Daily Excelsior...Business

Railways allow foreign bidders for land development .....

Coal Ministry to allot 92 mt coal to
ensure long-term linkages

NEW DELHI, Jan 3: The Coal Ministry today decided to allot a whopping 92.38 million tons of coal to ensure the much needed long term linkages to 236 sponge iron plants, 73 cement making units and 224 captive power facilities.

"The recommendation of the standing linkage committee in this connection has been approved by Minister of State for Coal Dasari Narayan Rao. The 236 sponge iron units with a total production capacity of 41.5 million tons located in 13 states have been sanctioned long term linkages of 19 million tons of coal per annum," a top Coal Ministry official said.

Of these 236 sponge units, 84 are located in orissa, 48 in Chhattisgarh, 36 in West Bengal, 27 in Jharkhand, 15 in Andhra Pradesh and 8 each in Karnataka and Maharashtra.

About 194 units have already started producing 10.38 million tons of sponge iron a year while another 42 with a capacity of 4.12 million tons will be commissioned soon, he said.

A total of 73 cement plants located in 14 states with an annual capacity of 116.8 million tons have also been granted long term linkage of 21.4 million tons a year.

Of these cement making units, 43 are being expanded to contribute 55.6 million tons, while another 30 are greenfield projects with projected capacity of 61.2 million tons.

Twenty four units are located in Andhra Pradesh alone with a production capacity of 46.25 million tons per annum.

"A total of 224 captive power plants in steel, cement and other sectors have also been approved long term linkage of 53 million tons per annum," he said.

These captive power plants are expected to generate 9,211 megawatt of power and most of these are to be commissioned. (PTI)

IOC to sell Rs 2,000-cr bonds in Jan

NEW DELHI, Jan 3: Public sector Indian Oil Corporation will sell bonds worth Rs 2,000 crore this month to tide over a financial crunch due to non-revision of fuel prices, its Chairman Sarthak Behuria said today.

"The company was losing Rs 165 crore per day on sale of petrol, diesel, LPG and kerosene, and was facing a shortfall in working capital fund," Behuria said here.

Crude oil prices crossed 100 dollar a barrel mark yesterday evening in New York, triggering a possible Government response to reduce the under-recoveries by public sector oil firms.

Indian Oil, Bharat Petroleum and Hindustan Petroleum are projected to lose Rs 69,753 crore on fuel sale as the Government has not allowed them to raise prices in line with the price of imported crude.

IOC Director (Finance) S V Narasimhan said: "We are optimising inventory, reducing working capital and maximising throughput to mitigate the impact of rising crude oil prices."

The company’s borrowings, which stood Rs 27,000 crore on September 30, 2007, have risen to over Rs 29,000 crore as it borrowed money to meet the working capital requirement in the absence of remunerative fuel prices.

IOC was selling petrol at a loss of Rs 9.20 a litre, diesel at Rs 10.9 per litre, LPG at Rs 332 per cylinder and kerosene at Rs 19.9 per litre. (PTI)

M&M raises prices across models, spares Logan

NEW DELHI, Jan 3: Carmaker Mahindra and Mahindra today said it would increase prices across all its models in a range of Rs 1,000-10,000.

The company has, however, kept its entry-level Sedan Mahindra Renault Logan out of the purview of the price rise.

"We have increased the prices across all models, except Logan, from January one. The price hike has been necessitated due to increasing raw material prices," a company spokesperson said.

Various carmakers, including Maruti Suzuki and Hyundai Motors, had earlier said that they would raise prices due to escalating raw material costs.

Mahindra today launched a limited edition variant of its Multi-Utility Vehicle (MUV) Bolero, priced at Rs 5.98 lakh (ex-showroom, Delhi)

The company intends to sell 1,000 units of the limited edition Bolero in the country. (PTI)

REL launches range of diamond
jewellery, eyes growth drivers

BANGALORE, Jan 3: The diamond and jewellery company Rajesh Exports Limited launched a range of international diamond jewellery brands today and said bulk exports are expected to constitute only one-fourth of its total revenues after five years as it focuses on better margin areas.

Bulk exports constitute 92-93 per cent of its total revenues, which are expected to clock Rs 8,000 crore for the year ending March this year, according to REL chairman Rajesh Mehta.

He told reporters here that the Bangalore-headquartered company would concentrate more on private label exports, diamond jewellery and retail — which offer better operating margins — as bulk export share in overall business is targeted to be brought down to 25 per cent in five years.

Mehta pointed out that while bulk exports offered operating margin of 3.5-4 per cent, it was 14 per cent in case of retail, 20 per cent for private label exports and 35 per cent for diamond jewellery.

