The changes will take place after the close of today's trade.
At 10:27 hours IST, shares went down 0.88 percent to Rs 1,396.90 on Bombay Stock Exchange.
The stock fell more than 13 percent in last one month whereas gained over 11 percent in one year.
Thu, Feb 28, 2013 at 10:48
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Gujarat Fluorochemicals to stop trading in F&O, stock tanks
Gujarat Fluorochemicals dropped nearly 4 percent on Thursday as the stock will stop trading in derivatives segment after February expiry.
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Gujarat Fluorochemicals to stop trading in F&O, stock tanks
Gujarat Fluorochemicals dropped nearly 4 percent on Thursday as the stock will stop trading in derivatives segment after February expiry.
At 10:39 hours IST, shares declined 2.6 percent to Rs 278.70 on Bombay Stock Exchange.
The stock slipped over 4 percent in last one month while plunged more than 42 percent in one year.
The trading in shares of Suzlon Energy , one of the world's largest wind turbine suppliers, will also be stopped in F&O segment after today's trade. But the stock gained over 1.4 percent after getting beaten down quite badly in last few sessions.
Select Sector to see impact
13:53 pm
Exice Duty on readymade garments exempted +ve for textile sector
expectation on: Business
Uday Kotak
Executive Vice-Chairman and Managing Director | Kotak Mahindra Bank
expectation on: Policy
Vetri Subramaniam
CIO | Religare Mutual Fund
expectation on: Markets
Raamdeo Agrawal
Joint MD | Motilal Oswal
expectation on: Markets
Atul Suri
NULL | Trader
expectation on: Policy
Pankaj Vaish
Head South Asia Markets | Citi
Thu, Feb 28, 2013 at 11:22
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BHEL, L&T gain on increase in govt expenditure
Engineeing majors Larsen & Toubro and BHEL gained 1.6 percent to Rs 1433.90 and 1.16 percent to Rs 208.85 on Thursday on Bombay Stock Exchange, respectively.
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BHEL, L&T gain on increase in govt expenditure
Engineeing majors Larsen & Toubro and BHEL gained 1.6 percent to Rs 1433.90 and 1.16 percent to Rs 208.85 on Thursday on Bombay Stock Exchange, respectively.
The government plans expenditure of Rs 5.53 lakh crore for the financial year 2013-14.
Select Sector to see impact
13:53 pm
Exice Duty on readymade garments exempted +ve for textile sector
expectation on: Business
Uday Kotak
Executive Vice-Chairman and Managing Director | Kotak Mahindra Bank
expectation on: Policy
Vetri Subramaniam
CIO | Religare Mutual Fund
expectation on: Markets
Raamdeo Agrawal
Joint MD | Motilal Oswal
expectation on: Markets
Atul Suri
NULL | Trader
expectation on: Policy
Pankaj Vaish
Head South Asia Markets | Citi
Thu, Feb 28, 2013 at 11:28
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Live Budget 2013-14: Educomp up 4% on 17% hike in allocation for education
Education stocks rallied quite sharply after the Finance Minister P Chidambaram hiked allocation for education programme by 17 percent in Budget.
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Live Budget 2013-14: Educomp up 4% on 17% hike in allocation for education
Education stocks rallied quite sharply after the Finance Minister P Chidambaram hiked allocation for education programme by 17 percent in Budget.
Educomp Solutions rose 4 percent to Rs 88.30 while Everonn Education gained 5.78 percent to Rs 68.60.
CORE Education went up 6.8 percent to Rs 64.40 while NIIT rose 4.44 percent to Rs 24.70.
Aptech rallied 5.36 percent to Rs 50.10.
Select Sector to see impact
13:53 pm
Exice Duty on readymade garments exempted +ve for textile sector
expectation on: Business
Uday Kotak
Executive Vice-Chairman and Managing Director | Kotak Mahindra Bank
expectation on: Policy
Vetri Subramaniam
CIO | Religare Mutual Fund
expectation on: Markets
Raamdeo Agrawal
Joint MD | Motilal Oswal
expectation on: Markets
Atul Suri
NULL | Trader
expectation on: Policy
Pankaj Vaish
Head South Asia Markets | Citi
He says that we need incentives for the manufacturing sector in the Budget, and that he does not expect a hike in excise & service tax rates. He expects government borrowing in FY14 at Rs 5.8-5.9 lakh crore, and that the Food Security Bill is a potential negative if implemented in this Budget.
Below is an excerpt from the interview
Q: A word on which way you think the finance minister (FM) will lean between the urgency to do something right now for growth versus the fiscal prudent situation.
A: I think the FM will be bringing out a very mature Budget because he knows that down the road, with the elections looming he may have to give some concessions may be a little later. However, I think he will focus on ensuring that the fiscal deficit gets down to the kind of number that he has been talking about, which is 4.8 percent in the next year. He would make sure that there are some incentives.
I think there would be lot in it for the capital markets, as he wants to make sure that there is a lot of activity in the market. He wants to make sure that more Foreign Institutional Investor (FII) investments come into the market, and there are opportunities for more initial public offerings (IPOs). So I see a lot of activity which is pro-capital market coming in. However, he will focus on fiscal prudence and perhaps a little bit of taxation on the higher side. Maybe not changing the tax rates but looking at some kind of a surcharge on the wealthy, something like that, some concessions for the poor. I think this is the kind of package that he would probably unveil tomorrow.
The company said the buyback was proposed to be carried out from open market through the Bombay Stock Exchange and the National Stock Exchange.
At 10:49 hours IST, shares rallied 5.51 percent to Rs 230.85 amid hefty volumes on Bombay Stock Exchange., up Rs 12.05, or 5.51%.
Market capitalisation of the company currently stands at Rs 231.20 crore.
To see all Budget related News Click Here
Company's promoter TH Licensing had made proposal to purchase shares of company. TH Licensing Inc holds 83.91 percent stake in the company as of December 31, 2012.
The board also consented to seek the approval of the public shareholders for the delisting offer by way of postal ballot.
At 10:55 hours IST, shares were quoting at Rs 136.90. There were pending buy orders of 419,600 shares, with no sellers available.
In the previous trading session, the share closed up 4.99 percent at Rs 130.40.
To see all Budget related News Click Here
"We are planning some investments in the downstream space to increase value addition. Some minor capacity addition will also take place, but the major focus will be on creating more value addition and creating products which will replace imports," Ankit Miglani, deputy managing director, Uttam Galva told CNBC TV18.
The company recently took board permission for raising up to Rs 175 crore through Qualified Institutional Placement (QIP).
The steel manufacturer however has not yet fixed the timing and pricing for the QIP.
Uttan Galva has been facing high interest burden like many others in the sector. Miglani said the company hopes to cut debt and lower interest cost through external commercial borrowings.
High debt has however has not stopped the company from acquisition of 58.35 percent stake in Lloyd Steel last year. The company plans to use the capital expenditure for further enhancement of Lloyd's steel making capacity.
Lloyd Steel has a 1 million tonne steel making capacity near Mumbai. Miglani is confident that the new capital investment will help Uttam Galva to improve operating performance.
