Aug. 30 (Bloomberg) -- Billionaire Mukesh Ambani’s Reliance Industries Ltd. acquired a stake in India’s luxury Oberoi hotel chain, his seventh investment this year as he diversifies from the oil and gas sector that made him Asia’s richest man.
Reliance Industries, operator of the world’s biggest refinery complex, agreed to pay 10.2 billion rupees ($217 million) for a stake in EIH Ltd., which runs the Oberoi and Trident hotels, according to a statement today.
Ambani, 53, has invested more than $1.2 billion buying into a broadband company, cargo carrier and announced plans to build hospitals, universities and set up a sports marketing company. The fastest pace of economic growth in 2 1/2 years is bolstering demand for services, providing alternative sources of revenue as Reliance’s core energy business slows.
“The push is to get into services and diversify their revenue sources from being a pure manufacturing company,” said Jagannadham Thunuguntla, chief strategist at SMC Capitals Ltd. in New Delhi. “Telecom and hospitality are a reflection of India’s growth story.”
Reliance Industries stock has declined 13 percent this year as natural gas production from the nation’s biggest field has been capped for at least two years and earnings from turning crude into fuels at its refining complex has slowed. Ambani faces increased competition from billionaire Anil Agarwal, who this month agreed to buy a controlling stake in India’s largest onland oil field.
‘Excellent Prospects’
“EIH has excellent future prospects,” Reliance said in a statement today. Manoj Warrier, a spokesman for Reliance, declined to comment further.
Reliance Industries shares which have the highest weight in the index, declined 0.2 percent to 947.95 rupees at the end of trading in Mumbai, falling for the sixth straight day. EIH shares gained 11.5 percent to 150.90 rupees, the highest in almost two years.
Reliance is close to signing an agreement with DE Shaw & Co. to start an $800 million infrastructure fund, the Economic Times reported Aug. 26, without saying where it got the information. Chairman Ambani told shareholders June 18 Reliance Foundation will build a university and a hospital in Mumbai.
The company, which also produces chemicals, expects its retail business revenue to grow 10-fold in five years to 450 billion rupees ($9.6 billion). Reliance Retail, with 1,150 stores in 86 cities, had sales of more than 45 billion rupees in the year to March 31, Ambani told shareholders June 18.
“There are opportunities to grow in telecoms and hospitality but I would like to see them fully concentrate on manufacturing,” said Juergen Maier, who helps manage $1.3 billion of emerging market stocks, including Reliance. “Their attempt at service in the retail sector hasn’t been very successful. I’m not very happy that they are diversifying into services.”
Peak Output
Reliance Industries expects to reach peak output at the KG- D6 field in the Bay of Bengal as late as 2012 at least two years behind schedule, two people with knowledge of the plan said July 27. The explorer is currently producing about 60 million cubic meters a day of the clean-burning fuel, 25 percent below its capacity.
The company is also spending almost $3.4 billion to buy shale gas assets in the U.S. from three companies, including Atlas Energy Inc. and Pioneer Natural Resources Co.
Reliance Industries operates 1.24 million barrels a day of crude oil refining capacity in the west Indian state of Gujarat. Global refining margins, or earnings from processing oil into fuels, shrank to $4.22 a barrel in the quarter, compared with $5.49 a barrel in the three months ended June 30, according to data compiled by BP Plc.
Gains from processing oil into fuels may remain stable in the next three quarters, Chief Financial Officer Alok Agarwal said July 27.
Slower refining profit have resulted in Reliance Industries’ net income missing analysts’ estimates in at least three of the last five quarters.
Monday, August 30, 2010
Thursday, August 26, 2010
Jobless Claims in U.S. Decrease More Than Forecast
Aug. 26 (Bloomberg) -- Applications for unemployment benefits in the U.S. fell more than forecast last week, easing concern the labor market was rapidly deteriorating as the economy slows.
Initial jobless claims dropped by 31,000, the first decline in a month, to 473,000 in the week ended Aug. 21, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance decreased, while those getting extended benefits climbed.
The average number of claims over the past month climbed to the highest level since November even as the latest reading provided some relief to the drumbeat of negative economic data in recent weeks. Employers have delayed hiring plans and some have renewed firings as the year-old recovery shows signs of petering out, raising the risk consumer spending will weaken further.
“Even before the recent uptick, the trend had been moderately high and that’s consistent with a lackluster pace of job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “The private sector really hasn’t recovered enough.”
Stock-index futures climbed after the report eased concern job losses were increasing. The contract on the Standard & Poor’s 500 Index rose 0.3 percent to 1,057.7 at 9:14 a.m. in New York. Treasury securities were little changed, erasing earlier gains.
Fewer Than Forecast
The median estimate of 48 economists surveyed by Bloomberg projected claims would drop to 490,000. Forecasts ranged from 475,000 to 510,000. The government revised the prior week’s claims figure up to 504,000, the highest level in nine months, from a previously reported 500,000.
There were no special factors influencing last week’s data, a Labor Department spokesman told reporters as the figures were being released.
The four-week moving average of claims increased to 486,750 from 483,500 the prior week.
The number of people continuing to collect unemployment benefits dropped by 62,000 to 4.46 million in the week ended Aug. 14, from 4.52 million the prior week.
The continuing claims figure does not include those receiving extended benefits under federal programs. The number of Americans who’ve used up traditional benefits and are now collecting emergency and extended payments rose by about 302,000 to 5.84 million in the week ended Aug. 7.
Jobless Rate
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.5 percent in the week ended Aug. 14 from 3.6 percent.
Eleven states and territories reported an increase in claims that same week, while 42 reported a decrease.