Meanwhile, REL is eyeing to reach out to 100 countries with its nine range of diamond jewellery under different brands, uneveiled today, over the next five years.

He said the nine ranges consist of 700 sets of jewellery including traditional, western and Arabian styles, appealing to a wide spectrum of customers and for various occasions such as daily, party and wedding wears, while the affordability factor has been kept in mind.

The company is already in discussions with diamond jewellery distributors and retail chains overseas such as Zara and JC penny for strategic distribution agreements, he said.

"We want to enter into strategic agreements with two distributors/retails in each country", Mehta said, adding, diamond jewellery sales are expected to top Rs 250 crore in the next fiscal.

In India, these ranges would be available in the rel showrooms branded "Laabh jewellers".

Responding to questions, he categorically ruled out offloading a stake in the company, and said there is enough liquidity to drive and fuel business over the next three years.

According to him, recession in the US would not "affect too much" as the American market constitutes only 15 per cent of the company’s total exports. (PTI)

SBI revises interest rates on term deposits

MUMBAI, Jan 3: Country’s largest lender State Bank of India has revised interest rates from tomorrow on domestic term deposits and reset the maturity period.

Deposit of 46 to 270 days earning an interest of 5.25 per cent has now been reset into deposit of 46 to 90 days earning interest of 5.25 per cent.

The deposits of 91 to 180 days will earn a high interest rate of 7 per cent and 181 days to less than one year will earn 7.5 per cent, a SBI release said.

Deposits of one year and up to 10 years duration have also been converted into buckets of one year to less than two years earning high interest of 8.75 per cent and two years to up to 10 years with interest rate of 8.5 per cent.

For senior citizens, the new deposit categories will be one year to less than two years with 9.25 per cent interest rate and two years and up to 10 years with 9 per cent interest.

Short term deposit of 15 to 45 days will continue to earn an interest of 4.75 per cent. (PTI)

Bajaj launches online investment and
stock broking platform

NEW DELHI, Jan 3: Bajaj capital venture, part of Bajaj Capital Investor Services Ltd, today announced the launch of ‘just trade-its’ online investment and stock broking services with a target of 1,00,000 accounts across thousand towns of India by the end of 2008.

"We would like to take our client base to 100 thousand accounts with ‘just trade’ by the end of this year in all the 1,000 towns of the country," MD (Bajaj Capital Ltd) Rajiv Deep Bajaj told reporters at the luanch of the website.

The website will offer stock broking, Mutual Funds & IPO services through a single online platform to Indian as well as NRI investors.

Just trade will offer online financial planning, ability to invest in 12 leading mutual funds, insurance as well as international trading.

The investors would also be able to transact online advice and support from the relationship managers at 150 branches across India.

The site will have initially two packages of Rs 599 and Rs 999 a month.

"We will have tie ups with multiple banks, with ICICI and HDFC Bank already on board. We are now looking for more banks, including public sector banks.

Bajaj Capital Ltd is India’s leading financial planning and investment advisory company for last 43 years with a clent base of nearly one million. (UNI)

UCO bank’s FPO plan may be delayed

NEW DELHI, Jan 3: Public Sector UCO bank’s proposal to raise money through a follow on public offer may be delayed by over a year, as the Government is unlikely to clear capital restructuring plan of the bank this fiscal.

"The capital Rejig proposal is under active consideration but it would take some time before it is finalised," an official source said.

The bank would have to delay its capital raising plan by 1-1.5 years, he said.

Subsequent to tweaking the capital structure, the bank intends to raise money from FPO to meet its credit needs and expansion plan. Conversion of capital into preference shares would allow the bank further headroom for raising resources, he added.

The Kolkata-based bank has a capital base of Rs 800 crore, of which Rs 600 crore is held by the Government and the remaining by public and financial institutions. The paid-up capital is higher than that of State Bank of India and Punjab National Bank.

"A part of equity capital would be converted in to preferential shares as per the RBI norms, the official said.

At such a high base, the bank’s earning per share is not very attractive and would not help the bank to raise significant amount of capital. So, in the larger interest of the bank, the decision would be taken on restructuring its capital so that it has less paid-up capital, the source said.

Shares of the bank were trading at Rs 84.05, up 3.13 per cent on the BSE. (PTI)

Railways allow foreign bidders for land development

NEW DELHI, Jan 3: Foreign bidders will be roped in by the railways for commercial development of vacant land in Delhi and Kanpur.

A decision has already been taken to develop 10 sites across the country commercially and expression of interest from developers invited.

