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)
Wednesday, August 11, 2010
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.
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