NTPC may sell 10% capacity at market rate

The Government may allow NTPC to sell 10% of its capacity at market determined price in the range of Rs.6 to Rs.8 per unit which it currently sells at Rs.1.80 per unit to state boards. Experts opine that such a move will help the company in improving its profits upto 40% and also improve valuations as it looks for disinvestment.

At present, NTPC sells 85% of its capacity to state electricity boards and the remaining 15% is sold to power-deficit states. The Centre may allow the company to sell 10% of this 15% capacity at market prices to bulk consumers like sugar mills, chemical manufacturers and steel plants.

DOT seeks approval for waiver of license fees in rural areas

To increase fixed line telecom density in rural India, last year, DOT planned to roll out services in rural areas. It also targeted an ambitious target of rural telecom density of 25% as against the present 12%. DOT also amended the terms of the basic services and universal access service (UAS) license to accommodate the telecom license fee waiver. This move was aimed to benefit state-owned BSNL and private players Reliance Communications, Bharti Airtel, HFCL and Tata Teleservices.

The finance ministry had however objected the license fee waiver. It objected that DoT should have ideally moved a note for Cabinet consideration which it never obtained its concurrence to the proposal. Due to the growing tiff between DOT and finance ministry, DOT will seek the approval of the Union Cabinet t waive off license fees for fixed line services in rural areas.

GMR to exit sugar business

After Balrampur Chini announced that it is looking to exit from its sugar business, promoters of GMR group announced that it will exit from its 11,000 tonnes crushed per day (tcd) sugar business. The company has hired investment banker N M Rothschild to find suitors. According to some experts, GMR now wants to be only a pure play infrastructure player. GMR Holdings holds 74.8% stake in the company and expert to gain attractive valuations given the ongoing sugar shortage in the country which has increased imports of sugar to the tune of 2 million tones.

NTPC to set up 301 megawatt solar power generation capacity

NTPC, India’s largest state run utility provider announced that it will set up 301 megawatts of solar power generation capacity by March 2014. It also plans to spend around Rs.5.64 billion towards modernizing its two units at Badarpur thermal power station. At present NTPC operates a majority of its installed capacity of over 30,000 MW through coal-fired power plants.

Tyre companies gearing up for next growth

Driven by growing demand in auto sector and recovering economy is expected to boost the country’s tyre industry. Industry experts suggest a healthy growth in the range of 7% to 8% in 2011. Sensing the upcoming demand tyre companies have lined up huge capital expenditure and capacity expansion next year.

JK Tyres, a leading players in the domestic market plans to invest Rs.1,200 crore and expand production in its car and truck radial segment during the next 2 years. Another leading tyre manufacturer, Ceat also plans to spend Rs.650 crore next year to set up a new plant and expand its existing plant capacity in Nasik.

Honda Seil enters into an MoU with Axis Bank

Honda Siel Cars India has entered into a Memorandum of Understanding (MoU) with Axis Bank for vehicle finance. Axis Bank has already approved a line of credit for financing the company’s dealers. According to T Nat Sume, HSCI Director (Marketing), “With this tie-up Honda Siel and Axis Bank have agreed to pool their resources together to make accessible organized finance at competitive rates to our dealers and customers across the country for purchase of Honda cars.”

Hyundai to display electric version of compact i10

Hyundai, Korea’s auto giant today announced that it will reveal a new electric version of its compact car ‘i10’ in Auto Expo. The company’s management also said that it will display its current range of products and new concept vehicles with futuristic technology. It said, "Hyundai i10 Electric is a zero-emission vehicle that reconciles motoring with the environmental aspirations of customers looking for a vehicle with the best possible ecological footprint."

Link home loans to completion of project: Home loan providers

To make real estate developers accountable for uncompleted and delayed projects, home loan providers have been insisting on construction-linked disbursal of funds, according to news released by Economic Times. Last year, several home loan providers and buyers experienced difficulty when several developers either stopped construction midway or slowed down the construction due to shortage of funds in 2008 and 2009.