While companies have boosted payrolls seven straight months, firings have remained elevated as the economic recovery shows signs of slowing. Private firms added 71,000 jobs in July, fewer than economists had forecast, according to government figures released Aug. 6. Unemployment held at 9.5 percent, near a 26-year high of 10.1 percent.
The government may report tomorrow the economy grew at a 1.4 percent pace in the second quarter, less than the 2.4 percent rate earlier estimated, according to economists surveyed by Bloomberg. That would be the slowest growth since the second quarter of 2009 when the economy was still contracting.
A year after the expansion resumed, companies are still cutting staff.
More Firings
Northrop Grumman Shipbuilding, a unit of Northrop Grumman Corp. this week said it would fire 292 employees at the Gulf Coast shipbuilding facility at Pascagoula, Mississippi, and that it expects to cut another 350 jobs at Pascagoula by the end of the year.
Congress this month passed legislation providing $26 billion in aid to state governments to prevent thousands of layoffs of teachers and other public service employees as declining tax revenue has left state and local governments with budget deficits the National Conference of State Legislatures estimates at $84 billion.
In a sign local governments and employees are cooperating to save jobs, the Los Angeles-based Engineers & Architects Association, which represents one-seventh of the city’s municipal workforce, agreed to terms that call for members to help pay their health insurance costs for the first time, Mayor Antonio Villaraigosa said this week.
Initial jobless claims dropped by 31,000, the first decline in a month, to 473,000 in the week ended Aug. 21, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance decreased, while those getting extended benefits climbed.
The average number of claims over the past month climbed to the highest level since November even as the latest reading provided some relief to the drumbeat of negative economic data in recent weeks. Employers have delayed hiring plans and some have renewed firings as the year-old recovery shows signs of petering out, raising the risk consumer spending will weaken further.
“Even before the recent uptick, the trend had been moderately high and that’s consistent with a lackluster pace of job growth,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “The private sector really hasn’t recovered enough.”
Stock-index futures climbed after the report eased concern job losses were increasing. The contract on the Standard & Poor’s 500 Index rose 0.3 percent to 1,057.7 at 9:14 a.m. in New York. Treasury securities were little changed, erasing earlier gains.
Fewer Than Forecast
The median estimate of 48 economists surveyed by Bloomberg projected claims would drop to 490,000. Forecasts ranged from 475,000 to 510,000. The government revised the prior week’s claims figure up to 504,000, the highest level in nine months, from a previously reported 500,000.
There were no special factors influencing last week’s data, a Labor Department spokesman told reporters as the figures were being released.
The four-week moving average of claims increased to 486,750 from 483,500 the prior week.
The number of people continuing to collect unemployment benefits dropped by 62,000 to 4.46 million in the week ended Aug. 14, from 4.52 million the prior week.
The continuing claims figure does not include those receiving extended benefits under federal programs. The number of Americans who’ve used up traditional benefits and are now collecting emergency and extended payments rose by about 302,000 to 5.84 million in the week ended Aug. 7.
Jobless Rate
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.5 percent in the week ended Aug. 14 from 3.6 percent.
Eleven states and territories reported an increase in claims that same week, while 42 reported a decrease.
While companies have boosted payrolls seven straight months, firings have remained elevated as the economic recovery shows signs of slowing. Private firms added 71,000 jobs in July, fewer than economists had forecast, according to government figures released Aug. 6. Unemployment held at 9.5 percent, near a 26-year high of 10.1 percent.
The government may report tomorrow the economy grew at a 1.4 percent pace in the second quarter, less than the 2.4 percent rate earlier estimated, according to economists surveyed by Bloomberg. That would be the slowest growth since the second quarter of 2009 when the economy was still contracting.
A year after the expansion resumed, companies are still cutting staff.
More Firings
Northrop Grumman Shipbuilding, a unit of Northrop Grumman Corp. this week said it would fire 292 employees at the Gulf Coast shipbuilding facility at Pascagoula, Mississippi, and that it expects to cut another 350 jobs at Pascagoula by the end of the year.
Congress this month passed legislation providing $26 billion in aid to state governments to prevent thousands of layoffs of teachers and other public service employees as declining tax revenue has left state and local governments with budget deficits the National Conference of State Legislatures estimates at $84 billion.
In a sign local governments and employees are cooperating to save jobs, the Los Angeles-based Engineers & Architects Association, which represents one-seventh of the city’s municipal workforce, agreed to terms that call for members to help pay their health insurance costs for the first time, Mayor Antonio Villaraigosa said this week.
Monday, August 23, 2010
Govt extends export sops to struggling sectors
The government continues to extend a helping hand to exporters. Announcing the annual foreign trade policy on Monday, Commerce Minister Anand Sharma said that the recovery in exports has been fragile at best and that it would be prudent to persevere with last year's policy stance.
In keeping with this view, the minister has announced the introduction of a bonus scheme for handicrafts and leather.
Govt extends export sops to struggling sectors
“Abrupt withdrawal can be very hurtful for those sectors that are labour intensive, where the demand has not returned and which continue to do badly. That is why we have retained the support or intensive for such sectors bringing in more the embrace of more incentive schemes which need intervention and support. Along with adding to what was being given earlier in the form of a new scheme where 2% additional bonus has been given to some sectors including handicrafts, handloom, many of the engineering projects as well as the textile and the leather industry.
The minister also announced that the Duty Entitlement Pass Book (DEPB) and Export Promotion for Capital Goods (EPCG) schemes would be extended to March 2012
In keeping with this view, the minister has announced the introduction of a bonus scheme for handicrafts and leather.
