The consortium of banks mandated to raise the $3 billion (about Rs 12,000 crore) for funding Tata Motors’ Jaguar-Land Rover acquisition is likely to consist of about 25 banks which will help distribute the financial burden amongst them.
The consortium, which presently comprises eight mandated lead arrangers — State Bank of India, Citibank, J P Morgan, Standard Chartered, BNP Paribas, Tokyo Mitsubishi UFJ, Mizuho Financial group and ING — has approached about 80 lenders in India and abroad, according to a source involved with the process.
“We are in talks with nearly 80 domestic and International banks. We are looking at expanding the size (of the consortium) to around 25, depending upon the availability of suitable partners,” the source said.
A larger number of banks in the syndication will help to comfortably distribute the financial burden, the source said, and added, “the consortium would complete the fund raising programme in the next three months.”
Monday, March 31, 2008
Power Grid raises Rs 4,000cr
Power Grid Corporation has raised close to $1 billion (Rs 4,000 crore) via loans from Asian Development Bank (ADB) and The World Bank.
According to a release issued by Power Grid to the BSE today, the company has signed a loan agreement with ADB, Manila for $400 million. The loan is part of ADB's newly introduced loan facility called Multi-tranche Financing Facility (MFF), which is based on time-sliced approach.
It has also signed an agreement with The World Bank for $600 million. The loan will be utilised to fund a basket of transmission projects during the 11th Plan.
According to a release issued by Power Grid to the BSE today, the company has signed a loan agreement with ADB, Manila for $400 million. The loan is part of ADB's newly introduced loan facility called Multi-tranche Financing Facility (MFF), which is based on time-sliced approach.
It has also signed an agreement with The World Bank for $600 million. The loan will be utilised to fund a basket of transmission projects during the 11th Plan.
Friday, March 28, 2008
IPO regime set to undergo sea change from July
100% payment by QIBs in IPOs and shorter time between IPO closing & listing.
The Securities and Exchange Board of India (Sebi) is expected to take two decisions simultaneously in July.
The first is to introduce a shorter time-frame between the closure of an IPO for subscription and its listing.
The second is asking all classes of investors, including qualified institutional buyers (QIBs), to make full payment while applying for an IPO.
Currently, QIBs have to pay a margin (around 10 per cent of the book-building price-band) when applying for subscription. But retail investors have to pay the entire amount, which is refunded within 15 days of the closure of the IPO if shares are not allotted.
Institutional investors, including foreign institutions, are known as QIBs.
Sources familiar with the developments said Sebi wants to fast-track these two decisions but a final decision can be taken only around July as a great deal of paperwork still needs to be completed and proper market feedback taken on board before a final decision. “The decision should be taken by July,” they said.
Sebi Chairman C B Bhave had recently said at a conference in Singapore that the regulator wants to change the norms for QIB investments in IPOs.
Sources said the feedback from QIBs is that most of them invest money collected from the public and full payment upfront in IPOs will be possible only if the share allotment and listing process is shortened in India. This has prompted the regulator to hasten the listing process of all Indian companies.
Sebi’s primary market committee, which will address the issue of reducing the gap between the closing of an IPO and its listing, is expected to meet in early April.
The draft consultative paper will then be put up for discussion, following which a final decision will be taken by the Sebi board.
The move will effectively put QIBs and the small retail investors on a level field when it comes to IPO applications.
The sources said the 10 per cent margin payment by QIBs often results in huge over-subscriptions but presents a distorted picture of an IPO’s success.
The Securities and Exchange Board of India (Sebi) is expected to take two decisions simultaneously in July.
The first is to introduce a shorter time-frame between the closure of an IPO for subscription and its listing.
The second is asking all classes of investors, including qualified institutional buyers (QIBs), to make full payment while applying for an IPO.
Currently, QIBs have to pay a margin (around 10 per cent of the book-building price-band) when applying for subscription. But retail investors have to pay the entire amount, which is refunded within 15 days of the closure of the IPO if shares are not allotted.
