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THE TRIBUNE SPECIALS
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B U S I N E S S


“We made a promise and we have kept it
“We made a promise and we have kept it

Nano rolls out for India
Mumbai, March 23
The first of the Nanos will hit the Indian roads from July when Tata Motors begins delivery of the car, starting version of which is priced at Rs 1 lakh, company chairman Ratan Tata said here today. Briefing mediapersons ahead of the Nano’s launch, Tata said bookings would remain open from April 9-25 and the final price for the first batch of applicants would be Rs 1 lakh, including taxes and duties. “The first batch of cars, to be allotted by lottery, would be price-protected," Tata said.

Sensex posts biggest gain of ’09
Onlookers watch a digital broadcast outside the Bombay Stock Exchange in Mumbai on Monday. Shares surged 5.1% as Asian markets rose on hopes of a fresh rescue package for the troubled US financial sector, dealers said.Mumbai, March 23
The markets saw the biggest one-day jump in 2009 as investors betted on the US government’s plans to clean up the books of banks in that country.
Onlookers watch a digital broadcast outside the Bombay Stock Exchange in Mumbai on Monday. Shares surged 5.1% as Asian markets rose on hopes of a fresh rescue package for the troubled US financial sector, dealers said. — AFP



EARLIER STORIES




A Bonhams auction house employee holds a recently discovered gem-encrusted gold finial from the octagonal golden throne of India's Tipu Sultan, also known as the Tiger of Mysore, in central London, on Monday. The gem-set gold finial will form part of the Islamic and Indian Art Sale at Bonhams in London, on  April 2.
A Bonhams auction house employee holds a recently discovered gem-encrusted gold finial from the octagonal golden throne of India's Tipu Sultan, also known as the Tiger of Mysore, in central London, on Monday. The gem-set gold finial will form part of the Islamic and Indian Art Sale at Bonhams in London, on  April 2. — AFP

US to spend $500 b to clean toxic assets
Washington, March 23
US Treasury Secretary Timothy Geithner announced on Saturday a new $500-billion federal program to remove from bank balance sheets troubled assets that he said “are now clogging” the US financial system.

Satyam bidding: L&T, Spice, Tech Mahindra shortlisted
New Delhi, March 23
Satyam Computer today shortlisted BK Modi's Spice, L&T and Tech Mahindra, among others, to move to the second stage of the bidding process, when these companies will be given financial data to decide on their auction prices.

PNB sees loan growth shrinking
Mumbai, March 23
With the financial downturn expected to stay next year as well, state-owned Punjab National Bank (PNB) today said its credit growth could shrink to 20 per cent in FY 10.

US demand for low-price Indian merchandise may rise
New Delhi, March 23
Come May, the demand for Indian merchandise priced between $10 and $60 may revive in the US stores, as American consumers start feeling the impact of the stimulus packages, exporters’ body FIEO said.

Govt issues oil bonds worth Rs 10,000 cr
New Delhi, March 23
The government today issued bonds worth Rs 10,000 crore to oil marketing PSUs to compensate them for selling some petroleum products at below the cost price.

Steel prices crash by 10% in fortnight
Experts blame it on polls
Mandi Gobindgarh, March 23
The steel prices around country have fallen by 10 per cent in last fortnight. Analysts point out Lok Sabha polls declaration responsible for this crash.

Renault India head resigns
Top management rejig announced
New Delhi, March 23
French auto major Renault today announced a top management rejig at its Indian subsidiary after the resignation of its head of operations in the country, Sylvain Bilaine.

‘Mitsubishi to slash 1,000 jobs, shut 50 branches’
New York, March 23
Japanese banking major Mitsubishi UFJ Financial Group Inc today said it was planning to close 50 branches and slash 1,000 jobs over the next three years, a media report says.

 





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Nano rolls out for India
Tribune News Service & PTI

Mumbai, March 23
The first of the Nanos will hit the Indian roads from July when Tata Motors begins delivery of the car, starting version of which is priced at Rs 1 lakh, company chairman Ratan Tata said here today.

Briefing mediapersons ahead of the Nano’s launch, Tata said bookings would remain open from April 9-25 and the final price for the first batch of applicants would be Rs 1 lakh, including taxes and duties. “The first batch of cars, to be allotted by lottery, would be price-protected," Tata said.