Though the process was earlier confined only to Indian bidders, now with the new guidelines issued by the Ministry of Finance, foreign entities will also be allowed.

However, the foreign bidders can only bid for a site which is more than 10 hectares in size as per the guidelines.

"Since the sites in Delhi and Kanpur are more than 10 hectares each foreign bidders would be allowed there to participate in the bidding," a senior Railway Ministry official said and added the last date of submission of expression of interest is January 30.

There are about 700 acres of railway land in 107 sites across the country which has been shortlisted for commercial development on public private partnership basis.

The 10 sites selected for commercial development in the first phase are in Delhi, Kanpur, Gwalior, Vizag, Kolkata, and Bangalore.

The report of the feasibility study for commercial development of the 10 sites spread over 265 acres of land has been submitted to the Rail Land Development Authority (RLDA).

The RLDA, a statutory authority under the railways ministry, was set up by an amendment to the Railways Act, 1989, for the development of vacant railway land for commercial use. "The purpose is to generate revenue by non-tariff measures," said the official.

The feasibility study conducted by the IL&FS has recommended construction of group housing societies, integrated township and marketing complex in these places.

RLDA had organised a pre-bid conference last month where more than 45 big developers had participated. Now with the doors thrown open for foreign bidders, the bidding is expected to be more aggressive.

However, the construction of hotel at railway land has found approval only in Bangalore in the feasibility report.

The railways hope to earn about Rs 500 crores from the sites. (PTI)

Relief to sectors under "stress": Chidambaram...........

NEW DELHI, Jan 2: Next month’s union budget will focus on maintaining high growth and give "relief" to sectors under "stress" such as those affected by the rupee appreciation, according to Finance Minister P Chidambaram.

In the minister’s book there is no no such thing as an "election budget" although he acknowledges that his next budgetary exercise will be the last "full budget" of the UPA Government. If elections are held on time before May, 2009 then there will be a vote-on-account next year.

As he prepares his fifth consecutive budget, Chidambaram says he has no no worries other than about some sectors under "stress" which he would address.

Chidambaram admits that delivery of promised goods and services has not not been satisfactory. But he is of the view that there is enough time for improvement in this area.

He said 16 months between now now and the scheduled time of Lok sabha elections was a lot of time. "Delivery has not not been satisfactory. 16 months is enough time to improve the delivery of goods and services."

Confident of a 9 per cent economic growth in the current fiscal, Chidambaram said that "the thrust of the budget (2008-09) will be to maintain high growth and ensure that the growth process endorses and includes larger and larger sections of the people."

Growth, he emphasised, is an imperative. "Inclusive growth is what we must work for. It requires hard work. It requires better governance. It requires delivery of goods and services."

Chidambaram said "there is no sector which is worrying me. There are some sectors which are under stress. For example, one reason the rupee appreciation has caused some stress to some sectors. We will address these causes to the extent possible and give them some relief."

His remarks assume significance against the backdrop of the steady rise in the value of the rupee in the last one year touching upto Rs 45 against US dollar in July last year.The Commerce ministry estimates that the appreciation could lead to a loss of Rs.53,000 crore to exporters in 2007-08.

Otherwise, the minister felt, all sectors were doing reasonably well in terms of production. "If there is a slow-down in demand in some sectors like housing and real estate, that is a result of a conscious policy to moderate the demand in these sectors.

Refusing to accept that the next budget will be an election-budget, the minister said he did not not think that budget decide elections.

"What dedcides elections are our capacity to deliver what you say. Budgets only give outlays and budgets don’t ensure outcomes. Between outlays and outcomes there is something called governance and delivery.

"We must deliver on the kilometres we pormised, on the villages that we promised electricity and water, on the invest that we say will be made on the units of electricity will be generated," he said.

Chidambaram said budgets certainly raise expectations and we support these expectations with financial outlays. It is the outcome of the budget that will decided whether we had delivered or not .

Chidambaram said in the last three and half years the government has delivered on a number of fronts. "We had delivered on rural employment, education, rural health care, roads, generation of electricity and transport and communications.

Reviewing the performance of the economy in the year that just ended, he predicted a nine per cent growth of the Indian economy in the current fiscal and dismissed fears that a global depression may affect India.

He said the challenges in the new year were the external financial sector and the food front domestically.

"It has been a good year for the economy despite uncertainty in the external world and some internal difficulties, especially on the food front. The year will return a rate of growth of 9 per cent," Chidambaram said.

In the last four years of the UPA Government, the economy has clocked an average 8.6 per cent growth and maintained that a five-year average of 8.6 per cent "is by all means an impressive record".

