Tag Archives: Indias

Shares in India’s Jet slide on Etihad deal worries

Jet-AirwaysMUMBAI: Shares in Jet Airways plunged nearly six percent Friday on concerns over whether India’s second largest private airline will clinch a stake sale to Abu Dhabi-based Etihad Airways.

Shares fell 6.19 percent before recovering slightly to close down 5.81 percent at 527.35 rupees as a media report said “fresh hurdles” had emerged in talks with the Gulf carrier over its plans to buy a stake in Jet.

“Etihad has put a host of conditions, including an option to buy up to 49 percent stake in Jet,” the Business Standard said on Friday, citing an unnamed source.

The Gulf airline also wants operational control and a representation on Jet’s board, the newspaper said. The Indian carrier declined to comment on the report.

Several Indian airlines have been in talks with foreign carriers after the government last year opened up the aviation sector further to allow non-Indian airlines to invest in their counterparts in the country.

Indian carriers need money to fund expansion and cut debt after years of losses caused by intense air-fare battles and rising fuel costs.

The Jet-Etihad development comes after Asia’s biggest low-cost airline, AirAsia, this week announced plans for a no-frills carrier in the country with India’s Tata conglomerate.

The venture awaits government and regulatory approval.

Copyright AFP (Agence France-Presse), 2013

AirAsia and India’s Tata propose joint airline

  MUMBAI: Asia’s largest low-cost carrier AirAsia on Wednesday announced plans to invest in an airline joint venture with India’s giant Tata conglomerate and another party.

The proposal, if cleared, would be the first foreign investment in India’s aviation sector since the government last September allowed overseas airlines to take up to a 49 percent stake in domestic operators.

“We have carefully evaluated developments in India over the last few years and we strongly believe that the current environment is perfect to introduce our low fares,” said AirAsia’s chief executive Tony Fernandes.

A statement from the airline said it had applied to India’s Foreign Investment Promotion Board for approval to take a 49 percent holding in the proposed joint venture with Tata Sons and independent investor Telestra Tradeplace.

The three parties have signed an agreement and will apply to the civil aviation regulator for a flying permit, it added.

The proposal would mark the Tata group’s re-entry into the aviation sector after nearly eight decades.

Former chairman J.R.D. Tata was passionate about planes and formed Tata Airlines in the 1930s. It was later nationalised by the government to become the country’s flagship carrier, Air India.

“The Tatas will be an investor in the proposed venture, with a minority stake of 30 percent, without any operating role. The airline will be managed by AirAsia,” a Tata group spokesman said.

“When AirAsia approached Tata Sons with a proposal for a stake in the venture, we concluded that given its reputed business model, AirAsia could be a relevant and successful service provider in the sector.”

Indian private carrier Jet Airways announced last month that it was in discussions with Abu Dhabi-based airline Etihad Airways for a stake sale, but no deal has been announced.

Indian carriers need money to fund expansion and cut debt after several years of losses caused by fierce price battles and rising fuel costs.

Only one of India’s six main scheduled carriers — privately held low-cost carrier IndiGo — made a profit last year, helped by a strict business plan and punctual performance.

Tata’s decision to return to aviation surprised analysts.

“It is difficult to digest why they are looking at aviation after staying away for years,” said Sharan Lillaney at Mumbai’s Angel Broking.

He was confident, however, that the low-cost carrier model was the only one that made business sense in India at the moment.

Access to capital and expertise are “critical” for India’s aviation market, the Centre for Aviation said in a recent report, which described India as encumbered by weaknesses in policy, skills and other areas.

“Foreign airline investment will deliver greater integration with the global aviation industry and exposure to best practice,” the consultancy said.

The AirAsia-Tata venture plans to operate from the southern city of Chennai and boost connectivity between smaller towns for Indian travellers.

Through its operations based in Thailand and Malaysia, AirAsia already connects Southeast Asia with some Indian cities such as Chennai, Bangalore, Tiruchirappalli, Kochi and Kolkata.

Copyright AFP (Agence France-Presse), 2013

India’s Cipla puts $215mn South Africa bid on hold

JOHANNESBURG: Cipla Ltd has put on hold a $215 million bid for control of South African generic drug firm Cipla Medpro, the chairman of the Indian drug maker said on Monday.

YK Hamied, chairman of the Cipla Ltd, did not give a reason why the drug maker has put on hold its bid for a 51 percent stake in South Africa’s third-largest generic drug seller.

Shares in Cipla Medpro fell 4.47 percent to 8.98 rand as of 1102 GMT, still above the 8.55 rand a share Cipla Ltd offered in November last year.

Cipla Medpro said it has not received any word from the Indian that the deal had been put on hold.

“We have not received any communication from Cipla Ltd about its withdrawal from the talks,” Johan du Preez, Cipla Medpro’s acting CEO, told Reuters.

“As far as we are concerned, the talks are ongoing.”

Copyright Reuters, 2013

India’s Glenmark Pharma announces discovery of new monoclonal antibody

glenmark pharmaceuticals 40MUMBAI: Indian drugmaker Glenmark Pharmaceuticals said on Monday it has discovered a new molecule that can be used to treat diseases such as rheumatoid arthritis and inflammatory bowel disease.

The new molecule, named GBR 830, is an anti-OX40 monoclonal antibody, Glenmark said in a statement, adding that OX40 is responsible for some autoimmune diseases.

The company said it has initiated studies for an investigational new drug (IND) application to be filed with the US Food and Drug Administration.

