Amtek Auto buys into Amtek India; to make open offer

Amtek Auto Ltd on Friday said it bought 26.25 percent stake in group firm Amtek India Ltd through several block deals on the Bombay Stock Exchange at an average price of 64.83 rupees a share.

Daiichi Sankyo to keep Ranbaxy listed

Japan's No.3 drugmaker Daiichi Sankyo intends to keep its Indian subsidiary Ranbaxy Laboratories listed, Daiichi's incoming president said today, denying persistent talk that Daiichi may turn Ranbaxy into a fully owned unit. Daiichi Sankyo bought a 64 per cent stake in Ranbaxy, a generic drug maker, in 2008 for 488 billion yen ($5.37 billion). Indian media have reported that Daiichi may be seeking to buy all the other shares in Ranbaxy to better control the subsidiary after problems with the quality of Ranbaxy's products emerged in the United States. "Ranbaxy has a strong brand and is highly respected as a good firm, and I think one reason for this is the fact that it is recognised as a good drugmaker listed in India. And we do not find any inconvenience in operating it listed and as it is," Daiichi Sankyo executive vice president Joji Nakayama told Reuters in an interview. Nakayama will replace Takashi Shoda as the company's president and CEO on June 28, if approval is given by shareholders. He also said Daiichi Sankyo seeks to rely on external resources, such as through an acquisition or joint venture, to strengthen its cancer drug business.

SC gives go-ahead to divestment in UP sugar mills

The Supreme Court today gave the go-ahead to disinvestment in 11 sugar mills owned by the UP government, but subjected the outcome to its final judgement. A bench comprising Justice G S Singhvi and Justice C K Prasad said that the UP government can go ahead with the bidding process as per schedule on June 3 but the "outcome would be subject to final adjudication. Any action taken by the respondent (UP government) shall be subject to the final outcome of the petition." The Court's direction came over a petition filed by one Rajiv Kumar Mishra, who challenged the bidding of 11 operational sugar units in the state. The UP government, in 2007, embarked on a drive to privatise sugar mills, but with not many takers for its loss-making units decided to sell the 11 operational units first. However, the decision to privatise operational units has since run into a legal tangle, stalling the disinvestment process. Earlier, the Allahabad High Court had also given a go- ahead of the proposed disinvestment by the state government but had specifically said that the mills should not be closed down and the pattern of land usage and employment should not be altered.

Idea to roll out 3G services by third quarter

Aditya Birla Group company Idea Cellular today said it expects to start 3G services in the third quarter of the ongoing fiscal. "We expect to roll out 3G services by the third quarter... We are in discussions with vendors for equipment," Idea Cellular Chief Technology Officer Anil Tandan told reporters on the sidelines of the LTE India 2010 conference here. Idea has won 11 circles for 3G services -- Maharashtra, Gujarat, Andra Pradesh, Madhya Pradesh, Himachal Pradesh, UP (East and West), Punjab, Haryana and Kerala. Asked if the company has finalised a vendor for procuring equipment, Tandan said, "We are in discussions... We work with four vendors - Nokia Siemens Networks, Ericsson, Huawei and ZTE." However, he did not give a timeline for finalisation of vendors by Idea. The auction for 3G mobile licences ended on May 19, with RCom, Bharti and Aircel bagging 13 circles each, generating a Rs 67,710 crore revenue windfall for the government. No single operator managed to bag all 22 circles on offer. The key circles of Mumbai and Delhi went to Bharti, Vodafone and RCom.

SAIL to borrow $1.3 bn in 2010/11

State-run Steel Authority of India Ltd expects to borrow 60 billion rupees ($1.3 billion) in the fiscal year to March 2011, to fund its capital expenditure, Chairman S K Roongta told reporters on Friday. Earlier, SAIL, India's largest domestic producer of steel, reported March quarter profit of 20.85 billion rupees, meeting forecasts.

