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Thursday, November 29, 2012

Sensex at 19-mth high on positive FDI buzz

Mumbai: Hopesof majority support for the government's decision to allow FDI in the retail segment, combined with global financial powerhouse Goldman Sachs projecting a new peak for the sensex at 21,700 and nifty at 6,600 in 2013, led to a strong rally on Dalal Streeton Thursday. 

    Thesensex gained 329 points to 19,171, near its 19-month high touched on May 2, 2011 as net FII buying jumped to about Rs 1,600 crore. The day's session added Rs 90,000 crore to investors' wealth with the BSE's market cap now at Rs 66.9 lakh crore. The rupee strengthened by 63 paise to close at 54.83 to a dollar.P21

Monday, November 26, 2012

GSK to invest 5,215cr in Indian arm

Will Raise Stake To 75% In One Of Largest Share Buybacks By An MNC


Mumbai: British drug giant GlaxoSmithKline (GSK) will invest around Rs 5,215 crore ($941 million) to increase stake in its Indian consumer healthcare subsidiary, GlaxoSmith-Kline Consumer Healthcare (GSKCH), to 75% through a voluntary open offer. 
    This is among the largest MNC share buybacks in the recent past, and also signals GSK's bullish sentiments in a key growth market. Swiss engineering giant ABB had showed up with a $965-million buyback offer two years ago in another instance of an MNC parent boosting its economic interest in the India unit. 
    GSK, which currently holds 43.2% in GlaxoSmith-Kline Consumer Healthcare 
(GSKCH), will pick up 31.8% of the total outstanding shares of the publicly listed Indian company at a price of Rs 3,900 per share. This represents a premium of approximately 28% to the NSE closing share price on Friday and 22% to the 12-month high on the Bombay Stock Exchange. 
    The announcement sent the GSKCH stock to a record 
high of Rs 3,652 on the BSE on Monday, up 20% or Rs 609 over the previous close of Rs 3,043. 
    "GSK Consumer Healthcare is a well established business in India and its leading product, Horlicks, is an iconic household brand. This transaction represents a further step in GSK's strategy to invest in the world's fastest growing markets and, we believe, offers 
a liquidity opportunity at an attractive premium for existing shareholders," David Redfern, chief strategy officer, GSK, said in a media release. 
    GSK's consumer healthcare business in India generated over Rs 2,800 crore (approximately £380 million at 2011 average exchange rates) turnover with 19% compound annual growth rate over the past five years. GSK had committed more than $2.5 billion earlier this year to buy back shares in its emerging market units. 
    "It reflects the confidence that the parent company has in emerging markets as well as in GSKCH, which is growing at a healthy rate. There is no doubt the parent would be looking at further entrenching itself in this market and could even launch more prod
ucts from its stable going forward," said an analyst from an Indian brokerage. 
    Besides Horlicks and Boost, which are growing at a healthy pace, the company also manufactures and markets Viva and Maltova apart from other brands in diverse categories, such as Eno, Crocin, Iodex, BreatheRight and Sensodyne. GSKCH has a strong marketing and distribution network in India comprising over 600 distributors and a direct coverage of over 7.5 lakh retail outlets. 
    Among other multinationals operating in India, GSKCH was the only one where the parent holding was below 51%. Post the offer, GSKCH would change from being an associate company to a subsidiary of GSK. 

BETTING ON GROWTH 

• GSK's Indian business clocked a Rs 2,800-crore turnover in the 12 months till Dec, 2011 

• Product range includes iconic brands like Horlicks & Boost, along with other well-known ones like Eno, Crocin & Iodex 

• It has over 600 distributors and has a direct presence in over 7.5 lakh retail outlets in India

Etihad set to pick 24% stake in Jet Airways

UAE Co Expected To Shell Out 2,200Cr Valuing Indian Carrier At Over 9,000Cr


New Delhi: Naresh Goyalowned Jet Airways is on the verge of becoming the first Indian carrier to benefit from the government's recent FDI policy change, allowing foreign carriers to invest in domestic airlines. Jet is in advanced stage of talks for a 24% stake sale to Middle East carrier Etihad Airways in a deal valued at $400 million (about Rs 2,200 crore). 
    Dayananidhi Maran's low-cost carrier SpiceJet has also admitted "that a few foreign airlines/investors have evinced interest" in it for picking up a stake. Three nonairline companies and two airlines are learnt to be in talks with SpiceJet at present but "a deal is not on the horizon". "It will be very premature to comment on the possibilities of any fresh equity issuance to such interested parties," an airline statement said. The scrips of both Jet and SpiceJet hit 52-week 
highs on BSE on Monday. Jet closed 10.8% higher at Rs 560 and SpiceJet closed almost 13% up at Rs 46.9. 
    "Jet Airways is in a mas
sive expansion mode and needs capitalization. They are in advanced stage of talks with Etihad (an airline Goyal helped build by providing friendly technical expertise in its initial years as he has solid ties with Gulf carriers). This deal is expected to be clinched shortly unless Goyal or Etihad set up some impossible demand," said a top aviation source. 
    Jet is 80% owned by Goyal through the Isle of Man-registered Tailwinds. 
    UPA-II recently allowed foreign airlines to pick up to 49% stake in Indian carriers. Asked how Jet will offload stake to a foreign carrier in such a situation, the source 
said: "We have not been informed those details. Maybe Goyal dilutes his existing 80% by 15-20%. Anyway, the deal has to be routed through the foreign investment promotion board and they will look at that." 
    The Rs 2,200-crore for a 24% stake in Jet values Goyal's carrier at $1.7 billion (Rs 9,438 crore), a substantial premium from the current market capitalization of Rs 4,366 crore. A team of top Jet officials like chief commercial officer Sudheer Raghavan and chief operating officer Hamid Ali are learnt to be in Abu Dhabi to clinch the deal under Goyal's overall guidance.


