Daily Excelsior...Business

Expert expects potato prices to stabilise at Rs 5-6 a kg

Emami on prowl to acquire cos; earmarks Rs 500 cr

Indian stock market among worst performers globally in Q1 2008

For most FY’08, inflation below RBI’s tolerance limit of 5%

Excelsior Correspondent

JAMMU, Apr 13: LG Electronics India Ltd today opened its outlet, Ajanta Electronics at Paloura on Akhnoor Road. DGM, State Bank of India, SP Singh was the chief guest on the occasion. The LG shoppee aims to offer all the digital needs of the households.

Speaking on the occassion, Branch Manager of LG, Rajinder Gupta said, "It has been our endeavour to create 'one-stop-shop' where the customers could avail all the household electronic accessories." He said that the company has come out with lifestyle format stores which offer difference in channel strategy wherein customers would experience the best in class shopping experience.

He further said that for the time being, the company has a total of 83 stores across the country of which 45 are shoppes and 38 are exclusive stores.

NGPA College launches its Jammu centre

Excelsior Correspondent

JAMMU, Apr 13: The NGPA College for CA and Commerce launched its Jammu centre in a function held, here today.

Prof. M R Puri, former Vice Chancellor, University of Jammu (JU) was the chief guest at the launching ceremony, while Arun Gupta, chairman ICAI Jammu chapter was also present.

In his address, Prof Puri applauded the efforts of NGPA for providing a unique opportunity to the students of Jammu, who were pursuing studies in Commerce stream.

The launching ceremony was followed by a seminar, wherein Neeraj Gupta, CMD, NGPA College Delhi, highlighted different courses being offered in Jammu centre. He also interacted with students and answered to their queries. This centre here is managed by Kusum Rattanpal.

Later, Veero Devi, wife of eminent educationist Late Prof H C Rattanpal, launched "Prof H C Rattanpal Memorial Trust". The trust will provide financial assistance to people of economically weaker sections to carry on studies and also arrange marriages for poor.

Netmagic eyes acquisition,
fund raising

MUMBAI, Apr 13: India's leading managed IT service provider Netmagic Solutions could look at an acquisition and a fresh round of fund raising for its expansion over the next 6-12 months, a top company official said.

"We are looking at an acquisition particularly in the sphere of application and database management...We are in dialogues with some companies but there is no immediate announcement," Netmagic CEO and MD Sharad Sanghi said.

"We are looking for the right fit (for acquisition) and it is possible in the next 6-7 months," he added.

Netmagic specialises in internet data centres, managed hosting, network operations and has recently began offering remote infrastructure management.

In February, it had raised Rs 80 crore through private equity funding through Fidelity International Ltd and Nexus India Capital.

However, to expand its managed IT networks and remote infrastructure management business, it could look at a fresh round of fund raising through debt.

"We will be raising more fund in another 12 months through some debt...It could be a few hundred crore," he said.

Sanghi said that the proceeds of the earlier round of funding will be deployed in setting up new data centres in Mumbai, Delhi and Chennai. It already has data centres in Mumbai and Bangalore in India and a virtual data centre in the United States.

On impact of the possible recession in the US market, Sanghi said that while the growth remains strong, there was a slowdown in average revenue per customer. (PTI)

Indian FMCG industry grow by 16 pc in 2007-08: FICCI

NEW DELHI, Apr 13: Indian FMCG industry, valued at Rs 746.5 billion in 2006-07, has grew by 16 per cent in 2007-08, compared to 14.5 per cent growth in the previous fiscal, a survey by industry body Ficci said.

The high growth in the sector is backed by the rising demand, fiscal incentives provided by the government like tax exemptions in some states and improved performance by leading companies, the chamber said in a statement.

Driving the growth of the sector, the 'deodorant' segment of the industry has achieved the highest growth of 40 per cent followed by hair dye at 30 per cent and chemical segments including cleaner and repellents at 23 per cent, the survey pointed out.

Although, there has been some deceleration in the soap and toiletries segment, it said.

The industry has been able to achieve growth despite of rising prices, increase in costs of various inputs such as petroleum products and packaging materials, the chamber said.

According to the study done by Indian market research bureau, the industry has witnessed launch of over 251 new products including 223 variants of existing products during the first 10 months of 2007, compared to 191 products including 173 variants in the same period in 2006.

The on-going retail boom in the country has forced the FMCG companies to re-work strategies and making arrangements with retail majors for sales promotion, the chamber said. (PTI)

Indian law firm ranked Asia's 4th in M&A legal advisory league

NEW DELHI, Apr 13: After billionaires and billion- dollar firms, it is the turn of an Indian law firm to reap accolades on international arena with Khaitan and Co being ranked as Asia's fourth biggest legal advisor for merger and acquisition deals during 2007.

Helped by some high-profile deals like the sale of mobile phone player Hutch to British giant Vodafone, Khaitan and Co had role in completed M&A deals worth about 17.41 billion dollars last year.

This is the fourth highest for any law firm in the Asia Pacific region, according to the latest issue of M&A Asia, published by Hong Kong-based Asian Venture Capital Journal.

