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Thursday, October 31, 2013
‘CELEBRATING LIFE’ IN STYLE Glittering Stars Light up Nita Ambani’s Birthday
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SENSEX AT NEW HIGH, CORE GROWS FASTEST IN A YEAR After Dalal St, Economy Joins Diwali Party
The Sensex surged to another record on Thursday as a festive spirit took hold of the market ahead of Diwali, seemingly undaunted by speculation elsewhere that the US Federal Reserve may withdraw its stimulus programme sooner than expected.
While this led to emerging markets dropping the most in a week, India bucked the trend as foreign institutional investors (FIIs) rushed to stock up on shares, pushing the Sensex to a second closing high in a row. It ended at 21,164 points, sending derivative volumes on the BSE to over . 2.06 lakh crore, also a record. The investor optimism was borne out by data released after the markets closed, suggesting that the trend may be sustained. The output of eight core sector industries rose at its fastest pace in a year in September, the government said, suggesting that India's industrial economy may finally be bottoming out. There was also good news on the fiscal front. A smart pick-up in revenue helped the government keep September's fiscal deficit at almost the same level it was in August, giving rise to hope that the target for the full fiscal year may be met despite three-fourths of the annual limit having been reached in the first half itself. The data could persuade investors to keep pouring back ahead of Diwali, signalling a blockbuster muhurat trading session on Sunday.
An ET poll said on Thursday that the Sensex is likely to touch 22,000 by
January.
The 30-stock benchmark was 92 points away from its lifetime intraday high of 21,256 that it touched on January 8, 2008. The broader index CNX Nifty of NSE rose 0.76% to close at
6,299, the highest level for the index since November 9, 2010. The Nifty is 58 points away from its lifetime intraday high. The derivative turnover on the NSE stood at over . 3.07 lakh crore.
The exuberance on Dalal Street isn't irrational, said Pankaj Vaish, managing director, head of markets, South Asia, Citibank. FIIs Don't Want to Miss Out
"Foreign institutional investors totally understand that the macro fundamentals are challenging, inflation is stubborn, growth is relatively weak, but at the same time they are really worried about missing a big upside move," he said in an interview. "Particularly if it becomes election-driven, as they missed out in 2009, they just don't want to miss that possibility this time." Reserve Bank of India Governor Raghuram Rajan had raised the repo rate on Tuesday by a quarter percentage point to curb inflation. The speculation about the US winding down its stimulus programme points to concerns about the rise being sustained.
"If the tapering starts off sooner than expected, market will become nervous and start correcting," said Sudip Bandyopadhyay, MD and CEO, Destimoney Securities. India was an exception to regionwide pessimism. Asian markets fell on the taper talk. The Hang Seng dropped 0.42%, the Shanghai Composite fell 0.87% and the Nikkei 225 declined 1.2%.
FIIs bought Indian stocks worth Rs 1,875 crore on Thursday, according to provisional figures. Domestic institutional investors, however, sold stocks amounting to Rs 833 crore. FIIs have pumped in close to $16 billion this year, out of which nearly $4 billion came in the past couple of months.
"FIIs have been big investors in the past two months, but given the macroeconomic fundamentals and the corporate results for the second quarter it is not clear whether this type of strong FII inflows will continue," said UR Bhat, managing director at Dalton Capital Advisors. Most of the index companies have beaten market expectations despite the overall economic slowdown, which has put Indian markets on a stronger footing compared with what it was a few months back.
The eight core sector industries — coal, crude oil, refining, steel, cement, natural gas, fertilisers and electricity — have a 38% weight in the Index of Industrial Production (IIP), making it a good lead indicator of industrial production.
The eight core sector industries expanded 8% in September, the most since the same month last year and well ahead of 3.7% in August, according to data released on Thursday. The growth is on the back of a strong 8.3% rise in September lastyear, which makes it that much more robust.