Aban Offshore plan may lead to heavy equity dilution

Aban Offshore, which lost its semi-submersible rig Aban Pearl on May 13, is facing a severe cash crunch. To meet its huge debt obligation for FY11-12 the company’s board of directors at its meeting on Tuesday approved raising additional long-term resources through issue of foreign currency convertible bonds, global depository receipts, American depositary receipts, etc, not exceeding amount equivalent to $400 million, and issue of equity related securities to qualified institutional buyers up to Rs 2,500 crore. This is, however, subject to shareholder approval. The sinking of Aban Pearl, the highest earning asset of Aban, had triggered serious worries over the company’s cash flows. For fiscals 2011 and 2012, Aban has debt repayment lined up of $375 million and $650 million ($1025 million in total), respectively. Aban has a debt obligation of $1,025 million for fiscals 2011 and 2012 (estimated), against expected cash flows of $500 million and $240 million from operations and insurance compensation, respectively, implying an unfunded portion of $285 million, according to Saeed Jaffer and Nitin Tiwari, analysts with Ambit Capital. In such a scenario, Aban would find it challenging to fund (either by equity or debt) this gap due to loss of revenues from a high cash generating asset. Kapil Yadav, analyst, Dolat Capital, said, “It will be very tough for Aban to raise money in such a scenario in order to meet its debt obligation as the market sentiment is not very upbeat and the cash-flow situation of the company is not very comfortable.” Kunal Lakhan, analyst with K R Choksey Shares & Securities, said since the contract with Petroleos de Venezuela, the Venezuelan oil company, is terminated it will lead to loss of revenues to the tune of Rs 350 crore every year. If Aban raises money at this point of time it will lead to heavy equity dilution as the stock is trading at sub-Rs 700 level. Aban Offshore stock has declined 32.66% since May 14 to Rs 685. The semi-submersible rig was a significant contributor with annual revenues of $123 million and Ebidta of $77 million. Analyst estimates show that there could be an annual revenue and Ebidta losses of $125 million and $81 million, respectively, due to the incident.

KoPT divided over govt's transloading facility JV

The Union Shipping Ministry wants to rope in SAIL and Shipping Corporation of India (SCI) to implement the proposed transloading facility on the Bay of Bengal, but officials of Kolkata Port Trust (KoPT) aren't too keen on the initiative. Rakesh Srivastava, joint secretary, shipping, told Fe that the ministry recently discussed the issue of setting up a transloading facility on the Bay of Bengal with SCI, SAIL and KoPT. It has mulled forming a SAIL-SCI joint venture for implementing and operating the project but “things are at a preliminary stage of discussion,” Srivastava said. The KoPT has to first agree to the idea of SAIL and SCI forming a JV to take up the project and send a formal proposal to the ministry. KoPT is yet to send any proposal to the ministry, Srivastava said. According to A Majumdar, who till May 21 functioned as KoPT’s acting chairman -- Ajay Ranade took over as acting chairman from Majumdar on May 24 -- two sites have been identified, one at Sandheads, off the coast of Bengal and another at Kanika sands, off the coast of Orissa. The port will soon take a decision as to how to move ahead with the project. Majumdar said since Indian Oil Corporation (IOC) had installed its 330 km Haldia- Paradip pipeline at a cost of Rs 700 crore, Haldia port had lost around 8 million tonne of crude cargo, which has become deterrent to its business. For the loss of crude cargo and draught constraints reducing parcel size of ships, Haldia handled around 10 mt less in 2009-2010 (the port is yet to come out with its yearly performance) from 41.5 mt it handled in 2008-2009. For sometime, the port, Majumdar said, was banking on the iron ore cargo but iron ore handling entirely depended on the demand from China. Now China seems to have created an inventory of iron ore and exports from India has dropped. This has reduced iron ore handling in Haldia. “Coking coal is one cargo, which can partially compensate the loss of crude cargo and for this the ministry as well as the KoPT is willing to see an SCI- SAIL JV implementing and operating a transloading facility on the Bay of Bengal,” Majumdar said. According to a section of KoPT officials, however, the move to nominate SAIL..