The Indian law firm had a role in a total 17 announced M&A deals worth about 17.82 billion dollars during the year, including 13 completed deals worth 17.41 billion dollars.

The M&A Asia list of legal advisers has been topped by US-based law firm Paul Weiss with completed deals worth 29.54 billion dollars. It is followed by Europe's Freshfileds Bruckhaus with 29.4 billion dollars worth completed deals and Sullivan & Cromwell at third place (24.5 billion dollars).

When contacted, Rabindra Jhunjhunwala, Partner and M&A division head at Khaitan and Company, told PTI, "Time and again, we have been leading from the front with several leading transactions under our belt. We have been helping several Indian companies become multi-nationals." (PTI)

eGOM on SEZs to meet on April 29

NEW DELHI, Apr 13: With the unrest on Special Economic Zones petering out, an empowered Group of Ministers is likely to meet here on April 29 to resolve many of the issues faced by the SEZs, mostly relating to taxation and export incentives.

However, the empowered Group of Ministers (eGoM), headed by External Affairs Minister Pranab Mukherjee, is not likely to take up the contentious demand of developers to lift the 5,000 hectare land ceiling, a senior official said.

"The land issue is not likely to come up, especially because Parliament would be in session. We do not want to rake up the SEZ debate again when it is all quiet now," he said.

While the Commerce Ministry officials have called a meeting on April 30 of developers from Goa whose SEZ projects were scrapped by the state government, the issue may also be discussed at the eGoM meeting.

The issues that need to be resolved by the eGoM include tax exemption on services given outside the SEZ by units in the zone, tax rebates on consignments shipped to the zones from the Domestic Tariff Area and the formula for calculation of income tax exemption on export income of the SEZs.

Government has so far granted 453 formal approvals for SEZs, out of which 207 have been notified and are at various stages of implementation and operation.

Exports from SEZs are expected to touch Rs 1,25,000 crore during 2008-09, an increase of more than 86 per cent over the last fiscal. During April-December 2007, exports from the tax-free zones totalled Rs 40,000 crore, while fresh investment of Rs 67,347 crore has flown in as on March 2008.

Commerce and Industry Minister Kamal Nath recently brushed aside "skepticism" on SEZs saying, "development of this nature reassures us of the validity of the basic policy". (PTI)

Ban on steel exports can hurt economy: Producers

NEW DELHI, Apr 13: Amid the Government move to ban exports of finished steel, the producers today said curbs on shipments could lead not only to bleeding of their coffers but also to a loss about Rs 20,000 crore to the country in foreign exchange earnings.

"A major part of exports of steel consists of products which do not have a domestic market or are surplus to domestic requirements. This material will become an immense idle inventory, adding to woes of the industry," Indian Steel Alliance President Moosa Raza said in a letter to Prime Minister Manmohan Singh.

With export price at about Rs 1,100-Rs 1200 per tonne, FOB and domestic ex-works price prevailing around 850 dollars, the incremental 200-250 dollar margin translates to Rs 4,000 crore of loss per million tonne on an annualised basis with current exports at about 4.5 million tonne per annum, he said.

The Rs 20,000-crore loss to the nation comes from exporting 4.5 MT of steel at an average price of 1,100 dollars per tonne.

Raza said total percentage of steel exports are not more than 6-8 per cent of total domestic production. "Would a total ban on the export of steel make steel available in significant quantities within the country to ease inflationary pressures?" the ISA President said.

He said with a blanket ban on exports, what would happen to the steel which has to be produced or to the equipment established which would be rendered idle and infructuous. "Will it not be a direct loss to the national economy?" he asked. (PTI)

Expert expects potato prices to stabilise at Rs 5-6 a kg

NEW DELHI, Apr 13: Potato prices, which have fallen to Rs 5-6 a kg in retail markets, are expected to stabilise at the current level, an expert feels.

The prices have come down due to higher production in states like Uttar Pradesh, Gujarat and West Bengal. Unavailability of adequate storage is adding to the farmers' woes as they have no other option but to sell the crop at a throw-away price.

"The prices of potatoes are not expected to come down further as farmers will not sell below cost of production," said Satish Bhonde, Additional Director of Nashik-based National Horticultural Research and Development Foundation.

Potato production in the country is estimated at 293.46 lakh tons in 2007-08 crop season as compared to 270.20 lakh tons in the previous year, according to NHRDF.

Bhonde said the prices are not likely to go up if government keeps a check on the stocks in cold stores.

The main reason for the higher output is increased area under coverage in West Bengal, Uttar Pradesh and Gujarat. The area under potato is estimated to have increased from 15.7 lakh hectare to 17.19 lakh hectare, he said.

In producing belt of Agra (Uttar Pradesh), farmers are getting only Rs 150-170 per 52 kg bag as against Rs 450-475 last year, said Rameshwar of Nitei village near Agra.

"We have kept our produce outside the cold storage in the open as there is no space inside," he said.

Ajay Gupta of Prabhat Cold Storage in Agra said that all the 186 cold stores are packed. Air space inside the cold stores has also been utilised for potatoes, he added.

