Faceoff between telcos, DoT over 3G roaming escalates
Catch ’em young: India Inc’s succession mantra
2012 will be year of mobile converged devices: Samsung
‘Policy paralysis can drag GDP growth below 7%’
Market to stay volatile, Q3 results critical
Faceoff between telcos, DoT over 3G roaming escalates
New Delhi, January 8
Filing an affidavit, the telecom operators have termed government’s move to question TDSAT jurisdiction as “a desperate attempt to avoid adjudication of the present dispute” and requested the tribunal to dismiss the department of telecommunications’s application moved last week.
The telecom operators have also opposed DoT’s submissions that for 3G they needed a separate licence. “DoT as a licensor should be aware that there is no 2G or 3G licence and the licence is common under UASL. This basic and fundamental error of perception colours the entire prospective and DoT’s action ,” the operators said in their reply.
The operators’ reply came over the new application moved by the DoT opposing tribunal’s jurisdiction to decide 3G roaming issue. The tribunal had directed the operators — Airtel, Vodafone, Idea, Aircel and Tata Tele — to file their reply on the government’s move.
Over DoT’s claim that tribunal cannot decide over any dispute under the licence agreements, the operators submitted that “the licence itself contemplates that any dispute under the licence will be adjudicated by the TDSAT”.
They further said that even section 14 of the TRAI Act says that TDSAT has jurisdiction “as the expert body to decide all disputes pertaining to the license between the licensor and the licensee“.
Moreover, in the present dispute, they have not challenged the validity of terms of their licence but they stand with it that it supports 3G roaming.
On the the Supreme Court’s recent judgement on the AGR issue cited by DoT in its application, the operators said that in that case TDSAT had struck down parts of the licence terms which authorized government to levy charges. Hence the apex court held TDSAT could not have done so as it did not have the power to go behind the terms of the licence.
On DoT’s plea that TDSAT should stay its proceedings and vacate the interim order passed by it as the same issue was sub judice before the Delhi High Court in a writ petition, the operators said the case has no significance and no notice has been issued yet.
“If the pendency of the public interest litigation was of such significance, then DoT ought not to have taken any precipitative action during the pendency of the said case,” the operators said.
Filing a new application, DoT has told TDSAT it could not entertain a petition seeking determination of contractual agreements and it was “not vested with the jurisdiction to grant declaration as prayed for”. — PTI
Girja Shankar Kaura/TNS
New Delhi, January 8
Even as the organizers, who include the Confederation of Indian Industry (CII), the Automotive Component Manufacturers Association of India (ACMA) and the Society of Indian Automobile Manufacturers (SIAM) took credit for the large crowds thronging the Auto Expo on the second day of public view of the exhibition, large number of exhibitors expressed dissatisfaction at the way things were being handled at the show, which organizers have been claiming to be the second largest in the world.
The auto fair’s organizers termed the descent of huge crowds as a “major success” for the event and CII even called the Auto Expo as the “king of all trade show” in India.
However, the exhibitors continued to fret at the at times unruly behavior of the crowd, which tended to even pass lewd comments at the models posing next to the vehicles on display.
“Being the king of all shows, it’s quite natural to have huge crowds. The challenge is to manage the high visitor levels keeping in mind the infrastructural constraints that the trade fair grounds has. In this direction, based on our previous years experiences we have already taken substantial actions”, said Rajive Kaul, chairman of the Auto Expo steering committee.
Exhibitors complained the venue was overcrowded on the first two days itself, as large number of passes were issued by the organizers even though these were restricted only for media and “VIPs”.
There have also been several complaints about no proper arrangements being available for commuting inside the complex. As was the case on Saturday, huge confusion prevailed on Sunday — both outside with people wanting to gain entry by any means as well as inside as the crowds refused to remain orderly.
As the “special invitee” passes, which the organizers had issued for the first two days were replaced by tickets for the general public, there were huge queues both at the ticket counters and the entry gates from early morning.
The scenes were equally chaotic inside as the exhibitors increased the number of guards posted inside the pavilions, who forced people to keep moving rather than standing still, which was creating chaos.
The latest edition of the biennial event witnessed the launch of two dozen car models by domestic companies and eight by global majors, besides eight motorbikes, scooters and bicycles by homegrown firms.