Govt extends export sops to struggling sectors
“Abrupt withdrawal can be very hurtful for those sectors that are labour intensive, where the demand has not returned and which continue to do badly. That is why we have retained the support or intensive for such sectors bringing in more the embrace of more incentive schemes which need intervention and support. Along with adding to what was being given earlier in the form of a new scheme where 2% additional bonus has been given to some sectors including handicrafts, handloom, many of the engineering projects as well as the textile and the leather industry.
The minister also announced that the Duty Entitlement Pass Book (DEPB) and Export Promotion for Capital Goods (EPCG) schemes would be extended to March 2012
Indian State-Run Companies Said to Consider Cairn Counter Bid
Aug. 23 (Bloomberg) -- Indian state-run energy companies are considering bidding for a stake in Cairn India Ltd., countering Vedanta Resources Plc’s $9.6 billion offer for the explorer, according to two people familiar with the matter.
India’s oil ministry has instructed Oil & Natural Gas Corp. to study the possibility of making a counter offer, one of the people said. GAIL India Ltd. may join ONGC, another person said.
Vedanta, the mining company controlled by billionaire Anil Agarwal, agreed this month to buy as much as 60 percent of Cairn Energy Plc’s Indian unit to gain access to the country’s biggest onshore oil field. ONGC owns a 30 percent stake in the field and is seeking to increase production as output from 30-year-old fields declines.
The Press Trust of India earlier reported ONGC, India’s largest explorer, Oil India Ltd. and GAIL have arranged $10 billion in funds from international banks to fund a possible bid.
R.S. Sharma, ONGC’s chairman, and Oil Secretary S. Sundareshan, the senior-most bureaucrat in the ministry, declined to comment. Oil India Chairman N.M. Borah and GAIL’s Chairman B.C. Tripathi didn’t answer calls to their mobile phones. Gordon Simpson, a spokesman for Vedanta, declined to comment, while David Nisbet, the head of group corporate affairs for Cairn Energy, didn’t respond to an e-mail sent to him.
India’s oil ministry has instructed Oil & Natural Gas Corp. to study the possibility of making a counter offer, one of the people said. GAIL India Ltd. may join ONGC, another person said.
Vedanta, the mining company controlled by billionaire Anil Agarwal, agreed this month to buy as much as 60 percent of Cairn Energy Plc’s Indian unit to gain access to the country’s biggest onshore oil field. ONGC owns a 30 percent stake in the field and is seeking to increase production as output from 30-year-old fields declines.
The Press Trust of India earlier reported ONGC, India’s largest explorer, Oil India Ltd. and GAIL have arranged $10 billion in funds from international banks to fund a possible bid.
R.S. Sharma, ONGC’s chairman, and Oil Secretary S. Sundareshan, the senior-most bureaucrat in the ministry, declined to comment. Oil India Chairman N.M. Borah and GAIL’s Chairman B.C. Tripathi didn’t answer calls to their mobile phones. Gordon Simpson, a spokesman for Vedanta, declined to comment, while David Nisbet, the head of group corporate affairs for Cairn Energy, didn’t respond to an e-mail sent to him.
Monday, August 16, 2010
Sugar stocks zoom by 6% on hike in ethanol price
Sugar stocks, led by Bajaj Hindusthan shot up by over 6 per cent on the Bombay Stock Exchange after the government raised the price of ethanol for blending with petrol to Rs. 27 per litre today.
Shares of Bajaj Hindusthan, the country's largest sugar manufacturer, climbed 6.11 per cent to touch a month's high of Rs. 124.90 on the Bombay Stock Exchange in afternoon trade. Later, the scrip was trading at Rs. 121.85, up 3.53 per cent. Simbhaoli Sugars rose 5.40 per cent to a high of Rs. 39.95. Later the scrip was quoting at Rs. 38, up 0.26 per cent on BSE.
Ethanol is used a biofuel additive for petrol and can be made from sugarcane byproduct, molasses.
"The government's decision would help molasses producers get better price for ethanol. This has buoyed the stocks of sugar companies, which were under pressure for quite sometime," SMC Capitals Equity Head Jagannadham Thunuguntla said.
However, Shree Renuka Sugars tanked 0.15 per cent at Rs. 68.55, after hitting its months high at Rs. 71. Following the announcement, stocks of other sugar companies, including Balrampur Chini Mills also rallied (up 0.71 per cent), Dhampur Sugar Mills (3.25 per cent).
The government today approved an interim fixed price of Rs. 27 a litre for ethanol, higher from Rs. 21.5 a litre earlier.
A Group of Ministers (GoM) has recently reaffirmed Rs. 27 per litre price for ethanol to be paid by the oil marketing companies to the sugar mills.
Shares of Bajaj Hindusthan, the country's largest sugar manufacturer, climbed 6.11 per cent to touch a month's high of Rs. 124.90 on the Bombay Stock Exchange in afternoon trade. Later, the scrip was trading at Rs. 121.85, up 3.53 per cent. Simbhaoli Sugars rose 5.40 per cent to a high of Rs. 39.95. Later the scrip was quoting at Rs. 38, up 0.26 per cent on BSE.
Ethanol is used a biofuel additive for petrol and can be made from sugarcane byproduct, molasses.
"The government's decision would help molasses producers get better price for ethanol. This has buoyed the stocks of sugar companies, which were under pressure for quite sometime," SMC Capitals Equity Head Jagannadham Thunuguntla said.
However, Shree Renuka Sugars tanked 0.15 per cent at Rs. 68.55, after hitting its months high at Rs. 71. Following the announcement, stocks of other sugar companies, including Balrampur Chini Mills also rallied (up 0.71 per cent), Dhampur Sugar Mills (3.25 per cent).
The government today approved an interim fixed price of Rs. 27 a litre for ethanol, higher from Rs. 21.5 a litre earlier.
