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THE TRIBUNE SPECIALS
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B U S I N E S S

Govt willing to pay more for LNG from Iran
Deora rules out cut in subsidy on LPG, kerosene

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

ECS nod to 52 oil, gas blocks under NELP-VI
New Delhi, January 15
A panel of top officials today approved the award of 52 oil and gas blocks offered in NELP-VI, including 19 blocks which received "erratic financial bids".

Supermarkets to sell wine in M’rashtra
Move may benefit Pawar-Mallya venture
Mumbai, January 15
Good quality wine will be available in supermarkets across Maharashtra at reasonable rates after the state government relaxed rules on their sale and rationalised the duty structure on wine.

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

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

GE buys UK’s Smiths aerospace unit 
for $4.8 b

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


 

A model displays a creation as part of Gianfranco Ferre' fall/winter 2007-08 men's collection at the Milan Fashion Week
A model displays a creation as part of Gianfranco Ferre' fall/winter 2007-08 men's collection at the Milan Fashion Week on Monday. — Reuters

 
The CEO of Tata Teleservices Ltd., Mr Darryl Green, and Bollywood actress Kajol at a promotional event in Mumbai
The CEO of Tata Teleservices Ltd., Mr Darryl Green, and Bollywood actress Kajol at a promotional event in Mumbai on Monday. — Reuters

Patel hopeful of AI-Indian merger 
by March 31

New Delhi, January 15
The Empowered Group of Ministers (EGoM) today deferred the decision on the time line for completion of merger of Air-India and Indian and asked Civil Aviation Minister Praful Patel to talk to the employees’ unions of both airlines.

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

An NEC employee displays the company's new PC "Valustar VW990/HG" at a preview in Tokyo
An NEC employee displays the company's new PC "Valustar VW990/HG" at a preview in Tokyo on Monday. The new PC is equipped with a 32-inch TFT flat screen and a digital high-definition television system tuner. It runs on a new Windows Vista operating system. — AFP

Wal-Mart, Bharti deal meets FDI 
norms: Govt

New Delhi, January 15
Having re-examined the tie-up between Bharti and Wal-Mart for retail business following political opposition, the government has found that the big-ticket venture conforms to all FDI policy norms.

Pak rules out MFN status  for India
Islamabad, January 15
Pakistan has ruled out extending the Most Favoured Nation (MFN) status to India, saying it should instead create "a level-playing field by removing non-tariff barriers".

OIL to launch IPO in 2007-08
Oil India Ltd (OIL) will launch an IPO offering 11 per cent of its total equity share capital in the second quarter of 2007-08.

Singtel may up stake in Airtel
New Delhi, January 15
Singapore's leading telecom operator Singtel said today it was committed to a long-term potential of the Indian market and would consider raising its stake in India's largest mobile player Bharti Airtel at "right terms and conditions".
The Minister of State for Industry, Dr Ashwani Kumar (left), with the Finance Minister of Hungary, Dr Janos Veres, at the India-Hungary joint commission and joint business council meeting in New Delhi
The Minister of State for Industry, Dr Ashwani Kumar (left), with the Finance Minister of Hungary, Dr Janos Veres, at the India-Hungary joint commission and joint business council meeting in New Delhi on Monday. — PTI

UBI deposit scheme
Mumbai, January 15
The Union Bank of India has launched union double deposit scheme with an interest rate of 8 per cent per annum and value addition of insurance cover to the depositors.

Corporate Results
TCS Q3 profit up 44.9 pc at Rs 1,116 crore

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

Sensex at new high
Mumbai, January 15
The Bombay Stock Exchange (BSE) benchmark Sensex today ended at a new peak of 14,129.64, up 73.11 points on strong global cues coupled with favourable developments on the economic front. The BSE Sensex also hit a new intra-day high of 14,202.12 before ending with 0.52 per cent rise over Friday's close of 14,056.53. — PTI





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Govt willing to pay more for LNG from Iran
Deora rules out cut in subsidy on LPG, kerosene
Tribune News Service

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

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

OIL to launch IPO in 2007-08

Oil India Ltd (OIL) will launch an IPO offering 11 per cent of its total equity share capital in the second quarter of 2007-08.

"We have an equity base of 214 crore shares. Of this, we propose to offer 10 per cent through an IPO and 1 per cent will be offered to the employees," OIL Chairman and Managing Director M.R. Pasrija said on the sidelines of the Petrotech conference here.

