Suven Life gets three patent approvals for CNS molecules

Drug firm Suven Life Sciences today said it has received three product patents for CNS molecules, two from Eurasia and one from Canada, which could be used for treating various central nervous system disorders.

The product patents are valid through 2027, Suven Life Sciences said in a filing to the BSE. The company has received approval for molecules that could be used in the treatment of neurodegenerative disorders like Parkinson's, Alzheimer's and Schizophrenia, it added.

Products developed out of these molecules may be out-licensed at various phases of clinical development like Phase I or Phase II, the company said. Commenting on the development, Suven CEO Venkat Jasti said: "We are very pleased by the grant of these patents to Suven for our pipeline of molecules in CNS arena that are being developed for cognitive disorders with high unmet medical need with huge market potential globally."

With these new patents, the company now has a total of 10 patents from Canada and 12 patents from Eurasia, the company said. Shares of Suven Life Sciences were trading at Rs 31.20 on the BSE in afternoon trade, up 2.63 per cent from previous close.

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Order book seen at Rs 15k -17k cr in 3-6 months: Pipavav

Pipavav Defence and Offshore Engineering Company secured order worth Rs 400 crore to repair, maintain and dry docking of oil rig of ONGC. Nikhil Gandhi, chairman, Pipavav Defence told CNBC-TV18 that the company's order book has now reached to Rs 8,500 crore. Further, it is likely to reach Rs 15,000-17,000 crore in three-six months.

Below is the edited transcript of Nikhil Gandhi's interview with CNBC-TV18

Q: Take us through the order that you have got from Oil and Natural Gas Corporation Limited (ONGC). What exactly is this in terms of a margin addition? Where does it take your order book?

A: This is first major contract we have got from ONGC in terms of rigs and oil platforms, because Pipavav has built one of the largest facilities in the world. We are very proud to have made a beginning with the ONGC. It is a very prestigious contract.

ONGC has large number of oil rigs and platforms demand both in terms of construction and maintenance during the next two-three years. Pipavav being the second largest dry dock in the world remains the leader henceforth to secure many such contracts.

Sagar Laxmi is a very prestigious machine of ONGC for offshore requirement, we will provide restoration. As far as the order is concerned, this is five percent of our total order value. This takes our order value to nearly Rs 8,500 crore.

We are looking at securing couple of more contracts from the global market. Pipavav has also secured two contracts from two of the largest oil and gas exploration companies and operating companies called Transocean and Noble. So, the year has ended well for Pipavav.

Q: What are you expecting to do by way of a revenue increase in FY13 itself and then going forward in FY14 since you have a decent order book of Rs 8,500 crore as you say. Can you draw for us how the revenue trajectory will look, how the EBITDA will look and more importantly actually EPS as well?

A: The combined EBITDA normally for warship building, offshore building and drydocking put together about 25 percent on an average. The order book will have a multiplication effect in next quarter or so. Some of the bids which we have already submitted are likely to come through.

We are looking at more robust execution both in terms of current and new orders. Also, new contracts are going to be significant in numbers. Our overall usage of ship building will increase significantly and so as the EPS margins.

Q: From an international perspective as well as from a domestic order book standpoint from Rs 8,500 crore where do you expect the order book to end up possibly in the next three months as well as six months?

A: Between next three to six months our order book could be close to Rs 15,000-17,000 crore. We are also increasing manpower. We have signed Memorandum of Understanding (MoU) and are in the process of finalizing agreement with French major DCNS, which is the second largest warship builder in the world.

With them being shareholder in the company, they will support us in terms of speedier execution and also improvement of R&D, supply chain management and interfacing with clients and other partners. We are in the process of having an all-round improvement over the next one or two quarters onwards, thanks to these two partnerships that we have built - Saab of Sweden and DCNS.

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Tecpro Systems rises 3% on order from SK Engg

Shares of Tecpro Systems rose nearly 3 percent intraday on Monday as the company has received an international order worth USD 17.4 million from SK Engineering & Construction, South Korea for Paco power plant (2X160 MW) in Panama.

The company said they would undertake the design engineering, fabrication, manufacturing, inspection, packing and supervision of erection & commissioning of the coal handling & fly ash handling systems for SKEC for Paco power plant.

At 13:39 hours IST, the stock went up 0.67 percent to Rs 149.60 amid large volumes on the Bombay Stock Exchange. Market capitalisation of the company currently stands at Rs 755.09 crore.

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Delhi airport development fee halved, GMR welcomes move

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'Kingfisher licence to be renewed if revival plan okayed'

In fresh ray of hope for the Kingfisher Airlines , sources in the aviation regulator, the Directorate General of Civil Aviation (DGCA), said that the licence of the cash-strapped carrier would be renewed if its revival plan gets a go-ahead.

According to the sources, the DGCA asked the airlines for commitment on funding, urging it to talk to its stakeholders. "We have asked KFA for commitment on funding...want assurance from the UB Group on funding," said sources.

They further said that the crisis-ridden airline must satisfy the stakeholders with the revival plan for the renewal of its licence, adding that it had not provided clarity on funding operations.

This comes two days after the DGCA met Kingfisher Airlines vice president Hitesh Patel over the issue. The licence of Kingfisher Airlines is set to expire on Monday.

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Ratan Tata hangs his boots, Cyrus Mistry takes over

Corporate icon Ratan Tata on Friday retired as chairman of Tata Group after a 50-year run predicting that India's growth will reestablish after the 'passing phase' of a difficult environment, which will most likely continue in the next year.

Turning 75 on Friday, he kept away from the Bombay House headquarters of the USD 100 billion group but instead spent time with employees in the manufacturing facilities of Tata Motors in west Indian Pune city.

"At the request of the union, I spent the day - my last day prior to retirement, in the Tata Motors' various manufacturing facilities at Pune to say farewell to my shop floor colleagues. We have been together in good times and bad and have gained closeness based on mutual trust," he tweeted.

He said in his twitter message that going to the plants and receiving greetings from so many colleagues is a great emotional experience.

"I have been deeply moved by the sincerity and spontaneity of their greetings. I will always carry memories of this day with me through the rest of my life," Tata said.

In a farewell letter to all the employees, he asked the employees to live by the value systems and ethical standards the group had followed all along.

Cyrus Mistry, the 44-year-old chairman designate, who is likely to take over as Tata group Chairman tomorrow visited the office on Friday. He was groomed for the assignment by Tata for a year.

He chose group company Tata Motors' sedan Indigo Manza to travel to work on a day that marked an end of an era.

The narrow lane leading to Bombay House, one of the oldest buildings in the heritage Fort area of south Mumbai, had heavy media presence since morning in anticipation of Tata visiting Bombay House.

In his letter to employees, Tata asked his colleagues to show their "support", "commitment" and "dedication" to achieve success in these somewhat difficult times.

"The difficult economic environment that we face in the current year will most likely continue through most of the next year. We will probably see continued constraints in consumer demand, over-capacity and increased competition from imports," he said.

Tata said there will therefore be great pressure on Tata companies to reinvent themselves in terms of business processes and to dramatically reduce costs, to be more aggressive in the market place and to widen their product range to better address consumer needs.

"We will also need to contain our borrowings and work hard to retain our margins. This environment would once again call on you for your support, your commitment and your dedication to achieve success in these somewhat difficult times," he said.

Tata said the seemingly gloomy picture, however, will be a passing phase.

"I feel confident that the robust growth that India has shown over the past several years will be re-established and the strong fundamentals in the country will result in India once again taking its place as one of the economic success stories of the region," he said.

Tata, who helmed the group for 21 years after being chosen successor by his uncle, the iconic JRD Tata, in 1991, is credited with transforming the group through bold decisions including large global acquisitions, even as some of its peers struggled to stay relevant post economic liberalisation.

Mistry, who has been with the group since 2006 in various capacities hails from the Shapoorji Pallonji family, the largest private share holder of the group's holding company Tata Sons.

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Mid-tier IT firms outperform big boys in 2012

Moneycontrol Bureau

The global economic downturn weighed on the Indian IT industry in 2012, a year, which saw old leaders slump, even as several smaller rivals thrived.

Tata Consultancy Services cemented its position as the top software services provider. It has maintained that it will grow faster than the 11-14 percent growth forecast by industry body NASSCOM for FY13.

Meanwhile, Infosys , once the benchmark, stopped issuing quarterly guidance this year and only expects to grow around 5 percent. Even this, analysts say, is going to be a tough ask in the current scenario. Many including Bank of America Merrill Lynch expect the Bangalore-based company is likely to miss its guidance.

Infosys' local rival Wipro too has struggled to keep pace in the changed economic environment, where customers are now taking longer than usual in finalising IT budgets and even cutting discretionary spends.

"We expect Infosys to cut their organic FY13 US dollar revenue growth guidance to 4 percent plus (from 5 percent plus) as the impact of accentuated seasonality may result in slower ramp up of deals, especially in banking, financial services and insurance (BFSI). We expect TCS to deliver sector-leading US dollar revenue growth (3% quarter-on-quarter) followed by HCL Tech  (2.8% qoq) in organic terms," Goldman Sachs analysts Rishi Jhunjhunwala and Girish Ramkumar said in a recent report.

Wipro, which like Infosys has gone through a management rejig in the last couple of years, is also expected to underperform the broader industry, with just 2 percent sequential US dollar revenue growth in Oct-Dec (it has guided for 1.2-3.2 percent growth) and a weak 1 percent volume growth, according to the Goldman Sachs analysts.

Some analysts, however, have a contrarian view and believe Wipro, could in fact turn out to be the dark horse and stage a recovery next year.

"Wipro is likely to benefit significantly from the surge in IMS deals expected over FY13-FY14, strong growth in Energy & Utilities, and the BFSI's return to stability," says Priya Sunder of Avendus Securities.