A Group of Ministers (GoM) has recently reaffirmed Rs. 27 per litre price for ethanol to be paid by the oil marketing companies to the sugar mills.
Vedanta Agrees to Buy Stake in Cairn’s Indian Unit
Aug. 16 (Bloomberg) -- Vedanta Resources Plc, the mining company controlled by billionaire Anil Agarwal, agreed to buy as much as 60 percent of Cairn India Ltd. for $9.6 billion to gain access to India’s biggest onshore oil field.
Vedanta, based in London, will pay a total of about $8.5 billion to $9.6 billion in cash, the company said today in a statement. The price is a 32 percent premium to Cairn India’s average closing price over 90 days. Cairn Energy Plc, Cairn India’s parent, will return a majority of the cash raised to shareholders and invest the rest in exploration.
Vedanta is following the strategy of BHP Billiton Ltd., the world’s largest mining company, by adding oil assets to zinc, copper, iron ore and aluminum businesses. The purchase will give the company access to the Mangala deposit in Rajasthan. Cairn India is 62 percent held by Edinburgh-based Cairn Energy.
“The main issue is, why do a deal, just in terms of there is no previous experience in oil and gas,” Paul Cliff, an analyst at Nomura Holdings Inc. in London, said today by phone. “It will be financed by debt and although it puts some strain on the balance sheet we think it is doable. It’s a concern for investors because Vedanta is a metals and mining house with one of the most aggressive organic growth profiles.”
Credit-Default Swaps
Vedanta will borrow as much as $6.5 billion to fund the acquisition, Deputy Chairman Navin Agarwal said on a conference call today. J.P Morgan Cazenove and Morgan Stanley are acting as joint lead financial advisers along with Standard Chartered Plc, which is also arranging the financing together with Credit Suisse Group AG and Goldman Sachs Group Inc.
Credit-default swaps linked to Vedanta debt rose 116 basis points to 649, according to data provider CMA, the highest since May. Swaps are used to speculate on a company’s ability to repay debt and gain when perceptions of credit quality deteriorate.
Vedanta will buy at least 40 percent and up to 51 percent of Cairn India from London-listed Cairn Energy. The mining company will also make an open offer to Cairn India stockholders for as much as 20 percent of issued shares. The final number of shares sold by Cairn Energy will depend on the results of the open offer, which could take Vedanta’s stake to as high as 60 percent. The process will take about three months to complete, Cairn’s Finance Director Jann Brown said on a call today.
“It’s the right time to realize some of the value we’ve created,” Chief Executive Officer Bill Gammell said on the call. “This isn’t an exit from India for Cairn Energy Plc.”
Sesa Goa
Sesa Goa Ltd., another company controlled by Anil Agarwal, will end up with 20 percent of the explorer in a follow-up deal. The holding will consist of shares bought from Vedanta and through the open offer to shareholders. Sesa Goa will fund most of its purchase with its own cash.
Sesa Goa expects to have 120 billion rupees ($2.6 billion) in cash by the end of March next year, helping to fund the $3 billion purchase, Managing Director Prasun Kumar Mukherjee said by phone today. Sesa Goa had a cash surplus of 80.54 billion rupees as of June 30, according to its quarterly results.
Cairn Energy rose as much as 21.1 pence, or 4.5 percent, to 489.4 pence in London trading, and was at 483.9 pence by 11:39 a.m. local time. The stock has risen 46 percent this year. Sesa Goa fell as much as 9.6 percent in Mumbai trading. Vedanta climbed 5.3 percent to 2,161 pence in London after tumbling 20 percent last week, when the acquisition was reported.
Rich List
Cairn India’s current management will continue running the company after the acquisition, Anil Agarwal said in an interview with Bloomberg UTV today. Cairn India won’t be taken private and Vedanta will provide guidance to the management, he said.
Agarwal, with an estimated fortune of 4.1 billion pounds ($6.4 billion), is ranked 10th on the annual Sunday Times Rich List of the wealthiest people in the U.K., the London-based newspaper said in April. He built his wealth on aluminum, zinc, copper and iron ore after buying Shamsher Sterling Corp. in 1979.
Vedanta was the first Indian company to list its shares on the London Stock Exchange in 2003, according to its website, and employs 30,000 people with operations in India, Australia and Zambia. The company said in 2008 it would spend $20 billion in India over four years on mines and power plants.
The company’s plans to increase Sesa Goa’s production to 50 million metric tons annually from 2014 won’t be affected by the transaction, Navin Agarwal said. Vedanta plans to complete the deal by the first quarter of 2011, he said.
The premium Vedanta is paying for Cairn India reflects the potential of the Rajasthan block, where only one of seven fields has begun production, Vinay Nair, a Mumbai-based analyst at brokerage Khandwala Securities Ltd., said by telephone.
“Even though Vedanta is not a full-fledged oil or exploration company, they’ve shown their management expertise on the mining side,” helping to unlock that value, Nair said.
Vedanta, based in London, will pay a total of about $8.5 billion to $9.6 billion in cash, the company said today in a statement. The price is a 32 percent premium to Cairn India’s average closing price over 90 days. Cairn Energy Plc, Cairn India’s parent, will return a majority of the cash raised to shareholders and invest the rest in exploration.
Vedanta is following the strategy of BHP Billiton Ltd., the world’s largest mining company, by adding oil assets to zinc, copper, iron ore and aluminum businesses. The purchase will give the company access to the Mangala deposit in Rajasthan. Cairn India is 62 percent held by Edinburgh-based Cairn Energy.
“The main issue is, why do a deal, just in terms of there is no previous experience in oil and gas,” Paul Cliff, an analyst at Nomura Holdings Inc. in London, said today by phone. “It will be financed by debt and although it puts some strain on the balance sheet we think it is doable. It’s a concern for investors because Vedanta is a metals and mining house with one of the most aggressive organic growth profiles.”
