The Tribune, Chandigarh, India

Reduced IPO listing time within a year: SEBI

New Delhi, November 23
Market regulator SEBI today exuded confidence that decision on reducing listing time for companies to seven days after close of an IPO could be made in a year's time, even as a number of entities will have to be involved in the process.

The decision to reduce IPO processing time from the present 21 days would be good for the companies as well, SEBI chairman CB Bhave told news channel CNBC TV 18.

"There are many people involved in it. The stock exchanges, merchant bankers, bankers to the issues, registrar. All these people should be brought to one table and then how to reduce the timeline, we are thinking on it. And we think that within a year to achieve this target is possible for the markets," Bhave said.

He said the proposed move will also be beneficial for the companies as the mopped up amount cannot be used unless the company is listed.

"It is a good step even from the point of view of companies. I think they would welcome the measure," Bhave said.

He, however, said infrastructure should be upgraded to implement the decision of reducing IPO processing time.

Bhave said settlement process in the secondary market has been reduced over time, and now primary markets should be reformed.

"In the secondary market, there was automation in stock market, then depository system took place. T+5, T+3, T+2..we completed these journeys..In this manner, there is a need to bring reform here (primary markets)," Bhave said.

To a question, Bhave said increasing the maximum limit that a retail investor can apply from the current Rs 1 lakh may not be that important for increasing his participation.

"If we think that only by increasing the threshold limit of Rs 1 lakh for retail investors would increase the participation of retail investors, it would be a statistical jugglery," he said.

He said rather retail investors should be given a message that the stock market is a price risk, but all other risks are being reduced.

On whether compulsory grading of IPO would continue, Bhave said there is a discussion in the Primary Market Advisory Committee on how much investors are benefited from the rating system.

"If there is need for any changes in it, then we would consider it," he said. — PTI

ArcelorMittal to pump in Rs 30k cr in K’taka

New Delhi, November 23
ArcelorMittal today said it has approached the Karnataka government for setting up a steel plant in the state, even as its proposed Rs 1-lakh-crore steel projects in Jharkhand and Orissa have failed to take off amid problems in acquiring land and regulatory bottlenecks.

"ArcelorMittal India has applied for approval of its proposed steel plant in Karnataka to the single window clearance committee of the state government," the company said in a statement.

However, the NRI billionaire LN Mittal-led company maintained that "setting up an integrated plant in the state would depend on a host of techno-economic factors.

"We would disclose more details on cost, capacity, timeline etc once the technical studies are completed in about three to four months," the source added.

Sources said that the world's largest steel maker is planning to set up a 6-million tonne per annum steel plant in the Southern state involving an estimated investment of Rs 30,000 crore. The company approached the Karnataka government committee with the proposal on Saturday.

The company has been facing problems in acquiring land besides "regulatory hurdles" for setting its 12-MTPA steel plants involving Rs 1-lakh crore investment, one each in Jharkhand and Orissa, and had said that options were open with the company to shift the sites of the proposed plants. — PTI

Sliding dollar worries exporters
Ruchika M. Khanna
Tribune News Service

Chandigarh, November 23
The volatility in the currency market, with the dollar sliding continuously, has left the exporters in the region in jitters. At a time when the exports are already on the decline, this fall of rupee against the dollar has hit exporters hard by shrinking their profit margins.

Exporters in the region say that though they have started with forward booking of dollar while accepting an order, this cannot be done on a long-term basis. With the dollar slipping continuously and no signs of stabilising, the exporters say that they are now sceptical of accepting long-term orders. “If the dollar slides further, exporters who book their orders now will be able to realise less as profits,” they say, maintaining that they are now adopting wait-and-watch policy.

Last year, the rupee depreciated over 25 per cent from Rs 39 to Rs 51 to a dollar. This year, the rupee has appreciated from the Rs 51 levels, over the last couple of months, to Rs 46.50 to a dollar today. Experts predict that this could go up even further. Estimates of currency experts range from Rs 45 to Rs 43 levels against the dollar over the next one year. This means that all such export-oriented companies might be faced with a scenario where they would realise lower amount in rupees as revenues than they did previously.

Ashwani Kohli, senior vice-president, Punjab Chamber of Small Exporters, said already the exports had declined by 35 per cent. This means that with lesser realisation for our exports, our working capitals are getting eroded. “The government must come to the aid of exporters immediately by making profits on exports non-taxable, as was being done earlier,” he said.

A leading leather exporter from Jalandhar, Gaurav Sud, said “because of the volatility, no exporter wants to start forward booking of the currency. The situation is such that for almost every consignment, our remittances are down by anything between Rs 5-6 lakh.”

With the high volatility in the currency market, exporters are now monitoring the currency continuosly. “Earlier, we would monitor the currency once a week, but now we monitor it two times a day as the rupee is appreciating continuously. For most short-term orders, the exporters have no option but to forward book the currency,” says SC Ralhan, regional chairman of Engineering Export Promotion Council.

