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B U S I N E S S

Annual Monetary Policy
RBI keeps key rates unchanged
Mumbai, April 24
In the annual credit policy for the year 2007-08 announced here today, the Reserve Bank has left the CRR, repo and reverse repo rates unchanged.
Announcing the policy here, RBI Governor Y.V. Reddy said the RBI has kept the bank rate unchanged at 6 per cent, the reverse repo rate at 6 per cent, repo rate at 7.75 per cent and the cash reserve ratio (CRR) at 6.5 per cent. The RBI has now permitted Indian banks to extend credit and non-credit facilities to step-down subsidiaries within the existing prudential limits and some additional safeguards. 
 Y.V. Reddy
The RBI’s decision not to change key rates is temporary and it would act swiftly if there is any surge in inflation, governor Y.V. Reddy said

India Inc cheers
New Delhi, April 24
India Inc today appreciated the balanced approach adopted by the RBI in its credit policy to contain inflation, bring in sound financial management and projecting a realistic GDP growth rate for the current fiscal.

Maruti net zooms 31.4 pc
New Delhi, April 24
Country’s largest car-maker Maruti Udyog Ltd (MUL) today posted a net profit of Rs 1,562 crore, a 31.4 per cent increase over fiscal 2005-06.



EARLIER STORIES

 

A Toyota Camry hybrid is on display at an international automobile show in New York. Japan's Toyota Motor Corp. became the world’s top selling automaker in the first quarter of 2007, overtaking US rival General Motors helped by brisk demand for fuel-efficient cars, figures showed on Tuesday.
Toyota top seller
A Toyota Camry hybrid is on display at an international automobile show in New York. Japan's Toyota Motor Corp. became the world’s top selling automaker in the first quarter of 2007, overtaking US rival General Motors helped by brisk demand for fuel-efficient cars, figures showed on Tuesday.—AFP
photo

Steps to contain inflation, maintain growth: FM
New Delhi, April 24
Finance Minister P Chidambaram has said the monetary policy will moderate inflation without hurting growth and provide relief to small housing loan borrowers.

Vedanta to buy 71 pc of Sesa Goa
Mumbai/London, April 24

NRI business tycoon Anil Agarwal-led Vedanta Resources will pay $1.37 billion (about Rs 5,700 crore) for acquiring 71 per cent stake in India's biggest iron ore exporter Sesa Goa, outbidding giants like Arcelor Mittal and Aditya Birla Group.

Service tax waiver has PM’s nod
New Delhi, April 24
The Foreign Trade Policy announcement regarding waiver of service tax on exports was approved by Prime Minister Manmohan Singh and was not unilateral as suggested by the Finance Ministry.

Emami plans biofuel unit
Haldia, April 24
Personal and healthcare major Emami group today announced setting up of a biodiesel plant here, the first in West Bengal, with an investment of Rs 150 crore.

Bank Account
HDFC net profit jumps 31 per cent

Mumbai, April 24
HDFC Bank has reported a 31 per cent jump in its quarterly earnings, meeting forecast and boosted by a rise in loans and higher fee income.


A Cambodian man drives his motorbike loaded with vegetables along a street in Phnom Penh on Tuesday. Economic growth in Cambodia has surged at around 9 per cent a year since 2000. Agricultural products are among the key factors to boost the country’s growth.
A Cambodian man drives his motorbike loaded with vegetables along a street in Phnom Penh on Tuesday. Economic growth in Cambodia has surged at around 9 per cent a year since 2000. Agricultural products are among the key factors to boost the country’s growth. Some 35 per cent of Cambodia’s 14 million people are mired in poverty after decades of civil war and government mismanagement that has led to rampant corruption at almost every level of business and politics. — AFP photo

Pepsico’s expansion plans for Punjab
Chandigarh, April 24 Pepsico plans to expand its operations in Punjab and turn the state into the largest producer of juice concentrate by engaging the state farmers in "a symbiotic contract farm production" to help the process of what it called "genuine and meaningful diversification".