Sunday, November 25, 2012

Sebi Talks Tough on Public Holding Rule

Tells cos deadline won't be extended this time


The Securities and Exchange Board of India, or Sebi, has warned as many as 40 listed private companies that the June 2013 deadline for promoters to reduce their holding to 75% would not be relaxed, and firms as well as their owners risked sanctions if they failed to comply. The securities market regulator conveyed its stance to senior officials of 40 companies last week, a person with knowledge of the development said. The list of companies in which public shareholding is below the mandatory 25% includes one of India's top information technology firms, Wipro, as well as the largest private sector airline, Jet Airways. Anil Ambani Group's Reliance Power, DLF, two Essar Group companies, Jaypee Infratech and L&T Finance Holdings are also in the list. 
Sebi Chairman UK Sinha has reiterated his intention of enforcing the 25% norm on a number of occasions. But last week's exercise became necessary as many companies had not even taken preliminary steps to bring down 
their promoter holding. By firmly staving off attempts to push back the deadline again, the regulator and government reckon that the capital markets could receive a boost with a large number of public offerings through 2013. 
The possible legal consequences of not complying with the public shareholding norms could include barring promoters and companies 
from tapping the capital markets, except for dilution of stake; shifting their stocks to the trade-fortrade segment (removing scrips from the derivative segment); compulsory delisting and even adjudication and prosecution proceedings. "We have served a clear warning last week. The companies that were called in were told that they would have a problem if they failed to raise the public holding," said the person on condition of anonymity. 
Many of India's state-owned companies also have low public holding, as low as 1% in a few cases. 
More Leeway for State-run Cos 
However, they have more breathing time to meet the deadline, which is August 2013, and need to reduce state ownership to 90% as opposed to 75% for private companies. Some state-run firms are looking to offer shares to the public to help a government struggling on the fiscal front to raise much-needed cash, 
"I see no movement towards it. The companies and their advisors are perhaps thinking that this time limit will be extended. But let me tell you that I am going to make it difficult. This is a very important requirement. Three years had been given, more than one-anda-half years are over, but there is absolutely no movement towards it," Sinha had said in April at an industry event. "This is something whether you like it or not will have to be treated as sacrosanct. If there are any requests for making this process simpler, we will 
meet that," he had said then. In June 2010, the Securities Contracts Regulation Rules were amended to raise the minimum public holding requirement to a uniform 25% for all companies. Listed companies with a higher promoter holding were to raise public shareholding by at least 5% every year till such time they met the norms. However, within a month, the rules were amended again to provide an exemption to state-owned companies, with the rules stating that these firms could achieve a minimum public holding of 10% instead of 25% within a period of three years. 
The regulator's internal analysis, based according to the shareholding pattern filed by listed companies for the quarter ended June 2012, showed there were a total of 216 companies (16 PSU and 200 non-PSU) with public shareholding of less than 10% and 25%, respectively.


MINISTRY OBJECTS TO EIL, OIL SALE

Oilmin Throws a Spanner in Selloff Works


    The government's disinvestment programme, which has struggled to get off the ground, could face another setback as the oil ministry has expressed reservations about the proposed stake sale in Oil India and Engineers India after the small Hindustan Copper issue was largely bought by government-run institutions. The ministry of petroleum and natural gas has said these two companies should hit the market only after stake sale in at least two more companies through the offer for sale (OFS) route, according to a government official. "They (oil ministry) want the finance ministry to review the process of OFS, and if the next two issues are a success, only then they intend to allow divestment in Oil India and EIL," the official said. 
The finance ministry has received cabinet approval for a 10% stake sale in Oil India, a . 10,000-crore upstream oil company that has a market value of over . 27,000 crore at Friday's closing price. At this price, a 10% stake sale could have fetched nearly . 2,500 crore for the government, but Friday's Hindustan Copper issue may have made things difficult. 

The petroleum ministry's objection underscores the problems faced by 
Finance Minister P Chidambaram as he races against time to raise . 30,000 crore from disinvestment this fiscal. Administrative ministries have often objected to PSUs under their charge hitting the market even after the cabinet's approval for partial privatisation. Hind Copper Issue Raises Doubts 
Attempts to sell small stakes in SAIL and Nalco had to be put off because of disagreements over pricing. A string of successful stake sales will, the government hopes, help revive the markets, engendering a feel-good factor that will help the scam-hit Congress-led UPA government in its attempt to win a third term in the 2014 general elections. The government had kicked off its divestment programme on Friday with the auction of a 4% stake in Hindustan Copper. 
Though the issue was oversubscribed, media reports indicated that the biggest subscribers were largely state-owned institutions, including the country's largest insurer Life Insurance Corporation and public sector banks such as State Bank of India. 
Some individual investors did participate, but institutional participation by the private sector was meagre. Details of who subscribed to the issue are not in the public domain. 
Disinvestment Secretary MH Khan had said last week the plan was to launch the Oil India issue before December 20, but the official quoted earlier said the oil ministry was not so sure. "That is going to be very difficult as the Hindustan Copper issue was bailed out by state-run financial institutions. The oil ministry has already conveyed its apprehensions," he said. 
Independent experts agree, saying the 
government needs to rework its stake sale strategy. 
"They should decide who they are targetting. In case of OFS, they should make it a closed auction to institutions 
as retail investors hardly participate. And if they want it to sell to retail investors, they should offer as big as 20% discount," said Prithvi Haldea, chairman of Delhi-based research firm Prime Database. However, the finance ministry is determined to push ahead with disinvestment. "It will all depend on NMDC now. If there is some interest from investors, we will be able to just end the year with Oil India too," the finance ministry official said. The finance ministry, which recently got cabinet approval for a 9.5% stake sale in power utility firm National Thermal Power Corporation, is hopeful of hitting the . 30,000-crore target. 
"If we are able to go ahead with two blue-chip compa
nies such as NTPC, SAIL or even Nalco, the target will be well within our reach," the official said. The NTPC stake sale may fetch the government around . 13,000 crore, almost half of its intended target.



Wednesday, November 21, 2012

High Spectrum Reserve Price a Mistake: Montek

Plan panel deputy chief hints at a review of the auction policy after the current round is over


Planning Commission deputy chairman Montek Singh Ahluwalia said on Wednesday that the high reserve price of spectrum in the recent auction was a "mistake" and the second auction later this year will take this into consideration. "I myself had raised the issue that it was a mistake to pitch the reserve price at a level close to that..." Ahluwalia told reporters on the sidelines of Indo-Japan symposium here. "I think, in hindsight, it was clear that the reserve price was too high." Montek is a member of an Empowered Group of Ministers (EGoM) that had set . 14,000 crore as the base price. The spectrum auction fetched a total of . 9,407.64 crore in the auction that lasted barely two days and found no bidders for the big circles, like Delhi and Mumbai. "But that doesn't matter; we are going to re-auction and you will discover the price," he said. The EGoM had lowered the reserve price from . 18,000 crore suggested by sector regulator Trai to . 14,000 crore, a decision that had been criticised. 
"I want to mention here that one or two newspapers criticised that as if by lowering the reserve price we are going to reduce the outcome. I had argued very strongly that a healthy auction process will discover the prices whether you fix it at one or two or seven hundred," he said. He hinted at a review of the auction policy after the current round of auction is over. "…once the auction is done, the issue of refarming can be looked at afresh...we should get the auction over and done and then what future policy should be, should be thought out much more clearly," he said.


