Business Standard - 15th October

Submitted By:-
Hitesh kr. Sharma
Inna Mathur
Jasleena Singh
(GR. 8 Sec- G)

Honda Motor prepares to exit Hero Honda

• The proposal was made by the Munjals to Honda Motor.
• Honda has decided to shed its premium tag and has plans to be in the low cost bike segment.
• The company plans to retail this bike in emerging markets such as China and India.
• Starting with a motorcycle costing just 27,000.
• Although Hero Honda and Bajaj Auto have said they were trying to develop one for 15,000-20,000.
GSK (world’s second largest drug maker, GlaxoSmithKline) TO MAKE INDIAA HUB FOR ANTI-PARASITE DRUGS
• GSK supplies about 600 millions tablets a year
• India produces half of these pills while the rest comes from GSK’s factory at Cape Town in South Africa.
• In March, Witty inaugurated a new albendazole manufacturing facility at Nashik in Maharashtra, at an investment of 1.5 crore to supply 300 million treatments a year.
OIL EYES TIE-UPS WITH OVERSEAS SHALE GAS FIRMS
• Public sector Oil India Ltd (OIL) is looking for tie-ups with shale gas companies in the US, Poland and Australia.
• The company had earmarked 4,000 crore for international acquisitions this year, none has made so far.
• Private sector Reliance Industries (RIL) has, over the past five months, made three shale gas acreage acquisitions in the US.
• Bharat Petro Resources Ltd bought two exploration acreages of shale gas operated by Norwest Energy at Perth, Australia.
• In March this year Board of oil and natural gas corporation has approved a pilot project for exploration in Damodar Basin at 128 crore.
POWER CAPACITY GROWS 8.12 % IN AUGUST
• The installed capacity in the power sector stood at 165,000 Mw at the end of August, registering 8.12 % annual growth.
• Last year it was 4.4% in same month.
• In the nuclear segment, the installed capacity grew at 10.6%.
• The hydro segment turned out to be a laggard, with only 0.45% increase in installed capacity.
AXIS BANK NET PROFIT UP 38%
• Owing to strong growth in interest income, the country’s third largest private sector lender reported a net profit of 735.14 crore for the second quarter of this financial year.
• Net interest income (NII), the difference between interest earned and interest expended, rose to 41%.
• Income from proprietary trades fell to 52% and pushing down the share of trading profits in operating revenue from 10 % to 4%.
• Net interest margin (NIM) is 3.68% which is better than year ago quarter but flat than first quarter.
RBI Intervenes to stem unabated rise in rupee
• According to forex traders - RBI by buying the foreign exchange at rupee 44.10 nudged the rupee down from a 25 month high to 44.25.
• Total market interventions became $1.5 – 2 billion by the oil companies buying the dollars worth over one billion.
• But because of foreign inflows rupee closed at 44.12 against the dollar.
• It is expected that the rupee will rise to 43.50 in coming weeks and touch 44 near December.
• Coal India’s `15000-crore IPO is expected to attract billions of dollars from foreign investors and in-turn create a liquidity shortage with an expected outflow of ` 11000 Crore for IPO.
• Rupee opened at 44.25 after closing yesterday at 44.52.
MFI Governance issue under Lenders lens
• SKS stung by the controversy over the sudden sacking of the MD at India’s largest Micro finance institution lenders have decided to raise corporate governance issue at board meeting.
• It was confirmed by an official of SIDBI that corporate governance issue will be raised.
• SKS recently terminated the services of MD and CEO Mr. Suresh Gurumani without any specific reason.
• Banks have jointly floated lenders quorum and its coordination is tasked to SIDBI under terms of 300 million dollar World Bank Loan.
• Objective of credit line to SIDBI is to scale up access to sustainable microfinance services and foster transparency.
• Ethical field practices will receive equal attention.
• Audit agencies have been appointed to examine the loan books of larger MFI’s and more institution will be covered in phases.
• One of the leading PE player said a recent development in the industry could affect the flow of funds.
• PE’s are also concerned about the Finance ministry’s decision to ask banks to cap the interest rates charged by MFI’s.
• Ministry wants to ensure that MFI’s do not charge more than 24% interest from borrowers who have taken bank financing.
• MFI’s mainly operate through middle men and they charge on an average 24-28% interest from these borrowers and they pay these middle men 3-4% commission.

Cabinet may clear AI’s `12,00 –CR Equity Infusion
• NACIL which runs Air India is likely to receive government approval for its second equity infusion of `1,200- CR by next week.
• Higher official mentioned that equity infusion will be taken up by the cabinet in its meeting next week and is likely to be cleared.
• The infusion will increase the base of the airline to `2145 – CR from `945 CR at present.
• Civil aviation ministry feels these infusions of a relatively smaller amount could not be of much help. They would need an infusion of at least `6,000 CR in one go to come out of the red.
• Air India has accumulated losses of `12,000 Cr and is expected to make an operational profit at end of financial year.
• Airline is also looking at launching a domestic low cost carrier under Air India express brand to boost its market share.
• Air India expresses the low cost subsidiary of Air India which flies mainly to West Asian countries.