Daily Excelsior...Business

Maruti’s Alto set to cross one-million mark

Govt may consider FDI in specific retail sectors: Nath

Non-Cong ruled states do better in implementation NREG scheme

Rangarajan Committee likely to submit report to PMO next week

Reliance Retail gets one loyal customer on every square foot

NEW DELHI, Feb 10: Mukesh Ambani-led Reliance group's retail juggernaut seems to be gaining scale uninterrupted, despite hiccups like political protests, going by the success of its the customer loyalty programme.

Reliance Retail, within the four months of rolling out its first store in November 2007, has touched an outlet base of 500 stores in various formats, spanning three million square foot of occupied space in various cities.

This expansion of the retail space has been achieved alongside the company's customer loyalty programme -- Reliance One -- which has also touched a membership base of three million customers.

The average of one loyal customer per every square foot of retail space is probably the highest and fastest loyalty programme amongst all the retail companies in India, according to industry people who did not wish to be identified.

Reliance Retail, a 100 per cent subsidiary of the country's most valued firm Reliance Industries Ltd, is targeting to make its loyalty programme one of the top 10 loyalty card base in the worldwide retail sector by 2012.

Reliance One, a pre-paid facility which allows customers to start using it right from the point of purchase, is valid across all the nine different formats of Reliance Retail stores.

Building on the success of Reliance One, the company is also seeking to become "the distributor of choice" for all financial services companies with an all-India footprint at every product level, said an industry source. (PTI)

Market turmoil wipes off over $100 bn from investors' wealth

MUMBAI, Feb 10: Barely 40 days into the new year and India Inc has seen its market value eroded by more than Rs 4,00,000 crore amid turbulent stock market conditions.

Interestingly, the country's 30 blue-chip companies, which constitute the market's benchmark Sensex, account for nearly the entire loss.

According to the latest data available with the Bombay Stock Exchange, the total market capitalisation of all the companies listed there currently stands at Rs 57,53,230 crore.

This represents a loss of Rs 4,16,755 crore from the level it stood at as of December 31, 2007 -- the last trading day of the previous year, when it stood at Rs 71,69,985 crore.

In the US currency, the loss amounts to about 110 billion dollars, bringing the total market cap to close to 1.7 trillion dollars.

While the market traded on a relatively stronger note during the first few days of the year, the latter half of January saw the stocks plummeting, tracking the weak worldwide cues.

The Sensex rose by close to 1,000 points in the first 10 days to reach a life-time high of 21,206.77 points on January 10, but battering on an almost daily basis since then has pushed it to below the 18,000-level.

As against a closing of 20,286.99 points on December 31, the Sensex settled at 17,464.89 points on February 9.

The total market capitalisation of 30 Sensex companies currently stands at Rs 24,45,249 crore, according to BSE data, down from Rs 28,61,341 crore as of December 31.

This represents a loss of Rs 4,16,092 crore for the Sensex companies so far in 2008 -- representing about 99.8 per cent of the across-market loss. (PTI)

Hinduja Group to expand auto biz

NEW DELHI, Feb 10: The Hinduja Group today said it is expanding its global automotive business with plans to widen the product portfolio of its commercial vehicles and foundries by foraying into components, construction equipment and technology.

The group has rechristened LRLIH Ltd, the holding company of Ashok Leyland Ltd and Ennore Foundries Ltd, to Hinduja Automotive Ltd (HAL) and said it was targeting organic and inorganic growth in its latest initiative for global automotive business.

"Hinduja Automotive will be the exclusive platform for strategic ownership and related businesses of the Group in the automotive sector," the Group said in a statement.

It said HAL would expand its present interest in commercial vehicles and foundries to a wider range of products and services such as components (including iron and aluminium foundry products), construction equipment, technology and other adjacent areas.

Gopichand P Hinduja and Dheeraj G Hinduja will continue as Chairman and Co-Chairman respectively of the company.

The Managing Director and CEO of Ashok Leyland R Seshasayee will be appointed as Vice-Chairman of Hinduja Automotive with immediate effect, it said, adding that he would be responsible for strategising and developing the Group's vision for global growth of the automotive business.