Cipla Set to Pop S Africa’s Medpro in $220-M Deal

Indian co picks up 51% stake, valuing South Africa's third-largest drugmaker at $440 m


    Cipla, India's second-largest drug firm, has agreed to acquire South African drugmaker Cipla Medpro, taking an important step towards consolidating its international business that now makes up more than half its quarterly revenues. Cipla said on Wednesday it will buy 51% of Cipla Medpro for about $220 million, valuing the beleaguered South African company at about $440 million. This is Cipla's first international acquisition in its 75-year-old history. "With this acquisition, South Africa will become the second-largest drug market for Cipla, which hopes to capture 5% of the market," said YK Hamied, chairman and managing director, Cipla. "Going forward it will be a priority market for us, why should we leave it to the Chinese," Hamied said. 
The acquisition will be a relief for Cipla Medpro and its shareholders, coming just months after its CEO Jerome Smith was suspended in August. Smith founded the company in 1993 and later forged a relationship with India's Cipla, which changed the fortunes of the South African company. Medpro used to source 80% of its products from Cipla, and the companies agreed Medpro would use the brand name of Cipla for selling products in Africa. Smith's abrupt departure led to uncertainty over the firm's future, but on Wednesday the shares rose after the Cipla announcement. Cipla is offering ZAR 8.55 per share (payable ex the final dividend for the 2012 financial year, which will be capped at a maximum of ZAR 0.10 per share). Medpro shares rose 7% to ZAR 8.29 from 7.10 ZAR at the Jo
hannesburg stock exchange. Cipla shares rose 2% to end at . 389.70 on Wednesday after the announcement. 
Cipla has been consolidating its position as India's second-biggest drugmak
er. In the past three years, its revenues have grown 41.53%, while the Indian drug market, estimated at about . 60,000 crore, has been growing at about 15%. Medpro is South Africa's third-biggest drugmaker with annual sales of . 1,000 crore. The South African market is estimated at about $4 billion, and comprises about 35% of the total African market. Cipla to Get Access to New Segments 
The acquisition will give Cipla a presence in respiratory drugs and those needed to combat illnesses of the central nervous system. "Till date, Cipla only had a profit-sharing agreement with Medpro, as the company would source all its products from Cipla, so this deal is a valid extension of that partnership," said Surjit Pal, analyst with Elara Capital. 
Cipla announced after its last quarter financial results that the company's future will be the international markets, a reflec
tion of this is the contribution of international business to its revenues. In the last quarter, it was 56% of the total business. Hamied said the company wanted to expand in all regions and categories such as malnutrition and pediatric products.




FM Asks Banks to Bail Out Builders

Tells bankers to fund residential projects stuck for want of funds


Finance Minister P Chidambaram has asked banks to lend a helping hand to builders, particularly those involved in construction of residential properties, in order to revive faltering economic growth. The minister discussed the problems of the real estate sector with the chiefs of state-run commercial banks at a meeting last week in New Delhi. Bankers who attended the meeting described the broad thrust of Chidambaram's comments, but declined to speak on record. 
"The minister asked banks to fund those residential projects that are stuck for want of funds. This, according to him, will help kickstart the economy," said a bank chief who at
tended the meeting. In August, after returning to the ministry, the finance minister asked banks to put pressure on builders to lower prices in order to reduce a growing inventory of unsold apartments. 
During the meeting, Chidambaram reviewed a report 
prepared by Ajai Kumar, CMD of Corporation Bank, on unsold stock in the real estate market and the way ahead. 
The report highlighted the need for builders to arrange their own resource for equity. It also stressed the need for builders to open an escrow account with banks. 
As of now, many builders show advances collected from purchasers of property as their equity contribution. The report, according to people at the meeting who described its contents, said this should end. 
Credit to Real Estate Sector Slows Down 
This is because the builder does not have any stake in completing the project. In its edition dated November 17, this paper had reported that half of the 3,23,000 apartments due for delivery in 2013 were likely to be delayed on account of problems faced by builders, including lack of financing and delayed clearances. Further, onefourth of apartments due for delivery in 2014 were likely to be delayed, according to the report from real estate research firm Liases Foras. 
Credit from commercial banks to the real estate sector rose only 4% for the year ended September 30, 2012, compared with a double-digit rise in 2010-11, a possible indication of the diminishing attraction of the sector. 
In August, the finance minister had told banks to put pressure on builders to cut prices. "Builders are sitting on huge inventories (unsold apartments) they are neither able to sell at the prevailing prices nor are they allowing others to buy by lowering prices." He further questioned banks as to why they were not putting pressure on builders to lower prices since they had funded both the builder and the 
retail home loan borrower. 
It's unclear what impact the minister's exhortation will have. 
At least half-a-dozen bankers that ET spoke to after the meeting in August said they did not discuss the subject of reducing prices with builders. "Even as we agree that real estate prices are at elevated levels, builders won't really care for our views," said a bank chief when asked if the bank has sent out any communiqué to builders to lower prices. 
"Back then (in August) the idea was to kickstart the economy and he is attempting it again. This time he has changed the approach," said a bank chief attending both meetings.


Tuesday, November 20, 2012

Sensex may Top 23000 by Dec 2013: Morgan Stanley

Monetary easing, pick-up in infra spending and stable crude prices likely to drive stock market growth


Global financial services firm Morgan Stanley says it expects the BSE's benchmark index, the Sensex, to rise nearly 26% to 23,079 points by December 2013. 
It said steady monetary easing at home and abroad, a pick-up in infrastructure spending and stability in crude oil prices will drive growth in the stock market. It also said cyclical sectors such as financials, industrials and energy will lead the growth as opposed to the defensive sectors. 
"Action from global central banks has reduced India's tail risks from macro stability tribulations, including high external deficit, and this is now evidenced by declining correlations in the equity market," analysts led by India strategist Ridham Desai said in a note on Tuesday. 
"The correlation of stocks with the Sensex is approaching lows, warranting wider sector positions. Cyclicals look ultra cheap versus defensives, supported by a likely trough in earnings growth… Small- and mid-caps look very attractive," the note said. 
While poor domestic liquidity, slowdown in policymaking and higher inflation could go against the growth thesis, broad market earnings growth may have bottomed out and will "accelerate" from here Morgan 
Stanley said. However, earnings face a risk of falling investment rates and margins may not improve from here, it said. 
"Macro conditions could worsen due to high twin deficits. Our proprietary leading indicator for broad market earnings suggests that growth will likely rise to average in the double-digits in the second half 2013 and further to around 20% in 2014," the note added. 
While Morgan Stanley assigned a 60% probability to the scenario where Sensex grows by 26%, it said that there are chances that it could also surge 53% to 28,137 on recovery in global growth, strong policy action and interest rate cuts. On the other hand, the benchmark could fall to 17,918 on weak policy action, continuing tight monetary policy and oil price shocks, it added. 
On tuesday, the benchmark Sensex fell 0.05%, or 9.68 points, to end at 18329.32 points, falling for the seventh day in the last eight sessions. The broader Nifty ended flat at 5571.55 points. A cautious market ahead of the winter session of Parliament, which starts on Thursday, also tracked lower European shares after a credit rating agency stripped France of its top-notch rating.