Later in the day, Tata said the company was committed to protecting the Nano's price at least initially. "We made a promise and we have kept it," he said.

The application forms, priced at Rs 300 would be available at Tata Motors' outlets and branches of the State Bank of India. The forms would be available at 30,000 locations across 1,000 cities. The forms would also be available at Tata-owned retail outlets like Westside and Croma. The applicants would have to make a down payment of Rs 2,999.

According to Tata, the first one-lakh applications would be allotted cars on a random basis selected in a lottery. Those who don't feature in the first one-lakh allottees would be paid an interest of 8.5 per cent on the application money.

Initially, the cars will be built at Tata Motors' plants in Uttarakhand and Pune. The company's plant at Sanand in Gujarat would go on stream by the end of this year. The capacity of Sanand would double from 2.5 lakh cars per year to 5 lakh annually, Tata said.

Tata Motors is still holding the land at Singur in West Bengal where the car plant was to come up originally and the company already spent about Rs 2,000 crore there. The Tatas are planning to take the small car to foreign markets over a period of time. It is expected to hit the US market in two-and-a-half years. However, the car for the US markets would be redesigned as per the safety standards of that country.

The Nano would be available in three versions -- the basic model and two deluxe models equipped with airconditioning, power brakes, power windows and other frills.

The snub-nosed car, which has its 623-cc engine in the rear (a first), can carry four passengers and has a fuel economy of 23.6 km per litre. The project was conceived in 2003 and has cost the company over Rs 2,000 crore.

Not an ego-trip: Tata

Excited about the launch of the people's car, the Nano, Tata Group chairman Ratan Tata today said the project was not conceived to satisfy his ego, nor was the Rs 1-lakh pricing a “gimmick”.

“I am very satisfied and excited about this launch today and Nano is not for my ego-trip...certainly, not an ego-trip at all,” Tata said at an editors meeting here.

The price of Rs 1-lakh was announced six-years ago when the Nano plan was unveiled at an European motor show, he said, adding that the fact that the company had kept its promise goes to show that it was not a “gimmick”.

May go to US in 3 yrs; drive in Europe by 2011

India may be the primary target market for Nano, but Tata Motors is looking at taking its Rs one lakh wonder to the US in three years, besides Europe.

“Given the present indications of the buying preferences in the US, we felt that we could further develop the European Nano to meet the requirements of the US,” Tata Group chairman Ratan Tata told reporters here.

The company has already unveiled the European version - Nano Europa - at the Geneva Motor Show earlier this month, which is likely to be fitted with a more powerful engine than the Indian version complying with Euro-V emission norms.

He said the company hoped that Nano would be available in the European market by 2011 and would be compliant with all the emission and safety requirements of Europe.

The making

From drawing board to Singur and to Sanand before hitting the showrooms, it has been quite a journey for Tata Motors’ Nano - the world’s cheapest car.

Here's how the Rs one lakh car was born.

March 2003: Ratan Tata discloses plans to launch the world's cheapest car at Rs 1 lakh at Geneva Motor Show

May 2006: Tata Motors announces setting up Nano manufacturing unit at Singur in West Bengal with initial investment of Rs 1,000 crore spread over 700 acres

Oct 2006: The Trinamool Congress opposes Tata Motors' plans to set up factory at Singur

Dec 2006: Violence mars Singur. Mamata Banerjee goes on indefinite hunger strike, which was called off after 25 days following appeals from the Prime Minister and the President.

May 2007: Peace talks between the state government and the Trinamool Congress fail

June 2007: CPM patriarch Jyoti Basu echoes Mamata Banerjee's demand that only 600 acres is required for the Singur project instead of 1,000 acres, but state government rules out returning Singur project land to farmers

Jan 2008: Ratan Tata unveils Nano at Auto Expo in Delhi.

Mar 2008: Nano showcased at Geneva Motor Show

Aug 2008: Talks between West Bengal Chief Minister Buddhadeb Bhattacharjee and Mamata Banerjee fail. Ratan Tata threatens to exit from Singur

Sep 2008: WB Governor Gopal Krishna Gandhi intervenes. Agreement signed between the state government and the Trinamool Congress but it is shortlived.