"The encouraging pick-up in core sector growth along with the double-digit rise in merchandise exports suggests IIP may post a modest improvement in September 2013 compared with the first five months of this fiscal," ICRA economist Aditi Nayyar said in a note. Prime Minister Manmohan Singh's economic advisor C Rangarajan said India's growth this year would be 5% or slightly faster, boosted by farm production and exports. The government is counting on a spurt in the second half of the year to take growth to more than 5% after the economy expanded just 4.4% in the April-June quarter. The government has rolled out a series of measures to revive the economy, which slowed to a decade-low 5% in the year to March.
On Thursday, State Bank of India rose 4.33% to close at Rs 1,755. The bank announced a reduction in interest rates on bulk deposits (Rs 1 crore and above) across maturities. Tata Steel, Gail, Tata Power, ICICI Bank and Coal India rose 1.8% to 2.45%. Dr Reddy's Laboratories fell 2.64% to Rs 2,455 after reporting its earnings.
Market breadth, indicating its overall health, was positive. On BSE, 1,319 shares rose and 1,161 shares fell. A total of 177 shares were unchanged. The breadth alternatively swung between positive and negative from early afternoon trade.
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Jignesh Shah resigns from MCX board Says FMC Can’t Draw Adverse View About Fit & Proper Tag Till Probe Is Completed
Mumbai: Jignesh Shah, founder, vice-chairman and a director of Multi-Commodity Exchange (MCX), resigned from the bourse's board on Thursday even as he replied to a show-cause notice to by Forward Markets Commission (FMC) about why he should not be disqualified from being a 'fit & proper person' to be on the board of an exchange.
FMC had slapped the notice on Shah for his alleged role in the Rs 5,600-crore payment crisis at the National Spot Exchange (NSEL), a group company of MCX, the only listed exchange in the country. The 'fit & proper person' test for a person to be on an exchange's board requires that he/she should be honest, with high integrity, a good reputation and solvent. Regulators in India take into account all these factors before allowing a person to be either a shareholder-director or an independent director on an exchange's board.
Shah's resignation came exactly three months after the NSEL scam came to light. Shah, along with some others, set up MCX from the scratch over the last decade — it is now one of the largest commodity bourses in the world. Shah was on the board of MCX as a nominee of Financial Technologies (FTIL), the main promoter of the commodities bourse.
Shah has already resigned from the MCX Stock Exchange (MCX-SX). He, however, continues to be a director on the boards of FTIL and NSEL.
The resignation came at a time when the economic offences wing of the Mumbai Police has taken some of the former top NSEL officials into custody, and also Nilesh Patel, the promoter of N K Proteins, one of the biggest borrowers of the exchange which owes investors about Rs 970 crore.
On Wednesday, Mohan India, another large borrower in NSEL, agreed to pay Rs 600 crore to settle its dues that totalled about Rs 770 crore. There are talks that Patel is also on the verge of paying up Rs 600 crore to settle his dues with the commodity bourse.
In his reply to FMC's showcause notice, Shah pointed out that proceedings initiated by various agencies into the NSEL fiasco were pending and, hence, it would be premature to draw any adverse inference either against him or FTIL on account of such proceedings, sources said. Shah also defended his position as a qualified board member of the bourse on the basis that neither him, nor FTIL has been found to have played any role in the NSEL scam.
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Industrialist buys heritage SoBo bungalow for 180cr
The owner of the over 1,000-sq-m land, the Fazalbhoy family, put it up for sale barely two months ago. It was acquired by M P Aggarwal, chairman of Sajjan India Ltd, on Thursday through a local property broker, it is learned. The Rs 180 crore sum includes a Rs 30 crore payment to a tenant to vacate the premises.
The land, part of the larger Westfield Estate, belonged to Hari Singh, the Maharaja of Jammu and Kashmir, till the late 1930s. On it stands today a ground-plus-two-storey bungalow with a carpet area of around 11,000 sq ft and three garages. Sources said the new owner, who currently lives on Carmichael Road, does not plan to redevelop his new acquisition and will probably stay in it.
