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SEBI wants 100% cover for listing of bonds
Mumbai, May 11
Market regulator SEBI today made it mandatory for companies seeking listing of corporate bonds and other debt instruments to maintain adequate security cover for them at all times. The 100 per cent security cover for listed debt instruments will have to be provided by listed as well as unlisted companies, the SEBI said while issuing the guidelines for listing agreement for debt securities.

NBFCs not keen on accepting public deposits
Chandigarh, May 11
High cost of funds, a rising default rate and apathy by policy makers has led to a number of non-banking finance companies (NBFCs) in the region to stop accepting public deposits. In past two years, almost 30 per cent of the NBFCs have migrated from category A (which are allowed to take public deposits) to category B (not allowed to accept deposits).

Citigroup on top among NRI-run firms
New York, May 11
Citigroup's Vikram Pandit may have been named among worst CEOs ever in America, but in terms of financial performance for the first quarter of this year, the banking behemoth has emerged as one of the best performers among the US companies run by persons of Indian origin.



EARLIER STORIES



Domestic car sales up 4 per cent in April
New Delhi, May 11
Domestic car sales showed their upward trend for the third consecutive month with April sales registering 4.2 per cent growth after prolonged decline that started in the second half of 2008. According to the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales in April went up to 1,02,899 units from 98,752 units in the same month last year, but it is too early to predict a recovery for the segment.

Travellers on Indian carriers to get higher compensation
New Delhi, May 11
Air travellers in Indian carriers are in for substantial increase in compensation for loss of lives and or of baggage and cargo on international flights with new rules coming into effect from June 30. As per the Ministry of Civil Aviation, new rules follow India's ratification of the Montreal Convention on the issue making it the 91st country to do so.
A man steers a kite buggy near Corus Steelworks at Redcar in England on Monday. Nearly 2,000 jobs are at risk at one of Britain's biggest steel plants after four major buyers pulled out of a contract, Corus said
A man steers a kite buggy near Corus Steelworks at Redcar in England on Monday. Nearly 2,000 jobs are at risk at one of Britain's biggest steel plants after four major buyers pulled out of a contract, Corus said.— AFP

ONGC to invest Rs 6,000 cr in increasing offshore output
Mumbai, May 11
With output falling from its ageing Bombay High and other Western Offshore fields, state-run Oil and Natural Gas Corp (ONGC) will invest Rs 6,000 crore in new and existing fields in this fiscal to raise output.

Maruti to up R&D headcount to 1,000
New Delhi, May 11
Japan’s Suzuki Motor Corporation (SMC) is looking at making India its global hub. The company’s Indian subsidiary would be investing heavily in research and development (R&D) over the next year and would also increase its workforce for the same.

Steel dumping continues as govt postpones safeguards
New Delhi, May 11
Corus, Posco, Arcelor besides other European, Korean and Japanese steel makers have booked orders to supply 5-6 lakh tones of steel to India. With the international steel prices plummeting to as low as $420-$430 per tonne, it is not viable to operate steel mills in any part of the world, said an executive of a steel manufacturing company.

‘US firm in race to buy into United Spirits’
New Delhi/London, May 11
The US buyout specialist Kohlberg Kravis Roberts (KKR) has joined the race to acquire a minority stake in Vijay Mallya-promoted United Spirits Ltd, says a media report.

BHEL abandons plans to produce offshore oil rigs
New Delhi, May 11
Unable to find a suitable partner for manufacturing (deep sea) offshore oil rigs due to huge investment requirement, state-run BHEL has decided to shelve the plans altogether.

 





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SEBI wants 100% cover for listing of bonds

Mumbai, May 11
Market regulator SEBI today made it mandatory for companies seeking listing of corporate bonds and other debt instruments to maintain adequate security cover for them at all times. The 100 per cent security cover for listed debt instruments will have to be provided by listed as well as unlisted companies, the SEBI said while issuing the guidelines for listing agreement for debt securities.

“The issuer shall ensure ... create and maintain security ensuring 100 per cent security cover for listed secured debt securities at all times and ensure that charges on the assets are registered,” the market regulator said.

SEBI further said while listed companies would have to make minimal disclosure while seeking listing of debt instruments, the unlisted companies would be required to provide detailed disclosures.

Debt securities include corporate bonds, government bonds, certificate of deposits, municipal bonds and other non-convertible debt instruments.