Several buyers were stuck in a difficult situation as they were expected to pay monthly installments towards the loan without receiving the possession of their house. Experts opine that releasing funds based on proportion of completed construction will be good for the real estate industry . Besides making developers accountable, it will also benefit buyers as it will reduce the installment amount during development stages.

i10 overtake Santro

Korean auto major, Hyundai, announced that sales of its next generation hatchback i10 have overtaken the sales of its best-selling Santro car. Average monthly sales of i10 reached 12,000 units compared to 7,000 average monthly units sold of Santro. The company expects to sell 85,000 units of Santro and 1.4 lakh units of i10.

Despite being priced higher than Santro, the growing popularity of i10 can be attributed to its contemporary styling, competitive pricing and superior technology. Arvind Saxena, senior VP at Hyundai Motor India said, “We follow a mutli-model strategy and look at consolidated sales of Santro and i10. Sales of the Santro and i10 together contribute a sizeable chunk of the compact car segment and it adds to a larger customer base.”

Apple's market cap reached $188 billion

On the day of Christmas, stock price of Apple Inc rose by $6.94 (3.4%) to reach a market cap of $188 billion. Apple’s stock price now stands at $209.04. The rise in the stock price is primarily due to the expected release of Apple’s new tablet computer, iPad in the next month.

According to The San Francisco Chronicle, iPad is likely be similar to an iPod Touch but with a 10-inch screen. It will run a version of the iPhone OS software created to handle larger applications.

RCom to raise Rs.6,300 crore

The Anil Ambani-controlled Reliance Communications (RCom) plans to raise around Rs.6,300 crore for scaling up its wireless and enterprise business, internally branded as ‘Edge 2010’. “With the Rs 6,300 crore, along with Rs 4,400 crore cash and cash-equivalents, RCom would be ready with Rs 10,500-crore war chest to get a significant edge in a competitive marketplace,” a company executive said on condition of anonymity. Besides, this financial war chest of Rs 10,500 crore will ensure adequate funds for the forthcoming 3G auctions and to upgrade its 3G-ready GSM and CDMA networks, the executive said.

Auto components manufacturers jumping onto defense bandwagon

The Indian government plans to spend around $100 billion till 2012 to buy defense equipment, including multi-crore fighter aircraft. An offset clause included will assure that $30 billion of the total amount spent will benefit the Indian companies that will supply parts to the defense sector.

While Rs.8,000 crore worth of defense contracts have already been signed over the last two years under the offset policy, around Rs.1,30,000 crore of contracts are expected to be opened up in the next few years. Sensing this huge opportunity, several auto component manufacturing companies, including Sona Koyo, Maini Precision Products, MRF Tyres, Minda Group, Sundaram Fastners, Tata Advanced Systems, Lumax, JBM Auto, Bharat Forge and Amtek Auto are venturing into defense bandwagon in the aviation sector . Several global companies are also looking to forge ties with Indian suppliers.

Jet Airways to raise $400 million

The Indian Government today has approved Jet Airways’ proposal for raising $400 million (approximately) Rs.1,850 crore from foreign investors. This amount will be raised through the qualified institutional placement route from FIIs.

The amount raised will be used by Jet Airways to meet its cash flow requirements.

Toyota to produce 70,000 compact cars by December 2010

Japanese car maker Toyota Motor Corp will produce 70,000 units of its new compact car by the end of December 2010. Deputy Managing Director TKM Sandeep Singh said, "To begin with we will be manufacturing 70,000 units of the compact car and are looking at a 10 per cent market share within one year of its release."

Unlike the present cars which are only about 30% indigenous, this compact car will be 70% indigenous. The engine will be imported from Japan. However, the company has not yet announced the price range for this car.

Essar to expand its Vadinar refinery capacity

Essar Oil will increase its Gujarat’s Vadinar refinery capacity from 10.5 million tones to 16 million tones by the end of 2010. Thereafter it will be India’s third largest refining company after Reliance Industries and Indian Oil Corp. Moreover, this expansion is expected to result in $3 more on processing of every barrel of crude oil.

Oil trades at $74

Oil traded above $74 today, buoyed by a sharp drawdown in U.S. crude stockpiles and an unexpected fall in the gasoline supply, but a firmer dollar limited gains. Crude inventories in the world's biggest oil consumer fell 3.7 million barrels as against the previously expected 900,000-barrel drop.

However, Oil's recovery gain was limited due to the strengthening dollar, which touched a two-month high versus the yen driven by the positive U.S. economic news and the steepest Treasury yield curve.