Institutional investors, including foreign institutions, are known as QIBs.
Sources familiar with the developments said Sebi wants to fast-track these two decisions but a final decision can be taken only around July as a great deal of paperwork still needs to be completed and proper market feedback taken on board before a final decision. “The decision should be taken by July,” they said.
Sebi Chairman C B Bhave had recently said at a conference in Singapore that the regulator wants to change the norms for QIB investments in IPOs.
Sources said the feedback from QIBs is that most of them invest money collected from the public and full payment upfront in IPOs will be possible only if the share allotment and listing process is shortened in India. This has prompted the regulator to hasten the listing process of all Indian companies.
Sebi’s primary market committee, which will address the issue of reducing the gap between the closing of an IPO and its listing, is expected to meet in early April.
The draft consultative paper will then be put up for discussion, following which a final decision will be taken by the Sebi board.
The move will effectively put QIBs and the small retail investors on a level field when it comes to IPO applications.
The sources said the 10 per cent margin payment by QIBs often results in huge over-subscriptions but presents a distorted picture of an IPO’s success.
JLR hits Tata Motors on BSE
TATA STOCKS POST GLOBAL BUYS
TATA STEEL-CORUS: Acquires Corus on January 31, 2007, for $14 billion. On February 1, the stock rises 5.85% to Rs 776.45 from the previous day’s close of Rs 733.50
TATA TEA-TETLEY: Acquires the Tetley Group in February 26, 2000, for £271 million. The scrip rises 2.85% to Rs 540 on February 28, 2000, from the previous close of Rs 525
TATA CHEM-GENERAL INDUSTRIAL PRODUCTS: Buys the soda ash business of General Industrial Products for $1 billion on February 1, 2008. On February 2, the company’s scrip rises 6.19% to Rs 310.14 from the previous day’s close of Rs 292.05
The stock falls 7% to touch its intraday lowest of Rs 630.
Concerns over funding the purchase of Jaguar and Land Rover (JLR) played the spoilsport and Tata Motors stock nosedived 7 per cent to reach the day’s low of Rs 630 on the Bombay Stock Exchange (BSE).
The Sensex stock, however, improved marginally later in the day only to close at Rs 655, still down by 3.56 per cent. The company’s stock had opened at Rs 677.
Experts attribute the fall to funding woes of the mega deal as Tata Motors had refused to furnish details of their financing plans. The company has managed to arrange for $3 billion in bridge loans of which $2.3 billion will be used to buy the two iconic British brands. The rest will mainly be used as working capital.
Religare Enterprise’s auto analyst Piyush Parag said, “The JLR deal is demanding a big capital expenditure from Tata Motors, which means lots of funds are going out from the company. We are expecting the earning per share (EPS) of Tata Motors to drop by 18 per cent in FY09 and by 12 per cent in FY10.”
The actual funding pattern is not disclosed by the company as it is still unclear as to how much of the $3 billion will be converted into debt and how much into equity. Market players are expecting the stock prices to stabilise after an announcement to this effect. But for the investor, they said, the fall is a good opportunity to buy into the company.
The general sentiment among auto experts is that although Tata Motors has managed to win over the Ford management and workers union to effectively bag the deal, the company may not be able to fund the research and development (R&D) expenses required for both the brands.
According to international reports, both the brands demand an annual infusion of Rs 4,000 crore for R&D. At present, Tata Motors spends only Rs 700 crore on R&D, annually.
Besides, both brands need to venture into newer markets to sustain growth. Tata Motors may find this difficult as they have limited expertise and knowledge of operating in the fiercely competitive international luxury car market, said experts.
Of the two, Land Rover is doing brisk business and is expected to recover from losses in FY09. However, Jaguar is expected to take a longer time to break even.