Anders Spare, the current Chief Executive Officer of LRLIH, will continue as the CEO of HAL, the statement added. (PTI)

Germany's Clyde Bergemann to invest USD 5 mn in India

NEW DELHI, Feb 10: The Germany-based cleaning solutions provider to power plants, Clyde Bergemann, will invest up to USD 5 million (about Rs 1,977 crore) to set up a manufacturing facility in the national capital region (NCR).

The proposed manufacturing facility would be its first unit in India. The company is also scouting for partners in India.

"We have decided to set up a manufacturing base near Delhi. The facility will help us increase sales in India, which is a key market," Clyde Bergemann Power Group Chief Operating Officer Keith Mitchell told PTI.

He added that the company was also looking to form partnerships and joint ventures with Indian firms on project- to-project basis.

The facility, likely to be operational in six to eight months, would produce on-load cleaning systems for boilers of coal-based power plants.

Clyde Bergemann floated a joint venture Macawber Beekay with India's BSBK group 15 years back to offer material handling and ash handling technologies. Its clientele includes power firms such as NTPC, Tata Power and Larsen and Toubro. The equipment was mainly imported from Clyde Bergemann's plants in China.

The firm had also set up a subsidiary Clyde Bergemann Indian Ltd in June last year with an aim to further its business in the country.

Clyde Bergemann Power Group is part of the Clyde Blowers Group, which employs over 2,500 people worldwide with sales of almost USD 2 billion. It has three manufacturing units in China, two in the US and four in Germany. (PTI)

Korean SME team to explore biz potential with India

NEW DELHI, Feb 10: A Korean business delegation, comprising representatives of small and medium enterprises, will visit India soon to explore the possibilities of expanding bilateral trade.

The delegation, including Hyundai Machinery, Soriso and Jinsun Textile, would be in the capital on February 22 to hold one-to-one meeting with Indian companies.

The Korean SME companies, which also include S D Hitec, Funt and Bookwang Tech, mainly deal in textile machinery, oriental herbal cosmetics, automobile moulds etc.

The delegation would also be accompanied by a few officials of the Korean commerce ministry.

India exports goods worth 4.50 billion dollars to Korea, while its imports amount to about 6.30 billion dollars, according to a report by the Korean Ministry of Commerce, Industry and Energy.

India's trade with Korea is still very low as compared to China-Korea trade volume, which was reported at 140 billion dollars last year.

India's principal imports from Korea include auto parts, steel, lubricating and light oil, ships, synthetic resins, and handsets and other wireless communication parts, while its exports comprises naphtha, various ores, yarns and medical supplies.

The visit of the Korea SME delegation to India assumes significance as the two countries are working on a Comprehensive Economic Partnership Agreement (CEPA) to promote growth through liberal bilateral trade, investment and economic and technical cooperation.

The next round of talks for the CCEA between the two countries is scheduled to be held in April 2008. (PTI)

Oriental Bank to open rep office in Dubai in 6 months

NEW DELHI, Feb 10: In a bid to establish a toehold in the overseas market, the Oriental Bank of Commerce is planning to set up a representative office in the UAE in the next six months.

"We already have got RBI approval and are seeking regulatory permission from the UAE authorities for opening an office in Dubai," Oriental Bank of Commerce Executive Director Allen C A Perienra told PTI.

With this, the bank would get its first overseas presence, he said, adding it is expected to come up in the next six months.

On insurance venture with Canara Bank and HSBC Group of the UK, Perienra said, "We have applied for R1 with IRDA. Once it is through, we will apply for the R2 clearance."

The insurance company is expected to start its operations by rolling out its policy in June, subject regulatory approval, he said.

The venture will have an initial paid-up capital of Rs 200 crore, besides HSBC Insurance (Asia-Pacific) will pay Rs 125 crore premium to take 26 per cent stake in the venture.

While the majority stake holder Canara Bank, with 51 per cent share, will invest Rs 102 crore, OBC will contribute Rs 46 crore and HSBC will invest a total of Rs 170 crore.

The new life insurance entity will have exclusive access to customer bases of both the state-owned banks and HSBC in India. Canara Bank and OBC have over 40 million customers and a nationwide network of 3,600 branches.