A company whose equity is listed on stock market, the regulator said, would have to make “minimal incremental disclosures related to the debt security ... since large amount of information is already in public domain”.

The agreement has been prepared by SEBI in consultation with the National Stock Exchange and the Bombay Stock Exchange.

SBI further said listed companies under the equity listing agreement with stock exchanges were required to disclose material developments on a continuous basis.

In case of those companies whose shares are not listed on stock markets, the market regulator said, the firms would have to provide detailed disclosures but fewer than those required under the equity listing agreement.

The regulator has already notified SEBI (Issue and Listing of debt Securities) Regulations, 2008, to encourage development of primary market for corporate bonds.

The market regulator said the issuer of debt instruments would have to inform the exchange about the credit rating, asset cover available and debt-equity ratio in a half-yearly communication. It will also have to notify the exchange regarding expected default in timely payment of interests or redemptions in respect of debt securities. Securities must be allotted to the public within 30 days of the closure of the issue, the SEBI said.

In case the allotment is not made or refund orders have not been dispatched within 30 days of the closure of the issue, the issuer will have to pay an interest of 15 per cent per annum.

In the cases, where the equity shares of the issuer are not listed on the exchanges, the issuer will "not forfeit unclaimed interest and such unclaimed interest shall be transferred to the Investor Education and Protection Fund”. — PTI 

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NBFCs not keen on accepting public deposits
Ruchika M. Khanna
Tribune News Service

Chandigarh, May 11
High cost of funds, a rising default rate and apathy by policy makers has led to a number of non-banking finance companies (NBFCs) in the region to stop accepting public deposits. In past two years, almost 30 per cent of the NBFCs have migrated from category A (which are allowed to take public deposits) to category B (not allowed to accept deposits).

It is learnt that in the past two years, around 40 NBFCs in Punjab, Haryana, Chandigarh and Himachal Pradesh have migrated from category A to category B. Thus only 82 odd NBFCs in the region are now allowed to accept public deposits, with most of these now concentrated around Jalandhar and Ludhiana.

This assumes significance as the RBI has been indirectly persuading ‘A’ category NBFCs to shift to ‘B’ category, by making rules and regulations tighter for the former category which accepts public deposits. Over the years, RBI has been indirectly promoting banks for retail mobilisation of resources, rather than the NBFCs. As a result, while the larger NBFCs in category A continue to thrive, the mid and small category finance companies have stopped accepting deposits and are being run by own resources.

Sources in the RBI said many of the NBFCs were voluntarily shifting to category B so that they could do hassle-free business, with their own funds and without being covered under the regulations of the RBI. “All category A NBFCs are required to file exhaustive quarterly forms, half yearly returns and an annual return with the RBI. 

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Citigroup on top among NRI-run firms

New York, May 11
Citigroup's Vikram Pandit may have been named among worst CEOs ever in America, but in terms of financial performance for the first quarter of this year, the banking behemoth has emerged as one of the best performers among the US companies run by persons of Indian origin.

While Citigroup bounced back into profitability in the first quarter of 2009, after five straight quarterly losses of multi-billion dollars, IT firm Cognizant Technology is possibly the only other American blue-chip company in this league to report a rise in profits for the same period.

In comparison, Indra Nooyi-led PepsiCo and Shantanu Narayen-led Adobe Systems posted declines in their first quarter profits.

ArcelorMittal also posted a billion-dollar loss in its first quarter net profit. The world's biggest steelmaker recorded a net loss of $1.1 billion in the quarter ended March 31, 2009, as against a profit of $2.4 billion in the year ago quarter.

Last month, business magazine Conde Nast Portfolio named Nagpur-born Pandit among the 20 worst ever CEOs in the American history. Besides, Forbes recently named Ayer among the most over-paid chiefs in the US in terms of shareholder return.

Citigroup, which has got three bailout packages totalling $45 billion from the US government since the beginning of economic crisis, reported a profit of $1.6 billion for the first quarter of this year. It had suffered a net loss of $5.1 billion in the corresponding quarter a year ago.

Franciso D'Souza-led Cognizant recorded an 11 per cent jump in profits at $113.13 million for the quarter ended March 31, 2009. In the year-ago period, the entity’s profit stood at $101.87 million. Revenues for the first quarter shot up to $745.86 million against $643.11 million in the corresponding period a year ago.