The show has participation from by 1,500 exhibitors from 24 countries, including the United States, China, Thailand and Turkey. The Delhi edition, which is considered to be one of the largest auto fairs in the world, is spread across 115,000 square metres of exhibition space.
Exhibitors said crowd mismanagement had left a bad taste on participants.
Reports regarding the reason for the chaos surfaced on the very second day of the event when the “special invitees” took over the pavilions forcing the exhibitors and the media to the background. There were also major complaints about the cleanliness in the complex.
It has now emerged the organizers issued one pass for every square metre of space booked by the participants, resulting in a total of about 115,000 free passes for the first two days.
The 11th edition of the Auto Expo will conclude on January 11. The event hopes to draw some 500,000 footfalls, including 30,000 exhibitors being allowed in every day.
New Delhi, January 8
“It is a fabulous opportunity for youngsters to be given leadership roles. Young people bring in a lot of energy, enthusiasm and will also be ready to challenge existing the status quo,” HR major Hay Group India’s director and leadership and talent practice leader, Mohinish Sinha, said.
In one of the much-awaited succession plans in corporate India, salt-to-software conglomerate Tata Group has named 43-year-old Cyrus Mistry as successor to chairman Ratan Tata, who will hang up his boots in December, 2012.
Youngsters are being groomed at various other companies as well. For instance, Rishad Premji, the son of software czar Azim Premji, has become chief strategy officer at Wipro.
Similar instances of young blood taking on a leadership role are reflected in the cases of Alok Kirloskar at Kirloskar group and Shravin Mittal (son of Sunil Mittal) at Bharti Airtel, who is serving as senior executive at a group company.
Aditya Mittal, the son of billionaire Lakshmi Mittal, has been serving as CFO at steel giant ArcelorMittal for quite some time.
At hospitality major Oberoi Group, Vikramjit Singh Oberoi is reportedly being groomed as a successor to his father P R S Oberoi, once the octogenarian hangs up his boot as chairman. Currently, Vikram is serving as chief operating officer and joint managing director of the group’s flagship firm EIH Ltd, while his younger cousin Arjun Oberoi is chief planning officer and joint MD.
Soon after the Vedanta group completed its acquisition of Cairn India, group chief Anil Agarwal’s daughter Priya Agarwal, 22, was named to the board of the acquired company.
Realty giant DLF has also seen a number of young members from the founder’s family joining the group in various positions. — PTI
2012 will be year of mobile converged devices: Samsung
New Delhi, January 8
Samsung has effected a price increase of some of its models by 3-5%, with the extent of the increase being from Rs 40 to Rs 800.
In an interview with The Tribune, Ranjit Yadav, Country Head, Mobile and IT, Samsung India said the firm was working on “democratization” of the smartphone market in India by offering a “smartphone for everyone”.
“We’re making smartphones available at different price points that cater to all sets of consumer audiences with rich features, thereby providing our customers with more choices — in terms of handsets, prices, applications and the platform that best suits their needs”, he said.
Samsung Mobile will launch anywhere between 40-42 new mobile models by the end of 2012, Yadav said. As of January 2012, 20 Samsung models are available in the sub Rs 5,000 range while 8-9 models are in the Rs 5-10k bracket.
According to a GFK Nielsen report, Samsung has emerged as the no. 1 smartphone player in India by the end of October 2011 in value terms with a market share of 32.3%.
Yadav said across all other mobile product categories, the brand has clocked year- on-year growth and also launched new product categories this year — the recent example being the Galaxy Note that fills the gap between a smartphone and a tablet.
He said Samsung’s strategy this year revolved around expansion of the Smartphone range with the launch of Galaxy, Wave and Omnia series, utilization of multiple operating systems, year of the tablets with the launch of Galaxy Tab 730 and 750.
On the channel strategy, Samsung has over the last year has strengthened the distributor infrastructure in tier 1 markets. Similarly in tier 2 markets, it has about 100-125 channel partners and the effort is to enhance awareness regarding the opportunity to build a profitable business with its products. “In tier 3 markets, we’ve deployed resources to engage retail, resellers and system integrators”, Yadav said.
New Delhi, January 8
Hoping that the economic scenario would improve in the new year, the eminent banker said he was hopeful that 2011 would be forgotten as a bad year and the government would press ahead with its reforms agenda.
