Mumbai, May 21
The rupee today plunged below the psychological 55-level to close at an all-time low of 55.04 against the dollar amid robust demand for the US currency from banks and importers, but there was no visible RBI action to shore up the domestic unit from its record low levels.

At the Interbank Foreign Exchange (Forex) market, the domestic unit opened slightly lower at 54.45 a dollar from last weekend's close of 54.42 and immediately touched a high of 54.44.

However, it soon started falling and at the fag-end trading breached the crucial 55-level and closed at 55.03, a fall of 61 paise or 1.12 per cent from its previous close.

Forex dealers said though rupee plunged to record low levels for the third day in a row, RBI was conspicuous by its absence in the forex market. Dealers, however, said RBI could intervene with more policy measures when markets resume tomorrow.

"Rupee breaching Rs 55 is a bit of worry as this has been seen as a strong resistance level. However, we expect the government to come up with some measures, which will help the domestic currency to pull back from the current levels," said NS Venkatesh, Head of Treasury, IDBI Bank.

He also said rupee is likely to appreciate tomorrow as additional liquidity from the exporters' Exchange Earner's Foreign Currency (EEFC) accounts will be added to the system.

TS Srinivasan, GM (Treasury) of Indian Overseas Bank, said there is a short-term weakness. "Going ahead, the central bank is likely to intervene without which the weakness in the currency is likely to continue," he said.

The depreciating rupee cast its shadow over the Indian benchmark Sensex, which pared its early gains to end with a modest gain of 30.51 points.

Yesterday, Finance Minister Pranab Mukherjee had said that the steep fall in the rupee was a matter of great concern and the Centre was trying to resolve the situation.

"It is a matter of great concern. We are watching the situation. The Centre is not (sitting) idle. We are trying to resolve (the issue)," Mukherjee had told reporters in Kolkata. — PTI

Mumbai, May 21
Amidst mounting concerns that many promoters who have got their loans restructured are misusing the corporate debt restructuring (CDR) mechanism, bankers today called for higher equity infusion, to the tune of one-fourth of the CDR demand.

"We have decided to demand higher capital infusion, to the tune of 20-25 per cent of CDR amount being sought by the promoters of companies that seek loan revamp, from the current 15 per cent. However, no final decision has been taken," State Bank of India Deputy MD Soundara Kumar told reporters after a hurriedly convened meeting of the CDR cell here today.

According to reports, already loans worth over Rs 60,000 crore have gone for CDR last fiscal, a rise of a whopping 156 per cent from a year earlier, making it the highest since the CDR cell was launched in 2001.

The number of CDR cases jumped to 84 during FY12, compared to 49 a year earlier.

Significantly, this amount is excluding the Rs 22,000-crore CDR of Air India, which was done outside this cell, and those of the state electricity boards, which is close to Rs 30,000 crore (figures for only two SEBs of Rajasthan (Rs 12,000 crore), and Haryana (Rs 8,000 crore) while those of Tamil Nadu SEB was not available.

A recent Crisil report said losses of discoms rose 24 per cent to Rs 27,500 crore between 2006-07 and 2009-10, which may rise to Rs 35,000-40,000 crore in 2010-11.

Banks bring cases to the CDR cell, an informal forum of bankers approved by the Reserve Bank, to negotiate relaxed repayment terms with struggling borrowers.

Cases brought to the CDR during the year included big-ticket loans to telecom tower services provider GTL, shipbuilder Bharati Shipyard, Hindustan Construction, Leela Hotel and several sugar and steel mills. — PTI 

New York, May 21
Struggling Internet firm Yahoo Inc has said it will sell half of its stake in Alibaba Group back to the Chinese e-commerce company for $7.1 billion.

Yahoo, which bought 40 per cent stake in Alibaba Group in 2005 for about $1 billion, will sell 20 per cent of its holding to the Chinese firm.

Chinese workers walk out from the Alibaba head office building in Hangzhou, in eastern China's Zhejiang province on Monday. — AFP

In an agreement reached yesterday, Yahoo said they would receive $7.1 billion from Alibaba composed of at least $6.3 billion in cash and up to $800 million in newly issued Alibaba preferred stock.

As part of the deal, Yahoo would sell the remainder of its Alibaba stake in stages.

"The deal provides for a staged exit over time (to Yahoo), balancing near-term liquidity and return of cash to shareholders with the opportunity to participate in future value appreciation of Alibaba," Yahoo said in a statement.

The future monetisation would happen when Alibaba goes public.

At the time of the IPO, Alibaba will be required either to repurchase one-quarter of Yahoo's current stake at the IPO price or allow Yahoo to sell those shares in the IPO

"...agreement provides clarity for our shareholders on a substantial component of Yahoo's value and reaffirms the significance of our relationship with Alibaba," Yahoo Interim CEO Ross Levinsohn said.