FIPB clears IKEA’s 10k cr plan for India

Largest Foreign Investment Proposal In Single-Brand Retail Now Goes To CCEA


New Delhi: Swedish furniture giant IKEA's plans to enter the lucrative Indian retail market moved a step closer on Tuesday with the Foreign Investment Promotion Board (FIPB) approving the firm's over Rs 10,000-crore proposal. 
    Economic affairs secretary Arvind Mayaram told reporters after an FIPB meeting that the board had approved IKEA's proposal. The Cabinet Committee on Economic Affairs (CCEA) will now examine the proposal and is likely to approve the investment, which will be the largest one in the singlebrand retail sector so far. 

    IKEA's plans to invest in the country is seen by the government as an approval of the attractiveness of the India growth story by foreign investors. The proposal comes at a time when the government is trying to woo foreign investment to revive growth, provide jobs and boost sentiment. 
    Last month, IKEA had filed final documents to start its retail venture after the government amended the policy on single-brand retail. The furniture major plans to invest over Rs 10,000 crore in a 
phased manner. In the first phase, it plans to start 25 stores and invest in India through a 100% subsidiary. 
    In September, the government unveiled the rules for single-brand retail, diluting the sourcing norms to enable IKEA to set shop in the country. The government has allowed 100% FDI in singlebrand retail, and 51% in multi-brand retail. 
    The FIPB approval comes against the backdrop of stiff opposition to the government move to open up the multibrand retail sector to global firms. Opposition parties are expected to give a tough time to the government on the issue of allowing FDI in multibrand retail when Parliament convenes for the winter session on Thursday. 
    Earlier, the FIPB had ap
proved three proposals in the single-brand retail sector, which included British footwear maker Pavers England's plan to start fully-owned stores, US luxury clothing Brooks Brothers' proposal for a 51% joint venture and Italian jewellery manufacturer Damiani's move to start a joint venture. 
    IKEA had earlier said that it viewed the recent developments related to FDI in singlebrand retail positively. The Swedish firm views India as an important market and has been sourcing from the country for the past several years. IKEA has said it will develop a "solid plan" for setting up stores once its application is approved. It has also said that it will continue to increase its sourcing in India from both existing and new suppliers, building on long-term relations. 

SETTING SHOP 

• Govt is keen on IKEA's investment, seeing it as an approval by foreign cos of the continuing India growth story 

• The Swedish furniture maker's plan also coincides with the govt's efforts to revive growth and boost business sentiment 

• The first phase of IKEA's plan will involve setting up 25 stores in India and investing through a fully-owned subsidiary

U-TURN? Oil ministry recalls note against RIL gas price hike



New Delhi: The oil ministry has withdrawn a note — prepared under then minister S Jaipal Reddy's watch — documenting its opposition to any premature increase in price of gas Reliance Industries (RIL) is pumping from its showcase Andhra offshore field. 
    The note was circulated in October among members of a ministerial panel for deciding issues regarding RIL's gas price and marketing rights. Senior officials were at pains to explain that the move did not signal any U-turn or softness towards RIL on the part of ministry under M Veerappa Moily. The officials said the note was withdrawn to avoid duplication — or even a possible 
conflict — with a panel already examining ways to improve future contracts for fields, including the pricing mechanism. 
    "The ministry goes by 
the book while dealing with all companies or issues, including lower production from RIL's field and the company's objections to the format of federal auditor's scrutiny of the field's performance and accounts," an official said requesting anonymity. 
    But skeptics refused to buy the argument, given the backdrop of federal au
ditor's report last year pointing fingers at the government for "showing undue favours" to RIL and anti-corruption activist Arvind Kejriwal's recent accusations of the company intentionally keeping production low to pressure the government. 
    The price of RIL's gas is due for review in April 2014. The ministry note, 
first reported by TOI on October 12, said the new price being suggested by the firm would push up the 
government's subsidy burden by $6.3 billion. Besides, higher RIL gas price would also impact power and CNG tariffs. 
    In case the price was revised before due date, the note said, at current production level of 25 mcmd (million cubic metre per day) the government would get only $0.5 billion more in the time till the due date. In contrast, RIL's take would rise by $4.1 billion in the same period. 
    RIL had initially sought a premature hike on the ground of increased operational costs. But the company later wrote to the ministry twice to say that it was only seeking an early start to discussion for the review. 

    The company has suggested a price of $14.2-$14.5 per unit, up from $4.2 at present. It argued that this is the price at which Petronet LNG is importing gas from Qatar or piped supplies are being proposed from Turkmenistan.

Monday, November 19, 2012

Irda, Finmin Lock Horns Over LIC’s Stake Ceiling

Watchdog against insurer owning up to 25% in listed cos


Afresh tussle between the government 
and a regulator has burst out into the 
open, with the finance ministry allow
ing Life Insurance Corporation (LIC) to own up to 25% of a listed company over the objections of sector watchdog Irda, which has blasted the decision. 
The enhanced limit could herald good news for the struggling disinvestment programme as the finance ministry could lean on state-run LIC, the largest insurer, to deploy its funds to buy hefty stakes in public sector companies that the government may find hard to sell in the open market. 
A senior finance ministry official said on Monday the government had acceded to the insurer's request to raise the investment limit from the Irda-mandated 10% to 25%. The official said the Irda ceiling did not apply to LIC as it was governed by a different set of rules than the rest of the industry. "We have taken this decision only after exhaustive consultation with the law ministry and we feel there is no legal concern," the ministry official told ET, adding that the government had informed Irda of the proposed changes. The government plans to formalise the 
change by way of a gazette notification under Section 43(2) of the Insurance Act of 1938, which allows it to set rules for LIC. Other insurance companies are governed by the Irda Act of 1999. 
The Insurance Regulatory & Developmental Authority, which had in 2008 amended investment norms to prohibit an insurer from holding more than a 10% stake in a company, openly criticised the government's decision, 
with Chairman J Hari Narayan saying it was against prudence. 
"It is against the (Irda) Act and against any prudence," he said, adding the regulator had ad
vised the government that it was unwise to increase the risk of LIC. 
"They said they have taken opinion from the law ministry, but we have asked them to take a second look. They have to understand the gravity of the issue and the potential danger…I do not agree with the government," the Irda chief said. The latest episode will make it the second time in recent weeks that tensions have erupted between the finance ministry and financial sector regulators. 
Irda Advised to take 'Pragmatic View' 
Last month, the finance minister ticked off the Reserve Bank of India for not cutting interest rates in its monetary policy review. 
Asked if Irda would take up the issue at a forum, such as the Financial Stability Development Council, the Irda chief said: "It is also run by the government." 
While the Irda chief seethed at the perceived undercutting of the regulator's authority, a senior official with LIC welcomed the move. "LIC is a state-owned company and will abide by the owner's decision. We have a strong finance minister, a strong secretary (DK Mittal), but we do not want to be in a fight with the regulator," the official said, requesting anonymity because of the sensitivity of the matter. 
Former LIC chairman SB Mathur, however, urged Irda to take a 'pragmatic view'. "You cannot have the same regulations for a company with a . 10,000-crore base and (one with) a . 13-lakh crore base," he said. 
"Irda will have to take a pragmatic view and it is in the interest of the macro economy that an institution like LIC invests its growing corpus considering the limited floating stock available." 
Market experts say LIC, which has long sought an increase in the investment limit, could come to the aid of the government by buying large chunks of equity in state-run companies that are slotted for disinvestment this year but are yet to be sold. 
More than seven months into the current fiscal year, the government has not been 
able to execute even a single share sale, with the process encountering obstacles from administrative ministries that are opposed to shares being sold at a steep discount to the book value. 
A sale to a government entity such as the LIC could find greater acceptance among administrative ministries, 
while helping the government realise its disinvestment target of . 30,000 crore for the fiscal year. The government, say experts, could seek LIC's help to exceed the disinvestment target and keep the fiscal deficit from overshooting. 
LIC aims to invest around . 50,000 crore in equities during this fiscal year, up from . 49,960 crore invested last year. As per last data available, it has exceeded the 10% investment limit in about 78 companies, of which only 27 are listed. Some of the companies in which LIC has exposure in excess of 10% include L&T, ITC, JSW Steel, MTNL and Wockhardt.