According to trade estimates, production has increased all over the country by at least 25 per cent, he said, adding that the prices would remain stable till the new crop arrives in November. (PTI)

Emami on prowl to acquire cos; earmarks Rs 500 cr

NEW DELHI, Apr 13: Armed with a Rs 500-crore war chest, homegrown FMCG major Emami is on the prowl to acquire companies both in domestic and international markets.

"In order to fastrack our growth, we have decided to take the acquisition route. It will not be big ones, but medium sized companies between Rs 200-400 crore," Emami Ltd CEO and Executive Director N Venkat said from Kolkata.

He said the company is looking for takeovers in the personal care category, which can be skin, hair, oral and even in the homecare segments.

"The search for potential targets has started in both the domestic and international markets," he said.

In international markets, Emami is looking for medium-sized companies in regions where it has presence such as the CIS countries, Middle East and South Asia.

Asked about the budget earmarked for the purpose, Venkat said: "About Rs 500 crore has been kept ready for various group companies. This is all through internal accruals."

He said Emami has started the process, although it is in initial stages. "Few things are under exploratory stage and it will be difficult to give a timeline," he said.

All this, he said is to propel the company's growth further. "In the first nine months of the previous fiscal, we grew by 15 per cent. In this fiscal, we are looking at 20 per cent growth," he said.

In the nine-month period ended December 2007, the company reported net sales of Rs 404.48 crore with a profit after tax of Rs 57.8 crore.

Venkat said the company's growth drivers will continue to be the skin and hair care brands such as Boroplus, Navratna and Mentho Plus along with new product categories that are being planned. (PTI)

Indian stock market among worst performers globally in Q1 2008

NEW DELHI, Apr 13: Indian stock market has emerged as one of the worst performers globally in the first three months this year, with concerns of a possible slowdown in the US economy and surge in commodity prices impacting sentiments of emerging and developed equity markets, a report says.

According to a monthly review by global index provider Standard & Poor's, the world's emerging and developed equity markets were hit hard during the first quarter of 2008, losing 10.56 per cent and 8.95 per cent respectively, during the period.

"Near record commodity prices, 10-year US Treasury rates approaching their lowest level, a struggling dollar, and the potential global impact of a perceived US recession all fuelled market volatility and uncertainty during the first quarter," S&P's senior index analyst Howard Silverblatt said.

Among the emerging world equity markets, 15 of the 26 countries lost ground during the January-to-March quarter this year with India, China and Turkey emerging as the worst performers.

During the first three months in 2008, Indian equity market lost 28.55 per cent, while China and Turkey witnessed a fall of 24.65 per cent and 36.62 per cent respectively.

However, emerging markets which managed to give positive returns despite the global concerns, include Pakistan, Morocco and Chile, which emerged as some of the best performers during the first quarter of this calendar year.

Pakistan stock market has provided a return of 10.25 per cent in the reviewed period, Morocco performed robustly giving gains of 23.81 per cent and Chile gave 8.5 per cent positive returns, the S&P monthly global stock market review said. (PTI)

For most FY’08, inflation below RBI’s tolerance limit of 5%

NEW DELHI, Apr 13: Inflation has shot up to 7.41 per cent towards the close of last fiscal, but for most part of the year it remained within RBI’s comfort level of 5 per cent.

Though the year 2007-08 began with wholesale price inflation touching 6.09 per cent, it was successfully kept below 5 per cent for most part of the fiscal through tight RBI monetary policy and Government steps to boost supply of commodities.

Official data show that the inflation rate remained at sub-four per cent level in 23 weeks and between 4 and 5 per cent in 16 weeks of the last fiscal.

Wholesale prices rose between 5 and 6 per cent year-on- year for 8 weeks, between 6 and sub-seven level for three weeks. For last two weeks of the fiscal, it was 7 per cent and 7.41 per cent respectively.

The rate is expected to come down as a slew of measures announced by the Government like ban on export of non-basmati rice, extension of ban on pulses and cut in import duties on food items came into force from the beginning of this fiscal, analysts said.

The Reserve Bank of India is scheduled to announce the monetary policy for this fiscal on April 29.

ADB expected inflation to fall to 4.4 per cent this fiscal.

The ADB projected that these duty cuts will have an impact after 2-3 weeks, while global banker Lehman Brothers has expressed apprehension over the efficacy of such fiscal sops and trade policies to tame the soaring prices.

The US-based investment banker said in a report that encouraging imports to augment domestic supply will mean importing at higher global prices.

The very fact that global food and commodity prices are rising, implies that India is not alone in facing high inflation.

In the region, Sri Lanka is facing inflation of 20.2 per cent, Mangolia 9 per cent, Pakistan 7.8 per cent, Bangladesh 7.2 per cent. Though China has much less inflation of 4.8 per cent, although in recent times it has touched double digits. Even in Japan, prices rose fastest since February 1981.

Elsewhere, the prices in Spain rose at highest rate of 4.5 per cent in 13 years in March, while Germany had 26-year high inflation of 7.1 per cent. (PTI)