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Friday, January 31, 2014

Tatas to exit Indonesia mine for $500m Looks To Cover Losses From Mundra Power Plant In Absence Of Tariff Hikes

New Delhi: Tata Power has decided to exit one of the two coal mines it holds in Indonesia for $500 million in a bid to raise cash for covering losses from operating the Centre’s first showcase project at Mundra in Gujarat and reduce consolidated debt. 

    Tata Power would sell its 30% stake in the PT Arutmin Indonesia (Arutmin) mine and associated companies in coal trading and infrastructure to an entity of Indonesia’s Bakrie Group, the promoter of Bumi Resources. 
    But it would continue to hold the stake in PT Kaltim Prima Coal (KPC), which owns one of the largest thermal coal producing mines in 
the world. KPC would also continue to supply coal to the group’s power plants, Tata Power said in a statement. 
    The company had ac
quired the stakes in 2007 for $1.1 billion to feed the Mundra power project, the first of a batch of four 4,000MW plants the government had conceived as public-private partnership projects to quickly ramp up generation capacity. 
    The move by the country’s largest private power producer reflects the predicament – which many observers say has reached crisis proportions – faced by generation utilities as populist politics block tariff revisions in line with rising costs and the rupee’s declining value. 
    Three years after starting production at Mundra, Tata Power has been left carrying a can of Rs 1,800-crore loss in FY12 as it could not raise tariff to cover increased cost of imported coal. In April 2011, it sought a revision citing rise in cost of coal imports and the regulator said the company should be compensated for the 
increase in coal cost. 
    The regulator ordered consumer states to form a panel to decide on compensating the firm for higher cost of coal imports from Indonesia. The panel headed by HDFC chairman Deepak Parekh suggested a compensatory tariff of 45-55 paise per unit but the states have turned down the proposal. 
    Other private power producers such as the Adani Group and Anil Ambani’s Reliance Power too face similar situations. Attempts to mitigate the situation through options such as blending imported and domestic coal too have not worked due to difference in the quality of the two varieties and inadequate supply from Coal India. 

UNLOCKING VALUE 

March 2007 Tata Power acquires 30% stake in two coal blocks in Indonesia for $1.1bn to mainly support its ultra mega power plant in Gujarat. The coal mines are owned and operated by Bumi Resources 
Jan 2014 Tata Power sells stake in Arutmin coal block to a Bakri Group entity for $500m, citing the challenging coal price scenario. The Group is the promoter of Bumi Resources. Some time back, the Indonesian government changed coal pricing rules, benchmarking them with international prices. The Indian company continues to own the other block, Kaltim Prima Coal 

Mundra power project has been making losses. Tata Power made a provision of 1,800cr towards it in FY12



USUAL REVISION Govt revises FY13 GDP growth to 4.5% from 5%


New Delhi: The government on Friday revised downwards economic growth for 2012-13 to 4.5% from the previous 5% due to sluggish performance of farming, manufacturing sectors and a decline in mining activity, raising fresh concerns about the health of the economy. 
    The growth is the slowest in a decade and is expected to pile more pressure on the UPA coalition as it heads into general elections later in the year. 
    While the growth is expected to revive in the current fiscal, critics are likely to sharpen their attack on the government over its handling of the economy. 
    The economy expanded at its slowest pace of 4% in 2002-03. Slowing growth and 
high inflation have added to the anxiety and upset household budgets. Weak industrial growth has added to the woes. The statistics office also revised upwards the growth for 2011-12 to 6.7% from the previously reported 6.2%, while growth for 2010-11 was revised downwards to 8.9% from 9.3%. 
    Economists cautioned that the new set of numbers on growth do not ring in fresh panic as they would be revised in the months with more data available. The government revises data periodically as more information trickles. 
    “It is clear that the slowdown in growth momentum is strong and there is no indication of any quick recov
ery, but nothing much should be read from this set of numbers as these will eventually be revised again, likely upwards. These numbers should not trigger any new panic,” said Siddhartha Sanyal, chief India economist at Barclays. 
    Growth has consistently slowed after the spectacular expansion of over 9% before the 2008 global financial crisis. Factors like slowing global growth, delay in regulatory approvals, policy paralysis, high interest rates and stubborn inflation have hit the economy. 
    Growth is expected to be around 5% in the current fiscal, and economists estimate the economy to bounce back in 2014-15 on the back of a revival in exports, farm sector and the impact of approvals to stalled projects.

At 7,000 crore dues, LIC is India's top tax defaulter Ex-J'khand CM Madhu Koda, With 103Cr, Named In Individual Category