TATA STEEL-CORUS: Acquires Corus on January 31, 2007, for $14 billion. On February 1, the stock rises 5.85% to Rs 776.45 from the previous day’s close of Rs 733.50
TATA TEA-TETLEY: Acquires the Tetley Group in February 26, 2000, for £271 million. The scrip rises 2.85% to Rs 540 on February 28, 2000, from the previous close of Rs 525
TATA CHEM-GENERAL INDUSTRIAL PRODUCTS: Buys the soda ash business of General Industrial Products for $1 billion on February 1, 2008. On February 2, the company’s scrip rises 6.19% to Rs 310.14 from the previous day’s close of Rs 292.05
The stock falls 7% to touch its intraday lowest of Rs 630.
Concerns over funding the purchase of Jaguar and Land Rover (JLR) played the spoilsport and Tata Motors stock nosedived 7 per cent to reach the day’s low of Rs 630 on the Bombay Stock Exchange (BSE).
The Sensex stock, however, improved marginally later in the day only to close at Rs 655, still down by 3.56 per cent. The company’s stock had opened at Rs 677.
Experts attribute the fall to funding woes of the mega deal as Tata Motors had refused to furnish details of their financing plans. The company has managed to arrange for $3 billion in bridge loans of which $2.3 billion will be used to buy the two iconic British brands. The rest will mainly be used as working capital.
Religare Enterprise’s auto analyst Piyush Parag said, “The JLR deal is demanding a big capital expenditure from Tata Motors, which means lots of funds are going out from the company. We are expecting the earning per share (EPS) of Tata Motors to drop by 18 per cent in FY09 and by 12 per cent in FY10.”
The actual funding pattern is not disclosed by the company as it is still unclear as to how much of the $3 billion will be converted into debt and how much into equity. Market players are expecting the stock prices to stabilise after an announcement to this effect. But for the investor, they said, the fall is a good opportunity to buy into the company.
The general sentiment among auto experts is that although Tata Motors has managed to win over the Ford management and workers union to effectively bag the deal, the company may not be able to fund the research and development (R&D) expenses required for both the brands.
According to international reports, both the brands demand an annual infusion of Rs 4,000 crore for R&D. At present, Tata Motors spends only Rs 700 crore on R&D, annually.
Besides, both brands need to venture into newer markets to sustain growth. Tata Motors may find this difficult as they have limited expertise and knowledge of operating in the fiercely competitive international luxury car market, said experts.
Of the two, Land Rover is doing brisk business and is expected to recover from losses in FY09. However, Jaguar is expected to take a longer time to break even.
Telcon buys majority stake in Spanish co
Telcon, a joint venture company of Tata Motors and Hitachi, has bought 79% in Serviplem, a Spain-based contruction equipment company for euro 45 million.
Through the acquisition, Telcon aims to have a significant share of the bouyant infrastructure industry of China and also India. Serviplem holds a majority stake in a Chinese manufacturing company set up in partnership with a local firm.
Ranaveer Sinha, managing director, Telcom said in a statement, "This acquisition is of great strategic importance and will add impetus to its plan to be a $2 billion company by 2012. Serviplem, which focuses on manufacturing and sale of transit mixers, dry bulk tanks and pumps. The technology will help Telcon to enter the concrete value chain with a number of offerings".
The acquisition will provide the Tata group a significant presence in the Aragon Region in Spain as it is already present in the region through its partnership with Hispano Carrocera S.A., a bus body building company, and its recently opened branch office at Zaragoza.
Through the acquisition, Telcon aims to have a significant share of the bouyant infrastructure industry of China and also India. Serviplem holds a majority stake in a Chinese manufacturing company set up in partnership with a local firm.
Ranaveer Sinha, managing director, Telcom said in a statement, "This acquisition is of great strategic importance and will add impetus to its plan to be a $2 billion company by 2012. Serviplem, which focuses on manufacturing and sale of transit mixers, dry bulk tanks and pumps. The technology will help Telcon to enter the concrete value chain with a number of offerings".
The acquisition will provide the Tata group a significant presence in the Aragon Region in Spain as it is already present in the region through its partnership with Hispano Carrocera S.A., a bus body building company, and its recently opened branch office at Zaragoza.