Gold surges to record high

Hong Kong, November 23
Gold surged to an all-time high of $1,167.60 an ounce in Asian trading today as investors shifted funds to the precious metal amid a weakening dollar.

Gold for immediate delivery rose 1.3 per cent to $1,167.60 an ounce, the highest ever. In the futures, the metal for December delivery on the New York Mercantile Exchange added 1.6 per cent to a record $1,165 an ounce.
Taking the cue from the overseas market, gold prices in New Delhi, too, shot by Rs 210 to an all-time high of Rs 17,810 per 10 gram.

In futures trading, gold for December delivery rose to a record Rs 17,532 per 10 gram on the Multi Commodity Exchange.

The rise in gold, which has been on an upward march for the past six trading sessions, was powered by a weak dollar and investors taking to gold as an alternative, traders said.

The rally in gold was sparked after the RBI bought 200 tonnes from the International Monetary Fund last month, spurring speculation other central banks would follow suit.

"A weak dollar against leading currencies and India buying gold are major force behind the current upsurge in gold prices," said Aurobinda Prasad of Karvy Comtrade in Hyderabad.

The precious metal for June delivery in Shanghai gained two per cent to $1,164 an ounce, the highest since futures trading started in January 2008. Traders said investors are on a buying spree on expectations that the prices would keep climbing. — PTI

LyondellBasell deal to boost RIL’s core businesses: Experts

New Delhi, November 23
The proposed acquisition of LyondellBasell by Reliance, if it goes through, will be a winning bet for RIL as the company has enough cash reserves to fund the deal, which in turn will further boost its core businesses, say experts.

Analysts of leading global investment banks like Credit Suisse, Goldman Sachs, CLSA and Citi have said the RIL-LyondellBasell deal would be value accretive for the Indian petrochem giant, besides the deal comes at a time when valuations are still low following the global economic slump.

Credit Suisse in a research report said : "While it is still early days, such an acquisition is one way of using RIL's large cash, and increase earnings visibility beyond the ramp up of KG D6."

Echoing a similar note, CLSA said "We would view the acquisition as positive if the total enterprise value remains below $12 billion. Reliance is adequately funded with $4 billion in cash and $8 billion in treasury stock besides access to extra leverage." The bid, if successful, would facilitate growth of RIL's core business as LyondellBasell has large petrochem capacities, good tech portfolio and JVs in the Middle-East, while RIL's petrochem business is mostly India-centric.

Goldman Sachs said "this deal is different from India's previous big overseas acquisitions, because of the relative size of the companies, balance sheet leverage, bankruptcy of the acquiree, and global economy now recovering as against heating up."

The acquisition can be value accretive for RIL, Citi said, adding that LyondellBasell's additional debt of $6.5 billion will increase RIL's FY11 Net Debt/EBITDA, but "within manageable limits". Besides, RIL can use part of the $8 billion treasury stock to fund the equity portion.

Shares of RIL surged as much as 4 per cent today and witnessed an intra-day high of Rs 2,205 on the Bombay Stock Exchange. On the volume front also, good momentum was seen as more than 8.63 lakh shares exchanged hands on the BSE.

RIL did not disclose the offer size, industry sources say its bid for LyondellBasell would be over $12 billion, making it the largest-ever acquisition by an Indian firm. The biggest-ever deal involving an Indian company so far is Tata Steel's takeover of European Corus for $12 billion. — PTI

Scrip gains 3 pc

Mumbai: Shares of Reliance Industries on Monday gained 3 per cent to close at a one-month high on the Bombay Stock Exchange after reports said its bid to acquire bankrupt LyondellBasell, if successful, would add value to the country's largest private company. RIL jumped 4 per cent to a intra-day high of Rs 2,205. It closed up by Rs 70.35, or 3.31 per cent, at Rs 2,195.50.

US restricts import of Indian safety matches

New Delhi, November 23
America has decided to restrict import of safety matches from India by imposing additional duties after it found that such shipments were injuring domestic industry.

"... the Department of Commerce (of US) will issue countervailing and anti-dumping duty orders on imports of these products (matches) from India," said US International Trade Commission (USITC) in a release.

The American administration's decision to impose additional duties comes after a complaint filed by US-based DD Bean and Sons against exports from Mumbai-based Triveni Safety Matches.

The USITC is scheduled to make its final injury determination on or about November 30. — PTI

Toyota mulls setting up engine plant in India

New Delhi, November 23
Japanese auto major Toyota today said it was considering to set up an engine and transmission plant in India as it looks to use more vehicle parts made here in its cars than import them.

The company, which has a joint venture, Toyota Kirloskar Motor, with the Kirloskar Group for its Indian operations, may set up the new plant at its upcoming second factory in Bangalore.

