The Week That Was

corporate
Ranbaxy, Pfizer settle Lipitor dispute
RANBAXY Laboratories made another big announcement a week after its promoters sold their shareholding to Japanese drug major Daiichi Sankyo. The Indian drugmaker and US pharma giant Pfizer announced that they have reached an out-of-court settlement over the world's largest selling drug, Lipitor (Atorvastatin). The settlement allows Ranbaxy to launch its generic version of Lipitor, the $12.7-billion cholesterollowering medicine, and combination drug Caduet on November 30, 2011, in the US with 180-day exclusive marketing rights along with the innovator company. Industry estimates peg Ranbaxy's revenue going up for Lipitor at $1.5 billion over a four-year period. A day after the announcement was made, Ranbaxy's shares fell by 7.68% or Rs 45.95 to close at Rs 552.25 on the Bombay Stock Exchange (BSE).
ADAG THREATENS LEGAL SUIT AGAINST RIL
After the initial shock and awe of RIL's sudden intervention into the probable Reliance Communications-MTN (South African telecom major) deal, the Anil Dhirubhai Ambani Group (ADAG) adopted an aggressive posture, threatening to take up legal action against Mukesh Ambani-led Reliance Industries. Earlier, RIL had claimed that MTN would have to consider the legal implications of acquiring Reliance Communications. However, talks between both the parties (RCOM and MTN) continued on the due diligence on RCOM. The proposed deal is worth $70 billion.
TARO PHARMA FILES SUIT AGAINST SUN
Isareli firm Taro Pharma commenced litigation against its former suitor Sun Pharma to prevent the Indian company from blocking the sale of its Irish unit. The litigation was filed in Israel. Taro has also cautioned its investors against selling its shares to Sun Pharma, which already holds a 34.4% stake in the company. In May last year, Sun Pharma had entered into an agreement with Taro to acquire the company for $460 million. However, last month, Taro Pharma announced that it had unilaterally withdrawn from the sale agreement, citing low valuation of the company after it made a financial turnaround. Taro has also invited Sun to submit an offer to purchase the Irish operations. If it wishes to do so, the company said that it would seriously consider the offer.
    economy
Direct tax collections
    rise, Govt relieved
DIRECT tax receipts rose 71.3% in the first two months of the current fiscal year from a year ago, indicating the economy was sustaining its growth pace. The buoyancy in revenue collection comes as a relief for the government, which is struggling to meet fiscal deficit targets amid the pressures of a soaring subsidy bill and farm debt waiver. The Central Board of Direct Taxes on Wednesday said that corporate tax receipts in the April-May period rose 68.05% to Rs 8,126 crore from Rs 3,185 crore in the same period last year. Income tax collections (including FBT, STT and BCTT) grew 73.05% to Rs 14,690 crore from Rs 8,489 crore. Total direct taxes for the twomonth period stood at Rs 22,840 crore, up from Rs 13,335 crore. The robust growth in direct taxes was achieved despite larger refund payouts at Rs 9,014 crore. Tax deducted at source (TDS) continued to grow this fiscal at about 51%. Refunds were issued to over 48 lakh taxpayers, compared with about 44.5 lakh worth refunds in 2006-07. The criteria for issuing refunds without verification of TDS instruments have been relaxed to gross TDS claims of up to Rs 5 lakh and net refund claim of Rs 25,000 per taxpayer. This is to provide better taxpayer services, particularly in issuing of refunds.
STATE GOVTS ASK CENTRE TO SHARE LOSS
State governments asked the Centre on Monday to share at least half of the Rs 8,000-crore revenue loss they would incur on account of reducing duty on petrol, diesel and cooking gas this fiscal. State governments, which obliged the central government by reducing taxes on petro products, have limited power to generate resources, empowered group of state finance ministers on VAT chairman Asim Dasgupta said. While reducing the duties on crude, petrol and diesel on June 4, forfeiting Rs 22,660 crore a year, prime minister Manmohan Singh had asked state governments to slash sales tax rates on fuel. States such as West Bengal, Kerala, Tamil Nadu, Maharashtra, Haryana, Bihar, Gujarat, Andhra Pradesh, Delhi, Orissa, Uttarakhand and Goa immediately obliged Mr Singh. The committee also asked the civil aviation ministry to give details of how prices of aviation turbine fuel (ATF) are fixed. Civil aviation minister Praful Patel last week made a strong case for giving ATF declared-good status in a meeting with prime minister and finance minister.
technology
BPOs may feel inflation heat soon
THE Indian BPO sector may also feel the heat of double-digit inflation, causing vendors to increase prices for their services, a study published in June by research firm DataMonitor seems to indicate. The study that tracked pricing for contact centre services globally found that one of the largest influencers on price shifts in the outsourcing sector relates to changes in inflation in the delivery locations. "Across selected markets, there has been some increases in general pricing ranging from as low as 2.4% to nearly 8%, which need to be taken into account by the vendor in the form of reduced levels of profitability or by passing inflationary increases back to the client," the study carried by lead analyst Peter Ryan and his team said. The study was based on how inflation moved in 2007 in UK, US, Mexico, China, India, Philippines and other countries. India had the highest rise in inflation among the listed onshore and offshore locations after Philippines and South Africa. The study was done across three categories, onshore locations such as UK and US, mature offshore locations such as India and Philippines and emerging offshore locations such as Argentina and Chile.
