New Delhi, March 13
In yet another blow to the Indian pharmaceutical sector, the US Food and Drug Administration (USFDA) has banned import of drugs from Sun Pharma’s Karkhadi facility in Gujarat for violation of manufacturing norms.

"This import alert was issued by the USFDA as a follow-up to the last inspection of the facility, during which some non-compliance of current Good Manufacturing Practice (cGMP) regulations were identified," Sun Pharmaceutical Industries said.

The company remains fully committed to compliance and has already initiated several corrective steps to address the observations made by the USFDA, it added.

Sun Pharma, which is lndia's biggest drugmaker by value, said the import ban would have negligible effect on the company's revenues.

"The contribution of this facility to Sun Pharma's consolidated revenues is negligible. Sun Pharma maintains its FY 2013-14 consolidated sales growth guidance," it said.

The company's Karkhadi facility manufactures antibiotics and active pharmaceutical ingredients (APIs). The company has 10 manufacturing sites in India.

According to information available on the USFDA website, an import alert enables 'detention without physical examination of drugs from firms which have not met drug manufacturing norms'.

Earlier this week, Sun Pharma had voluntarily recalled 2,528 bottles of its generic version of diabetes drug Glumetza in the US market on the basis of a customer complaint.

The USFDA has been cracking down heavily for non-compliance of manufacturing norms and various facilities of companies like Ranbaxy and Wockhardt have already been banned from importing drugs into the US market.

While all plants of Daiichi Sankyo-controlled Ranbaxy Laboratories in India have been banned from exporting drugs to the US, Wockhardt has also faced similar actions on its two plants in the country.

Reacting to the development, the Sun Pharma scrip had tanked as much as 6.5%. In the afternoon trade, however, it was down 3.91% at Rs 580.40 on the BSE. — PTI 

New Delhi, March 13
Country’s largest carmaker Maruti Suzuki India Ltd (MSIL) is heading for a bumpy ride ahead as the institutional investors are pressing the company to review its decision to allow its parent company, Suzuki Motor Corp (SMC), to set up a wholly owned subsidiary to run the Gujarat plant.

Reports suggested that with the SEBI stepping in on behalf of the investors, the company has sent its clarification to the market regulator over the issue.

Reports said MSIL was yet to receive a response on its clarification from the regulator, which was reportedly looking into whether the transaction flouts corporate governance and related party transaction norms.

Forced by the pressure from the minority shareholders, MSIL has reportedly called a Board meeting on March 15, which would also be attended by Suzuki chairman Osamu Suzuki.

There were reports that MSIL may reconsider its decision at the Board meeting, but sources said the discussion about the Gujarat deal may not take place and the meeting is primarily being held to discuss the company’s annual budget.

Institutional investors had approached the SEBI, seeking its intervention to safeguard minority shareholders’ interests and to ensure compliance with good corporate governance norms with regard to the transfer of the Gujarat project to the car maker’s Japanese parent Suzuki.

MSIL is facing stiff resistance from private sector mutual funds and insurance companies, which own almost 7% of the company, for its decision to allow Suzuki Motor to make cars for MSIL at a proposed plant in Gujarat instead of manufacturing the vehicles itself.

Separately, state-run Life Insurance Corporation of India (LIC) has sought clarifications from MSIL about the Gujarat project. The private institutions along with LIC own up to 16% share in the company.

Representatives of 16 institutional investors have met SEBI officials and submitted a memorandum addressed to chairman UK Sinha on the issue.

In January, Maruti said a wholly-owned subsidiary of Japan’s Suzuki Motor would set up a manufacturing unit on a land in Gujarat that Maruti owns and had originally intended to develop.

MSIL said the Gujarat unit would manufacture cars only for the Indian carmaker and as per its requirements on no profit, no loss.

But the move met with opposition from institutional investors who said the deal was against the interests of minority shareholders as the nature of the transaction implied MSIL may eventually end up as a shell company.

The decision has apparently been also opposed by the independent directors on the MSIL board. MSIL has not yet finalised the contract agreement and the deal would be consummated only after approval from the Board and the audit committee.

MSIL has maintained the deal is in the best interests of shareholders and is in compliance with all norms. 

New Delhi, March 13
Aviation in India offers a huge potential for growth as access to aviation is still a dream for nearly 99.5% of its population, indicates the FICCI-KPMG India Aviation 2014 report.

According to the report, the Indian civil aviation industry is on a high growth trajectory, albeit with minor hiccups. The industry has ushered in a new wave of expansion driven by low-cost carriers (LCC), modern airports, foreign direct investment (FDI) in domestic airlines, cutting-edge information technology (IT) interventions and a growing emphasis on no-frills airports (NFA) and regional connectivity. The Indian civil aviation industry is among the top 10 in the world with a size of around $16 billion. This is a fraction of what it can actually achieve.

