SPECIAL COVERAGE
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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

B U S I N E S S

ONGC gets nod for petrochem business
Dehra Dun, August 14
The government has given a green signal to Oil and Natural Gas Corp’s (ONGC) petrochemical plans but has discouraged the India’s largest oil and gas producer from foraying into fuel retailing.

Venantia of Namibia reacts after winning the Nokia Face of Africa competition in Sun City, South Africa, on Sunday.

Venantia (centre) of Namibia reacts after winning the Nokia Face of Africa competition in Sun City, South Africa, on Sunday. — AFP

i-flex acquires US firm for $122.6 m
Mumbai, August 14
IT solutions major i-flex has acquired US-based anti-money laundering firm Mantas for $122.6 million, in the largest ever all cash deal made by an Indian software company.



Models perform on the ramp at the Chikan Mahotsava, 2006, in Lucknow on Sunday night.
Models perform on the ramp at the Chikan Mahotsava, 2006, in Lucknow on Sunday night. — PTI

Economic Advisory Council projects 7.9 pc growth rate
New Delhi, August 14
The Prime Minister’s Economic Advisory Council, chaired by Dr C. Rangarajan, has forecast a near 8.0 per cent rate of growth in 2006-07, following three years (2003-2006) of 8.1 per cent growth. This will be the first time ever that the country’s economy would be growing at 8.0 per cent for a continuous span of four years.

Indra K. Nooyi Nooyi to be Pepsi CEO
New Delhi, August 14
PepsiCo, which is facing heat on pesticide residual issue in India, today named Indra K. Nooyi, Indian, as its worldwide Chief Executive Officer from October 1.

Aircel to get DoT letter for 8 circles
New Delhi, August 14
Competition in the cellular market, including the national capital, could soon be hotting up with the Department of Telecom clearing a proposal to issue Letter of Intent to mobile operator Aircel in eight of the 11 circles it had applied for licences.

SpiceJet to sell and lease back aircraft
Mumbai, August 14
SpiceJet Ltd has said it plans to sell 16 Boeing 737 aircraft for more than $1.1 billion to Nomura Babcock & Brown Co. and lease them back again.

Floods, blasts hit diamond trade
Mumbai, August 14
Last month’s serial bomb blasts in Mumbai and heavy flooding in Surat, the hub of the diamond cutting and polishing trade in the subcontinent, has left the gem and jewellery export trade reeling.

 K Ramakrishnan Andhra Bank scouts for acquisition
Chandigarh, August 14
Andhra Bank will now focus on geographical synergy so as to have a wider pan- India presence. Rather than opening new branches, the bank is looking to acquire smaller banks, use technology for internet banking and introduce seven-day banking. This was stated by the Chairman and Managing Director of Andhra Bank, Mr K Ramakrishnan, during a brief visit to Panchkula.                             
  K. Ramakrishnan

Securities Bill passed in Rajya Sabha
New Delhi, August 14
The Parliament today passed the Government Securities Bill which aims to consolidate and amend the law relating to government securities and its management by the Reserve Bank.

Corporate News
Fortis Financial to acquire stake in ACERC
Mumbai, August 14
Fortis Financial Services Ltd today said it would acquire a 28 per cent stake in ACERC Information Technology Ltd.

  • GMR ferro alloys arm

  • BHEL bags Rs 1,224 cr order

  • Bharat Alloys & Energy

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ONGC gets nod for petrochem business

Dehra Dun, August 14
The government has given a green signal to Oil and Natural Gas Corp’s (ONGC) petrochemical plans but has discouraged the India’s largest oil and gas producer from foraying into fuel retailing.

Petroleum Secretary M.S. Srinivasan said the company has been permitted to set up units to manufacture petrochemicals from residue from its refineries and using natural gas.

“Worldwide, refineries are being converted into refinery-cum-petrochemical complexes to gain from the high margins on petrochemicals. Naturally, ONGC would also be encouraged to set up petrochemical complexes wherever they have refineries or have a natural gas source,” he said.

The Rs 4,900-crore aromatic complex and olefin complex that ONGC has planned to set up adjacent to its subsidiary, Mangalore Refinery and Petrochemicals Ltd (MRPL) and the Dahej petrochemical complex in Gujarat are the natural extensions to get the maximum value out of refinery produce and natural gas respectively, he said.