Thursday, March 27, 2008
Bharat Forge to invest Rs 350cr
Bharat Forge, the leading global manufacturer of forged and machined components, today signed a memorandum of understanding (MoU) with the Maharashtra government for its centre for advanced manufacturing at Baramati, Maharashtra.
The MoU was signed today by V K Jairath, principal secretary (industries), government of Maharashtra and B N Kalyani, chairman and managing director, Bharat Forge, in the presence of Maharashtra chief minister Vilasrao Deshmukh, Ashok Chavan, minister for industries, Johny Joseph, chief secretary.
The company will invest Rs 350 cr for setting up a forging capacity of 30,000 tonne per annum, which will manufacture large crankshafts for marine and power, landing gear, engine and structural parts for aircrafts and helicopters, connecting rods for locomotive and equalizer bars and spindles and other heavy products for construction machines.
The MoU was signed today by V K Jairath, principal secretary (industries), government of Maharashtra and B N Kalyani, chairman and managing director, Bharat Forge, in the presence of Maharashtra chief minister Vilasrao Deshmukh, Ashok Chavan, minister for industries, Johny Joseph, chief secretary.
The company will invest Rs 350 cr for setting up a forging capacity of 30,000 tonne per annum, which will manufacture large crankshafts for marine and power, landing gear, engine and structural parts for aircrafts and helicopters, connecting rods for locomotive and equalizer bars and spindles and other heavy products for construction machines.
Kingfisher to fly abroad by August
The Deccan brand, once synonymous with low cost flying in India, will cease to exist after its merger with the Vijay Mallya promoted Kingfisher Airlines, which will takeoff for international destinations by August.
"Deccan will cease to exist because after the merger there will be only one company and that will be Kingfisher Airlines," UB Group chief and Kingfisher Airlines Chairman Vijay Mallya told reporters here.
He said the Karnataka High court convened meeting for the merger of Kingfisher Airlines (KA) and Deccan would be held on on April 17, following which it would gear up to fly abroad.
"On March 17, the Director General of Civil Aviation has given Kingfisher approval to fly abroad from August 28," Mallya said.
KA had acquired 26 per cent stake in Capt Gopinath promoted Air Deccan for Rs 550 crore last year and made an open offer for 20 per cent stake taking its holding to 46 per cent.
Mallya's latest statement comes contrary to earlier position maintained by Gopinath, who said the two airlines would operate as separate entities even when the two were merged.
After the takeover by Kingfisher, Deccan had rebranded itself as 'Simplifly Deccan' and surrendered major metro routes for the full service sister concern.
"Deccan will cease to exist because after the merger there will be only one company and that will be Kingfisher Airlines," UB Group chief and Kingfisher Airlines Chairman Vijay Mallya told reporters here.
He said the Karnataka High court convened meeting for the merger of Kingfisher Airlines (KA) and Deccan would be held on on April 17, following which it would gear up to fly abroad.
"On March 17, the Director General of Civil Aviation has given Kingfisher approval to fly abroad from August 28," Mallya said.
KA had acquired 26 per cent stake in Capt Gopinath promoted Air Deccan for Rs 550 crore last year and made an open offer for 20 per cent stake taking its holding to 46 per cent.
Mallya's latest statement comes contrary to earlier position maintained by Gopinath, who said the two airlines would operate as separate entities even when the two were merged.
After the takeover by Kingfisher, Deccan had rebranded itself as 'Simplifly Deccan' and surrendered major metro routes for the full service sister concern.
Wednesday, March 26, 2008
Maruti Suzuki launches Swift DZire
Maruti Suzuki today launched its new entry level sedan Swift DZire, making it the seventh model to be launched by the company in the last three years.
Variants of the DZire will be available in the range of Rs 4.49 lakh to Rs 6.7 lakh (ex-showroom Delhi). The petrol variant is being priced in the range of Rs 4.49 to Rs 5.9 lakh while the diesel one will be available between Rs 5.39 to Rs 6.7 lakh.