Copyright Reuters, 2013

Pfizer considers purchase of India’s Agila Specialties-report

Pfizer 0NEW YORK: Pfizer Inc is considering buying India’s Agila Specialties, the injectable-medicines unit of Indian drug supplier Strides Arcolab Ltd, for a possible price of $2 billion, Bloomberg reported on Monday.

Pfizer is doing due diligence and a deal could be reached this quarter, Bloomberg reported, citing unnamed sources.

A Pfizer spokeswoman said the company does not comment on market rumors or speculation.

Agila makes cancer treatments and antibiotics, Bloomberg said.

Pfizer shares were up 23 cents at $26.75 on the New York Stock Exchange.

Copyright Reuters, 2013

Indian telecommunications tower operator Bharti Infratel prices IPO, raising about $764mn

Bharti-InfratelNEW DELHI: Indian telecommunications tower operator Bharti Infratel Ltd priced its initial public offering near the lower end of an indicative price range, raising about $764 million in the country’s biggest IPO in two years.

Bharti Infratel, a unit of top Indian mobile phone carrier Bharti Airtel Ltd, said it fixed a price of 220 rupees a share for funds and wealthy investors and 210 rupees a share for retail investors. The company had set an indicative price range of 210-240 rupees for the IPO.

The IPO, which closed on Friday, was subscribed 1.3 times. In a pre-IPO sale, Bharti Infratel had agreed to allot shares to cornerstone investors at 230 rupees a share.

According to Reuters calculations, the share sale should have raised about 41.8 billion rupees ($764 million) and values Bharti Infratel at about $7.6 billion.

Bharti Infratel was selling more than three quarters of the total 188.9 million shares on offer, while four of its private equity investors, including arms of Temasek and Goldman Sachs, were selling the remainder.

Parent Bharti Airtel, which owned 86 percent of the tower operator before the IPO, was not selling any share.

Bharti Infratel plans to build new towers and upgrade existing towers with the IPO funds.

The shares should be listed on the Bombay Stock Exchange and National Stock Exchange towards the end of the month, said a person with direct knowledge of the matter, although the listing date is yet to be finalised.

Shares of Bharti Airtel, owned nearly a third by Singapore Telecommunications, were down 3.6 percent on Monday afternoon in a Mumbai market that was down 0.4 percent.

Copyright Reuters, 2012

India’s Jet Airways shares jump on Etihad deal hopes

Jet-Airways 400MUMBAI: Shares of India’s Jet Airways rose as much as 4.7 percent on Monday to a near two-year high, and were headed for a fifth straight session of gains, on growing expectations that Abu Dhabi’s Etihad Airways will buy a stake in the carrier.

India’s Mint newspaper reported on Monday, Etihad may decide as early as this week whether it will invest in Jet Airways or Kingfisher Airlines, citing two people familiar with the development who requested anonymity.

Jet declined to comment.

Jet was up 4.3 percent as of 0557 GMT, after earlier hitting its highest since January 2011. Shares have surged 18 percent over the prior four sessions.

Copyright Reuters, 2012

Changes to India’s SLR for banks since 1949

india central bankMUMBAI: India’s central bank left its key interest rates unchanged as expected on Tuesday but said policy focus was shifting towards growth, reiterating its October guidance of further easing in the first quarter of 2013 as inflation was seen cooling.

The Reserve Bank of India held the policy repo rate at 8 percent, and subsequently, the reverse repo rate was left unchanged at 7.00 percent.

The RBI also kept the cash reserve ratio, the share of deposits banks must keep with the central bank in cash, steady at 4.25 percent.

It left the minimum requirement for banks’ government bond holdings at 23 percent of deposits.

Copyright Reuters, 2012

Small investors shun India’s Bharti Infratel IPO

telewNEW DELHI: Small investors largely shunned an IPO by the tower arm of Indian telecom firm Bharti, aimed at raising $845 million, but the issue was fully subscribed thanks to institutional buyers, data showed Saturday.

The initial public offer (IPO) marked Bharti Airtel’s return to the capital market after a decade-long break, and was the biggest public issue since state-run Coal India raised $3.4 billion in an IPO in late 2010.

The tower arm, Bharti Infratel, planned to sell 66.1 million shares, or more than 40 percent of its offering, to small investors and offered them a discount.

Individual small investors took just under 20 percent of their allocation but demand from institutional buyers ensured that total bids exceeded the shares on offer by 1.3 times, according to stock exchange figures.

Since the Coal India offer which had bids for more than 15 times the number of shares on offer India’s IPO market had virtually dried up as the economy slowed, with over 50 firms pulling their offers since early 2011.

But in recent months, India’s benchmark 30-share Sensex stock index has surged, led by optimism over a blitz of government reforms and overseas fund in-flows.

Bharti Infratel has over 34,000 transmission towers across 18 states covering 11 telecom circles, and also holds a 42 percent stake in Indus Towers — the world’s biggest tower firm — which has around 110,000.

Analysts said problems dogging the troubled telecom sector in which profits are under pressure and regulation has been erratic were responsible for the weak individual investor demand along with competition from other smaller issues.

Bharti group chief executive Sunil Bharti Mittal told reporters he was happy with the outcome and said he believed the “the doors have opened” for other IPOs with the Bharti offer.

Bharti Infratel was expected to keep a little over 75 percent of the issue proceeds while a quarter would go to private equity firms including Temasek, The Investment Corp of Dubai and Goldman Sachs, according to issue documents.

After the IPO, Bharti Airtel’s stake in Bharti Infratel would fall to 79 percent from a current 86 percent, while private equity firms will own 10.58 percent, down from 14 percent earlier.