Govt will try to rein in fisc deficit close to 5.3%

New Delhi:The government will strive to rein in the fiscal deficit within the revised target of 5.3% of GDP for 2012-13, C Rangarajan, chairman of Prime Minister's Economic Advisory Council, said on Monday. 

    The UPA coalition is struggling to meet its fiscal deficit target due to sluggish revenues, delayed stake sales in state-run firms, rising subsidies and lower-thanexpected cash from the auction of second generation (2G) spectrum. "I think the attempt will be to see that we remain as close as possible to revised fiscal deficit that has been indicated by the finance ministry. All efforts will be made to get that number," Rangarajan told reporters on the sidelines of a function. 
    Faced with a challenging situation, the finance ministry recently revised the fiscal deficit target to 5.3% of GDP from the earlier projection of 
5.1% of GDP. 
    The government has unveiled a fiscal consolidation plan and has said it is committed to tackle the yawning deficit, which the central bank has said is a stumbling block before easing monetary policy. The finance ministry has also undertaken an austerity drive to tame wasteful spending but economists estimate that the deficit would still be close to 5.8% of GDP. 
    Efforts to sell stakes in state-run firms are yet to take off significantly despite government's commitment to fast-track the process. The government expects to raise 
Rs 30,000 crore from stake sales in state-run firms in the current fiscal but analysts say it would be an uphill task to meet the target. 
    "I think still there are about four to five months for the end of the year. There are many actions that are possible," Rangarajan said, when asked whether the government would be able to meet its fiscal deficit target. 
    During April-September, the fiscal deficit stood at Rs 3.37 lakh crore, or 65.6% of the full year-target set for 2012-13 compared to 68% in the same year-ago period, government data showed. The former central bank governor also said the Reserve Bank of India will consider several factors into consideration before deciding on interest rates. 
    "We need to watch the behaviour of prices of course, the Reserve Bank will take all factors into consideration. But there is still some time for Reserve Bank to take a decision."

PMEAC chairman C Rangarajan

MHADA PROPERTIES AT MIRA ROAD Lack of papers shut the doors on 718 home lottery winners

Mumbai: At least 718 winners of the 1,616 who were allotted apartments through the Konkan board of the Maharashtra Housing and Area Development Authority (Mhada) have been found to be ineligible. Documents submitted for five winners are still being scrutinized. These apartments are all located in Mira Road. 

    The Konkan board's chief officer, Bhausaheb Dangade, said that these winners were found ineligible as they had failed to furnish various documents such as domicile and salary certificates and had incomplete addresses. Dangade said Mhada is now planning to give another opportunity to these winners to furnish proof within 15-20 days. If they fail to provide the documents, these flats will be allotted to those in the waiting list. 
    After any draw, Mhada sends offer letters to winners, informing them that they had won a house and that they have to furnish various documents such as domicile and salary certificates and also pay the initial 

amount to confirm their flat booking. 
    In case of Mira Road, the total 1,675 flats were sold for the low income groups (monthly salary of between Rs 8,000 and Rs 20,000) and the economically weaker sections (monthly salary of less than Rs 8,000). Of 1,675,Mhada declared 1,616 as 
winners. Of the 1,616 winners, 819 were declared eligible on the basis of the documentary evidence they submitted while 718 were ineligible. 
    Meanwhile, the Konkan board is planning to hold a lottery for sale of approximately 2,400 flats in Virar and 150 flats in Vengurla in Konkan on May 31, 2013. Unlike in case of the lottery held for Mira Road in 2012, Mhada will also have flats for those in the high income category individuals. Stating that the transport connectivity to Virar has improved drastically and that there is a huge demand for the area, Mhada has priced these flats tentatively at Rs 3,200 per sq ft (psf) and Rs 2,000 psf in Vengurla. Possession for flats in both this places will be given in 2014.

I questioned giving 2G at 2001 rate, says RBI guv


New Delhi: RBI governor D Subbarao, who was finance secretary during UPA-1, on Monday told the special CBI court that he had in 2007 questioned the telecom ministry's proposal to fix Rs 1,600 crore as fee for 2G licences. 
    Subbarao's appearance in the court as a prosecution witness is significant in view of the CBI's argument that the government had sold 2G spectrum cheap by sticking to 2001 rates while granting licences in 2008 that the agency chargesheet says led to a loss of around Rs 31,000 crore. The RBI governor said that any loss figure needs to be seen in the context of a policy decision. Subbarao st
ated that there was a sacrifice of revenue, but a policy sometimes needs to strike a balance between a welfare objective and revenue maximization. 
    He said the finance ministry's view on spectrum pricing was that the price must be "rediscovered" as it would be inappropriate to give licences at the price fixed in 2001-02. 

