Suzlon raises stake in REpower to 73.71%

Suzlon Energy Ltd has informed that the Company has acquired the first tranche of Martifer Group's stake in REpower Systems AG, Germany ("REpower") for a payment of approximately Euro 65 million. The transaction takes Suzlon's holding in REpower to 73.71%. Suzlon already holds 91% voting rights in REpower through an existing agreement with Martifer. Earlier this month, Suzlon and the Martifer Group entered into an agreement on a revised payment schedule for Martifer's 22.4 percent stake in REpower. As per the new terms, Suzlon acquires the stake in three tranches by payment of Euro 65 million in December 2008, Euro 30 million in April 2009, and the final tranche of Euro 175 million in May 2009, which will take Suzlon's ownership level to approximately 91% in REpower

GE Fin may sell stake in arm to IDBI, IDFC

ources close to the development confirmed the move and said that GE is all set to hive off its construction equipment finance business into a separate Rs 650-800 crore joint venture company and is in talks with IDFC and IDBI for the same. When contacted, the GE spokesperson said: “We treat our business and customer discussions with high confidentiality and are unable to disclose any details.” An IDBI senior official did not respond to the queries sent by ET. ET was the first to report that IDFC is in talks to acquire around 35% in GE’s construction equipment finance business and that the process pertaining to the transaction should have ideally been completed by the middle of the year. “Talks were initiated in the beginning of the current year but the slowdown in global markets and the current turmoil in financial services sector led the delay in the agreement. It may take some time for the final deal to come through,” said a source. IDBI was set up in July 1964 to provide credit and other facilities for the development of the Indian industry. IDBI offers a wide range of products and services, including deposits and loans, while IDFC is meant to facilitate financing infrastructure projects in the private sector in areas of power, roads, ports and telecommunications. Apart from infrastructure financing, the firm is also into asset management and investment banking. GE Commercial Finance, globally, has assets of over $335 billion. It caters to industries, including healthcare, manufacturing, construction, infrastructure and equipment, among others. The company’s real estate portfolio spans across all market segments — from industrial, commercial and office space to residential and recreational developments

Bank rates tumble, stimulus this week

While the UPA government’s top economy managers hinted on Monday that a second set of monetary and fiscal stimulus measures could come within days, Prime Minister Manmohan Singh held an hour-long meeting at his residence with RBI governor Duvvuri Subbarao. Though Subbarao remained tight-lipped about what transpired in the meeting, the key issue was the 150- to 200-basis point cut in key bank rates proposed by the Centre to ease access to credit and pre-empt a further slowdown in economic activity.

Reliance Money, FTIL plan stock exchanges

The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are set to have some serious competition. Reliance Money, controlled by the Anil Dhirubhai Ambani Group, and Financial Technologies India Ltd (FTIL), which operates one of the world’s largest exchange networks, are exploring the option of setting up their own equity exchanges Sources familiar with the developments said both companies see enormous scope in this space since only 5 per cent of Indian households invest in equities compared to the international average of up to 50 per cent. The scope for a new exchange can be seen from the rapidly growing business of equity derivatives, which are basically instruments whose value is at least partly derived from one or more underlying equities. The NSE enjoys a virtual monopoly in equity derivatives with daily average volumes at Rs 10,000 crore in the spot segment. In comparison, the BSE has daily average volume of just Rs 4,000 crore. The NSE’s daily average volume in derivative segment is Rs 40,000 crore.