Oct 2008: Ratan Tata formally announces pulling out of Nano plant from Singur and days later declares Sanand at Gujarat as the new manufacturing location for Nano

Mar 2009: Ratan Tata unveils European version of Nano with added features and complying with Euro V emission norms at the Geneva Motor Show; Nano makes commercial debut. — PTI

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Sensex posts biggest gain of ’09
Tribune News Service & PTI

Mumbai, March 23
The markets saw the biggest one-day jump in 2009 as investors betted on the US government’s plans to clean up the books of banks in that country.

The Sensex gained 457 points to close at 9,424 registering the biggest single-day gain since December 10, 2008.

Among the major gainers today were stocks in the banking, oil and gas and metal sectors.

All the Sensex stocks except DLF closed in the green. Ranbaxy was the biggest gainer closing 10.8 per cent higher. Tata Steel was another gainer closing 10.4 per cent up at Rs 194. Other big gainers included Reliance Infra, Hindalco and HDFC that closed 8.4 per cent higher.

Brokers said the market was driven higher by strong global cues amid expectations of a fresh set of monetary measures as foreign funds covered short positions ahead of the expiry of derivatives contracts on March 26.

Similarly, the National Stock Exchange’s 50-share Nifty also jumped by 132.85 points or 4.73 per cent to close at 2,939.90 from its last close.

Sentiment remained strong throughout in sync with firm Asian and European markets.

Asian indices ended higher by 2.5-5.0 per cent while European markets were up by 1-2 per cent in morning trading.

The rally in global stocks was largely attributed to a surprising decision by the US Federal Reserve to pump in over $1 trillion into the financial system, which is expected to help revive the US economy.

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US to spend $500 b to clean toxic assets

Washington, March 23
US Treasury Secretary Timothy Geithner announced on Saturday a new $500-billion federal program to remove from bank balance sheets troubled assets that he said “are now clogging” the US financial system.

“The financial system as a whole is still working against recovery,” Geithner wrote in an op-ed piece published in The Wall Street Journal outlining his plans.

“Many banks, still burdened by bad lending decisions, are holding back on providing credit.” The administration of President Barack Obama has developed a new “Public-private investment program” that will set up funds to provide a market for the troubled loans and securities issued by banks over the past several years, he wrote.

“The new Public-private investment program will initially provide financing for $500 billion with the potential to expand up to $1 trillion over time, which is a substantial share of real-estate related assets originated before the recession that are now clogging our financial system,” Geithner pointed out.

The treasury secretary was due to make a formal announcement of the plan and provide details at press conference today. — AFP

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Satyam bidding: L&T, Spice, Tech Mahindra shortlisted

New Delhi, March 23
Satyam Computer today shortlisted BK Modi's Spice, L&T and Tech Mahindra, among others, to move to the second stage of the bidding process, when these companies will be given financial data to decide on their auction prices.

Sources said the Satyam board has shorlisted six bidders comprising L&T, Tech Mahindra, Spice, and private equity players. Spice chief B K Modi and a spokpesperson of Tech Mahindra declined to comment, saying they are bound by the non-disclosure agreement. The L&T spokesperson too declined to comment.

As per the bidding process schedule, short-listed bidders will be given access to business, financial and legal diligence materials provided they execute a non-disclosure and non-solicitation agreement, a standstill pact and a “no-claims” undertaking.

There is no reserve price for the auction, leaving the bid prices wide open.

A senior Spice Corp official said the company had received e-mail from the board of Satyam informing it (Spice) of its shortlisting, and financial and legal data would be available from tomorrow.

The board of Spice is meeting tonight to take stock of the situation and an official said the company wanted Satyam to share details of the CBI investigations so far into the Rs 7,800 crore fraud in the IT firm as that would help the bidders to reach appropriate valuation in the absence of latest quarterly results and other data.

“If there is lack of transparency, we will not bid. The board should share enough information on the number of shortlisted bidders,” said the official.

The Satyam board has invited bids from the selected bidders to acquire a 51 per cent stake in the company. The winner will initially acquire 31 per cent through a new share issue.

In the second stage, the investor will have to make an open offer to other Satyam shareholders to purchase from them a minimum of 20 per cent of the company's share capital, according to regulations. — PTI 

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PNB sees loan growth shrinking

Mumbai, March 23
With the financial downturn expected to stay next year as well, state-owned Punjab National Bank (PNB) today said its credit growth could shrink to 20 per cent in FY 10.