Launched as an replacement of the earlier mid size sedan Maruti Esteem, the DZire will have features like including integrated stereo, steering mounted audio controls, automatic climate control, power windows and dual airbags.
Variants of the DZire will be available in the range of Rs 4.49 lakh to Rs 6.7 lakh (ex-showroom Delhi). The petrol variant is being priced in the range of Rs 4.49 to Rs 5.9 lakh while the diesel one will be available between Rs 5.39 to Rs 6.7 lakh.
Launched as an replacement of the earlier mid size sedan Maruti Esteem, the DZire will have features like including integrated stereo, steering mounted audio controls, automatic climate control, power windows and dual airbags.
Tata-Ford deal on JLR by evening today
After months of negotiations with Ford Motor Company (FMC), India's largest auto maker Tata Motors has signed the agreement to buy out luxury marquees Jaguar and Land Rover. An announcement to this effect is expected by the evening.
Although an official confirmation on the deal size is yet to be out from Bombay House, the headquarters of Tata Group, reports suggest that it could be in the range of $2-2.5 billion. A formal announcement will be out by 1730 hrs (IST).
According to sources in the know, the deal was signed last night in London, which is also the head quarters of the Premier Automotive Group (PAG). Jaguar and Land Rover apart from Volvo Cars comprise the PAG.
Ford, however has said that it will make an announcement only after it intimates its employees about the deal.
The deal has taken almost 9 months to fructify as both the involved parties were engaged in advanced talks pertaining to engines and parts supply from Ford, pension liability of Unite workers, retrenchment among other issues. Ford supplies about 90% components to Jaguar and Land Rover.
Tata Motors got into a more detailed discussion with Ford Motor Company (FMC) after the US-based auto giant declared Tata Motors as the preffered bidder on January 3 among a couple of other interested parties including Mahindra and Mahindra and One Equity Alliance.
The talks were held between the two parties amid concerns expressed by Jaguar dealers in the US, which is also the luxury marquees' largest market, which noted that an Indian buyer will adversely impact the value of the brand as the world's cheapest car, Nano, made by Tata Motors came at one-twentieth of the cost for the least expensive Jaguar model.
Ford is selling both the brands at less than half its purchase cost, which was $5.2 billion. The company had bought Jaguar in 1989 for $2.5 billion while Land Rover was bought from BMW for $2.5 billion in 2000.
A positive news for the Tata group is that the PAG, managed to post a profit of $504 million for the last financial year despite a loss of $344 million posted in 2006.
Ford does not share details of individual brands but sales from the Land Rover brand is believed to have pushed the groups' revenue substantially as it rose by 18% for the company even as Jaguar posted a drop of 19% in 2007. Land Rover's annual sales crossed 2 lakh units for the first time ever as markets like Russia, Spain, China and France recorded best sales.
Although an official confirmation on the deal size is yet to be out from Bombay House, the headquarters of Tata Group, reports suggest that it could be in the range of $2-2.5 billion. A formal announcement will be out by 1730 hrs (IST).
According to sources in the know, the deal was signed last night in London, which is also the head quarters of the Premier Automotive Group (PAG). Jaguar and Land Rover apart from Volvo Cars comprise the PAG.
Ford, however has said that it will make an announcement only after it intimates its employees about the deal.
The deal has taken almost 9 months to fructify as both the involved parties were engaged in advanced talks pertaining to engines and parts supply from Ford, pension liability of Unite workers, retrenchment among other issues. Ford supplies about 90% components to Jaguar and Land Rover.
Tata Motors got into a more detailed discussion with Ford Motor Company (FMC) after the US-based auto giant declared Tata Motors as the preffered bidder on January 3 among a couple of other interested parties including Mahindra and Mahindra and One Equity Alliance.
The talks were held between the two parties amid concerns expressed by Jaguar dealers in the US, which is also the luxury marquees' largest market, which noted that an Indian buyer will adversely impact the value of the brand as the world's cheapest car, Nano, made by Tata Motors came at one-twentieth of the cost for the least expensive Jaguar model.