SC warns govt on auction 
eeking an affidavit from the telecom secretary on the recent spectrum auction, the SC on Monday said, "Even if 0.1% of spectrum is kept back, it will not be acceptable. The Centre was required to auction all that had been cancelled. In the 1,800 MHz bandwidth, nothing could have been kept back." P 9 RBI guv: Can't say govt suffered loss 
New Delhi: RBI governor D Subbaraosaid the finance ministry's "endeavour" was to maximize the government's revenues, but "since the DoThad already issued letters of intent on January 10, 2008, the effort of the ministry was to see if the price for spectrum could be enhanced to reflect the current market prices". "We also negotiated an increase in spectrum usage charges," he added. 
    Subbarao had told the JPC much the same recently, but his deposition in the court has an evidentiary value that can help the CBI make a case of illegal gain. The RBI governor told the court that he had written a letter on November 22, 2007 to then telecom secretary D S Mathur. "I wrote this letter to confirm if proper procedure was followed with regard to due financial diligence. I also questioned as to how the rate of Rs 1,600 crore, determined as far back as 2001, could 
be applied for licence given in 2007 without any indexation, let alone current valuation," he said. Finance secretary from April 2007 to September 2008, he said by June 2008, it was agreed between the telecom department and the finance ministry that only spectrum beyond startup range would be priced. 
    Later, during his cross-examination, Subbarao said in a meeting held on July 4, 2008, the then finance minister P Chidambaram and Raja had conveyed to the PM about the agreement between DoT and the finance ministry on pricing. On being asked whether the government had suffered any loss , Subbarao said, "There was certainly sacrifice of revenue." He later said, "It is correct that while determining policy, the government has to make a balance between welfare maximization and revenue maximization. In this case, if there was a sacrifice of some revenue, it cannot be said that the government suffered a loss."

Saturday, November 17, 2012

Saffron Loses Its Senapati:Bal Thackeray Called The Shots In Mumbai Like No One Has In Decades.

Jan 23, 1927- Nov 17, 2012


End Comes At 3.33pm After Long Ailment With His Brand Of Marathi Manoos-Hindutva-Rough & Ready Politics,  Both Feared And Loved, One Of India's Most Colourful, Charismatic & Controversial Leaders Leaves Behind A Divided Family And An Uncertain Legacy

TEAM TOI 


Mumbai: Bal Keshav Thackeray, founder of Shiv Sena and one of Maharashtra's most iconic and divisive figures, died on Saturday after weeks of ill-health. Thackeray, 85, was seriously ill since Wednesday when his blood pressure plunged and he lost consciousness. 
    "He suffered a cardio-respiratory arrest today. We could not revive him despite 

our best efforts. He breathed his last at 3.33 pm," said pulmonologist Dr Jalil Parkar, who was the Sena chief's doctor for the last five years and was by his bedside till the end. In his last days, Thackeray received round-the-clock attention from a battery of Mumbai's best doctors. 
    Thackeray's body, wrapped in saffron and with his trademark dark glasses on, has been kept in a glass casket in a hall on the second floor of 'Matoshree', his residence in Bandra. It will be taken at 7 am on Sunday to Shivaji Park, where legions of supporters are expected to pay their last respects between 10am and 
5pm. A large stage is being erected on the sprawling grounds under the statue of Chhatrapati Shivaji. Party leaders announced that the final rites will be held at 6pm at the Shivaji Park crematorium. 
    Thackeray is survived by sons Jaidev and Uddhav, who is executive president of the party. News of his demise was followed by an appeal from Uddhav to restive cadres, requesting them to maintain calm. However, the city of Mumbai and its suburbs had already begun shutting down in anticipation of trouble. 
    The post-Thackeray phase marks a new era in Maharashtra's politics and heightens speculation about the strategies the Sena would need to adopt in the absence of its principal crowd-puller. For over four decades, Thackeray had dominated the stage, courting controversy with a blend of regional chauvinism and cultural aggression, and punctuating it with biting, if often crude, humour through editorials in his mouthpiece Saamna. On the demolition of the Babri Masjid, Thackeray famously said, "If Shiv Sainiks have done it, I am proud of them." 
Thackeray ran Sena govt on remote control 
    Thackeray was the eldest son of writer-crusader K S Thackeray, also known as Prabodhankar, for he edited a periodical called Prabodhan (Renaissance). Beginning his career as a cartoonist in the 1950s, he plunged into a nascent statehood movement for Maharashtra. 
    The Sena, which began as an outfit that fought to secure employment opportunities for Maharashtrians in the 1960s, gradually turned into a mainstream party that tasted power for the first time when it swept Mumbai's local body polls in 1985. The use and threat of mob violence became a calling card. There were even whispers about a culture of extortion taking root. 
    But it was Thackeray's sons-of-thesoil agenda that altered the state's political culture and eroded the Congress base. Using aggression to demand job 
quotas for the working class Mumbaikar Marathi, he built a loyal constituency and acquired near-mythical stature. 
    The Sena acquired prominence on the national stage when it embraced Hindutva and aligned with the BJP, eventually winning the Maharashtra assembly polls in the charged atmosphere of the mid-90s. Thackeray's stature grew when he spurned public office and installed Manohar Joshi as CM, although he made it known that he would be the one in charge running the gov
ernment on "remote control". From film-makers to businessmen, Thackeray's approval was considered a must. 
    His predilection for rough-andready methods showed in the manner in which his government dealt with the Mumbai underworld. During the Sena-BJP regime, nearly 100 gangsters were gunned down in 'encounters' that were described by then home minister Gopinath Munde as 'necessary' to tackle the deteriorating law and order situation. 
    However, cases for hate speech registered against him in the wake of the 1992 Mumbai riots continued to dog him. He escaped prosecution due to the reluctance shown by successive governments, including the ones headed by the Congress, to grant sanction. But he was banned in 1999 by the EC from voting or contesting in any election for six years for violating the code by seeking votes in the name of religion and caste in a bypoll in Mumbai in 1987. 

Leaders to attend funeral 
ujarat CM Narendra Modi, MP CM Shivraj Chauhan, BJP's LK Advani, Sushma Swaraj, Nitin Gadkari and Arun Jaitley will be present for the funeral as will be NCP leader Sharad Pawar. They will be taken from Veer Sawarkar Marg, which will remain closed to traffic. TNN

FUTURE TENSE: Does Uddhav (52) have it in him to emerge out of his father's shadow and take centrestage? Or will 44-year-old cousin Raj (seen below at 'Matoshree' on Saturday evening) move into the driver's seat?

Friday, November 16, 2012

HARD DAYS Rupee, Shares Plunge on Fears of Fiscal Slippage

Rupee falls to 55.17 against dollar as tensions in the Middle East too affect market sentiment


The rupee and the shares were pummeled on Friday as investors grew sceptical about the government's ability to deliver on the fiscal promise and the conflict in the Middle East escalated, which could push up oil prices, India's Achilles' heel. Falling exports and a steady rise in imports are not helping the Indian currency either, with the demand for the US dollar remaining high. 