Adobe recorded a 29 per cent decline in net income at $156.4 million in the first quarter of 2009, compared to $219.4 million in the corresponding period a year ago. — PTI

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Domestic car sales up 4 per cent in April

New Delhi, May 11
Domestic car sales showed their upward trend for the third consecutive month with April sales registering 4.2 per cent growth after prolonged decline that started in the second half of 2008.

According to the Society of Indian Automobile Manufacturers (SIAM), domestic passenger car sales in April went up to 1,02,899 units from 98,752 units in the same month last year, but it is too early to predict a recovery for the segment.

Total two-wheeler sales in April also surged by 13.71 per cent to 7,00,995 units compared with 6,16,468 units in the same period last year. Bike sales, during the same month, was up 12.11 per cent at 5,62,357 units as against 5,01,592 units in the corresponding month a year ago, SIAM said.

SIAM, however, said it is too early to say the country's auto mart is on a recovery path.

“On a month-on-month basis, all the segments, except for the two-wheeler, recorded lesser sales compared with last month. Signs are not very encouraging and things are still very sensitive,” SIAM senior director Sugato Sen said.

The industry witnessed a total vehicle sales of 8,94,058 units as against 8,07,183 units in April this year, up 10.76 per cent, SIAM said.

In the passenger car segment during April, sales of car market leader Maruti Suzuki India increased by 8.61 per cent to 56,221 units compared to 51,766 units in the same month last year, SIAM said.

Hyundai Motor India Ltd also registered a growth rate of 3.49 per cent at 22,241 units as against 21,492 units a year ago.

Tata Motors' sales were marginally up at 11,202 units, while the same stood at 11,193 units in April last year.

In the motorcycle segment, market leader Hero Honda registered a 25.87 per cent surge with total sales of 3,48,132 units in April compared to 2,76,580 units in the year-ago period.

Rival Bajaj Auto's sales, however, plummeted by 22.88 per cent at 1,06,516 units as against 1,38,117 units in the corresponding month last year, SIAM said.

TVS Motors, too, registered a fall of 10.06 per cent in sales at 44,238 units as against 49,186 units.

Honda Motorcycle & Scooter India, however, saw its bike sales rising by 93.55 per cent at 39,136 units compared to 20,220 units in the year-ago period.

In the scooter segment, the total sales increased by 19.91 per cent at 97,129 units as against 81,002 units a year ago, SIAM said.

Honda Motorcycle & Scooter India registered growth of 13.47 per cent at 53,779 units as against 47,396 units in the same month last year.

TVS Motor's scooter sales were, however, down by 3.27 per cent at 17,805 units as against 18,406 units last year.

SIAM said commercial vehicle sales during the month dipped by 11.25 per cent to 29,842 units from 33,626 units in the year-ago period. — PTI 

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Travellers on Indian carriers to get higher compensation
Vibha Sharma
Tribune News Service

New Delhi, May 11
Air travellers in Indian carriers are in for substantial increase in compensation for loss of lives and or of baggage and cargo on international flights with new rules coming into effect from June 30. As per the Ministry of Civil Aviation, new rules follow India's ratification of the Montreal Convention on the issue making it the 91st country to do so.

Currently in case of death of a passenger, Indian airlines operating to international destinations give Rs 7.5 lakh as compensation. The new rules would raise this up to 100,000 special drawing rights (SDR) or over $66,500, that is almost Rs 33 lakh.

As per an IMF fact sheet, SDR is an international reserve asset created by the IMF in 1969 to supplement existing official reserves of member countries. SDRs are allocated to member countries in proportion to their IMF quotas. One SDR, a basket of global currencies created by the IMF, is equivalent to over $.665.

With regards to air passengers on international flights, hike would be similar in case of compensation for loss, damage or delay in baggage. The limit of compensation for passenger delay is 4,150 SDR per passenger. For delay, loss or destruction of baggage, the carrier's liability is limited to 1,000 SDR per passenger and for cargo to 17 SDR per kg, industry sources explain.
At present, the liability for uninsured baggage is about Rs 450 per kg and if insured, the compensation would be as per the insured value.

The Montreal Convention, 1999 supersedes all previous international instruments on air carrier liability. It applies to all international carriage of persons, baggage or cargo performed by aircraft for reward.