Credit-Default Swaps
Vedanta will borrow as much as $6.5 billion to fund the acquisition, Deputy Chairman Navin Agarwal said on a conference call today. J.P Morgan Cazenove and Morgan Stanley are acting as joint lead financial advisers along with Standard Chartered Plc, which is also arranging the financing together with Credit Suisse Group AG and Goldman Sachs Group Inc.
Credit-default swaps linked to Vedanta debt rose 116 basis points to 649, according to data provider CMA, the highest since May. Swaps are used to speculate on a company’s ability to repay debt and gain when perceptions of credit quality deteriorate.
Vedanta will buy at least 40 percent and up to 51 percent of Cairn India from London-listed Cairn Energy. The mining company will also make an open offer to Cairn India stockholders for as much as 20 percent of issued shares. The final number of shares sold by Cairn Energy will depend on the results of the open offer, which could take Vedanta’s stake to as high as 60 percent. The process will take about three months to complete, Cairn’s Finance Director Jann Brown said on a call today.
“It’s the right time to realize some of the value we’ve created,” Chief Executive Officer Bill Gammell said on the call. “This isn’t an exit from India for Cairn Energy Plc.”
Sesa Goa
Sesa Goa Ltd., another company controlled by Anil Agarwal, will end up with 20 percent of the explorer in a follow-up deal. The holding will consist of shares bought from Vedanta and through the open offer to shareholders. Sesa Goa will fund most of its purchase with its own cash.
Sesa Goa expects to have 120 billion rupees ($2.6 billion) in cash by the end of March next year, helping to fund the $3 billion purchase, Managing Director Prasun Kumar Mukherjee said by phone today. Sesa Goa had a cash surplus of 80.54 billion rupees as of June 30, according to its quarterly results.
Cairn Energy rose as much as 21.1 pence, or 4.5 percent, to 489.4 pence in London trading, and was at 483.9 pence by 11:39 a.m. local time. The stock has risen 46 percent this year. Sesa Goa fell as much as 9.6 percent in Mumbai trading. Vedanta climbed 5.3 percent to 2,161 pence in London after tumbling 20 percent last week, when the acquisition was reported.
Rich List
Cairn India’s current management will continue running the company after the acquisition, Anil Agarwal said in an interview with Bloomberg UTV today. Cairn India won’t be taken private and Vedanta will provide guidance to the management, he said.
Agarwal, with an estimated fortune of 4.1 billion pounds ($6.4 billion), is ranked 10th on the annual Sunday Times Rich List of the wealthiest people in the U.K., the London-based newspaper said in April. He built his wealth on aluminum, zinc, copper and iron ore after buying Shamsher Sterling Corp. in 1979.
Vedanta was the first Indian company to list its shares on the London Stock Exchange in 2003, according to its website, and employs 30,000 people with operations in India, Australia and Zambia. The company said in 2008 it would spend $20 billion in India over four years on mines and power plants.
The company’s plans to increase Sesa Goa’s production to 50 million metric tons annually from 2014 won’t be affected by the transaction, Navin Agarwal said. Vedanta plans to complete the deal by the first quarter of 2011, he said.
The premium Vedanta is paying for Cairn India reflects the potential of the Rajasthan block, where only one of seven fields has begun production, Vinay Nair, a Mumbai-based analyst at brokerage Khandwala Securities Ltd., said by telephone.
“Even though Vedanta is not a full-fledged oil or exploration company, they’ve shown their management expertise on the mining side,” helping to unlock that value, Nair said.
Wednesday, August 11, 2010
India's Reliance plans to restart fuel stations
NEW DELHI Aug 11 (Reuters) - India's Reliance Industries (RELI.BO: Quote) plans to reopen all of its fuel stations in the country and is currently selling petrol and diesel at the same rates as state firms, a company statement said on Wednesday.
Reliance, which operates the world's biggest refining complex at Jamnagar in Gujarat, shut down its petrol pumps in 2008 as crude prices surged towards $150 a barrel.
At the time the Indian government subsidised fuel sales by state firms, knocking private retailers out of the market.
"If the government announces diesel deregulation then diesel, like petrol, will also be available at market rates. Further to this Reliance will resume operations across all pumps, pan India," the Reliance statement said.
Retail sale of petrol and diesel are again viable since the end of June when the government lifted all controls on petrol and raised administered prices of other fuels including diesel.
Reliance owns more than 1,400 fuel stations in India.
The government plans to free diesel prices also, but the deputy chairman of the Planning Commission told Reuters in an interview the government would set diesel rates for the next few months. [ID:nSGE6790K1]
Essar Oil (ESRO.BO: Quote), the only other private refiner in India, and Reliance had together captured about 17 percent of domestic retail market for diesel and accounted for 10 percent of petrol sales by 2005 before they were forced to shut down their pumps.
"Now, with the deregulation of petrol, there is a level playing field and Reliance petrol will now be sold at the same price as that of the other oil companies," the statement said. (Reporting by Nidhi Verma; editing by Surojit Gupta)
Reliance, which operates the world's biggest refining complex at Jamnagar in Gujarat, shut down its petrol pumps in 2008 as crude prices surged towards $150 a barrel.
At the time the Indian government subsidised fuel sales by state firms, knocking private retailers out of the market.
"If the government announces diesel deregulation then diesel, like petrol, will also be available at market rates. Further to this Reliance will resume operations across all pumps, pan India," the Reliance statement said.
Retail sale of petrol and diesel are again viable since the end of June when the government lifted all controls on petrol and raised administered prices of other fuels including diesel.
Reliance owns more than 1,400 fuel stations in India.