BIG DEALS Glamis Villa stands on 1,000 sqm land with 11K sq ft carpet area
•Industrialist Sajjan Jindal bought a Nepean Sea Road bungalow for 400cr
•Kapadia Bungalow at Nepean Sea Road sold to Runwal Group for 350cr
•Villa Nirmala at Carmichael Road bought for 300cr by Ashok Piramal Group and developer Khemchang Kothari
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Goodies for mobile users signal new market war
New Delhi: Mobile phone users have a lot to cheer about this festive season. It's raining freebies and discounts on phone buys as well as internet data charges. And with the Diwali weekend coming up, the pitch may get stronger.
One of the most attractive offers comes from Anil Ambani-owned RCom. The operator is offering the latest Apple iPhones, 5C and 5S, at never-heard-before prices. RCom will give you the 16 GB versions of the devices without any down payment. The 5C will cost you Rs 2,500 per month for two years and the 5S Rs 2,850. This payment comes bundled with free unlimited calls and SMSes (local and STD across network), apart from zero cost for 3G data usage. There is also no charge on national roaming.
There is a down payment though for higher versions of the two devices, 32 GB and 64 GB.
Sony, which is also expanding in the Indian mobile phone market, is offering free limited-period 3G data packs as well as other accessories along with its premium Xperia Z range of phones.
After cut, petrol to cost 78.04 in city S tate-run fuel retailers cut the price of petrol by Rs 1.45 per litre on Thursday. The fuel will now cost Rs 78.04 a litre in the city. Meanwhile, diesel prices have been hiked and will cost Rs 60.08 in Mumbai. P 10 Real war's on mobile data front
New Delhi: Jaideep Ghosh, who tracks the telecom sector at KPMG India, said operators are expected to go aggressive on iPhone schemes as the customers of the brand are high users of data and calls. "If the offer is good, iPhone fans will lap it up. Moreover, the operator will stand to benefit as a bundled scheme ensures that you are locked up with the telco for a long period."
Contacted for confirmation, RCom refused to comment on the schemes, saying it'll be announced on Friday. Sources said RCom, which does not enjoy high brand equity among premium customers, wants to ride on the scheme to poach topend customers.
And as the competitive heat spreads on to the devices market, the real war appears to be on the data tariffs front. While call charges—that are the lowest in the world—have been sobering for sometime, data is witnessing an intense battle between operators who see internet as the next growth driver for revenues, as well as profits.
The trend has been strong for sometime and went up to a new high when in July RCom cut the price of its 3G data tariffs below that charged for 2G. 3G had failedto be a high flier in the market, but with lower charges, companies expect its acceptance to go up.
RCom's scheme spurred fresh competition in the market and there has been a renewed thrust to acquire data customers and push up internet usage. Airtel, the country's biggest phone operator, has been aiming at first-time internet phone users with the expansion of its 'Re 1 entertainment store' plan.
And on Thursday, Vodafone—its closest competitor-—slashed its 'pay as you go' 2G tariffs by as much as 80%, bringing them at par with 3G prices. Vodafone termed the scheme as 'Diwali bonanza' and said under it, mobile internet charges will remain the same as home rates even on roaming. The rate has been cut from 10paisa for 10KB of internet usage to 2paisa per 10KB usage. "This reduction in mobile internet charges is an important step in our strategy to drive mobile internet and we are confident that this move will facilitate in faster adoption and better usage," said Vivek Mathur, chief commercial officer at Vodafone India.
KPMG's Ghosh said lower data prices and attractive schemes help companies attract new users to the data fold. "And apart from getting new data subscribers, it also helps drive up the usage of data amongst users. The higher usage compensates for the lower entry prices that they offer."
Industry officials said that Vodafone's aggressive pitch will have to be matched up by other operators who will have to follow suit soon. "Everybody will have to match it. End of the day, we have to be competitive," an official with a leading operator said, requesting anonymity.
Posted by Unknown at 7:29 PM 0 comments
Wednesday, October 30, 2013
Sensex at all-time closing high, but euphoria’s missing
Mumbai: The 30-scrip BSE sensex closed at an all-time high of 21,034 points on the back of aggressive buying by foreign institutional investors (FIIs) with access to lowcost funds in the US. But the euphoria that normally accompanies such milestones was missing—and for good reason, because the real economy is anywhere but on ahigh. Economic growth is at 4.4% (for the quarter ended June), less than half the 9.2% it was at when the sensex was
its previous peak of 21,005 in November 2010. It's not very different from the US situation, where Wall Street and 'Main Street' have diverged. The record peak for the benchmark index comes at a time when several broking houses are either cutting salaries or shutting shop because retail investors, who have not made much money in the last five years, are staying away from Dalal Street.