However, to start with the joint venture will sell products from selected branches, Perienra said, adding partners are identifying and working out the strategy for the launch. (PTI)

More Garib Raths likely this year

NEW DELHI, Feb 10: The Railway Ministry is gearing up to announce a few more Garib Rath trains in the coming budget even as three pairs of Garib Rath, which were announced last year, are yet to be rolled out.

While the next rail budget is just a fortnight away, Kolkata-Guwahati, Ranchi-Bhubaneswar and Nizamuddin-Dehradun Garib Rath express trains are yet to be operational due to the unavailability of the coaches.

"The announcement made in the budget will be fully implemented before March 31," said a senior ministry official. "The coaches are being readied for the three Garib Rath trains at Kapurthala coach factory and they would be operational before the end of the current financial year," he said.

Railways had announced eight Garib Rath trains, the common man’s air-conditioned train, in the last budget out of which five have been rolled out.

It was promised in the last Rail Budget that all the state capitals would now be linked with Garib Rath trains in the coming years like Rajdhani trains.

Besides announcing some new trains, a major part of the budgetary resources would be allocated for infrastructure, including construction of bridges and new lines, said the official.

The total plan outlay to be presented in the coming Rail Budget is likely to be around Rs 36,000 crore while railways are expected to generate a substantial revenue to meet the growing expenditure through public-private partnership.

This time the focus is likely to meet most of the expenditures through internal resources, said the official.

Railway Ministry is expected to implement the recommendation of the Sixth Pay Commission in 2008-09 and the Government has asked the ministry to make a provision of Rs 9000 crore from its own sources to pay wages which are likely to be hiked by the pay panel. (PTI)

Maruti’s Alto set to cross one-million mark

NEW DELHI, Feb 10: The country’s largest carmaker, Maruti Suzuki India, is set to add yet another feather on its cap with its best selling hatchback model ‘Alto’ expected to cross the one-million market this week.

"The model is just about 2,500 units short of crossing the one-million mark, which we expect to achieve in the middle of the week," a company official said.

The top-end variant LXi, outsells the other two, Standard and Lx by huge margins, which suggests that today’s customers prefer cars that are high on features to bare models, the official added.

Since its launch in 2000, Alto has set many records such as the first model in India to cross two lakh sales in a single financial year, fastest to sell one lakh units in 150 days.

It took six years for the brand to clock five lakh units in the domestic market and since 2005-06 it continues to be the best selling model in India, dethroning MSI’s erstwhile bread and butter model M800.

The model had recorded its best monthly sales of 22,784 units in November 2007, the official said, adding it continued to average 20,000 units a month.

Besides the domestic market, MSI has exported over 1,52,300 units in overseas market, with the Netherlands at the highest (over 22,000 units). It has recently made inroads in Algeria and Chile selling over 7,000 units this fiscal in both the countries. This fiscal Alto exports has been 21,335 units (till January 2008). (PTI)

Govt may consider FDI in specific retail sectors: Nath

NEW DELHI, Feb 10: The Government may allow Foreign Direct Investment for specific sectors such as electronic and sports goods in retail if an expert study going into the issue foresees no impact on the neighbourhood mom and pop stores.

"We are expecting the ICRIER report on retail by the end of February. Certainly, we can be more flexible in areas of retail like electronics and sports goods. But, I want to see the whole report and make sure what I believe is correct and is backed by a report," Commerce and Industry Minister Kamal Nath said.

Nath said he had commissioned the Indian Council of Research in International Economic Relations (ICRIER) to come out with a study on retail to understand the impact of big retail on the small shops.

"Until I have the ICRIER report, I cannot do (open) retail. I have got to ensure these basic things. The point is that the neighbourhood store should not be hit," he said, adding that the retail has to be seen in a totally India- specific context and not in a general sense.

"Retail in India is not like retail in Malaysia or Thailand," he said.

However, opening sectors like electronics, sports goods, pharmacy and confectionery to FDI would not have an impact on the neighbourhood stores but would instead drive the Indian industry, Nath said.

Nath said the country’s "prime concern is that our small retailers are not dislocated. ...I want to find a job for the sons and daughters, nephews and nieces," and added that FDI in specific sectors would create additional jobs.

He said said an international sports goods brand entering India would not be competing with a kirana store, since that is a different type of retail.

Barring defence equipment, retail and the financial sector, FDI norms for all other key sectors have been liberalised, he said.

