SPECIAL COVERAGE
CHANDIGARH

LUDHIANA

DELHI


THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

TCS fixes IPO price at Rs 850 a share
Mumbai, August 7
Tata Consultancy Services Ltd today fixed at Rs 850 the price of a share of Re 1 for its IPO which has become the largest public sale of shares by a private company in terms of issue size of Rs 5,420 crore.

UT-Mohali all set for IT boom
Mohali, August 7
Nasscom-KPMG reported last month that Chandigarh-Mohali would be the best place in India for business process outsourcing. The latest figures released by the Software Technology Park of India, Mohali, seconded Nasscom’s report that the information technology sector in Chandigarh-Mohali is all set to hit big time.

Traders protest Tanishq’s glittering offer
Kolkata, August 7
A top jewellery chain’s offer to exchange inferior gold ornaments with pure ones has irked traditional goldsmiths who say the scheme is ruining their business.

No collateral needed for study loans
New Delhi, August 7
The Centre today said that necessary instructions have already been issued to banks to provide educational loans without any collateral. These loans will be subject to a maximum limit of Rs 7.5 lakh for studying within the country while for overseas education, the limit has been fixed at Rs 15 lakh.

HAL to make doors for Airbus
New Delhi, August 7
Amid stiff international competition, public sector Hindustan Aeronautics Limited has bagged the biggest-ever export contract, from aircraft manufacturer Airbus Industries, for the supply of 1,000 doors for its planes.

Sporty Amby for UK roads
London, August 7
Hindustan Motors’ legendary Ambassador car will soon hit British roads in a new soft-top sports version. The new-look Ambassador will be manufactured by David Darrell, UK’s only dealer of the Ambassador.



Bollywood actress and beauty queen Neha Dhupia at the inauguration of a restro-bar in New Delhi
Bollywood actress and beauty queen Neha Dhupia at the inauguration of a restro-bar in New Delhi on Friday night. — PTI

EARLIER STORIES

 
A Kuwaiti pearl diver jumps off a dhow on Saturday during a training session in the Gulf waters off Kuwait City
A Kuwaiti pearl diver jumps off a dhow on Saturday during a training session in the Gulf waters off Kuwait City, 10 days before the start of the annual pearl diving season. Pearl-diving trips are held annually under the patronage of the Kuwaiti Emir in order to keep alive traditions that accompanied the once-important national pearl trade before the discovery of the oil wealth. — AFP

SBI cuts short-term rates
Mumbai, August 7
State Bank of India has reduced interest rates on short-term domestic deposits by .25 per cent with effect from August 9 while leaving the long-term rates unchanged.

Sebi GM’s house, office raided
Mumbai, August 7
The Central Bureau of Investigation today raided the residence and the World Trade Centre office of Sebi General Manager (Futures and Options) Narain Parekh. Sources said the raids were conducted at the office in South Mumbai and at Mr Narain's residence.

AVIATION NOTES 

Skies likely to be opened during peak period
The much-delayed aviation policy is yet to be announced, but liberalisation of the skies for a short three-month period is hinted at from November to help reduce congestion and off-loading of passengers. This will help in catering to the additional passenger load which peaks during the November-January period.

Investor guidance

Transaction tax and MFs
Q: Please clarify the following doubts: 1) Is it that the mutual fund investors (equity scheme) would have to bear transaction tax when mutual fund units are purchased? 2) Would they be entitled for concession of removal of long-term capital gains tax and reduction in short-term capital gains tax to 10 per cent?

  • Budget queries

  • Capital gains

Top









 

TCS fixes IPO price at Rs 850 a share
Tribune News Service and PTI

Mumbai, August 7
Tata Consultancy Services Ltd today fixed at Rs 850 the price of a share of Re 1 for its IPO which has become the largest public sale of shares by a private company in terms of issue size of Rs 5,420 crore.

Announcing the pricing for the IPO, TCS Chief Executive S. Ramadorai said the Tata Group company had also exercised the green shoe option of Rs 706 crore and part of the proceeds of the issue would be used for the transfer of Tata Sons’ TCS division to the IT company.

Tata Group chairman Ratan Tata said “We have long-term intentions to list the company on the international stock exchanges” but added “no time frame has been set”.