Shareholders approve merger of RIL-IPCL
New Delhi, April 24
Shareholders and creditors of Reliance Industries Limited (RIL) today unanimously approved the amalgamation of Indian Petrochemicals Corporation Limited (IPCL) with RIL.

Private sector workers to get Shram awards
New Delhi, April 24
Prime Minister Manmohan Singh will honour 45 workers with prestigious Shram Awards for the year 2004 at Vigyan Bhawan here on Friday. For the first time private sector workers would receive the awards.

 

 

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Annual Monetary Policy
RBI keeps key rates unchanged
Tribune News Service

Highlights

  • Bank rates unchanged

  • GDP growth forecast at 8.5 per cent

  • Inflation target below 5 per cent

  • Risk weight for housing loan up to Rs 20 lakh cut

  • Cos can invest overseas up to 35 pc of networth

Mumbai, April 24
In the annual credit policy for the year 2007-08 announced here today, the Reserve Bank has left the CRR, repo and reverse repo rates unchanged.

Announcing the policy here, RBI Governor Y.V. Reddy said the RBI has kept the bank rate unchanged at 6 per cent, the reverse repo rate at 6 per cent, repo rate at 7.75 per cent and the cash reserve ratio (CRR) at 6.5 per cent.

The RBI has now permitted Indian banks to extend credit and non-credit facilities to step-down subsidiaries within the existing prudential limits and some additional safeguards. Banks and primary dealers have also been permitted to begin transactions in single-entity credit default swaps.

The RBI also introduced measures to make interest rates attractive for housing loans upto Rs 20 lakh. Reddy announced today that risk weight on the residential housing loans to individuals would be reduced to 50 per cent from 75 per cent as a temporary measure, keeping in view the default experience and other relevant factors.

This step would be applicable to loans up to Rs 20 lakh and will be reviewed after one year, the policy said. This measure will leave banks with more money to lend for the housing sector and make interest rates attractive for loans up to Rs 20 lakh.

Meanwhile the apex bank has lowered its growth forecast to 8.5 per cent from 8.5-9 per cent as it expects global GDP to decline in 2007.

Inflation targets have also been revised downward to 5 per cent from last year's targets of 5-5.5 per cent. The RBI hopes to rein in inflation between 4 and 4.5 per cent over the medium term.

With foreign exchange inflows peaking $200 billion, the RBI has begun to move a bit further towards full capital account convertibility.

Among the measures in this direction include permission for Indian companies to invest in foreign companies upto 300 per cent of their net worth, hedging for individuals and outward remittances up to $ 100,000 as against $50,000 in the past.

Domestic producers and users will also be allowed to hedge their price risk on international commodity exchanges for copper, aluminia, zinc, and even aviation turbine fuel. Indian companies will also be allowed to rebook and cancel their forward contracts.

The RBI has also reduced interest rate ceilings on non-resident deposits. It proposed allowing corporates to repay more external commercial borrowings ahead of schedule, proposed increasing the aggregate ceiling for overseas investment by mutual funds to $4 billion from $3 billion, and increased the foreign portfolio investment limit for listed firms.

Reddy also put out a roadmap for the apex bank to develop the corporate bond market, futures contract, establishment of credit information companies and a number of steps to help distressed farmers and micro-finance.

Reddy announced that a credit guarantee scheme would be introduced for distressed farmers.

Markets party

The financial market gave a thumbs up to the annual credit policy, which pushed up the benchmark Sensex higher by over 225 points and lifted rupee to over a nine-year high.

The RBI’s annual monetary and credit policy, which left all key rates unchanged, boosted trading sentiment in stocks, forex and bond markets at 1230 hrs and triggered all-round buying.

While the BSE Sensex zoomed by over 225 points to 14,153.58, the rupee surged by 51 paisa against the US dollar which traded at Rs 41.17.

The government bonds rose, pushing 10-year yields down to the lowest this month. Bonds rallied and the yield on the benchmark 8.07 per cent bond due for 2017 fell 4 basis points, or 0.04 percentage points, to 8.03 per cent.

