NEW DELHI, Apr 29: Competition watchdog CCI has approved the proposal of HSBC to acquire retail and commercial assets of Royal Bank of Scotland (RBS NV) and wealth management business of RBS Financial Services (RBS FSPL) in India.
In an order, the Competition Commission of India (CCI) noted that HSBC and RBS FSPL have relatively very few branches in India and there was presence of a large number of banks that provide services similar to the services provided by HSBC, RBS NV and RBS FSPL.
“Considering the facts on record and the details provided in the notice given under sub-section (2) of Section 6 of the Act and the assessment of the proposed combination is not likely to have any appreciable adverse effect on competition in India…”
“…Therefore, the Commission hereby approves the proposed combination under sub-section (1) of Section 31 od the Act,” the CCI while approving the proposed merger.
In July 2010, UK-based RBS had announced it would sell off its retail and commercial banking business in India, worth USD 1.8 billion (about Rs 8,500 crore then), to British banking major HSBC.
RBS, which received a 45.5 billion pound bailout from the UK government post the 2008 financial crisis, would sell its retail and SME business in India for a premium of USD 95 million, which would be over the adjusted net asset value of the bank’s businesses in the country.
As on March 31, 2011, HSBC and RBS together have 81 branches in India.
HSBC in its submission to the CCI had said except for some of the branch licences to required to continue its business, RBS NV would surrender its branch licenses.
“HSBC would apply to the RBI for obtaining the licences for its new branches to continue the business being acquired under the proposed combination,” CCI said quoting HSBC’s submission.
Even after the sale, RBS has said it would continue to retain its wholesale and investment banking businesses in India. (PTI)

NEW DELHI, Apr 29: The Finance Ministry is likely to finalise a draft bill for setting up a holding company, that will raise resources from the market to meet capital requirements of the public sector banks, by May-end.
The Ministry, sources said, has already carried out consultations for the proposal to set up a holding company for bank capitalisation.
“We are shaping the bill. It will be ready by May-end,” a source said, adding that the draft bill is not likely to be tabled in the ongoing Budget session of Parliament.
The Ministry, the source added, will seek approval of the Cabinet for the draft bill after conclusion of the Budget session, which ends on May 22.
In view of the huge capital requirement of the public sector banks to meet the Basel-III norms, Finance Minister Pranab Mukherjee in his Budget speech in March proposed to set up a holding company to fund PSU lenders.
In his Budget speech, Mukherjee had said that the government was examining the possibility of setting up a holding company for funding banks.
The government has repeatedly said it was committed to protect the financial health of state-owned banks and financial institutions.
According to estimates, the government would be required to pump Rs 2 lakh crore capital into the state-owned banks by 2020 to help them meet fund requirement and comply with the Basel-III capital adequacy norms.
For the current financial year 2012-13, the government has made a provision of Rs 15,888 crore for capitalisation of PSBs, regional rural banks and other financial institutions, including NABARD.
The government had infused more than Rs 20,000 crore in 2010-11 and Rs 12,000 crore in 2011-12 in various state-owned banks to help them maintain a capital adequacy ratio of more than 8 per cent. (PTI)

MUMBAI, Apr 29: Seed Fund Advisors, a venture capital (VC) fund that invests in early-stage companies, is planning to invest around Rs 80 crore in the current fiscal.
“We are planning to invest around Rs 80 crore in the current financial year, which will be done across all sectors,” Seed Fund Managing Partner Mahesh Murthy told.
The investments will be done from the VC firm’s second fund, Seed Fund-II. The sector-agnostic fund house has two funds. While Seed Fund-I has a corpus of Rs 65 crore, Seed Fund-II has a total fund of Rs 250 crore.
The early stage VC fund had already exhausted the first fund and is currently under divestment phase. From the second fund, it has given commitment of Rs 170 crore to various entities as of now and rest Rs 80 crore will be invested in this fiscal.
The VC firm, which has raised money from investors including pension funds of the Scandinavian countries and Commonwealth funds, recently invested around Rs 10 crore in a SMS search engine company named ‘Innoz’.
“The fund searches for innovative ideas and entrepreneurs to fund and ‘Innoz’ is one such company. At present, the company gets around 1 million searches a day from customers,” Murthy said.
Referring to divestment plans from existing portfolio companies, he said the company had exited from firms like Carwale and Redbus among others and made sounds return out of the investments.
“The returns were pretty attractive from these exits and we hope to maintain the trend in the future,” he said.
According to the company website, the portfolio of the early stage fund house comprises brand like Afaqs, Edusports and Fetise among others. (PTI)