Analysts bullish on 2009 commodity market fortunes

Gold has performed well in comparison to commodities such as base metals and crude oil as well as other asset classes like equities, debt, realty and bank fixed deposits. The yellow metal made an all-time high of $1032 per ounce in March due to a weak dollar, rise in crude oil prices and good investment flows. Prices fell to $681 level in October but have recovered to current level at $885. According to Naveen Mathur of Angel Commodities gold will continue being a favourite commodity with investors. He sees the metal getting support at $650 with a potential to exceed its record high of $1030 per ounce. Other analysts too are bullish on gold with Kishore Narne, research head, Anand Rathi commodities, predicting $1200 levels by mid-2009. “With liquidity infusion across the globe, paper currency will see an erosion in value and gold will be a better vehicle for investment,” says Mr Narne.In 2008, most of the commodities were on a rollercoaster ride. Crude oil, copper, soybean and crude palm oil hit alltime highs. Prices however could not sustain at those levels and there was a fall in investment flows into commodities following the US subprime mortgage crisis and the global financial turmoil in its aftermath. Also, after July, the dollar recovered and demand destruction with the onset of a global recession and inventory build-up led to a sharp fall in crude oil and base metal prices. In the case of edible oil complex (oilseed and oil), lower stock holding and rally in crude oil supported the prices during period January to June 2008. Thereafter due to good production estimates and fall in crude oil prices the complex was pulled down. But now when most of the governments are announcing economy stimulus packages and banks slashing down the interest rates to ease money supply things might improve even for commodities like base metals and crude oil. Jayant Manglik of Religare Commodities said that following gold, 2009 will also see demand picking up for base metals and crude oil with establishment of demand and supply equilibrium. “Investors will go long gold, crude oil and metals,” says Mr Manglik. Strong growth recorded by China, a major base metals consumer, led to sharp rise in metals until mid-2008 following stocking and a rise in industrial activity. Copper hit an all-time high of $8930 per tonne in first week of July due to rise in construction activity, but prices thereafter fell to $2800 level. Even crude touched an all time high level at $147 per barrel and thereafter fell by 75%.

Services sector will prop growth rate: Industry report

The survey by the the Federation of Indian Chambers of Commerce and Industry (Ficci ) said: "Although the slowdown is expected to make a further dent in the growth of some segments of the sector, given its overall contribution of 63 percent to the GDP (gross domestic product), the services sector growth is expected to help maintain a healthy GDP growth this fiscal." According to the survey, the number of wireless subscribers grew 50 percent in April-November compared to the same month last year. Internet subscribers grew 26 percent and broadband subscribers went up 87.7 per cent during the period, it added. During 2007-08, the services sector grew 10.7 percent, higher than the 8.8 percent growth in the manufacturing and 4.5 percent growth in the agriculture sectors. Sectors like housing finance, entertainment and media industry, IT and IT-enabled services, organised retail trade, education and training have seen a "high growth of 10-20 percent" in April-November, the report said.

Reliance Power arm to upgrade facilities at ITI in U.P.

Anil Ambani-led Reliance Power said its wholly-owned subsidiary Rosa Power will upgrade infrastructure facilities at Industrial Training Institute (ITI) Shahjehanpur in Uttar Pradesh, where the company has also been allotted 20 per cent of sea ts. As part of its pact with ITI, Rosa Power would train and educate youth in different industrial jobs in the villages affected by its over Rs 5,000 crore and 1,200 mega-watt power projects in the area. A Reliance Power spokesperson said that Rosa Power would “upgrade the infrastructure facilities of ITI, Shahjehanpur in phased manner'' and it has been allotted 20 per cent of the total seats in the training institute. The company, however, did not discl ose the proposed budget for the initiative. At present, there are 18 different trades like electrician, welder and fitter in which ITI provides training. The company might offer direct or indirect job opportunities to the people graduating from these courses. The admissions to the seats allotted to the company would be completed jointly by ITI and Rosa Power officials, the spokesperson noted. The admissions for this year got closed on December 15 and in total 50 people got admitted to the said program, out of which 12 people got selected for o ne year program and balance 38 people for two year program. This will be continued in future academic sessions also.

Services sector will prop growth rate: Industry report

The survey by the the Federation of Indian Chambers of Commerce and Industry (Ficci ) said: "Although the slowdown is expected to make a further dent in the growth of some segments of the sector, given its overall contribution of 63 percent to the GDP (gross domestic product), the services sector growth is expected to help maintain a healthy GDP growth this fiscal." According to the survey, the number of wireless subscribers grew 50 percent in April-November compared to the same month last year. Internet subscribers grew 26 percent and broadband subscribers went up 87.7 per cent during the period, it added. During 2007-08, the services sector grew 10.7 percent, higher than the 8.8 percent growth in the manufacturing and 4.5 percent growth in the agriculture sectors. Sectors like housing finance, entertainment and media industry, IT and IT-enabled services, organised retail trade, education and training have seen a "high growth of 10-20 percent" in April-November, the report said.