The government plans to free diesel prices also, but the deputy chairman of the Planning Commission told Reuters in an interview the government would set diesel rates for the next few months. [ID:nSGE6790K1]
Essar Oil (ESRO.BO: Quote), the only other private refiner in India, and Reliance had together captured about 17 percent of domestic retail market for diesel and accounted for 10 percent of petrol sales by 2005 before they were forced to shut down their pumps.
"Now, with the deregulation of petrol, there is a level playing field and Reliance petrol will now be sold at the same price as that of the other oil companies," the statement said. (Reporting by Nidhi Verma; editing by Surojit Gupta)
Shipping Corp. of India Plans to Sell Up to 20% Stake
Aug. 11 (Bloomberg) -- Shipping Corp. of India Ltd., the nation’s biggest marine transport company, approved a plan to sell up to a 20 percent stake, Chairman S. Hajara said.
The sale, pending approval from India’s cabinet, will comprise an offer of fresh shares and a stake sale by the government, Hajara said in a telephone interview. The state- owned company plans to invite bids from banks as early as this month to manage the offer, he said today.
India revived its plans to sell Shipping Corp. shares as Asia’s third-biggest economy seeks funds to narrow its budget deficit from a 16-year high. The government aims to raise as much as 400 billion rupees ($8.6 billion) this year by selling stakes in companies including Coal India Ltd. and Steel Authority of India Ltd.
Shipping Corp., which said profit increased 60 percent in the first quarter, seeks to raise funds as the company adds 14 ships in the financial year that started in April. The government, which owns an 80 percent stake in Shipping Corp., had in 2005 planned to sell a 15 percent stake in the company.
Shipping Corp. fell 1.1 percent to 165.55 rupees in Mumbai today. The shares have gained 12 percent this year. The company owns a fleet of 74 vessels of 5.01 million deadweight tons and has 29 vessels on order.
The government said in January it may sell shares in 60 state-run companies to shrink its budget deficit to 5.5 percent of gross domestic product this fiscal year from 6.9 percent last year. Since April, two state-run companies have tapped the markets as part of that initiative.
The sale, pending approval from India’s cabinet, will comprise an offer of fresh shares and a stake sale by the government, Hajara said in a telephone interview. The state- owned company plans to invite bids from banks as early as this month to manage the offer, he said today.
India revived its plans to sell Shipping Corp. shares as Asia’s third-biggest economy seeks funds to narrow its budget deficit from a 16-year high. The government aims to raise as much as 400 billion rupees ($8.6 billion) this year by selling stakes in companies including Coal India Ltd. and Steel Authority of India Ltd.
Shipping Corp., which said profit increased 60 percent in the first quarter, seeks to raise funds as the company adds 14 ships in the financial year that started in April. The government, which owns an 80 percent stake in Shipping Corp., had in 2005 planned to sell a 15 percent stake in the company.
Shipping Corp. fell 1.1 percent to 165.55 rupees in Mumbai today. The shares have gained 12 percent this year. The company owns a fleet of 74 vessels of 5.01 million deadweight tons and has 29 vessels on order.
The government said in January it may sell shares in 60 state-run companies to shrink its budget deficit to 5.5 percent of gross domestic product this fiscal year from 6.9 percent last year. Since April, two state-run companies have tapped the markets as part of that initiative.
RBI for capping foreign investment in banks at below 50% Read more: RBI for capping foreign investment in banks at below 50% - India Business - Busin
MUMBAI: The Reserve Bank on Wednesday proposed bringing down the foreign investment in new private sector banks to below 50% from 74% now, a suggestion that may help some lenders retain their Indian-owned status.
The prescription contained in the discussion paper on norms for entry of new private sector banks comes at a time when two leading private sector lenders -- ICICI Bank and HDFC Bank--have lost the status of Indian-owned banks.
"Since the objective is to create strong domestic banking entities and a diversified banking sector ... aggregate non-resident investment, including FDI, NRI and FII in these banks could be capped at a suitable level below 50% and locked at that level for the initial 10 years," the central bank said.
ICICI Bank and HDFC Bank were categorised as foreign- owned, Indian-controlled lenders, as FDI in them rose over 50 per cent. This happened after norms on calculating FDI changed to include all types of foreign investment including FDI, FII, NRI, ADR, GDR and foreign currency convertible bonds.
The new norms of calculating FDI may have repercussions on their on downstream investment, like in subsidiaries.
The discussion paper said the downstream investment of banks would not be an issue for monitoring indirect foreign investment, if the foreign investment is below 50%.
Experts, however, said it is not clear whether these proposals even if implemented will cover existing banks or not.
"It is not clear. However, it is possible that even the existing banks will have to comply with the new cap over a period of time for a level playing field," said KPMG Financial Services Tax Leader Punit Shah.
Giving rationale for capping foreign investment at 50%, the discussion paper said, "This would enable foreign capital to be used in the promotion of domestic banks ... This would allow for foreign technical collaboration in setting up domestic banks."
RBI released the paper on issuing new banking licenses to foster greater competition and expand the banking system. It listed the pros and cons of various norms such as minimum capital requirements and caps on promoters as well as foreign shareholding.
Meanwhile, RBI is considering applications from 18 foreign entities, including Goldman Sachs, Morgan Stanley, Industrial and Commercial Bank of China (ICBC) and National Australia Bank to start operations in India.
The prescription contained in the discussion paper on norms for entry of new private sector banks comes at a time when two leading private sector lenders -- ICICI Bank and HDFC Bank--have lost the status of Indian-owned banks.
"Since the objective is to create strong domestic banking entities and a diversified banking sector ... aggregate non-resident investment, including FDI, NRI and FII in these banks could be capped at a suitable level below 50% and locked at that level for the initial 10 years," the central bank said.