New Delhi: Life Insurance Corporation (LIC) of India, the country’s largest insurer, has over Rs 7,000 crore in tax demand pending against it. This makes it the biggest tax defaulter in the country. Among other defaulters are Aditya Birla Telecom, Vodafone Infrastructure and Bharat Petroleum, data given by the income tax department under RTI showed. 
    The list of top 10 pending tax demands in each category was given to activist Subhash Agrawal in response to his RTI application seeking the list of top tax defaulters. 
    The tax demand raised by the department against LIC is for the assessment year 2010, which is pending “as on date”, the response furnished on January 27, 2014, said. 
    In the companies cate
gory, the top slot was given to LIC, which also had the biggest pending tax demand in all the other categories, according to the RTI reply. The demand against LIC was Rs 7,027 crore, followed by Aditya Birla Telecom (Rs 2,372 crore), Vodafone Infrastructure (Rs 2,038 crore), Idea Cellular (Rs 1,517 crore ) and Bharat Petroleum (Rs 1,494 crore ). 
    Other companies with pending tax demand include Nerka Chemicals (Rs 
1,354 crore), Tamil Nadu State Marketing Corporation (Rs 1,234 crore), Andhra Pradesh Beverages Corporation (Rs 1,228 crore), HDFC Bank (Rs 1,051 crore) and IndianOil Corporation (Rs 874 crore). 
    In the individual category, those with pending tax demand included Sanjay Singal (Rs 280 crore), followed by Sukesh Gupta (Rs 155 crore) and former Jharkhand CM Madhu Koda (Rs 103 crore). 
    “This is to state that 
this office is only having a list of wherein demand is pending as on date... Now how many or which of the demand comes or not comes under a particular section wherein the assessee is deemed to be in defaulter, such linking is neither available nor possible to be collated by this office,” additional I-T director Ashish Abrol said in the response. 
    The ‘trust’ category is led by Mumbai Metropolitan Region Development Authority, with pending tax demand of Rs 654 crore, followed by the Jamsetji Tata Trust (Rs 290 crore), the Board of Control for Cricket in India (Rs 167 crore), Credit Guarantee Fund Trust for Micro and Small Enterprises (Rs 162 crore), NEIA Trust (Rs Rs 83 crore), UP Forest Corporation (Rs 51 crore) and Divya Yog Mandir Trust (Rs 41 crore), among others.



AS officer's son tipped to be Microsoft's global CEO Hyderabad-Born 46-Year-Old Is A 22-Yr MS 'Insider'

Washington/Bangalore/New Delhi/Hyderabad: Hyderabad -born Satya Nadella, son of an IAS officer who was secretary to former Prime Minister P V Narasimha Rao, is being tipped strongly to become chief executive of Microsoft, according to several news outlets citing sources familiar with deliberations on the matter. 

    Nadella, 46, is a 22-year Microsoft insider who now heads the company’s $20-billion cloud and enterprise group. If the Microsoft board, which has been searching for a successor to current CEO Steve Ballmer for nearly five months, goes through with his appointment, he will be the topranked chief executive of Indian-origin, comfortably overtaking Indra Nooyi of 
Pepsico. An announcement is expected as early as Friday. 

    Microsoft is currently the world’s fourth-largest company by market cap ($312 billion) after Apple ($450bn), Exxon Mobil ($405bn) and Google ($394bn); Pepsico’s is way behind at $124bn. 
    Nadella grew up in Hyderabad. His father, B N Yugandhar, went on to become a Planning Commission member, and friends recollect him as “a jholawala, a man with an NGO mindset.” 
    Nadella studied at the Hyderabad Public School, Begumpet, the alma mater of other global business bigwigs like Shantanu Narayen, CEO of Adobe Systems, and Prem Watsa, chairman and CEO of Fairfax Financial Holdings, who’s known as Canada’s Warren Buffet. He did his engineering from Manipal University between 1984 and 1988, and then went to the US where he received a degree in computer science and an MBA. 

WINDOWS OPEN FOR SATYA NADELLA 
Born in 1967 in Hyderabad, studied at Hyderabad Public School, Begumpet 
Engineering in electronics and communication from Manipal University 
MS in computer science from University of Wisconsin–Milwaukee 
MBA from University of Chicago’s Booth School of Business 
Started his tech career at Sun Microsystems, joined Microsoft Corporation in February 1992 
First MS assignment was as program manager for Windows Developer Relations Group 
Now, executive VP, cloud and enterprise, a $20-billion business at the $78-billion Microsoft 
Nadella’s strength is the variety of roles he’s played in MS, his weakness is in consumer space 
    Satya Nadella worked briefly with Sun Microsystems, before joining Microsoft in 1992. At Microsoft, he has worked in a variety of businesses, from core enterprise products to online services including Bing, MSN and the cloud platform Azure. 
    He is part of a large contingent of Indians, numbering in the thousands, who joined Microsoft in the 1990s, leading former honcho Bill Gates to look at India as both a research hub and a market after he recognized the country's potential on both counts. 
Microsoft’s Hyderabad campus is now the company's largest non-US-base. The company has nearly 5,000 employees in India out of its 100,000-strong workforce. 
    The variety of roles Nadella has played is now proving to be his strength. Ashlee Vance of Bloomberg BusinessWeek writes that Nadella is one of the most impressive members of the new bunch of senior executives he has seen 
at Microsoft. “Crucially, he’s more or less Microsoft’s cloud master and has a firm handle on what it takes to run Bing, Office365, Skype, and Xbox Live. Nadella is also well-liked and respected throughout the industry. And he’s enough of a different character from Steve Ballmer and Bill Gates to inject some new life into the company,” he says. 
    That’s something Microsoft desperately needs. Once the undisputed king of the computing world, the company has lost a lot of ground over the past decade to companies like Google and Apple on account of its failure to anticipate the revolutionary changes that the internet and mobile devices have 
been ringing in. 
    The company is now making moves away from its roots as a software maker to focus on hardware and internetbased services. In some areas it has made good progress, such as the cloud platform Azure and to a lesser extent the cloud-based office productivity tools. But in the crucial area of mobile devices, Nadella has a huge task on his hands, and it’s not an area he has much experience with. Less than 2% of smartphones are Windows-based. 
    Microsoft acquired Nokia’s mobile business recently to try and do a leapfrog in this space. Patrick Moorhead, president at Moor Insights & Strategy and a veter
an of the computer industry, says Nadella may face a challenging time in fixing Microsoft's problems in the consumer space. 
    “Nadella has a lot of experience, but not as much as someone who typically runs a company of the size of Microsoft. He has spent most of his time in the enterprise space, so I think he would need a very strong lieutenant who gets the consumer market,” Moorhead told TOI. 
    Vance appears to agree: “What Nadella is not is the radical agent of change or the inspirational visionary that some investors and outsiders have been hoping for. He seems likely to keep pushing on Microsoft’s data center-focused cloud journey and unlikely to take any drastic mea
sures around consumer products.” 
    If indeed Nadella is the chosen one, everybody would be keenly watching to see the steps he takes to get back the consumer mindshare that Microsoft has lost to Apple and Google.