Reliance Petroleum refinery goes on stream

Reliance Petroleum has announced the commissioning of its refinery in a Special Economic Zone at Jamnagar, Gujarat in India. With a crude oil processing capacity of 580,000 barrels of oil per day, the company ranks as the 6th largest refinery in the world and is also amongst the world's most complex refineries. RPL commenced its crude processing on 25 December 2008. The secondary processing units are now under synchronization and commissioning. The entire refinery complex is expected to attain full capacity shortly. The commissioning of the RPL refinery catapults Reliance into the league of the largest refiners globally, both in terms of complex refining capacity and earnings potential. With the completion of the RPL refinery, Jamnagar has emerged as the Refining Hub of the World' with the largest refining complex with an aggregate refining capacity 1.24 million barrels of oil per day in any single location in the world. The state-of-the-art, globally competitive RPL refinery has been completed in 36 months from concept to commissioning, which is a new benchmark for building a grass-root refinery of this scale and complexity. This refinery has been built with a significant capital cost competitive advantage. This record has been achieved in spite of the significant shortfall in engineering and construction resources that has impacted most other refinery projects globally. RPL achieved the milestone by leveraging the project management skills of the Reliance group together with world-class implementation partners like Bechtel UOP and Foster Wheeler amongst others.

Tata Teleservices - Updates on Open Offer

Lazard India Pvt Ltd ("Manager to the Offer"), on behalf of NTT DOCOMO, INC ("Acquirer") along with Tata Sons Ltd ("Persons Acting in Concert and referred to as "PAC"), has issued this Announcement to the Equity Shareholders of Tata Teleservices Maharashtra Ltd ("Target Company"), which is in continuation of and should be read in conjunction with the PA, published on November 14, 2008, in relation to the Offer (as defined below), pursuant to and in compliance with Regulation 10 and Regulation 12 and other applicable provision of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 and subsequent amendments thereto ('Regulations') With reference to the Public Announcement whereby the Acquirer and PAC made an Open Offer to the equity shareholders of the Target Company to acquire up to 384,241,919 equity shares of face value Rs 10/- each, representing in aggregate 20% of the fully diluted equity share capital of Target Company at a price of Rs 24.70 per share ("the Offer"), the equity shareholders are requested to not the following: In compliance with Regulation 18(1) of the Regulations, the draft Letter of Offer was submitted to Securities and Exchange Board of India (SEBI). The final observations letter in terms of Regulation 18(2) of the Regulations from SEBI is still awaited. Hence, the schedule of activities set out in paragraph 53 of the PA will undergo a change. Accordingly, the date of opening of the offer stated in the PA i.e. January 08, 2009 is postponed, till further notice in this regard is published by the Manager to the Offer. The revised schedule of activities in respect of the Offer pertaining to acquisition of the equity share of Target Company will be announced separately on receipt of observation from SEBI in terms of the Regulations. The terms used but not defined in this Announcement shall have the same meaning assigned in the PA.