Telecom transmission tower companies earn their money by leasing space to mobile phone firms.

Bharti Infratel is expected to use the proceeds to expand its number of towers and upgrade existing ones.

Copyright AFP (Agence France-Presse), 2012

India’s deficit-cutting plan faltering as clock ticks

New Delhi: India’s finance minister has banned government officials from holding conferences at five-star hotels, restricted travel and ordered a freeze on hiring to fill vacant posts.

A single-minded political veteran who commands both fear and respect in Indian officialdom, P. Chidambaram is squeezing government ministries hard to cut spending wherever they can, and quickly, to help rein in a widening fiscal deficit.

He is a man under pressure and with an eye on the clock.

Four weeks ago to the day, he set himself an ambitious target: to hold the government’s fiscal deficit for 2012/2013 to 5.3 per cent of gross domestic product, even as sceptical private economists forecast a deficit closer to 6 per cent.

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But a series of revenue-raising setbacks since October 29 now means it will be almost impossible for the government to meet that target, economists say, and some finance ministry officials privately agree. That increases the risk that credit rating agencies could downgrade India to junk in the coming months.

“This has taken on a very great sense of urgency,” said Rajiv Biswas, chief Asia economist at market information and analytics company IHS, as he called on Chidambaram to draw up a credible medium-term road-map for cutting the deficit.

The deficit reduction plan unveiled by Chidambaram last month was panned by economists for being short on specifics and putting a firewall around fuel subsidies and expensive social welfare programmes for the country’s millions of poor.

A month earlier a deficit reduction panel appointed by Chidambaram had urged the government to cut such spending. Their language was dramatic: India was on the edge of a “fiscal precipice” and the economy was “flashing red lights”, they said.

The government is pursuing a “band-aid approach” to deficit reduction, favouring quick fixes instead of implementing structural reforms to slash the deficit, said economist Rajeev Malik of CLSA in Singapore, who is sticking to a deficit forecast of 6 per cent of GDP.

Financial markets are already expecting the Indian government to overshoot its target and hit around 5.6 per cent of GDP, which helped push benchmark 10-year bond yields to the highest in nearly three months late last week.

But the big unknown is the response of the rating agencies, which have repeatedly warned India to get its finances in order.

The agencies are unlikely to reveal their thinking until after Chidambaram unveils his budget in February, analysts said.

But in October, Standard & Poor’s said India still faced a one-in-three chance of a downgrade within the next 24 months. Such an outcome would hurt investor sentiment and push up overseas borrowing costs for Indian companies.

Chidambaram, 67, a lanky politician with a disarming smile that belies a sharp tongue and an intolerance for time-wasting, charmed financial markets with his can-do attitude and burst of economic reforms in September, after years of policy inaction by Prime Minister Manmohan Singh’s weak coalition government.

India’s benchmark BSE index rallied more than 6 per cent after the reforms were announced in mid-September. But concerns over implementation, the fiscal deficit and falling foreign fund inflows have since pushed it down 3.3 per cent.

“We believe that this is the beginning of the realization that a sustainable turnaround in India’s growth prospects would require considerable effort, well beyond the burst of measures seen in September,” Deutsche Bank said last week in an analyst note headlined “Reality Check”.

Chidambaram’s deficit reduction plan banks heavily on raising billions of dollars by auctioning off cellphone airwaves and selling shares in state companies.

Neither effort is going particularly well.

The government raised less than a quarter of its 400 billion rupee ($7.3 billion) target in a 2G spectrum auction in mid-November. A second auction is planned before March, but a senior government official told Reuters there would likely be at least a 200 billion rupee shortfall.

India succeeded in raising 8.1 billion rupees ($147 million) by selling shares of state-run Hindustan Copper Ltd on Friday, although the deal was supported by buying from state institutions.

To put the deal in context: New Delhi aims to raise 300 billion rupees by selling shares in state companies this fiscal year, which ends in March. Excluding the latest sale, it has managed just 1.25 billion rupees so far.

The government is staring at an overall shortfall of nearly 500 billion rupees in revenues this year, the government official said, speaking on condition of anonymity because of the sensitivity of the subject. This may require additional borrowing from the market.

Chidambaram’s battle to tame the deficit takes place against the backdrop of a continued economic slowdown, and a fractious parliament where the government has lost its majority after its biggest coalition ally withdrew support to oppose its reforms.

Manufacturing is contracting and exports are falling. India’s October trade deficit of nearly $21 billion was its worst on record.

And a second round of reforms aimed at liberalising the pension and insurance sectors has fallen victim to gridlock in parliament. It is not clear if the measures, long sought by investors, will be passed in the current winter session.

But Chidambaram, who began his second stint as finance minister in August, gives no appearance of being disheartened and as recently as Saturday was confidently predicting he would be able to contain the deficit to 5.3 per cent of GDP.

Inside his ministry, officials said the target looks daunting but they have had no word of a revision from the minister. Instead, he has intensified pressure on them to find ways of meeting the target, they said.

Chidambaram’s credibility is not yet on the line, said analysts. In fact, perhaps the opposite. His credentials as an economic reformer during two previous stints as finance minister are buying him time to pull India back from the fiscal precipice.

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India’s finance minister sees 5.5% quarterly growth

New Delhi: India’s economy logged around 5.5 per cent growth in the last financial quarter, the finance minister estimated on Saturday – a rate that could boost calls for lower interest rates to spur activity.