Saturday, January 25, 2014

STAY CONNECTED MTNL plans affordable Wi-Fi cover for Mumbai

Mumbai: MTNL is keen on launching "affordable" Wi-Fi facilities at airports, railway stations, Monorail, Metro, prominent malls, restaurants, hotels and households in a big way this year. On Friday, it launched "free roaming" (for incoming calls) in Delhi and Mumbai for nearly five lakh local customers. 

    Union minister for communication & IT Kapil Sibal, who launched the "free roing" at a function in Powai, said MTNL may be merged with BSNL soon and the synergy will be good for the country, facilitating better mobile and broadband services. He hinted that the merger was awaiting a cabinet nod. 
    "Our objective is to turn Mumbai into Wi-Fi mode in nine months," said MTNL executive director Peeyush Agrawal. "We will tie up with coffee houses, restaurants, 

hotels, food courts in malls, airports and stations. The Wi-Fi will be completely secured. We will follow all norms to ensure data protection. We plan to introduce unlimited downloads for as low as Rs 50 a month. The pricing is still being worked out," he said. 

    MTNL plans to increase the customer base by at least 2 lakh (Wi-Fi users) this year. One of the major problems faced by MTNL in Mumbai is cable theft, which has resulted in hundreds of landlines going "dead". "We have introduced a cable theft circuit system. The moment anyone cuts off or tries to steal a cable, the system activates the circuit and rings an alarm at our control room. We can nab the culprit in minutes," he said. 
    The new version of Akash 4, the cheapest tablet PC, will be manufactured this year and the price may come down to Rs 1,500 for students, Sibal said.

BJP poised for best ever tally, Modi set to be PM, say polls

For First Time, Cong Seats May Fall Below 100


    Narendra Modi could be poised to become India's next prime minister with two opinion polls released on Friday predicting that the NDA will get at least 210 seats and the BJP itself would cross the 180 mark and perhaps even 210 in the coming Lok Sabha elections. 
    In contrast, the UPA and the Congress appear to be facing a rout with both polls giving the ruling alliance less than 
130 seats and the Congress perhaps less than three digits for the first time ever. With parties like the AIADMK, the TDP, the TRS and the BJD, all of which would be regarded as potential BJP allies, projected to win 50 seats or more between them, the news for the BJP and Modi couldn't get better. 
    The India Today-CVoter poll predicted that the NDA would win 212 seats on the back of a dominant performance in the Hindi belt and the western states of Gujarat and Maharashtra. The CNN-IBN-CSDS poll was not very different in terms of the big national picture, though regional details vary between the two polls.
    According to the CSDS poll, the NDA will win 211-231 seats if elections were held now and the BJP alone would bag anywhere between 192 and 210, which would make it the party's best showing ever. 
'No major impact of AAP outside Delhi' 
    At the upper limit of this range, the NDA would need just 41 more MPs to support it to gain a majority in the Lok Sabha. 
    While agreeing on the big picture, including on the fact that the AAP will not have a major impact in terms of seats anywhere other than in Delhi, the two polls have significantly different predictions for key states. In UP, the India Today-CVoter poll projects that the BJP will win 30 of the state's 80 seats, the BSP 24 and SP 20. The CNN-IBN-CSDS poll gives the BJP between 41 and 49 seats, BSP 10-16 and SP 8-14. Both agree that the Congress will decline drastically from the 21 seats it won last time in UP. 
    Similarly, while the CVoter poll sees the JD(U) getting nearly wiped out in Bihar, with just four seats, the CSDS poll gives Nitish's party anything between 7 ands 13 seats. Both give the BJP the bulk of Bihar's 40 seats but disagree on the distribution of the rest, primarily between RJD and JD(U). 
    In Tamil Nadu, too, while 
CVoter poll gives the AIADMK a decisive edge with 29 of the state's 39 seats, the CSDS poll sees Jayalalithaa's party winning between 15 and 23 seats. In Kerala, CVoter suggests the Left has the edge in a close contest while CSDS feels the Congress-led UDF is well ahead. 
    One of the regional parties on which both polls agree is the Trinamool Congress, with CVoter giving Mamata's party 23 of West Bengal's 42 seats and CSDS saying it could win between 20 and 28 seats. Either way, it would improve on its tally of 19 in 2009 and could end up being the third largest party in the Lok Sabha after the BJP and Congress. Whether Mamata would be able to leverage this gain in seats could be another matter.


Friday, January 10, 2014

$4TN TRADE China edges US out as biggest trader?

Beijing: China may have surpassed the United States to become the world's biggest trading nation as its foreign trade crossed the $4-trillion mark in 2013. The final picture will emerge after the US announces its trade figures next month. 