On fuel retailing, he said, selling petrol and diesel was a losing proposition and compensation in the form of oil bonds for selling fuel below the cost of production was only available to public sector oil retailers — IOC, HPCL, BPCL and IBP.

“No such compensation mechanism is available to new players in this business, including ONGC,” he said, adding that the company board will take appropriate decision keeping the economics of the business in view.

Petroleum Minister Murli Deora had earlier this month told Parliament that ONGC had deferred its plan for development of petrol stations.

ONGC had been granted license to sell petrol and diesel and the company had envisaged setting up 1,100 petrol pumps but now the government was keen that it focused on exploration and production and not enter into a losing business. — PTI

 

OVL, Mittal may bid jointly for Kazakh block

ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, may rope in Mittal group for buying stake in Satpayev block in Kazakhastan, a top company official said Monday.

“Instead of going alone for buying the stake in Satapyev oil block we are looking at various options including bidding through ONGC-Mittal Energy Ltd (OMEL),” the official said on the sidelines of the ONGC golden jubilee celebration here.

ONGC and Mittal Group are partners in OMEL formed last year. The new company has identified Kazakhstan among countries that they would be looking at.

After months of studying the matter, OVL had in April indicated its preference for Satapayev out of two offshore blocks in Caspian Sea where Kazakhstan had offered India 50 per cent stake.

Satpayev block is owned by Kazakhstan’s national oil and gas company KazMunaiGaz. — IANS

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i-flex acquires US firm for $122.6 m

Mumbai, August 14
IT solutions major i-flex has acquired US-based anti-money laundering firm Mantas for $122.6 million, in the largest ever all cash deal made by an Indian software company.

The acquisition will be funded by preferential allotment of i-flex shares to the majority share holder Oracle at Rs 1307.50 per share.

After the conclusion of the deal, Oracle’s share holding will go up by 2.6 per cent to more than 55 per cent from the current 52.50 per cent, i-flex CMD Rajesh Hukku told reporters here today. The deal is likely to be concluded in 60 days time.

Mantas, which is a leading provider of anti-money laundering and compliance software employs 150 persons and has a presence in more than 100 countries.

The company’s revenue stood at $35 million during the last fiscal and the company has grown 25 per cent as against the year ago period during the first quarter of 2006.

“With Mantas we are completing the whole footprint of risk and compliance as it complements and strengthens i-flex’s Reveleus’s risk and compliance portfolio,” said Mr Hukku.

Mantas is likely to add to i-flex’s bottomline from the third quarter of the financial year 2006-07.

The deal is expected to provide i-flex an added advantage in the $20 billion anti-money laundering software market as Mantas is already an established player in the space.

The leading clients of Mantas include top banks and financial institutions like ABN Amro, Barclays, Citigroup, Merrill Lynch and Bear Streans. — PTI

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Economic Advisory Council projects 7.9 pc growth rate
Tribune News Service

New Delhi, August 14
The Prime Minister’s Economic Advisory Council, chaired by Dr C. Rangarajan, has forecast a near 8.0 per cent rate of growth in 2006-07, following three years (2003-2006) of 8.1 per cent growth. This will be the first time ever that the country’s economy would be growing at 8.0 per cent for a continuous span of four years.

In an upbeat assessment of the economy’s performance last year and prospects for the next year, the EAC to PM has called for better infrastructure, more public and private investment in infrastructure, as a necessary condition for sustaining these high rates of growth.

The EAC has also drawn the government’s attention to the need for “reasonable rates of interest”, and for lower fiscal deficit, particularly revenue deficit.

Forecasting a 7.9 per cent rate of growth in 2006-07, the EAC says this will come from 1.5 per cent growth of output in agriculture, 9.7 per cent in industry and 9.5 per cent in the services sector. The sub-sectors driving growth in fiscal 2003-06 were manufacturing, construction, communication and financial and business services.

Despite rising oil prices, due to which inflation at home has gone up from 4.1 per cent last year to 5.5 per cent this year, the EAC believes global growth will be sustained and that there are no significant external constraints for the expansion of the Indian economy.

Industrial output has expanded at a rate of 10.1 per cent in April-June 2006, while export and import volume growth are indicative of reasonably strong external demand for Indian manufactures and domestic demand for raw materials and intermediates. Reflecting this outlook, the EAC projected a higher growth in industry this year (9.7 per cent) than in the previous year (8.7 per cent).