India’s once-booming economy has been hit by high interest rates, Europe’s debt crisis that has slowed exports, and sluggish investment caused by domestic and overseas concerns about policy and corruption.

Chidambaram said in televised remarks in the western Indian city of Pune that he expected official data to be released next Friday to show that the economy grew by “around 5.5 per cent” in the three months to September 30.

That would be down from 6.9 per cent in the same second-quarter period a year earlier.

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“It goes without saying that we face a difficult situation,” Chidambaram said at a bankers’ conference, adding that the “global economy is still in crisis”.

India’s economy was growing by more than eight per cent before 2011-12. But it has been performing increasingly worse with the Congress-led government of Prime Minister Manmohan widely criticised for its handling of the situation.

Even though 5.5-per cent growth would be the envy of much of the world, it is not enough for India, which has been aiming for close to double-digit expansion to substantially reduce crushing poverty.

“For us eight per cent growth is not an aspiration but a necessity. India cannot afford to grow below eight per cent,” Chidambaram said.

The slow growth comes at a time when it is more difficult for the Indian government to pep up the economy than in the 2008-09 financial crisis.

Then, the government had more fiscal room to stimulate the economy but now it is struggling to cut a widening budget deficit and avert a downgrade of its sovereign debt to “junk” status by global credit ratings agencies.

In addition, the central bank has been keeping interest rates high to combat stubbornly high inflation.

Indian inflation eased marginally in October to 7.45 per cent year-on-year, but economists said that the level was still too high to permit the bank to lower rates.

Indian businesses have been calling for lower rates, saying India’s economic slowdown is in large part due to the high cost of borrowing that has curbed consumer spending.

India’s reform drive faces test in unruly parliament

Posted November 23, 2012 00:04:56

India’s parliament has adjourned in uproar on the first day of what promises to be a stormy new session for the weakened government and its pro-market reform drive.

Unruly protests and shouting led the speaker of the lower house to adjourn proceedings twice before she called a premature end to the sitting of the increasingly dysfunctional legislature around mid-afternoon.

Amid the bedlam, Prime Minister Manmohan Singh’s coalition, facing parliament for the first time since losing its majority, avoided a no-confidence motion, which flopped after being proposed by former ally Trinamool Congress.

The Prime Minister had called on all parties to let parliament function after the last session was almost entirely lost due to protests, which have added to a growing national sense of political and economic malaise.

“We all have an obligation – in opposition as well as in government – to work together to enable our parliamentary democracy,” the 80-year-old leader said in a statement.

“Our parliament has a very heavy legislative agenda during the winter session. I seek cooperation from my colleagues in the house.”

The ruling coalition lost its majority in September when Trinamool Congress withdrew its 19 MPs to protest against the government’s decisions to raise fuel prices and increase foreign direct investment in the retail sector.

Opponents have billed the measures as anti-poor, saying they pander to large foreign corporations, and have demanded they be submitted to parliament for discussion.

The decision to allow foreign supermarkets into the retail sector did not require a vote and has become law, but proposals to open up the gigantic insurance and pensions markets will need parliamentary approval.

“The government has not even made an effort to create acceptance (of foreign investment),” Sushma Swaraj, leader of the main opposition Bharatiya Janata Party, told parliament above the din of jeers and shouting.

Singh’s push for pro-market reforms comes as the government faces a slowing economy, a gaping fiscal deficit and high inflation which has built pressure on the left-leaning alliance led by the Congress party.

Gross domestic product expanded at its slowest pace in three years in the second quarter and data for July-September, expected at the end of the month, will likely underline the extent of the downturn.

Analysts say the fractious opposition has not decided whether to unite to try to bring down the vulnerable government and force early elections before their scheduled date in 2014.

To survive, Singh’s coalition will have to depend on outside parties, particularly the regional Samajwadi Party from the state of Uttar Pradesh, which has pledged support but is also hostile to foreign investors.

According to the New Delhi-based think-tank PRS, 102 bills are pending in parliament covering issues like land acquisition, access to food, affirmative action for women and a host of anti-corruption initiatives.

Since re-election in 2009, Singh’s government has been rocked by a string of graft accusations, including charges that officials pocketed millions of dollars when awarding tenders for telecoms and coal-mining ventures.

“Our country is ailing while political institutions look increasingly corruption-ridden, opportunistic and effete in meeting national challenges,” said The Times of India in an editorial Thursday.

“At this hour of crisis, India’s parliamentarians claim without exception that public interest is their top priority. The winter session will show if this is true.”


Topics: business-economics-and-finance, world-politics, india, asia

India’s stocks decline for sixth day

Mumbai: Indian stocks fell for a sixth day, the longest stretch of losses in a year, as lenders and carmakers declined amid growing concern the government will fail to meet its fiscal deficit targets.

The BSE India Sensitive Index, or Sensex, retreated 0.9 per cent to 18,309.37, the lowest close since September 13. The S&P CNX Nifty Index on the National Stock Exchange of India Ltd lost 1 per cent to 5,574.05. State Bank of India, the nation’s biggest lender, fell 2.1 per cent. Tata Motors Ltd, India’s the owner of Jaguar and Land Rover, slid the most in two weeks.

The Sensex erased an advance of 0.5 per cent as European stocks declined and as Finance Minister Palaniappan Chidambaram told reporters in New Delhi that it was too early to say the deficit goal won’t be reached. The government raised less than 25 per cent of its target yesterday from selling mobile-phone airwaves, a sale Chidambaram was counting on to help avert a credit-rating downgrade and narrow the budget deficit.