“We have been cautious (in lending) to over-leveraged sectors. We expect credit growth of 20 per cent in the next fiscal,” PNB chairman and managing director K C Chakrabarty told reporters here today.

The lender has seen its credit portfolio growing at as high as 39 per cent in the current fiscal, Chakrabarty said.

Despite the adverse impact of the financial turmoil, credit growth in many government-owned banks has risen over the past one year, Chakrabarty said.

The country’s third largest bank, however, will meet the requirements of growth-oriented segments though it will be cautious about over-leveraged sectors, Chakrabarty said.

“These are difficult times ... But we will be lending to (meet) the productive requirements of clients,” Chakrabarty said.

Noting that lending rates in the banking system “are not high” and are linked to the deposit rates of each bank, Chakrabarty said PNB would look at possibilities of further reduction in its rates.

The cost of funds for banks is dependent largely on deposit rates rather than the liquidity condition in the banking system, he said.

PNB is also planning to ramp up its financial inclusion in the period ahead, Chakrabarty said.

The lender has targeted increasing its no-frills accounts to 10 crore from the current 48 lakh in the next five years, he added. — PTI

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US demand for low-price Indian merchandise may rise

New Delhi, March 23
Come May, the demand for Indian merchandise priced between $10 and $60 may revive in the US stores, as American consumers start feeling the impact of the stimulus packages, exporters’ body FIEO said.

“We expect that from May onwards, there will be some improvement in orders... Buying power is slowly picking up in America again because of the stimulus package... We feel demand for an article which sells between $10 to $60 will again pick up,” FIEO president A Sakthivel said.

Pick-up in demand for merchandise in the US would help the most sectors like textile garments, handicrafts and leather and leather products, Sakthivel said.

The FIEO chief expects the next fiscal beginning April to be better than 2008-09 which may end up with an export growth of 10 per cent from about 25 per cent in the previous year.

The US accounted for 13 per cent of India's exports in 2007-08. However, the US’ share in labour-oriented sectors is quite significant. American buyers source 30-35 per cent textile from exports.

As the American economy is battling the worst recession in seven decades, India’s exports of gems and jewellery, leather and textile have taken a severe beating in the last five months.

The Commerce Ministry estimates put the total exports for the current year to go up to $170 billion, slashing earlier estimate of $200 billion. — PTI

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Govt issues oil bonds worth Rs 10,000 cr

New Delhi, March 23
The government today issued bonds worth Rs 10,000 crore to oil marketing PSUs to compensate them for selling some petroleum products at below the cost price.

While IndianOil Corporation will get the highest Rs 5,817.27 crore of special bonds, Bharat Petroleum Corporation Ltd will receive Rs 2,144.32-crore bonds and Hindustan Petroleum Corporation Ltd will be issued bonds worth Rs 2,038.41 crore.

The bonds will carry an 8 per cent coupon rate and will mature in 2026, the government said in a statement.

The investment in these bonds will not be counted as statutory investment that banks have to make in government and other securities. — PTI

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Steel prices crash by 10% in fortnight
Experts blame it on polls
Gurdeep Singh Mann
Tribune News Service

Mandi Gobindgarh, March 23
The steel prices around country have fallen by 10 per cent in last fortnight. Analysts point out Lok Sabha polls declaration responsible for this crash.

“The market has grown uncertain. Iron and steel stockists are holding back the stocks. Everyone is waiting to see which government comes to power and what its policies towards steel industry would be,” says Anil Suraj, a steel analyst and owner of Steel Town Group of Industries.

Apart from polls, more to add to cocktail of worries is financial year coming to a close and the budget. Besides steel, the prices of TMT, structure steel, MS Bar, sponge iron and iron have registered reduction by 10 per cent.

The price range of Rs 30, 000 per tonne has tumbled down to Rs 27, 000 per tonne. MS Ingot was Rs 27, 000 per tonne two weeks ago. Its downfall began in beginning of March and today it stands at Rs 25, 500 per tonne.

Rates of scrap have also been hit, registering downfall of nearly Rs 700 to Rs 800. This has affected Mandi Gobindgarh - the largest manufacturing base of raw material.