While Infosys and Wipro struggled over the last year, smaller outsourcers like Hexaware Technologies saw strong growth.

Atul Nishar, Hexaware's chairman, recently said he was "reasonably" confident of outperforming the wider industry in 2013. This optimism came even as it was forced to cut its fourth quarter (Oct-Dec) guidance to USD 92 million from USD 94.7-96.5 million, due to changes to a project plan for a customer and impact on account of hurricane Sandy, which devastated the US east coast.

TCS, Infosys and Wipro, all have underperformed many of its peers over the last one year. Infosys and Wipro are down 17 percent and 3 percent, weighed down by their slow growth and near-term uncertainties. While TCS has gained 8 percent, many others like HCL Tech, Tech Mahindra and MindTree are up 60-75 percent.

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Cyrus Mistry to formally take charge on Monday

Cyrus Mistry, the new chairman of the Tata Group, will formally take charge of his office on Monday, company sources said. Mistry, who was appointed chairman to succeed Ratan Tata, is the sixth chairman of the Tata empire. The Group was founded as a private trading firm in 1868 by entrepreneur and philanthropist Jamsetji Nusserwanji Tata. "Today and tomorrow being holidays, Mistry will attend office in his capacity as the group chairman only on Monday," sources at the Bombay House, the Group's headquarters, said.

Ratan Tata retired as chairman of Tata Group after a 50-year run yesterday. He, however, did not attend the office on the last day as he chose to celebrate his Diamond Jubilee birthday celebrations at the Tata Motors manufacturing facilities at Pune. Mistry, who was groomed for the assignment by Tata for a year, had made a visit to Bombay House. Ratan Tata, who helmed the group for 21 years after being chosen successor by his uncle, the iconic JRD Tata, in 1991, is credited with transforming the group through bold decisions including large global acquisitions, even as some of its peers struggled to stay relevant post economic liberalisation.

Mistry, who has been with the group since 2006 in various capacities hails from the Shapoorji Pallonji family, which is the largest private shareholder of the group's holding company Tata Sons. Born on July 4, 1968, Cyrus Mistry completed his graduation in Civil Engineering from London's Imperial College of Science, Technology and Medicine and followed it up with a masters in Management from the London Business School. He was chosen by a 5-member panel last year to succeed Ratan Tata.

During Ratan Tata's tenure, the group's revenues grew manifold, totalling USD 100.09 billion (around Rs 475,721 crore) in 2011-12 from a turnover of a mere Rs 10,000 crore in 1991. Tata led the group into some notable acquisitions, starting from Tetley by Tata Tea for USD 450 million in 2000, to steelmaker Corus by Tata Steel in 2007 for GBP 6.2 billion and the landmark Jaguar LandRover in 2008 for USD 2.3 billion by Tata Motors.

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Tap local tech knowhow to lead in auto, gadget biz: Hitachi

Welcome to The Forbes India Show on CNBC-TV18.  In this episode, meet Hiroaki Nakanishi, CEO, Hitachi who has been credited for the turning the Japanese company into a global technological giant.

Below is an edited transcript of the show on CNBC-TV18.

Q: This is the first time in Hitachi's over-100 year history that the board is meeting in India. What is the significance of this development? What do you and the board sense about the Indian market?

A: India is a very important market and our presence here is still not big enough. Our Indian operations contribute only one percent to total revenue. But with India growing, we are planning to emphasise our presence in the country.

Simultaneously, we are not simply interested in the business of selling products or manufacturing of products. We wish to be involved in total engineering, manufacturing and maintenance which will strengthen our position and enable us to export products from our Indian unit to other parts of the world.

Q: Your interest in India comes at a time when the economy is slowing down to cause a significant paralysis in manufacturing and infrastructure. So what make you confident about India?

A: India holds significant promise because the government has started to announce measures to boost and implement some of the infrastructure initiatives. The second aspect that has attracted our focus is the rapid rise in population and purchasing power of the middle-class. And that will significantly affect the economic environment in India. It is to emphasise our outlook on India that motivated the board to meet in India.

Q: Do you estimate a tripling of your revenues in India by 2015?

A: Yes, I expect we can do that.

Q: What will be the specific areas of opportunity in India?

A: From the viewpoint of organic growth, one product area that is growing very rapidly is home appliances or white goods. Currently, recently our engineering teams began to adjust air-conditioners to work in India as the weather in India is completely different from that in Japan. This is the kind of new trend that is driving the industry. However we do not have a big presence in other areas such as the automotive sector.

Q: In the US and elsewhere across the globe you are a significant supplier to the auto sector?

A: The Indian automotive industry is growing even though the economy is somewhat shaky. We think we have found the answer to the new challenges facing the automotive industry. We will tap India's strength in engineering, designing, maintenance and technology to enter and strengthen our presence in this sector.

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Apple to drop patent claims against new Samsung phone

Sat, Dec 29, 2012 at 09:04

Apple Inc has agreed to withdraw patent claims against a new Samsung phone with a high-end display after Samsung said it was not offering to sell the product in the crucial US market.

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Union Bank raises Rs 800 cr through tier-II bonds

Union Bank today said it has raised Rs 800 crore through issuance of lower tier-II bonds. "We have raised additional capital to the extent of Rs 800 crore by issue of unsecured redeemable non-convertible subordinated lower tier II Bonds," the bank said in a release.

The 10-year bonds have a fixed coupon rate of 8.90 per cent per annum payable annually, it added. Earlier, the bank had announced that it has received an enabling resolution from its board to raise up to Rs 1,500 crore through bonds over the next three months. State-run Union Bank posted 57 percent jump in net profit to Rs 554 crore during the second quarter of current financial year. Shares of the bank closed 1.37 percent up at Rs 274.15 on BSE today.

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Ratan Tata hangs his boots, Cyrus Mistry takes over

Corporate icon Ratan Tata on Friday retired as chairman of Tata Group after a 50-year run predicting that India's growth will reestablish after the 'passing phase' of a difficult environment, which will most likely continue in the next year.

Turning 75 on Friday, he kept away from the Bombay House headquarters of the USD 100 billion group but instead spent time with employees in the manufacturing facilities of Tata Motors in west Indian Pune city.

"At the request of the union, I spent the day - my last day prior to retirement, in the Tata Motors' various manufacturing facilities at Pune to say farewell to my shop floor colleagues. We have been together in good times and bad and have gained closeness based on mutual trust," he tweeted.

He said in his twitter message that going to the plants and receiving greetings from so many colleagues is a great emotional experience.

"I have been deeply moved by the sincerity and spontaneity of their greetings. I will always carry memories of this day with me through the rest of my life," Tata said.

In a farewell letter to all the employees, he asked the employees to live by the value systems and ethical standards the group had followed all along.

Cyrus Mistry, the 44-year-old chairman designate, who is likely to take over as Tata group Chairman tomorrow visited the office on Friday. He was groomed for the assignment by Tata for a year.

He chose group company Tata Motors' sedan Indigo Manza to travel to work on a day that marked an end of an era.

The narrow lane leading to Bombay House, one of the oldest buildings in the heritage Fort area of south Mumbai, had heavy media presence since morning in anticipation of Tata visiting Bombay House.

In his letter to employees, Tata asked his colleagues to show their "support", "commitment" and "dedication" to achieve success in these somewhat difficult times.

"The difficult economic environment that we face in the current year will most likely continue through most of the next year. We will probably see continued constraints in consumer demand, over-capacity and increased competition from imports," he said.

Tata said there will therefore be great pressure on Tata companies to reinvent themselves in terms of business processes and to dramatically reduce costs, to be more aggressive in the market place and to widen their product range to better address consumer needs.

"We will also need to contain our borrowings and work hard to retain our margins. This environment would once again call on you for your support, your commitment and your dedication to achieve success in these somewhat difficult times," he said.

Tata said the seemingly gloomy picture, however, will be a passing phase.

"I feel confident that the robust growth that India has shown over the past several years will be re-established and the strong fundamentals in the country will result in India once again taking its place as one of the economic success stories of the region," he said.

Tata, who helmed the group for 21 years after being chosen successor by his uncle, the iconic JRD Tata, in 1991, is credited with transforming the group through bold decisions including large global acquisitions, even as some of its peers struggled to stay relevant post economic liberalisation.

Mistry, who has been with the group since 2006 in various capacities hails from the Shapoorji Pallonji family, the largest private share holder of the group's holding company Tata Sons.

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Mid-tier IT firms outperform big boys in 2012

Moneycontrol Bureau

The global economic downturn weighed on the Indian IT industry in 2012, a year, which saw old leaders slump, even as several smaller rivals thrived.

Tata Consultancy Services cemented its position as the top software services provider. It has maintained that it will grow faster than the 11-14 percent growth forecast by industry body NASSCOM for FY13.

Meanwhile, Infosys , once the benchmark, stopped issuing quarterly guidance this year and only expects to grow around 5 percent. Even this, analysts say, is going to be a tough ask in the current scenario. Many including Bank of America Merrill Lynch expect the Bangalore-based company is likely to miss its guidance.

Infosys' local rival Wipro too has struggled to keep pace in the changed economic environment, where customers are now taking longer than usual in finalising IT budgets and even cutting discretionary spends.

"We expect Infosys to cut their organic FY13 US dollar revenue growth guidance to 4 percent plus (from 5 percent plus) as the impact of accentuated seasonality may result in slower ramp up of deals, especially in banking, financial services and insurance (BFSI). We expect TCS to deliver sector-leading US dollar revenue growth (3% quarter-on-quarter) followed by HCL Tech  (2.8% qoq) in organic terms," Goldman Sachs analysts Rishi Jhunjhunwala and Girish Ramkumar said in a recent report.