"We are very confident that the investments we will do over the next two years will significantly improve EBITDA. We feel that over time that will come down and EBITDA will go up and that will result in better bottom-lines going forward," Miglani said.
Uttam Galva plans to spend around Rs 400 crore as capital expenditure in next two years.
Titagarh Wagons , the major company in wagons manufacturing, fell nearly 2 percent. According to experts, if government hikes rail fare then the funds, which government gets, will be used for orders of new wagons.
Kalindee Rail Nirman dropped nearly 3 percent while Hind Rectifiers crashed 5.5 percent. Kernex Microsystems , Texmaco Rail & Engineering and Stone India were down 1-3 percent.
However, Zicom Security jumped 5.5 percent and BEML , which provides coaches for railway, gained more than 2 percent.
The Railway Budget is expected to lean towards pragmatism and fiscal prudence. It will be interesting to see if he bites the bullet on a fare hike or will he look at other measures to mobilise resources to offset the burden of the recent diesel price hike.
CNBC-TV18 sources say that a passenger amenity cess could be introduced and the railway fares may include a fuel adjustment component to adjust for the diesel price revisiion. If passenger fares are hiked this time, it will be the second hike in his 4 months tenure. Remember, fares were hiked by 21 percent on January 22 after which railway minister said it would not be revised in the Budget again.
"Lower sales growth and costs related to store closures led to an earnings miss. Uncertainty on discretionary demand is likely to constrain near-term stock performance," JP Morgan reasoned.
Pantaloon Retail posted a net loss of Rs 20.4 crore in the October-December quarter of FY13 as against profit of Rs 5.6 crore in a year ago period. However, net sales rose nearly 18 percent to Rs 1,253 crore from Rs 1,065 crore during the same period.
At 12:06 hours IST, shares declined 0.74 percent to Rs 206.85 on Bombay Stock Exchange.
In the previous trading session too, the stock lost 3.34 percent to close at Rs 208.40.
"The renewed focus on asset sales in recent months has opened up possibilities of the sale of Corus' assets which will give Tata Steel's earnings and valuations a meaningful uplift," CLSA said.
The company's December quarter earnings were poor . Net loss jumped 27 percent year-on-year to Rs 763 crore as weak demand and prices in its main European market squeezed margins.
At 12:18 hours IST, shares slipped 2.13 percent to Rs 353.25 on Bombay Stock Exchange.
The project comprises 49 units of Suzlon's S88 - 2.1 MW wind turbines and will be commissioned in 2013-14, the company said in a statement. The project will be commissioned in Rajasthan.
ONGC currently has an existing installed base of 51 MW from wind energy projects operating in Jakhau site, Gujarat. The new order will take ONGC's total installed windpower capacity to 153.9 MW.
The S88 turbine is designed for operations in medium wind regimes with the ability to withstand extreme conditions and operate effectively with lower maintenance costs, the statement said.
The S88 has enjoyed international success, with over 2,400 units installed worldwide, translating to over 5 GW of capacity, it added.
Also read:
Videocon soars 18% as ONGC eyeing Mozambique gas field
Expect Budget to give wings to renewable energy: Suzlon
"RBI's regulations on new bank licenses are unclear for NBFCs, which do not have a promoter group. Since IDFC has no promoter it is not clear who can form the required financial holding company, and whether it is eligible," Morgan Stanley reasoned.
The banking regulator on Friday issued its final guidelines for grant of new banking licences and invited applications from aspirants. RBI said the applicants should have a past record of sound credentials, integrity and financial strength with a successful track record of 10 years.
RBI said non-operating finance holding company must be fully promoter-owned. "Non-operating holding company will hold 40 percent in new bank for 5 years and will cut stake in new bank to 15 percent in 12 years," the RBI added. Private companies and NBFCs can set up bank via non-operating holding company.
At 10:05 hours IST, shares went up 1.6 percent to Rs 158.60 on Bombay Stock Exchange.
The final licensing norms are largely in-line with draft guidelines, Arun Duggal, chairman of Shriram Group told CNBC-TV18.
"Our preference is to set up a separate bank under Shriram Capital. We want to profitably serve low income families, small businesses, truck drivers, shop keepers etc which are not yet served by the banking system," he added.
In 1993, 10 licenses were granted and in 2001 two licenses were granted. Duggal expects the central bank to grant atleast half a dozen licenses. However, this process should not be a prolonged one.
Below is the edited transcript Arun Duggal's interview with CNBC-TV18
Q: What have you made of the guidelines and whether they seem more onerous than what the draft recommendations are or whether this actually opens up the field for players?
A: We are still studying the guidelines; they are quite comprehensive and rather detailed. We still are in the process of evaluating the various provisions under the guidelines. However the guidelines are largely in line with what the preliminary guidelines were.
Q: There are just a couple of provisions which pertain to companies like yours. First that the promoter entity is allowed to set up a bank through a non operative financial holding company. All companies do not have this flexibility. Would it be restrictive on the part of Shriram Group to go through this route?
A: It is an important question and I must say that our preference is to go set up a separate bank under Shriram Capital. However let me also say as to what our ultimate desire and aim here is.
We are proceeding on the assumption that the thrust behind the new license will be to improve financial inclusion, to provide banking services to nearly half of our population which is not served at all or served well by the existing banking system.
So that is the assumption based on which we will be proceeding with our application and we would want to create a very different kind of bank, a bank which can serve low income families, small businesses, truck drivers, shop keepers etc which are not yet served by the banking system.
We would want to serve them profitably. To do that we will have to have a very low cost structure completely different way of doing banking and that is what we would like to do, that is what we are planning to work on.
Q: One of the regulation seems to suggest that all Non-Banking Financial Banking Company (NBFC) lending operations within the group need to be merged with the bank. Is this feasible for you?
A: That is not our understanding and that would not make any sense at all from the reading of the regulations.
Q: How difficult would it be for you to meet the Statutory Liquidity Ratio (SLR) and the cash reserve ratio (CRR) recommendations straightaway if you were to set up a bank?
A: That shouldn't be a problem for us, we have enough financial flexibility and we have planned for it so as far as the capital requirements are concerned it shouldn't be any problem for us.
Ajay Srinivasan, CEO - Fin Services, Aditya Birla Group told CNBC-TV18 that his company will look at all the options to promote, start a bank. "It is early to comment on exact structures and how you will get this moving, but we will look at all the options and then take a call on what we think is in the best interest of everybody, " says Srinivasan.
Srinivasan also mentions that the company is working on asset allocation and may look to merge options in the longer-term.
Below is the verbatim transcript of Ajay Srinivasan's intterview on CNBC-TV18.
Q: The RBI has said only non-financial companies that are widely held and listed should hold the holding company. In your group have you identified which would be this promoter company?
A: For today, financial services at the Aditya Birla Group, a part of the Aditya Birla Nuvo which is a widely held company. The guidelines have only come out on Friday, so for any further details and structuring issues we will have to deal with as we get into greater detail and discuss internally.
Q: Will you convert your non-banking financial company (NBFC) into a bank or promote a bank and then divest the NBFC from various activities?
A: It is early to comment on exact structures and how you will get this moving, but we will look at all the options and then take a call that we think is in the best interest of everybody.