Ford is selling both the brands at less than half its purchase cost, which was $5.2 billion. The company had bought Jaguar in 1989 for $2.5 billion while Land Rover was bought from BMW for $2.5 billion in 2000.
A positive news for the Tata group is that the PAG, managed to post a profit of $504 million for the last financial year despite a loss of $344 million posted in 2006.
Ford does not share details of individual brands but sales from the Land Rover brand is believed to have pushed the groups' revenue substantially as it rose by 18% for the company even as Jaguar posted a drop of 19% in 2007. Land Rover's annual sales crossed 2 lakh units for the first time ever as markets like Russia, Spain, China and France recorded best sales.
Saturday, March 22, 2008
BMW to source chassis and engines from India
German luxury carmaker BMW is evaluating over 100 component manufacturers in India to outsource engines and chassis for its global manufacturing operations, according to a board member.
“We are impressed with the quality of die casts and forgings in India that we use for our global operations. The quality of products from second- and third-tier is impressive. Once our pilot project evaluating 100 ancillaries is completed we will outsource engines and chassis for our cars,” said Ind Herbert Diess, who is on the BMW AG board.
The German car-maker’s international purchasing office in Gurgaon, Haryana, currently sources motorbike handles and die casts from India. The India outfits of multinationals like Mico Bosch and Conti also supply it software solutions.
The car-maker sells the 3 and 5 series assembled from CKD (completely knocked down) kits at its plant in Chennai.
BMW’s Indian operations added 200 people in 2007. “The number of jobs we add in India depends on our market growth,” said Norber Reithofer, chairman of the BMW Board of Management.
“India is an important growth market for us. Our estimate is that by 2015 the market for premium cars will reach 10,000 units a year. We also plan to increase the share of our CKD units in the country,” Reithofer added.
“BMW sports utility vehicles like the X3, X5 and the 7 series could be locally assembled at the Chennai plant if we reach a critical number of 500 units,” said Frank Peter Arndt, head of production.
The company also plans to launch the Mini next year to coincide with the iconic small car’s 50th anniversary. However, Kay Segler, senior vice- president, Brand Management Mini, said the process of homologation (adapting to Indian conditions) is time-consuming and expensive.
“It costs about ¤200,000 and takes six months to complete the homologation in India, which pushes up our cost and delays the launch of this compact car in India,” Segler said.
According to BMW, the small car could cost between Rs 25 lakh and Rs 30 lakh and will be available as a CBU. The company said the Mini’s diesel engine could deliver 25 km to the litre under test conditions.
The Mini engine will be supplied by Fiat. “Mini engines will also be supplied by other vendors. We are in discussions,” said Klaus Draeger, another board member.
Meanwhile, the company is also mulling globally the option of launching a fourth anchor brand under which the auto major’s future “green concept” car will be housed.
The fourth brand is part of the car maker’s “Project I” to offer new environment-friendly transportation technologies over the next five years.
Addressing the group’s Annual Accounts Conference in Munich, Reithofer said, “Project I is fully independent and even free to act beyond BMW structures. Whether this will require a fourth brand or not will be decided at a later date.”
“We are impressed with the quality of die casts and forgings in India that we use for our global operations. The quality of products from second- and third-tier is impressive. Once our pilot project evaluating 100 ancillaries is completed we will outsource engines and chassis for our cars,” said Ind Herbert Diess, who is on the BMW AG board.
The German car-maker’s international purchasing office in Gurgaon, Haryana, currently sources motorbike handles and die casts from India. The India outfits of multinationals like Mico Bosch and Conti also supply it software solutions.
The car-maker sells the 3 and 5 series assembled from CKD (completely knocked down) kits at its plant in Chennai.
BMW’s Indian operations added 200 people in 2007. “The number of jobs we add in India depends on our market growth,” said Norber Reithofer, chairman of the BMW Board of Management.
“India is an important growth market for us. Our estimate is that by 2015 the market for premium cars will reach 10,000 units a year. We also plan to increase the share of our CKD units in the country,” Reithofer added.