For death of a passenger, there is a strict liability of 100,000 SDRs. The carrier will not be liable beyond this limit if it proves that such damage is not due to negligence or other wrongful act or omission of the carrier; or such damage is solely due to negligence or other wrongful act or omission of a third party.

If the carrier proves that the damage was caused or contributed by the negligence and wrongful act or omission of the passenger or the person claiming compensation, it shall be exonerated to the extent of such negligence or wrongful act or omission.

In case of death or injury of passengers, the carrier shall make advance payments without delay to natural persons.

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ONGC to invest Rs 6,000 cr in increasing offshore output

Mumbai, May 11
With output falling from its ageing Bombay High and other Western Offshore fields, state-run Oil and Natural Gas Corp (ONGC) will invest Rs 6,000 crore in new and existing fields in this fiscal to raise output.

“Our capex for development of Western and Eastern Offshore fields for this fiscal is Rs 6,000 crore. It will be funded from internal accruals,” a top company official said.

The explorer is currently developing its eastern offshore Krishna-Godavari basin finds - G1 and GS 15.

“GS 15, a shallow-water field, will flow first gas from April next year. G1 will take time as it is a deepwater field, but will start production from April 2011,” the official said. ONGC envisages a production of 0.982 million tonnes of sweet or low-sulphur crude and 5.92 billion cubic metres (bcm) of gas over 15 years from G1 and GS 15.

“The two fields put together will produce two million standard cubic metres per day of gas. The onshore oil and gas processing terminal at Odalarevu, on the coast of Andhra Pradesh, is ready,” he said.

The gas to be produced has still not been tied up for sale, the official said, adding that the company hoped to sell it at market-determined rates. — PTI 

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Maruti to up R&D headcount to 1,000
Tribune News Service

New Delhi, May 11
Japan’s Suzuki Motor Corporation (SMC) is looking at making India its global hub. The company’s Indian subsidiary would be investing heavily in research and development (R&D) over the next year and would also increase its workforce for the same.

With Maruti Suzuki India (MSI) providing SMC with higher revenues than even the parent company, India has emerged as the major investment centre for the company.

While giving a sneak preview to the media of its latest offering to the country in Ritz, which would be launched later this week, MSI managing executive officer (engineering) IV Rao said: “Currently our R&D strength is 720 people and it will be increased to 1,000 by March, 2010. We are now looking out for more experienced people”.

SMC has already said India would be the global small car development hub outside Japan for other markets, he added.

Pointing to the kind of investment being made here Rao said the MSI's R&D centre was being developed to be at par with SMC's facility in Japan. It will also have crash test centre.

“From an engineering point of view, M800 and Omni will qualify for BS-IV norms. If these two were to be phased out, it will be a marketing decision," Rao said.

He said the company was also looking at refurbishing some of its existing models, including the former mainstay of the company the M800, making them compatible to Bharat stage IV.

The company would launch the country's first BS-IV emission norms compliant car Ritz on May 15 in both petrol and diesel variants. To be manufactured on the swift platform, Ritz would be placed in the premium hatchback segment with an eye on luxury.

It might just be priced a bit below Swift, which has been manufactured with attracting the youth and has emerged as the company’s fastest selling model.

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Steel dumping continues as govt postpones safeguards
Bhagyashree Pande
Tribune News Service

New Delhi, May 11
Corus, Posco, Arcelor besides other European, Korean and Japanese steel makers have booked orders to supply 5-6 lakh tones of steel to India. With the international steel prices plummeting to as low as $420-$430 per tonne, it is not viable to operate steel mills in any part of the world, said an executive of a steel manufacturing company.

India and China are the only growth engines and manufacturers from across the world are looking at to dump steel to keep the steel mills rolling. The government and the steel ministry have also decided not to take a decision in the matter and say they are yet to examine the issue in full detail.

“We feel that there is a need to consult the domestic industry and steel manufacturers and do a little more homework before we can take any decision on the imposing duty. We have asked the Directorate General on Safeguards (DGS) to consult the domestic (user) industry and come back to the board after 60 days (with recommendations), said Commerce Secretary GK Pillai after a meeting of the Standing Board on Safeguards,” it said. The board is headed by Pillai and has steel secretary as its members.

The industry is apprehensive and says the government is taking long time to take decision in the matter and it will be too late once the steel starts coming to the shores, which will be in another 3-4 months.