Q: Mergers and Acquisitions (M&A) in banking have been very few so far. Usually we have seen only bailouts. Do you foresee M&A activity post the issue of new licenses since there is a chance that some deep-pocketed guys could get licenses?
A: I do not see anything specific as a result of this, but there are economies of scale in financial services in general and therefore consolidation activities will be an ongoing process. I am not sure that this alone will necessarily kick off M&A.
Q: Will you look at M&As as an option?
A: We would look at all options as you would expect anybody to. I do not think that this specifically would lead to any of that.
Q: When Yes Bank and Kotak Bank came into existence, the PSU banks were pretty weak, they were barely coming out of a slowdown. Some of them had just been listed. Even the new private banks like UTI Bank at that time were small. Now many of the new private banks are giants. PSUs are savvier. Also, some of the new banks are offering 7 percent on savings account. Given all this, will making money be very difficult for the new banks?
A: The first issue is that the banking sector has developed considerably since the last set of new banks came in. It is much more competitive than it was at that stage, there is no taking away from that. However, you also have to look at the bigger opportunity and some of the thinking behind these guidelines which is around broadening the spread of banking, increasing the reach of banking and in that context we still find 35-40 percent of Indians have a bank account. So, if I look at it from a broader opportunity perspective, there is still a long way to bank Indians as compared to where we are today. While competition has increased, I would still think the opportunity is large.
Q: Would 25 percent branches in unbanked areas is going to be burdensome? The incumbents so far only have 25 percent of their incremental branches in unbanked areas.
A: This is in line with the RBI's thinking and the focus that they want from this round of new bank licenses. Anybody who is looking for applying at this stage will have to find a way to make this work for them, because it is a reality.
Q: Do you think that some groups like yours who have a Telecom License can find better synergies like providing the backbone for business correspondence, mobile banking?
A: It is a little early to talk about our license application per se, but if we look at financial inclusion, technology will play a big role. It will require a different technology to make financial inclusion work differently and to make it work profitably. So, we will have to look at different elements including using the telecom network that is available, the correspondence that are available. The key point is that technology will be important in making inclusion work and making it viable.
Q: When do think the licenses will be finally handed to the chosen ones, this calendar year or FY14?
A: It is difficult to say. Last time, the process took about a year from the time applications went in. So, I cannot comment on how much time it will take this time around.
"NBFC's have large and diverse balance sheets. So, they need to be looked and planned out in a manner that fulfils the overall regulatory requirement", he told CNBC-TV18 in interview.
Below is the verbatim transcript of his interview to CNBC-TV18
Q: Would you be looking directly at a bank and then divesting businesses from your finance companies or would your (NBFC) be converted into a bank?
A: In the longer term we need to have one balance sheet and one entity. This will actually host all the loan related activities. While some of the other fee based activities can be outside the bank to the extent it is permissible.
It is a long-term plan and something which we will do on day zero. It has to be fully thought through because there is a liability side implication, the asset allocation across various sectors. So, all of them will have to be really worked on. However, in the longer term it will be one balance sheet is what we can say.
Q: Is it mandated by the Reserve Bank of India (RBI) that NBFCs need to merge their operations into a new bank or you all do have an option of starting a new bank or perhaps merging your existing business into an NBFC?
A: What I hear from various quarters is that there is perhaps an interpretation of that type available. However, from a business efficiency perspective it is ideal that it is on one balance sheet. We get the best out of that balance sheet is what will have to be looked at.
So, it is something which will be a long-term goal than immediate goal. However, there could be some specialised activities like the infrastructure finance. Given that it is a very long-term lending and housing it in a bank could pose an asset-liability mismatch. It may be one we can look at putting in a separate NBFC and within the overall supervision of the RBI.
Q: Are there any activities that do not fit into the banking structure because then the RBI says they will have to be taken out of that entity?
A: In a broader sense the regulatory mandated activities will have to be moved out of the bank like brokerage or a mutual fund, etc. In terms of the activities, which are around loan origination, which will be driven by nearest to the customer rather than being at a branch, need to be seen. Or something which may have to be really managed in a manner that is synergistic with the bank.
Other than that will be the brokerages, mutual funds. Those activities, in any case are mandated to be outside of the bank.
Q: If an NBFC does convert into a bank do you see it hampering near term profitability as you look to meet the reserve requirements or the priority sector lending?
A: It is difficult to comment as of today. It will have to be something very carefully thought through because many NBFCs have got a very large and diverse balance sheets. So, they will have to be looked at and planned out in a manner that fulfils the overall regulatory requirement.
May be one will have to look at it in the context of what has been the existing balance sheet. The new balance sheet will have to originated and then matched with the way the liabilities can be built in the balance sheet.
For example we are also carrying a level of borrowing from various sources for the purpose of having supported the current balance sheet. They cannot be paid off in one shot. So, all these phasing will have to be done in a manner that really fits within the banking environment and put that together.
It is difficult to comment whether it will be an impact on profitability on upfront basis. However if the transaction can be managed well, I don't see that posing as a problem.
Q: Do you think listing in three years is an easy option or will that be challenging?
A: The un-banked branches are not going to cost too much by way of infrastructure as well as manpower cost. Let us put a number of about Rs 20 lakh per annum. Let us say we have 200 branches in the first year, which is a very ambitious target to say.
These 50 branches will cost me around Rs 7-10 crore. I don't think that is a big number in the context of large profitable operations. I don't think so. So, yes it is imbalanced. It is a question of how one roll out these branches. Also how one builds it over a period of time.
So, I don't think that will have a big impact on the profitability of the bank. Yes, I am assuming zero contribution from these branches also. So, I don't think that should really hamper us unless one plans for 1000 branches in a year. Then it poses a problem, but I don't think it is feasible.
Q: If an entity were to convert its NBFC into a bank, that NBFC is listed, so the bank will be listed from day one?
A: It depends on whether the NBFC has got any other activities or not. So, it is a question if there is a promoter for the NBFC, then one needs to look through the non-operating holding company and those ways of taking it forward.
End of the day it is a guideline, it only puts together a framework in which RBI will approve bank license.
Q: Assuming you get the license and you convert your NBFC into a bank, you are already listed that is alright by the rules?
A: At the end of the period, RBI wants to achieve a very diverse shareholding for the bank. Now, if one is able to achieve it right upfront, I don't think they will have an objection to that.
So, it is a guideline which sets a frame work. These regulators can always be engaged in what is an ideal way to take it forward. They want the banks to be profitable and they want serious capital providers to be backing the bank.
If these two are met with and it is well ring fenced from promoters, the other activities, if these three things are fulfilled then regulator or whoever is promoting entity can always engage with the regulator. Then make them understand how it fulfils the overall undertone of what is expected out of it.
Q: I want your comment as an NBFC guy, what happens to groups which are only finance groups? Do largely finance groups get excluded?
A: I don't think so. They are allowing an NBFC to be converted into a bank. This means that they will have to really think through their ownership structure that exists today at the NBFC level or at any other level.
Then put together a path to really unwinding this ownership structure to satisfy what RBI requires. If the intent is there and we are able to fulfill the basic expectation of RBI as to how they want the banks to be operating, all this should be solvable issues in my view.
More to come...