Wipro, which like Infosys has gone through a management rejig in the last couple of years, is also expected to underperform the broader industry, with just 2 percent sequential US dollar revenue growth in Oct-Dec (it has guided for 1.2-3.2 percent growth) and a weak 1 percent volume growth, according to the Goldman Sachs analysts.

Some analysts, however, have a contrarian view and believe Wipro, could in fact turn out to be the dark horse and stage a recovery next year.

"Wipro is likely to benefit significantly from the surge in IMS deals expected over FY13-FY14, strong growth in Energy & Utilities, and the BFSI's return to stability," says Priya Sunder of Avendus Securities.

While Infosys and Wipro struggled over the last year, smaller outsourcers like Hexaware Technologies saw strong growth.

Atul Nishar, Hexaware's chairman, recently said he was "reasonably" confident of outperforming the wider industry in 2013. This optimism came even as it was forced to cut its fourth quarter (Oct-Dec) guidance to USD 92 million from USD 94.7-96.5 million, due to changes to a project plan for a customer and impact on account of hurricane Sandy, which devastated the US east coast.

TCS, Infosys and Wipro, all have underperformed many of its peers over the last one year. Infosys and Wipro are down 17 percent and 3 percent, weighed down by their slow growth and near-term uncertainties. While TCS has gained 8 percent, many others like HCL Tech, Tech Mahindra and MindTree are up 60-75 percent.

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Maruti Suzuki gains 2% on assembly plant in Africa

Country's largest car producer Maruti Suzuki India gained as much as 2.2 percent intraday on Friday after agencies reported that the company is considering setting up its first overseas assembly plant in Africa as it seeks to revive exports.

The Financial Express reported that the company is scouting for new export markets and Africa is more or less untouched, chairman RC Bhargava said.

"Countries that are on the cusp of motorisation may be key to Maruti's plan of doubling exports in the next four years as Europe struggles to recover from a slowdown, according to head of sales Mayank Pareek," the report said.

Among other developments, recently the company has started spadework to set up its second facility in Gujarat with acquisition of another 600 acres, in addition to its existing plan to invest Rs 4,000 crore for setting up a plant in the state. The company also said it expects about 6-7 per cent sales growth in 2013-14 after closing the current fiscal with about 6 per cent rise in vehicle sales.

Commenting on exports, MSI Managing Director and CEO Shinzo Nakanishi had said MSI is finding it tough due to the decline in European market. "Last year we had a total export of 1.27 lakh units. This year we may be a little less than that because of the slowdown in Europe, which used to be our biggest overseas market," he said.

MSI has been exploring new markets to keep its overseas sales momentum, Nakanishi said.

At 12:21 hours IST, the stock rose 1.6 percent to Rs 1,506 on the Bombay Stock Exchange.

(With inputs from PTI)

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Ratan Tata: How he turned around Tata

Ratan Tata's reign at Tata Sons ends today. Cyrus Mistry will take over as chairman of the conglomerate that makes tea, coffee as well as software, steel, motor cars and everything in between. CNBC-TV18's Menaka Doshi takes a look at the life and times of Ratan Tata.

In March 1991 JRD Tata, an icon of Indian industry stepped down as Tata Group chairman to make way for a 54 year old handsome, tall, over 6 feet, Cornell architecture graduate with the same illustrious surname Tata.

Ratan Tata had left India at the age of 15 and returned 10 years later in 1962, to join the Tata Group. Working in the group's ailing textile mills, in the furnaces of Jamshedpur, reviving Nelco, and 29 years later taking over as chairman.

On the occasion Arun Shourie, former telecom minister said, "I remember that 20-25 years ago the Tata's were a collection of fiefdoms. These were very good people but they were powers in their own right. Darbari Seth was a formidable figure and so were Rusi Modi,Nani Pankhiwalia. These were wonderful people but it was not a group. Ratan Tata slowly changed that or rather rapidly changed that nature of the group by bringing in persons of his own age group,"

Harish Bhat, (Author, Tata Log) CEO & MD, Tata Global Beverage said, "Undoubtedly Ratan Tata has made the Tata Group far-far more cohesive than it was earlier. That is the powerful identity of a single Tata brand that is uniting the entire group today. That was a fresh identity that he brought in, when he was chairman of the group. That is a business excellence model which links the group together. There are people who link the group together; there is a sense of common identity and common strategy that binds the group today and of course a sense of common purpose, which has bound the group together for several decades now."

Those who know him describe him as a pioneer, a visionary and a leader passionate about technology. Ratan Tata proved that when he introduced the first 'made by India' car - the Indica and 11 years later the people's car, the 1 lakh rupee Nano.

Hormazd Sorabjee, Editor, Autocar says,"I think Ratan Tata is an absolute visionary. We have seen that with Indica, no one thought that could be done and it was done. Again with the Nano, it was not a success but as a product it was done. Perhaps the execution is where is not been upto level, it has not fulfilled the vision completely. I think perhaps that is one area which Ratan Tata must be disappointed."

However, the fear of failure has never stopped Ratan Tata from giving his best. In 2007 in an interview to CNBC-TV18 he had said, "I'm the one who took the big risks; you have to have a belief and see it to the end."

Despite the Nano's lack of success, the mega acquisitions that will take time to fully pay off- Dilip Pendse Tata Finance fraud, the Niira Radia tape controversy - Ratan Tata's 21 years as chairman have helped grow the group to USD 100 billion in revenue, 60% of which come from overseas.

In the 2007 interview Ratan Tata, outgoing chairman, Tata Group had also said, "I am often misunderstood in our companies for being too critical but it is because I want to hold my head high and say we are world-class."

That mission will continue as Ratan Tata leaves Bombay House to head the key charities that control Tata Sons, the group's holding company. Figuratively and literally, he's just around the corner.

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Chettinad Cement up 4% ahead of board meet for delisting

Shares of Chettinad Cement rallied as much as 4.4 percent to touch an intraday high of Rs 988 on Friday as the company is going to consider delisting today.

The meeting of the board of directors of the company will be held today, for considering the draft notice and special resolution to be passed by the shareholders of the company through postal ballot in regard to voluntary delisting offer to the public shareholders of the company.

Delisting offer was made by M/s. Chettinad Holdings (P) Limited (the Acquirer), belonging to the promoter group of the company, with a view to delist the equity shares of the company from the National Stock Exchange of India Limited (NSE) and Madras Stock Exchange Limited (MSE), and to withdraw the permitted to trade status from the Bombay Stock Exchange Limited (BSE), the company said in a release.

Promoters hold 88.44 percent stake in the company, as on September 2012.

At 12:13 hours IST, the stock rose 3.58 percent to Rs 980 on the Bombay Stock Exchange.

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Suzlon surges 9% ahead of lenders meet on CDR package

World's fifth largest wind turbine supplier Suzlon Energy rallied as much as 9 percent to touch an intraday high of Rs 19.60 on Friday as the lenders will meet today to discuss CDR package.

The Financial Express reported that the lenders to debt-ridden Suzlon will meet on Friday to discuss its corporate debt restructuring (CDR) package.

The report says, "Though Suzlon's Rs 11,000 crore debt has been admitted into the CDR cell, the company's recast package has not yet been approved by the lenders. Over the last few weeks the monitoring committee or the largest lenders to Suzlon, including SBI and IDBI Bank, have been meeting to thrash out the finer details of the package. This will now be presented to the rest of the consortium on Friday."

At 12:40 hours IST, the stock rose 8.36 percent to Rs 19.45 amid heavy volumes. In the previous trading session, the share gained 2 percent to close at Rs 17.95.

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Binani Cement eyes foreign presence via stake sale, says MD

News of Binani Cement divesting about 40 percent of its stake to a subsidiary in Singapore drove the share prices up to a 52 week high on Wednesday. Vinod Juneja, MD of Braj Binani Group told CNBC-TV18, the company is interested in becoming an international player and the stake sale would be in line with that objective. He also added that the sentiment about the cement industry has improved of late and therefore, they are planning expansions in places like China and Dubai.

Here is the edited transcript of the interview on CNBC-TV18.

Q: There have been rumours that apparently you are looking to divest about 40 percent stake in Binani Cement . First, would you want to confirm that and how far are negotiations already?

A: There is no negotiation. I only want to mention that till recently, Binani Cement was having 25 percent equity of JP Morgan and 10 percent of Credit Suisse. So, there is nothing new and 35 percent of the equity of Binani Cement till 2008-2009 was between JP Morgan and Credit Suisse. Binani Cement as a cement company is not only limited to India. We have got plants in India where we have got a capacity of 6.5 million tonne in two different locations in India but, now we have also become a global player.

Binani Cement has got a plant, it is the only Indian company which has got a 3 million tonne cement plant running in China. A 3 million tonne plant is also running in Dubai. We have now become a global player. Last year, we have done share buybacks whereby, we have purchased whatever shares were there in the market for a good price.

We are holding almost 99.6 percent equity in Binani. We have got equity base of Rs 180 crore and we think it is a fairly good equity for Binani. We always thought it is for us and if we have to disinvest, as we have said, our board has decided on it recently. But, we have not made any concrete plan. We know how to do it but, definitely we wanted to become an international player.

Binani Industries which is a holding company is still listed. Binani Cement which till last year was listed both in BSE and NSE and at that time, listing for Binani Cement was 10 percent done by JP Morgan. Now the right time has come. We thought we will do something. There is no point because we have to go for expansion, we have to go for overseas acquisition and Binani has to look out for opportunities. We require these and we want to be liquid.

There is no point in keeping 100 percent equity with you. We said this is the right time so let us see how it shapes up because so far there is a good sentiment for the cement industry in India.