“BMW sports utility vehicles like the X3, X5 and the 7 series could be locally assembled at the Chennai plant if we reach a critical number of 500 units,” said Frank Peter Arndt, head of production.
The company also plans to launch the Mini next year to coincide with the iconic small car’s 50th anniversary. However, Kay Segler, senior vice- president, Brand Management Mini, said the process of homologation (adapting to Indian conditions) is time-consuming and expensive.
“It costs about ¤200,000 and takes six months to complete the homologation in India, which pushes up our cost and delays the launch of this compact car in India,” Segler said.
According to BMW, the small car could cost between Rs 25 lakh and Rs 30 lakh and will be available as a CBU. The company said the Mini’s diesel engine could deliver 25 km to the litre under test conditions.
The Mini engine will be supplied by Fiat. “Mini engines will also be supplied by other vendors. We are in discussions,” said Klaus Draeger, another board member.
Meanwhile, the company is also mulling globally the option of launching a fourth anchor brand under which the auto major’s future “green concept” car will be housed.
The fourth brand is part of the car maker’s “Project I” to offer new environment-friendly transportation technologies over the next five years.
Addressing the group’s Annual Accounts Conference in Munich, Reithofer said, “Project I is fully independent and even free to act beyond BMW structures. Whether this will require a fourth brand or not will be decided at a later date.”
Thursday, March 20, 2008
GMR signs deal to upgrade Istanbul airport
Having already built a new airport at Hyderabad, infrastructure major GMR Group, along with other consortium partners, today signed an agreement with the Turkish government to expand an airport at Istanbul, the commercial hub of the country.
The GMR-led consortium will be developing facilities for trebling the passenger capacity of the Sabiha Gokcen International Airport (SGAI) at Istanbul with an investment of euro 250 million (about Rs 1,600 crore).
According to a release issued by GMR today, in addition to making an initial investment to increase the capacity of the airport to 10 million passengers per annum in 30 months, the consortium will pay euro 1.92 billion concession fee spread over 20 years to the Turkish government.
It will recover the money through various aviation and related activities, upgradation of the Sabiha Gocken Airport, named after a woman combat pilot and adopted daughter of the father of modern Turkey, Mustafa Kemal Ataturk.
"This project will increase the international exposure of the GMR Group...It will also serve as the ideal reference for entering into other European countries," GMR international division chief executive officer Ranjit Murugason said.
The GMR-led consortium will be developing facilities for trebling the passenger capacity of the Sabiha Gokcen International Airport (SGAI) at Istanbul with an investment of euro 250 million (about Rs 1,600 crore).
According to a release issued by GMR today, in addition to making an initial investment to increase the capacity of the airport to 10 million passengers per annum in 30 months, the consortium will pay euro 1.92 billion concession fee spread over 20 years to the Turkish government.
It will recover the money through various aviation and related activities, upgradation of the Sabiha Gocken Airport, named after a woman combat pilot and adopted daughter of the father of modern Turkey, Mustafa Kemal Ataturk.
"This project will increase the international exposure of the GMR Group...It will also serve as the ideal reference for entering into other European countries," GMR international division chief executive officer Ranjit Murugason said.
SBI, 8 others may combine for $3 bn Tata loan
Atleast four public sector banks and four foreign lenders are likely to join State Bank of India led consortium to raise the $3 billion for Tata Motors to fund their foreign acquisitions including the $2 billion Jaguar and Land Rover deal.
PSBs likely to join the consortium of financiers are Bank of India (BoI), Bank of Baroda (BoB), Indian Overseas Bank (IoB) and Syndicate Bank, while the foreign banks are Barclays, HSBC, DBS and Singapore-based United Overseas Bank, a source close to the development said.
"SBI is looking at enhancing the number of entities in the consortium to 20 so that the burden of financing such a huge sum can be distributed amongst them," the source said.
Country's largest lender has already started talks with all eight banks to be a part of the consortium and will come out with an official announcement soon, the source said.