NEW DELHI, Apr 29: Steel Ministry has directed all PSUs under its administration to set up a committee in each of them with the mandate to prepare annual targets and review performances.
The committee, a must from now on, should comprise at least five Board directors – one each from the PSU and the government and a minimum of three independent directors.
“Major PSUs like SAIL, RINL and NMDC should invariably have a sub-committee comprising one director of the PSU, one government and a minimum of three independent directors for preparing MoU targets and reviewing performance against those,” steel ministry has written in a letter to the PSUs.
As per the current practice, state-run units are required to prepare a target projecting their annual production, sales and revenue. This follows the signing of a Memorandum of Understanding (MoU) between the company and the ministry and the performance is reviewed at year-end.
Though there could be many reasons for the performance of a company in a particular year, the management often themselves in embarrassing positions because of the glaring mismatches between the projection and the actual performance.
During a quarterly review of the performance, Steel Minister Beni Prasad Verma expressed concern over MOIL’s falling profits and asked the company to improve its performance. (PTI)

NEW DELHI, Apr 29: Global telecom body GSMA has written to Telecom Minister Kapil Sibal against Trai’s recommendations on spectrum auction, saying it can lead to increase in telecom tariffs and thus reduce economic growth.
“High upfront reserve prices can deter operators in taking part in an auction and … High prices flow through into high mobile prices which can retard growth in the number of subscribers and limit call volumes leading ultimately in reduced overall economic growth,” GSMA Director General Anne Bouverot said in a letter to Sibal.
GSM Association (GSMA) globally represents GSM service providers and its member companies account for over 80 per cent mobile phone services market share worldwide.
Its communique against spectrum auction proposals made by Telecom Regulatory Authority of India, follows a joint letter written by honchos of top five GSM operators in India.
The top executives belonging to Bharti Airtel, Vodafone, Idea Cellular, Uninor and Videocon Telecommunications in their letter had said the high base price of spectrum recommended by Trai can raise mobile tariffs by up to 30 per cent. They also demanded the recommended price be reduced by 80 per cent.
The Telecom Regulatory Authority of India (Trai) has recommended base price of Rs 3,622 crore for a megahertz of spectrum at pan-India level that is around 10 times higher than the price for 2G licences in 2008, when A Raja was the Telecom Minister.
According to Trai recommendations, a minimum of 5 Mhz should be allotted, which means that pan-India spectrum in 1800 MHz band will cost Rs 18,000 crore. The reserve price is five times the base price of Rs 3,500 crore for 3G auction.
Trai Chairman JS Sarma in an investor conference call had said that recommendations “will only raise the average spectrum cost per minute by 1.5 paise on an average.”
Commenting on the high base price from spectrum, GSMA said “the short-term goals of maximising revenue for governments seeking to reduce budget deficits, are actually harmful to the development of the mobile sector and the socio-economic benefits it brings.”
GSMA in the letter said Trai’s “proposals disregard international best practice in spectrum policy and would jeopardise billions of US dollars of investment.” (PTI)

