in the sector.

The high-powered panel, headed by National Manufacturing Competition Commission (NMCC) chairperson V. Krishnamurthy, is also understood to have underlined the need for easing stringent monetary stand taken by the Reserve Bank of India to boost demand for consumer goods and consumer durables.

The panel, which submitted its report listing recommendations for the short-term to Prime Minister Manmohan Singh last week, is understood to have pointed out that sharp slump in the consumer durables and consumer goods had resulted in decline in the performance of the manufacturing sector, which has led India’s strong economic growth in recent years.

Pointing that “reasonable inflation rate” is also a pre-requisite for growth, the panel has argued for immediate steps to ease high interest rates, which is directly impacting the off take of consumer goods and consumer durables triggering deceleration in manufacturing sector.

As part of its recommendations, the panel, which comprised secretaries of finance, revenue, commerce, textiles and industrial policy and promotion among others, has also called for rationalisation of excise duties to boost production.

The consumer durables sector grew by 6 per cent in November 2007, witnessing 4.1 per cent negative growth, as compared to November 2006.

Ludhiana, February 11
Real estate company, Omaxe, will invest over Rs 2,000 crore towards developing integrated townships and malls in Punjab in the next six months.

The company, which launched 800 luxury apartments and penthouses, each priced between Rs 1.2 crore to Rs 2 crore, stated that it would put its upcoming five malls in Ludhiana, Patiala and Amritsar to operation by the end of this year.

"We are in the process of identifying land near Chandigarh and plan to procure at least 1,000 acres for integrated townships. The coming six months would witness an investment of over Rs 2,000 crore towards several projects," said Vineet Nanda, vice-president marketing, here today.

Giving details of the complex that was launched today, Nanda said the luxury apartments and penthouses with a spa village would target the NRI and niche segment.

“To fuel a steady growth, we will be investing Rs 400 crore in the next three years”, he said.

New Delhi, February 11
Industry chamber Assocham and World Trade Centre, Chelyabinsk, Russia, today signed a memorandum of understanding (MoU) to promote economic and trade ties between the industry of two countries.

The MoU was signed between Assocham secretary general D.S Rawat and director, World Trade Centre (WTC), Chelyabinsk, Tatiana Grekhova in the presence of former steel secretary S.K Pachauri.

The pact has identified areas such as engineering, oil & gas, metallurgy, pharmaceuticals and telecom for setting up of JVs, said Rawat.

The MoU clearly states that the two associations would also exchange information on legal economic status, trade policies and legislative changes of their respective countries to strengthen trade, technological and industrial cooperation between India and Russia.

Besides, the industry of India and Chelyabinsk would inform each other of all activities that have the potential to farther the trade and investments and will assist each other in organising business delegations and facilitate their business contacts.

In addition, the MoU also emphasises that India and Chelyabinsk would also exchange information about international fairs, exhibitions and trade promotion events to be held in their respective countries and assist their members in participating in such events.

The two countries would also unite their efforts for development of tourism, besides assisting development of mutually beneficial JVs and investment opportunities between their respective members and organisations.

New Delhi, February 11
On the eve of the visit of the Russian Premier, the Confederation of Indian Industry (CII) has asserted that India and Russia need to pay more attention to expand their trade and investment basket.

“There are enough complementarities and historical bonding to help the two countries engage and revitalise the currently sagging trade and investment flows,” CII head of trade policy T. S Viswanath said.

“Russia has the potential to become India’s next big trade and investment partner if the two sides decide to engage with each other and iron out the barriers to free flow of goods and services into each other’s markets,” said a paper titled ‘Revitalising India-Russia trade’, prepared by the CII.

Given the problem of a short and dependable and cost effective trade route, the two sides need to look at new areas of cooperation, it said, adding there is a need to move towards high value added products besides boosting the sagging trade in commodities that have been traditionally traded between the two countries.

It may be easier to revive trade in commodities since India had held a prominent position in the Russian market earlier and the “India brand” can be revived with some effort.

Besides merchandise trade, the two sides also need to focus on service trade since there are enough complementarities that exist between them.

Two sectors, which have immediate relevance, include education, including IT training and R&D for engineering products, it said.

Bilateral trade has not been substantial with both exports and imports exhibiting a fluctuating pattern.