In the service sector, the trade, hotels, transport, storage and communication sub-sectors are expected to decelerate from 11.5 per cent growth last year to 10.5 per cent this year. Consequently, the non-agriculture sector (industry and services) is projected to grow at 9.6 per cent, the same as the last year.

Agriculture remains a major area of concern, partly because of its continued dependence on rainfall and partly because of stagnation of yields. The EAC says there is need for a vigorous push for new technologies, particularly for rain-fed crops, their active dissemination through extension supported by inputs, credit and rural infrastructure. Energy and other infrastructure pose the main constraint on acceleration of growth of manufacturing.

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Nooyi to be Pepsi CEO

New Delhi, August 14
PepsiCo, which is facing heat on pesticide residual issue in India, today named Indra K. Nooyi, Indian, as its worldwide Chief Executive Officer from October 1, 2006.

Ms Nooyi, who had been named the 28th Most Powerful Woman globally by Forbes in 2005, will succeed Mr Steve Reinemund, who retires next May.

Mr Reinemund, will serve the company as Executive Chairman and Director until his retirement.

In her position as President and Chief Financial Officer she was responsible for all of PepsiCo’s corporate functions, including finance, strategy, business process optimisation and information technology.

Prior to assuming her current position in May 2001, Ms Nooyi was the Senior Vice-President and CFO, and SVP of Corporate Strategy and Development. She has played key roles in the Tricon spin-off, the purchase of Tropicana, the public offering of Pepsi Cola bottling group and the merger with Quaker Foods.

In a separate development, undeterred by the pesticide-in-cola controversy, the two soft drinks majors PepsiCo and Coca Cola today said their long-term investment plans for India were intact and would not be scaled down. All this, a day after the US Government said foreign investment inflows could be hit due to the controversy.

PepsiCo India chief Rajiv Bakshi told mediapersons that the company’s investment plans would not be affected in any way though short-term plans could be reviewed. Echoing similar sentiments, a Coca Cola spokesperson said that in the past 13 years, the company had invested $1 billion in India. “We are committed to our plans,” he added. — UNI, TNS

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Aircel to get DoT letter for 8 circles

New Delhi, August 14
Competition in the cellular market, including the national capital, could soon be hotting up with the Department of Telecom clearing a proposal to issue Letter of Intent to mobile operator Aircel in eight of the 11 circles it had applied for licences.

The mobile operator, in which Malaysian major Maxis holds a majority stake, can enter anytime into the lucrative Delhi circle with DoT clearing its application for LoI, which is a pre-requisite for a licence.

Aircel had applied for licences in 11 circles to create a pan-India telecom footprint. The company would be the seventh operator to foray into the Delhi circle, which has more than six million cellular subscribers.

Meanwhile, TRAI Chairman Nripendra Misra has sought an extension of the tenure of chairperson and the members of the Authority from three years to five years besides seeking more powers for the regulator. — PTI

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SpiceJet to sell and lease back aircraft

Mumbai, August 14
SpiceJet Ltd has said it plans to sell 16 Boeing 737 aircraft for more than $1.1 billion to Nomura Babcock & Brown Co. and lease them back again.

The aircraft will be delivered over approximately 22 months beginning in January 2007, the company said in a notice to the BSE here today. Earlier in the year, the company completed a similar financing with BBAM for its first four B737-800 aircraft deliveries.

Together with today’s announcement, the company has now completed the financing of its first 20 aircraft orders for Boeing 737-800/-900ER aircraft.

Airlines typically book a profit of between $2 million and $4 million by sale and lease back of each plane, aviation industry players said.

Domestic air carriers, buffeted by rising oil prices amid increased competition, have resorted to sale and lease back of planes to fund expansion in a fast-growing market. For instance, another low-cost air carrier Deccan Aviation has closed deals for four Airbus A-320 planes, while top domestic carrier Jet Airways sold and leased back five aircraft in April this year. — UNI

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Floods, blasts hit diamond trade
Shiv Kumar
Tribune News Service

Mumbai, August 14
Last month’s serial bomb blasts in Mumbai and heavy flooding in Surat, the hub of the diamond cutting and polishing trade in the subcontinent, has left the gem and jewellery export trade reeling.