On the stock market, the major contribution to the rise in the Sensex came in from Bank index, which shot up by 313.41 points, or 4.55 per cent at 7,195.25 points. Most of banking stocks were up between the range of 3 and 7 per cent across the board. — PTI 

Bankers  gung ho

Bankers were optimistic about the Reserve Bank’s annual credit policy, which left all key rates unchanged, but feared that there could be tightening measures in the near future if it had to contain inflation around 5 per cent.

There is substantial liquidity in the market, evident from the fact that the money supply was dangerously high at 20.8 per cent and any containment will require some drastic belt-tightening.

K.V. Kamath, managing director of ICICI Bank, which accounts for a sizeable percentage of home loans, fears further tightening as the apex bank tries to achieve the medium term inflation target of 4 to 4.5 per cent. J&K Bank chairman and chief executive Haseeb A. Drabu said that between the lines it was a strong monetary policy and there could be further tightening in the next few months.

Public sector banks, however, welcomed the cut in risk provisioning as it would improve their margins with about 80 per cent of their home loans being sub-Rs 10 lakh. — PTI

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India Inc cheers
S. Satyanarayanan
Tribune News Service

New Delhi, April 24
India Inc today appreciated the balanced approach adopted by the RBI in its credit policy to contain inflation, bring in sound financial management and projecting a realistic GDP growth rate for the current fiscal.

However, the Federation of Indian Export Organisation has expressed its disappointment over lack of initiative to contain hardening of rupee.

“The policy lays greater emphasis on price stability, aiming to contain inflation at 5 per cent in current fiscal,” ASSOCHAM president Venugopal N. Dhoot said.

FICCI president Habil Khorakiwala said, “On the whole, the RBI has responded remarkably well in a live-wire fashion to the developments in the Indian economy”.

PHDCCI president Sanjay Bhatia suggested that once the inflation was within manageable limits, the RBI should take measures to soften the interest rate structure in the country. Under the current circumstances, the RBI could not have announced a more appropriate policy, said CII president R Seshasayee.

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Maruti net zooms 31.4 pc
Girja Shankar Kaura
Tribune News Service

New Delhi, April 24
Country’s largest car-maker Maruti Udyog Ltd (MUL) today posted a net profit of Rs 1,562 crore, a 31.4 per cent increase over fiscal 2005-06.

MUL board of directors had approved the financial results which saw the profit before tax going up to Rs 2,279 crore in 2006-07, a growth of 30.3 per cent over the previous year. The board also recommended a dividend of 90 per cent which is a 20 per cent increase over the 2005-06 fiscal.

The financial results pointed to a 24 per cent increase in its net profit at Rs 448.56 crore for the fourth quarter ended March 31, 2007 as compared to Rs. 360.92 crore for the corresponding period last year.

The company’s total income also rose to Rs 4,634.74 crore in the said period in comparison to Rs. 3,392.27 crore for the quarter ended March 31, 2006.

Its operating margins fell by 12.4 per cent in the January-March quarter from 14.8 per cent a year earlier.

Sales of its vehicles rose 30 per cent to 2,00,112 units in the quarter.

Maruti opened a new car plant in February with a capacity of up to 3,00,000 units and a diesel engine and transmission plant with similar capacity.

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Steps to contain inflation, maintain growth: FM
Tribune News Service

New Delhi, April 24
Finance Minister P Chidambaram has said the monetary policy will moderate inflation without hurting growth and provide relief to small housing loan borrowers.

“We must moderate inflation without affecting growth. Both are important (moderate inflation and high growth). And I think what the RBI has done today is broadly in line with government’s thinking. These steps would moderate inflation without affecting growth,” Chidambaram said.

On the RBI’s projection of slower growth of India’s economy at 8.5 per cent in 2007-08 against the expected 9.2 per cent for 2006-07, he said, “It was a cautious and conservative position”.

“If manufacturing rises by double digit numbers like services, 8.5 per cent GDP growth would be floor and not the ceiling,” he added.

“To keep inflation below 4.5 per cent is indeed an aggressive target. But that appears to be the tolerance level for inflation.”