SPECTRANET BOUGHT FOR RS 125 CR
Spanco Telesystems and the promoter group of Shyam Telecom have acquired Spectranet, Punj Lloyd's internet services provider (ISP) arm. The deal is reported to be in the region of Rs 125 crore. Spanco and the Shyam group will together hold 100% in the entity through a joint venture, Citycom, formed for this purpose. Spectranet employs 350 people across Delhi, Bangalore and Mumbai. It offers internet services, internet data centre services, managed optic fibre build out and maintenance, and cable TV solutions. Spanco and the Shyam group intend to invest in expanding broadband network from the existing three cities to about 10. Chandigarh, Chennai, Jaipur, Ahmedabad, Kolkata and Pune are some of the cities it plans to extend the network to. A communication from the company said around Rs 500 crore will be invested in network expansion. The JV is an equal partnership but may eventually have larger holding from the Shyam group, which also has other interests in telecom. The Shyam group operates telecom services in Rajasthan through Shyam Telelink and has Shyam Telecom, a listed entity in telecom equipment manufacturing, in its fold.
    markets
    Sensex down 4%,
touches 43-week low
THE market mood has turned distinctly bearish following a slew of negative factors as the benchmark sensex lost lustre for the fifth week in a row and ended the week down by over 4% to nearly 43-week low of 14,571.29. Spiralling inflation to double digit at 11.05% due to higher crude oil prices, sustained selling by foreign funds and political concerns mainly weighed on the market sentiment which dragged the sensex to its lowest level in the current calender year. The Bombay Stock Exchange (BSE) barometer virtually crashed by 2,863.65 points or 16.42% in last five weeks. It also slumped by a whopping 6,635.48 points or 31.29% from its all-time peak of 21,206.77 recorded on January 10 in the current calender year. The benchmark sensex gyrated in a wide range of 15,789.62 points and 14,519.27 points before concluding the week at 14,571.29 points from last weekend's close of 15,185.92 points, a steep fall of 618.33 points or 4.07%. The Sensex has not seen this level since August 24, 2007 when it closed on 14,424.87 points. Similarly, the S&P CNX Nifty of the National Stock Exchange (NSE) also tumbled by another 169.55 points or 3.75% to end the week at 4,347.55 from previous weekend's close of 4,517.10 points. Inflation which was higher than market anticipation created a flutter on the bourses with the benchmark sensex tanking over 500 points on Friday.
Weak global cues also cast shadown on the market sentiment. Not a single sectoral index, mainly interest rate sensitive, ended the week in positive terrain as selling emerged all across the board. Realty, capital goods and oil and gas indices suffered a sharp setback. The sectorial BSE-Realty index was the worst sufferer and ended the week sharply down by 437.09 points or 7.51% on widespread fear that RBI is likely to take monetary measures further to stem inflation which led to slower growth of the sector. The BSE-CG index crashed by 619.37 points or 5.15% to end the week at 11,399.79 points and the BSE-Oil&Gas index by 497.12 points or 5.01% to 9,419.89 points. Foreign Institutional Investors (FIIs) nearly pulled out Rs 7,478 crore in the current month till June 19 and sold shares worth Rs 22,847 crore in the current calender year so far, mainly weighing on the market sentiment. The broad-based BSE-100 Index dipped by another 301.37 points or 3.76% to finish the week at 7,716.24 points from last weekend's close of 8,017.61 points. The BSE-200 Index and the Dollex 200 were also quoted sharply lower at 1,809.24 and 701.00 at the weekend compared to last weekend's close of 1,879.05 and 728.69 respectively. The BSE-500 Index plunged by 217.01 points or 3.64% to end the week at 5,747.62 points from 5,964.63 points and the Dollex-30 too ended lower at 2,784.04 from 2,904.75 at the last weekend. politics
Mumbai Sikhs protest,
demand action
Thousands of Sikhs blocked railway tracks, damaged a station and observed a shutdown in parts of Mumbai Saturday to protest the killing of a member of the community by the Dera Sacha Sauda sect chief's bodyguards. They vowed to continue "peaceful" protests until the culprits were brought to book. Around 5,000 Sikhs squatted on railway tracks near Mulund station and stopped suburban and long distance train services from 11.30 am, causing hardship to thousands of office-goers and college students. A Central Railway spokesman said the agitators blocked all the four lines and damaged the Mulund railway station. The blockade was lifted after two hours with police help and train services were resumed, he added.
MCCAIN ATTACKS OBAMA OVER TRADE
Republican presidential candidate John McCain ventured to Canada to attack his Democratic opponent on trade, while Barack Obama dismissed McCain's push for U.S. offshore oil drilling as making ``absolutely no sense.'' The rivals were hammering at each other on economic issues that are key to American voters'. McCain attacked Obama over his opposition to the North American Free Trade Agreement while Obama jabbed at McCain's proposal to allow offshore oil drilling. The Federal Election Commission also showed the two presumptive presidential nominees almost even in fundraising during the month of May.