Tumble down in rates has brought domestic market in parity with the international market. Imports, too, have reduced. Experts point that the clouds of uncertainness are expected to clear after new government comes to power.

“It is expected that things will get better after June, when demand may also increase. Till then market will recede even more,” Anil pointed out. He added that government should step in such conditions and ensure making policies that are pro-active.

It is pertinent to mention here that in February industry had seen revival of around 10 per cent, as compared to prices in January.

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Renault India head resigns
Top management rejig announced

New Delhi, March 23
French auto major Renault today announced a top management rejig at its Indian subsidiary after the resignation of its head of operations in the country, Sylvain Bilaine.

“After 25 years with Renault and the last four years heading Renault operations in India, Sylvain Bilaine has decided to leave the company to create his own consultancy firm in France,” Renault India said in a statement. Bilaine was country general manager for Renault in India.

Effective April 1, Marc Nassif will be appointed executive director of Renault India and country general manager for Renault in India, responsible for all activities of Renault in India, the statement added.

Nassif is currently deputy managing director of Renault Nissan Automotive Private Ltd, based in Chennai, and will continue to keep this responsibility and report to Katsumi Nakamura, member of the renault executive committee and leader of the region Asia Africa, it said.

Sudhir Rao has been appointed chief operating officer of Renault India, who in turn will report to Nassif, the statement said.

“The above appointments reflect the strong and continuing commitment from Renault in strengthening our market presence, along with our Alliance and JV partners, in the extremely important Indian market,” it said.

Renault has halted its plans to launch cars in India till 2010 in the wake of the global slowdown and the company has decided to hold back investment in assembly line at its Chennai plant.

The company had last year announced a Rs 4,500-crore investment over seven years to produce four lakh cars annually in an alliance with its Japanese group company Nissan. — PTI

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‘Mitsubishi to slash 1,000 jobs, shut 50 branches’

New York, March 23
Japanese banking major Mitsubishi UFJ Financial Group Inc today said it was planning to close 50 branches and slash 1,000 jobs over the next three years, a media report says.

According to a report by the Wall Street Journal, the biggest bank of Japan in terms of assets, is planning to reduce headcount and shut down about 50 branches over a period of three years as part of its ongoing effort to cut costs.

“The plan for its core banking unit Bank of Tokyo- Mitsubishi UFJ, includes shutting down at least 200 automatic teller machines,” the WSJ report published online stated. WSJ report added, MUFG has stopped short of laying off people and would instead eliminate 1,000 jobs through natural attrition and move another thousand into new positions within the group.

The daily pointed out that laying-off of people in Japan is extremely difficult because of the tough labour laws protecting staff and public pressure on companies to preserve social stability. However, many Japanese companies have laid off people in recent months because of the sharp downturn in the country’s economy. — PTI

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BRIEFLY

SBI staff strike on Apr 8-9
NEW DELHI:
Officers of the State Bank of India have decided to go on a two-day nationwide strike from April 8 to press for hiring officers and revising pay scales. “There is a shortage of 7,000-8,000 officers across the country. If you take into account the new branches, this figure will cross 10,000,” All India State Bank Officers' Federation president said. The officers’ union has threatened to go on an indefinite nationwide strike in May if their demands were not met. — PTI

Rupee stronger by 18 paise
MUMBAI:
The rupee bounced back by 18 paise and ended at 50.45/46 against the greenback as local stocks rallied strongly on increased capital inflows amid a weakening dollar overseas. Dollar buying by oil companies, however, put pressure on the rupee The domestic currency moved in a limited range of 50.40 and 50.66 during the day after resuming stronger at 50.48/50 a dollar from its Friday’s close of 50.63/64 a dollar. — PTI

Ranbaxy’s Paonta Sahib facility
NEW DELHI
: Ranbaxy Lab on Monday said it had received good manufacturing practice certificate from UK and Australian health regulators for its facility at Paonta Sahib in Himachal Pradesh. “Medicines and Healthcare products Regulatory Agency of the UK and the Therapeutic Goods Administration of the Australian government, have issued good manufacturing practice certificates for the company's site at Paonta Sahib, following a joint audit conducted in October 2008,”it said. — PTI

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