    "It is very likely that China has overtaken the US to become the world's largest trading country," Zheng Yuesheng, a spokesman for China's customs administration, said while announcing that the country's imports and exports totaled $4.16 trillion last year. 
    US trade came to $3.5 trillion in the first 11 months of 2013, and there is little possibility that it would cross China's level in the last month. China may become the top trader for the first time and stay ahead of the US in total foreign trade by $250 billion once 

Washington releases full data for 2013, sources said. 
    China became the world's biggest goods exporter in 2009. Its imports have also risen steadily. 
    Chinese foreign trade grew at 7.6% in 2013. The growth rate 
has fallen short of the government's 8 per cent target. The country's exports rose at an annual rate of 7.9% to $2.21 trillion while imports grew 7.3%. to $1.95 trillion. 
    China continued to buy less than it sold resulting in a 12.8 per cent rise in trade surplus to $259.75 billion, according to Customs data released on Friday. 
    The European Union and US accounted to over one-fourth of China's total trade at $559 billion and $521 billion, respectively. Countries in the Association of South East Asia were engaged with China for trade worth $443 billion, up by nearly 11 per cent 
compared to 2012. 
    Trade with Japan saw a sharp decline of over five per cent reaching $312.5 billion after a year of acrimonious relationship between the two countries. 
    Some analyst suspect that a section of Chinese exporters are overstating their shipments in order to bring more funds into the country. Chinese authorities have taken action to curb this trend. The foreign exchange regulator the State Administration of Foreign Exchange, said last May it would intensify scrutiny of export voices and impose tougher penalties on firms providing false data.

Industrial output falls 2.1% in Nov

New Delhi: Industrial production contracted for the second consecutive month, falling 2.1% in November, as manufacturing activity slumped, raising concerns of a prolonged slowdown. The latest data has raised a fresh dilemma for the Reserve Bank of India which is due to take a call on interest rates later this month. 

    While mining and electricity managed to stay in positive territory, a 3.5% decline in manufacturing output meant that the overall index of industrial production stayed in the red, latest data released by the Central Statistics Office on Friday showed. 
    What will come as a bigger worry is that compared to October 2013, production across factories and power utilities was lower in November, resulting in a month-on-month decline in IIP. "This reinforces the belief that fall in manufacturing growth has not yet bottomed out. Urgent measures and fresh
thoughts are required to boost manufacturing, without which the jobs potential here will remain depressed," Ficci president Sidharth Birla said in a statement. 
    Given the bleak forecast, even Yes Bank managing director and CEO Rana Kapoor said that a prolonged slow
down will adversely hit employment. 
    Economists do not expect industrial activity to pick up immediately. "The slowdown in the industrial sector is coming to an end, but we expect a prolonged bottoming out process as there are no visible triggers for an up-cycle at this stage. Even if industrial production growth rebounds back to positive in December, industrial production growth will be negative in Q4 of 2013, suggest
ing that GDP growth is likely to moderate in the fourth quarter after the rise in the third quarter, despite better agriculture growth," Nomura economists Sonal Varma and Aman Mohunta said in a note. 
    Ratings and research firm Crisil too predicted tepid growth in the remainder of 2013-14, citing infrastructure and input constraints and weak domestic demand.



Infy narrows gap with peers Revenue Up 1.7% Q-o-Q, Raises Full-Year Forecast To Near 12%

Mysore: Infosys has raised its dollar revenue growth guidance for this fiscal to 11.5-12%, up from the previous 9-10%, marking a return to near industry average growth and reflecting the success of its decision to focus more on large transformation projects. Nasscom has forecast that the IT industry will grow this year at 12-14%. 

    With only one quarter remaining, the latest guidance is unlikely to go terribly wrong. Infosys needs to grow by 1.4% sequentially in the last quarter to hit the upper end of its guidance. The guidance is a significant improvement over the dismal performance of last year, when Infosys grew 5.8% as against the industry growth of over 11%. Industry peers TCS, Cognizant and HCL have been growing well above average. 
    The forecast pushed the company share price up by 
nearly 3% on a day when the benchmark sensex was flat. Revenue for the December quarter, at $2.1 billion, grew 1.7% over the previous quarter and was largely in line with analysts' expectations. The December quarter tends to be a low-growth quarter because of year-end holidays in customer markets, mainly the US and Europe. Net profit, at $463 million, was up much more than expected at 20.9%, and operating margin was up nearly 3.2 percentage points at 25%, reflecting the success of the massive cost optimization initiative that began since the return of co-founder N R Narayana 
Murthy as executive chairman in June. 
    CEO S D Shibulal said the external environment was getting better in most business segments. "Clients are focus
ing on cost optimization and are gaining confidence to invest in their strategic initiatives," he said. But followed it up with caveats: "Clients continue to be hesitant to take large investment decisions. IT budgets of clients in general would be flat in 2014, compared to 2013. And we face pricing pressure on large deals and commoditized services." 
    Partha Iyengar, country manager-research in Gartner India, said it was a good sign that Murthy's back-to-basics strategy was working. "But we need one more quarter of continuous outperformance to say that the company is out of the woods," he said. 
    Since Murthy's return, the company has taken a step back on its effort to focus more on IP (intellectual property)-led software development and platform services and on consulting, which were expected to substantially increase revenue per employee.



AAP aims at 1 crore members by Jan 26

New Delhi: The AAP launched a massive volunteer recruitment drive on Friday. Chief minister Arvind Kejriwal who is also the party convener, said that the party is aiming at induction of at least one crore people by January 26. He also said that the membership fee of Rs 10 has now been waived off completely. 