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Vedanta to buy 71 pc of Sesa Goa

Mumbai/London, April 24
NRI business tycoon Anil Agarwal-led Vedanta Resources will pay $1.37 billion (about Rs 5,700 crore) for acquiring 71 per cent stake in India's biggest iron ore exporter Sesa Goa, outbidding giants like Arcelor Mittal and Aditya Birla Group.

London Stock Exchange-listed Vedanta has bagged a deal for buying 51 per cent stake in Sesa Goa Ltd from its Japanese parent Mitsui & Co Ltd for $981 million (around Rs 4,070 crore) in cash. It also plans to purchase an additional 20 per cent stake through an open offer to be launched soon.

Vedanta said the deal would create India's largest diversified mining group, with “leading market positions in aluminium, copper, zinc and iron ore together with an industry leading pipeline of expansion projects”.

“This acquisition provides us with an industry leadership position in the attractive iron ore business in India,” Vedanta Resources Chairman Anil Agarwal said in a statement.

"Sesa Goa is a natural fit for Vedanta; it is an efficient, low-cost miner with growth opportunities in one of the world's fastest growing economies. This transaction is immediately earnings and cash-flow accretive and will create significant long-term value for our stakeholders," he added.

This is the third metal sector deal focussed on iron ore capacities in less than a week after Indian conglomerate Essar Group’s announcement last week to acquire ore rich Minnessota Steel in the US and the British mining giant Anglo American’s proposed $1.5 billion acquisition of about half of a Brazilian iron-ore project.

Vedanta said the open offer to the public shareholders of Sesa Goa to acquire further 20 per cent stake was expected to close by July 2007.

While the total cash consideration for 71 per cent of Sesa Goa stake was $1.37 billion, the deal would be funded through a mix of newly committed bank debt facilities of $1.1 billion and existing cash resources, it said.

Vedanta said it has acquired Mitsui's 100 per cent stake in Finsider International Ltd UK, which owns 51 per cent stake in Sesa Goa, at a price of Rs 2,036 per share of Sesa Goa.

The 50-year old Sesa Goa, which has mining operations across iron ore-rich states like Goa, Karnataka and Orissa, was under Italian management before Mitsui acquired it in 1996. — PTI

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Service tax waiver has PM’s nod

New Delhi, April 24
The Foreign Trade Policy announcement regarding waiver of service tax on exports was approved by Prime Minister Manmohan Singh and was not unilateral as suggested by the Finance Ministry.

"No Foreign Trade Policy can be announced without approval of the Prime Minister," a senior Commerce Ministry official said here.

He said many rounds of discussions were held with the Finance Ministry on the proposal and Prime Minister's clearance was obtained two days before its announcement.

Since Parliament is in session (though in recess), a copy of the policy was delivered at the Speaker's office before it was made public.

The official was reacting to reports that Finance Ministry was "taken by surprise" by Commerce and Industry Minister Kamal Nath's April 19 announcement regarding waiver of service tax on exports. — PTI 

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Emami plans biofuel unit

Haldia, April 24
Personal and healthcare major Emami group today announced setting up of a biodiesel plant here, the first in West Bengal, with an investment of Rs 150 crore.

Laying the foundation stone of the project here today, Chief Minister Buddhadeb Bhattacharya said the state government would soon frame a biodiesel policy to encourage such projects.

He said the three districts identified for jathropa cultivation were Bankura, Purulia and West Midnapore. The bio-diesel project will be set up by Emami Biotech.

Joint chairman of Emami group of companies R.S. Agarwal said initially Emami Biotech would import crude farm oil and other ingredients for production of biodiesel from Malaysia and Indonesia.

"Efforts are being made to ensure availability of jathropa oil from the fourth year of plant operation," Agarwal said. — PTI

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Bank Account
HDFC net profit jumps 31 per cent

Mumbai, April 24
HDFC Bank has reported a 31 per cent jump in its quarterly earnings, meeting forecast and boosted by a rise in loans and higher fee income.

Its net profit for the quarter ended March 07 was 3.44 billion rupees ($83 million), up from 2.63 billion reported a year earlier.

