New Delhi, January 15
Petroleum Minister Murli Deora today ruled out withdrawal of subsidies to cooking gas and kerosene after March deadline.

''As per strict instructions of Congress president Sonia Gandhi, the subsidies on kerosene and cooking gas will not be withdrawn. The UPA chief has asked the Petroleum Ministry to supply the fuels at the same price,'' Mr Deora told reporters here.

OIL to launch IPO in 2007-08 Oil India Ltd (OIL) will launch an IPO offering 11 per cent of its total equity share capital in the second quarter of 2007-08. "We have an equity base of 214 crore shares. Of this, we propose to offer 10 per cent through an IPO and 1 per cent will be offered to the employees," OIL Chairman and Managing Director M.R. Pasrija said on the sidelines of the Petrotech conference here. The IPO is not divestment of government equity and so the proceeds will go to the company and not to the government. — PTI

However, the government is not keen on increasing the subsidy and cutting the prices of the two fuels.

In 2002, the government had said it would phase out subsidies on LPG and kerosene over three years. In 2005, the deadline on subsidies was extended to March 31, 2007.

Mr Deora told reporters here on the sidelines of the inaugural ceremony of Oil and Gas Conservation Fortnight that he would meet Chidambaram next week to review the central taxes on petroleum products.

The import tax on crude oil is now 5 per cent, while both gasoline and diesel attract a 10 per cent rate. The excise tax on both gasoline and diesel are 8 per cent, but crude oil is exempt from this.

The Oil Ministry wants the Finance Ministry to reduce the taxes on oil products so that refining and marketing companies can pass on the potential savings to the consumers.

On the liquified natural gas (LNG) from Iran, Mr Deora said the government was willing to pay more than the earlier negotiated price of $22 billion for supply of five million tonnes of LNG per annum for 25 years beginning 2009-end, with an option to buy an additional 2.5 million tonnes a year.

"We have been telling (Tehran) they should honour the first contract and then we could talk about the price," he said.

Mr Deora, ahead of the Iranian Oil Minister Kazem Vaziri-Hamaneh’s visit next week, said any LNG if bought over the five million tonnes level can be negotiated at higher prices.

While India wants Tehran to "honour" its commitment to supply the LNG to India at around $2.9 per million British thermal unit (mbtu), Iran, however, now wants over $4.50 per mbtu.

Mr Deora said, "We are looking forward to discussing two pending matters. One is our contract with them for LNG supplies, and the second the Iran-Pakistan-India pipeline."

The minister said a secretary-level trilateral meeting would take place in Tehran on January 20-21 to discuss the pipeline and pricing of gas to be supplied to India and Pakistan through the proposed $7-billion project.

Mumbai, January 15
Good quality wine will be available in supermarkets across Maharashtra at reasonable rates after the state government relaxed rules on their sale and rationalised the duty structure on wine.

Under the new excise regulations to be introduced later this week, organisers of parties, get-togethers and even small melas will be allowed to set up bars by paying just Rs 600 per day as licence fees. Earlier, wine was clubbed with hard liquor and only eating joints were permitted to serve alcohol. Daily licences were pegged at Rs 6,000 per day.

The fledgling wine industry in Maharashtra has been lobbying for permission to set up wine bars in public areas across the state in order to cultivate the taste for wine among the public. At present, the market is dominated by hard liquors and beer.

The relaxed rules come amidst the growth of the wine industry in Baramati, the constituency of NCP strongman Sharad Pawar. A new winery being set up in partnership with Pawar's family and Vijay Mallya's United Breweries group will bring more than 300 acres of land under grape cultivation within two years.

The Four Seasons Vintners company set up under the partnership will make wines using French and Italian technology, according to sources. It has acquired nearly 130 acres of land in Baramati and an additional 200 acres is in the process of being acquired. The company is also signing contracts with the farmers across 800 acres to grow grapes.

Naturally, Sharad Pawar has been lobbying for wine to be taken out of the list of prohibited alcoholic drinks. 

New Delhi, January 15
The RBI is unlikely to cut the statutory liquidity ratio (SLR) given the spurt in credit growth in December and the recent hike in the cash reserve ratio (CRR), even though the government decided to provide more flexibility to the central bank in using that tool, feel a clutch of bankers.

The RBI will announce policy measures in its credit review, slated for January 31.

The SLR is the binding requirement on banks to keep at least certain portion (currently fixed at 25 pc) of their deposits in liquid assets, mainly government bonds.

Citing inflationary expectations in the economy the RBI had recently effected a hike in the CRR to 5.5 per cent to suck out about Rs 13,500 crore from the system and a cut in the SLR would instead infuse more liquidity in the market, thereby almost nullifying the CRR hike, bankers believe.

"A 1 per cent cut in the SLR would release about Rs 25,000 crore in the system," Punjab National Bank CMD S.C. Gupta told PTI, adding that "the SLR is a weapon with the RBI, but no immediate use is expected...when the necessity arises the RBI may use it." Oriental Bank of Commerce CMD K.N. Prithviraj said, though the RBI would be armed with freedom to fix the SLR he did not foresee the apex bank to make major changes in the SLR in the near future as it would more than square-off the CRR hike.