The IPO is not divestment of government equity and so the proceeds will go to the company and not to the government. — PTI

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

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

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

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

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

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

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

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

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

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

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

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ECS nod to 52 oil, gas blocks under NELP-VI

New Delhi, January 15
A panel of top officials today approved the award of 52 oil and gas blocks offered in NELP-VI, including 19 blocks which received "erratic financial bids".

The Empowered Committee of Secretaries (ECS) met today and decided awarding blocks offered under the sixth round of the New Exploration Licensing Policy, officials said.

The ONGC and its partners had emerged as the top winner of NELP-VI with 25 blocks, including 12 deep-sea blocks, while Reliance would get seven deep-sea blocks.

Santos would get two deep-sea blocks. Of the six shallow water blocks on offer, the ONGC and its partners would walk away with three blocks while Focus-Newbury, Petronas and Petrogas would get one each.

ONGC and its partner were set to get 10 on-land blocks while OIL and partners had been allotted seven blocks. — PTI

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Supermarkets to sell wine in M’rashtra
Move may benefit Pawar-Mallya venture
Shiv Kumar
Tribune News Service

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

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

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

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

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

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

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RBI unlikely to cut SLR: bankers 

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

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

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

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

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

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

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

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

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

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

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Institutions may be allowed short selling 

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

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

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

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

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

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

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GE buys UK’s Smiths aerospace unit for $4.8 b

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

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

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

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

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

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

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

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Patel hopeful of AI-Indian merger by March 31
Tribune News Service

New Delhi, January 15
The Empowered Group of Ministers (EGoM) today deferred the decision on the time line for completion of merger of Air-India and Indian and asked Civil Aviation Minister Praful Patel to talk to the employees’ unions of both airlines.

Reports suggested that the Civil Aviation Minister would hold talks with the employees’ unions of the two carriers later this week to assure them about possible loss of jobs and other human resource-related matters after the proposed merger.

He was, however, hopeful that a merger to create a single corporate entity would be completed by March 31 this year.

The EGoM headed by External Affairs Minister Pranab Mukherjee met this evening in a bid to work on the finer points of the proposed merger.

"The EGoM decided to take up the issue of integration of employees in a cautious manner to avoid any unwanted situation,” the Civil Aviation Minister said.

The EGoM is expected to meet next fortnight again where the views of the employees’ unions would also be put forward for consideration.

Mr Patel maintained that there would not be any loss of jobs after the merger.

He said the EGoM approved the recommendations by the Committee of Secretaries on taxation and stamp 
duty issues. 

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RIL at lifetime high

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

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

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

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

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

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Wal-Mart, Bharti deal meets FDI norms: Govt

New Delhi, January 15
Having re-examined the tie-up between Bharti and Wal-Mart for retail business following political opposition, the government has found that the big-ticket venture conforms to all FDI policy norms.

"We have examined the Bharti-Wal-Mart joint venture and everything is in conformity with the existing policy on FDI in retail," high-level sources in the Commerce and Industry Ministry said.

With the government finding no fault with the venture, the stage is now set for other global retail chains like Tesco of the UK and Carrefour of France to sew their deals for foray into the growing Indian market with similar arrangements. As the government had last year put the FDI in wholesale cash and carry on the automatic route, the Bharti-Wal-Mart project is not required to seek government approvals. The same route is open to others, the sources said.

The similar model is being examined by Carrefour, which is reportedly in talks with the Wadias. — PTI 

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Pak rules out MFN status  for India

Islamabad, January 15
Pakistan has ruled out extending the Most Favoured Nation (MFN) status to India, saying it should instead create "a level-playing field by removing non-tariff barriers".

Without directly commenting on External Affairs Minister Pranab Mukherjee's remarks during his visit here that Pakistan should implement SAFTA in total to encourage free trade in the region, Prime Minister Shaukat Aziz said, "Pakistan was in favour of level-playing field by removing non-tariff barriers".

"Extending MFN is not the only solution to promote trade but there should be level-playing field", he was quoted as saying by the APP news agency today.— PTI

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OIL to launch IPO in 2007-08

Oil India Ltd (OIL) will launch an IPO offering 11 per cent of its total equity share capital in the second quarter of 2007-08.

"We have an equity base of 214 crore shares. Of this, we propose to offer 10 per cent through an IPO and 1 per cent will be offered to the employees," OIL Chairman and Managing Director M.R. Pasrija said on the sidelines of the Petrotech conference here.