“There’s doubt,” Sunil Pachisia, vice president at Pratibhuti Viniyog Ltd, said by phone today. “The finance minister’s comments on fiscal deficit were unconvincing.”

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The Sensex dropped 3.1 per cent the past six days, a streak that is the longest since the eight days to November 21. The gauge is valued at 14.9 times estimated profit, more than the MSCI Emerging Markets Index’s multiple of 11.2.

Speculation the central bank will delay interest-cuts also dragged stocks lower today after Reserve Bank of India Governor Duvvuri Subbarao said inflation is still at an elevated level. The benchmark inflation gauge had eased to an eight month-low in October.

India’s retail industry to grow to $1.3 trillion by 2020

New Delhi: The size of India’s retail industry is expected to more than double to $1.3 trillion (Dh4.78 trillion) by 2020, led by an estimated 25 per cent average annual growth in organised retail if overseas investment is permitted in the sector, an industry body has said.

“The Indian retail is poised to become a $1.3 trillion opportunity by 2020. With the current market size estimated at $500 billion, this translates to an additional $800 billion in the next eight years,” said R.V. Kanoria, president of the Federation of Indian Chambers of Commerce and Industry (Ficci).

The country’s traditional retail industry is expected to grow at an average annual rate of five per cent over the next year, while the organised retail is estimated to register a growth rate of around 25 per cent during this period.

Currently, almost 94 per cent of India’s retail industry is unorganised or traditional.

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The central government recently took a decision to allow up to 51 per cent foreign direct investment (FDI) in multi brand retail and raise the limit for overseas investment in single brand retail to 100 per cent.

Ficci on Saturday organised an interactive meeting with different stakeholders of retail industry like representatives of small Kirana stores, farmers and consumers, to gauge the immediate concerns of the industry.

Addressing the meeting, Kanoria said FDI would help improve back end infrastructure and reduce wastage, especially of fruits and vegetables.

Kanoria said an estimated investment of almost Rs640 billion (Dh43 billion) is required to build a strong back end infrastructure in the country. “FDI in retail would help in addressing this issue with compulsory investment of 50 per cent in back end,” he said.

Lack of adequate storage facilities cause huge wastage of food products. According to some industry estimates, 35 to 40 per cent of fruits and vegetables and nearly 10 per cent of food grains in India are wasted annually due to lack of storage facilities.

In a presentation at the interactive meeting, Raghav Gupta, principal, Booz & Co, said nearly 800,000 people were currently employed directly in organised retail in India.

Without FDI this number is expected to increase to two million by 2016 (another four million opportunities via indirect employment). However, FDI in retail can potentially add another 1.5 million jobs by 2016 where additional direct employment will rise by 0.5 million and additional indirect employment will increase by one million, Gupta said.

“Less than 80 per cent of this employment opportunity will be for people with minimum qualifications. These jobs will offer higher salaries, defined career paths and better work environment compared to unorganised retail,” he said.

India’s HDFC Ltd Q2 net flat, meets forecast

Posted by Shoaib-ur-Rehman Siddiqui

MUMBAI: Housing Development Finance Corp (HDFC), India biggest mortgage lender, reported flat profit for the July-September quarter on Monday, meeting market estimates.

Stand alone net profit for the fiscal second quarter was 11.51 billion rupees ($213.80 million) compared with 9.71 billion rupees a year ago, and total income rose 27 percent to 52.7 billion rupees over the same period.

Analysts expected HDFC to post net profit of 11.48 billion rupees, according to Thomson Reuters I/B/E/S.

Copyright Reuters, 2012

India’s Kingfisher says hopes to fly again from Nov

NEW DELHI: Grounded Indian airline Kingfisher expects to start flying again on Nov. 6 if the country’s aviation regulator gives the go-ahead, the debt-laden company said on Friday.

Kingfisher Airlines has given its response after the Directorate General of Civil Aviation asked the carrier why its licence to fly should not be cancelled for failing to provide a “safe, efficient and reliable service” but a spokesman for the company declined to comment on what that response was.

“Currently we anticipate resuming operations on November sixth, subject to our resumption plan being reviewed and approved by the DGCA,” Kingfisher said in a statement.

The airline last week said its planes would remain grounded until Oct. 20, having stopped flying at the beginning of the month after an employee protest turned violent.

Struggling to pay its bills, the airline is seven months behind in salary payments and staff protests started last month when a group of engineers refused to certify the airworthiness of planes.  On Wednesday, the regulator failed to approve Kingfisher’s proposed winter schedule of flights. The company had 2,930 departures per week last year in its winter schedule, which is due to start this year on Oct. 28.

The Centre for Asia Pacific Aviation, which estimates Kingfisher’s total debts at around $2.5 billion, said a fully funded turnaround would cost at least $1 billion.

Copyright Reuters, 2012

India’s Maruti unveils revamped bestseller, has over 10,000 pre-orders

Tuesday, 16 October 2012 12:25 Posted by Shoaib-ur-Rehman Siddiqui

marutiNEW DELHI/MUMBAI: The world’s biggest-selling small car was revamped on Tuesday when Maruti Suzuki India Ltd launched a new version of its Alto model, clocking over 10,000 pre-orders as it tries to fend off rising competition in the entry-level car market.

Since 1984, Maruti’s entry-level models have outsold anything in India’s car market, as millions of middle-class families and first-time owners in the developing country flocked to its Maruti 800 model and its successor, the Alto.

“Our engineering team has made many innovations to offer more space, improve driveability and safety to customers,” Shinzo Nakanishi, Maruti’s managing director, told reporters.