The growth in Indian aviation has created significant employment opportunities. With passengers and aircraft fleet likely to double by 2020, the need to strengthen the human resource development infrastructure is immediate need. As per KPMG estimates, the total manpower requirement of airlines is estimated to rise from 62,000 in FY-2011 to 1.17 lakh by FY-2017. It is estimated that the sector, overall, will need about 3.50 lakh employees to facilitate growth in the next decade.

The report says that Indian aviation industry is overtaxed and this is being reflected in the industry's lack of competitiveness at the global level. It is important for India to acknowledge the devastating impact of high taxes. Some of the avoidable taxes/charges that need immediate attention are central and state taxes on ATF and MRO, service tax on air tickets, high airport charges.

The report notes that the next generation of aviation growth in India will be triggered by regional airports. At present, there are around 450 used, un-used and abandoned airports and airstrips spread all over the country.

The most significant development in the Indian domestic market is the growing dominance of the low-cost carrier model, which in FY 2013 accounted for almost 70% of the domestic capacity. 

New Delhi, March 13
Expressing ‘concern’ over declining revenue growth, Infosys executive chairman NR Narayana Murthy said the rate of growth declined 77% during March 2011 to March 2013.

The Infosys co-founder also expressed unhappiness over the laggard performance in the past two years.

"Under normal circumstances, our operating margin should have been 41.5%. But it ended up as 23.5% as of date and that means it is a drop of approximately 45%.

"Therefore, revenue growth went down by 77% and margin growth went down by 45% during the period March 31, 2011 to March 31, 2013. These are matters of great concern for us," he told investors at a Barclays meet.

The rupee was about 44 per dollar as of March 31, 2011, moving to around 54-55 as of March 31, 2013 and went further down to 62 in September last year.

"About 48% of our revenue gets translated to rupee and given that there was a devaluation of about 25% in the rupee-dollar exchange rate, we should have added approximately 12% to our operating margin," he said.

Reacting to this, the firm's shares fell by 8.54% to close at Rs 3,357.50 apiece. — PTI

Hyderabad, March 13
Budget airline SpiceJet has signed a deal with Boeing Co to buy 42 737 MAX jets in a deal worth $4.4 billion at list prices, the company said on Wednesday.

Delivery of the new jets will begin in 2018, SL Narayanan, chief financial officer at SpiceJet's parent, Sun Group, told reporters at the air show.

Payments for the order will be closer to the delivery date, he said, declining to give further details on funding plans.

Narayanan said some payments for the latest order would be adjusted against the 12 Boeing 737 NG planes from an ongoing order SpiceJet will be swapping for 737 MAX.

SpiceJet, controlled by billionaire Kalanithi Maran's Sun Group, is seen as a target for investors after India relaxed restrictions on investment by foreign airlines. It has reported interest from potential investors but has not named any. — Reuters

BRIEFLY

CBI probes MCX, FTIL and ex-SEBI chairman
New Delhi: The CBI on Thursday registered a Preliminary Enquiry (PE) against former SEBI chairman CB Bhave and ex-member KM Abraham, as also against Jignesh Shah-founded FTIL and MCX, among others. The PE was registered on the issues of alleged irregularities in granting sanction to the MCX-SX by the SEBI in 2008 and renewing the recognition in 2009 and 2010. — PTI

L&T wins Rs 3,655-cr road project in Qatar
New Delhi: Larsen & Toubro has won a Rs 3,655-crore road project in Qatar, its single largest road order in the international market. The project involves construction of 11-km road consisting of 10 lanes and four-lane sections with additional roads and ramps. — PTI

Mercedes starts assembly of S-Class in India
New Delhi: German luxury carmaker Mercedes Benz on Thursday announced commencement of assembly of the S-Class sedan in India and has slashed the car's price by Rs 18 lakh to enhance its position in the country. — PTI

Hero MotoCorp rolls out new Splendor at Rs 47,250
New Delhi: Hero MotoCorp on Thursday launched its largest-selling Splendor motorcycle in an all-new look. The new Splendor, iSmart bike, equipped with stop-and-start i3S technology, has been priced at Rs 47,250 (ex-showroom, Delhi). — TNS

Conference on ICT standards, emerging technology begins
New Delhi: The European Union on Thursday assured India to assist in establishing world-class Information Communication Technology (ICT) standards and emerging technologies. A two-day conference to discuss this issue began on Thursday. Titled “Indo-European dialogue on ICT standards & emerging technologies”, the conference was inaugurated by MF Farooqui, Secretary, DoT. — TNS