"It's all negative for the rupee on both the internal and external fronts," said KN Dey, director at Basix Forex, which advises companies on exchange rate movement. "Given the underlying pessimism all around, the currency could see a new low," he said. 
The local currency fell for a third straight week to end at 55.17 to the US dollar, losing 7.5% since its October peak of 51.32. The demand from oil companies, which is averaging around $750 million a day, could rise if crude oil prices were to increase due to the rising tensions between Israel and Palestinians. Nifty closed 1% down at 5574.05 while the Sensex ended 0.88% lower at 18309.37. 
"The market depth was quite low and there was some selling by FIIs in index stocks around the last half an hour, 
which pushed markets into the red," said Motilal Oswal, chairman, Motilal Oswal Financial Services. "The focus now will be on the Parliamentary session commencing next week (Thursday). My guess is markets will tread in positive territory." 
There could be dollar outflows in December if FIIs take away profit from local investments where the benchmark indices have gained the most in Asia this year. "The outlook on rupee has a weakening bias in the near term," SBI chief economist Brinda Jagirdar said. "The economic environment is very challenging as trade deficit is worrisome and first-half economic growth is expected to be soft." 
Investors worry that the government may not be able to meet its upwardly revised fiscal deficit target of 5.3% of the GDP after the 2G spectrum auction failed to get even a fourth of the forecast amount. 
"The Rupee may remain in the range between 54 and 56 in the near term," Jagirdar said. She expects the currency to gain when the reform measures start getting implemented and inflation eases. 
But for the moment, no one is ready to put a bet on the rupee. Any rise in crude prices will further put pressure on India's huge current account deficit. Trade deficit stood at a record $20.96 billion in October as exports fell 1.63% year-onyear. Current account deficit was 3.9% of


Walmart paid bribes in India? Retail giant probing allegation


Oppn May Use It To Fight FDI In Retail


New Delhi: Walmart has disclosed that it is probing alleged violations of the US anti-bribery law in India, China and Brazil, a development that may trigger fresh opposition to the opening up of domestic retail market to global firms. The disclosure will provide ammunition to the opposition that is planning to corner the UPA on its decision to allow FDI in multi-brand retail when winter session begins next week. "Since the implementation of the global review and the 
enhanced anti-corruption co
mpliance programmes, we have identified or been made aware of additional allegations regarding potential violations of the Foreign Corrupt Practices Act," Walmart said. WIDENING WEB 
EARLY 2011 | Walmart began audit of anti-corruption practices of foreign arms in 
Mexico, China and Brazil 
JULY 2011 | The retailer identified "significant weaknesses" in the 3 countriesAUTUMN 2011 | Probe widened to cover all 26 subsidiaries APR 2012 |New York Times reported that in 2005, Walmart 
had found "credible evidence" of Mexican subsidiary paying bribes to open more stores 
NOV 15, 2012 | Walmart officially acknowledges internal probe into alleged violation of US anti-corruption law in India, China and Brazil 
    We will not tolerate  noncompliance anywhere or at any level of the company. Our expectation is that each and every one of our associates will adhere not only to the letter of the law, but also to the highest standards of personal integrity — Walmart 
ED probes Walmart investment in India 
    
The Enforcement Directorate has started a probe into allegations of violation of foreign exchange rules by Walmart in its investment of $100 million (around Rs 450 crore at the 2010 exchange rate) in a company owned by the Bharti group, its joint venture partner in the wholesale cash and carry business. The RBI, which was asked by the commerce ministry to examine a possible Fema violation in the deal, has reportedly asked the ED to probe the charge. P 17 
WALMART PROBE BJP says retail FDI issue has turned murkier 
New Delhi: On its probe into alleged corrupt practices in India, China and Brazil, Walmart said, 
    "When allegations are reported or identified, we, together with our third party advisors, conduct inquiries and when warranted, we open investigations." The company added, "We have 
inquiries regarding allegations of potential FCPA violations in a number of foreign markets where we operate, including but not limited to Brazil, China and India. This is in addition to the ongoing investigation in Mexico." 
    The disclosure, made in a regulatory filing, suggests Walmart has uncovered evidence of potential violations of the FCPA as the fallout continues from a bribery scheme involving the opening of stores in Mexico that was the subject of a New York Times investigation in April. NYT quoted an unnamed source as saying that the disclosure did not mean that Walmart had concluded it had paid bribes in China, India and Brazil. "But did indicate the company had found enough evidence to justify concern about its business practices in the three countries—concerns that go beyond initial inquires and that are 
serious enough that shareholders need to be told," the newspaper said. It also said the justice department and the Securities & Exchange Commission were looking into the company's compliance with the anti-bribery law. 
    When contacted, a Walmart India spokesperson declined to comment on specific allegations until investigations were concluded by the company. 
"This investigation is unrelated to the recently publicized public interest lawsuits related to claims that Wal-Mart is in violation of FDI laws," the spokesperson in an emailed response to TOI. 
    NYT reported that the expanding investigation began in spring 2011 as a relatively routine audit of how well Wal-Mart's foreign subsidiaries were complying with its anti-corruption policies. The audit initially included Mexico, China and Brazil with accounting firm KPMG and law firm Greenberg Traurig conducting interviews and spot checks of record systems. 
    The BJP said the latest disclosure by the US retailer makes the issue of allowing FDI in multi-brand retail "murkier". "We need to have answers as to why the government is in a hurry to allow FDI in multi-brand retail.These questions need to be answered," BJP spokesperson Nirmala Sitharaman said.



Govt pushes for docs’ bulletins on Thackerayhealth

City Calm After Uddhav Spoke On Thursday


Mumbai: A nudge by Mumbai police top brass prompted Shiv Sena CEO Uddhav Thackeray late Thursday night to give a health update on his ailing father, party patriarch Bal Thackeray, and appeal to Sainiks to maintain peace in the city. 
    Uddhav's announcement had the desired effect on Friday as Mumbai crept back to normalcy. Autorickshaws and taxis returned to the roads, buses ran as normal and no incidents of violence were reported. All importantly, there was little of the uncertainty and anxiety that had permeated Mumbai on Thursday, impelling joint commissioner of police (crime) Hi
manshu Roy to speak to Uddhav to defuse the tension in the city. 
    The state government, it is learnt, believes the Thackerays should allow a medical doctor to issue regular health bulletins instead of having visitors make pronouncements on leaving Matoshree. On Friday, it was party members again—not doctors—who gave out news on Thackeray's condition.