Sat, Feb 23, 2013 at 16:48
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Mayur Shah, MD, Marathon Group expectations on the Budget
Mr. Mayur Shah, Managing Director, Marathon Group
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Mayur Shah, MD, Marathon Group expectations on the Budget
Mr. Mayur Shah, Managing Director, Marathon Group
Mr. Mayur Shah Managing Director of Marathon group, one of Mumbai's leading real estate groups with projects across the length and breadth of Mumbai voices his opinion on the upcoming budget 2013.
From DJ EU Officials Spain Aid Cap Of 100 Bn Euros 'should Be Enough'
The latest earning numbers FIRST on CNBC-TV18
Toyota India has seen a number of firsts. The most recent is the design and development of the Etios and Liva for India by Indian designers and the rolling out a car-model for under Rs 5 lakh.
Below is an edited transcript of the show on CNBC-TV18
Q: The Etios and Liva are cars designed very much for India. How happy are you with the sales that they have recorded?
A: These models are one of our first that have been designed for India. These models are part of Toyota global range focusing especially on emerging markets. For the first time, we have begun to focus on the Indian consumer and the Indian market. Every aspect of India has been studied for the development of the Etios. Simultaneously we would expand this Etios model to other emerging markets. In terms of Indian market sales, I am very happy as the customers have acknowledged the challenges that we overcame.
Q: When you launched it a year and half ago I think your company said you were looking at 100,000 cars in 2012. Was that target achieved?
A: Yes. Two years ago we launched the Etios. Firstly, we launched a sedan model following a hatchback model and then followed it up with a diesel variant. In total, we achieved the original target of 100,000 cars.
Q: Could you have brought a small car into India a little earlier? You were a pioneer in the Indian market and introduced lots of segments. With the Qualis and the Innova you have really cracked open a new segment. Did you ignore the small car market for too long because that is a fast growing market?
A: Yes. The pioneers in the Indian auto industry are Maruti Suzuki , Tata Motors and Mahindra and Mahindra . We are challengers. We are still small compared to these giants. The Toyota philosophy is to grow step by step.
Q: You saw a gap in the Indian market and you introduced Qualis and Innova and then you decided to move into the small car market. Is that correct?
A: Yes. We have a kind of responsibility towards not only to customers, but also to employees, suppliers and dealers. Once we commit, we have to slowly rise and grow step by step.
Q: What do you feel about the industry today? The year 2012 was difficult. The data for the automobile industry in January revealed a highly negative picture. Toyota saw a 23 percent drop in January. When will things get better?
A: According to my understanding, India is a very promising market offering stable growth in the mid-and long-term. It is difficult to judge from last year or beginning of this year. Though the market is shaky, there is growth. However, interest rates are still high, there are difficulties related to exchange rates and a slowdown in customers' perception to buy cars.
Q: Do you expect anything from this Budget? What would you want and what do you expect?
A: I have observed that a lot of people visit our outlets but they do not, waiting for the right moment.
Q: How can the government help you turn that interest into a purchase?
A: The government can help by contributing to the increase in the consumer's buying power. So I look forward to some interest rate adjustment in the Union Budget.
Q: When will you say it is a good Budget?
A: The Budget will be good if it boost the customers' buying sentiment, supports with taxation and announces measures that will enhance the auto industry.
Q: Has the downturn in the last two years affected any of your investment plans? You have two factories at the moment. There were reports that you are planning a third factory. Are you planning a third factory, do you have any investment plans in the next year or two years and are these factories running to full capacity?
A: Yes, we built an additional plant after the first reached full capacity. Now the second plant has almost reached full capacity as per plan. Together both plants rollout 310,000 units.
Q: So that is about 100,000 in the first plant and about 200,000 in the second plant?
A: Yes. We have no plan to increase investment or initiate capacity expansion.
Q: Are you planning a third plant? When will the third plant be set up, if you say that your two plants are near full capacity?
A: There are rumours, but we have no plan for a third plant.
Q: Are you going to launch any improvements in the Etios and Liva? A few customers opine that though they are good models, they do not look as luxurious inside. So, are you planning a revamp of these two models?
A: Toyota's culture calls for continuous improvement or Kaizen. So, every moment and chance we get, we try to improve our models.
Set up in 2010, ZipDial essentially addresses this problem. ZipDial was started by three graduates from Indian Institutes of Management (IIM), Indian Institutes of Technology (IIT) and Stanford University in 2010 Valerie Wagoner, Sanjay Swamy and Amiya Pathak. They have developed a powerful and innovative suite of marketing solutions based on the simplicity of dialling a toll free number.
ZipDial helps brands connect with customers through a missed call. The client has given a toll free number that consumers can dial into, but instead of having to wait endlessly to connect with a call center executive or punching multiple options the call rings once and disconnects and then the consumer receives an SMS with more information on the marketing campaign.
ZipDial's clients leverage these number for sending promotional messages or information. Services include mobile number verification for e-commerce ventures, mobile banking polls and customer feedback surveys.
"We came up with the idea for ZipDial in a late night brainstorm as entrepreneurs do. By the time we came up with about 300 different applications we said, okay, now it is time to put a business around this.At the time I contacted a couple of smaller businesses who I thought might be interested in using such a service and literally in the first conversation they were trying to hand me cash over the table for their first month subscription because they were so excited about the service," says Valerie Wagoner.
Between 2010 and now ZipDial has been steadily adding clients. Today its mobile engagement and analytics platforms is used by companies like Procter & Gamble (P&G), Hindustan Unilever (HUL), Cadbury, Disney, MakeMyTrip, Ola Cabs, Snapdeal, Puma, Amnesty International and a lot more. Businesses pay annual or biannual subscription plus usage fee based on success. Valarie claims that compared to Facebook, ZipDial drives between 2-5 times more engagements across all customers and in a time period that is at least twice as fast.
"Cafe Coffee Day is an example of a retail customer that we work with. They have done campaigns where they are promoting a coupon opportunity and users ZipDial to earn coupons and those are then redeemed when the person walks into the Cafe Coffee Day outlet. We have also looped in a feedback survey where consumers can rate their experience at Cafe Coffee Day by Zip Dialling for happy or unhappy," Wagoner says.
In April 2011 the venture raised Rs 3.6 crore in funding laid by Mumbai Angels. This maiden brand also saw participation from Blume Ventures and the partners at AngelPrime. In December 2012 Silicon Valley based incubator cum seed fund 500 startups invested another Rs 2.5 crore. The funds were used to scale up and get the wheels turning on international expansion plan. Times Internet is the latest investor in the venture.
"The ZipDial has created engagement for 100 percent of consumers. So compared to something like QR codes which is limited to smart phone users or even SMS which fewer than half of Indian mobile phone owners like to send or know how to send. Zip Dialling is a 100 percent accessible interaction. So we see fantastic results like makemytrip.com increasing their feedback responses from less than 0.5 percent to more than 10 percent," Wagoner says
With revenues of Rs 5.5 crore in just first year of operations Wagoner and team at ZipDial seemed to be dancing all the way to the bank. Wagoner is now looking to leverage ZipDial's relationship with its global brands to expand across countries in Asia and Africa. Not only is ZipDial creating value for large brands but it is also helping Small and Medium Enterprises (SME) use mobile engagement and analytics for a starting package of Rs 1,000 a month. Wagoner claims this important segment will continue to scale up in India.