    Within three hours of announcing this, almost 50,000 people had joined AAP across India. "The option of joining the party online has been given this time and 47,500 people became members through online registration. Another 1,950 became members through the phone service," said party sources. Till January 7, the party had a membership of almost 2 lakh and a volunteer base of just over 7 lakh. More than half of these people joined the party after the declaration of assembly election results in Delhi on December 8 last year. "Till December 8, the party had 27,632 members and 2.47 lakh volunteers. In the one month after declaration of results, 1.65 lakh people joined as members and another 4.64 lakh as volunteers. We are quite confident of touching the one crore mark in the next few weeks," said sources. 
    The 'mein bhi aam aadmi' drive was launched on Wednesday by Kejriwal with the release of a phone number on which people can register. Senior party member Gopal Rai said that people could register by either calling on this number or messaging on 
it. Even missed calls on the number would be responded to but only one member will be accepted on one mobile number. "Other than the phone number, people can register online. The form is available on the party website and it can be downloaded and copied. Volunteers can distribute these forms by going door to door or organizing camps. Those who do not have mobile phones can join the party by giving their voter ID information but that will start after January 17," said Rai. 
    The party was almost entirely dependent on its volunteers and members for its campaign in Delhi. With limited funds and the need to involve as many people in its movement as possible, the party is aiming to induct several lakhs before the Lok Sabha elections. It did away with the membership fee while also admitting that it was not administratively equipped to deal with this influx of people.


Mhada allots realtor extra 1.7L sq ft area Space Belongs To Adjacent LIG Colony

The Maharashtra housing and area development authority (Mhada) has sanctioned D B Realty an additional built-up area of 1.70 lakh sq ft worth around Rs 500 crore to redevelop the Middle Income Group-1 (MIG) colony in Bandra (East). This additional area belongs to the Lower Income Group (LIG) colony, which is part of the same sprawling layout the authority built five decades ago. 
    Mhada denied it had transferred the development rights of LIG to MIG and described it as pro rata or proportionate allocation of floor space index (FSI) among all the residents living on the layout. FSI is the 
ratio allowed of floor space in a building to the plot size. 
    Mhada CEO Satish Gavai said the additional built up-area sanctioned to D B Realty is not the first case; it has been done in other Mhada redevelopment projects, including the ongoing Samata Nagar project in Kandivli. The authority said it will earn Rs 105 
crore as premium for allowing D B Realty this additional area. 
    But sources said Mhada's decision flies in the face of its own affidavit filed in the Bombay high court in 2006 in response to a public interest litigation by Awaz Foundation. The affidavit categorically said that "there will be no allot
ment of the unutilized FSI of LIG societies to MIG or high-income (HIG) societies and vice versa." 
    In the Bandra (East) MIG-1 project, D B Realty said it was unable to consume the entire FSI it was entitled to. Mhada has increased the FSI to 3.5, but the developer said it will be able to utilise only up to 2.66 
FSI on the 20,150 sq m plot.
    It further contended that the FSI of the LIG society, with its 1,098 tenements, will be as high as 6.06—a built-up area of 1.49 lakh sq m on a plot of 24,580 sq m. The builder said that since the maximum FSI cap is 3.5, there is FSI left that cannot be utilized by LIG societies and so the same 
should be granted to the MIG portion of the layout, which is larger with low density in terms of numbers of tenements. 
    "It is therefore in the interest of Mhada that wherever the societies can consumeFSI on gross leased area up to 3.5, the same may be permitted. Mhada will stand to gain premium which otherwise would have remained unutilized in the layout. This will result in revenue of hundreds of crores to the authority," said the developer in its proposal letter to Mhada. 
    D B Realty has the mandate to redevelop the 19 buildings in MIG-1 located in Gandhi Nagar in Bandra (East). However, the project has stayed stalled since over six years due to a host of problems and the developer has been unable to start work. Recently, it proposed to mortgage the colony land to raise funds for the redevelopment. However, residents rejected the proposal a few months ago. 

BANDRA PROJECT 
    
Mhada allots 1.70 lakh sq ft of additional built-up area belonging to LIG colony to MIG-1 in the same layout in Bandra (East). This additional area is worth at least Rs 500 crore. Mhada said it will receive Rs 105 crore as premium from builder D B Realty 

    In response to a 2006 PIL, Mhada's affidavit had said there will be no allotment of unutilised FSI of LIG societies to MIG and vice versa 

    The developer said the LIG portion of the Bandra layout has over 6 FSI while the cap is 3.5. Hence, the additional portion be allowed to be used in the MIG part

D B Realty has the mandate to redevelop the 19 buildings in Gandhi Nagar's MIG-1. The project is stuck for six years


Tuesday, January 7, 2014

ON THE RISE AGAIN India Inc earnings to hit six-quarter high in Q3

 India Inc is expected to post its best earnings growth in six quarters in the October-December (third) quarter of the current financial year on the back of a strong performance by export-oriented sectors and a low base. 

