New Delhi, June 30
The seventh round of search for oil and gas in the country, NELP-VII, has come as a cropper with few blocks receiving interests from oil majors. There were 181 bids received from domestic and global oil majors as compared to last year’s round of NELP-VI when there were 165 bids received. As many as 96 Indian and foreign oil majors placed their bid for 45 exploration blocks. There were 57 blocks put on offer, of which bids were received only for 45 blocks.

But there is not much of an enthusiasm shown by Indian and global oil majors as the names remain the same year after year. Those who applied for the blocks are ONGC, Reliance Industries, Essar Oil, British Petroleum, BHP Billiton etc.

The winners would be decided by August 31, 2008. State-owned ONGC is understood to have bid for the maximum number of blocks, while Essar Exploration and Production Ltd has bid for four shallow water blocks along with US-based Nobel Energy, in addition to one deep water block with GSPC.

Reliance Industries (RIL), which has a major presence in upstream operations, is understood to have bid for an estimated half-a-dozen blocks. The present NELP rounds were postponed twice because of a clause inserted in the Union Budget of 2008-09, which does not allow tax holidays for companies who produce gas from the investments made in these rounds.

The finance ministry gave tax holiday concessions only for companies who produce oil, but not gas. Oil ministry did make requests for the exemptions to gas sighting that there may be a lukewarm response in the NELP rounds , but the finance ministry refused to lift the clause.

Of the 57 blocks that were put up for auction, the largest-ever offering of exploration blocks by the government, 19 received just single bids and it was not clear if global giants like Exxon Mobil and Chevron had evinced interest in the seventh round of National Exploration Licensing Policy.

New Delhi, June 30
In a move that could further make air travel costlier, oil companies today hiked jet fuel prices by 4.3 per cent.

Consequently, aviation turbine fuel (ATF) would cost Rs 69,097.19 a kl in Delhi, while in Mumbai it would cost Rs 71,630.53 a kl effective midnight tonight.

The decision to hike the jet fuel prices comes at a time when the aviation industry is reeling under intense pressure of rising operating costs, and leading airlines like Jet Airways reporting losses running into crores of rupees.

Industry analysts pointed out that the latest hike in ATF prices would force the carriers to hike ticket prices further. — PTI 

Mumbai, June 30
Country's largest private-sector lender ICICI Bank and leading home loan lender HDFC today hiked their lending rates with effect from July 1. Both institutions have also increased their deposit rates by 0.5-1 per cent across various tenures.

ICICI Bank increased its Benchmark Advance Rate and Floating Reference Rate (FRR) by 0.75 per cent to 16.5 per cent (15.75 per cent) and 13.5 per cent (12.75 per cent), the bank said.

HDFC home loan borrowers will also have to pay more following a 0.5 per cent hike effected in its retail prime lending rates (RPLR).

Meanwhile, home loans and auto financing from public sector State Bank of India would be dearer as the lender has decided to hike interest rates by 50 basis points on all credit linked to prime lending rates.

Speaking at a function in Ghaziabad on Monday, SBI chairman-cum-managing director O.P. Bhatt said the bank has decided to raise the interest rate by 0.5 per cent on all loans such as home loans and auto loans which are linked to PLR.

The revision in PLR came after SBI raised its PLR from 12.25 per cent to 12.75 per cent last week following Reserve Bank's increasing its key short-term lending rate to banks and the mandatory cash deposits that banks need to keep with the apex bank (CRR) by 0.5 per cent each.

Referring to the impact on bank's profit margins, Bhatt hoped to maintain the net interest margin at 3 per cent this fiscal. — PTI

New Delhi, June 30
Having acquired more than 40 per cent share in the Spice Communications, the Aditya Birla group telecom company Idea Cellular today made an open offer to the shareholders of the former for acquiring additional 20 per cent stake in the telecom services provider for about Rs 1,066.63 crore.

Idea Cellular along with the Malaysia's TM International would launch an open offer on August. 22 to buy up to 20 per cent of Spice Communications , their investment banker said while filing a document with the Bombay Stock Exchange.

Idea Cellular along with the PACs, who include Malaysia's TM International, have made the open offer for acquiring up to 137,985,050 equity shares representing 20 per cent of the paid-up equity share capital of Spice Communications at Rs 77.30 each.

The mandatory offer follows a three-way deal struck last week to acquire Spice by Idea Cellular, India's fifth-largest mobile operator.

Under the deal, TM International's, a unit of Telekom Malaysia , 39.2 percent stake in Spice will be converted into Idea shares. TM will also pay for a preferential allotment that will give it around a fifth of Idea. The offer would close on September 11.

Earlier, on June 25, Idea Cellular said it would acquire 40.8 per cent stake in B K Modi-owned Spice group for Rs 2,716 crore. 