“Thousands of small units which are the backbone of trade have been thrown out of business by the floods,” says Mr Navin Mehta, President, Mumbai Diamond Merchants’ Association. Heavy flooding in the past week has resulted in more than 8,000 units, employing nearly a lakh of persons, shutting shop.

“It will be very difficult for us to meet the Christmas orders from big clients in the West,” Mr Mehta said.

The small diamond-cutting and polishing units collectively form India’s diamond export trade valued at Rs 54,000 crore in 2004-05.

According to the office-bearers of the Gem & Jewellery Export Promotion Council, attempts are being made to shift some of the processing work to units in other parts of the country. However, the council expects exports to be hit this year.

Surat is a major diamond-processing centre, accounting for nearly half the country’s export trade and employs more than 2,00,000 workers.

The offices of big traders and exporters are located around Opera House in downtown Mumbai. When the bombs went off in Mumbai’s local trains last month, 12 of the victims were employees of these companies who were returning home from work. 

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Andhra Bank scouts for acquisition
Ruchika M. Khanna
Tribune News Service

Chandigarh, August 14
Andhra Bank will now focus on geographical synergy so as to have a wider pan- India presence. Rather than opening new branches, the bank is looking to acquire smaller banks, use technology for internet banking and introduce seven-day banking.

This was stated by the Chairman and Managing Director of Andhra Bank, Mr K Ramakrishnan, during a brief visit to Panchkula, to introduce seven days banking in the branch. Talking to TNS, he said though they were planning to open 110 new branches across the country this fiscal, the bank was looking at acquisition of a bank with about 300 branches across western and northern India.

“Opening new branches is a very expensive proposition. We are thus scouting ground for acquisition of a smaller bank. Though we are in talks with some banks, but it may take a while before the acquisition deal starts rolling,” he said, while refusing to give more details.

“Besides, we will also introduce mobile banking, where a “bank on wheels” will reach out to customers, and offsite ATMs will be set up,” he said. Mr Rama K. Ramakrishnankrishnan also said that the bank was also looking for an income of over Rs 60 crore through insurance and mutual funds businesses.

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Securities Bill passed in Rajya Sabha
Tribune News Service

New Delhi, August 14
The Parliament today passed the Government Securities Bill which aims to consolidate and amend the law relating to government securities and its management by the Reserve Bank.

The Government Securities Bill, 2006, was passed in the Rajya Sabha today by a voice vote. The Lok Sabha has already passed the Bill. Earlier, members belonging to Samajwadi Party, TDP, and AIADMK walked out from House saying they wanted full discussion on the Bill.

Replying to a brief discussion on the Bill, Finance Minister P. Chidambaram said the introduction of securities in demat form would remove the possibilities of losing, misuse or possible faking of securities.

He said it would remove rigidities by allowing banks and financial institutions to open accounts in their own name as well as in name of clients for trading.

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Corporate News
Fortis Financial to acquire stake in ACERC

Mumbai, August 14
Fortis Financial Services Ltd today said it would acquire a 28 per cent stake in ACERC Information Technology Ltd.

Fortis Financial has entered into a share-purchase and subscription agreement with ACERC Information Technology for acquiring 23.52 lakh equity shares of Rs 5 each at the prevailing market price, the company informed the Bombay Stock Exchange.

Under the agreement, Fortis Financial would issue up to 10.71 lakh equity shares of Rs 10 each to Sanjay Padode for Rs 70 per share or the price determined as per SEBI Guidelines on preferential allotment basis, subject to shareholders approval.

GMR ferro alloys arm

In a major restructuring move, GMR Industries Ltd, the flagship company of the GMR group, has said it will demerge its ferro alloys division to form a separate company — GMR Ferro Alloys & Industries Ltd.

The Board approved the proposal to demerge the company’s ferro alloys division at a recently-held meeting and under this scheme of arrangement 38 equity shares of GMR Ferro Alloys would be allotted to every shareholder holding 100 equity shares in GMR Industries.

GMR Industries added that it had also received the Board’s nod to merge its subsidiary Bharat Sugar Mills Ltd (BSML) with itself.

BHEL bags Rs 1,224 cr order

Bharat Heavy Electricals Ltd has bagged an order worth Rs 1,224 crore from Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd for setting up a thermal power plant in the state.