    Profit after tax (PAT) of companies on the benchmark sensex is set to increase 13% year-on-year (y-o-y) to around Rs 55,000 crore during the quarter, estimates made by leading brokerages showed. PAT growth is expected to accelerate to 16% y-o-y in the fourth quarter (January-March) as earnings slowly move up to levels seen during the boom years. Though India Inc's PAT growth will still be lower than the heady 25%-plus increase seen between 2002-03 and 2007-08, it would be closer to the average of the past 10 years. 
    While growth was concentrated among a few sectors in the previous quarters, several 
sectors are expected to register gradual improvement in growth rates from the third quarter. "Downgrades to sensex EPS (earnings per share) have taken a breather," an analyst at Motilal Oswal Securities (MOSL) said. 
    The growth trend emerging from the quarterly results suggest that the worst may be over for India Inc in terms of earnings. After a 3% y-o-y degrowth in PAT in the quarter ending June 2013, profits at 143 companies covered by MOSL grew 8% y-o-y in the following quarter. 
    PAT growth is expected to 
be 10% y-o-y for these firms during the quarter ending December 2013. But this is still lower than the long-term average growth of 14%. Only around a third of these firms are expected to report a decline in PAT — the lowest level in 11 quarters. 
    "The worst is over for most of the sectors. The earnings are likely to be above expectations, especially in IT and commodity-related businesses," said Vikram Dhawan, director, Equentis Capital. Deven R Choksey, MD, KR Choksey Shares and Securities, said, "The earnings for the third quarter will be better." 
    Telecom, cement and automobiles sectors are expected to report growth after several quarters of decline. In fact, telecom, cement, media, real estate and retail are likely to emerge as the sectors logging the highest growth. 
    Sensex firms are likely to report 13% y-o-y increase in sales to around Rs 5 lakh crore.


Sensex ushers in 2nd worst new year Index Loses 500 Points In First 5 Sessions On FII OutflowsInvestors Cautious

Mumbai: Sliding in each of the five sessions of 2014, the sensex is now down nearly 500 points, or 2.3%, from its 2013 close, making this the second worst index performance in its history in terms of points loss. The worst was in 2011, when index had lost a little over 800 points in the first five sessions in the new year. In terms of percentage loss, however, 2014 is the third worst in the last decade, BSE data showed. 

    Market players blame the continuous foreign fund selling for this loss in the index, which is now 800 points below the all-time peak scaled exactly a month ago. In the last three sessions, the pace of selling by foreign institutional investors (FIIs) has gained pace with the net outflow figure during the period at about Rs 900 crore now. 
    Other than FII selling, brokers said that investors will take a call after the results seasons begins. "By looking at index movement since the beginning of this year, it seems that market participants are now waiting for earning season to start and accordingly 
they'll plan their bets," said Jayant Manglik, president-retail distribution, Religare Securities. The October-December quarterly results would start with technology Major Infosys announcing its numbers on Friday. 
    However, not everyone is convinced that the current trend could be something that 
investors should be worried about. "Usually, towards the end of the (financial as well as calendar) year we see NAV propping by fund managers. So if such acts could help keep the market at an elevated level, after the start of the New Year we could expect some profit taking," said Arun Kejriwal, director, KRIS. 
    The silver lining behind this slide in the sensex is the emergence of some buying interest in the mid- and small-cap stocks. "Investors have shifted their focus to mid-cap and small-cap counters and rightly so, as these segments have been showing upward momentum and facing negligible impact despite erratic moves in the benchmark index," said Manglik. Kejriwal, who agrees that the current buying in select stocks from these segments au
gurs well for the market. 
    BSE data showed that Suzlon Energy, a Rs 2,825-crore market capitalization company, is up 13% during these five sessions while Ashok Leyland, valued at close to Rs 4,900 crore, has gained nearly 7%. Financial Technologies (FTIL) and Multi Commodities Exchange (MCX) have also gained 46.4% and 23.7%, respectively, but there is talk of merger and selloffs in these stocks. 
    In comparison, Tata Power is down nearly 13% during the same period, while JSW Energy has lost 8.8% and Tata Steel is off 6.8%. Software stocks too are witnessing profit taking after some of the frontline ones hit their life highs recently. On Tuesday, sector leader TCS closed 1.5% lower while Infosys lost 1.7% and Wipro was down 1.4%.


Did Diageo help Mallya move out 4,000 crore?