PSU stake sale process to be expedited

In a bid to expedite the process of disinvestment of public sector undertakings as also avoid bunching of public offerings, the Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal for appointment of merchant bankers to be taken up simultaneously with the clearance for stake sale in PSUs. An official statement on the CCEA decision said: “The appointment of merchant bankers and other intermediaries will now be taken up simultaneously with the process of seeking CCEA approval as soon as the Minister-in-Charge has approved the case.” Accordingly, the ministries concerned will henceforth be required to seek simultaneous approval from the CCEA for selection and appointment of merchant bankers along with consent for disinvestment of the Centre's equity stake in PSUs. “It is expected that the time [thus] saved will be optimally utilised in preparing for the actual transaction and in facilitating the disinvestment process,” it said. “The approved process will help planning and timing of the public offerings in a manner that they are spread out evenly and avoid bunching as far as possible so as to ensure better response from investors, including retail,” the statement said. Under the existing approval mechanism, delays occur as ministries have to first seek clearance for disinvestment and then obtain consent for the appointment of merchant bankers on a case-by-case basis. The government has targeted to mop up Rs.40,000 crore through divestment during the current fiscal and among the major PSUs that are to be lined up for stake sale are Coal India Ltd., Indian Oil Corporation, MMTC, RINL, Shipping Corporation, Hindustan Copper, Power Grid Corporation and Manganese Ore India Ltd.

NTPC-BHEL JV mulls technology tie-up with global firm

NTPC-BHEL Power Projects Ltd (NBBPL) today said it is exploring the possibility of a technology tie-up with a foreign player, which may be offered a minority stake in the company. The move is aimed at bringing Indian power equipment manufacturing at par with international companies through the induction of modern technology. "There is always a possibility of a third partner, whenever the need arises we would take a call. We are exploring the possibility for technological tie-up with a foreign company," NBPPL Chairman C P Singh told PTI in an interview. He said, "It (the technology tie-up) may or may not be an equity partnership." NTPC-BHEL Power Projects Private Ltd is a 50:50 JV firm formed between NTPC and BHEL on April 28, 2008, for carrying out Engineering, Procurement and Construction (EPC) contracts, besides the manufacture and supply of equipment for power plants. "There is always a shortage of power equipment manufacturing units in the country," Singh said, adding that the JV would augment power generation capacity addition in the country. The company currently has an order book of about Rs 450 crore. It is targeting an order book of Rs 7,000 crore by the end of the current fiscal. At present, NBPPL is working on the 100-MW Namrup Power Station in Assam and the 726-MW combined cycle power plant being set up by ONGC Tripura Power Corporation at Palatana, in Tripura. It will also take up execution of the 500-MW Singrauli thermal power plant and the 600-MW thermal power plant of Andhra Pradesh Power Generation Corporation Ltd (APGENCO) at Rayalseema. NBPPL falls under the administrative control of the Ministry of Heavy Industries and Public Industries. The Ministry of Power has set a target for adding 78,000 MW of power generation capacity during the current XI Five-Year Plan Period (2007-12). This is likely to translate into immense business opportunities for equipment- manufacturing companies like NBPPL.

Indian oil cos won't bid for Gulfsands Petroleum

State-run Oil India and refiner Indian Oil Corp on Thursday denied reports that they were still considering an offer for Syrian-focussed oil explorer Gulfsands Petroleum. News organisations on Wednesday reported comments from Oil India's Chairman N. M. Borah saying the companies' were still interested in Gulfsands. "It is not a closed chapter. A number of possibilities can come up ... Gulfsands is very much on our radar," Borah told reporters. Oil India and Indian Oil Corp withdrew a 315 pence per share approach, which had valued Gulfsands at 381 million pounds ($548 million), in May after their request to conduct due diligence was turned down by Gulfsands which dismissed the offer as "wholly inadequate". The companies had been asked by Britain's takeover watchdog to submit a bid by May 11 or walk away for a minimum of six months. However, they agreed they can return with an offer within the six month period if a rival bid materialises. Shares in Gulfsands were down 0.4 percent to 256 pence at 0722 GMT, valuing the business at 295 million pounds.