While Organization of the Petroleum Exporting Countries (OPEC) has left the output policy unchanged at 24.84 million barrels per day (bpd), concerns remain about their ability in persuading other members to stick to quotas.

Ford to sell its Volvo unit

Ford Motor’s looks forward for selling its Volvo unit to Geely, China's largest private automaker by early 2010, only after Geely receives approval from the Chinese government.

While this deal will help Geely in acquiring modern technology to upgrade its car line-up and bring it closer to becoming a global competitor, Ford, can use the sale proceeds to speed up its debt repayments and move towards profitability it projected for 2011.

Ford's intention to sell it Volvo unit comes after its traditional rival, General Motors choose to abandon Saab, its rival Swedish car brand to Dutch luxury car builder Spyker Cars NV. This deal however fell flat and General Motors announced that will have to wind down its 60 years old Saab Brand.

Sterling Addlife to enter Africa

Vadodara-based Sterling Addlife India Limited plans to set up office in Africa for promoting medical tourism for Gujarat. The company was awarded as National Accredited Board for Hospitals and Healthcare providers (NABH) and currently owns Sterling hospitals in Vadodara and Ahmedabad.

Sterling Addlife, which owns the Sterling hospitals in Vadodara and Ahmedabad, has been awarded the National Accredited Board for Hospitals and Healthcare providers (NABH). It is one of the largest chain hospital in Gujarat and has invested around Rs 200 crore.

Paramount plans to expand in Tier II and Tier III cities

Chennai-based Paramount Airways plans to expand in Tier II and III cities, specifically in cities like Salem, Puducherry, Bellary, Mysore and Ranchi. Operations from these cities are expected to be commenced by the end of 2010 with first service launched from Chennai to Tuticorin.

Paramount currently operates to 17 destinations and is targeting to increase this to 40 by the end of 2011. It plans to acquire 8-10 turbo planes to cater to Tier II and Tier III cities. Management of the company believes that this expansion in domestic markets will help the airline in achieving a 10% market share by the end of 2010 compared to 2% at present.

Wait for 3G spectrum delays further

Consumers will now have to wait till 2010 or early 2012 to avail the much awaited 3G services. The government has now announced that while it will stick to its January 2010 schedule for auctioning wireless 3G spectrum, it will allot the airwaves only in August next year. This will delay the rollout of a service that has been hanging fire for over two years now.

Mobile telecom companies are pleased with the new announcement that 4 players instead of 3 players earlier decided will be allotted spectrum. Also, the bidding telecom companies need to submit on 25% of the bid amount upfront, as against 100% decided earlier.

L&T Infotech pacts with Savvion

L&T Infotech, an IT services provider has announced a strategic partnership with Savvion, a leading business process management company to provide Business Process Management (BPM) solutions. Services will be provided for business process modeling, implementation and integration solutions and services to clientele.

Industry experts expect the Business Process Management’s market size to reach $2.6 billion globally by 2011. Sudip Banerjee, L&T Infotech's CEO said, "This partnership is in line with our constant endeavour to provide added value to our clients. Our offerings on BPM platform such as Savvion gives our clients the IT agility needed to keep pace with rapid business change."

Tighter capital rules for banks under Basel

The Basel Committee on Banking Supervision has proposed new rules and plans to introduce stricter limits on what counts as top-level-assets and on risk exposure from trading derivatives and securities by banks . Since the worst economic crisis after World War II, global regulators have been wrestling to increases supervisions of banks across the world. With the intention to reduce risks in financial system, the Group of 20 nations agreed early this year to maintain more and better quality capital in their banking systems.

CEAT to increase stake in Srilankan JV

CEAT, a leading tyre manufacturer of India will be increasing its 27% stake in its Srilanka based manufacturing joint venture, Ceat Kelani International Tyres. Manufacturing capacity of Ceat Kelani will increase to 60 tonnes per day from existing 45 tonnes per day. On marketing front, the company plans to increase the number of CEAT hubs (exclusive outlets) to 250 from 205 for addressing the needs of its trucks and buses segments.