There is a good outlook from every known credit analyst and everybody holds a positive outlook on the cement and pharma industry. This particular year, 2013-2014, when it is an election year infrastructure will be more in demand whether it is for roads or bridges and things will improve.

Q: We understand that it is a good year for the cement industry. One clarification we wanted was whether you have got a specific capacity increased target in mind for which you need some cash which might induce some kind of offering or equity offering to global investors. Is that on the cards, do you have a specific capacity expansion in mind?

A: Yes. We want to expand in China. So far we have got a clinkerisation plant, we are trying to put up another in China. We are trying to put up another grinding unit to increase our capacity. In Dubai also we are trying to do the same. These are some of the things in line and we are trying to work it out.

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Kalpataru Power gets new orders worth over Rs 950cr; stk up

Kalpataru Power Transmission has received new orders worth over Rs 950 crore, reports CNBC-TV18.

At 13:31 hrs Kalpataru Power Transmission was quoting at Rs 92.60, up Rs 3, or 3.35%. It has touched an intraday high of Rs 93.85 and an intraday low of Rs 89.60.
 
It was trading with volumes of 137,878 shares, compared to its five day average of 27,932 shares, an increase of 393.61%.
 
In the previous trading session, the share closed up 1.19% or Rs 1.05 at Rs 89.60.

The company's trailing 12-month (TTM) EPS was at Rs 12.42 per share. (Sep, 2012). The stock's price-to-earnings (P/E) ratio was 7.44. The latest book value of the company is Rs 113.57 per share. At current value, the price-to-book value of the company was 0.81. The dividend yield of the company was 1.62%.

 

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Confident of achieving double-digit growth in H2: Sun TV

SL Narayanan, Group CFO, Sun Group, says that the subscription revenues are good and there has been tangible evidence of increased sales of DTH connections on the ground and now the company is in much better shape. In December 2011, no revenue was contributed from the Tamil Nadu analog ecosystem. But in this quarter we will see revenue between Rs 7.5-8 crore.

Below is the edited transcript of his interview to CNBC-TV18.

Q: How do you see subscription revenue growth in the second half of the year, in the first half at least in the past six quarters, they have range from low single digits to at times even negative, the second half there are some people who expect a double digit growth, are their hopes fructifying?

A: Basically, we have seen complete reversal of stocks because digitization was still a distant thing but in the last few weeks we have seen with great satisfaction the progress on the ground.

It is more heartening to see that the government is extremely committed to the implementation date for the phase II, which is April 1. Sun TV has some large markets on footprints like Hyderabad, Bangalore and Vizag. The subscription revenues are good and there has been tangible evidence of increased sales of DTH connections on the ground. The company is in much better shape now.

On the cable side, we had signed the deal with Arasu, which is the analog system in Tamil Nadu. So we will see the first full quarter of revenues coming in from that set of subscribers. In December 2011, no revenue was contributed from the Tamil Nadu analog ecosystem. But in this quarter we will see revenue between Rs 7.5-8 crore.

Q: Overall, what might be the subscription revenue growth you think in the second half, year-on-year comparison?

A: Between direct-to-home (DTH) and cable, we are growing at about 8-9 percent and we will do even better in this quarter.

Q: How is the ad revenue looking at this point in time especially for Sun TV and do you expect to come back to those growth rates that you were clocking possibly in FY10-FY11?

A: Ad revenue is looking better. We had been consistently guiding to a low single digit growth in the first half, we are now confident that we will see double digit growth in the second quarter.

Q: Will you be able to push up therefore ad rates?

A: No, at this time we are still coming out of a very difficult situation. Right now we are seeing some early signs of growth. We don't have any plan to increase tariffs but towards the start of the next financial year, we could see some opportunities for growth.

Q: Can you quantify when the last time ad rate hike was taken was?

A: We did not increase ad rates for the whole of FY12 but before that we had some increases. FY12 was an extremely difficult year not only for the media industry but across the board. Interest rates were high; there were difficult situation in telecom and auto business.

Interest rate sensitive like auto and real estate was down. FMCG sector cut down their spending and 55 percent of our revenue comes from the FMCG universe. So we took bidding in FY12 because of a variety of reasons so we did not increase rates that year. About nine months gone into the current financial year, I do not think we will increase rates before the start of next financial year.

Q: Many analysts were quite surprised with the move with regards to the IPL diversification. Can you explain the rationale behind the diversification into cricket considering the past that we have seen in terms of finances have not been great for the IPL franchises, do you think that for a company such as Sun TV which has had a very clean balance sheet as of now, it would put some amount of added stress going forward and might not be taken that keenly by investors?

A:  Our diversification in to IPL will not in any way disturb the strength of our balance sheet because the way the cash flows are planned out for IPL, whatever we keep spending, keeps coming back in terms of distribution from the central sponsorship rights. So we do not think there will be any major investment into the IPL business barring some lost funding in the first year which is not going to be more than 50 paisa per share.

We will see a breakeven in the beginning of second year. We have not bid extraordinarily high sum of money. Our bid amount was about 50 percent of the amounts that were bid in the previous rounds. So we are very conservative for putting out our bid amounts and we also think that given the kind of distribution possibilities out of the central pool which Board of Control for Cricket in India (BCCI) controls, there will be very minimal exposure, more like a working capital funding.

We will start making money from third year onwards. The title sponsorship rights have now gone for a substantially higher sum for the second half of the IPL tenure. Those upsides have not even been factored into our business plan projections.

watch for more....

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Kalpataru Power rises 5% on Rs 955-cr order

Shares of Kalpataru Power Transmission gained as much as 4.7 percent to touch an intraday high of Rs 93.85 on Thursday as the company has received new orders worth over Rs 955 crore.

Kalpataru Power says new orders include supply & installation of 800 KV HVDC - 238 kms transmission line worth Rs 405 crore from Power Grid Corporation; two projects of 132 KV D/C - 420 kms transmission line worth Rs 260 crore in Uganda; 230 KV S/C - 228 kms transmission line worth over Rs 140 crore in Armenia and 138 KV S/C, 80 kms transmission line of Rs 65 crore in Philippines.

Electrical system revamp project at Hazira worth Rs 85 crore from ONGC was also a part of new orders.

At 13:42 hours IST, the stock rose 3.52 percent to Rs 92.75 amid large volumes on the Bombay Stock Exchange.
 
Trading volumes increased 398 percent to 1,39,131 shares as compared to its five day average of 27,932 shares.

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SP downgrades Egypt credit rating on 'elevated' tensions

Rating agency Standard and Poor's today downgraded Egypt's long-term credit rating because of "elevated" tensions over its political crisis, and warned it could be lowered further.

The country's long-term rating was lowered to 'B-' from 'B' because the turmoil has "weakened Egypt's institutional framework, and the increasingly polarised political discourse could diminish the effectiveness of policy-making," the agency said.

"A further downgrade is possible if a significant worsening of the domestic political situation results in a sharp deterioration of economic indicators such as foreign exchange reserves or the government's deficit," it said.

Egypt's economy, once a vibrant opportunity for investors, was brought low by the early 2011 revolution that ousted Hosni Mubarak, ruler for the previous three decades.

The uncertainty has not improved under President Mohamed Mursi, who came to power in June on the back of support for his Muslim Brotherhood and other Islamists.

Agreement on a USD 4.8 billion loan from the International Monetary Fund was put on hold this month because of the political impasse Mursi has found himself in amid fierce opposition protests.

The IMF money is needed to prevent a collapse of Egypt's currency. The country's central bank foreign reserves have more than halved since Mubarak's overthrow to less than USD 15 billion.

"The downgrade reflects our opinion that political and social tensions in Egypt have escalated and are likely to remain at elevated levels over the medium term," Standard and Poor's said.

The political polarisation will likely weaken international consensus on extending credit to Egypt, it said. "We expect political tensions to remain elevated, with no clear indication that rival factions will be brought to a point at which they can contribute to addressing Egypt's economic, fiscal, and external challenges," the agency said. The agency's short-term rating for Egypt was maintained at 'B' but with a negative outlook.

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WB govt's land policy affected industrial climate

After a historical victory on the plank of Maa-Maati-Manush (mother-land-people), the Trinamool Congress government grappled with major economic issues during the year, which experts say, would warrant dramatic reversal of policies on issues such as land acquisition.

It is felt the Chief Minister Mamata Banerjee's emphasis on a rigid land policy has pleased the farming community but not the industry.

Banerjee's consistent tirade as the Opposition leader against Tata Motors ' Nano plant at Singur, which was finally cancelled, had its impact on investor confidence in the state.

It would have required a turnaround in the policy of the incumbent state government to woo investments by convincing farmers on the need to have a simultaneous growth in industry along with agriculture.

Induction of industry-savvy former secretary general Ficci Amit Mitra as finance minister fuelled hopes of industrial revival during the year after Banerjee came to power in May 2011, ending the 34-year old Left rule.

In August 2012, the state government formed a panel of Group of ministers (GoM) to formulate a new industrial investment policy for West Bengal. Besides Mitra, the panel included Industry Minister Partha Chatterjee and Labour Minister Purnendu Bose.

Banerjee also announced that a new policy that would focus on IT and NRIs.

Besides, she said a decision had been taken to set up two deep sea ports, in Sagar and Rasulpur and that global tenders would be floated for both of the them.

Industrialists apprehend the government's emphasis that there would be no forcible acquisition of land and industry would have to directly purchase from land owners, could slow down investments to a trickle.

Success of the proposed investments by companies like Jai Balaji Steel, Bhusan Steel, NTPC (Katwa power project) and Kulpi port, that would involve investments of over Rs 40,000 crore, will hinge on a industrial-friendly policy, they say.

Not only the land policy, the state government's decision of not allowing IT SEZs has also cast a shadow on the possible entry of IT major Infosys in Bengal.