This has been a narrow rally driven by a few select stocks that the FIIs have favoured. Of the 30 sensex stocks, only 13 have returned double-digit gains since the last peak in 2010. In contrast, five stocks lost nearly 50% and 14 have given negative returns during the same period.
And although the sensex has gone past the last high, the more broad-based indices like BSE-100, 200 and 500 are well short of the November 2010 levels.India looks to be a safer bet than China, Brazil
The sensex is now just about 170 points short of its all-time peak of 21,207, reached in intra-day trades on January 10, 2008—around the same time the US subprime bubble was bursting and threatening to sink global financial markets.
Since Raghuram Rajan took over as RBI governor and stabilized the rupee, which had become a major investment negative for FIIs, the sensex has rallied 13.3%, backed by net foreign fund inflows of $4.5 billion. Combined with the 8.8% appreciation in the rupee to 61.24 now from 67.09 then, the total gain for the FIIs is a little over 24%. And all this in just about 55 days.
With the US Fed expected to continue with its stimulus package of keeping interest rates at home low and funds cheap, FIIs are punting on relatively risky assets like emerging market (EM) stocks. Significantly, among EMs, currently India looks to be a safer bet than China, Brazil and other markets. "There is ample liquidity in the market for FIIs to get funds," said Dharmesh Mehta, MD-institutional equities, Axis Capital. "With little or no fresh supply of stocks in India, FIIs are being forced to restrict themselves to a small basket."
There is another reason for this FII frenzy. Several fund managers are betting on a better show by the BJP-led coalition in the state elections in Delhi, Rajasthan, MP and Chhattisgarh.
Most market players expect the BJP, which now controls two of the four states going to polls, to improve its tally by eating into the Congress' two states. "If that happens, there'll be a euphoric rally," said the head of a brokerage.
In Wednesday's session, the sensex opened above the 21K mark and picked up gains through the session to hit an intraday high of 21,090 but closed a tad off that mark, but still 29 points higher than its previous peak of 21,005 on November 5, 2010.
Unlike in February 2000 and November 2007, when the sensex had scaled new highs followed by euphoria on Dalal Street, this new peak was rather low key. "The value of the sensex shows it is at a new high. However, retail investors feel disillusioned because the high priced stocks they owned were sold off months ago. What they are left with are stocks that have halved in value," said Arun Kejriwal, director, KRIS.
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Tuesday, October 29, 2013
RBI ups rate, but your EMIs unlikely to go up
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Infy to pay $35m, settle visa ‘fraud’ case in US
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Tuesday, October 22, 2013
Mukesh ties up with UK firm for chicken restaurant chain
Mumbai: Mukesh Ambanicontrolled Reliance Industries plans to run an exclusive chicken restaurant
chain in India in partnership with a UK-based company as he seeks a bite of the quick service restaurant (QSR) pie, which is pegged to grow at 30% per annum. Given that Ambani is a strict vegetarian, it is a clear sign that business decisions can be separated from an individual's dietary and lifestyle choices. The chain, to be called 'Chicken came First' (CCF) will directly compete with KFC (Kentucky Fried Chicken), the world's most popular chicken restaurant chain.
RIL has picked up a 45% equity stake in Two Sisters Foods India (TSFI), which belongs to 2 Sisters Food Group (2SFG). 2SFG, the third largest food company in the UK, supplies poultry, red meat, fish, and bakery and chilled/ frozen products to the retail, food service and food manufacturing sectors.
RIL has picked up the stake through Reliance Retail for an undisclosed sum. The balance 55% is held by 2 Sisters Food Group, founded by British businessman Ranjit Singh Boparan.