PE investments in listed firms suffer $2.24 bn loss in '08

Private equity investments in public firms have tanked as much as $2.24 billion so far this year, thanks to the massive erosion in equity markets as well as the present economic downturn, a latest study says."Due to continuous downfall and rough market conditions of 2008, the overall till-date-return on PIPE deals of 2007 (on volume basis) is at (-42.37 per cent) aggregating to a loss of $2.24 billion," Nexgen Capitals, the merchant banking arm of brokerage firm SMC Global Securities, said in its latest report. An analysis of private investment in public equity in 2007 shows that these deals in the country have lost funds to the tune of $2.24 billion till December 17 this year. Total investment in PIPE deals of 2008 were $5.29 billion, while the current mark to market values stand at $3.05 billion. Amid the downturn, telecom, emerged as the only sector that survived the downturn and registered gains of as much as 10 per cent. Beside telecom, all the other sectors reported losses and the hardest hit were Banking, Financial Services and Insurance (BFSI), healthcare and retail. "Wealth destruction is all pervasive irrespective of the sector and irrespective of the stock. Still, telecom sector weathered the volatile capital market conditions," the report added. An analysis of industry-wise return till December 17 shows that IT & ITeS suffered loss of 74.09 per cent, BFSI (32.37 per cent), infrastructure (71.84 per cent), healthcare and life sciences (42.66 per cent), retail (91.43 per cent), media (75.35 per cent), manufacturing (73.07 per cent) and real estate (76.42 per cent).

Believe it or not: Oil cheaper than packaged water

Back-of-the-envelope calculations show that a litre of petrol costs about Rs 11 and diesel about Rs 13, excluding transportation and sundry other charges etc. In contrast, you pay Rs 12-15 for a one-litre bottle of water. Here's how the arithmetic goes: A barrel of crude oil contains about 190 litres. At $38 a barrel, the current price in the international market, each litre of crude works out to Rs 10, taking the exchange rate at Rs 50 to a dollar. On an average, approximately 28-29 litres of petrol and 85 litres of diesel are refined from each barrel of crude. Admittedly, this figure can vary according to the type of crude being processed and the technology deployed in a refinery. So how much would the price of a litre of motor fuel be after incurring the cost of refining, if there were no other charges? The calculation is so mind-boggling that sometimes even executives of oil marketing companies get confused by the myriad central and state taxes - levied at incremental rates - and complex charges such as "freight equalisation levy'' and dealer margins, etc. Such levies taken together constitute 45-55% of the sale price of petrol or diesel. So if petrol costs a little over Rs 45 a litre in Delhi pumps, taxes and levies make up about Rs 22 and another Rs 12 constitutes the oil-marketing firm's profit. That leaves a basic cost of about Rs 11 per litre. Similarly, at Rs 32 a litre - the Delhi price of diesel - the actual cost can be taken as Rs 13 as the companies are making a profit of almost Rs 3 a litre. These calculations are admittedly simplistic and do not take into account other products such as kerosene, jet fuel, cooking gas, naphtha, etc., that are produced along with petrol and diesel and have a bearing on the final cost of each product. However, there won't be big difference between these figures and the figures worked out by the industry.

Stimulus Plan-II will aid IT sector

The government is set to extend the blanket tax exemption provided to software companies in order to boost the IT industry, which has become one of the biggest casualties of the global financial crisis. The Software Technology Parks of India scheme that grants a ten-year income-tax holiday under Section 10A of the Income-Tax Act is expected to continue beyond its March 2010 deadline in a move that should help smaller players.

Govt to push for easier credit, more duty reliefs

The UPA government’s second and final stimulus package for the current fiscal, would focus on credit availability to industry and trade at affordable rates with some policy rate adjustments by the Reserve Bank of India, sources here familiar with the development, told Business Line. They further noted that since labour-intensive export segments such as leather and leather products, marine products and textiles had suffered severely due to the drop in overseas orders that led to retrenchment of workers, the second stimulus would address these specific sectors in a bid to bolster them. Asked whether there would be any duty cuts particularly at a time when both customs and excise collections have been falling since September 2008, the sources said that there would be a possibility of duty cuts in mass consumption items such as pulses in the second stimulus.