Indian banks have been riding strong loans growth as companies expand but they have been facing pressure on margins. It is because borrowing costs rose faster than lending rates as the central bank tightened liquidity to contain inflation.

Indian Overseas Bank

Indian Overseas Bank (IOB) today announced a net profit of Rs 289.76 crore for the fourth quarter ended March 31. The total income stood at Rs 1,935.84 crore for the three months ended March 31, 2007, where as the same was at Rs 1,336.94 crore for the same period in 2006, the IOB informed the BSE.

Meanwhile, the board of directors at a meeting held today, recommended a dividend of 30 per cent.

The IOB added that figures for the current quarter and current year include the operations of erstwhile Bharat Overseas Bank Ltd and hence are not comparable.

On annual basis, the bank posted a net profit of Rs 1,008.43 crore for the 12-month period ended March 31, 2007 and the total income was at Rs 6,219.12 crore.

Bank of India

The Bank of India (BoI) has posted a 75.68 per cent jump in its net profits at Rs 447.44 crore for the fourth quarter ended March 31 as against Rs 254.42 crore for the same period in 2006.

Total income of the bank grew by 37.20 per cent to Rs 3,192.13 crore for the three months ended March 31, the BoI informed the BSE.

The board has recommended a final dividend at 15 per cent for the financial year 2006-2007 on equity shares. With this, the total dividend during 2006-07 amounted to 35 per cent, including interim dividend at 20 per cent declared and paid in December 2006.

On annual basis, the bank posted a net profit of Rs 1123.17 crore as against Rs 701.44 crore for the year ended March 31, 2006 and the total income also increased to Rs 10,743.28 crore.

Indian Bank

The Indian Bank has reported an increase of 69 per cent in net profit at Rs 235.31 crore for the quarter ended March 31, 2007 as compared to Rs 139.16 crore for the corresponding quarter last year.

Total income of the bank increased by 43.18 per cent at Rs 1,563.61 crore.

The board of directors recommended a dividend of 20 per cent and a special dividend of 10 per cent on the equity share capital to mark its centenary year celebrations and 8 per cent on the preference share capital for the year 2006-07.

During 2006-07, the bank posted a net profit of Rs 759.77 crore as compared to Rs 504.48 crore in the last fiscal.

Total income increased to Rs 5017.86 crore for the year ended March 31, 2007 from Rs 3827.74 crore for the year ended March 31, 2006. — Agencies

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Pepsico’s expansion plans for Punjab
Ruchika M. Khanna
Tribune News Service

Chandigarh, April 24
Pepsico plans to expand its operations in Punjab and turn the state into the largest producer of juice concentrate by engaging the state farmers in "a symbiotic contract farm production" to help the process of what it called "genuine and meaningful diversification".

In addition, company will also collaborate with the state government in the fields of education, health, rural sanitation and supply of clean drinking water. This was stated by Sanjeev Chadha, CEO Pepsi International, during his interaction with Chief Minister Parkash Singh Badal here this evening. He said company’s contract operations in the farm sector ranged from potato production to apple and citrus fruit and it will expand to blackberry and pomegranate.

He said through the use of state-of-the art technology, the company had brought usage of water down to one third of the original. The same techniques could be used to promote water preservation on large scale operations in the state. He explained that the latest technology of rice plantation through seeds adopted by the company on 15000 acres in Jalandhar district would prove to be a shot in arm to save labour on paddy transplantation.

Badal emphasized that the big companies must fulfill their social obligations and help to reduce economic disparities in the state. "It is in the interest of the rich segment to help the process of economic justice and equality as a stable society is the prerequisite for any development and prosperity," said Badal. 

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Shareholders approve merger of RIL-IPCL

New Delhi, April 24
Shareholders and creditors of Reliance Industries Limited (RIL) today unanimously approved the amalgamation of Indian Petrochemicals Corporation Limited (IPCL) with RIL.