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Monday, October 21, 2013
Tax breaks for seniors on the house Income From Mortgaging Properties To Rise | 80-Plus To Gain The Most
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Sunday, October 20, 2013
CBI mulls option of closing Coalgate case against Birla Statement By PMO Leaves Agency In A Bind
New Delhi: Prime Minister Manmohan Singh's strong defence of the allocation of the Talabira II coal block to Hindalco has created uncertainty about the fate of the CBI's investigation into the matter, with many feeling that it may turn out to be still-born.
Sources in the agency acknowledged that with the PM owning up the controversial allocation, they were in abind. "We can't close the investigation straightaway and, having registered an FIR for alleged misconduct, will have to talk to all people concerned. But we are open to the idea of closing the investigation," said a senior source in the agency when asked about the fallout of the PMO's intervention in the high-profile probe. The CBI had never ruled out the possibility of the investigation being wound up, with senior officials emphasizing at the outset that "FIR is just a primary action in any case" and that "many probes initiated by the agency are shut down". But while closure of investigation was talked about as a technical possibility, it is now being seen as a distinct prospect, with sources in the CBI appearing reconciled to aborting the probe after seeking legal opinion.
A senior CBI officer explained, "According to our enquiry, the joint venture between PSUs and Hindalco was designed to favour the private company, and it involved violation of rules. However, we will take a thorough legal opinion on whether there was criminality in this matter and if there is nothing against Kumar Mangalam Birla, Hindalco Industries Ltd and P C Parakh, there is a possibility that the case will be closed."
In what marked a repudiation of the allegation against Birla and former coal secretary Parakh, the PMO had said on Saturday, "The PM is satisfied the final decision in this regard was entirely appropriate and based on merits of the case placed before him."
'FIR JUST A PRIMARY ACTION'
Senior CBI officers say FIR is just a primary action and
many cases end in closures
"We will take a thorough legal opinion... if there is nothing against K M Birla, Hindalco and P C Parakh, there is a possibility the case would be closed,"
says an officer On Oct 19, PMO defended allocation of coal block to Hindalco, saying decision was "appropriate and merit-based"
CBI has already stated that
"it is not probing quid pro quo against Parakh" in the case but "misuse of official position"
Agency is expected to file status report to SC on Coalgate this week, probably by Oct 22 'PMO hint clear: Get off their backs'
The CBI had accused Birla and Parakh of conspiring to allocate Talabira II coal block in Odisha to Hindalco, reversing the decision of the screening committee under the coal ministry to award the block to public sector entities Neyveli Lignite Corporation (NLC) and Mahanadi Coalfields Limited. In the FIR, the agency also alleged that the change was to the disadvantage of NLC which had planned to use the Talabira deposits for a power plant it proposed to set up.
The charge was rejected by the PMO which said the decision was changed at the instance of Odisha CM Naveen Patnaik who had cited the needs of his state to demand a reconsideration. It dismissed the charge that NLC was adversely impacted by saying that the final decision was arrived at after factoring in the interests of the PSU.
In contrast to the CBI's charge about there being a conspiracy between Birla and Parakh to favour Hindalco, the PMO painted the decision as legitimate and influenced by the spirit of federalism and the need to generate jobs in Odisha. In fact, the PMO went on to say that it had relaxed the guidelines to enhance Hindalco's share from the block: a fact that even the CBI had not mentioned in its FIR to substantiate the charge of criminal conspiracy between the aluminium major and the coal ministry.
Although the PMO emphasized that it did not wish to impede the CBI's investigation, sources in the agency said the public rejection of their FIR translated into a clear hint to get off the back of Birla and Parakh.
Explain all coal block allocations: BJP to PM
New Delhi: On the day PM Manmohan Singh left on a tour of Russia and China, the BJP asked why he had explained only one coal block allocation when even the SC has held that all allocations were not done in a free and fair manner. "For the first time since the coal block allocation scam came up, the PM has explained about one allocation. But there have been more than 150 coal block allocations, so will he be able to explain all of them," party spokesperson Prakash Javadekar asked on Sunday. TNN
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Saturday, October 19, 2013
PM admits he cleared coal block to Hindalco
In Strong Rebuttal Of CBI's FIR Against Birla & Ex-Coal Secy, Says Decision Was 'Appropriate' And 'Merit-Based'
New Delhi: The Prime Minister's Office on Saturday ended its silence on the latest and possibly most explosive development in Coalgate by acknowledging that Manmohan Singh put his stamp of approval (on October 1, 2005) on the allocation of a coal block to top industrialist Kumar Birla's Hindalco. At the same time, it vigorously rebutted the Central Bureau of Investigation's claim of illegality, saying the PM stood by the decision as no wrong had been committed.