Referring to fixing the price at Rs 850 despite the oversubscription at Rs 900 per share, Tata said, ‘We priced the issue at this level to provide attractive upside to investors once the scrip is listed on the exchanges, which is expected to happen by end of this month”.
The offer, which closed last week, aimed to offload 55.45 million shares of holding company Tata Sons. Each share of Re 1 face value was being sought to be sold for between Rs 775 and Rs 900.

The TCS public issue, which closed on Thursday, was oversubscribed 10.32 times. In other words, TCS received applications for 571.84 million shares.

In all, the company received 1.35 million applications from institutional bidders, high net worth individuals and retail investors. The high net worth individuals’ component of the issue was oversubscribed 21.29 times while the qualified institutional bidders’ component was subscribed over seven times. Of the six million demat accounts active, almost 25 per cent were quoted as applicants in the TCS IPO.

At an upper band of Rs 900, TCS received subscriptions for 252.86 million shares, valued at Rs 22,758 crore. At Rs 850, there were applications for 194.85 million shares, valued at Rs 16,562 crore.

Bids for 75.99 million shares, valued at Rs 6,650 crore, were placed at the price of Rs 875. TCS received subscriptions for 27.98 million shares totalling Rs 2,308 crore at a price of Rs 825.

According to the company foreign institutional investors have applied for 210.25 million shares, individual investors for 163.28 million, corporates for 115.14 million and institutions for 10.77 million.
Top

 

UT-Mohali all set for IT boom
Chitleen K. Sethi
Tribune News Service

Mohali, August 7
Nasscom-KPMG reported last month that Chandigarh-Mohali would be the best place in India for business process outsourcing. The latest figures released by the Software Technology Park of India (STPI), Mohali, seconded Nasscom’s report that the information technology sector in Chandigarh-Mohali is all set to hit big time.

Recording an exponential increase, the quantity of software export from Punjab in the past two years has crossed the Rs 200-crore mark. Stating this, the Director, STPI, Dr Sanjay Tyagi, today said that they registered software export worth Rs 182.47 crore in the financial year 2003-2004 ending March 2004. From April to June 2004, the figure had already gone beyond Rs 50 crore.

The STPI, a Government of India body that regulates software export from Punjab and Chandigarh, is the sole registering body of all IT and IT-enabled industries in the region. Currently, it has over 200 industries from Chandigarh and Punjab registered with it. They include Quark and Infosys.

Mohali would cross the Rs 1000-crore mark in the next five years. “We are expecting Rs 300 crore worth of export from Quark and at least Rs 700 crore from Infosys,” added Dr Tyagi.

“By January 2005, we will have Infosys and Convergys starting operations at the Chandigarh Technology Park. We are expecting the DLF centre to be occupied by December, 2004. A Chandigarh Training on Soft Skills Programme has been started in collaboration with these companies to ensure that skilled persons are available to them. Also the IBM e-governance centre is likely to be in operation by October this year,” said Mr Vivek Atray, Director, IT, Chandigarh.

But for the time being over 75 per cent of the total export from this region is concentrated at Mohali. Quark and Infosys alone are responsible for 60 per cent of the total exports from the state, including Chandigarh.”

“Compared to the 38 other STPIs in India, STPI, Mohali, is now becoming one of the bigger grossers. “The best STPIs are exporting over Rs 2000 crore worth of software. We would be at half our potential in five years,” said Dr Tyagi.
Top

 

Traders protest Tanishq’s glittering offer

Kolkata, August 7
A top jewellery chain’s offer to exchange inferior gold ornaments with pure ones has irked traditional goldsmiths who say the scheme is ruining their business.

Goldsmiths and jewellers have been organising protest marches in the city and demonstrating in front of the showrooms of Tanishq, the jewellery chain that has launched a new scheme called 19K=22K.

The scheme offers to exchange old and impure gold for pure 22K gold at one of the Tanishq showrooms.

But the Swarna Shilpa Bachao committee, an umbrella organisation of goldsmiths and jewellers in West Bengal, said the Tanishq offer is not only harmful for the traditional jewellery industry, but also misleading.

According to committee president Pradip Ghosh, the Tanishq offer implies that traditional goldsmiths and jewellers peddle in impure gold.

“It is insinuating when people, because of the Tanishq offer, ask us if our gold products are impure and inferior,” Ghosh said.