ICICI Bank and HDFC Bank were categorised as foreign- owned, Indian-controlled lenders, as FDI in them rose over 50 per cent. This happened after norms on calculating FDI changed to include all types of foreign investment including FDI, FII, NRI, ADR, GDR and foreign currency convertible bonds.
The new norms of calculating FDI may have repercussions on their on downstream investment, like in subsidiaries.
The discussion paper said the downstream investment of banks would not be an issue for monitoring indirect foreign investment, if the foreign investment is below 50%.
Experts, however, said it is not clear whether these proposals even if implemented will cover existing banks or not.
"It is not clear. However, it is possible that even the existing banks will have to comply with the new cap over a period of time for a level playing field," said KPMG Financial Services Tax Leader Punit Shah.
Giving rationale for capping foreign investment at 50%, the discussion paper said, "This would enable foreign capital to be used in the promotion of domestic banks ... This would allow for foreign technical collaboration in setting up domestic banks."
RBI released the paper on issuing new banking licenses to foster greater competition and expand the banking system. It listed the pros and cons of various norms such as minimum capital requirements and caps on promoters as well as foreign shareholding.
Meanwhile, RBI is considering applications from 18 foreign entities, including Goldman Sachs, Morgan Stanley, Industrial and Commercial Bank of China (ICBC) and National Australia Bank to start operations in India.
Monday, August 09, 2010
India's Car Sales Hit All-Time High
NEW DELHI -- Monthly car sales in India hit an all-time high in July, racing ahead of the previous record in March, as new models and rising disposable income encouraged consumers to buy vehicles.
Local sales totaled 158,764 cars in July, up 38% from the 115,084 recorded a year earlier, according to data issued Monday by the Society of Indian Automobile Manufacturers. In March, auto makers had sold 155,600 units in India.
"The growth in the car market is helped by the sustained effort of auto companies to tap the rural market," said Vishnu Mathur, director-general of the society.
Just 12 people on an average among 1,000 Indians own a car or utility vehicle, while the percentage of vehicle owners is much smaller in rural areas. This growth potential amid rising income levels in the second-fastest-growing major economy is encouraging auto makers to launch new models, especially of small cars as most local buyers prefer them because of low price and running cost.
A key reason for higher car sales has been easy availability of loans at low interest rates. However, double-digit inflation has forced India's central bank to raise lending rates by 1.0 percentage point since March, including a quarter-percentage-point hike late July, which could make loans more expensive.
However, Mr. Mathur said the recent round of rate hike has been modest and unlikely to hit sales in the near-term.
Meanwhile, the growth in car sales is likely to overtake the society's projection of 12%-13% in the current fiscal year through March. "We are looking at our growth projections and may revise them upward in the next few months," Mr. Mathur said.
Sales may set new records in October and November, spurred by a number of Hindu and Muslim festivals, considered auspicious to acquire assets.
"New car models will continue to expand the market, with sales likely to be strong in September too" as the festival season starts during the month, said Surjit Arora, an analyst at Mumbai-based brokerage Prabhudas Lilladher Pvt. Ltd.
Local sales at Maruti Suzuki India Ltd. rose 27% to 76,111 cars in July.
The Indian unit of Suzuki Motor Corp. makes eight small-car models, including the Alto, Swift, WagonR, Ritz and Estilo. It launched a variant of the Alto with a 1.0-liter engine last week to retain the company's leadership in the Indian car market as new entrants challenge its dominance.
The local unit of Ford Motor Co. posted a more-than-fourfold rise in its July sales to 8,473 cars from 2,081 a year earlier. The company introduced the Figo, its first small car in India, in March.
Nissan Motor Co. sold 955 cars in the local market, up from just 17 a year earlier. Sales were helped mainly by its new small car, Micra, which was introduced in July.
The Indian unit of Hyundai Motor Co. sold 28,811 cars, up 24% from a year earlier, while sales at Tata Motors Ltd. grew 69% to 24,613 units.
Sales of commercial vehicle and two-wheelers also recorded strong gains during the past month, data from the society showed.
Local truck and bus sales grew 37% to 51,481, helped by strong performances from market leader Tata Motors, second ranked Ashok Leyland Ltd. and Mahindra & Mahindra Ltd.
Truck and bus sales at Tata Motors rose 30% in July to 30,827 vehicles, while those of Ashok Leyland grew 69% to 6,022 vehicles.
In the motorcycle segment, sales rose 30% to 710,621 units as Hero Honda Motors Ltd., Bajaj Auto Ltd. and TVS Motor Co. reported higher sales.
Scooter sales increased 36% to 167,195 units with Honda Motorcycle and Scooter India Pvt. Ltd. and Suzuki Motorcycle India Pvt. Ltd. posting gains.
Overall, vehicle exports in July soared 42% to 198,368 units.
Local sales totaled 158,764 cars in July, up 38% from the 115,084 recorded a year earlier, according to data issued Monday by the Society of Indian Automobile Manufacturers. In March, auto makers had sold 155,600 units in India.
"The growth in the car market is helped by the sustained effort of auto companies to tap the rural market," said Vishnu Mathur, director-general of the society.
Just 12 people on an average among 1,000 Indians own a car or utility vehicle, while the percentage of vehicle owners is much smaller in rural areas. This growth potential amid rising income levels in the second-fastest-growing major economy is encouraging auto makers to launch new models, especially of small cars as most local buyers prefer them because of low price and running cost.
A key reason for higher car sales has been easy availability of loans at low interest rates. However, double-digit inflation has forced India's central bank to raise lending rates by 1.0 percentage point since March, including a quarter-percentage-point hike late July, which could make loans more expensive.