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Tax sops may boost sagging insurance sector in 2013

The long-pending Bill seeking to raise FDI limit to 49 per cent in insurance business remained stuck in 2012, although going ahead the sector may see some action with the government expected to extend tax sops to boost the sagging industry.

 Prodded by finance minister P Chidambaram, the tax authorities and insurance regulator Irda are working on the possibility of removing Service Tax on first premium and create separate exemption limit for pension schemes.

 A slew of incentives being considered by the finance ministry may provide the much-needed booster dose to the life insurance industry.

 The Department of Revenue is examining whether, in addition to NPS, some insurance pension products - as approved by Irda - may be included in the separate limit over and above the limit of Rs 1 lakh under section 80C of the IT Act for the purpose of income tax deduction on the premium paid.

 Besides, the Department is looking into the proposal of exempting annuity policy from service tax in line with National Pension Scheme (NPS) and may reduce the levy on single premium products.

 The CBDT is considering whether the total sum paid for post-retirement medical scheme could be made eligible of income tax deductions.

 The announcements by the Finance Minister are expected to stimulate the growth of the sector.

 "I am sure all the draft guidelines will be finalised in the first quarter of the year. I am also confident that 2013 will see the collaborative efforts to grow the life insurance sector gaining further strength. This will result in a clearly laid out roadmap for the sector," Max Life Insurance Managing Director Rajesh Sud said.

 Echoing similar views, Reliance Life Insurance, President and Executive Director Malay Ghosh said: "We hope to see several enabling regulations, as mentioned by the Finance Minister, in the next few months to drive stable growth for the industry in the coming years."

 The key initiatives expected by the industry include bancassurance, open architecture, use and file product approval process and simplifying agency licensing process.

 During 2012, the Cabinet approved the much-delayed Insurance Bill, for approval and passage in Parliament so that foreign investors can pump in more funds into the capital intensive sector.

 The government had introduced the Insurance Bill in the Rajya Sabha in December 2008 to improve and revise laws relating to the sector in the wake of private participation.

 The insurance amendment Bill is an omnibus legislation to change parts of three Acts: Insurance Act, 1938; Insurance Regulatory and Development (Irda) Act, 1999, and General Insurance Business Nationalisation Act. .

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Sugar tasted sweeter this year; industry sees decontrol

Sugar tasted sweeter this year for the Rs 80,000 crore industry which saw bumper production, higher exports and signs of freedom from government control, but consumers had to pay Rs 10 per kg more for the commodity through the year.

High retail prices helped sugar industry recover costs and clear almost entire cane payments to farmers -- worth Rs 52,000 crore in 2011-12 marketing year (October-September).

The year started on a good note with the Prime Minister appointing an expert panel in January to examine the decontrol of the sugar sector, ending on a hope that 2013 could be a landmark year with government freeing the only industry left under its control.

Sugar industry, on which five crore cane farmers depend, is controlled right from fixing the cane price to marketing of the sweetener.

Much to the industry's liking, the expert panel headed by PMEAC Chairman C Rangarajan submitted a positive report on the decontrol of sugar sector in October with recommendation of immediate removal of two major controls - regulated release system and levy sugar obligation.

Through the release mechanism, the Centre fixes the sugar quota that can be sold in the open market and under the levy system, it asks mills to contribute 10 per cent of output to run the ration shops costing industry Rs 3,000 crore a year.

Even before the report was submitted, the government had started to loosen its grip on the sector by relaxing the regulated release mechanism in April from monthly basis to quarterly, and then later to a four-monthly exercise. The move has helped mills manage inventories and cash-flows better.

The government has hinted that it would eventually phase out sugar quota allocation for open market sale. It has also started the consultation process with states on removing levy obligations and sugarcane pricing.

At the fag end of the year, Food Minister K V Thomas assured the industry leaders that Rangarajan report would not meet the fate of earlier reports.

"The decision on some of the recommendations will be taken in the next 4-5 months. It will take some time, we cannot take decision in haste. We are taking views of the state governments," Food Secretary Sudhir Kumar said.

Way back in 1971-72 and 1978-79, the government had made attempts on decontrol. Agriculture Minister Sharad Pawar also tried for the decontrol in 2010 when he was holding the charge of Food Minister, but without any result.

Besides some action on the decontrol front, the year also witnessed surplus sugar production, prompting the government to initially allow exports of 2 million tonnes and then freeing shipments altogether in May. .

Sugar output rose to 26.34 million tonne in the 2011-12 marketing year (October-September), as against 24.4 million tonne in the previous year. Exports from India, the world's second largest producer but biggest consumer, stood at 3.4 million tonne, as against 2.6 million tonne in this period.

The government provided another major boost to the sugar industry by allowing price of ethanol (a bye-product of sugarcane) to be decided by the market forces.

In November, the Cabinet Committee on Economic Affairs (CCEA) approved that procurement price of ethanol would be determined by oil marketing companies and ethanol suppliers.

It had fixed an ad-hoc price of Rs 27 per litre in 2010.

The CCEA's direction to oil firms on the implementation of 5 per cent mandatory ethanol blending with petrol against the current level of 2 per cent would be beneficial for the sugar mills with expected rise in demand for ethanol.

The year turned out to be fruitful for sugarcane farmers as well; they got better price from the industry and cane payment arrears were also not very high at Rs 444 crore for 2011-12 marketing year that ended in September.

Higher cane price pushed up retail rates by about Rs 10 in last one year to Rs 44-45 per kg, adding to burden on consumers who are already facing the burnt of high inflation.

Branded, packed sugar is being sold at about Rs 50 a kilo.

However, there was not much hue and cry this year on sugar price rise as had happened in 2009-10, when rates touched Rs 50 per kg. The reason being gradual increase in the prices and not sudden spurt in rates.

The price of the sweetener could go up further next year with the Centre increasing cane rates to Rs 170/quintal for 2012-13, from Rs 145 in the previous year. Moreover, Uttar Pradesh, which declares its own cane price, has increased rates to Rs 280-290/quintal, from Rs 240-250.

Not only that, sugar production is expected to decline to 23.5 million tonne in 2012-13 although output will remain higher than annual domestic demand of 21-22 million tonne for the third consecutive year.

"There was this atmosphere that sugar production might fall drastically due to drought situation. But the situation has improved. Earlier we were expecting 23 million tonne production, but now 23.5 million tonne. So, the situation is comfortable and prices are under control," the Food Secretary said.

Indian Sugar Mills Association (ISMA) too was satisfied with the year coming to a close.

"It was a good year for the sugar sector. Mills could recover cost from July onwards. The cane price arrears to farmers have almost been cleared," ISMA Director General Abinash Verma told PTI.

"The Rangarajan Committee report on decontrol has come during 2012 which was on expected lines. We look forward to its acceptance by the government in 2013," Verma added.

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Vodafone concerned over sale of spectrum held by operators

Vodafone India has expressed concern over government's decision to put on the block all spectrum that is currently being held by telecom operators whose licences are expiring in 2014.

"We are deeply concerned with these developments as these are unfair, discriminatory, contrary to the terms of licence and against public interest," Vodafone's Resident Director TV Ramachandran said in a letter to Telecom Secretary R Chandrashekhar.

The telecom secretary had recently said that government will auction the spectrum being held by incumbent GSM operators in 900 MHz band whose licence are coming up for renewal in November 2014.

Also Read: Chargesheet filed in spectrum allocation case in NDA regime

They will, however, be allowed to hold 2.5 Mhz in each circle in the same band even after expiry of their licences after a paying a market-determined price.

Vodafone is one of the company whose licences in Delhi, Mumbai and Kolkata are due for renewal in 2014.

"Most importantly, they, in effect, are coercing participating in the auction particularly in our case since three of our unified access licences are due for extension in November 2014," he added.

Ramachandran said that any decision that licences can be assured of spectrum only if they participate in the auctions is completely untenable both under policy and licence.

The Union Cabinet on December 13 approved reduction of 30 percent in reserve price for spectrum in 1800 MHz band for 4 service areas Delhi, Mumbai, Karnataka and Rajasthan where no bids were received during auctions held in November, 2012.

The new base price after 30 percent cut would be Rs. 485.142 crore for Delhi, Rs. 474.915 crore for Mumbai, Rs. 231.084 crore for Karnataka and Rs. 46.956 crore for Rajasthan.

"At these reserve prices, spectrum cost will be excessive resulting complete non-viability of our businesses. It would jeopardise competition amongst service providers, ultimately harming the consumers and the sector," he said.

He said that at such rate of spectrum, Company's spectrum cost in Delhi and Mumbai will be 15 to 19 times more than other existing players whose licences are not under extension at present.

Vodafone requested government to review its decision and said, "There are some other decision taken by the Union Cabinet that are of concern to us."

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FDI, Wal-Mart controversies: An eventful year for retail

The retail sector, where the government permitted foreign direct investment in multi-brand, courted controversies during the year with several opposition parties making it a political issue in Parliament. Even before its entry into multi-brandretail, the global chain Wal-Mart was grappling with various issues, including spending money in the US on lobbying for entry into India.

Adding action to the drama was Swedish furniture chain IKEA's hectic bargaining with the government over sourcing clauses for its foray into the Indian market with plans to invest Rs 10,500 crore, the largest FDI in single-brand retail so far, and the alleged Rs 870 crore fraud in Reebok India by its two top executives. The year started on a sombre note for the sector, with the lingering effect of the decision to put on hold relaxation of FDI in retail in 2011.