Taking what is being seen in political and bureaucratic circles as an uncharacteristically strong stand, the PMO
said, "The PM is satisfied that the final decision in this regard was entirely appropriate and based on merits of the case placed before him."
The PMO statement comes after retired coal secretary P C Parakh—booked along with Birla for alleged criminal conspiracy and misconduct, and corruption—said that if the CBI thought there were irregularities, then the PM ought to be "accused No 1" for giving his approval.
With the opposition baying for his resignation, Singh's move to forthrightly own up to having sought a reassessment of Hindalco's case after a representation by Odisha chief minister Naveen Patnaik appears intended to cap a politically debilitating controversy. But by doing so, Singh, who at the time held charge of the coal ministry, accepted he was the "competent authority" who signed off on the allocations in 2006-09, the period under CBI's lens.
WHY HE UPTURNED ORIGINAL DECISION
May 7, 2005 | PM receives letter from Kumar Mangalam Birla for allocation of Talabira II coal block to Hindalco. PMO seeks report from coal ministry June 17 |Birla repeats his request to PM Aug | Coal ministry sends file to PM, says screening committee decided to allocate Talabira II block to state-owned Neyveli Lignite Corp Aug 17 | PMO gets letter from Odisha CM Naveen Patnaik backing Hindalco request Aug 29 | Coal ministry asked to re-examine the allotments based on Patnaik's letter
Sept 16 | Coal ministry resubmits file. Says Talabira II and III be mined as a single mine by a JV between Mahanadi Coalfields, Neyveli Lignite & Hindalco
Oct 1 | PM approves the proposal
Oct 15, 2013 | CBI registers a case against Birla and former coal secretary P C Parakh for criminal conspiracy and corruption in the Hindalco case. CBI says Hindalco was ineligible for coal block PMO stresses on Naveen's 'preference' for Hindalco
But by doing so, Singh, who at the time held charge of the coal ministry, accepted he was the "competent authority" who signed off on the coal allocations in the 2006-09 period – under CBI's lens. On whether the PM would be ready to be questioned in any Coalgate case, as suggested by senior minister Kamal Nath, a PMO spokesperson declined comment, saying CBI was yet to make such a request.
The PMO said it didn't wish to impede the CBI's investigation, but justified altering the screening committee's earlier decision to award the coal block in question to public sector companies Neyveli Lignite Corp (NLC) and Mahanadi Coalfields Ltd (MCL) by relying heavily on Patnaik's backing to Hindalco.
In accommodating Hindalco as the third partner in a joint venture, the PM also waived a violation in guidelines to enhance the firm's share by arguing that NLC and Mahanadi were "sister PSUs" and Neyveli's share could be made good from Mahanadi's 70% allocation.
It invoked the "federal framework" to say Patnaik's views had to be accommodated, and claimed that public sector claimants had not been disadvantaged. Countering criticism that private sector firm Hindalco had been favoured, the PMO said the coal requirements of the two PSUs, who also sought the blocks, were protected in a separate arrangement.
Neyveli Lignite was allotted Talabira II coal blocks in Sambhalpur by the screening committee headed by then coal secretary P C Parakh as the panel held that Hindalco had failed to utilize a previously allocated block. The PMO said while the original recommendation was being processed by it, the PM received a letter dated 17.8.2005 from the Odisha CM saying that the state government assigned "topmost priority" to allocating Talabira II to Hindalco. Singh noted "please get a report from the coal ministry" on the letter. Birla, in his letter, also sought the linkage and officials said he explained that Hindalco had not been able to use its previous allocation as a bauxite lease for its aluminium plant had not materialized.