The new car’s petrol model offers 15 percent greater fuel efficiency, he said.

Maruti, controlled by Japan’s Suzuki Motor, has had over 10,000 pre-orders for the Alto since bookings were opened in late September, Nakanishi added.

Cheap to buy and run, the Alto 800′s two predecessors became instant best-sellers in a sector that Maruti Suzuki dominated until the late 1990s. As more automakers have muscled into the market, and more Indians had the cash for larger cars, its grip has slipped.

In the fiscal year that ended in March, Maruti sold over 310,000 Altos, making it the world’s biggest selling small car. Indians bought 2.02 million cars that year.

Sales of Maruti’s entry-level models are down 21 percent so far in the current fiscal year, hit by rising competition from rivals such as Hyundai Motor Co’s Eon and Tata Motors Nano model.

Copyright Reuters, 2012

Middle East ranks second for India’s electronics hardware exports

Dubai: Middle East countries have become the second top destination for India’s Electronics hardware exports during the year 2011-12, according to a senior official with Electronics and Computer Software Export Promotion (ESC).

“Exports to Middle East during 2011-12 is valued at $1.83 billion, registering a growth of 52 per cent when compared to $1,274 billion in 2010-11,” said Kamal Vachani, regional director of ESC for the Middle East.

To capitalise on this growth, ESC is fielding a strong contingent of 40 companies at Gitex in a bid to strengthen its relations with the Middle East in information and communications technology (ICT).

“The Middle East market represents a massive potential waiting to be tapped by India’s software manufacturers. With the governments’ support and encouragement, numerous e-initiatives and projects are being undertaken, which offers Indian IT companies excellent opportunities to explore the market,” said Vachani.

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The overall growth in export of electronics and software to Middle East countries during 2011-12 is estimated to be 37 per cent.

Export of software and related services to Middle East countries has also registered a excellent growth of 26 per cent. Export of software and services increased from $1.73 billion estimated in 2010-11 to $2.07 billion estimated in 2011-12.

During the 2012-13, ESC expects a growth of 10-15 per cent in ICT trade with the Middle East countries.

“Gitex is the largest and the most impressive ICT event of its kind in the Middle East. Naturally, India has a great stake in the booming Middle East, Africa, Asia and European markets for which Dubai is the gateway,” said D.K. Sareen, Executive Director of ESC.

“Thus the event provides the participating Indian ICT companies opportunities for scouting the expanding burgeoning Middle East market,” he said.

Vachani said ESC has been encouraging Indian IT companies, particularly small- and medium-sized enterprises to participate by offering special packages to them since Middle East markets hold tremendous potential for Indian companies.

Sareen said: “We are confident Gitex will provide a successful business interface for the Indian contingent since the region’s key decision makers will be participating at the fair.

India’s outsourcer Infosys reports profits rise

infosys 400BANGALORE: Indian IT outsourcer Infosys said Friday net profit rose 24.3 percent in the three months to September, but warned of uncertainties for the industry in the face of slowing global economic growth.

Consolidated net profit for the fiscal second quarter rose to 23.7 billion rupees ($450 million) from 19.06 billion rupees a year earlier, the Bangalore-based firm said in a statement to the Bombay Stock Exchange.

“Global economic uncertainties continue to face the industry,” said chief executive S.D. Shibulal in a statement.

Shares in the group fell 7.56 percent to 2,340 rupees in early trade Friday after the firm kept its forecast for full-year revenues unchanged, reiterating that it expected a 5.0 percent rise.

Revenues rose 21.7 percent to 98.58 billion rupees for the second quarter.

Most of India’s IT outsourcing firms say the outlook for the industry remains difficult because of uncertainty in the key US and European markets.

Infosys last month announced it had agreed to buy Zurich-based consulting firm Lodestone for $350 million, which would add more than 200 clients across industries to Infosys’ clientbase.

Shibulal called the deal a “transformational acquisition”.

Copyright AFP (Agence France-Presse), 2012

India’s September trade deficit $18.1b

New Delhi: India’s annual exports fell for the fifth consecutive month and imports rose in September, pushing the trade deficit to its widest in 11 months in the latest bleak data from Asia’s third largest economy as it struggles to balance its finances.

Exports contracted to $23.7 billion, 11 per cent lower than last year, the government said in a statement, without giving details of which sectors were worst hit. Imports rose for the first time since April, driven by an almost 31 per cent jump in crude oil purchases for the energy-hungry economy.

September’s $18.1 billion trade deficit was the biggest since October 2011, a worrying development for the government while it seeks to stave of the threat of a downgrade to India’s sovereign debt rating.

Massive asset purchase programmes unveiled by the central banks in the United States, Europe and Japan are expected to stoke higher global commodity prices, which would inflate India’s import bills.

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Heeding warnings by Standard & Poor’s and Fitch that the fiscal and current account deficits could trigger a credit downgrade, the government has recently taken unpopular steps such as hiking diesel prices and allowing foreign supermarkets in the retail sector.

Testing times for India’s MBAs

10 October 2012 Last updated at 23:05 GMT By Yogita Limaye BBC News, Bangalore Pavan Shanbhog Pavan Shanbhog had to wait months to get a job and had to accept a lower salary than he had hoped India has the largest youth population in the world, and at one time its graduates could expect to leave university and walk into top jobs. But after spending thousands of dollars on business courses, many are finding that tough economic times have taken their toll on their job prospects.