New Delhi, June 30
The RBI has warned the finance ministry about the possible impact that large foreign capital flows could have on the real estate sector, and the possibility of an asset bubble being created. In a meeting held recently, the RBI has questioned the policy of allowing foreign venture capital to invest in the real estate sector, stating that the risks associated with this money could impact the banking and financial sector.

The RBI has also raised concerns of a possibility of a real estate bubble building up in the Indian real estate sector, as the sub-prime crisis grips the western countries.

RBI has reasoned that exposures in the form of housing or real estate loans are ultimately taken by the financial sector, and if there is a turmoil in the financial market worldwide, then a real estate bubble could build up in India and so the flow of foreign funds should be carefully moderated in this sector.

The RBI has cautioned that the policy of allowing Foreign Venture Capital Investment (FVCI) to invest in domestic venture capital funds will be like foreign direct investment (FDI) in the real estate sector, which until now is not allowed.

The RBI has raised concerns that apart from the fundamental issue of whether real estate investments could be considered as genuine venture capital, the FVCI relaxation has resulted in real estate sector being unconditionally open to foreign investment, clearly not the intent of the FDI policy.

What really has raised an alarm for RBI is the the rush of foreign entities seeking permission to register as FVCI. According to the apex bank, some of these entities do not have any substantial capital base, but have applied on the basis of financial commitments from the potential foreign investors, whose antecedents and background are not verifiable.

Besides this, most of these companies are based in Mauritius and a few of them have same set of promoters as well as similar address of the registered office. According to RBI, most of the tax havens such as Mauritius are being used as a channel for routing the investments and obfuscating the identity of the real investor.

RBI’s concerns are also about Indian corporates, who are setting up their wholly owned subsidiaries or joint ventures abroad and are routing money into the country through tax havens. The policy of allowing Indian companies to allow setting up companies abroad was meant to encourage Indian corporates become global by acquiring or setting up companies overseas . However, most Indian entities are abusing this loophole and are taking advantage of low overseas interest rates and are raising money abroad and then using this JV route to bring back the capital in their group companies and then investing them in real estate sector.

Mumbai, June 30
Inflation is likely to peak to around 13 per cent over the next two months before it gradually moderating to around 8.5-9 per cent by end of this fiscal, economists have said.

The country's economic growth too would moderate below earlier forecast of eight per cent to around the 7.5-7.8 per cent level in FY 2009, they said.

"I expect inflation to peak to around 12.5-13 per cent in the next two months before beginning to decline. But double-digit inflation will continue at least for the next four to five months," Yes Bank's chief economist, Shubhada Rao told PTI here.

Global fuel prices present the most important concern to policy makers, the economists said. "Inflation will be contingent upon oil prices," Crisil's director and principal economist D.K. Joshi said.

"Prices of products such as aviation turbine fuel and naphtha have shot up 40 per cent year-on-year," Enam Securities' chief economist Sachidanand Shukla said.

While inflation would peak at around 12.5-13 per cent, Joshi expected the yearly average inflation rate to be around the 8.5-9 per cent mark.

This figure, again, is much higher than the 5.5 per cent projected by some economists earlier.

Rao, however, pegged the average at a much higher nine to 9.5 per cent.

Economic growth would be below the eight per cent mark, "maybe even below the 7.5 per cent mark", Bank of Baroda's chief economist Rupa Rege Nitsure said.

But other economists such as Joshi and Enam's Shukla felt that it would be in the 7.8 per cent range.

"Growth will definitely slow down given the rate hikes, but I don't expect it to fall sharply. It will be around the 7.8 per cent mark," Shukla said.

Yes Bank's Rao said even pessimists were forecasting a seven per cent growth. "Amidst the present global turbulence and domestic headwinds, seven per cent is still very healthy," she said.

Food prices are expected to ease in the next few months.

Much would, however, depend upon the monsoon, the economists said, but with a good one forecast, they expect a healthy kharif crop which would help in pushing down food prices.

On whether the Reserve Bank would further hike the repo rate and cash reserve ratio (CRR), most economists expect a 0.25-0.50 per cent hike in the repo but were divided over its timing.

A CRR hike would, however, depend upon prevailing liquidity conditions, they said. While some expected the RBI to hike rates in July, others felt that the RBI might do so later.

However, all are agreed that inflation would continue to occupy centrestage throughout this fiscal. — PTI 

New Delhi, June 30
Soaring inflation and high interest rates are expected to take a toll on the Indian economy, which is expected to witness a growth rate of 7.5 per cent this financial year against 9 per cent in 2007-08, according to Germany-based Dresdner Bank.

"For this fiscal year, we now expect GDP growth of only 7.5 per cent," Dresdner Bank, the banking arm of global insurance major Allianz group said, pointing out that Indian economy has lost further momentum this year with production growth slowing substantially in the first four months of 2008.

Dresdner's projections are much lower than the finance ministry's expectations of 8-8.5 per cent GDP growth.