Indian Aviation sector on a revival mode

The Indian Aviation sector now seems to be in a revival mode with number of passengers jumping over 25% this October-November 09 period. Flights to metro cities, especially leisure travel destinations like Goa and Kerala increased substantially, primarily due to improvement in business and leisure travel. The overall passenger traffic had been lagging since 2008. This should give some relief to airline companies that were gripped with losses due to global slowdown, falling demand and souring fuel prices. If fuel price and currency rates remain stable airliners can expect to see improvements in their margins over the coming years.

Shopper's Stop plans to open 32 more stores

Shopper’s Stop, a leading retail chain plans to invest Rs 350 crore during the next 5 years for setting up a total of 32 stores around Amritsar, Ahmedabad,, Mysore, Mangalore, Aurangabad, Chandigarh and other Tier II cities, totaling the total stores to 60. While its private label business has fallen this year from 20% last year to 17% this year, management of the retail chain expects it to rise to 20% by the end of next year. Affordable foreign brands have a good scope in India.

On its private labels business, Shrikhande said that its contribution to the company's sales this year so far has fallen to 17 per cent as against 20 per cent last year.
"The share of private labels has gone down to 17 per cent this year but we expect it to rise to 20 per cent next year," Shrikhande said, adding that the affordable foreign brands have a good scope in India.

Sistema taking tariff war to a new level

Sistema Shyam Teleservices has taken the tariff war in the fastest-growing Indian telecom market to a whole new level. It introduced call charges as low as half paisa per second. Experts opine that while this new move could hurt its competitors besides causing churn amongst existing users, this pricing will not be sustainable in the medium to long term.

Orchid Chemical sells off its injectable pharma business

Orchid Chemicals and Pharmaceuticals sold off its generic injectable pharma business to Hospira, a US based diversified healthcare group for $400 million. The proceeds will be used to retire Orchid’s significant debt and to pursue new growth opportunities. The company announced that $260 millions will be used to settle its short-term debt of $110 million and $150 million FCCBs due in 2012. The balance will be invested in new areas and working capital.

Private FM radio players urge for a rescue package

India’s private FM radio operators have urged the Government for a rescue package that entails a five year extension to their license period, arguing that such a move will be important for the viability of fledging private FM sector. High start-up costs have been weighing down the sector’s profitability over the past decade. According to Vineet Jain, managing director of Times of India, “ While private sector has done all that was possible to invest in and grow the FM sector, it is now time for the government to urgently step in and make some policy corrections to ensure the viability and indeed the very survival of this infant industry. The logical thing would be an extension of the license period to 15 years”.

Bharti Airtel plans to buy stake in Warid Telecom

Just after two months of a failed acquisition attempt of South Africa's MTN, Bharti Airtel is now planning to buy a controlling stake in Warid Telecom, the fourth largest telecom player in Bangladesh. It plans to purchase the company's 70% stake from Abu Dhabi Group. Bangladesh is an emerging market with mobile density of approximately 33%, and projected user base of 100 million by 2013. Bharti accounts of about 115 million subscriber base which is almost quarter of India's wireless subscribers. Urban telecom density has now reached 100% and revenues and profits of telecos are now under pressure.

Mahindra and Mahindra enters into Aerospace

Mahindra and Mahindra acquired two Australian companies, Aerospace Australia and Gippsland Aeronautics, jointly with Kotak Private Equity for Rs. 175 crore. These acquisition will help Mahindra to cash in on a growing demand for economical air transport and to diversify its earnings. It can also give Mahindra to foray into global aerospace components and aviation markets. Anand Mahindra, Vice Chairman of the company said, "Our investment in component capability will address the need of both civil and defense markets".

Indian Airlines to suffer losses $5.6 billion loss

According to Air Transport Industry Association (IATA) expects the Indian Airlines to suffer approximately $5.6 billion in losses in 2010. This will be a relatively larger loss figure compared to $3.8 billion loss expected earlier.

Lyondell Submits News Reorganisation Plan

Netherland based company, LyondellBasell Industries AF submitted a new reorganization plan in a US court to help it come out of bankruptcy and pay off its huge debt amounting to %8 billion through a $2.8 billion right issue and fresh equity issue for the balance. Recently, Mukesh Ambani-controlled Reliance Industries Ltd had placed a non-binding bid to buy a controlling stake in LyondellBasell after its emergence from Chapter 11 bankruptcy.