"A sum of Rs 72,000 crore is being invested to increase the overall capacity from 13.82 million tonnes to 23.46 million tonnes and we have already placed orders worth Rs 58,000 crore till January last," he said.
Out of Rs 72,000 crore, Rs 10,284 crore would be used for development of SAIL mines under Raw Material Division (RMD) to increase the production of iron ore. The RMD, which runs seven captive iron-more mines at Kiriburu, Meghahatuburu, Gua and Chiria in Jharkhand, and Bolani, Barsua and Kalta in Odisha, is working on the modernisation and capacity expansion of mines in the Eastern part of the country, Verma said. SAIL will invest Rs 10,284 crore for development of mines under RMD as well as Bhillai to cater to its increased iron-ore requirements, he said.
Of the total investment, he said, SAIL will pump in Rs 940 crore to increase the capacity of Kiriburu mines from 4.25 million tonnes per annum to 5.50 million tonnes per annum. Another Rs 900 crore will be invested on adjoining Meghahatuburu mines in West Singhbhum district of Jharkhand to increase capacity from 3 million tonnes per annum (MTPA) to 6.50 million tonnes per annum. Rs 1091 crore will be invested for enhancing the capacity of the Bolani Mines from 4 MTPA to 10 MTPA.
He said jobs for most of the packages of these projects have already been awarded and are likely to be completed by 2013-14. Besides, the mining in Gua Mines in West Singhbhum district, which remained closed since 2011, is likely to resume soon, Verma said. Gua Mine will be developed up to 10 MTPA capacity along with installation of beneficiation and pelletisation facilities with an investment of Rs 3,000 crore, Verma said after visiting Kiriburu and Meghahatuburu mine for the first time.
He feels that RBI is not looking for many entrants, instead for some who are financially sound.
Below is the verbatim transcript of his interview to CNBC-TV18
Q: Tell us any of the sticky points that you would want further clarity on from the Reserve Bank of India?
A: The clarity on transition provisions for existing NBFC was very nice. The guidelines and the sentence, that existing NBFCs would be permitted to convert themselves to or alternately promote a bank. That is the option given. However, one would need more clarity on the transition provisions and how they would apply.
Q: As far as the net worth requirements are concerned and that eligibility criteria that has been put in place does that keep the net wide open or does it bar several entities from applying?
A: They are looking for people who are financially sound. They do not want many entrance of Rs 100 crore or Rs 50 crore, instead they want Rs 500 crore to come in. That is the expectation by RBI. That expectation is in a way becoming clearer, that somebody who is in it for a long run.
Commenting on the minimum capital requirement of Rs 500 crore, he said, "I think it is a good starting point from the earlier limit of Rs 300 crore. We will have to see how it pan out."
By allowed public sector undertakings (PSUs) to seek banking licences, Takru emphasises the creation of a level-playing field between PSUs and private sector companies. "Nobody has an edge. The same guidelines will be applicable to all parties seeking a banking-licence."
He supported RBI and said that from the beginning made it thsi clear that it was around financial inclusion .
Below is the verbatim transcript of his interview to CNBC-TV18
Q: On the plain reading of the guidelines put out by the Reserve Bank, are you in the race or out?
A: I think the guideline is actually a broad range of people to apply. It is not applying too many filters at the initial stage other than some broad criteria. So yes, at this point in time it looks like someone like us would be eligible to apply.
Q: In terms of the eligibility criteria and the obligations that the Reserve Bank will impose if you were to get a bank license do you believe that the obligations are too many or are they fair and it gives you a level playing field?
A: I think that's the way the guidelines are. They are very transparent in terms of what their expectations are. They have said from the beginning that this is really around financial inclusion.
I think, like it was mentioned just now, the RBI does believe that one wants widely held banks. They believe depositor interest is more important than just the shareholder interest. So, it is consistent with their thinking. It is consistent with what they have been talking about in the guidelines. If one wants to apply, the n they have to apply under those conditions.
Undercurrents of rivalry between Infosys and TCS have never been a big secret, but the face-off has now reached another level. It was a sixand a half year IT contract to develop and maintain MCA 21. A portal launched by the ministry of corporate affairs in 2006, which is the main platform for cos to submit documents and filings to the Registrar of Companies.
TCS was handling this contract since 2006, but the contract was given to Infosys after TCS's contract expired in December 2012. Around January, TCS completed the official handover to Infosys, but the site ran into severe technical glitches post the handover. This created a panic situation at MCA prompting the ministry to bring in TCS as an external consultant for the contract. This essentially means that TCS will have to work with Infosys in sorting out the issue.
The ministry has jumped in to ensure corporate using the portal face minimum inconvenience. Sachin Pilot, Corporate Affairs Minister said, "Issues were caused due to transition. The website is now almost back to normal. If cos loses time, no extra money will be charged."
However, Infosys has been quick to retort with a statement, rubbishing allegations of negligence at its end.
Till date Infosys has made no significant changes to the system, which continues to run in the old environment. That is managed by the incumbent vendor, Tata Communications. Infosys gave a statement that any reports that imply that the instability in the MCA 21 applications is on account of their negligence are misguided.
V Balakrishan, Head, Infosys BPO, Bangalore said, "This is a complex project, whenever there is a transition happens one will see some challenges. I think it's a great project and we are working with the ministry closely to address all the challenges".
Even though Infosys's statement has raised eye brows, TCS however remains tight lipped. As per policy, it did not officially comment on the contract.
Gold prices fell below Rs 30,000 per 10g level on Thursday, mirorring a fall in gold prices in overseas markets. Gold has now fallen around 6 percent in the last 30 days.
"There has been a significant correction but what we are seeing is volumes will pick up and we are seeing grammage growth back into a decent number...The pattern generally has been people work on a budget and they have a certain value in mind when they come to a store and if they get more grams it makes so much more sense for them to buy gold," Subramaniam told CNBC-TV18.
Also read: See gold at $1500/oz; profit taking in commodities says UBS
After a weak first half, Titan's jewellery volumes picked up 12 percent in the third quarter, helped by festive season demand and start of the wedding season. Jewellery EBIT margin picked up 80bps to 9.8 percent in Oct-Dec, according to Bharat Chhoda and Dhvani Modi of ICICIDirect.com, the retail broking arm of ICICI Securities.
Subramaniam sees customers walking into stores on the back of the fall in gold prices and a "reasonably strong" wedding season.
He also said that the company hedges its entire gold inventory and didn't have any inventory gains or losses.
Meanwhile, studded jewellery volumes are also expected to see an uptick in the Jan-March quarter on the back of the promotional 20 percent discount on diamonds offered by Titan, the ICICI Direct analysts said in a recent report.
Titan shares were down 0.5 percent at Rs 256.40 on NSE in noon trade.
Below is the verbatim transcript of his interview on CNBC-TV18
Q: We have seen some slip in gold prices off late; it stands at a seven month low. What impact will it have on your realisations as well as in terms of your volume performance for Q4?
