Business Standard - 13th October

Submitted By

Gauri Shankar
Gurleen Kaur
Gajender Singh


FIIs INCREASE STAKE IN OIL MARKETING COMPANIES.

But analysis say these state-run firms are still undervalue.
Foreign institutional investors(FIIs) have raised their stakes in public sector oil marketing companies(OMCs) in the three months ended sept30.
The government decentralled petrol prices and announced plan to decentrall diesel rates as well. The three stak-run omcs-indian oil corporation, bharat petroleum corporation and hindustan petroleum corporation.
According to analysts, the increased FII interest not with standing, OMCs remain undervalued when compare to their global peers. The OMCs which purchase crude oil at market rates are required to sell diesel, kerosene and LPG at government capped prices, resulting in loss.
The companies donot incur any loss on sale of petrol new, as the goverenment decontrolled petrol price on June 25 in accordance with the suggestion made by KIRIT PARIKH GROUP.
INDIAN OIL touched a 52- week high at 458.9 on Sept 21, the day BCPL also reached its high of 814.9 a share.
Though the general market is adding to their interest in these companies, the government's divestment plans for Indian Oil and ONGC also seem to be working in favour of the government owned companies.
So the government also plans to sell 10% stake in IOC and 5% in ONGC.

GOVT ASKS BLACKBERRY TO PROVIDE ACCESS TO SERVICES BY 31st DECEMBER
Government has exteneded the deadline for second time in six weeks, has asked RIM maker of BlackBerry phone to come up with a final solution by 31st December on giving access
to security agencies to the companys popular mesenger and enterprise services.

INDIA ENTERS UNSC AS NON-PERMANENT MEMBER AFTER 19 YRS.
After a gap of 19 yrs , India was today elected to the United Nations Security Council.
India received 187 votes, including Pakistan out of the 191 countries that voted, while one member is abstained from the vote and three votes were polled against India.
Other countries were also elected to the UNSC today are South Africa, Colombia, Germany and Portugal and the new members will take their places from Jan 2011.
Five new countries will be replacing Austria, Japan, Mexico, Turkey and Uganda. Three of the new members are the part of G4( India, Brazil, Japan and Germany) who want to become permanent members India is hoping that change comes in next 2 yrs.
Puri said after voting, “ It is the fact that many of the countries that will be on the council next year are also aspirants for permanent membership”.
He added that we will try and make a use of the time in this 2 yrs and also give our partners a sense of confidence and build trust, so that they feel comfortable with security council BRIC( Brazil, Russia, India and China) could present a united front on several international issues.

STATE FMs TO MEET OVER GST ON OCTOBER 29-30
State finance minister would meet in Goa for two days to firm up thier views on centre's revised draft for implementation of the Goods and Service Tax (GST).
Skoda launches new FABIA at 4.19 lakhs.
skodaAuto launched a new model of its Fabia brand, with a starting price of `4.19 lakh for the base variant in Maharashtra (ex-showroom). The new Fabia has a changed interior and exterior, with added safety features such as air bags as standard. It will be sold with
three engines options - 1.2-litre petrol and diesel and a 1.6-litre petrol.While the 1.2-litre models will have three variants- Classic (base), Ambiente (mid) and Elegance (topend),
the 1.6-model will only have the top-end version, priced at `5.81 lakh. The Czech company, part of the Volkswagen group of Germany, is aiming to more than double sales of the Fabia, which has received dismal response so far. Skoda has been able to sell an average
of 470 units per month of the Fabia in the first six months of the year, far below the average of its competitors. The Maruti Swift sells more than 10,000 units every month.
Skoda aims to push Fabia volumes to 1,160 units with the new model, with an overall target of selling 14,000 units of the car over 12 months


DRUG SEIZURE DISPUTE WITH INDIA NOT RESOLVED: EU

The European commission clarified today that no breakthrough in the on going dispute between India and the European Union (EU) regarding generic drug seizure had been reached.

Govt. Regulators call truce; agree on FSDC structure.

The government and financial sector regulators buried their differences on the proposed Financial Stability& Development Council (FSDC) after Finance Minister Pranab Mukherjee offered the
Reserve Bank of India governor a sweetener.While the finance minister will head the proposed body, the governor will head the only sub-committee under the settlement formula. Earlier, the government had proposed two sub-committees with the one on regulatory coordination chaired by the RBI governor and the other, on financial stability, headed by the finance secretary.The modification in the structure follows opposition from Mint Road. The RBI governor even went public with his concerns. In its response to a consultation paper floated by the finance ministry, RBI had said that the proposed FSDC would “impinge on regulatory autonomy and flexibility” and had made a case for functioning as the systemic regulator.

STREET DIVIDED ON COAL INDIA'S IPO PRICING GOVT'S PRICE BRAND
The wait for Coal India's initial public offer (IPO) pricing is finaly over, as government anounced a price band of Rs 225-245. Last month most expert and analysts had estimated the IPO to be priced in the range of Rs 200-220, but now the final pricing at
Rs225-245 appears to be higher.
Here the issue is aggressively priced. It would have help interacting retail investors if the price had been in the region of Rs 200 a share.
Pricing apart, what places Coal India in a favourable spot is its status of being the worlds largest coal minner and a dominent 81 per cent market share in the country.