If policy paralysis continues and agriculture growth does not happen, we could slip below 7%," Parekh said in an interview on a TV business news channel.
When asked whether Indian industrialists would stay away from investing in India and would look at overseas opportunities if the policy paralysis continues, Parekh said: "Well, that trend can accelerate."
"More and more Indians are investing abroad but the market is in India. Everyone knows that the desire for Indian businessmen is to first to invest in India. It’s a huge market, large population, large middle class, urbanisation happening. All factors are positive. Only if we can get our act together," he noted.
Parekh is a member of the prime minister's Council on Trade & Industry and was also part of a group of industry leaders and other eminent citizens that had written two open letters about the current state of affairs of the Indian economy and the need to address the concerns of a policy paralysis. These issues, along with the various efforts required for spurring investments, were also discussed at a meeting this council had with the PM last month.
Asked whether India could achieve 8% growth without addressing the issue of policy paralysis and areas of concern with regard to the reforms process, Parekh said: "I don’t think we’ll get 8%. We’ll have to be satisfied with 7%. The monsoon has been good for the last two years. We have agricultural growth of 3-4.5%, which ensures we’ll get to at least 7%. If policy paralysis continues and agriculture growth doesn’t happen, we could slip below 7%."
He, however, said there was a need to hope for the best. "We’ve to look at it differently today. We have to be positive. It is a new year. Let us put the past behind us, let us look what we can do and how we can get back to 8% GDP growth," he said. "The more you criticize the government and the more negative you are about the government, the confidence around you, the confidence of the people of the country, also takes a dip," he noted.
Parekh expressed confidence the PM would live up to expectations. "I’m confident he will. You’ll see a different set of guidelines and difference in speed at which decisions are taken after February... I’m very optimistic that the PM and his team have taken a view, have taken a decision, to not let 2011 continue," he added.
When asked whether a loss of confidence was the reason for corporates not investing in India, Parekh said: "I don’t know if they’ve lost confidence, but the risk of investments, the approvals, takes a lot of time, it’s always risky. They may put large amounts of money in a project if it doesn’t take off, then they’ll be blamed why did you spend so much of money? The risk and the negative accusations...," he said.
Asked about his wishlist from the government to change the mood, Parekh said steps are required to spur investment. "Secondly, interest rates have to come down gradually. Food inflation has come down extremely low, Interest rates have to come down to spur growth... Thirdly, the approval process has to be streamlined. Fourth, there are dozens of projects (that) are struck half-way, particularly in the power sector. These power projects have to be kickstarted again," he said.
Parekh said that pending reforms in areas like taxes, pension, banking and insurance were very critical, especially for the next generation.
"The other thing is, the government must reduce its expenditure. (Then), we must push social projects as 60% of our population, 6,000 million or so live in rural India. How do we make them put more money in their pockets, so that they do more consumption," he noted.
Asked whether business confidence in the country was lower than even 2008 levels, Parekh replied in the affirmative. — PTI
Q: I'm a government servant. I opened a PPF account on August 20, 1996 at State Bank of India's Main Branch in Lucknow. On August 24, 2001 I got this account transferred at State Bank of Patiala, Mohali. I understand this account will mature on April 1, 2012. I've never taken any loan against this account nor made any withdrawal, nor have I ever defaulted in the annual contributions. I'm now interested in extending this account to another five-year term. What is the correct procedure and time to extend this account? What will be the interest rate applicable on the amount accumulated as on March 31, 2012, and on the amount contributed after April 01, 2012? Is there any specific procedure to close the account?
— Prati Pal Singh
A: The PPF account can be extended before the expiry of one year or thereafter by filing Form H with the bank for such an extension. Presently the rate of interest payable in a PPF account is 8% per annum. However, a recent government notification has raised the interest to 8.6% p.a. The account can be closed by filing Form C along with surrendering the passbook and the bank will take further action with regard to closure of the account and payment of the balance to the account holder.
Q: I opened a Public Provident Fund account on April 20, 1982, which matured after 15 years in 1997. That year I extended it, unit by unit, for three units each of 5 years, that is, up to April 20, 2012, on which date 30 years would be completed. I paid the last installment of Rs 70,000 in April 2011 and don't intend to extend the account any more after April 20, 2012. Is the last installment paid in April 2011 the final one and will I get my dues on April 20 this year?