SEOUL, Apr 29: South Korea’s top regulator said Sunday it would receive preliminary bids for a 6 trillion won ($5.28 billion) controlling stake in Woori Finance Holdings by July 27, after two previous attempts to privatise the group floundered over a lack of bidding interest.
Authorities are under pressure to dispose of the stake before the current president, Lee Myung-bak, ends his term in office early next year. They face an uphill struggle with few domestic firms boasting the capacity for the deal and U.S. Fund Lone Star’s years-long struggle to offload a stake in Korea Exchange Bank still fresh in foreign investors’ minds.
‘We plan to pick a preferred bidder around early October,’ Kim Yong-beom, a senior official at the Financial Services Commission (FSC), told reporters.
A sale notice for the stake will be put up on April 30.
Kim told a briefing that it was open to every option, including a merger with a local financial holding  company.
The government, which owns 57 percent of Woori, has done little to change the sale framework, but there are more favourable circumstances for investors following a revised law that allows bidders to buy new shares of a merged company, the FSC said.
It’s unclear which potential bidders may emerge.  KB Financial Group Inc., seen by some analysts as the most likely local suitor, has said it lacks the financial capacity for the acquisition.
Kim Seok-dong, chairman of FSC, said earlier that the government had to fulfill the privatisation project before presidential elections in December.
The sale of Woori is the lynchpin of President Lee Myung-drive to reduce state ownership and recoup billions of dollars of taxpayers’ money spent to rescue the financial sector in the wake of the Asian financial crisis in the late 1990s.
JP Morgan, Samsung Securities and Daewoo Securities are managing the deal, as they did previously. ($1 = 1136.3000 Korean won)
(AGENCIES)

NEW DELHI, Apr 29: In the on-going tussle between the Centre and BJP-ruled Madhya Pradesh over supply of jute bags for wheat, the government has blamed the state for inaccurate and improper planning for the delay in supply of gunny bags for procurement of the crop.
After Madhya Pradesh threatened that it would stage protests against the Centre here, Food Minister K V Thomas shot off a letter to Chief Minister Shivraj Singh Chouhan insisting that the state is facing a crisis of jute bags as it had revised its estimates of bags requirement frequently.
“Planning for purchase of bags by Madhya Pradesh government was not accurate and it increased its initial projected requirement of 1.44 lakh bales of bags to be purchased from DGS&D (Directorate General of Supplies & Disposals) to 3.19 lakh bales,” Thomas said.
The supply of jute bags was bound to be effected in the state as the Madhya Pradesh government revised jute bags requirement frequently, while other states like Punjab and Haryana had firm planning in November 2011, he said.
Chouhan has set a deadline of April 30 for the Centre to meet his demand failing which the Chief Minister and his supporters may hold demonstrations in the capital. MPs from Madhya Pradesh will also join the agitation.
Leader of Opposition in Lok Sabha Sushma Swaraj, who is MP from Vidisha, had raised this matter in the Lower House last week. She demanded that the Centre immediately supply the jute bags as wheat was lying on the roads and will rot.
In the wake of these developments, Thomas has assured that the supply of jute bags would improve in the coming days.
He, however, said, “It may be impressed upon the state officials concerned to properly plan for their jute bag requirements in future in a more realistic manner.” (PTI)

MUMBAI, Apr 29: Private sector lender Yes Bank has set a target of achieving a balance sheet size of Rs 1.5 lakh crore by the turn of 2015.
“The remaining three years will see the bank witnessing accelerated growth with the objectives to achieve a balance sheet size of Rs 1.5 lakh crore, deposit base of Rs 1.25 lakh crore and advances of Rs 1 lakh crore,” Yes Bank Managing Director & CEO Rana Kapoor said.
He was addressing the top management, investors and analysts on the completion of two years of its Version 2.0 vision yesterday.
This confidence comes on the back of significant momentum on Casa and retail liabilities front, he said, adding that going forward, the bank will focus on branch expansion.
“We have a target of 900 branches, along with increasing headcount to 12,750 by March 2015,” Kapoor said.
The bank has 356 branches across over 200 cities and more than 5,600 employees as of March 2012.
He further said, “the focus for the next phase of growth is primarily to build on the strong underlying foundation created in terms of our expanding Casa deposit base by leveraging on the branches, products and human capital investments and further growing our corporate businesses.”
The city-based bank, founded in 2004, has seen a jump in Current Account, Savings Account (CASA) growth after it raised the interest rates on savings bank deposit rates to 7 per cent late last year.
As of Q4 of last fiscal, its CASA ratio grew to 15 per cent of total deposits, up by 4.7 per cent year-on-year. The bank has a CASA target of 30 per cent by 2015. CASA ratio is the ratio of the deposits in the form of Current Account & Savings Account to the total deposits.
For the fourth quarter, the bank reported a 33.6 per cent spike in net profit to Rs 272 on an income of Rs 2,051.4 crore.
Its net interest income improved 28.6 per cent to Rs 448.2 crore as against Rs 348.8 crore in the same quarter a year ago. (PTI)