The jewellers said the goodwill of their business, which was so important in this trade, was being hampered because the Tanishq campaign had sowed seeds of doubt in the minds of customers.

He alleged the offer was misleading people as it was “unscientific and false”. He, however, did not explain how.

“Is Tanishq making no losses by offering to exchange people’s impure gold for pure gold?” Ghosh asked.

The committee is angry that the Tanishq campaign had suggested that 80 per cent of jewellers in the city sold inferior quality gold.

Goldsmiths and jewellers demonstrated in front of a Tanishq showroom on Friday, but the police stepped in before things turned ugly.

However, Tanishq said its offer was aimed at educating people about the impurity levels prevalent in the gold market and denied the company was trying to malign traditional goldsmiths or suggest they were cheating clients. — IANS
Top

 

No collateral needed for study loans
Tribune News Service

New Delhi, August 7
The Centre today said that necessary instructions have already been issued to banks to provide educational loans without any collateral.

These loans will be subject to a maximum limit of Rs 7.5 lakh for studying within the country while for overseas education, the limit has been fixed at Rs 15 lakh.

Banking Secretary N. Sisodia said the Indian Banks Association (IBA) had issued the requisite instructions to banks in this regard.

He said if students faced difficulties in getting loans, they could contact the Finance Ministry.

This is in pursuance of the announcements made by Finance Minister P. Chidambaram during his budget speech last month.

Under the previous education loan scheme in operation since April 2001, loans up to Rs 7.50 lakh and Rs 15 lakh were available for courses within the country and abroad, respectively. Collateral free loans were offered by banks subject to a maximum limit of Rs 4 lakh.

Under the revised scheme, banks will give educational loans without the requirement of any collateral with a maximum limit of Rs 7.5 lakh for domestic education and Rs 15 lakhs for education overseas.
Top

 

HAL to make doors for Airbus

New Delhi, August 7
Amid stiff international competition, public sector Hindustan Aeronautics Limited has bagged the biggest-ever export contract, from aircraft manufacturer Airbus Industries, for the supply of 1,000 doors for its planes.

The contract, worth Rs 380 crore, envisages supply of 1,000 ship sets of forward passenger doors for A319, A320 and A321 aircraft.

The deal was signed at the company headquarters in the French city of Toulouse recently by HAL Managing Director A. Saxena, Airbus Senior Vice-President Allain Flourens and Vice-President Eric Gillard.

Significantly, the Indian Airlines has decided to acquire 43 aircraft of these three categories.

HAL has already been exporting work packages for civilian aircraft of Airbus Industrie and the Boeing company of the USA and its performance has been credited with ‘no rejection’ and ‘no delay’ by foreign firms.

The signing of the contract has given a further impetus to HAL to get a good share of the global market. — PTI
Top

 

Sporty Amby for UK roads

London, August 7
Hindustan Motors’ legendary Ambassador car will soon hit British roads in a new soft-top sports version. The new-look Ambassador will be manufactured by David Darrell, UK’s only dealer of the Ambassador.

“With the rise in popularity of Bollywood films, the Indian Ambassador car has become quite fashionable,’’ Mr Darrell said.

He hopes after the new, soft-top version of the Ambassador for the British market, he might get a contract to design and build a hard-top version for India.

“For the past two years, I have been importing the Hindustan Ambassador as a classic car. Though the original car is still extremely popular, the design of the Amby is about 50 years old and the time is right to work on a new version of what is a design classic,’’ he said. — UNI
Top

 

SBI cuts short-term rates

Mumbai, August 7
State Bank of India has reduced interest rates on short-term domestic deposits by .25 per cent with effect from August 9 while leaving the long-term rates unchanged.

Interest rates on short-term deposits of maturity from 15 days to 45 days and 46 days to 179 days have been revised downwards by 25 per cent to 3.75 per cent per annum and 4.25 per cent per annum, respectively, the SBI said in a press note here today.

The domestic term deposits with a maturity period of seven to 14 days (for Rs 15 lakh and above) would henceforth be discontinued, the SBI said.

There is no change in the interest rates of term deposits with maturity period 180 days and above.

Senior citizens would continue to receive .5 per cent higher interest rates for domestic term deposits with maturity of one year and above.

