Mumbai, February 25
HDFC Bank today stated that it had finalised the acquisition of the Centurion Bank of Punjab in a share swap deal. Shareholders would get one share of HDFC Bank for every 29 shares of CBoP.

Stock prices of both banks fell following the announcement of the share swap deal. The share price of CBoP, which had run up sharply in the past week, fell more than 14 per cent to close at Rs 48.25. HDFC Bank fell more than 3 per cent as well.

In a statement today, HDFC Bank's board of directors said they had accepted the valuation report by consultants Ernst and Young and Dalal and Shah for the share swap ratio. Centurion Bank also said that its board had approved the swap ratio.

The combined HDFC Bank will add 2.5 million customers from 393 branches of Centurion Bank. It would have 1,148 branches and Rs 1.2 trillion in deposits, the joint statement said.

In a filing to the BSE, HDFC Bank said its board would again meet on Thursday to formally approve the merger. It would then need shareholders and regulatory approval.

HDFC would also consider making a preferential offer to its promoter Housing Development Finance Corp Ltd (HDFC) to enable it to maintain its shareholding percentage in the HDFC Bank

Following the merger, HDFC Bank would be the country's largest private sector bank in terms of branch network. "It is a win-win situation for all stakeholders, shareholders, employees and customers of both banks," HDFC chairman Deepak Parekh said.

The bank's deposits would climb up to Rs 1,20,000 crore, advances to Rs 85,000 crore while the balance-sheet size would swell to Rs 1,50,000 crore, Parekh said.

HDFC Bank managing director Aditya Puri will head the merged bank, while Jagdish Capoor will continue as non-executive chariman.

Puri said the merger would be smooth as there were no integration bottlenecks since there would be no overlapping of branches. He added that no employee would be sacked following the acquisition.

Greater Noida, February 25
Japanese auto major Honda, which plans to enter the Indian compact car market next year, has started working on a new global small car based on Indian requirements.

The company, which has hiked its production capacity to one lakh units at its facility here, is currently weighing options between the Jazz and an unnamed compact car on a new platform for introduction in India towards the end of next year.

"Internally, we have just started work on a global small car, which would be developed keeping in mind the requirements of the Indian market," Honda Siel Cars India (HSCI) president and CEO Masahiro Takedagawa told reporters here.

He, however, said it would take "several years" for the car to be launched in India.

"While the development is based on Indian conditions, the majority of engineers working on it are Japanese," Takedagawa added.

HSCI is expected to launch its compact car by the end of next year, when its second plant at Tapukara in Rajasthan will go on stream. "Currently, we are weighing options between the Jazz and another compact one on a new platform for launch in India," HSCI senior general manager Jnaneswar Sen said.

The company will also be be expanding dealership network across 90 cities in the country in the next three years ahead of its planned foray into the compact car segment.

"In preparation for Honda's planned foray into the compact car segment, we are expanding our dealership network to 160 in 90 cities in the next three years," Takedagawa said.

The company currently has a network of 80 dealers in 51 cities and will be taking up the number to 100 in 2008-09.

After the capacity expansion and the new plant in Rajasthan goes on stream, HSCI would have a total production capacity to 1,60,000 units by the end of next year.

The company has invested Rs 400 crore for hiking the capacity from earlier 50,000 units. So far, it has invested Rs 1,620 crore since it started operations in India in 1997.

On the sales front, HSCI is aiming at 90,000 units in the fiscal 2008-09 from this year's expected 68,000 units. — PTI

New Delhi, February 25
There are enough reasons for the Congress-led UPA government to cheer about when it comes to making a budget for the election year. What makes the situation comfortable is the fact that government’s coffers are flowing with tax collections, making the spending on public-oriented programmes a little more copious.

Another reason to cheer about is the fact that despite the crude oil volatility and high food prices in the international markets, the situation at the domestic front is largely comfortable as yet. This is due to the fact that oil and fertiliser bonds have been issued without making any changes in governmental policies, no matter that future generations will have to pay for these profligacy.

Another reason to cheer about is that there has been a continued good growth of country’s foreign exchange reserves and the strengthening of rupee against the dollar.

However, there are imperatives in the election year and this time the increase in spend will be more in three areas because of the vote bank — one, more spend on agriculture and farming community and the programmes thereof. In the farm sector, there have been concerns due to the tardy progress in agriculture growth at 2.4 per cent.

Second area of concern for the government will be the payout that will come as a result of the Sixth Pay Commission, to be announced in April. This will cost central government exchequer Rs 45,000 crore for three lakh central government employees.

Third area of concern is managing the industrial production, which is slipping in the current year. There is already a sign of slowdown in consumer durables sector.

Moreover, the tricky situation will be managing the inflation. Though the prices have been brought under control in the past few months, there could be challenges that have to be faced — firstly of volatile crude prices and secondly of international food prices, especially if we have to procure more food in face of failure of agriculture crops.

Another area which has to looked through the lens is the UPA government's flagship programmes like National Rural Employment Guarantee Scheme (NREGS), Bharat Nirman, Sarv Shikha Abhiyan, which were announced for all inclusive growth.

Moreover, the foreign direct investment into the country is likely to decline due to uncertainty in the American markets. Another area to be relooked into to appease the common man is by giving him more money in the hands to actually spend. This could be done by revisiting the tax slabs. 

Chandigarh, February 25
Bogged down by the rupee appreciation and unavailability of funds granted under the Textile Upgradation Funds Scheme (TUFS), textile sector in the region is hoping for some reprieve from the finance minister, as he gets ready to present his budget proposals for the coming fiscal.