When Pavan Shanbhog joined a business management course in 2010 at a mid-ranked college near the southern Indian city of Bangalore, he expected that in two years’ time he would be working at a reputed firm, earning a high salary.

Pavan graduated from his course in March this year without a single job offer.

Over the next four months he went for countless interviews and was finally hired as a business analyst at a small financial services firm.??”I had never expected that I would have to wait so long to get a job,” says Pavan. “I’ve finally found something where I like the role, but I’ve had to compromise on pay.”??Pavan and his classmates are being offered average annual salaries of $7,000 (£4,370), about 15% lower than similar graduates were getting a year ago.

Students taking extra classes for test Many students take extra classes to help their chances of getting into the best colleges Hotly contested

His situation may have been very different if he had graduated from one of the country’s best business schools, such as the Indian Institutes of Management (IIMs).

Students there are often recruited even before they finish their courses, with some getting multiple job offers.

This year, the average pay offered to students from India’s top ranked business school IIM Ahmedabad was $25,000.

This is considered a very high starting salary in the country, although it is no longer rising substantially year after year, as was the case during periods of higher economic growth. ???

Continue reading the main story Mohandas Pai, former head of human resources at Invensys
I feel sorry for the money their parents have spent because they’re not getting anything in these lower rung institutions”

End Quote Mohandas Pai Former head of human resources at Invensys It is no wonder that there is intense competition to get into these institutes.

This month, more than 200,000 students will be taking the common admission test (CAT) to try to gain entry into one of India’s best business schools.

But only the top 2% stand a chance of making it.??That is why students across India take extra classes to prepare for the test.??MBA aspirant Nikhil Cherian has been attending lessons at the Triumphant Institute of Management Education (TIME) coaching centre in Bangalore.

“I think I’ll make it to at least one of the top 20 schools, but if I don’t I won’t just go to any college,” says Nikhil.

“I’ll wait and take the exam again. The market is so low that if we don’t get a degree from a reputed institute, there is no guarantee of a decent job.”

Gulshan Chhabra, vice president at TIME, says: “With the investment on education being so high, people are definitely more selective now about which business school they want to get into.”

Management education in India could cost anything between $15,000 and $28,000, and many students take loans to pay their fees.

A report from financial research agency CRISIL says increasing awareness among students about the quality of education may result in a number of business schools closing down over the next couple of years.

‘Rubbish’ students Continue reading the main story Young and jobless graphic

High youth unemployment is one of the biggest problems confronting societies around the world, condemning whole generations to a life of much reduced income.

In our special report we look at the challenges facing today’s young and jobless, and the attempts to overcome the problem.

Industry insiders says the problem goes further than the management institutes. The quality of higher education in India across disciplines is poor, they argue, and does not meet the needs of the corporate world.

This may be reflected in the fact that not a single Indian college made it to the top 200 in the recently published Times Higher Education World University Rankings.??”The top 25% of students are pretty good, the next 25% are passable, but the remaining 50% are rubbish,” says Mohandas Pai, the former head of human resources at Infosys, one of India’s largest software firms.

“I feel sorry for those kids. I feel sorry for the money their parents have spent because they’re not getting anything in these lower rung institutions.”

In the past few years, Nasscom, which represents IT firms in India, has said that three out of every four engineering graduates in the country are unemployable.

Indian Institute of Management Bangalore The standard of teaching is a problem in India, the head of the Institute of Management says

Mr Pai says this is because the government controls the university curriculum and does not allow it to be revised regularly to keep up with the needs of the industry.

“The biggest human resource tragedy is being played out in India and it is being played out in higher education because of the failure of government policy,” he says.??There is also the problem of the shortage of teachers, says Prof Pankaj Chandra, director of IIM Bangalore.

“In India, teaching is made very unattractive. Remuneration for professors is low. We need to develop an ecosystem where academics are valued.”

The corporate world has slowly begun to step in to changes things. Some companies have adopted colleges, training their faculty and sharing the latest industry knowledge with them.

But many say the biggest step needs to be taken by the government to allow the education system to function freely, so that India can reap the demographic dividend of its large youth population.?

India’s Kingfisher Airlines CEO urges staff to return to work

Wednesday, 10 October 2012 11:56 Posted by Shoaib-ur-Rehman Siddiqui

kingfisher-airlines NEW DELHI: The CEO of India’s Kingfisher Airlines Ltd, grounded since the start of the month, urged striking employees to return to work as the carrier scrambled to find solutions to its cash flow problems.

Shares in the carrier fell 5 percent, their daily limit, for the eighth straight session on Wednesday as investors lose hope that the airline controlled by liquor baron Vijay Mallya will get a lifeline from a foreign airline or another saviour.

The carrier has until the end of next week to explain to the government why it should not be shut.

“Without all of you, without exception, coming back to work, we will have no way forward,” CEO Sanjay Aggarwal said in a letter to employees on Tuesday.

“We have been working relentlessly to try and rectify this situation, and that too against all odds,” Aggarwal wrote in the letter seen by Reuters.

Kingfisher has so far failed in its long-running search for an investor and is $2.5 billion in debt by one estimate.

The carrier has grounded its fleet since Oct. 1 after an employee protest turned violent.

Staff, who have not been paid for seven months, held protest marches late last week after what police said was the suicide of a Delhi-based employee’s wife worried about her family’s precarious finances.

Meetings last week between the carrier and pilots and engineers demanding their back pay failed to reach an agreement.

Late on Friday, India’s aviation regulator sent a “show-cause” notice to Kingfisher asking why its license to fly should not be cancelled after failing to provide a “safe, efficient and reliable service.”