A: There has been a significant correction but we think volumes will pick up. We are also seeing grammage growth back into a decent number. In our first two quarters there was a decline and in the last quarter we had a 12 percent growth and that should be more than sustained this quarter as well, going by the prices.
Generally, people work on a budget and they have a certain value in mind when they come to a store and if they get more grams it makes so much more sense for them to buy gold. So gold is just not an ornament, it is also investment and it makes lot of sense for them to do that.
Actually it is welcome if gold prices ease off a little because you find customers walking back to stores and particularly with the wedding season being reasonably strong this year, we should see more walk-ins now.
Q: Is there any immediate loss in terms of inventory that you may have purchased at more expensive levels?
A: No, because we hedge our gold entirely. We don't have any inventory gains or losses at all. We buy and sell at the same rate and that is the mechanism we follow. We use the gold on lease scheme for that very effectively. So, any reduction or drop in gold rates will not impact us at all.
Q: Is your internal research telling you that we are going to see some more fall in gold prices or this is it?
A: We don't have much of an internal research on this because our entire business model is based on just the making charges. We don't have a view on gold as yet. Of course we do read a lot of what reports come out from various bankers and so on and so forth. Frankly there have been very contradictory views.
We have got views which talk about gold rates going past USD 2000 per ounce again sometime during the year. There also have been contradictory reports saying that the bull run gold has been having for the last five-six years is about to reverse .So it is very difficult to say actually what could happen.
However, I would assume that the economy in the US is going to change now; the Quantitative Easing three (QE3) reversal, if they are not going to be spending so much more then gold should start dropping because the dollar would start strengthening and that is a more likely possibility.
Q: You have indicated that the volume growth of 12 percent that you saw in Q3, we are likely to see that in Q4 as well. Is it only because of the festive season or the lag effect of the festive season spilling on to Q4 as well? Can this double digit volume growth extend on to FY14 as well?
A: I won't be surprised if it extends because now if you were to look at today's gold rate vis-Ã -vis what it was last year and if you were to knock off the customs duty impact, which is significant over the last one year the customs duty has gone up significantly. Even with that it is less than 10 percent and therefore volume growth is bound to happen, the industry will grow.
A double digit volume growth is not something which I would rule out at all.
The government should introduce tax free bonds, form infrastructure debt funds and also formulate comprehensive policy for developing public private partnership projects (PPPs) to propel industry growth.
Given the rapidly growing demand for housing from the low middle income population, there is a need to promote low cost housing. Some of the other issues which need government's immediate attention are high duty rates, which needs to be lowered.
Cement is one of the core industry which is crucial for development of nation's infrastructure. Somehow, this aspect has continously been ignored.
To encourage growth in cement industry, excise duty rate should be reduced from 12 percent to 6‐8 percent. In addition, the duty structure should be simplified to be either on specific rate per MT 9 metric tonne) or on an ad‐valorem basis
It is requested to provide a level playing field; by levying basic customs duty on cement imports into India. Alternatively, import duties on goods required for manufacture of cement should be abolished and free movement be allowed without levy of duty
The industry is one of the basic and core infrastructure industries. However, unlike other similar industries/goods, cement is subjected to higher rates of taxation. It is proposed that cement be stipulated as 'Declared Goods' under section 14 of Central Sales Tax Act so that it is put on an equal footing with other core sector goods like coal, steel, crude oil, jute and cotton yarn.
Standard Chartered, Barclays, Citibank, Deutsche Bank, HSBC and UBS are arranging the meetings in Asia, Europe, and the United States, said the source.
Benchmark sales are usually of at least USD 500 million.
Also read: RIL may enter voice mkt; telecom needs consolidation: Kotak
Ms. Manju Yagnik, Vice Chairperson, Nahar Group - One of Mumbai's leading real estate companies provides her perspective on the upcoming budget .
Q:What are the key necessities that you feel are must for the revival of economic growth?
A: Improving fiscal health, containing of inflation while ensuring inclusive growth are the basic necessities I feel that are must for the revival of economic growth. The government has been making all round efforts to address these basic challenges and it has succeeded to some extent.
Apart from the key policy decisions by the RBI, faster regulatory clearances, policy framework for hassle free land acquisition should enhance business confidence levels in the real estate circles leading to increased investment and thereby reviving growth. RBI could play a major role in revival of the economic growth. With the recent cut in repo rate and CRR has indicated a clear shift in the stance of the central bank to a soft money regime. We are optimistic about the likely change in the investment climate in the country. The real estate contributes lion's share in the country's GDP. Providing relief to the sector may boost the overall economy Various estimates are suggesting that the GDP growth will be above 5 per cent in the current fiscal year. We are expecting bold policy measures to boost the economy from the forthcoming union budget.
Q:What are your predictions on what the Budget is likely to deliver?
A:There are already positive indications that the upcoming budget may be a populist one and we tend to agree with it. As usual there is euphoria ahead of the budget, but I believe the finance minister may pitch for strong policy measures to take up reforms further while rationalizing taxes for the salaried class increasing the demand for realty projects. The budget may be a balanced policy statement this year, taking cognizance of common man, corporate sector and development.
Q:What do you feel optimistic about, in the current situation?
A: Government's clear intention and confidence about continuation of financial reforms, serious efforts towards rationalization of tax system, steps towards cutting down the subsidies are the few things that make us optimistic about the current situation. By taking decision about FDI in retail in the recent past, the government has already indicated that there is no question of going back from the reforms.
Q: What are the biggest challenges that you think are holding back corporate expanding?
A: I feel it's the bottleneck in the approval processes, lack of data coordination among various authorities that the corporate expansion plans are resisted. However, the budget might hopefully reduce the regulatory compliance for corporate and facilitate investments to drive growth.
Q:What are your expectations from this budget?
A: The Real Estate Industry is second largest contributor to the country's GDP after considering the lull in the real estate market since the last few months and its gradual attempt to make a comeback, the expectations from the upcoming budget for the real estate industry is high. We hence await the infrastructure status to the industry that will automatically accord priority status from the RBI to the real estate projects. Considering the shortage of working capital faced by the developers, we also expect the budget to smoothen FDI inflows. In order to meet the demand for additional homes, there is an urgent need to speed up the approval process. We expect the government to come out with the single window clearance system for approving projects.To match the increasing residential development taking place in tier I and tier II cities, there is a need to improve the infrastructure base in these cities. Additional funding assistance to the prime cities for infrastructure and for the real estate industry to meet the shortage of working capital is expected from this budget. All these measures will help the real estate industry in India to supply additional stock of homes at reasonable rates that can be affordable for the modern man.
TPG, which owned about 20 percent of Shriram Transport before the sale, sold the shares at Rs 715 each to a large number of overseas and domestic institutional investors, the source said.
The private equity firm had launched the share sale late on Wednesday in the price range of Rs 715 to Rs 755.95 per share, according to a term sheet seen by Reuters.
Shares in Shriram Transport were trading down 7.1 percent at Rs 702.1 at 1.16 p.m. while the Nifty was was down more than 1 percent.
Also read: NBFCs growth to moderate; bet on Shriram Transport: Kotak
Ashok Tyagi, chief financial officer, DLF told CNBC TV18 in an interview that the company will be able to halve its debt to Rs 12,000 crore from Rs 21,400 crore currently.