Fund raising may hit Rs 4 lakh crore in 2010 :-
Corporate India is set to end the calender year with record fund raising from the primary and secondary
markets.
Indian companies have raised close to the cumulative Rs 3.14 lakh crore raised in 2009.
India Incs highest fund mobilization was in 2007 when it mopped up over Rs 3.20 lakh crore .
With around 3 months to go several large ,small and medium -sized firms are gearing up to raise funds for expansion and capital needs cumulative fund raising likely to touch Rs 4 crore this year. Fund raised by the overseas secondary market in the form of depository receipts, FCCBs ,non convertible and qualified institutional placements .
Certain companies like Reliance inc. ,ADAG group ,Tata group companies as well as GVK,GMR,Suzlon ,Jet airways ,Uninor and other.
In the past 2 to 3 years companies had to postpone their expansion and fund raising activities due to global economic slowdown and uncertainty but now conditions are improving.
The government’s plan to raise $10 billion through disinvestment and beginning to materialise and this will create more capital inflows to markets .
A combination of favorable factors like 9% GDP growth ,a good monsoon that may spur agriculture growth close to 3.8% ,industry growth and service sector growth of 10% continuing favorable policy decision and stress on infrastructure growth.

NPC Shortlists Kazakhstan For N-reactor Experts

State run Nuclear Power Coporation (NPC) which is in the process of increasing generation capacity to 63000MW by 2032 from present level of 4560MW. It has shortlisted Kazakhstan to export reactors in the range of 220MW, 540MW and 700MW capacity.
Kazakhastan has more than 15 percent of global reserve of uranium, a key source of nucleare energy.

Tata Steel Europe shuts down unit


Tata Steel Europe has decided to shut down Tata Steel Living Solutions, located at Shotton, North Wales. The unit was established in 2003 and was making modular buildings for the construction industry. The move has put 180 jobs on the block. The company, in a release, said the company had been in losses since its inception. Tata Steel Building Systems MD Andrew Black said: “It is with great regret that, following a detailed review of the Living Solutions business, we have proposed to withdraw from this business activity.” The company said the continuing weak construction sector,coupled with a few other reasons,led to the decision. Tata Steel Europe
is open to selling off the plant if any seriousbuyers approach it. The operations at Living Solutions are said to
be very small compared to Tata Steel Europe and shutting the business will not have any material effect on the company’s financial well being

Mills new CEOof SpiceJet

Three months after Sanjay Aggarwal resigned as chief executive officer (CEO) of SpiceJet, the airline announced the appointment of Neil Raymond Mills as the CEO. Mills has joined SpiceJet from another low-cost carrier, the Dubai-based Flydubai, where he was the Chief Financial officer. “Most recently, Neil was the part of the start up team for Flydubai and saw the airline grow from a planning stage to nine operating aircraft in 18 months,” said a company statement. Mills was earlier with easy- Jet for 12 years in different roles. During his tenure there, the airline grew from four to 174 aircraft. Sanjay Aggarwal’s 20- month stint as CEO ended in July. He resigned after Sun TV promoter Kalanithi Maran’s Kal Airways Pvt Ltd acquired a 37.7 per cent stake in the airline, making an open offer to buy an additional 20 per cent from shareholders.
Under Aggarwal, the Guagaon- based SpiceJet turned profitable for the first time in its five years of operations, in 2009-10, making a profit of `61 crore. Under Aggarwal, it grew from 94 daily flights to 16 cities with 15 Boeing-737 aircraft to 137 daily flights to 19 cities with 21 Boeing-737 planes. Mills is taking charge at a
time when the airline is expanding domestic as well as international operations. The carrier has ordered 30 Boeing aircraft to be delivered between 2014 and 2018. It has planned to have 50 aircraft by 2014


Google to launch low-cost Android phones in India

In its attempt to become a significant player in India’s huge wireless industry,
Google Inc would reportedly allow several less known Indian handset makers to release low-cost devices that include the technology giant’s Android operating system in the coming months
Android lends functionality to smartphones, including touchscreen capability and a large marketplace of small software “apps,”gained market share quickly this year in developed countries like the US.
Google is banking largely on a crop of inexperienced Indian smartphone manufacturers Micromax Informatics Ltd, Spice Mobility Ltd, and Olive Telecom to makeAndroid phones in the $150 range, and eventually reduce it to a $100 level.


Google joins $5-bn offshore wind grid project

google Inc has thrown its financial clout behind an ambitious $5 billion proposed electric transmission line intended to spark investment in new wind farms off the heavily populated US East Coast.
Japan’s Marubeni Corp and New York investment firm Good Energies are joining in financing the planned 350-mile underwater electric cable, which will be led by transmissionline developer Trans-Elect