The order entails setting up a 500 MW power plant, with two units of 250 MW each (units 5 and 6) at Parichha TPS Extension, UP. The project would be commissioned in 2009-10, the engineering and manufacturing company said in a statement.

Under the secured order BHEL would manufacture, supply, test and commission the main plant package along with associated auxiliaries and civil works.

Bharat Alloys & Energy

VBC Industries Ltd today said it would merge Bharat Alloys & Energy Ltd with itself.

The Board of Directors, at its meeting held recently, approved the draft scheme of merger with a swap ratio of 2:1, the company engaged in the food processing industry informed the Bombay Stock Exchange.

Under the draft scheme of merger, two equity shares of Rs 10 each of the company would be allotted for every one equity share of Rs 10 each of Bharat Alloys & Energy Ltd, it added. — Agencies

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BRIEFLY

Blue Dart delisting
Mumbai, August 14
Blue Dart Express Ltd today announced a notification from its promoter, DHL Express (Singapore) Pvt Ltd, for purchase of its outstanding publicly held shares and delisting of the company. A meeting of the board would be held on August 17, to consider DHL’s proposal, the company informed the BSE. The delisting of the company would be as per the terms and conditions of the SEBI guidelines, the company engaged in the express courier and cargo business added. — PTI

Strides Arcolab
Mumbai, August 14
Pharmaceutical company Strides Arcolab Ltd said today it has received tentative approval from the United States Food and Drug Administration (US FDA) for Nevirapine tablets, an anti-AIDS drug. “We are pleased to receive this first tentative approval from the US FDA for Nevirapine tablets. This approval represents significant opportunity for the company to commercialise Nevirapine — a key anti-retro viral (ARV) in the treatment of AIDS,” Strides Arcolab Vice-Chairman and CEO Arun Kumar said. — PTI

Titan outlets
Ludhiana, August 14
Titan Industries Limited plans to open 40 new outlets across the country within this fiscal and is eyeing a growth target of 25 per cent. “We have plans to open 40 new showrooms of Titan watches across the country in this fiscal and we are definitely looking at opening of our outlets in malls which are rapidly coming up,” Titan Industries Limited, Business Head (Titan), Ajoy Chawla said here. “We will open 15 new outlets only in the northern part of the country,” he added. — PTI

Apollo Tyres
New Delhi, August 14
Apollo Tyres said today it was looking at acquisitions in Europe and South-East Asia as part of its inorganic growth strategy. The company, which earlier this year acquired Dunlop Tyres International (Proprietary) Ltd through an all-cash deal worth Rs 290 crore, said growth through acquisitions was a major part of its strategy for presence in the international market. — PTI

Clutch Auto
Mumbai, August 14
Auto parts maker Clutch Auto Ltd has announced orders worth over Rs 27 crore from tractor and clutch manufacturers in Turkey and Serbia. The company has secured an order worth over Rs 25 crore from Turkey’s leading tractor manufacturer Uzel Makina Sanayi AS, it informed the BSE today. It has also bagged another Rs 2 crore tractor clutch order from Serbia-based IMT Fabrika, Clutch Auto said. — PTI

Allahabad Bank
Chandigarh, August 14
Allahabad Bank has announced an increase in the interest rates of term deposits with effect from August 16. The maximum rate announced by the bank is 8 per cent in the time bucket of 7 years and above. Interest rate has also been enhanced in the time bucket of 181 days to less than 1 year from 6 per cent to 6.25 per cent, 1 year to less than 2 years from 6.75 per cent to 7 per cent, 2 years to less than 3 years from 7 per cent to 7.25 per cent and 3 years to less than 7 years from 7.25 per cent to 7.5 per cent. — TNS

Ranbaxy Lab
New Delhi, August 14
Country’s largest drug maker, Ranbaxy Laboratories Limited (RLL) said today it had received approval to manufacture and market anti-AIDS/HIV drug for children “Triviro-LNS kid” and “Triviro-LNS kid DS” in India and also filed with WHO Geneva for pre-qualification for the same. Both products are triple anti-retroviral (ARV) combinations. “We hope that with these new formulations, we will be able to make accessible, a high quality and convenient treatment to a large number of HIV-positive children,” RLL CEO and Managing Director Malvinder Mohan Singh said. — PTI


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