Over a period of three years, the construction company plans to sell 25-30 million sq ft of projects and generate earnings before interest tax depreciation and amortization of more than Rs 7700 crore.
Below is the edited transcript of the interview on CNBC-TV18
Q: How do you plan to scale down your debt and what levers you have penciled in for that including asset sales and possible equity issuances?
A: We had been talking about reducing debt for a few quarters now. Oct-Dec was the first quarter where our numbers showed a reduction in debt of about Rs 1,850 crore. So we are now down from Rs 23,200 crore to about Rs 21,400 crore from a debt standpoint.
With the sale of Aman Resorts and the wind farm, this number should come down to about Rs 19000 crore.
Then this will be followed by the capital action to comply with the Securities and Exchange Board of India (SEBI) norms. We are going to issue just north of 8 crore new shares to comply with the SEBI norms. So we expect that at the end of June the debt will further come down to Rs 16,000-17,000 crore range depending on how the entire capital issuance goes.
Our stable debt number (which we believe is a minimal stress number) is a debt which can be services comfortably by our rental assets through their lease rental discounting mode. That number we believe is about Rs 12000 crore. So we plan to cut debt to Rs 12,000 crore in three years from a Rs 16,000-17,000 crore.
Our development business is working on zero debt scenario which is the ideal situation for us to be in. I anticipate this journey to take between two-three years.
Q: The market got quite excited about EBITDA guidance of Rs 8250 crore on a steady state basis. Can you just take us through what is the route to that kind of EBITDA delivery?
A: I just want to put a caveat that from our financial numbers recovery standpoint we spread across three stages. One is the reduction in net debt which you are already beginning to see. With the launches you will see an improvement in cash flows. However because most of the new launches will be governed by new accounting guidelines which unfortunately put a four-six quarter lag between the time you launch a project till the time that you can book revenues. The EBITDA numbers will start strengthening only about four quarters down the line.
Our rental EBITDA as of today is running at about Rs 1,750 crore a year. With the natural escalation of 15 percent every three years and a couple of rental assets coming on (such as the Mall of India in Noida expected to be commissioned in calendar year 2013), and with a muted leasing volume of about 1.5 million square feet a year going forward, we believe that three years down the line our rental EBITDA should be in the range of about Rs 2700 crore.
On the development side, we expect that 1.5 million square feet of sales in the Golf Course Phase five area, about 2.5 million sq ft of sales in the New Gurgaon area, about 2.5-3 million sq ft of sales in the rest of India and about 0.5 million sq ft of sales in the Delhi super-premium area, should help us to have a sustainable EBITDA of north of Rs 5000 crore three years from now. Now depending on the market these three years could be four years, but the indications right now are that at the end of three years we should be able to broadly stabilize around this level. About Rs 5,000 crore plus of EBITDA from the development business, and about Rs 2,700 crore of EBITDA from the rental business.
Q: Can you just take us through what you expect to achieve in year one, year two as road maps or milestones to get into that three year figure?
A: So the numbers that I mentioned which is 1.5 million square feet of sales in the Golf Course Phase five area, about 2.5 million sq ft of sales in the New Gurgaon area and about 2.5-3 million sq ft of sales in the rest of India area, this sales number you should begin seeing from the next fiscal itself which is 2013-14.
However you should see a part of these launches based EBITDA flowing into the books from the next fiscal and hopefully by the end of the third fiscal. So you will see the sales volume hitting from next fiscal onwards but the EBITDA buildup of that will happen across the next three years with the next year being the lowest, the year after being the higher and hopefully in the third fiscal from now we should be ballpark in the numbers that we are talking about.
Q: Some analysts felt that the management was pretty cautious in terms on execution related issues even though you outsource a lot of your projects to big companies. Could you breakup that target you just outlined in terms of specific projects that you hope to be on stream between year one and year two?
A: We are talking of about 8-9 million sq ft of sales every year that means on a three year cycle one is talking about an execution buildup of about 25 million sq ft which we believe is in a range which can be handled with outsourced agencies also. One is talking of launching about 8-9 million sq ft in terms of sales every year across a three year cycle which assuming that the project takes three and a half years to complete you are talking of a peak execution volume of about 25-30 million sq ft on all these new projects which is doable. A number significantly north of that becomes a challenge from an execution standpoint.
Q: You have indicated in the past that you will look at doing equity issuances as well. How many issuances do you think you will have to do? What kind of instrument are you leaning towards and what kind of line is the management comfortable with in terms of equity dilution?
A: Right now we are doing an equity dilution which is for SEBI compliance. All of us know that there is a promoter Compulsorily Convertible Preference Shares (CCPS) issue lying in one of the subsidiary DLF Cyber City and at some stage before March 15 that will need to be resolved. The exact roadmap of that is unclear right now as we are focused on the equity issuance which has to be done by end of May. However I do believe that by March 15 that issue will need to be resolved in some acceptable form and shape. And may be one of those issues would be that at some stage that could lead to a secondary dilution. Right now it is still premature to talk about that.
Q: Of the numbers from sales that you are talking about over the next two-three years how much of it is predicated on a jump in realisations or selling rates over the next 24-36 months. Have you priced in significant increases in realisations?
A: No. Infact the numbers that I spoke to you about are based on the prices that we are talking today. We launched the Sky Court which was our last launch in New Gurgaon at about Rs 8000 per sq ft. Our next launch in that area should be slightly higher than that . We will launch Phase 5 in the next couple of months, we'll know the prices then. But we don't see any significant increases in prices from now on. We are anticipating that these launch prices are the ones that should sustain with some degree of tinkering.
We are clearly building in material escalation clauses to at least minimise the chances of margin erosion on account of input material inflation.
DB Realty to roll out 3 projects, eyes Crown for jewels
The court's action came after it took cognisance of the offence under sections 276B and 278B of the I-T Act, 1962, for not remitting Rs 74.94 crore deducted as TDS in 2009-10 fiscal and Rs 23.70 crore imposed as interest for not meeting the deadline stipulated for payment.
Section 276B entails rigorous imprisonment for a minimum of three months and a maximum of seven years with fine. The development spells fresh trouble for Mallya, whose airline is tottering with a net loss of Rs 755.17 crore for the third quarter ended December 31, 2012, a period when it did not operate a single flight.
The I-T officials on Tuesday had filed the criminal complaint against the airline and Mallya for failure to remit TDS for the fiscal 2009-10. The I-T Department had also complained that Kingfisher owed the government Rs 401 crore as TDS amount, deducted from salaries of its employees and from payments made to others in the financial years 2008-2012.
The next hearing will be on April 19. Carrying a debt of nearly Rs 8,000 crore and accumulated loss and liabilities of a similar amount, Kingfisher has been grounded since October 1 last year after its pilots and engineers went on a strike over non-payment of salaries.
India today faces problems of twin deficits - high fiscal deficit and unsustainable level of current account deficit. Besides, there is a widespread perception about slackness in clearances of projects at government level. International credit rating agencies have already issued warning that India may be downgraded to junk-status if fiscal consolidation is not addressed in a timely manner.