— DR Sharma
A: In case you would like to claim benefits under Section 80C of the Income Tax Act to the extent of Rs 70,000, you may deposit that amount before April 20. This should entitle you to claim the deduction for the current financial year in which Rs 70,000 has been deposited. You may not be able to get the dues on April 20 itself as it will take some time for the bank to complete the formalities. You have to file an application in Form C for closing the account.
Q: My friend who is a partner in a firm files his income tax returns manually. He has to get a tax refund for FY 2008-09 but till now hasn't received it. What is the way out to get the refund at the earliest and is there any timebound period within which the income tax department is supposed to give the refund?
— Rajesh Jogdand
A: The Income Tax Act, 1961 does not specify a time limit for the grant of tax refunds. However, a tax return is normally processed within one year of the date of filing and, therefore, the refund ordinarily should have been received by you within or after the completion of the aforesaid period. You may meet the assessing officer concerned with whom the return has been filed in case you haven't received the refund. You may also approach the ombudsmen appointed by the tax authorities if your request by the officer is not given due consideration.
History suggests turbulent market conditions are among the best times to invest in stocks. The bourses are likely to consolidate at the current levels for the next one year before the conditions are set for the next bull run. Investors with an investment horizon of three to five years will have an opportune time to create wealth from the equity markets, says Manish Bhandari
It is an unusual start for all the equity investors who lost a fortune in the stock markets for the last five years and witnessed the debacle of the Indian currency towards the end of 2011 amid a gloomy economic future. For them 2012 has come as a light at the end of the tunnel. The new year has brought hope for long-term investors as equity is generating a cash yield of 9 per cent per annum compared to a yield of 7 per cent per annum from commercial property, 2% 7 per cent per annum offered by residential property, and nil yields from precious metals and agricultural commodities.
By making the above mentioned thesis, my readers will surely question why I’m a charged bull by the economics offered by equity markets. My answer is - not yet.
The thesis is simple: The key factors of production in India (land, labour and cost of capital) are at their cyclical high, thereby restricting the market and margin expansion for companies. I differ with some experts arguing the revival of equity markets merely based on the current peaking of interest rate cycle. For the real takeoff, the majority of factors of production should come down from their cyclical high. Hence an interest rate cut, unless aggressive, will have limited impact on balance sheets of companies whereas the current economic slowdown will also bring about a correction in the real estate sector besides lowering labour costs.
My hunch is that by midyear the pessimism about the country’s economic situation would be at its highest, while avoiding any prediction on the results of key state assembly elections, which can swing the mood. History suggests turbulent market conditions are among the best times to invest in stocks. The bourses are likely to consolidate at the current levels for the next one year before the conditions are set for the next bull run. Investors with three to five years of investment horizon will have an opportune time to create wealth from the equity markets.
Property prices have peaked
Indian investors have displayed undying faith in two asset classes - real estate and gold - over the last decade. I firmly believe real estate prices have peaked for the next few years, after rising at a CAGR (compound annual growth rate) of more than 24% for the past decade, thereby leading to tenfold return in the last decade. The runaway returns from real estate can be compared to the manifold increase in gold prices we have witnessed between the years 19501 and 1980 (fifty fold) while increasing only fivefold in the next two decades. While at the current real estate prices, the affordability of buyers of both commercial and residential property has diminished considerably. The consumption in tier II and tier III towns is likely to be impacted by the notional loss of wealth in case of decline in real estate prices. Hence asset allocators should avoid real estate for now while building positions in equities with a three to five year horizon.
Agriculture may dominate scene
The moot question for investors will remain in which theme they should position themselves for the next 3-5 years to get manifold returns. If we analyze the Indian equity landscape of the last two decades, the theme of banking and commodities has dominated the period from 1994 to 1997 and technology and telecommunications from 1995 to 2000, while capital goods, construction and power has dominated the period from 2004 to 2008, giving more superlative returns than the bourses. My crystal gazing suggests the food and agriculture/agrochemicals related theme will dominate the scene from 2013 to 2017.