Also Read:

Small stocks make big gains in 2012, large peers lag behind
FDI inflows jump 65% to $1.94 bn in October

After battling stiff political opposition, the government allowed 51 per cent FDI in multi-brand retail in September this year, but left it to the states to permit global retailers to open stores. The government also gave its go ahead for 100 per cent FDI in single-brand retail from 51 per cent earlier. The sourcing norms for FDI exceeding 50 per cent in single brand retail was also tweaked, changing the previous "mandatory" sourcing requirement of 30 per cent of items from micro, small and medium enterprises (MSMEs) to "preferably" from MSMEs.

It, however, required foreign firms that wanted relaxation of the 30 per cent procurement norms to set up manufacturing facilities in India. The step to let FDI in multi-brand retail didn't go down well with Opposition parties and erstwhile UPA ally Trinamool Congress, which decided to withdraw support from the government over the issue and others, including hike in diesel prices.

The issue stalled proceedings of Parliament till the government agreed to a voting on allowing of FDI in multi-brand retail that it managed to win, thanks to the abstention of Samajwadi Party and Bahujan Samajwadi Party. Just when the government thought it was done with the issue, Wal-Mart's disclosure in the US that it spent close to USD 25 million (about Rs 125 crore) since 2008 on its various lobbying activities, including on issues related to "enhanced market access for investment in India", created furor again. The Opposition stalled Parliament for many days on the issue.

As per Wal-Mart's lobbying disclosure reports, the company has continuously lobbied for its India entry since 2008, except for a few quarters in 2009. The company, however, stressed that it did not pay bribes to anyone in India.

Another issue that created controversy was Wal-Mart's USD 100 million investment in Cedar Support Services, an arm of Bharti Ventures, when FDI in retail was not allowed. Now, the Enforcement Directorate is investigating the alleged violation of FDI regulations under Foreign Exchange Management Act, 1999, by cash-and-carry chain Bharti Walmart -- the equal joint venture between Wal-Mart and Bharti group.

Not only Indian authorities, Wal-Mart itself is probing allegations of corrupt practices against it in foreign markets, including India. In March this year, the firm started a worldwide review of its policies, practices and internal controls for US Foreign Corrupt Practices Act compliance.

Following this, Bharti Walmart suspended five people, including Chief Financial Officer Pankaj Madan, as part of the global investigation. After this, the JV decided to put a halt on opening of new cash and carry wholesale stores in India pending the probe.

While Wal-Mart hit the headlines in multi-brand, it was IKEA that made news continuously in the single-brand segment. The Swedish furniture announced plans to invest Rs 10,500 crore in India to open 25 stores over a period of time. It had proposed to invest 600 million euro (Rs 4,200 crore) to open 10 stores in the first stage. The remaining 900 million euro (Rs 6,300 crore) for opening 15 more stores.

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IKEA approaches FIPB again; seeks review of its application

Swedish furniture retailer IKEA has approached FIPB again seeking a review of its earlier application so that it is allowed to open cafeteria at its proposed single brand retail stores in the country.

On November 20, the Foreign Investment Promotion Board (FIPB) approved the IKEAs proposal to invest Rs 10,500 crore to open single brand retail stores in India, but pruned the list of items which it wants to sell.

Besides furniture, the Scandinavian firm in its original application had sought government approval to sell items such as textile products, consumer electronics, leather products, lifestyle products, and food and beverages to be served at its restaurants and cafe.

"IKEA has again sent its application for review, seeking permission to let it open cafeteria at least," an official source said.

Three big Indian retailers post Rs 1,200 cr loss in FY11

The Department of Industrial Policy and Promotion has forwarded the review application along with its comments in support of IKEA. The FIPB is expected to take up the proposal in the next meeting, the source added.

"So many other foreign companies, which want to open stores in India, are keenly watching the developments in IKEA proposal. The government needs to send a healthy signal on the issue," another source said.

IKEA, the world's largest furniture retailer, operates 336 stores in 44 countries. It plans to invest USD 778 million to set up 10 furnishing and homeware stores as well as allied infrastructure over 10 years.

Subsequently, it plans to invest USD 1.7 billion to open 15 more stores. The company has said it will take three years to build a supply chain to roll out its first outlet in the country.

It was the third foreign company after apparel maker Brooks Brothers and Pavers England, the UK-based shoemaker, to obtain FIPB approval under the foreign investment policy for single-brand retail.

Key Cabinet ministers have touted IKEA's proposal as evidence that foreign investors are still bullish on India, and the government diluted some contentious provisions of its single-brand retail policy.

The FIPB has approved a total of 66 proposals pertaining to single-brand retailing since 2006.

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Looking to raise Rs 1500 crore via perpetual bonds: UBI

Debabrata Sarkar, CMD of Union Bank of India said they are looking to raise perpetual bonds worth Rs 1500 crore. Taking into consideration the Basel III committee recommendations, a mix of tier II bonds along with perpetual bonds may help them raise capital in the December quarter itself, he believes.
 
Sarkar further elaborated that out of the Rs 1500 crore, Tier I perpetual bonds will be worth around Rs 300 to 400 crore.

Here is the edited transcript of the interview on CNBC-TV18.

Q: What is your capital adequacy now, what is the Tier one and what would you like it to be in this fiscal year?

A: As far as my current capital is concerned, till September the total capital adequacy ratio was 11.39 percent and tier one was 8.17 percent while tier two was at 3.22 percent.

Q: At the end of the third quarter all this would have been trimmed by about 0.5 percent you think given the credit growth?

A: Last Saturday we had a board meeting and we took the authority's mandate for Rs 1500 crore, both in Tier II as well as in case of perpetual bonds. We are checking the present growth so that we can look into the credit growth.

Q: You all are looking to raise about Rs 1500 crore of bonds. So could you walk us through what that will do?

A: From January 1, 2013 Basel III committee recommendations will be implemented. So keeping these in mind, we thought that perpetual bonds can go for Rs 1500 crore with a mix of tier II bonds as well as perpetual bonds so that we can raise a little bit in this December quarter itself.

Q: You are going to raise Rs 1500 crore only through perpetual bond?

A: Perpetual as well as through a tier II mix, considering the appetite of the market.

Q: So what will be the Tier I part of the perpetual bond of this Rs 1500 crore?

A: At this moment, we think out of this Rs 1500 crore, around Rs 300 to 400 crore will be raised via Tier I capital perpetual bond, in accordance with the appetite of the market and the rest will be raised by Tier II considering the absorption capacity of the market.

More to come.

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Hinduja group acquires US based- Houghton Int'l for $1bn

The Hinduja group has done some christmas shopping for a whopping 1 billion dollars. Gulf Oil which is owned by the Hinduja group, has acquired US based Houghton International. This will make them the ninth largest in the lubricant space, reports CNBC-TV18's Sajeet Manghat.

This acquisition has been done through debt and equity. The debt comprised 70 percent and 30 percent. This will eventually be infused into Houghton International to work better. Houghton International is a niche player, which is basically into metal working fluids. In the USD 6 billion market, it has a share of 12 percent and that's where Hinduja Group plans to leverage.

It has 12 manufacturing facilities spread over 10 countries. This would enable Hinduja Group to increase its revenues from global markets. Houghton International has a 12 months sale of USD 858 million. It also has earnings before interest, tax, depreciation, and amortisation (EBITDA) of USD 132 million. The Gulf Oil today has consolidated sales of nearly Rs 1,300 crore. So that's where the big picture is going to be come in.

It is not going to be an easy job for Hinduja Group because Houghton is in markets. Thes markets are traditionally weak in terms of economic activity, especially Europe, North America and Asia. This means that the improvement in the markets margins would be very modest. However, from the Hindujas point of view the synergies will work perfectly. They can leverage the partnerships and the facilities in across 10 countries. They can also offer Houghton access to new markets in Asia, especially India.

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Single FSA for PSUs and private coal consumers

There would a single "Fuel Supply Agreement" (FSA) draft for both public and private sector power companies seeking coal from Coal India Ltd . "There will be only one single FSA for both private and public parties," Union Coal Minister Sriprakash Jaiswal said on the sidelines of a two-day World Confluence on Human, Power and Spirituality conference.

However,minister did not elaborate. Coal India officials said at present, there were minor differences in the draft clauses for public and private power companies such as on security deposit and provision for arbitration clauses. The draft for PSUs allowed arbitration in case of dispute and there were some relaxations on security deposit. Jaiswal expected the FSAs would be signed by the power companies in a month's time.

NTPC , a major consumer had said recently it would sign FSAs after meeting the Coal India chief. Private companies in the past had accused Coal India of drafting the power supply document in favour of public power companies. The minister, however, said that there was no final decision so far on price pooling of coal.

Price-pooling was opposed by power companies, mainly state owned entities, and existing players. Speaking about the proposed coal regulator, Jaiswal said that the Group of Ministers would meet in the next few days to finalise the draft of the coal regulator bill.

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Suicide bombers attack Airtel office in Nigeria

Two suicide car bombers attacked the offices of mobile phone operators India's Airtel and South Africa's MTN on Saturday in Nigeria's northern city of Kano, killing themselves but no civilians, the police said.

"The one who hit the Airtel office was shot by military men before the bomb exploded ... at the MTN office the car rammed into the fence but no civilians were killed," Ibrahim Idris, the chief of police in Kano, told Reuters by phone.

Islamist sect Boko Haram has previously targeted phone companies, saying they help the security forces catch its members.

Also Read: Chargesheet filed in spectrum allocation case in NDA regime

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Maruti to set up second plant in Guj; acquires 600 acres

Maruti Suzuki India said it has started spadework to set up its second facility in Gujarat with acquisition of another 600 acres, in addition to its existing plan to invest Rs 4,000 crore for setting up a plant in the state. The company also said it expects about 6-7 per cent sales growth in 2013-14 after closing the current fiscal with about 6 per cent rise in vehicle sales.

