Business Line - 13th October

Business line: news analysis
Submitted by Group 7 (SECTION: F):
DEEPAK BARNWAL
CHETAN DHINGRA
BHANUPRIYA

FRONT PAGE
• Coal India, a PSU major, is coming out with IPO offer priced between Rs. 225 and Rs. 245, thus mopping up amount of around Rs. 15000 crore. With this the government is going to meet a third of the disinvestment target of Rs. 40000 crore during the current fiscal year. The government is divesting 10 percent stake through this IPO. There is a generous offer of discount of 5 percent for retail investors and the employees of coal India. The issue will close on October 20 for institutional buyers and October 21 for retail and non- institutional buyers.
• The index for industrial production (IIP) which was registering a growth rate of 10.6 percent during the month of august 2009- 2010 dropped down to 5.57 percent during the corresponding month of the current fiscal year. There was a decline of production of basic goods and consumer non-durables but growth of consumer durables. There was a significant drop in the production of capital goods, bringing down the index. The finance minister showed disappointment at the decline of index but hoped that the index will show the sign of growth again as the demand for the industrial goods increases.
CORPORATE
• The European Union under FTA is asking for the elimination of the import duties on the fully built units which currently attract 100 percent duty including the 60 percent custom duty. The EU countries specifically France, Germany, Italy are pushing for the duty cut to propel the sale of cars in the growing market like India as there is stagnation in the demand in the European countries. But the society of Indian automobile manufacturers (SIAM) is opposing these proposals arguing that these duty cuts will slow down the investments in this sector as the import will turn more viable.
• Eli Lilly, a global pharma company, has sued Dr. Reddy’s laboratory for patent infringement on its abbreviated new drug application (ANDA) in USA court. This law suit is filed to prevent Reddy’s laboratory from coming out with the generic version of the patented drug GEMZER. The patent is going to expire in November 2012. Eli Lilly is also fighting a case against sun pharma for the same drug.
• Renault, a UK based car maker, has made a long term goal to develop an India centric car by 2014-15. The cars are going to be designed and developed by the Indian R&D centre based in Chennai. This is a vault face from the Mahindra- Renault venture where getting a car in the mid size segment didn’t yield fruitfully.
• The acquisition of the local drug companies by MNCs has created furore within the establishment as making these drugs available to the common people at affordable rate. The sharpest difference in the opinion is about the use of the compulsory licensing of these drugs if manufactured under the generic licensing. The department of industrial policy and promotion is handling all the queries regarding overtake of local drug companies and how to provide drugs at affordable rates.
ECONOMY
• Mr. Rajan Bharti Mittal, president of FICCI, is leading the Indian business delegations of 181 members to Africa to ink deals in the tune of $ 1 billion at the Kenyan capital Nairobi. The focus sectors are IT/ ITes, telecom, healthcare, banking, power, construction, minerals roads etc. The companies are going to network with the players in African countries under two days events of “Namaskar Africa”.
• The secretary general of FICCI, Mr. Amit Mitra, has called upon the industry minister, Mr. Anand Sharma, to take up the case of total market access for the Indian pharma companies and drugs that are approved by US FDA. This is to tackle the problem of anti-counterfeit drugs legislation in Kenya and other African countries.
MARKETING
• The acquisition of three Hobi group firms by Dubai based subsidiary of Dabur India Ltd. Has consolidated its position as a leading player in the global personal care market. This is going to consolidate its presence in West Asia and North Africa region.
• Mr. V. D. Wadhwa, MD of timex group, stated that the company is going to exit the lower end models and will focus on the fashion category watches costing more than Rs. 1000 as the watches are coming out of the old time and becoming the fashion statement among the youth.
• The nascent industry of ready to eat oats is going to see more fire in the coming days with the launching of new products in this category by companies like Marico. There are already oats based products are available offered by Pepsi (Quaker oats) and Kellogg’s (ready-to-eat oats).
• Coca cola India has launched new campaign showcasing the emotions and desires of youth to remain close to their roots even when they venture out for the search for better opportunities. Company is also giving them a chance to win a trip back home during Diwali.
MONEY/ BANKING/ IT
• The domestic currency, which opened at 44.54, closed at 44.67 loosing 26 paisa during intraday trading.
• The bond prices trading flat during the first half has gained momentum due to the stable interest rate as the IIP index showed lower demand. But the higher inflation may cause the selloff in the short run.
• The finance minister Mr. Pranab Mukherjee has launched the takeout finance scheme for India infrastructure finance company (IIFCL). This is a step towards the accelerated flow of fund in the infrastructure sector.
• Insurance regulatory and development authority (IRDA) has no legal right to force the promoters of the insurance companies to dilute their stakes in case of IPOs. IRDA is meddling with insurance companies as various foreign players are the largest share holders of these Indian companies.
• The users of Blackberry can have a sigh of relief as government has extended the date of complying with the security concerns from October 31 to December 31. This decision was taken after the high level meeting between home ministry, RIM (phone maker) and department of telecommunication.
• Nokia, the biggest cell phone maker in India, has launched a new smartphone N8 at price Rs. 26,259.
MARKET WATCH
• The decline in the industrial index and weak global equity market has caused the slide in the share prices to close at lower value base on day-to-day trading. Sensex fall by 136.55 points.
• NSE declined by 44.95 points or 0.7percent.
• Exide industry declared a positive growth of 18% year-on-year and 42% growth in net profit.
• TATA Motors has completed the issue of shares aggregating $ 750 million.
• The close down of Tuticorin unit of Sterlite industry has put pressure on the supply of copper in the domestic market as the London metal exchange is running low on inventories.
• Delhi metro recorded a hike of 44 percent in the last three months due to the common wealth game and being preferred mode of transport.