Even though domestic growth is at bottom of the last ten years, choice for the government is limited. Therefore, the number of measures announced by the government since September last year deserves appreciation. These measures including the most recent partial deregulation of diesel prices have improved the sentiments within the country and of international investors.
In usual times, a pre-election budget would be aimed at propelling consumption demand. However, the prevailing circumstances denote a new normal for India. Fiscal consolidation is a priority today and the finance minister will like to build on incrementally positive measures announced so far. Thus, the central focus of the Budget 2013 will be on presenting a reliable estimate of fiscal deficit.
The minister has been able to contain the deficit so far and it is expected that revised fiscal deficit estimate of 5.3 percent is more likely to be achieved. Unless it happens, credibility of any estimate of fiscal deficit in the forthcoming budget will be minimal. This means no populist schemes that may demand huge expenditure from constrained coffers of the exchequer and limited scope for reduction in burden on individual taxpayers.
This year's budget is important but not very significant. Importance lies in the fact that everyone is waiting to see how the finance minister takes forward his promise of fiscal consolidation roadmap. If he presents a credible estimate of fiscal deficit of 4.8 percent, markets and rating agencies will welcome it. However, the very next day, the budget will be a non-event, and that is why this year's budget is not very significant.
There is a need to look beyond the immediate obsession of having a unique number, like the fiscal deficit as percent to GDP, conveying all that matters for policy. The quality of fiscal adjustment is no less important than containing the quantum of deficit within the acceptable range.
In the expenditure compression course pursued in current fiscal, the axe has disproportionately fallen on capacity creating plan heads of expenditure which have impact on medium term growth potential of economy. The upcoming budget therefore, needs to be closely watched for the quality aspects of consolidation too.
A credible fiscal deficit is the necessary condition for India but not a sufficient condition to bring the economy back on growth path. The sufficient condition lies beyond the budget. It is the revival of animal spirit that will matter in India's recovery from dead-low growth point.
The cabinet committee on Infrastructure has met just once so far without any conclusive move forward. Unless investment climate is revived through faster clearances and approvals of projects, economic activities may remain subdued. So all eyes on the budget but better hopes lies outside the budget.
While addressing a press conference, Singh said, "The ministry is likely to present a Bill in the second part of the Budget session in the Parliament seeking to create the Civil Aviation Authority (CAA) which will be competent enough to sort out sector issues."
Singh pointed out that the Directorate General of Civil Aviation has not been effective in regulating growing needs of the sector. "There is an urgency to replace the DGCA with a more authoritative body to reinforce safety and security of millions of passengers and airlines," the minister said.
CAA will have a separate fund. It will be self-funding and will also be given financial and operational freedom. It will have a chairperson, director-general and seven to nine members.
On Jet Air -Etihad deal, he said both parties are still working on a probable alliance.
The retail chain debuted on the bourses today on a positive note but failed to sustain those gains for long due to heavy sell-off. The proceeds from the IPO will be used to open 60 stores in next 2.5 years. The company plans to keep its debt at low levels and don't plan to raise any more funds from banks for next two years.
Below is the edited transcript of his interview to CNBC-TV18.
Q: What does V-Mart hopes to do in terms of sales and profits through the course of this year?
A: Right now we have 62 stores; by March the company plans to open seven stores and add another 25 stores to take the total tally to 94 stores. At the profit after tax (PAT) level, we expect above 40 percent hike in the top-line and 50 percent hike in bottom-line. Our return on networth was around 26-27 percent pre-initial public offering (IPO) capital and around 18 percent post capital infusion.
We will keep our gross margin at good levels, as 80 percent of our sales come from gross margin which currently stands above 34 percent. We have a low inventory at about 3.5-4 times, we like to continue with the same and keep our investors happy. We will use the IPO proceeds to open 60 new stores in next two and half years.
Q: What kind of cash flows do you expect in 2013 versus the leverage that you have because the examples from the sector have been of very difficult balance sheets and poor cash flows, is your situation different?
A: We have built up a very strong and basic model where our inventory cycle is very low and our gross margins are very good. We conserve cash and generate cash. We also have very limited debt. We have a working capital limit of Rs 45 crore. After IPO, our net cash stands around Rs 45 crore on our books. Right now we do not require much debt.
We have internal policies that do not go beyond 0.7 times at any point of time which we have never done. We would keep our debt level very low and we don't think any fund from either of the banks for next two years.
Below is the edited transcript of Bansal's interview to CNBC-TV18
Q: What would be the company's interest cost burden for the rest of the year, and what steps is the company taking to alleviate that load?
A: We have about Rs 300 crore of debt, which for a company of our size is really not much. Three of our key projects are expected to go live in the next three-five months, the inventory of which is worth about Rs 15000 crore. We would be organising debt funding for that. So, debt is not really a concern and any softening in interest rates will not really impact us too much.
Q: Between the last quarter (Q2) and this quarter (Q3) your sales jumped from about Rs 50 crore to Rs 125 crore. Can you give us the reason for this?
A: Sales of Rs 125 crore is the number which is recognised in our revenues. Including sales of DB Crown, which has not reached that threshold of construction where you begin to recognise revenues, our sales numbers are about Rs 432 crore for the quarter. The jump in sales is because we got complete clarity from the government on the new Development Control (DC) regulations in the last quarter. So we could market and sell the products wholeheartedly. That period also coincided with the markets opening up a little.
Q: So in the current quarter, which properties will you be recognising revenues from? Can you give us a breakdown of how much each property will contribute?
A: I cannot give you the specifics, but the major kicker will be DB Crown, which is expected to cross the 25 percent construction threshold when you begin to recognise your revenues. That is the accounting policy we follow.
Other than that, DB Woods, DB Suburbia and DB Ozone have been the major contributors, with DB Woods being the primary one. However, being suburban projects, they have relatively low margins.
Q: What are the rates that you are managing to book these properties on?
A: The average rate of realisation is going up. We have about Rs 300 crore of liquid transfer development rights (TDR) which sits on our books. This sells at about Rs 2500-2600 per square foot. Our suburban projects are about Rs 15,000 per square foot (sq ft), and the south Mumbai projects are northwards of Rs 30,000 per sq ft.
Q: Do you have any pent-up inventory that you hope to sell through the course of this calendar year?
A: Inventory had been pilling up because you don't want to hit the market where you are not clear about what the market impact of the new regulations will be. Now that there is clarity, the last quarter was pretty strong with Rs 432 crore of sales. I expect this momentum to continue. I wouldn't be surprised that with three premium projects - DB Turf at Mahalaxmi, DB Heights at Jacob Circle and DB Paradise at BKC covering about 4 million sq ft of residential area coming live, sales numbers should definitely be strong. There will be a lag in the profit numbers because the recognition will take some time to come through.
Q: Promoters have been revoking some of the stake pledges they had with many banks. What is the situation on that front?
A: That is between the promoters. The executive management and ownership are separate. I cannot comment on that.
Q: I believe you have also resumed negotiations on the big redevelopment project in Bandra. How do things stand there?
A: With the inventory and cash flows we hope to get now, we will have to scout around for projects. There are very interesting projects available at comparative prices, and we are exploring all kinds of opportunities.