The IPO is not divestment of government equity and so the proceeds will go to the company and not to the government. — PTI

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Singtel may up stake in Airtel

New Delhi, January 15
Singapore's leading telecom operator Singtel said today it was committed to a long-term potential of the Indian market and would consider raising its stake in India's largest mobile player Bharti Airtel at "right terms and conditions".

"We remain committed to our investment in Bharti Airtel and believe in the long-term potential of the Indian market," a spokesperson for Singtel, which holds about 31 per cent stake in Bharti Airtel, said. — PTI

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UBI deposit scheme

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

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Corporate Results
TCS Q3 profit up 44.9 pc at Rs 1,116 crore

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

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

TCS also announced a dividend of Rs 3 per share for the quarter, a company statement said.

IPCL profit Rs 405 cr

Indian Petrochemicals Corporation Ltd (IPCL) has posted a net profit of Rs 405 crore for the quarter ended December 31, 2006, as compared to Rs 289 crore for the quarter ended December 31, 2005.

The total income (net of excise) has increased from Rs 2,836 crore for the quarter ended December 31, 2005, to Rs 3,130 crore for the quarter ended December 31, 2006.

The company's Chairman Mukesh Ambani said despite a challenging environment, improvement in performance was achieved primarily through better productivity and reduction in costs, thereby enhancing value for our shareholders.

Tulip Q3 net profit up

Tulip IT Services Ltd, a leading provider of end-to-end data connectivity, ended Q3FY07 with a net profit of Rs 27.49 crore, up Rs 11.87 crore from Q3FY06.

The company's total revenue increased to Rs 222.17 crore in Q3FY07 as against Rs 135.14 crore in Q3FY06, up 64.39 per cent.

The third quarter ending December 31, 2006, witnessed a turnover of Rs 222.35 crore with an increase in number of connects in IP/VPN business to 35,014 in Q3FY07 from 24,106 in Q2FY07.

Tulip Connect is one of the largest and managed end-to-end MPLS (multi-protocol label switching) enabled IP/VPN that uses wireless connectivity for the last mile. The company's earnings per share (EPS) stood at Rs 9.48 during Q3FY07.

HCL Q2 revenue up

HCL Technologies has reported a 39 per cent jump in its revenues for the second quarter of 2006-07 at Rs 1,465 crore over the corresponding quarter of previous fiscal.

The company posted a gross profit of about Rs 563 crore in the quarter, up 41.8 per cent year-on-year.

HCL increased its headcount by 1,865 in the quarter, taking its employee base to 38,317 as on December 31. — Agencies

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BRIEFLY

Tata Steel buys Rawmet
Mumbai, January 15
Tata Steel has entered into a definitive agreement to acquire 100 per cent equity stake in Rawmet Ferrous Industries located near Cuttack. Rawmet Ferroud Industries, which has its registered office at Kolkata, consists of two 16.5 MVA semi-closed electric arc furnace having a capacity of producing around 50,000 tonnes of high-carbon ferro chrome per annum, the company said. The agreement was signed at Bhubaneswar by Tata Steel and representatives of IMR Metallurgical Resources AG, which holds a 66.46 per cent equity stake, Rawmet Commodities Pvt Ltd, which holds a 12.48 per cent equity stake and other shareholders of Rawmet Ferrous Industries. — UNI

Stake in Fortis
New Delhi, January 15
Fortis Healthcare said today it had signed pre-IPO placement agreements with UK-based Metdist Group and Trinity Capital aggregating Rs 56 crore. The company said the agreements were for allotment of one million equity shares each to Raj Kumar Bagri and Apurv Bagri of the Metdist Group of Companies and two million equity shares to Trinity Capital. Fortis Healthcare Ltd (FHL) Managing Director Shivinder Mohan Singh said the equity shares issued as per pre-IPO placements would be subject to lock-in after the completion of the IPO. — PTI

SICOM stake
New Delhi, January 15
The Unit Trust of India (UTI) has invited bids from financial investors to sell its 36.58 per cent stake in the State Industrial Corporation of Maharashtra (SICOM), the investment arm of the Maharashtra Government. UTI holds a 40 per cent stake in SICOM --36.58 per cent through Specified Undertaking of Unit Trust of India and 3.5 per cent through the UTI Mutual Fund. — PTI

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