However, the Finance Minister emphasised that he was not minimising the challenges ahead.

"The external sector remains uncertain. In fact, the uncertainty may have deepened in the last few months because of unravelling crisis in several segments of the financial sector.

"Domestically on the food front we keep our fingers crossed on rice procurement, wheat production and procurement. If all these turn out to be favourable then I think the pressures will ease. There is no question of relaxing the vigil on the food front because food is the most important driver of prices in India," he said.

Asked about fears of a global depression affecting the Indian economy, Chidambaram said the most pessimistic outlook has projected a growth of 4.5 per cent to 4.7 per cent in 2008 in world output. "We should not not be affected by the slight dip in the output."

About the sub-prime crisis in the US economy, he dismissed any prospects of that hitting the Indian economy. "The sub-prime crisis does not not have a first order impact on India because Indian banks and financial institutions are not not exposed to the sub-prime market."

The Prime Minister had recently only said that the sub-prime crisis could have a slow-down impact on other economies which could have an impact, he said in reply to a question.

On the food front, the minister said the Government needs to address some structural bottlenecks and the inefficiencies in the system.

"There are gross inefficiences in the Public Distribution System in the manner in which we distribute fertiliser subsidies and products such as kerosene and LPG. Some of the inefficiencies are well-known like diversion of items like kerosene in PDS and pilferage. We need to plug the wastages and leakage."

Talking about inflation, he said the issue was really the food prices. "All other prices are under control. There have been occasional flare ups. Onion prices go up one day and come down another day. Edible oil goes up one day and comes down the other.

"I am basically worried about the supply-demand mismatch. We have requested the ministries concerned to do a more rigorous and realistic asssessment of supply and demand met the gaps through import and through adquate supplies in parts of the country where there are inadquate supplies." (PTI)

ASCI pulls up top FMCG companies for misleading advertisements.........

NEW DELHI, Jan 2: Hindustan Unilever, Henkel India and Proctor and Gamble have been pulled up by the advertising Standard Council of India (ASCI) for misleading advertisements during July-September in 2007.

The FMCG majors were among total 11 advertisers against whom complaints were upheld by the Consumer Complaints Council (CCC) of ASCI during the period.

Hindustan Unilever had to modify a TV commercial of its product Vim dish wash liquid which according to the CCC was a misleading advertisement. The commercial against which complaint was made claimed that ‘just one drop enough. New Vim drop has 10 times more lime power than the bar’.

Based on the complaint, the advertiser had to provide proof and substantiate that ‘one drop’ of Vim could produce the cleaning effect as visually depicted and claimed in the voice over of the TV commercial.

Eventually the commercial had to be modified as the claim mentioned in the advertisement was misleading as the ‘cleansing protocol’ provided in the report submitted by the advertiser did not appear in the advertisement.

Similarly, Henkel India claimed that ‘each drop of prill has active ingredients which removes grease better than the bar’ and according to the CCC, claim mentioned in the advertisement was not substantiated adequately.

Subsequently, the advertiser conducted the cleaning efficiency test with an independent lab for which they have provided a copy of the report.

Even Proctor and Gamble had to assure appropriate modification of the TV commercial which claimed that one tablespoon of ‘Tide’ was sufficient for washing a bucket full of clothes.

According to a complaint, the advertiser contradicted its own statement in the advertisement of ‘1 spoon’ being required when actually ‘1 scoop’ is required as mentioned on the pack.

Besides the leading FMCG firms, United Spirits, Coca Cola India, Perfetti Van Melle, Mahindra Renault, KBM Marketing and Rajvansh Clinic were other companies against which complaints were upheld by the CCC during the period. (PTI)

Maruti Dec sales up 6.88 pc ..............

MUMBAI, Jan 2: Car market leader Maruti Suzuki India Ltd (MSIL) today reported a 6.88-per cent increase in its car sales in the domestic market during December at 58,401 units against 54,640 units in the corresponding month last year.

In all, the company sold 62,515 vehicles in December 2007 which includes 4,114 units of exports, MSIL said in a statement.

In the A2 segment comprising hatchbacks Alto, Wagon-R, Zen and Swift, the company reported a marginal increase of 2.89 per cent in sales at 39,575 units compared to 38,461 units in the same month last year.

Sales of flagship Maruti 800 continued to skid, dropping by 1.35 per cent in November at 7,190 units against 7,289 units in the same month a year ago.

In the MUV segment comprising Gypsy and Grand Vitara, the company reported a 29.58-per cent growth in sales during the month at 311 units.

Exports in December grew 75.43 per cent to 4,114 units against 2,345 units a year ago. (PTI)