Accordingly, interest for senior citizens for deposits of one year to less than three years and three years and above would be 5.5 per cent and 5.75 per cent, respectively, it added. — PTI
Top

 

Sebi GM’s house, office raided

Mumbai, August 7
The Central Bureau of Investigation today raided the residence and the World Trade Centre office of Sebi General Manager (Futures and Options) Narain Parekh. Sources said the raids were conducted at the office in South Mumbai and at Mr Narain's residence. His bank accounts have been frozen.

CBI sources in Delhi said the searches were carried out after the agency had registered a disproportionate assets case against the Sebi official last week.

The sources claimed that assets to the tune of Rs 1.5 crore were recovered so far which included possession of three flats in posh locations of Mumbai. — Agencies
Top

 

Bank strike

Kolkata, August 7
All 15,000 branches of the Regional Rural Bank throughout the country will join the all-India bank strike on August 24. The strike, called by the United Forum of Bank Unions (UFBU), a conglomerate of nine bank unions, seeks the immediate wage revision of nearly six lakh bank employees in the country. — UNI
Top

 
AVIATION NOTES 

by K.R. Wadhwaney

Skies likely to be opened during peak period

The much-delayed aviation policy is yet to be announced, but liberalisation of the skies for a short three-month period is hinted at from November to help reduce congestion and off-loading of passengers. This will help in catering to the additional passenger load which peaks during the November-January period.

A hike in the foreign direct investment has already been announced by the government. Apex fares on domestic sectors have been slashed, new carriers have expressed their desire to enter the Indian skies and established foreign airlines want to operate additional flights. These are healthy developments, but the civil aviation scenario remains bleak because airports are not properly equipped to handle the increased passenger traffic.

Several new ‘no-frill’ carriers have applied for licences to the Directorate-General of Civil Aviation. A majority of them will be granted permission as soon as the new aviation policy is announced.

Airline officials believe that there will be chaos if more players start operating flights from the international airports. “Where are the parking bays for more aircraft?” asked two officials at Indira Gandhi International Airport.

In the coming peak season, some foreign carriers are likely to be granted permission to operate as many flights as they want. This arrangement is indeed reciprocal. But the two national carriers, Air-India and the Indian Airlines, will be hard hit because they do not have additional aircraft to operate more flights. This arrangement may prove to be counter-productive.

India needs more experienced and competent pilots to operate commercial flights. Safdarjung airport is an ideal place to train pilots and operate helicopter services.

The officials feel that it will be a waste of money if the airport is converted into a green belt. Costly equipment and gadgets are installed there and the airport should be utilised for training purposes.
Top

 
Investor guidance

by A.N. Shanbhag

Transaction tax and MFs

Q: Please clarify the following doubts:

1) Is it that the mutual fund investors (equity scheme) would have to bear transaction tax when mutual fund units are purchased?

2) Would they be entitled for concession of removal of long-term capital gains tax and reduction in short-term capital gains tax to 10 per cent?

3) Would the mutual fund unit buyer (equity scheme) also have to bear the brunt of 50 per cent of the transaction tax of 15 per cent that the mutual fund company had to pay while buying the share?

4) Now that long-term capital gains tax is removed and the short-term capital gains tax is reduced, is there anything to choose between growth scheme and dividend reinvestment scheme of mutual funds?

5) U/S 195 of the IT Act Mutual Fund is required to deduct tax at source at 20 per cent on long-term capital gains and 30 per cent of the short-term capital gains from non-residents. Is this applicable now?

6) Is the period of treating capital gains as short term reduced from 12 months to three months in this year’s Budget proposal?

T.J.Simon

A: 1. Yes, the STT (Securities Transaction Tax) is applicable to equity-based MFs but not the debt-based ones.

2. The answer is in the positive.

3. When the MF buys the shares, it is required to pay STT. This cost may certainly be passed on to the investors, directly or indirectly.

4. As per the wordings of the law, the additional units allotted to the investor under a dividend reinvestment option would attract the provisions of STT. However, clarity on the issue is awaited.

5. Sec. 195 has not been touched by the Budget. The old provisions stay put.

6. No. The period is still 12 months. This period of three months pertains to dividend stripping either before or after the record date. It has been extended to nine months after the record date for MFs and also has been extended to bonus issues of MFs. The provisions for equities remain untouched.