Safeguard duty, imposed to protect local industry from surge of cheap imports, has always been a bone of contention in world trade. Especially at this time when the steel mills are either shutting down or are operating at nearly half the capacity, taking a decision on this issues can be a political hot potato, said an industry observer.

US under Obama Administration, felt the heat over the issue, when it planned to impose safeguards to protect its domestic steel industry . There was no urgency to consider the safeguard duty, said Steel Secretary P K Rastogi.

These are interim recommendation ,there should be further examination, he added.

When asked if there could an injury to the local industry in view of non-imposition of the safeguard duty, Pillai said, we do not see any threat to the industry.

This dumping will have a cascading effect on the Indian steel industry in coming months, said steel industry source. “If the steel keeps getting dumped then we are likely to revisit the October- November situation where consumers postponed consumption waiting for a better price in future,” warn steel industry sources.

Steel producers, led by Essar Steel, Jindal and Ispat, had approached the government for immediate imposition of safeguard duty on key steel items.

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‘US firm in race to buy into United Spirits’

New Delhi/London, May 11
The US buyout specialist Kohlberg Kravis Roberts (KKR) has joined the race to acquire a minority stake in Vijay Mallya-promoted United Spirits Ltd, says a media report.

“It has emerged that Kohlberg Kravis Roberts, the US buyout specialist, has entered the race to buy a minority stake in United Spirits, the parent company through which Mallya owns Whyte & Mackay,” The Times has reported.

The report published online said KKR faced competition from the likes of Diageo, the British maker of Guinness stout and Gordon's gin, for the stake in United Spirits.

UB Group officials were not available for comment.

Earlier, Mallya had said four players, including Diageo, had shown interest in acquiring a minority stake in the UB Group.

However, Mallya had declined to divulge the names of other companies, citing confidentiality clause. — PTI 

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BHEL abandons plans to produce offshore oil rigs

New Delhi, May 11
Unable to find a suitable partner for manufacturing (deep sea) offshore oil rigs due to huge investment requirement, state-run BHEL has decided to shelve the plans altogether.

“We are abandoning offshore business. We tried our best to have a collaboration but we could not get one as the investments were heavy and we had to construct them (rigs) in West Asia,” BHEL chairman and managing director K Ravi Kumar said.

However, the company is continuing its onshore oil rigs business and is planning to expanding it further.

“We are doing onshore rigs with ONGC and Oil India Ltd (OIL),” Kumar added.

In 2004, BHEL signed a memorandum of understanding with state-owned OIL for the refurbishment and upgradation of their land rigs.

The company's primary business is manufacturing power equipment and it plans to augment its manufacturing capacity for supporting 15,000 MW electricity generation by the end of this financial year. — PTI

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BRIEFLY

IOC may cut its stake in Farsi fields
NEW DELHI
: Indian Oil Corp may cuts its stake in the massive Farsi gas and oil field in Iran as it faces financing pressure due to continuing losses on fuel sales. IOC holds 40 per cent interest in Farsi, where ONGC Videsh, the overseas arm of Oil and Natural Gas Corp, is the operator with an equivalent shareholding. Oil India Ltd holds the remaining 20 per cent. — PTI

NIIT bags Rs 84-cr order
MUMBAI:
Software training firm NIIT Ltd on Monday said it had bagged a five-year contract worth Rs 84.38 crore from the Gujarat government for providing computer education in 1,870 schools in the state. NIIT said it had bagged the order to introduce computer aided learning in 1,870 high and higher secondary schools for 9-12 classes in Gujarat. Earlier, the company had entered into a similar agreement with the Rajasthan government. — PTI

Four Soft bags Dutch contract
MUMBAI
: IT firm Four Soft on Monday said it had bagged a contract from The Netherlands-based cargo services provider Prime Cargo for providing freight related solutions. Four Soft Netherlands BV, a subsidiary of the company, has entered into a deal with Prime Cargo for providing its integrated freight forwarding solution, the firm said. However, the company did not disclose any financial detail of the contract. — PTI

Hitachi Data Systems tie-up
BANGALORE
: Hitachi Data Systems, a wholly owned subsidiary of Hitachi Ltd and the only provider of services oriented storage solutions, on Monday said it had partnered with Wipro Infotech for providing wide range of services, consultation and next generation storage solutions. — PTI

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