Liquidity is already high in the system with bank credit growing at over 30 per cent. A spurt in credit growth in December by Rs 82,614 crore despite a hike in the CRR shows that a cut in the SLR would only inject more cash in the system and inflate inflation, which has already breached the threshold projected by the RBI for this fiscal.

"The RBI should not lower the SLR below 25 per cent since it will release a substantial amount to the system where the liquidity is already very high. This will further fuel inflation, which is at a very high level," Hinduja Group President (Finance) and CFO Prabal Banerjee said.

The Union Cabinet recently decided to promulgate an ordinance to remove the 25 per cent floor for the SLR, giving more headroom to the RBI on managing liquidity.

But, with inflation crossing 5.5 per cent and industrial production expanding to an 11-year high, top bankers and analysts feel the RBI would have to strike a balance between attacking the rising prices and easing liquidity in its credit policy review slated for January 31.

Prithviraj said the central bank would have to strike a balance between liquidity and inflation. "Liquidity is required for stepping up investment in the country and inflation is a danger." Indian Bank CMD K.C. Chakrabarty said checking inflation was the key target for the RBI. — PTI 

Mumbai, January 15
Market regulator SEBI said today it was considering allowing institutions to short sell in the capital markets and expects to see it through in the current calendar year.

"We will persuade people concerned that it is (short selling by institutions) needed and we hope it could come through in the calendar year 2007," SEBI Chairman M Damodaran said at the Ficci annual capital market conference here.

Short selling allows sale of securities that is not owned by the holder. However, the seller re-purchases the securities later at a lower price and returns it to the holder.

He also said SEBI had started work on the implementation of R H Patil Committee recommendations on strengthening the corporate bond market and results would be out soon.

On a separate exchange for small and medium enterprises (SMEs), the SEBI chief said the market watchdog was working on devising a model, which would facilitate smaller companies to tap the capital markets without lowering the bar for regulations.

Mr Damodaran said SEBI would actively encourage trade groups to be self-regulatory bodies and was looking into the issue of reducing the time taken by companies to tap the capital markets. — PTI 

London, January 15
General Electric (GE) has agreed to buy the aerospace business of Britain's Smiths Group Plc for $4.8 billion cash as it seeks to capitalise on a flood of new plane orders and robust US military spending. The two firms also said today they had agreed to set up a joint venture for their detection businesses to be owned 64 per cent by Smiths and 36 per cent by General Electric.

Smiths, whose aviation unit makes flight management systems, said it planned to return 2.1 billion pounds ($4.1 billion) of the proceeds from the sale to shareholders.

''This acquisition is consistent with our strategy to invest in high-technology infrastructure businesses that deliver strong growth, earnings expansion and higher margins,'' GE Chairman and Chief Executive Jeff Immelt said.

The aerospace industry is benefiting from rising US military spending and strong plane orders amid a flurry of new projects by planemakers Boeing and Airbus.

But the new work has come at a cost, and Smiths aerospace unit has been hit by higher development costs.

''The structure of the aerospace industry is changing — in particular its increased capital requirements and the growing importance of supplier scale, especially as the next generation of large programmes kicks in,'' Smiths Chief Executive Keith Butler-Wheelhouse said.

Smiths said it was aiming to close the deal in the second quarter of this year, and expected that it would allow the firm to pursue a ''progressive dividend policy''. 
— Reuters

Mumbai, January 15
Shares of Reliance Industries today surged nearly 2 per cent on the back of rumours of a stock-split announcement in the company's upcoming Board meeting.

A company spokesperson declined to comment but the market remained abuzz with rumours about a possible splitting of Reliance Industries' equity shares.

RIL has been known for shareholder-rewarding announcements like bonus issue and stock split and it would be no surprise if it comes up with a stock-split announcement.

The shares of RIL touched a lifetime high with the scrip jumping to Rs 1372.30 in intra-day trading on the BSE. The scrip gained Rs 24.55 to close at Rs 1364.65 on the BSE.

On the National Stock Exchange, RIL shares gained Rs 25.45 to close at Rs 1364.95. — PTI 

Mumbai, January 15
The Union Bank of India (UBI) has launched union double deposit scheme with an interest rate of 8 per cent per annum and value addition of insurance cover to the depositors. Chairman and Managing Director M.V. Nair said here today that the minimum amount of the deposit was Rs 1,000 with no ceiling on the maximum amount. The scheme would close on March 31, 2007. — UNI

Mumbai, January 15
Tata Consultancy Services, India's largest software exporter, today reported a 44.9 per cent jump in net profit to Rs 1,116 crore in the third quarter of this fiscal.

The total revenue during October-December 2006-07 stood at Rs 4,873 crore, up by 8.42 per cent compared to the same quarter in the last fiscal. The company added 55 new clients in Q3.