However, Mr. Mathur said the recent round of rate hike has been modest and unlikely to hit sales in the near-term.
Meanwhile, the growth in car sales is likely to overtake the society's projection of 12%-13% in the current fiscal year through March. "We are looking at our growth projections and may revise them upward in the next few months," Mr. Mathur said.
Sales may set new records in October and November, spurred by a number of Hindu and Muslim festivals, considered auspicious to acquire assets.
"New car models will continue to expand the market, with sales likely to be strong in September too" as the festival season starts during the month, said Surjit Arora, an analyst at Mumbai-based brokerage Prabhudas Lilladher Pvt. Ltd.
Local sales at Maruti Suzuki India Ltd. rose 27% to 76,111 cars in July.
The Indian unit of Suzuki Motor Corp. makes eight small-car models, including the Alto, Swift, WagonR, Ritz and Estilo. It launched a variant of the Alto with a 1.0-liter engine last week to retain the company's leadership in the Indian car market as new entrants challenge its dominance.
The local unit of Ford Motor Co. posted a more-than-fourfold rise in its July sales to 8,473 cars from 2,081 a year earlier. The company introduced the Figo, its first small car in India, in March.
Nissan Motor Co. sold 955 cars in the local market, up from just 17 a year earlier. Sales were helped mainly by its new small car, Micra, which was introduced in July.
The Indian unit of Hyundai Motor Co. sold 28,811 cars, up 24% from a year earlier, while sales at Tata Motors Ltd. grew 69% to 24,613 units.
Sales of commercial vehicle and two-wheelers also recorded strong gains during the past month, data from the society showed.
Local truck and bus sales grew 37% to 51,481, helped by strong performances from market leader Tata Motors, second ranked Ashok Leyland Ltd. and Mahindra & Mahindra Ltd.
Truck and bus sales at Tata Motors rose 30% in July to 30,827 vehicles, while those of Ashok Leyland grew 69% to 6,022 vehicles.
In the motorcycle segment, sales rose 30% to 710,621 units as Hero Honda Motors Ltd., Bajaj Auto Ltd. and TVS Motor Co. reported higher sales.
Scooter sales increased 36% to 167,195 units with Honda Motorcycle and Scooter India Pvt. Ltd. and Suzuki Motorcycle India Pvt. Ltd. posting gains.
Overall, vehicle exports in July soared 42% to 198,368 units.
Sunday, August 01, 2010
How APJ Abdul Kalam finished mission impossible
Are leaders born?No. Leadership is all about creativity and learning to grapple with failure and success, as former president APJ Abdul Kalam learnt in the course of becoming a leader of the nation’s scientific community and later of the nation itself.
Kalam headed the Satellite Launch Vehicle mission when it was first attempted in 1979. The mission failed. Kalam did not have any explaining to do as his boss fielded all the questions at the press conference that ensued. But the next mission in 1980 was bang on, and this time Kalam was allowed to announce it to the world.
“A creative leader gives credit to his team when there is success, and when there is failure he absorbs it,” Kalam said, recalling his days in the Indian Space Research Organisation (Isro)while delivering a talk on leadership on the campus of SAP Labs in Whitefield on Friday. The global software applications developer had invited Kalam to speak to its employees and motivate them.
Pointing out the difference between how leadership was perceived a decade back and how it changed later, Kalam said that competitiveness was the key to success and it was important for one to work and succeed with integrity. He said “vision, power of travelling to the unexplored depths, management skills, courage, nobility, transparency in action and to work and succeed with integrity” were a few concrete qualities that make a leader.
Kalam recalled the “best advice” he had received when in Isro.
“One should not let problem be the captain of one’s ship. One should be the captain of the problem and defeat and overcome it.”
Asserting that pressure could sometimes create wonders, he recalled how, as an aeronautical engineering student, he had to design a low-level aircraft under a nine-month project. The design he had developed after labouring for seven months was rejected and he was told that if he failed to come up with a successful design in three days his scholarship would be in soup. Kalam and his five batchmates lost their sleep and food for the next three days and came up with another design that was appreciated and accepted. He said the experience taught him how valuable time was, as he could accomplish in three days something for which nine months had been reserved.
Kalam headed the Satellite Launch Vehicle mission when it was first attempted in 1979. The mission failed. Kalam did not have any explaining to do as his boss fielded all the questions at the press conference that ensued. But the next mission in 1980 was bang on, and this time Kalam was allowed to announce it to the world.
“A creative leader gives credit to his team when there is success, and when there is failure he absorbs it,” Kalam said, recalling his days in the Indian Space Research Organisation (Isro)while delivering a talk on leadership on the campus of SAP Labs in Whitefield on Friday. The global software applications developer had invited Kalam to speak to its employees and motivate them.
Pointing out the difference between how leadership was perceived a decade back and how it changed later, Kalam said that competitiveness was the key to success and it was important for one to work and succeed with integrity. He said “vision, power of travelling to the unexplored depths, management skills, courage, nobility, transparency in action and to work and succeed with integrity” were a few concrete qualities that make a leader.
Kalam recalled the “best advice” he had received when in Isro.
“One should not let problem be the captain of one’s ship. One should be the captain of the problem and defeat and overcome it.”
Asserting that pressure could sometimes create wonders, he recalled how, as an aeronautical engineering student, he had to design a low-level aircraft under a nine-month project. The design he had developed after labouring for seven months was rejected and he was told that if he failed to come up with a successful design in three days his scholarship would be in soup. Kalam and his five batchmates lost their sleep and food for the next three days and came up with another design that was appreciated and accepted. He said the experience taught him how valuable time was, as he could accomplish in three days something for which nine months had been reserved.
Subscribe to:
Posts (Atom)