Bangalore: The Karnataka high court's order annulling Diageo's acquisition of shares in India's largest distiller, United Spirits Ltd from Vijay Mallya's UB Holdings Ltd (UBHL), landed the British drinks giant in a tight spot two weeks ago (reported by TOI). But a detailed order publicly available now—may prove to be more embarrassing for Diageo, which is listed on the London and New York stock exchanges. 
    The division bench order, saying the deal-making was not bona fide since UBHL was facing allegations of fund diversions to tax havens, has questioned Diageo's loan guarantees to an offshore Mallya 
entity which owns F-1 team Force India. The court said the structuring of the deal 
adversely impacted UBHL's creditors and 
the right of the purchaser (Diageo) would be decided by the winding-up petitions filed by them. 
    The 173-page order has opened a Pandora's box for Mallya and Diageo after the HC bench accepted and heard a clutch of winding-up petitions filed against UBHL, a parent of Mallya's diversified empire and a significant stakeholder in the grounded Kingfisher Airlines Ltd. UBHL is also the 
primary guarantor to various KFA creditors, including BNP Paribas, Rolls Royce & Partners Finance and Avions. 'FUND DIVERSION' 
Karnataka HC had annulled Diageo's buyout of shares in USL from UBHL. Order says deal-making wasn't bona fide as it involved parallel transactions 
Mallya 'diverted' 4,000 crore to subsidiary in tax haven British Virgin Islands 
HC queries Diageo-backed 840cr 'loan' to Force India 
Mallya didn't come to court with clean hands: HC 
Bangalore: The Karnataka high court, which has annulled Diageo's acquisition of shares in United Spirits, has taken cognizance of a $135 million (around Rs 840 crore) guarantee given by Diageo Holdings Netherlands BV to Watson Ltd, an offshore Vijay Mallya company which controls the Force India Formula-1 Team. Diageo executed the guarantees for a financing deal from Standard Chartered Bank. 
    Terming it a parallel transaction, the court said this substantial benefit availed by Mallya is liable to 
make him accountable to UBHL creditors. This, the HC pointed out, happened even as UBHL and its promoter Mallya had 'not come to the court with clean hands'—in reference to a possible diversion of Rs 4,000 crore to a subsidiary in British Virgin Islands, a tax haven. It ruled that UBHL's explanation (that these funds were remitted overseas for financing Whyte & Mackay acquisition in 2007) was 'unacceptable', and that the matter needed further investigation. 
    When contacted by TOI, a UB Group spokesperson said: "UBHL admittedly is not a party to the transaction involving Rs 4,000 crore. 
It was a legitimate remittance made through normal banking channels by USL to its subsidiary to repay a loan taken from Citibank for the acquisition of Whyte & Mackay. As for the transaction relating to Watson Ltd, once again UBHL admittedly is not a party to the transaction. However, a loan has been legitimately advanced by Stanchart to Watson on the strength of its creditworthiness. In respect of this loan, a backstop guarantee has been issued by Diageo in favour of Stanchart—all legitimate transactions carried out after appropriate disclosure." 
    The court order said, 
"UBHL has vaguely attempted to justify this for discharging the Whyte & Mackay liability, without proper explanation or supporting documentation." It added that the sale to Diageo should not have been permitted, pending a final investigation into the issue. "Such diversion of Rs 4,000 crore was bound to have an indirect impact on UBHL and its general creditors," it said. 
    Sanjay Jain, a director at Taj Capital, a New Delhibased investment advisory firm, said, "It appears from the order that commercial details of the deal between Diageo and the UB Group in public domain were inade
quate. USL's shareholders approved the sale of treasury stock and preferential allotment (at Rs 1,440 per share) based on public disclosures. One cannot understand how Diageo carried out an acquisition in a listed Indian company with such disclosures." 
    "Diageo continues to believe that its purchase of USL's shares is genuine and bona fide, and that the acquisition price of Rs 1,440 per share paid to UBHL is fair and reasonable. Diageo intends to appeal the decision and will also consider other options open to it to defend its position," a Diageo spokesperson said.

Cold wave freezes north India, fog hits air, rail & road traffic


Delhi's 2nd-Worst Fog In 8 Yrs Affects Over 600 Flights



    Frigid conditions showed no signs of abating as the mercury hovered several notches below normal in north India and a thick fog enveloped the region, throwing life out of gear. While flights were diverted and cancelled in New Delhi and Lucknow, rail and road traffic was disrupted in Rajasthan. 
    A total of 463 flights (232 arrivals and 231 departures) were delayed in New Delhi between 1am on Sunday and 11.15am on Monday as the second-worst fog spell in the past eight years hit airport operations in the city. Another 137 flights (74 departures and 63 arrivals) were cancelled and 52 diverted to other airports. Many passengers were forced to wait for several hours at various terminals. 
    The city recorded its most dense spell of fog since 2010 between January 4 and 6. Low visibility conditions set in around 5.30pm on Saturday and improved only around 11.30am on Monday, resulting in 42 hours of dense fog. The good news is that the dense fog 
hours will reduce considerably over the next three days. 
    Met department officials said that a calming of winds and a drop in temperatures led to the formation of fog on Saturday. It was initially not very dense but by 2.30am on Saturday, visibility had reduced considerably. Poor visibility conditions remained for three hours. 
    "There was not much change in the situation through the day. All through Saturday afternoon, visibility fluctuated between 400m and 600m. At 6.30 pm, the situation suddenly worsened due to heavy moisture incursion from west Delhi. By 8.30pm, visibility at IGI Airport fell to 
zero and flights were severely affected in the blinding conditions," said Dr R K Jenamani, director in-charge, IGI Met. 
    The fog in New Delhi upset flight schedules as far as Jaipur, Lucknow and Amritsar, where most of the flights were diverted. 
    There was chaos at Lucknow airport after the 20 Delhibound flights diverted there crowded the tarmac. The tarmac has the capacity to accommodate 24 planes at a time and with the sudden landing of 20 flights diverted from Delhi, it was chock-ablock with planes. 
    Lucknow airport also saw up to four Delhi flights and one Mumbai flight being can
celled because of heavy fog conditions, leaving hundreds of passengers in the lurch. Likewise, three flights to Kolkata were delayed. More than 5,000 passengers were reported to be stranded on Monday morning. 
    Another 13 Delhi-bound flights were diverted to the Amritsar airport. Most of the airlines had made boarding and lodging arrangements for the travellers to stay overnight in Amritsar but the passengers of a few low-cost operators complained that no arrangement was made for them. "Most of the 1,800 passengers who landed here were given accommodation while some had to spend the night at 
the airport," said a senior official at Amritsar airport. 
    The fog also led to around 20 trains running late, two being cancelled and 11 getting rescheduled in Delhi on Monday. The Jharkhand Express from Hatia to Anand Vihar was running up to 15 hours late. Rajdhani trains coming from Guwahati, Ranchi, Patna, Howrah, Mumbai and Bhubaneswar were running late and high-priority trains such as the Howrah Rajdhani and Sealdah Duronto had to be rescheduled. 
    In Rajasthan, foggy conditions affected rail and road traffic. Vehicles were moving at a snail's pace and some trains were running behind schedule. In a fog-related incident, at least 10 vehicles rammed into each other on the Delhi-Jaipur national highway at Chandwaji, 100km from Jaipur. 
    The intense cold wave sweeping across Punjab, Haryana and Chandigarh continued unabated in most parts with the mercury dropping to a record-breaking minus 2.1 degree Celsius at Hisar. Residents of Srinagar in Kashmir Valley were digging out 2.3mm of snow that fell overnight, with the temperature plummeting further two notches to minus 2.3°C. 