City Union Bank Q4 net up 33% to Rs 34 cr

Private sector lender City Union Bank today reported a growth of 33.32 per cent in net profit to Rs 34.81 crore for the fourth quarter ended March 31, 2010, over the same period last year. Total income rose to Rs 282.31 crore for the January-March quarter of the 2010 financial year from Rs 255.59 crore in the same period of the previous fiscal, City Union Bank said in a filing to the Bombay Stock Exchange. The board of directors has proposed a dividend of 75 per cent, or Rs 0.75, per share of face value of Rs 1 each for the year 2009-10. For the year ended March 31, 2010, the company posted a net profit of Rs 152.76 crore, up 25 per cent from the previous fiscal. Shares of City Union Bank Ltd were being traded at Rs 32.40 on the BSE, up 1.73 per cent from the previous close.

India's Q1 gold demand surges to 193.5 tonnes - WGC

India's total gold demand surged to 193.5 tonnes in the first quarter ending March from 24.2 tonnes a year earlier, the World Gold Council said on Wednesday. Jewellery demand rose to 147.5 tonnes from 37.7 tonnes, while investment demand rose to 46 tonnes. Total demand consists of both jewellery as well as investment demand.

3G will revolutionise the games people play

Now, get ready to enjoy an enhanced gaming experience with third generation (3G) technology!With the onset of 3G technology, there will be high data transfer rates over longer distances, efficient bandwidth use, map and positioning services and multi-player gaming facilities.With the mobile value added services (VAS) market pegged at around $45 billion, the latest trend is 3G spectrum which is expected to create a paradigm shift in the VAS market in India. According to various estimates, the number of mobile handset users in the country is expected to reach nearly 800 million in next four years, and 3G will change the way people communicate. Says Nitish Mittersain, CEO of Mobile entertainment company Nazara Technologies, "3G is the new buzzword in the world of telecommunications whose launch opens the door to innovative value added services which will bring everything to one convergent device. Larger bandwidth will permit high quality and large games to be downloaded easily and quickly, enabling a large number of consumers to access such games in a fraction of seconds.""High end mobile devices with more processing power, memory and larger screen embedded with speed will enhance the overall gaming experience for the consumer. In fact, 3G users are expected to spend at least 3-4 times more on gaming as compared to normal users," Mittersain, also the chairman of the mobile committee of Indian Merchants' Chamber, told PTI. According to him, multi-player and social gaming is set to see the biggest uptake as Indian version of games on SNS platform will be sought after by avid gamers. "Nazara has already launched social mobile Internet games such as Mobile Housie which has received a great response from the users," he says.Jump Games CEO Salil Bhargava anticipates that 3G would have a positive impact on the consumption of mobile games."Faster download speeds and newer, more powerful devices, will help in offering better user-interfaces thereby improving content discovery. 3G will also help in offering users enhanced gaming experience with possibilities of multiplier and 3D gaming," he says. On the impact mobile Internet-based games will see after 3G's arrival, he says, "Gaming will become more persistent. Faster connection speeds will enable offering higher quality gaming experience to the end user. Going forward, features like in-game micro-transactions will also help increase the game play longevity and keep the user hooked to the game." Meanwhile, experts from telecommunications industry from across the country would huddle in Mumbai on May 28 to discuss the impact of 3G on Mobile VAS. The spotlight would also be on the mobile TV services as well as the impact of 3G on mobile gaming and streamlining of innovative ideas to create casual gamers. "After 2G, 2.5G, GSM and CDMA, it is now 3G, which is expected to bring changes the way people communicate. After 132 countries across the world, 3G is now set to revolutionise mobile communications by introducing high speed connectivity and infotainment to Indians," says Indian Merchants' Chamber president Gul Kripalani.