Neyveli could not be dropped as it was a central PSU backed by the screening committee. In its account, PMO has leaned on the Odisha CM's "clear preference" for Hindalco in the "interest of creating more employment and growth of the state's manufacturing sector."
Posted by Unknown at 7:35 PM 0 comments
Thursday, October 17, 2013
Loan defaults stall two mega townships
Mumbai:Real estate firm Hirco has defaulted on payments to lenders for its two large Rs 1,000 crore-plus townships in Panvel and Chennai, casting a shadow on the future of the projects.
Work on the firm's project in Panvel, Raigad district, has been stalled for the past few months. The project has a mix of commercial and residential properties and is spread over 300 acres. More than 1,000 apartments are believed to have been sold in Panvel. Hirco claims to have more than 66 million sq ft of development in the two township projects being built by its subsidiary, Hiranandani Palace Gardens.
Following the default, the residential township outside Chennai, the Hiranandani Palace Gardens, is under threat of a takeover by the lenders, TOI has learned.HDFC may sell off Hirco's Chennai property
Mumbai: Two mega township projects undertaken by Hirco have run into trouble following loan defaults by the developer. HDFChad advanced aroundRs 500 crore in two tranches to the Chennai projectjointly promoted by Niranjan Hiranandani and his daughter Priya. Both have since stepped down from theHircoboard.Itisbeing built in three phases on an over-200 acresprawl.
The lender has already classified the first tranche as an NPA (non-performing asset) and will classify the second tranche similarly. It plans to send a notice to the firm for repayment under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act(SARFAESI).
If Hirco fails to pay up, HDFC will attach the Chennai property estimated to be worth several times the loan. The property would then be auctioned.Marketsourcessaidone of the Hiranandanis may bid for it. "Because of a family dispute, neither family member is willing to bring in fresh capital for the project. With RBI norms becoming stricter on project lending, there cannot be any progress unless promoters bring in money,'' said a source familiar withthedevelopment.
Early this year, Tata FinanceCapital Servicesdragged thecompany tocourtfor a term loan default of Rs 76 crore, and demanded the company's liquidation for non-payment.
Hirco's chief financial officer, Samir Shroff,wasunavailable for comment and did not respond to text message and phonecallsseeking comment.
A Hiranandani Constructions spokesperson said, "Niranjan Hiranandani resigned from Hirco Plc around 22nd December 2010. This knowledge is in public domain. Hence the details of the companies, which you areseeking now,is not available with us." It is learned that Hiranandani has made an offer tobuy outthecompany.
"It's a mismanaged company," said a former executive. "A 1.75 million sq ft commercial building in thePanveltownship is 75% complete. It could easily fetchRs500crore."
Hirco, listed on the London Stock Exchange's Alternative Investment Market, was set up in 2006 to invest in residential andcommercialcomplexes.
On June27,chairman David Burton said in the company's half-yearly statement that progress on the developments appearedsomewhatsubduedwith only moderate progress in the last six months. The company had said in its annual financial statement in September 2012 that the completion of both the Chennai andPanvel projects remained atleast a decade away.
"While information flow on the projects remainsunsatisfactory and we have no real clarity over who is really in control of the projects, what does seem clear is that completion will needsubstantialfurther investmentof bothequity andlongertermdebt," Burton hadsaid. Infra problems, title disputes plague affordable homes on city's fringes
Mumbai: The affordable homes market, thriving on the outer fringes of Mumbai, is beset with problems like lack of infrastructure, poor transport connectivity, issues of land titles and delayed clearances.
In 2008, many developers who rode the real estate boom by catering mainly to high-income buyers started enticing lower and middle class clients with smaller properties outside Mumbai limits when the market slowed down. These locations are 60 to over 100 km from Mumbai. But they claimed to have registered brisk sales of smaller flats in places like Boisar, Virar, Panvel, Kalyan, Shahpur, Ambivali and Karjat. These homes cost anywhere from Rs 10 lakh to Rs 35 lakh.