"The transaction will establish a balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future." Alibaba group Chairman and CEO Jack Ma said.

In addition to the share repurchase deal, the companies have also agreed to amend their existing technology and intellectual property licensing agreement. — PTI

Among other things, this amendment will grant Alibaba licence to continue operate Yahoo-China under the Yahoo brand for up to four years at a royalty payment of $550 million. — PTI

New Delhi, May 21
The government will dole out Rs 38,500 crore additional cash subsidy to public sector oil companies as part of compensation for selling diesel, domestic LPG and kerosene below cost in 2011-12 fiscal.

"Yes, the Finance Ministry has agreed to give Rs 38,500 crore compensation for the January-March quarter," a top oil ministry official said here.

The cash payout would be on top of Rs 45,000 crore that Indian Oil Corp (IOC), Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) got for the first nine months of 2011-12 financial year.

The three firms had lost a record Rs 1,38,541 crore on selling diesel, domestic LPG and kerosene at government-controlled rates that were way lower than market price.

Together with the additional payout agreed, the government will make up 60 per cent or Rs 83,500 crore of the total revenue loss.

Upstream companies ONGC, Oil India and GAIL India have been asked to shell out an additional Rs 1,640 crore - over the Rs 53,360 crore indicated earlier - as their share of the subsidy burden.

The cash subsidy and assistance from upstream oil companies would bridge almost all of the Rs 138,541 crore of revenue loss, the official said. "Without this, the three companies would have for sure posted huge losses." IOC is to declare its fourth and 2011-12 annual financial results on May 28, while HPCL would do so on May 29. BPCL has scheduled a board meeting for the results on May 25.

Besides losses on diesel, domestic LPG and kerosene, state fuel retailers also lost Rs 4,890 crore on sale of petrol, a commodity which was decontrolled in June 2010 but rates of which haven't been raised due to political considerations.

The oil marketing companies also incurred an interest payout of Rs 4,800 crore due to delay in payment of cash subsidy by the government, the official said, adding that both of these demands have not been met by the Finance Ministry.

"So in effect, the share of oil marketing companies would be the loss they incurred on sale of petrol and the interest outgo," he said, adding that the Oil Ministry had asked for Rs 49,870 crore to compensate the three firms for selling fuels at government-controlled rates, and towards interest compensation. — PTI 

New Delhi, May 21
Brij Mohan Lall Munjal-led Hero Group is undertaking a restructuring of family shareholding in two promoter firms of the country's largest two-wheeler maker Hero MotoCorp.

In a filing to the BSE, Hero MotoCorp said BML Munjal's wife Santosh and his second son Suman will transfer their shares in the two investment companies - Hero Investments Pvt Ltd (HIPL) and Bahadur Chand Investments Pvt Ltd (BCIPL) — to other sons Pawan and Sunil.

All the family members are partners of the firm Brij Mohan Lall Om Prakash (BMOP).

The filing said that Suman, who currently holds 21,610 shares representing 71.63 per cent stake in HIPL, will transfer a total of 14,407 shares to Pawan and Sunil.

Out of the total, 7,203 shares, representing 23.88 per cent stake in HIPL, will be in favour of Pawan, while Sunil will get 7,204 shares that also accounts for 23.88 per cent stake, it added.

Post this transaction, all the three brothers will have 23.88 per cent stake each in HIPL. Private equity firms BC India Pvt Investors II and Lathe Investment Pte Ltd will continue to own 19.81 per cent and 8.56 per cent stake respectively in the investment firm.

As per the announcement, there will be no change in the shareholding on the main company — Hero MotoCorp. — PTI

New Delhi, May 21
Customs duty collection declined by 8.8 per cent to Rs 11,594 crore in April this year because of the cut in the duty on petroleum products last year and duty drawback outgo.

Collections from customs duty was Rs 12,714 crore in the same period last fiscal.

"For fall in customs duty collections, there are 2-3 reasons like cut in duty on petroleum products. The revenue is not there like last year. (Also) we have given more drawbacks in April, this year, compared to last year by about Rs 500 crore," CBEC Chairman SK Goel said. — PTI

New Delhi, May 21
Bilateral trade between India and Pakistan has declined by about 30 per cent to $1.56 billion during April-January, 2011-12.

During the same period of 2010-11 fiscal, the bilateral trade was $2.22 billion, Minister of State for Commerce and Industry Jyotiraditya Scindia said in a written reply to the Lok Sabha.

He added that as a result of the bilateral discussions held over the past year between the two countries, Pakistan has replaced its 'positive list' - comprising 1,963 items that could be exported by India - with a 'negative list' of 1,209 items.

"This implies that except for these 1,209 items, all other items can be exported. Such substantial increase in tradable commodities is expected to reduce trade through third countries," Scindia said. In another reply, the minister said trade between India and Japan during April-January 2011-12 has surpassed the figure of total trade in 2010-11. — PTI