Mahindra to acquire 55.2% stake in Reva

Mahindra & Mahindra today announced that it will acquire 55.2 per cent stake in electric carmaker Reva, marking its entry into the alternative fuel-based passenger vehicle space. The two companies today signed an agreement, under which M&M will acquire 55.2 per cent stake in Reva Electric Car Company by a combination of equity purchase from Reva's promoters and a fresh infusion of over Rs 45 crore into the company, the homegrown auto major said. Post the buyout, the Bangalore-based company will be renamed as Mahindra Reva Electric Vehicle Co Ltd with M&M's President for the Automotive business Pawan Goenka as its chairman. Reva's Deputy Chairman and Chief Technology Officer Chetan Maini will play the role of Chief of Technology and Strategy in Mahindra Reva. "This is a key strategic acquisition for Mahindra in its march towards sustainable mobility. Mahindra and REVA bring together complementary strengths," Goenka said. With M&M's global distribution network, REVA's vehicles have a potential to significantly gain in market penetration, he added. Under the agreement, the new board of Mahindra Reva will have five nominees from M&M, two from Reva's founder the Maini family and one from California-based AEV LLC, Reva's co-founder. " The EV market is poised to grow significantly and we conclude that in order to seize the opportunity, we needed the resources and experience of a major automotive manufacturer," Maini said. As a result of M&M's investment, Mahindra Reva will be able to "scale, innovate and accelerate" and will be able to deliver better products to more customers in more places, he added.

Govt announces Rs 95 lakh relief for rubber growers

The Commerce and Industry Ministry today announced financial assistance of Rs 95 lakh for about 19,000 rubber growers in the country during the current financial year. Under the Price Stabilisation Fund scheme, the ministry provide financial relief to growers when the prices of tea, coffee and rubber fall below a specified level. "On the basis of price spectrum band 2009, 18,915 rubber growers would receive financial assistance of Rs 95 lakh during 2010-11," a statement said. The average domestic price for rubber was Rs 97.56 a kg during 2009 and it was a 'normal year' for the commodity. Tea and coffee growers did not get the assistance as it was a 'boom year' for them (based on a price analysis of the commodities during the past seven years). The annual average domestic price for tea was Rs 102.83 per kg during 2009, while the average price for 'coffee arabica' was Rs 175.32 per kg. This led to the year being categorised as a 'boom year' for these products. The Rubber Board has projected natural rubber production at 8.93 lakh tonnes in 2010-11 fiscal against 8.31 lakh tonnes in the previous fiscal, while consumption is expected to rise to 9.78 lakh tonnes from 9.3 lakh tonnes last year. Rubber is mainly grown in southern India.

Food inflation to come down to 4-5% by Nov: Abhijit Sen

Planning Commission Member Abhijit Sen today said food inflation is expected to decline to 4 to 5 per cent by November from the current over 16 per cent after the arrival of Kharif (summer) crops. Sen also noted that farm sector growth would be revised upwards to 0.2 per cent in 2009-10 from the earlier estimate of minus 0.2 per cent. quot;Prices have started falling from March after good Rabi arrival. For some commodities like onion and potatoes, the fall is very sharp. But overall prices are very high. After Kharif season, prices will start coming down," Sen told reporters. "It's quite possible food inflation will come down to 4-5 per cent by November this year," he added. Experts had predicted a drop in food inflation with the arrival of Rabi crops in April. However, food inflation has continued to rise and surged to 16.49 per cent for the week ended May 8, mainly due to high prices of vegetables and fruits. Earlier this week, Prime Minister Manmohan Singh had also exuded confidence that overall inflation would come down to 5-6 per cent by December. On farm sector growth, Sen said growth is likley to be 0.2 per cent in 2009-10 due to upward revision in production in third advance estimate. "In 2010-11, the farm sector growth is likely to be 5-6 per cent if met department forecast on monsoon comes true," he added. In the thrid advance estimates released recently by the Agriculture Ministry, foodgrains production has been revised upwards to 218.19 million tonnes from 216.85 million tonnes quoted in the second advance estimate released in February.