Considering the slowdown in the past over one year, the textile sector in the region is hoping for a special package to bail it out of the present crisis. With the Prime Minister already having assured them of some special incentives, they are hoping for a substantial cut in excise duty, softening of import duty and more budgetary allocations for research and development, so that they can retain their competitive edge over China.

Kamal Oswal, managing director, Nahar Group of companies, says that with a 15 per cent appreciation in rupee textile exports have taken a beating. “Drastic steps have to be initiated in the budget so that we remain competitive in the global scenario. The duties on basic inputs like dyes and chemicals are very steep and should be brought down. The high inland freight costs are also eating into the profits, and the work on proposed inland freight corridors should be expedited through proper budgetary allocation,” he says.

Supporting his views, Sanjay Gupta, managing director of Supreme Yarns, Ludhiana, says that most of the textile hubs in the country, including Ludhiana and Delhi, are going through a difficult phase because of the slowdown in the US economy and appreciation of rupee. “At this juncture, it would be a great help if the service tax and the incidental state taxes are refunded. The EPCG capital duty of 5 per cent can be abolished, and the fund allocation under TUFS should be given to the industry at the earliest,” he adds.

Industry in Panipat, which accounts for 30 per cent of the handloom exports from India, too, looks forward to easy availability of finance to the industry and better marketing and management inputs. V.K. Batra, a textile export consultant, says that the government should create a special allocation for the handloom industry within the textile sector. “This sector is suffering because of unavailability of easy finance. Though the government had created a Credit Guarantee Fund Trust, wherein a unit was given a collateral free loan of Rs 50 lakh from SIDBI, the scheme has not been implemented. A fund for marketing development, too, should be created,” he says.

Ramesh Verma, president of Handloom Exports Manufacturers Association, Panipat, while reiterating the demand of easy finance options for the sector, demands that the budget should create a fund for setting up research and development centres in all textile hubs and help create a direct linkage between manufacturers and their overseas clients. 

New Delhi, February 25
The centre today decided to give a hearing to the developers of 12 approved special economic zones (SEZs) in Goa, whose government had recommended scrapping of these zones following public protests.

According to commerce secretary G.K. Pillai, the centre will separately initiate discussions with the Goa government on the fate of three already notified SEZs .

The commerce secretary, who also heads the Board of Approval for SEZs, said the proposals that had earlier been forwarded by the state but are yet to come before the BoA would be treated as withdrawn.

Apart from this, those SEZs who have been given formal and in-principle approval in Goa, will be issued a show-cause notice in the light of the recommendation of the state government following the principle of natural justice.

Show-cause notices would be served to developers of 12 approved SEZs — those that had received formal and in-principle approval but not notified — asking why the permission granted to them should not be cancelled, added the commerce secretary.

The Goa government, had, on December 31 recommended to the centre for scrapping these zones, following widespread public protests.

In addition to this, the centre today cleared 10 more SEZs located in Tamil Nadu, MP, Gujarat, Andhra Pradesh, Maharastra and Haryana. Anant Raj Industries, which wants to set up IT/ITeS SEZ in Haryana, has also received approval.

Ludhiana, February 25
Dollar-hit engineering goods exporters in Punjab are focussing on tapping buyers in Commonwealth of Independent States (CIS) countries now. Having surveyed the untapped potential that these countries hold, exporters in the region are making all efforts to surpass the existing growth rate in bilateral trade.

In their first such initiative in this direction, these exporters are expecting 20 buyers from Russia, Uzbekistan, Kazakhstan, Tajikistan and Azerbaijan, who would probe opportunities in units manufacturing garden tools, sewing machines, textile mill machinery, food processing machines, steel pipes, cranes, tractors and various other items.

Apart from securing export contracts, entrepreneurs are also looking forward to forging joint ventures with them.

"The share of engineering export to these countries from Punjab so far is negligible. On the other side, the market that these countries have to offer is even bigger than Europe. Exporters here never got a chance to explore much on this front as buyer visits were restricted till Delhi only. But now, business units are keen on tapping the unexplored markets and particularly after facing the dollar crisis, the target is to diversify," said S.C. Ralhan, regional chairman of Engineering Export Promotion Council (EEPC), which is expecting at least 50 exporters from across the state to avail of the opportunity to meet with these buyers. Ralhan said investors in Russia and other CIS countries were also keen on using India as a manufacturing base.

Trade between India and Russia having recorded a 27 per cent rise in 2006-07 and expected to reach $60 billion within the next five to eight years, exporters said the growth rate could rise much further if such initiatives continued. 

New Delhi, February 25
The two-day strike of the public sector banks through out the country has been called off following an agreement between the banks and unions to discuss their demands.

Chairman of the Indian Banks Association (IBA) M B N Rao told PTI from Bangalore that the IBA and United Forum for Bank Unions have agreed to hold discussions on the union demands.

Rao said a formal agreement to hold discussion between the two sides would be signed today. Rao said pending discussions, the unions agreed not to carry out their strike today and tomorrow.

Rao said detailed schedule for talks would be drawn on March 3.

Union sources said an MoU is likely to be signed between Indian Banks Association (IBA) and the United Forum of Bank Unions, which had called for the strike, later today in Mumbai on various demands of employees, union sources said.

The unions are demanding early settlement of wage revision, second option for employees to go for pension scheme and compassionate appointment, among other things.

They are also protesting against merger between PSU banks.

Earlier, a conciliatory meeting called by Chief Labour Commissioner S K Mukopadhyay on Friday and another by the IBA on Saturday had failed. — PTI