In the court convened meeting of shareholders, secured creditors and unsecured creditors of RIL held on April 21, 99.9 per cent of the shareholders- representing 99.99 percent of the total value of the equity shares held by them- voted in favour of the scheme of amalgamation. Seven shareholders, representing 0.0006 per cent of the total value of shares, voted against it.

The company has filed a petition today seeking approval of the high court of judicature at Bombay for sanction of the scheme. Earlier, the shareholders, secured creditors and unsecured creditors of IPCL had approved the scheme at the respective court convened meetings held on April 14. — UNI

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Private sector workers to get Shram awards
R. Suryamurthy
Tribune News Service

New Delhi, April 24
Prime Minister Manmohan Singh will honour 45 workers with prestigious Shram Awards for the year 2004 at Vigyan Bhawan here on Friday. For the first time private sector workers would receive the awards.

The awardees will be decorated with Shram Bhushan, Shram Vir/Shram Veerangana and Shram Shree/Shram Devi awards in recognition of their distinguished performances, innovative abilities and outstanding contributions in the fields of productivity, exhibition of exceptional courage and presence of mind, a press release said.

These workers are employed in various private sector units employing 500 workers or more, departmental undertakings and public sector undertakings of the central and state governments.

The private sector has also been brought within the ambit of the awards and the number of awards has also been increased from 17 to 33.

Twenty nine awardees are from the public sector while 16 workers belong to the private sector. Some of them have bagged the awards jointly. No nomination was found suitable for the top most prestigious honour of Shram Ratna Award but in lieu of Shram Ratna/Shram Bhushan Awards, three additional Shram Vir/Shram Veerangana awards and one additional Shram Shree/Shram Devi Awards are being given.

S P Gupta, chargeman BHEL, Hardwar has been conferred with the second highest Shram Bhushan Award. It carries a cash award of Rs 1,00,000 and a ‘Sanad’.

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BRIEFLY

Airtel bags Asia award
New Delhi, April 24
Bharti Airtel, India’s leading telecom services provider has been awarded the ‘Best Emerging Market Carrier’ in the Telecom Asia Awards 2007. The award is the most prestigious honours program in the Asian telecommunications sector. Bharti Airtel was selected amongst 30 telecom companies from the Asia-Pacific region, a company release said today. President and CEO Bharti Airtel Limited Manoj Kohli said, “The Indian telecom market is setting new benchmarks every day and as a leader in the telecom space, we feel proud to have led that success.” — TNS

Reliance Retail
New Delhi, April 24
Reliance Retail, the subsidiary of Reliance Industries Ltd, will soon launch its own label of consumer electronics goods. The company, tapping the country’s $5.6 billion consumer durable market, today unveiled its digital store. It would be investing over Rs 1,000 crore over the next three to four years for setting up 150 such stores, the first of which was unveiled in the National Capital Region. Reliance Digital stores would sell everything from TV sets, home theatre, refrigerator, cooking range, dishwasher to computers and mobile phones from across brands. — TNS

Siemens Ltd
New Delhi, April 24
Siemens Ltd will acquire a 77 per cent stake in Chennai-based iMetrex Technologies Ltd. Under the share purchase agreement, Siemens has the option of acquiring the balance stake of 23 per cent in the next five years. With this acquisition, Siemens will consolidate its Building Technologies Business (SBT). The integration of SBT into the newly acquired company is proposed to be known as Siemens Building Technologies.— UNI

Elder Pharma
Mumbai, April 24
Board of Elder Pharmaceuticals Ltd. has approved raising up to $50 million through foreign currency convertible bonds in 2007-08, a senior official told a television channel on Tuesday. The money will be used to fund possible acquisitions and other expansion plans, Alok Saxena, director (international), told CNBC TV-18. — Reuters

GHCL plan
Sutrapada, April 24
Gujarat Heavy Chemicals Limited (GHCL), which has business interest in diversified fields, is planning to foray into the US and Chinese markets and aims $1 billion turnover from its soda-ash business in the next 30 months. Sanjay Dalmia-promoted GHCL, third largest soda-ash manufacturer in the country, had clocked a turnover of $111 million in 2006. — PTI

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