The Government liberalised on January 30 FDI norms in areas such as civil aviation, petroleum refining, credit information companies, industrial parks and commodity exchanges. However, retail was kept out of the FDI policy review since there were concerns that opening the sector would adversely impact the small retailers across the country. (PTI)

Non-Cong ruled states do better in implementation NREG scheme

NEW DELHI, Feb 10: The National Rural Employment Guarantee scheme may be the pet project of Congress chief Sonia Gandhi, but the non-Congress ruled states have done better in the implementation of the project.

The BJP-ruled Madhya Pradesh, Chhattisgarh and Rajasthan have come out with flying colours in implementation of the scheme. The data on financial assistance received by states for 2007-08 under National Rural Employment Guarantee Act (NREGA) shows that BSP-ruled Uttar Pradesh and the Left Front ruled West Bengal have also done reasonably well.

The only consolation for the Congress is Andhra Pradesh where the Y S Rajasekhara Reddy Government has secured the third place in terms of funds utilisation under the scheme.

Madhya Pradesh has received maximum amount of Rs 2,111.95 crore as financial assistance from the Centre for NREGA followed by Uttar Pradesh which has got Rs 1,170.41 crore for implementing the programme.

Andhra Pradesh with Rs 1,050.24 crore is at the third place, while Rajasthan and Chhattisgarh are in the fourth and fifth places with Rs 874.11 crore and Rs 845.43 crore of assistance respectively. West Bengal is in the sixth place with Rs 801.36 crore of financial assistance for NREGA.

The UPA government had released a total of Rs 9,865.77 crore in 2007-08 till December 2007 for NREGA, which is one of the biggest component of its ambitious Bharat Nirman programme.

The scheme, which completed two years of its implementation on February 2, has been expanded. The scheme covered 200 districts when it was launched in 2006. Last year, its scope was extended to more 130 districts.

Last week Rural Development Minister Raghuvansh Prasad Singh had announced that the scheme would now be extended to all the backward regions of the country. The allocation for the scheme too has been stepped up.

The Centre till December 2007 had released Rs 9,865.77 crore for the scheme for the current fiscal, which is an increase of 14 per cent over the fund release of Rs 8,640.86 crore in 2006-07 in this scheme.

With Bharat Nirman mandate aimed at building a critical infrastructure in rural India, the UPA Government seems to be on target on promoting its Aam Aadmi agenda. (PTI)

Rangarajan Committee likely to submit report to PMO next week

NEW DELHI, Feb 10: The Rangarajan Committee, which is considering relief for the rupee-hit exporters, is likely to submit its report to the Prime Minister’s Office this week, suggesting benefits that may be announced in the Budget.

"We are expecting the report of the Rangarajan Committee this week and the recommendations made are likely to be implemented in the Budget," a senior Commerce Ministry official said.

Prime Minister Manmohan Singh had asked C Rangarajan, Chairman of his Economic Advisory Council, to suggest relief measures for exporters, particularly those engaged in labour-intensive sectors.

Issues like service tax refund for more sectors and sunset clause on 100 per cent export-oriented units are also under examination by the Committee.

Commerce and Industry Minister Kamal Nath said last week it was not a package but a level-playing field that the exporters would be supplied with.

On extending further relief to the exporters, Nath had said, "We will have to take a view because exports are among the largest employment generating sectors. We are looking at not a package but more at neutralising aberrations like transport costs. Another issue is the refund of state level taxes," Nath had said.

He said while exporters were ready to deal with competition, they needed a level-playing field with countries such as Thailand, China, the Philippines and Malaysia.

"Indian exporters are not wanting any concessions or any subsidies but are asking for a level-playing field and that is a very fair demand," he had said.

State-level duties like octroi, mundi tax and electricity duty were adding to the burden of exporters. There is a 6-7 per cent element of state levies.

"We are trying to work out a mechanism on how we can do it," Nath had said.

The over 15 per cent rise in rupee value against the dollar last year has impacted exporters’ margins as well as resulted in decline in growth of several labour-intensive sectors like textiles, leather and handlooms.

Nath further said he has identified three sectors-toys, sports goods and leather-and would be giving priority to them and provide hand-holding to increase their competitiveness in the global markets. (PTI)