The country's largest car maker also said it will not enter the premium segment of passenger cars in India and will "protect" its image of a small car manufacturer. "We have land at two locations in Gujarat. The first one is offered by the government and the second one is a private land that is directly acquired by us with some negotiations by the government," Maruti Suzuki India (MSI) Chairman RC Bhargava told reporters.

The company has acquired about 600 acres, located about 40 km from the first site near Mehsana, he added. "The second location is for our future expansion. Once we exhaust the capacity at the first site, we will move to the second one," Bhargava said. He, however, did not share details such as when the firm is likely to start construction at the second site.

When asked if MSI is shifting its focus from Haryana, where it has recently witnessed severe labour unrest, Bhargava said: "We are not moving away from Haryana. We have two plants in the state and going to Gujarat after utilising the capacity completely at Gurgaon and Manesar. We will do the same once we exhaust the capacity in Gujarat also." He said the company will do the ground breaking ceremony for the Gujarat facility early next year.

MSI had earlier this year announced to invest Rs 4,000 crore, its biggest ever outside Haryana, to set up a 700-acre new production facility in Gujarat by 2015-16. Besides, components suppliers of the company are also likely to make an equal amount of investment to set up their respective plants. The capacity in the first phase will be 2.5 lakh units a year. Talking about the company's performance in this fiscal, Bhargava said: "We are going to end this year with a growth of about 6 per cent over last year. Overall, there is a sign of softening in India's car market due to various factors."

During the next financial year, the company is not expecting anything better than the current fiscal and it will grow in single digit only, he added. "We hope to grow 6-7 per cent growth at best in next fiscal, which is going to be the election year and so we don't expect anything drastic happening," Bhargava said. Commenting on exports, MSI Managing Director and CEO Shinzo Nakanishi said MSI is finding it tough due to the decline in European market.

"Last year we had a total export of 1.27 lakh units. This year we may be a little less than that because of the slowdown in Europe, which used to be our biggest overseas market."

MSI has been exploring new markets to keep its overseas sales momentum, Nakanishi said. Bhargava said: "I don't know when the European market will revive but we have been entering new markets like Algeria, which is one of our biggest now and we expect to sell around 25,000 units there." The company has also been exporting both completely built units and completely knocked down units to Indonesia amounting to about 40,000 units.

On the Sri Lankan market, Bhargava said sales have fallen by almost 50 per cent this year due to the increase in import tariffs by the government there. Asked whether the company would look to set up assembly operations overseas, he said: "It is possible in the course of next few years that we have overseas assembly operations in the markets where we are looking."

These overseas assembly plants could be run by Maruti directly and not by Suzuki Motor Corp, he said, adding however that "at the moment there are no such plans to set up assembly operations anywhere". On the company's plans to enter premium segment of Indian passenger car market, Bhargava said: "Maruti and Suzuki Motor grew and became profitable on the basis of small cars. Small cars in India is going to be a big segment in future also. MSI has the image that it is first class small car maker and I would try to protect that image."

He also ruled out MSI diversifying into the commercial vehicle segment. Asked about the progress at the violence-hit Manesar plant, Bhargava said the production has reached normal level of about 1,900 units per day. When asked if the company would reconsider to take back some of the workers that were fired after the violence in July, he replied in negative. While the company has terminated services of over 500 permanent workers alleging their role in the violence, which killed one senior official and injured nearly 100 others, the police has filed charge sheets against about 145 people only.

Asked about the police report, which contradicted MSI's claim of an outside influence and concluded that the violence was an internal matter, Bhargava said: "Police has not given us any specific reason why it happened... It is something like an unknown disease by an unknown virus. "Police evidence says there is no evidence of outside influence. Everybody has its own conclusion. As far as Maruti is concerned, whether there is an external influence or not, it does not matter on our decision (of firing the workers). We have to accept the police findings."

The company took disciplinary action against the workers based on testimonials and evidences gathered from managers and supervisors of the Manesar plant present at the time of violence, he added.

Also Read: Maruti acquires additional 500 acres land in Gujarat

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Sebi slaps Rs 65 lakh fine on official of Satyam Computer

Capital market regulator Sebi today said it has imposed a penalty of Rs 65 lakh on a senior official of the then Satyam Computer Services Ltd for alleged violations of insider trading norms during fiscal 2008-09.

Satyam Computer Services was acquired by Mahindra group in 2009 and rechristened as Mahindra Satyam. Sebi said it levied the fine on Satyam Computer Services Head of Investor Relations TAN Murti for allegedly indulging in insider trading when he was in possession of "unpublished price sensitive information relating to acquisition of Maytas Infra Ltd (MIL) and Maytas Properties Ltd (MPL) by the company."

The regulator had conducted a probe relating to insider trading in the shares of Satyam Computer during the fiscal year 2008-09. Murti had "sold 14,500 shares of Satyam Computer on December 15, 2008" prior to the announcement, the regulator said.

Sebi said Satyam Computer had announced the acquisition of MIL and MPL on December 16, 2008 and that the deal was cancelled the next day. The regulator said the information about the proposed deal was price sensitive in nature.

On December 17, 2008 the price of the scrip fell 33.5 per cent from previous close but after the cancellation of the deal, it recovered marginally on the NSE, Sebi said. "In the instant case, the information was highly price sensitive and when the same was made public, the market reacted very adversely leading to a fall of 33.5 per cent of share price which is quite substantial.

"The noticee (Murti) by selling 14,500 shares of Satyam Computer on December 15, 2008 has avoided a loss of Rs 21.54 lakh," Sebi said.

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AMFI to offer mutual fund details in e-format

The Association of Mutual Funds in India (AMFI) today launched an electronic form of mutual fund common account statements (eCAS). "Mutual fund houses, in collaboration with AMFI have started issuance of mutual fund common account statements in an electronic form," it said.

Market regulator Sebi has mandated all mutual funds to provide a common account statement (CAS). "One of the main challenges to roll out CAS was to aggregate data across five registrars and presents a common account statement to an investor based on the PAN. Suitable independent partners had to be identified to address confidentiality related challenges.

"With eCAS, we believe investors will have further convenience and we will together make a positive impact on our environmental responsibility through this go-green initiative," Amfi chief executive H N Sinor said.

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German bank sues over Kingfisher Airlines planes

Germany's DVB Bank SE has sued aviation regulator Directorate General of Civil Aviation (DGCA) and Kingfisher Airlines to have two planes it financed for the troubled carrier deregistered, a possible first step towards recouping its funds.

The case underlines the problems that leasing firms and financing companies face in recovering grounded planes from Kingfisher, as airports, banks and tax authorities scramble for the crisis-hit carrier's assets.

International Lease Finance Corp (ILFC) - owned by U.S. insurer AIG - is also struggling to take back Kingfisher planes it owns, one of which, an Airbus A-320, has been impounded by tax authorities for non-payment of dues by the carrier.

The DGCA must deregister the DVB-financed Airbus planes, now parked in Istanbul, before the bank can put them to use or lease them out.

"Our main trouble really is with the DGCA, which should deregister the aircraft," Carsten Gerlach, senior vice president of aviation finance at DVB, told Reuters.

"We have now filed a writ petition at the High Court in Delhi against DGCA and also Kingfisher, strictly focused on deregistration," Gerlach said by phone from Frankfurt.

However, the DGCA argues that those aircraft were not financed by DVB alone, so deregistering them would make the DGCA answerable to other financiers, who are also trying to recover their money, according to a senior government source with direct knowledge of the situation.

The DGCA and Kingfisher did not respond to requests for comment.

Meanwhile, leasing company IFCL has also asked the DGCA to deregister four Kingfisher-operated planes, but it faces separate obstacles.

These planes include an Airbus A-320 parked at Mumbai airport that was impounded by tax authorities last week after the carrier failed to settle long-pending dues.

"People just go the airport, see a plane in Kingfisher colours, and stake their claim on it," the source said, referring to the tax authorities' impounding of the Airbus.

"What they don't understand is that the plane may not belong to Kingfisher at all."

Kingfisher, owned by flamboyant liquor baron Vijay Mallya, has hit back at the tax authorities' actions, saying it is illegal for authorities to seize aircraft that are owned by foreign lessors.

"This will send a very wrong signal to any foreigner who wishes to do business in the aviation industry in India," the airline said in a statement last week.

Kingfisher has 33 scheduled passenger planes registered in India, according to data from the DGCA. It had a fleet of 64 a year back, when it was India's No. 2 carrier by market share.

It is saddled with a combined debt load of $2.5 billion, according to one estimate, and has not paid salaries for months.

Kingfisher, which has not flown since October, had its license suspended in October after months of canceled flights and staff walkouts.

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Hinduja group acquires US based- Houghton Int'l for $1bn

The Hinduja group has done some christmas shopping for a whopping 1 billion dollars. Gulf Oil which is owned by the Hinduja group, has acquired US based Houghton International. This will make them the ninth largest in the lubricant space, reports CNBC-TV18's Sajeet Manghat.

This acquisition has been done through debt and equity. The debt comprised 70 percent and 30 percent. This will eventually be infused into Houghton International to work better. Houghton International is a niche player, which is basically into metal working fluids. In the USD 6 billion market, it has a share of 12 percent and that's where Hinduja Group plans to leverage.

It has 12 manufacturing facilities spread over 10 countries. This would enable Hinduja Group to increase its revenues from global markets. Houghton International has a 12 months sale of USD 858 million. It also has earnings before interest, tax, depreciation, and amortisation (EBITDA) of USD 132 million. The Gulf Oil today has consolidated sales of nearly Rs 1,300 crore. So that's where the big picture is going to be come in.