Budget queries

Q: I have the following doubts about Budget-04:

1. From when are the STCG and LTCG taxation changes for equity/equity-based mutual funds applicable? If this is say, from a specified date ‘x’, then will it be applicable for shares/units bought before the date ‘x’, but sold after the date ‘x’? In your column dated 17/06/04, you have mentioned that this will be applicable for LTCG. Will it be applicable for STCG too?

2.Since STCG/LTCG tax treatments are different for debt-based mutual fund and equity/equity-based mutual funds now, will it be ok if I set off the gain incurred in debt-based mutual funds with loss incurred in equity/equity based mutual funds? Is the reverse also true?

3. Can the gains/losses incurred before date ‘x’ be set off with any loss/gain after date ‘x’?

4. Does it also mean that STCG before date ‘x’ will be added to other incomes to find the gross total income and STCG after date ‘x’ will be considered separately and will not be considered to calculate gross total income?

5. Are dividend/bonus stripping permitted for shares as before? If recently I have acquired some bonus shares, can I book short term capital loss selling the original shares?

6. Suppose I bought some mutual fund units long time back (more than a year) and the present NAV of those units are below my purchase price, will it be prudent to sell these units before date ‘x’, since any long-term capital loss after date ‘x’ will be ignored?

Nilay Hazra

A: 1. The provisions related with STT, LT and ST will be applicable from the date of publication in the official gazette.

2. Regarding the set-off, realise that if LT gain is tax-free, the loss is also tax-free and is not available for the set-off.

3. Before the date ‘x’, you should be guided by the current provisions.

4 to 6. The answer to all these queries is in the affirmative.

Capital gains

Q: I sell some shares within one year and some shares after one year and by the end of any financial year if the net result from investing in a portfolio of shares is a loss then where is the question of short-term capital gains or long-term capital gains due to sale of shares?

Shobha Pillai

A: The long-term capital gains on shares is exempt for tax and so is the loss. Therefore, the loss cannot be carried forward.

The short-term capital gains on shares is taxed @10 per cent. The short-term loss can be carried forward for a set-off against short-term gains in subsequent years, for eight years. Previously, since the LT gains were subject to lower incidence of tax, setting off LT losses against ST gains was against the interest of the revenue. Therefore, LT losses could be set off only against LT gains. ST losses could be set off both against LT and ST gains. Unsettled LT and ST loss were to be carried forward separately for eight years to be set off only against LT gains.

Now that the LT gains are exempt, ST loss can only be carried forward.
Top

  bb
BRIEFLY


Saudi billionaire arms dealer Adnan Kashoggi arrives at the 56th Red Cross Ball at the Salles des Etoiles of the Monaco Sporting Club
Saudi billionaire arms dealer Adnan Kashoggi arrives at the 56th Red Cross Ball at the Salles des Etoiles of the Monaco Sporting Club on Friday. Over 1,000 guests pay more than $1,000 each to attend the gathering, which is hailed as Europe’s largest charity event.
— AP/PTI

Rust Check
Kolkata, August 7
City-based PCP Technologies Pvt Limited has entered into a joint venture with Dominion Sure Seal Group of Canada to introduce Rust Check, an anti-corrosive liquid for automobile companies. The liquid will also lubricate all internal systems and keep the electrical connections intact. — PTI

Coates renamed
Kolkata, August 7
Coates India Ltd, a subsidiary of DIC Asia Pacific Pte Ltd, has been renamed ‘DIC India Ltd’. The DIC group, which is a market leader in printing inks, organic pigments and thermosetting resins, had agreed to lend its name to the Indian subsidiary which showed the parent company's long-term commitment to the local arm. — PTI

Coop societies
Solan, August 7
HP Governor V.S. Kokje today urged Himachalis, particularly the jobless youth, to strengthen the cooperative movement in the state as it had the potential of helping ease the unemployment problem. Mr Kokje, was speaking at a function organised by the Parwanoo Urban Co-operative Bank Ltd. at its local branch. He said that at present neither the government nor the private sector offered any meaningful scope for providing jobs. — OC
Top


HOME PAGE | Punjab | Haryana | Jammu & Kashmir | Himachal Pradesh | Regional Briefs | Nation | Opinions |
| Business | Sports | World | Mailbag | Chandigarh | Ludhiana | Delhi |
| Calendar | Weather | Archive | Subscribe | Suggestion | E-mail |