The airline was given 15 days to respond.

The regulator has also asked Kingfisher to stop selling tickets until its concerns are resolved.

“We are aware it is a big ask, but no potential investor will put his money in an airline that is not operational. Neither will our esteemed guests come back to us unless we commence operations soon,” Aggarwal wrote to staff.

Kingfisher, once India’s second-biggest airline, last week extended what it has described as partial lock-out until Oct. 12.

India recently allowed foreign airlines to buy a maximum 49 percent stake in local carriers, a move long lobbied for by Kingfisher, although no airline has publicly expressed an interest in investing in Kingfisher.

Mallya’s United Spirits Ltd and Diageo Plc recently confirmed long-rumoured talks for the UK giant to take a stake in India’s dominant whisky maker, which could make it easier for Mallya to find funds to rescue Kingfisher.

Since India’s investment policy change, “the dialogue with potential investors has gathered momentum,” Aggarwal said.

“Even non-strategic investors are showing interest in investing in Kingfisher Airlines, which is a good sign.”

Kingfisher has never made money since its launch in 2005, and before grounding its fleet last week, it was flying just 10 planes out of fleet that numbered 64 a year ago.

Copyright Reuters, 2012

India’s Bajaj Auto to raise capacity to 5.7mn vehicles

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bajaj-autoMUMBAI: Bajaj Auto, India’s No.2 motorcycle maker, plans to expand its annual production capacity to 5.7 million vehicles by the end of the current financial year, from 4.5 million, K. Srinivas, president of its motorcycle business, said on Wednesday.


The company, whose vehicle sales in September fell 14 percent, declined to provide details on how much it would be investing to increase the capacity.


India’s SBI says cuts benchmark lending rate by 25bps

Saturday, 22 September 2012 15:32 Posted by Parvez Jabri

Reserve-Bank-of-India 400MUMBAI: India’s biggest lender, State Bank of India, said on Saturday it has cut its benchmark prime lending rate, the interest rate that commercial banks normally charge, by 25 basis points to 14.50 percent per annum with effect from Sept. 27.

Earlier this week, the bank cut its base rate by 25 basis points to 9.75 percent.

Indian central bank on Monday cut the cash reserve ratio, the share of deposits banks must keep with it, by 25 basis points to 4.5 percent.

Earlier this month, SBI had cut deposit rates between 50-100 basis points across maturities.

India’s NDTV sues Nielsen over ratings data

NDTV sues viewer rating­s agency TAM India and its global parent­s, Nielse­n and Kantar, for over $1.3 billio­n.  NDTV sues viewer ratings agency TAM India and its global parents, Nielsen and Kantar, for over $1.3 billion.

NEW DELHI: India’s oldest private TV network, NDTV, said Wednesday it had sued viewer ratings agency TAM India and its global parents, Nielsen and Kantar, for over $1.3 billion for allegedly manipulating data.

In a 194-page lawsuit filed in the Supreme Court of New York, New Delhi-based NDTV alleged the defendants tilted data in favour of other broadcasters who “paid” money.

“We have filed the suit,” a senior NDTV executive told AFP on condition of anonymity. He declined to comment further, saying the matter was before the courts.

Ratings agencies earn billions of dollars annually by selling data on viewership sizes and patterns that are used by advertisers for marketing and advertising plans.

Highest viewed broadcasters typically get the most advertising money.

In its suit, NDTV alleged widespread data manipulation had been going on for over eight years, repeatedly under-reporting the number of people actually watching NDTV channels.

The suit demands at least $810 million in compensation for lost revenues resulting from “false, fabricated and manipulated data”.

It also seeks damages totaling $580 million to compensate for TAM’s alleged gross negligence and hundreds of millions of dollars more for other alleged wrongdoings including breach of duty.

NDTV accused Nielsen and Kantor of operating “worldwide through a complex web of subsidiaries and joint ventures and abusing the power of TAM’s monopoly in India.”

TAM is India’s only TV ratings firm.

The suit alleged the defendants’ acts have had a “catastrophic effects on customers, on the television industry, on customers and on viewers” around the world including the United States.

Formed in 1998, TAM is a joint venture between global ratings giant Nielsen and Kantar Media Research, another leading international player in the audience measurement industry.

The television channel said Nielsen and Kantar ignored repeated warnings of the flaws in TAM’s process of collecting viewership data.

The suit singled out Nielsen, calling it a case “of a once noble company… exhibiting unabashed short-term greed”.

A Nielsen spokesman said the firm “has a longstanding policy of not commenting on pending legal matters.”

NDTV’s stock was trading broadly flat at 52.90 rupees on Wednesday.

Trade diplomacy: Business community welcomes India’s positive decision on FDI

Calls for libera­lisati­on of the visa regime and to allow Indian busine­ssmen to invest in Pakist­an.  .

LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) welcomed the Indian government’s decision to lift a ban on direct investments from Pakistan and called for liberalisation of the visa regime to make this move more meaningful and result-oriented.   

In a statement issued on Thursday, LCCI President Irfan Qaiser Sheikh urged the Indian authorities to grant multiple visas to businessmen so that they can travel freely.

The LCCI president said that the Indian decision has made it clear that trade diplomacy was working well and more such decisions would be taken to help bring the two countries closer.

Sheikh hoped that the Indian authorities would also consider lifting the ban on Indian investors wanting to invest in Pakistan. He said that the trust level between the two sides will go up and help tackle other issues faced by the two sides for decades.

“We hope this decision will be fruitful for the business community and the people of the two countries,” he said.