The UPA government has recorded an average 8.9 per cent growth during the first four years of its rule. Last fiscal, the country's GDP growth stood at 9 per cent, compared to 9.6 per cent in the previous fiscal.

For five years starting from 2007, Planning Commission has targeted Indian economy to grow at nine per cent with the terminal year delivering a growth of 10 per cent.

The current rise in inflation and high interest rates have already left a dent on the industry and the production growth rate of the country has substantially slowed down in the past four months. In fact, industrial growth had slipped to 3 per cent in March, but recovered to 7 per cent in April.

"The only segment that is showing some resilience is the services sector, which is still recording double-digit growth rates," Allianz-Dresdner Economic Research said in its latest report on economy and markets.

Inflation was at a modest 3 per cent at the end of the year 2007, and is at present hovering over 11 per cent mark, the highest level in 13 years.

"Rising Inflation is a matter of concern for India, particularly because the country is affected by rising food prices and as a considerable part of the country's population has to spend its entire income on food," the report added.

Inflationary pressures were intensified due to rise in energy prices and wages.

After the surge in recent months, rupee depreciated as much as 8 per cent against the US dollar and by 13 per cent against the Euro, the report added.

The pressure on the rupee can be primarily attributable to the rise in inflation. Besides, there were other factors such as deterioration in the current account in the first quarter and the low influx of capital due to the restraint on the part of foreign investors at the Indian stock exchange. — PTI

Mumbai, June 30
State-run Union Bank of India on Monday said it has completed the implementation of debt waiver and relief scheme for farmers across its 1,600 branches.

BRIEFLY

CPI-IW up 1 point
Shimla: The All India Consumer Price Index Number for Industrial Workers (CPI-IW), on base 2001=100, for May, this year, increased by one point to stand at 139, Labour Bureau sources said on Monday. The index recorded a maximum increase of seven points in Goa centre, three each in Vijaywada, Godavarikhani, Rourkela and Tiruchirapally centres, two in seven centres and one point in 21 centres. — UNI

L&T bags Rs 1,557-cr order
Mumbai: Engineering major Larsen and Toubro on Monday said it has received Rs 1,557-crore order from Andhra Pradesh Power Development Company Ltd (APPDCL) for construction-related work. The company has received a letter of intent for Rs 1,557 crore steam Turbine Generator package of 2X800 MW to be installed at Krishnapatnam power station in Andhra Pradesh, L&T said in a filing to the Bombay Stock Exchange. — PTI

Acumen Capital plan
Chandigarh: Private Equity firm Acumen Capital Advisor is looking to invest $ 50 million in India’s IT, media and telecom companies by the end of December this year. “We have identified technology, media and telecommunications as potential areas where we would like to invest. We are expecting that by the end of this year, we will be finalizing deals worth USD 50 million by picking up stake in Indian companies,” Acumen Capital Advisor Private India Limited, managing partner, Gautam Seengal said. — PTI

Yes Bank raises Rs 364-cr
Mumbai: Private sector Yes Bank on Monday said it has successfully raised Rs 364 crore from the Netherlands-based Rabobank, through a combination of debt and equity. The amount has been raised in a combination of upper tier-II sub-ordinated debt and hybrid tier-I capital, a press release issued here stated. — PTI

Hikal plant in Taloja
Mumbai: Hikal on Monday announced the inauguration of their new multipurpose agrochemical plant set up at its existing manufacturing facility in Taloja. The company had signed a long-term contract manufacturing agreement with Bayer CropScience AG, for supply of active Ingredients for crop protection products. Company Vice chairman and MD Hai Hiremath said in a release here that supplies from the multi purpose plant would commence during the second half of this year. 
— UNI

Vijaya Bank plan
Patiala: Vijaya Bank will open five new branches and 10 ATMs in Punjab in current financial year. “Currently Vijaya Bank has 25 branches and 10 ATMs in Punjab, with the opening of more branches and ATMs the bank will serve better to the customers in the state,” deputy general manager BS Rai said here on Monday. — UNI

Zenith foray
Bangalore: The city-based Zenith Software Limited (ZSL) has made a foray into the Scandinavian countries by entering into a partnership with Norway- based Software Offshoring Consulting (SOC) company. ZSL, part of the Zenith Group, provided IT/ITeS services across various domains with major focus on Insurance, Travel, Retail and Financial Services with global offices in the US, UK and Australia. — UNI

B.S. Mankotia retires
Chandigarh: B.S.Mankotia, regional PF commissioner-II, Regional Office, Chandigarh, retired on Monday after putting in 40 years of service. He joined in 1967 and also served as dy director, North Zone, audit, PF, New Delhi. Meanwhile, S.K. Aggarwal, regional provident fund commissioner, Punjab and Chandigarh, has released four cheques amounting to Rs 24.4 lakh to the retiring employees of Hartron and Milk Plant, Chandigarh. — TNS