RIL suspends drilling with Transocean equipment

Reliance Industries has suspended drilling of a well in KG Basin using a rig hired from Transocean, whose drillship had last month exploded causing a huge oil leak in the Gulf of Mexico. The company's junior partner in block KG-DWN-2003/1 (or D3) Hardy Oil and Gas said there were "unresolved mechanical issues" with Transocean's rig 'Deepwater Expedition' which was drilling an exploration well on the block. Reliance Industries spokesperson offered no comments on the drilling suspension. US-based Transocean's Deepwater Horizon had exploded on April 20, killing 11 people and causing a leakage in a well leased by BP. A US Congressional committee has been told that the blow out preventer (BOP) on Deepwater Horizon had a leak in its crucial hydraulic system. "The KGV-D3-W1 exploration well (in D3 block) has been temporarily suspended due to unresolved mechanical issues associated with the blow out preventer (BOP) of the Deepwater Expedition drilling rig," Hardy Oil said in a statement. The KGV-D3-W1 exploration well commenced drilling on April 2 using the Transocean rig Deepwater Expedition. The well was drilled to a depth of 2,608 meters. "Subsequently, the operator (RIL) spent a considerable amount of time attempting to resolve a problem with the control system of the drilling rig's BOP. "The operator has been unable to resolve the issue to its satisfaction and, mindful of safety and operational matters, has taken the decision to suspend the well," Hardy said. RIL has 90 per cent interest in D3 and Hardy the remaining 10 per cent. It has made two significant gas discoveries (Dhirubhai 39 and 41) in the block till date. The well, Hardy, said, will be re-drilled using an alternative deepwater rig. It, however, did not say what would be the fate of Deepwater Expedition drilling rig. Hardy Chief Executive Officer Yogeshwar Sharma said: "In the interest of safety, the D3 joint venture has taken the considered decision to suspend the W1 well. The operator (RIL) is working towards mobilising an alternative rig at the earliest opportunity." The KGV-D3-W1 exploration well was located in water depth of 1,653 meters. The target depth of the well, which aims to explore the hydrocarbon potential of Mio-Pliocene sands, was 3,514 meters. The Block D3 is located in the Krishna Godavari Basin on the East Coast of India and covers an area of approximately 3,288 square kilometers.

SBI raises Rs 5 bn via CDs: Sources

State Bank of India, the country's largest lender, raised Rs 5 billion through issuance of a three-month certificate of deposit at 5.40 percent, three sources with direct knowledge told on Wednesday. "The money was raised to give it to one of the subsidiaries, which is not a bank, due to some mismatches," one source said.

Hotel Leela aims to cut debt by Rs 700-900 cr this fiscal

Hotel Leelaventure Ltd, which operates five-star hotels, plans to cut debt by launching a Rs 375 cr share sale to institutions after July, a top official told Reuters. It is planning to raise an equal amount of funds by issuing foreign currency convertible bonds (FCCBs) in the next two months, which will be used to add capacity, Vice Chairman Vivek Nair said on Tuesday. Its board late on Monday approved raising up to Rs 750 crore via qualified institutional placement or foreign currency convertible bonds. "We would like to bring down the existing debt in the books, Nair, also the managing director, told Reuters. Its total debt, including FCCBs stands at about Rs 2500 crore. "The QIP will help bring that down, plus our internal accruals will also go towards debt reduction," adding that the company plans to reduce almost Rs 700-900 crore of debt this year.