It is not going to be an easy job for Hinduja Group because Houghton is in markets. Thes markets are traditionally weak in terms of economic activity, especially Europe, North America and Asia. This means that the improvement in the markets margins would be very modest. However, from the Hindujas point of view the synergies will work perfectly. They can leverage the partnerships and the facilities in across 10 countries. They can also offer Houghton access to new markets in Asia, especially India.

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Expect NIMs, gross NPLs to improve in Q3, Q4: Bank of India

N Seshadri, ED, Bank of India is hopeful of improving net interest margins (NIM) in the third and fourth quarter of FY13. According to him, deposit cost moderation and credit pick-up is going to contribute towards better NIMs.

Also read: See 100% upside in UBI, Vijaya Bank, UCO Bank: Darashaw

Seshadri also expects recoveries to outpace slippages in the next few quarters. Besides, he believes the slippages in the quarter ending December will be lower than the previous quarter. Going ahead, the ED of Bank of India sees gross NPLs coming down in the next two quarters.

Here is the edited transcript of the interview on CNBC-TV18.

Q: Not just Bank of India, but much more than your bank, other banks, even your bigger rivals have had a huge problem with restructured assets and gross NPLs. Can you take us through how your NPL picture might look in the current quarter? You should have a fairly decent idea and your guesses as to the next quarter?

A: Yes, we did fairly larger slippages in the first two quarters largely because of the way the economy behaved and we were ahead of the curve in terms of NPLs. We have seen a moderation and we have seen some of these NPLs which were not on viability but, on the cash flow constraints that they had. They are in fact responding and we hope that the upgradation and recoveries would outpace the slippages.

I am not saying the slippages have completely stopped, it is a function of the economy. There would be some slippages but, we could see that in the fact that the recoveries and upgradation outpaces the slippage and as far as this and next quarter is concerned, we will definitely see that process continuing.

Q: Slippages in the second quarter were at Rs 2733 crore, you expect it to be lower than that?

A: It is much lower than that.

Q: One of the brokerages had come out with a mid-quarter review of Bank of India and there is an expectation that net interest margins (NIM) might actually improve from that level that you had hit in the first half of FY13 which is at around 2.3 percent. Can you just give us a guidance in terms of how exactly NIMs would pan out in this quarter and for the second half?

A: We have declared results pretty well in the last quarter also. Traditionally, you would see that NIMs would go up on a quarter on quarter basis because the first quarter and second quarter NIMs are subdued.

We would definitely see that the third and fourth quarter NIM should improve for two reasons, one is off-take and pick up and the second which is more important is the moderation in the deposit cost. The liability cost in fact, would have a lag effect and we would see that in the third and fourth quarter, there will be an appreciable contribution on account of a reduction in the cost.

We had actually given an estimation of NIM which would be close to about 2.60 to 2.65 percent as we go along. I think it is happening. The fourth quarter NIM would be closer to the annual average NIM of the bank.

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PVR off day's high, LT Finance denies stake buy

PVR , a cinema exhibitor with presence in about 24 cities including all the four metros, gained more than five percent to Rs 301 on Friday as L&T Finance picked up 11.41 percent stake in PVR. But PVR, yesterday, informed NSE that the mode of acquisition is "pledge of shares by promoters".

However, the stock came off day's high after L&T Finance denied reports of company picking up 11.41 percent stake in PVR.

At 12:21 hours IST, PVR rose 2.68 percent to Rs 293.40 amid large volumes.

Trading volumes increased 196 percent to 1,89,967 shares as compared to its five day average of 64,091 shares.

(With inputs from PTI)

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CESC to do maintenance work, power supply may be affected

Power utility CESC Ltd said its power supply to consumers in some areas of the city could be affected tomorrow as it would carry out maintenance of the Kidderpore Distribution station. "To strengthen its distribution system, CESC will carry out urgent maintenance job at Kidderpore Distribution Station on Saturday, December 22, 2012," CESC said in a statement.

As a result, power supply to consumers in Karl Marx Sarani, Manastala Lane, Ramkamal Street, CGR Road (part), Watgunge, Kidderpore bridge, Orphangunge Market & Road, Remount Road, Mayurbhanj Road, Mominpore, Ekbalpore, Ibrahimpore Road, Hastings, Diamond Harbour Road (Kidderpore), Ramkamal Pal Road and Muhamadan Burrial Ground  areas may be affected between 11 am and 3 pm, it added. The RPG-Sanjeev Goenka Group firm has about 26.5 lakh customers, with an addition of one lakh customers every year.

Also Read: Indo Tech Tansformers falls 5% on delisting offer a

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Cairn may revise production guidance; stock at 52-week low

Private oil & gas producer Cairn India fell as much as 3.4 percent to touch a 52-week low of Rs 309.30 on Friday after sources indicated that the company is likely to revise its production guidance downwards in January. The timeline for a ramp-up to 240 kbpd remains unclear due to Bhagyam reservoir issues, say sources.

Cairn India is facing some reservoir pressure problems in the Bhagyam field in Rajasthan. Despite getting all the approvals from the government for almost 11 months now, the company is unable to ramp up the entire Rajasthan production by 8 percent. It can increase their production to 40,000 barrels a day from the current 20,000 barrels, reports CNBC-TV18's Nayantara Rai quoting sources.

Hence it is likely that the company may announce lower guidance at its annual conference call in the third week of January while announcing it results.

At 13:09 hours IST, the stock lost 2.55 percent to Rs 312 on the Bombay Stock Exchange.

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Maruti Suzuki gains on benefits from weaker yen

Maruti Suzuki shares gain 0.75 percent on bets a steep depreciation in the yen will boost earnings by reducing the costs of imports from Japan.

Since hitting a low of 1.3838 on July 25, the INR/JPY has risen to the current level of 1.5314.

Aso Read: Maruti acquires additional 500 acres land in Gujarat

Traders also cite a report in The Economic Times that Maruti Suzuki is looking to enter the small pick-up truck segment.

A spokesman for Maruti Suzuki declines to comment on the company's future product plans when contacted by Reuters.

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Companies Bill: CSR is almost mandatory, says ALMT Legal

The Companies Bill has been approved by the Lok Sabha. It is a vast Bill. It covers everything and replaces the earlier Companies Act of 1956.

Don't miss: Companies Bill, 2012 Analysed

In an interview to CNBC-TV18, Hitesh Jain, partner at ALMT Legal speaks about the Companies Bill and gives his outlook going forward.

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Ekta Batra.

Q: What are the implications on the P&L and the balance sheets of companies? The corporate-social responsibility (CSR) expenditure now is nearly being mandated at 2 percent. I understand the wording is not mandatory, but companies may spend. Yet a board member will have to be in a committee, which will monitor this expense and give credible explanations, if that 2 percent is not met. Will this, therefore, begin to impact the P&L in some fashion?

A: There are two very important provisions in the clause. The first clause is that the board is mandated to ensure that the company will spend on the CSR. Second thing is that they have to give their explanation. So, effectively although there is no mandatory obligation on the company, but a responsibility is cast upon the board members.

Added with the responsibility, to give the explanation for non-implementation or implementation makes it mandatory. When you are not able to give a satisfactory explanation about not spending on CSR activities then the regulator will certainly have a power to question the roles and responsibility of the directors. So, effectively it gives a teeth, it is not just a provision on the paper, but it puts an obligation on the board, which they cannot easily get away. So, one thing is very clear that the new bill has looked into this provision extremely carefully. Although not mandatory, but a binding obligation is on the board to make sure that the company will spend on the CSR.

Q: After the Companies Bill being passed, what are the most common queries that you are facing from clients at this point in time? What are they most worried about in terms of adherence going forward?

A: The first query, which we are facing from the client, is about the CSR. The second is about the Memorandum of Association. They are also worried about the roles and responsibility of the independent directors. The fourth concern, which they are discussing, is the provisions pertaining to investor protection mechanism.

There is one very important provision. If you are obtaining the credit facilities and loan from the bank, if incorrect information is provided, it puts a heavy onus on the board. The queries are also directed towards the roles and responsibility of the independent directors. What is the responsibility, whether they are going to be liable, to what extent they will be responsible? The independent directors attend for the sake of attending and there is no positive contribution. For example, when you look into the various examples, you deal with the frauds in the corporate governance or the problems arising in the corporate governance and the independent directors playing just a role on the paper.

More to come.

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Stable outlook for Yes Bank, says Moody's Rating

Moneycontrol Bureau

Global rating agency Moody's on Thursday assigned a bank financial strength rating of D+ to private sector lender - Yes Bank , with a stable outlook.

The rating reflects the bank's financial position and relatively small, but rapidly growing franchise as India's fourth-largest new generation private-sector bank. The rating also takes into account short track-record of strong financial performance and its very high level of loan growth, the agency said in a note.

Moody's also assessed Yes Bank's deposits with the rating rank of Baa3/P-3. The baseline credit assessment was ranked as ba1.

The rationale behind the ratings as stated in the Moody's report:

- A relatively small, but rapidly, expanding mainly corporate franchise

- Relatively solid capitalization, although the level is being depleted by growth

- Strong asset quality, although with high loan growth, limited track record and favorable economic cycle

- Moderate funding and liquidity risks, despite some funding vulnerabilities related to its dependence on corporate deposits

- A widely diversified loan book in terms of industry concentration

- Business profile geared towards large corporate segment at 67% of loans, mid-sized corporate segment of 18% and retail loans of 15%.

However, any deterioration in asset quality coupled with reduction in loss aborbing buffer can pose threat to rating downgrade. Moreover, decline in tier-I capital level below 8% will also make a case for rating cut.

Yes Bank shares zoomed more than 82% in the last one year as against a rise of 57% of Bankex, the broader index for banking stocks. At 13:35 hrs on Thursday, those are trading at Rs 466, down nearly 1% while 30-share sensex was down by 0.40%.

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