But despite frenzied construction in these far-flung places, problems soon arose. Buyers realized that in several of these locations, there was barely any social infrastructure like schools, markets, hospitals and restaurants. Some projects are located 8-10 km from the nearest railway station. Builders too found that permissions from local civic bodies were inordinately delayed.
In Vasind near Shahpur, Tata Housing had to scrap one of its affordable homes projects because environmental clearances got stuck in red tape. In Karjat, only phase I of a large low-cost project by Tanaji Malusare City was completed. The remaining phases have failed to take off despite a huge initial demand.
Experts said that despite the slowdown in the property market, demand for affordable homes is eight to ten times more than luxury apartments. Shubhankar Mitra, head, strategic consulting (west), Jones Lang LaSalle India, said, "Anticipated supply in this segment is 50,000 to 60,000 tenements. Most of the supply comes from grade B and C developers offering flats in the range of Rs 2,500 to Rs 3,500 a sq ft."
"Infrastructure is not adequate. This pushes up the cost, making the project unviable for many developers," added Mitra.
Concurred Pankaj Kapoor of Liases Foras, a property research firm, "Locations like Panvel still lack the livability factor. You require human mass for infrastructure to come up and this may take another decade."
He said the affordable homes market is relatively better than the luxury one. "Sales to inventory ratio is higher than the luxury segment. The current stock of expensive flats will take at least 100 months to sell. The affordable ones have an inventory of about 30 months, although ideally it should be about 11 months," he added.
Builder Nayan Shah of Mayfair Housing, which builds luxury apartments in suburban Mumbai, branched out into the affordable sector a few years ago with a project in Virar. "There is good demand from people who want to sell their tenements in Mumbai and move to a larger, cheaper home further away from the city," he said.
Developer Nayan Bheda of Neptune Group blamed the government for not promoting affordable housing. "Permissions don't come in time and there is little support from the local municipality," he said.
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Wednesday, October 16, 2013
Fitch warns it may cut US rating
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AN INSULT TO BIZ COMMUNITY India Inc biggies rally behind Kumar Birla
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PMO distances itself from Birla controversy
New Delhi:Expressing worry over the CBI action on Kumar Mangalam Birla, commerce and industry ministry Anand Sharma said, "Time has come for all institutions to collectively reflect because who is going to take the responsibility for what has happened so far?" He refused to comment on individual companies.
Speaking to TOI, corporate affairs minister Sachin Pilot too advised caution. "While no one is above the law and wrong doers have to be brought to justice, we must ensure that such actions are based on hard facts and do not create an atmosphere of fear and uncertainty. Recent incidents will certainly dampen business confidence and investment sentiment, both domestic and foreign. It will perhaps also negatively impact decision-making by bureaucrats and policymakers." Congress general secretary Digvijaya Singh urged caution in proceeding in the case, saying that while "we are witch hunting", the country is forced to import coal to feed its thermal power stations. "The government, the judiciary and everyone should note that despite one of the largest coal reserves, we are witch hunting and importing coal to feed our thermal power plants," Singh said.
On Tuesday, the CBI lodged an FIR against Aditya Birla Group chairman K M Birla, and former coal secretary P C Parakh, sending shockwaves across the industry and the bureaucracy.
Many drew parallels between the current round of probes with the string of actions by an overzealous Enforcement Directorate under V P Singh against top industrialists such as S L Kirloskar, L M Thapar and Kapal Mehra.
Coming under attack from the opposition, the PMO sought to distance itself from the controversy. PMO sources said Manmohan Singh has made it clear that he had nothing to hide in any coal block allocation under investigation. "The government is fully cooperating with the Supreme Court on the probe," said an official. In recent months, apart from Birla, several top industrialists—Sunil Mittal, Ravi and Anshuman Ruia of Essar, Naveen Jindal of JSPL, JSW's Sajjan Jindal and Unitech's Sanjay Chandra. A host of corporate houses, including Anil Ambani's group, Vodafone and Tata Communication, are facing CBI action for alleged irregularities.
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Maha 5th in list of requests for no. portability
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BJP to be single largest party in 2014: Survey ‘Regional Allies Will Hold Key To 272-Mark’
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