NEW DELHI, Apr 29: The promoter holding in Vijay Mallya-led UB group’s Kingfisher Airlines has slipped below the psychological level of 50 per cent for the first time in about four years.
While over 90 per cent of promoters’ total shares in the troubled air carrier are pledged with the lenders, their total holding has now dropped to 47.28 per cent, from 50.20 per cent at the end of last quarter ended March 31, 2012.
After taking into account the shares pledged by the promoters, their total holding of non-encumbered shares account for a mere 4.67 per cent stake in Kingfisher Airlines, as per the latest shareholding data filed by it with the BSE.
While the promoters continue to hold the same number of shares (about 29 crore), their holding has come down in percentage terms due to increase in Kingfisher’s total number of shares, which in turn, has happened because of conversion of certain convertible bonds into equity last week.
The promoters’ holding has not declined because of any sale of shares by them in the airline.
Burdened under a huge debt pile, Kingfisher has been flying through turbulent times for many months now and its market value has seen a significant erosion of more than two-third in the past one year.
Its shares hit an all-time low of Rs 13 last week on April 25 and are currently trading just over Rs 15 level.
The promoters’ overall stake in the airline last stood below 50 per cent level about four years ago on June 30, 2008.
Analysts say that a holding below 50 per cent level as such does not trigger any risks for the promoters of a listed company, as non-promoter holding is generally widely dispersed among a large number of shareholders.
A high or low promoter holding has, at the most, has some psychological values attached to it, they added.
Any acquisition threat arises only after some other entity gets a higher stake than the promoters, and that too of at least 25 per cent as per the takeover regulations.
Speculations have been doing the rounds for a long time that some strategic or financial investors could acquire stake in Kingfisher, while there have also been talks of some ‘white knight’ coming to the rescue of crisis-hit airline.
The term ‘white knight’ is used for a friendly investor, who buys a sizeable stake from promoter or public investors in a listed entity facing outside takeover threats.
Besides Kingfisher, the promoter holding is below 50 per cent in three other UB group companies as well. These include McDowell Holdings (42.52 per cent), United Spirits (27.78 per cent) and Mangalore Chemicals & Fertilizers (30.44 per cent).
In addition, the promoter holding is just over 50 per cent level in UB Holdings (51.5 per cent), while it is much higher in United Breweries Ltd (74.82 per cent). (PTI)

MUMBAI, Apr 29: Tata Elxsi, a technology design company and part of the Tata Group, is in the process of expanding head count at its visual computing lab in Bangalore backed by a strong order book, a senior company executive has said.
“We have 330 people working in Bangalore and we are in the process of hiring more,” Tata Elxsi Head, Marketing & Sales, Asia, Kunaal Saigal told here.
The company provides engineering software and design services. It has four labs – at Andheri and Bandra in Mumbai, as well as Bangalore and Santa Monica in Los Angeles – which develop visual effects, 3D stereoscopy and animation for TV commercials, TV serials, movies, custom made content and computer games.
“Yash Raj Films (YRF) is our key client. We recently bagged a deal to do visual effects for its forthcoming movie called ‘Ek Tha Tiger’. We will also do visual animation for ‘Roadside Romeo’, a YRF-Walt Disney co-production, as well as UTV’s ‘Arjun, The Warrior Prince’. ‘Dhoom 3’ and ‘Bhag Milkha Bhag’ are the other movie projects we will be doing,” he said.
He declined to disclose the value of these deals, or the respective contributions to the company’s revenues from its divisions like embedded product design, industrial design, as well as systems integration, besides visual computing labs.
The company has also become a preferred partner of Microsoft’s computer games.
“We are a preferred partner for Microsoft’s Connect gaming platform. We have already worked on games like ‘Disneyland Adventure’ as well as ‘Rush’, which we delivered recently,” Saigal said. (PTI)