Fewer cops were deployed outside Matoshree on Friday

Thursday, November 15, 2012

Mumbai on edge as Bal Thackeray’s health see-saws


Like the ailing Sena chief's reported condition, the situation in Mumbai has swung from precarious to stable since Wednesday night. Here is a round-up


    Matoshree has seen a steady stream of VIP visitors since Wednesday night, when reports of Shiv Sena chief Bal Thackeray's failing health began to emerge from a thicket of rumours. But news of the Sena chief's condition has repercussions far beyond his immediate neighbourhood. Here's what's happened at Matoshree and across the city since Wednesday night. 
POLICE MOBILISED 
The Mumbai police began mobilising forces around 8.30 pm on Wednesday, after CommissionerSatyapalSinghandothertopofficialsmet with Chief Minister Prithviraj Chavan. 
    "We were informed that the Sena chief's health was critical and we anticipated a huge crowd at Matoshree. We also anticipated problems elsewhere and hence deployed forces all over the city," a senior police officer said. 
    The main control room, located at the Police Commissionerate at Crawford Market, sent an emergency wireless message asking all police station heads and officers above the rank of assistant police commissioner to report to their stations by 10 pm. 
    Meanwhile, police stations in western region (from Bandra to Andheri on either side of the Western Expressway) were asked to deploy two-thirdsoftheirforcesatvantagepointsinthe area. Fortunately, barring incidents of violence outsideMatoshree,whereSenasupportersdamaged a TV broadcast van, there was no violence reported on Wednesday night. 
    Orders to remain present at their stations continued till early Thursday morning, till reports of the Sena chief's improving condition began to emerge. 

    In the morning, many shops and establishments remained closed on their own accord. While some be forced to shut, no violence was reported.AtMahim,atensesituationdeveloped when Sena workers tried to forcibly close an eatery. They came face to face with a crowd of people who insisted that it remain open, and there was a confrontation before the police intervened and dispersed both mobs. 
AT MATOSHREE 
Among the first to arrive at Matoshree on Wednesday evening, around 8.30 pm, was his 
nephew and MNS chief Raj Thackeray. Soon after, Diwali celebration lights in and around Matoshree were turned off and taken down as the Sena chief was put on life support by Dr Jalil Parkar, who remained at Matoshree till 5.30 am. 
    Suryakant Mahadik, head of the Bharatiya Kamgar Sena, the Shiv Sena's trade union, who was there with MLC Ramdas Kadam, appealed for the crowd to disperse after leading a chant of "Balasaheb zindabad". 
    Inside Matoshree, Raj was spotted conversing with his MLAs, while Uddhav was with his wife, his personal assistant Ravindra Mhatre 
and Sena aide Ravi Dodi. 
    When Amitabh Bachchan arrived around 1 am, the main gate had been locked and the actor had to be hoisted over it to enter Matoshree. He later tweeted that both him and son Abhishek had sustained minor cuts and wounds at Matoshree and were treated by doctors there. 
    AndwhilethesteamofvisitorsarrivedatMatoshree all through Thursday, Thackeray is believed to have personally met only four: Chief Minister Prithviraj Chavan, Nationalist Congress Party chief Sharad Pawar, BJP leader Gopinath Munde and actor Nana Patekar. 
    According to a source, Pawar is believed to haveaskedUddhaviftherewasanyneedforhim to come and visit the Sena chief, to which Uddhavrespondedintheaffirmative.Atitspeak,the crowd outside Thackeray's heavily-guarded Bandra (E) residence swelled to over 7,000 on Wednesday night, and sporadic incidents of violence against journalists were reported. 

'LET US PRAY FOR HIM' 
Late on Thursday night, Uddhav Thackeray stepped outside Matoshree with his wife and son and told Sena supporters that Bal Thackeray's health was stable, and that they should not lose hope. "You have forgotten your hunger and thirst, and you have been here since yesterday (Wednesday). Your prayers will pull Balasaheb out of this crisis," he said to hundreds of supporters around 11 pm. 
    Wearing a light blue kurta, he added, "I have not lost hope; you should also not lose hope. We are soldiers of a leader who is known to be a fighter. Let us pray for him together." 
GHOST TOWN 
Thursday morning began on a cautious note for Mumbaikars. Shops were shut in several Sena strongholds despite bhau-beej celebrations. Dadar, Matunga and Bandra (East) were all but deserted - only a few medical stores remained open. 
    There were fewer rickshaws and taxis available, with many anticipating trouble and choosing to stay off the roads. 
    "It was very difficult to get auto. I needed to travel from Kandivali to 
Bandra to visit my brother but not a single auto driver was ready to ply. Finally I took a bus and was surpised by howlittletraffictherewas,"saidNisha Sinha , a resident of Kandivali. 
    Dadar's Plaza cinema downed its shutters and cancelled all its shows; eventhepetrolpumpacrossfromSena Bhavan remained shut. 
    There were policemen at almost every junction across the city. After 7 pm on Thursday though, with several top Sena leaders claiming that the condition Thackeray's condition was stable, tension eased across the city, barring pockets around Sena Bhavan, Shivaji Park and Kalanagar. 

CHIEF MINISTER'S MEETING 
Meanwhile, antipating huge crowds outside Matoshree and at Shivaji Park, Chief Minister Prithviraj Chavan calledanemergencymeetingofsenior officials on Wednesday night to discuss matters such as crowd control, preventingthespreadofrumours,and arrangementsforanypossibleeventuality. 
    Police Commissioner Satyapal Singh, Director-General of Police S S Dayal, senior officers of the state government and Chief Decretary Jayant Banthia were present at the meeting. 
    The police and its intelligence units told the chief minister that they 
anticipate a crowds of up to 20 lakh over the coming day. Following this, a message was sent to all reserve police police units to beef up their manpower; the Rapid Action Force was also sounded out. 
    Every policeman on leave in Maharashtra was told to report back to work. 
    The traffic police have been told to keep basic connectivity working, while Railway Police Commissioner Prabhat Kumar has been instructed to keep Mumbai's lifeline on track. 
    AseniorIPSofficersaid,"Therewas a farmer agitation in western Maharashtra and most of the reserve forces 
were tackling the law and order situation there. We needed some time to prepare and by morning we were able to gather enough forces." Sources in the chief minister's office said that the Lt General Sanjay Kapoor, in charge of Maharashtra,GujaratandGoa,wasalsoalertedandtoldtobereadyincaseof an emergency. 
    The local army unit was also asked to be on alert. Soon after the meeting, the CM apprised Prime Minister Manmohan Singh and President Pranab Mukherjee of the situation in Mumbai, following which the President decided to cancel his scheduled visit to the city.

On Wednesday evening, Diwali lights around Matoshree were taken down and a massive crowd gathered outside, waiting for news about the Sena chief's health


1. Police officials struggle to control the swelling crowds outside Matoshree on Thursday 2. Shops around Sena Bhavan remained shut 3. Uddhav, Rashmi, Aditya and Tejas outside Matoshree on Thursday night


From left: The Kapoors, veteran actor Manoj Kumar, director Madhur Bhandarkar at Matoshree on Wednesday. Cops stop a Sena worker and Salman Khan fan as he tries to approach the actor

 

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