The thesis for tomorrow’s winner for investing is based on the affordability and aspiration of the masses leading to higher per capital consumption, years of underinvestment by both the public and private sector due to faulty policies, coupled with under representation in the stock markets. The burgeoning subsidy bill, pressure on the exchequer and high cost of foreign exchange will force policy makers to liberalize these sectors, companies coming to capital markets for equity to expand and creating opportunities for equity investors in existing companies.
Investors must use judgment
The rising consumerism in niche categories and inbound/outbound travel are other theme that will dominate the Indian scene for a considerable period of time. I’m wary of buying a consumption basket as a proxy of the Indian growth story. Valuations are running ahead of fundamentals for a lot of stocks. Hence investors have to use a lot of judgment on the margin of safety offered by businesses and undervaluation represented by stocks. With rising per capita income a lot of goods and services that were catering to a small section of population for the past decade have take a centrestage, increasing their presence at the national level with due representation on the stock markets. Having said that, it is always challenging to segregate fad from fashion as well as fair value of companies from a promising future portrayed by the financial media and pundits for individual investors. Investing as a profession is about research and judgment of value but equally about the temperament of an individual.
The author is CEO & managing partner, Vallum Capital Advisors, a Mumbai-based investment advisory firm. The views expressed are his own
Market to stay volatile, Q3 results critical
The bourses began the New Year on a positive note with the Bombay Stock Exchange Sensex posting a huge rally of 421 points on January 2, which helped the markets close in positive territory. The Sensex gained 412.81 points or 2.67% to close at 15,867.73 points. The National Stock Exchange Nifty closed the week with gains of 129.80 points or 2.81% at 4,754.10 points.
The broader indices like the BSE 100, BSE 200 and BSE 500 gained 2.69%, 2.75% and 2.69%, respectively, while the BSE MidCap gained 2.42% and the BSE SmallCap rose 2.78%.
Some of the beaten down sectors in recent times recovered smartly during the week, with the BSE Bankex gaining 6.37%, BSE Capital Goods up 5.94% and BSE Metal rising 5.19%. The BSE FMCG, which has been rising in recent weeks, closed marginally down at 0.08%, led by Hindustan Unilever that lost 2.65%.
In individual stocks Tata Motors gained 13.87%, JSW Steel was up 11.68%, ICICI Bank rose 9.64%, Larsen & Toubro gained 8.44% and Tata Steel was up 8.34%. On the losing side Hero Honda lost 8.92%.
The week was positive on the institutional front as well with foreign institutional investors buying stocks worth Rs 692 crore while domestic institutions sold stocks valued at Rs 291 crore.
The rupee was comparatively steady and closed the week at Rs 52.72 against the US dollar.
The coming week will see volatility creeping into the market and the first of the big quarterly results from Infosys will be declared during the week. The rupee’s depreciation will prove positive for Infosys and it would be important to see how much it changes the profits for the firm.
The market has seen taxfree bond issues receiving a huge response from qualified institutional buyers and high net worth individuals and an adequate response from retail investors. The recent bond issues from NHAI and PFC were oversubscribed on day one for the QIB and HNI portion but remained open as the retail portion was yet to happen. NHAI closed its issue last week and PFC will do so in the current week. These issues offer interest that is taxfree at coupon rates of 8.2% for 10-year duration and 8.3% for 15-year duration. The current week will also witness the second tranche of bonds with income tax benefits under Section 80CCF from IDFC, L&T Finance and SREI Infra coming to the market.
The stock market looks like it will continue to make attempts to go up and a breakout above 4,800 for the Nifty and 16,000 for the Sensex looks imminent. It will be important to note whether the markets are likely to sustain the breakout or not. Any failure to breakout and then sustain could be a bearish indicator for the bourses.
The Sensex has support at 15,687, then at 15,482, than at 15,351, then at 15,135 and finally at 14,855 points. It has resistance at 16,024, then at 16,128, then at 16,360, then at 16,775 and finally at 16,884 points.
The Nifty has support at 4,695, then at 4,629, then at 4,587, then at 4,532 and finally at 4,422 points. It has resistance at 4,803, then at 4,836, then at 4,911, then at 4,968 and finally at 5,043 points.
Right now equity investors need to be cautious.
The author is founder of KRIS, an investment advisory firm. The views expressed are his own