Close shave for passengers as diverted plane's tyre bursts 

New Delhi:Over hundred passengers aboard an AI flight to Delhi had a close shave when the plane had to make a rough landing in Jaipur after it was diverted from Delhi due to fog. The Airbus A-320 was coming from Imphal via Guwahati and damaged its wing when a tyre burst upon landing. 
    By the time the plane reached Jaipur, visibility had fallen dramatically. But by then the plane ran critically low on fuel. The pilot had no option but to declare a fuel emergency and land blind. TNN 
'Polar vortex' puts US in deep freeze Trains Stop, Schools Shut As Mercury Dips To Sub-Zero Levels Chidanand Rajghatta TNN 
Washington: Trains froze, schools closed, and people largely stayed indoors as a "polar vortex" descended on more than half the United States on Monday, plunging temperatures to record subzero levels in many parts of the country. 
    The country's midwest and the mountain region got the worst of what is described as a mass of dense, frigid, arctic air. Temperature in Fargo, North Dakota was forecast at -35°C. With windchill, that was expected to go down -51°C in some places —not quite cryogenic but getting there — the coldest it had been in more than two decades. 
    Among major cities Chicago, known as the 'Windy City', was bracing for at least -28°C with wind chill, while New York and Washington DC were relatively lucky with about -10 and -12°C. The first flight delays and cancellations began happening on Monday morning, and passengers on an Amtrak train 
from Detroit to Chicago were stranded for more than nine hours after both the trains' engines froze. 
    The extreme cold front came on top of more than a foot of snow in some places making travel treacherous. People were cautioned to stay indoors and officials warned that exposed flesh could become frostbitten and tyre seals might leak. The National Weather Service used the term "Particularly Danger
ous Situation" (PDS) for the first time to warn denizens of the twin cities in Minnesota (Minneapolis and Saint Paul). 
    The day began fairly enough on Monday with temperatures in -4 to -10°C in the mid-Atlantic region. But they were expected to fall 40 degrees in course of the day, driving people indoors by the evening as the "polar vortex" extended its cold stranglehold on the country. 
    A "polar vortex" is a per
sistent, large-scale cyclone and they are typically found around either north or south poles. It is rare for them to swing as far as this one has into densely populated areas. But as many on social media remarked, this is just a reminder as to who is in charge of the planet: the only winner in this cold war is Mother Nature. One small mercy: It will all be over in 24-36 hours when temperatures will return to the normal winter cold.



CHILL KILL: A man catches drifting snow on his face in Kansas on Sunday. (L) A woman slips on ice during a freezing shower in Roosevelt Island, New York


Sunday, January 5, 2014

State’s population grew 16% in 2001-11, cars 158% But Experts Say Better Public Transport Crucial Before Any Deterrents

The transport department's move to levy a higher tax on every second car a family buys in Mumbai is prompted by the exponential growth in vehicles on the city's roads, but experts caution that a deterrent can only follow an improvement in the quality of the city's public transport. 

    Rishi Aggarwal of Mumbai Transport Forum, an alliance of active citizens working towards sustainable transport solutions, believes it is essential for the state to step up its public transport before it begins resorting to deterrent measures such as high taxes. "A lot of people using cars today use the justifiable argument that they can't get into overcrowded local trains or non-AC public buses. We need to give people 
high quality choices in public transport before we deter them from bringing their cars out on the road," he said. 
    Transport expert Ashok Datar believes the state and Mumbai in particular, definitely needs measures to limit the number of cars on its streets. "We have limited resources in terms of road space and the exponential rise of cars vis-à-vis the population warrants measures such as increasing taxes, in principle," he says. He however, believes the devil will lie in the detail to determine whether such a tax would actually be effective in deterring people from buying more cars. 
    Maharashtra has not only registered the highest number of vehicles every year in the country in the decade since 2001, but has also added a staggering one crore cars in that period. The state's vehicular population has grown by 158% in the period from 2001 to 2011, while its population has correspondingly grown by only 16%. 
    Measures limiting vehicular population are in force the world over. Singapore for instance, levies a road tax equivalent to 120% of the car price on every new purchase. It also issues only a limited number of licence plates every year. Shanghai and Beijing too levy a similarly hefty road tax. 

TIMES VIEW : The state government's move to hike the motor vehicles tax by 200% for families planning to buy a second car is unfair, and Chief Minister Prithviraj Chavan's argument that the rise in the number of cars on city roads is due to easy availability of car loans and good salaries in the IT sector is deeply flawed. The rise may have to do more with the greater freedom that women justly enjoy. Increasingly, in Indian families, two cars are needed because both husband and wife lead independent professional lives. To discourage women in the family from having their own cars by placing curbs in the shape of higher taxes is to turn the clock back.



 

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