Stimulus package for exports, housing & steel

The package is expected to be fine-tuned at a late evening meeting which is expected to be attended by Mr Nath himself and deputy chairman Planning Commission Montek Singh Ahluwalia and Cabinet Secretary K M Chandrashekhar. Earlier it was reported that exporters who have purchased export credit protection are set to get an additional dole-out from the government over and above the cover they have already bought. The government is expected to come out with a Rs 350-crore additional package for exporters soon. This will be in addition to Rs 5,000-crore refinance package announced earlier in the month by the Reserve Bank of India for Exim Bank to provide liquidity support to troubled exporters. The funds will be used to provide export credit insurance cover to exporters over and above the protection provided by Export Credit Guarantee Corporation, ECGC executive director S Prabhakaran said at a CII seminar. “Exporters who have ECGC cover will get an additional 10% of money depending on the type of cover. It will cover those entities who are covered by the MSMED (Micro Small and Medium Enterprises Development) Act,” Mr Prabhakaran said. While the details of the package are still being worked out, the non-SME beneficiaries from the package are likely to be from sectors such as textiles, gems and jewellery and leather. The list is expected to cover the list of beneficiaries in detail, he added. One of the fall-outs of the financial crisis in most western markets since September this year is that many Indian exporters saw a dip in demand and had to cancel order. For the first time in several years, the country’s exports saw an absolute dip in exports during October this year. Many even faced payment and credit problems, leading them to enforce their claims with the credit insurer. Many have also been facing problems because of a volatile rupee. Mr Prabhakaran said the Corporation has seen the size of claims going up, but added resource-wise it was comfortable and will not increase the premium. “We are having a comfortable claim to premium ratio.” Mr Prabhakaran said ECGC is not shunning new entrants seeking a cover. Instead, it is encouraging exporters to go for turnoverbased policies instead of transaction-based policies and ensuring that exporters go for a long-term protection rather than a selective cover. Unlike in India many commercial entities like COFACE have already indicated their unwillingness to take on exposures in countries like UK, USA, Ireland, Iceland and Italy.

Funds dial IT czars for Satyam deal

Institutional investors led by Aberdeen Asset Management , Fidelity and ICICI Prudential hold a 61% stake in Satyam, several times the 8.3% stake held by the family of the company’s founder and chairman, Ramalinga Raju. This makes the company vulnerable to a hostile takeover, especially since several funds are upset at Satyam’s founders for trying to use the company’s cash pile to buy the two Maytas firms run by Mr Raju’s family members. But given Satyam’s reputation problems and the challenging global environment, getting a buyer may not be easy, analysts say. However, at least two people familiar with the developments told ET that bankers acting on behalf of some funds had approached Satyam’s rivals such as Wipro, Infosys, large overseas IT companies and financial players in the past few days. Infosys and Wipro declined to comment as they are in a “silent period” before quarterly results next month, but informed sources indicated that these companies did not show interest in pursuing a deal. Private equity investors are rumoured as another set of potential buyers, although analysts say Satyam is more likely to attract interest from IT firms as a financial buyer would need to have a top management team in place before moving in to do a deal.

Reliance Industries to start world's biggest refinery

The $6 billion project will make the oil complex in Jamnagar in Gujarat the world's single biggest supplier of fuels to the global market, pumping out 1.24 million bpd of ultra-clean fuels to Europe, Africa and the United States. The project is a triumph for Chief Executive Mukesh Ambani, who helped break India's heavy reliance on imported fuel a decade ago with Reliance's first 660,000 bpd plant, a cash cow for the firm during a profit boom over the past four years.

India- Room for Monetary Policy Easing

India’s government said the country has room to cut interest rates further and pump more money into the economy to sustain growth after the global recession caused industrial output to shrink for the first time in 15 years. “An aggressive monetary policy may be necessary if the global economic depression continues to adversely affect manufacturing,” the finance ministry said in its mid-year review of the economy presented in parliament today. India also needs to increase spending on infrastructure to offset declining private investment, the ministry said. Prime Minister Manmohan Singh, seeking re-election before May next year, wants to sustain consumption as a decline in exports forces companies to cut production and fire workers. The government on Dec. 7 announced a 200 billion-rupee ($4-billion) stimulus package to prop up consumer spending, a day after the central bank cut interest rates for the third time in two months. “The only strong solution to spur consumer spending lies in lowering borrowing costs,” said Dharmakirti Joshi, an economist at Mumbai-based Crisil Ltd., the local unit of Standard & Poor’s. “The decline in inflation gives the central bank enough legroom to ease the policy.”