"In order to localise production (more), in future I am very keen to set up a transmission and engine unit in the second plant," Toyota Kirloskar Motor (TKM) managing director Hiroshi Nakagawa told PTI on the sidelines of Environmentally Friendly Vehicles Conference here. — PTI

Wipro creates jobs in US
Expands Atlanta development centre
Shubhadeep Choudhury
Tribune News Service

Bangalore, November 23
US President Barack Obama’s shrill cries asking American companies to give preference to the New York suburb Buffalo over Bangalore has been replied in kind by the Bangalore-based IT giant Wipro by generating jobs in the recession-hit US.

Wipro Technologies today announced the expansion of its Atlanta development centre with the employee strength of the centre having scaled up to 350 employees in the past nine months.

“The newly expanded centre, focused on delivering world-class services, will continue to create new job opportunities in the local community,” a company communiqué issued here said.

Eighty per cent of the employees at the centre have been hired locally and includes recent graduates from academic institutions in Atlanta such as Georgia Institute of Technology, Emory University, and Georgia State University.

Experienced professionals and even retired US army personnel have been recruited at the centre run by the Indian IT behemoth. The employees are being positioned for long-term, global careers through training and customer programmes based in Atlanta, as well as through project work at other locations in the US.

They will support North American companies in the healthcare, manufacturing, telecommunications, utilities, retail and financial services sectors. The programmes address the aspect of customer proximity, customer sensitive intellectual property issues and management of government projects.

Two local officials with deep roots in Atlanta, capital of the American state of Georgia, have been quoted in the communiqué issued by the Wipro. One of them is Jorge Fernandez, vice-president of global commerce for the Metro Atlanta Chamber.

“Our goal is not to just attract companies, but to ensure that they thrive and grow in our market. Wipro’s success signifies more high-tech jobs to metro Atlanta, and continues to build our reach into India,” Fernandez has been quoted to have said.

“Atlanta is the prime location for an international company to build its US headquarters. We are delighted Wipro is finding attractive talent here and that our market is welcoming its services,” the communiqué quoted Charles Whatley, director of commerce and entrepreneurship at the Atlanta Development Authority, as having said.

Sambuddha Deb, executive vice-president and chief global delivery officer for Wipro Technologies, also gave abundant hints that Wipro would not ignore the local sentiment while running its operations in the American city which also houses the headquarters of Coca Cola.

“Wipro’s extensive investment in hiring local talent showcases our dedication to the community in Atlanta, as well as our clients in this region. The centre has received positive feedback from our existing clients and new customers, demonstrating our commitment to delivering world-class solutions for a global economy through localised initiatives,” Deb has been quoted by the communiqué as having said.

3G Spectrum
MoD to release 25 Mhz frequency
Tribune News Service

New Delhi, November 23
The hopes for the auction of air waves for the third generation (3G) services have revived again with the Department of Telecom (DoT) and the Ministry of Defence (MoD) having come to an understanding whereby the armed forces will release 25 Mhz of radio frequency.

Although the Empowered Group of Ministers (EGoM) meeting held here last week failed to bring about a consensus on the release of the spectrum by the defence forces, reports suggest there was some movement forward following assurances from the DoT.

The government plans to commence auction of 3G (third generation) spectrum from January 14 next year, but lack of clarity on number of slots to be sold has been putting a shadow over it.

Finance Minister Pranab Mukherjee, who heads the EGoM, had called for the meeting with Telecom Minister A Raja and Defence Minister AK Antony to resolve the issue. But despite all efforts from the Finance Minister, the meeting remained inconclusive. Reports now suggest that the DoT has given a seven-point action plan, including getting an approval of the Cabinet Committee of Economic Affairs, for setting up an optical fibre cable for the Defence at a cost of Rs 10,000 crore to the MoD following which there has been some agreement.

The DoT has also agreed to build this cable network in three years, six months ahead of the earlier plan.

The deal apparently has been worked out by Sam Pitroda, Adviser to Prime Minister, who was roped in by the Finance Minister to work out a consensus between the two warring ministries.

The agreement between the DoT and the MoD for spectrum vacation is likely to be signed by December 7 after the DoT seeks the Cabinet nod.

The MoD has, however, set a condition that operators winning the 3G bids will be allowed to use the spectrum only from June 2010.

Reports said DoT Secretary PJ Thomas, had sent a detailed plan to Defence Secretary Pradeep Kumar, for building the cable network.

SEBI notice to RIL on RPL share sale

Mumbai, November 23
Market regulator SEBI is understood to have asked RIL as to why it should not be barred from accessing the market in relation to violation of insider trading norms, a charge denied by the company.

Reliance Industries has not violated any regulations, a spokesperson for Mukesh Ambani-led firm said today, when asked about SEBI’s show-cause notice in relation to sale of shares of its then subsidiary Reliance Petroleum in late 2007.

SEBI is understood to have issued a show-cause notice in April this year against Reliance Industries, stating why it should not take action for possible violation of insider trading norms in relation to sale of shares of then subsidiary RPL in November 2007. — PTI