The foreign institutions comprised not only of Citi Bank and JP Morgan but also Standard Chartered, BNP Paribas, Tokyo Mitsubishi UFJ and Mizuho Financial Group, the source said.
Sources said SBI plans to raise the amount by the second half of April to enable Tata Motors to complete the acquisition soon.
PSBs likely to join the consortium of financiers are Bank of India (BoI), Bank of Baroda (BoB), Indian Overseas Bank (IoB) and Syndicate Bank, while the foreign banks are Barclays, HSBC, DBS and Singapore-based United Overseas Bank, a source close to the development said.
"SBI is looking at enhancing the number of entities in the consortium to 20 so that the burden of financing such a huge sum can be distributed amongst them," the source said.
Country's largest lender has already started talks with all eight banks to be a part of the consortium and will come out with an official announcement soon, the source said.
The foreign institutions comprised not only of Citi Bank and JP Morgan but also Standard Chartered, BNP Paribas, Tokyo Mitsubishi UFJ and Mizuho Financial Group, the source said.
Sources said SBI plans to raise the amount by the second half of April to enable Tata Motors to complete the acquisition soon.
NetJets eyes India, names partner
With a fleet size of 750 aircraft worldwide, at least 3,90,000 annual flights across 170 countries, and a 20-year history, the US pioneer in fractional aircraft ownership, NetJets has its eyes set on the Indian market.
NetJets announced Ashish Chordia, CEO of Shreyans (luxury distribution company), as a strategic partner for India. It is likely to announce its first Indian customer shortly.
The Indian strategic partner will help NetJets build a sales relationship with high networth Indians and corporates.
NetJets announced Ashish Chordia, CEO of Shreyans (luxury distribution company), as a strategic partner for India. It is likely to announce its first Indian customer shortly.
The Indian strategic partner will help NetJets build a sales relationship with high networth Indians and corporates.
US bars multiple H-1B applications
The US has barred employers from filing more than one H-1B visa application for a worker in a fiscal year amid a growing clamour to raise the cap to allow more skilled professionals from India and other countries to work here.
"To ensure a fair and orderly distribution of available H-1B visas, USCIS will deny or revoke multiple petitions filed by an employer for the same H-1B worker and will not refund the filing fees submitted with multiple or duplicative petitions," the US Citizenship and Immigration Services said in an announcement.
The Congress has set a limit of 65,000 for H-1B workers for the fiscal 2009.
The changes will ensure that companies filing H-1B petitions subject to congressionally mandated numerical limits have an equal chance to employ an H-1B worker, it said.
This rule does not preclude related employers (such as a parent company and its subsidiary) from filing petitions on behalf of the same worker for different positions based on a legitimate business need.
There has been growing presure from US companies to raise the H-1B visa quota with Microsoft chairman Bill Gates describing the cap as "arbitrary and counterproductive."
"Microsoft has found that for every H-1B hire we make, we add on average four additional employees to support them in various capacities," Gates, who once said that if he had his way he would scrap the H-1B visa system entirely, told a House of Representatives Panel on Science and Technology.
"To ensure a fair and orderly distribution of available H-1B visas, USCIS will deny or revoke multiple petitions filed by an employer for the same H-1B worker and will not refund the filing fees submitted with multiple or duplicative petitions," the US Citizenship and Immigration Services said in an announcement.
The Congress has set a limit of 65,000 for H-1B workers for the fiscal 2009.
The changes will ensure that companies filing H-1B petitions subject to congressionally mandated numerical limits have an equal chance to employ an H-1B worker, it said.
This rule does not preclude related employers (such as a parent company and its subsidiary) from filing petitions on behalf of the same worker for different positions based on a legitimate business need.
There has been growing presure from US companies to raise the H-1B visa quota with Microsoft chairman Bill Gates describing the cap as "arbitrary and counterproductive."
"Microsoft has found that for every H-1B hire we make, we add on average four additional employees to support them in various capacities," Gates, who once said that if he had his way he would scrap the H-1B visa system entirely, told a House of Representatives Panel on Science and Technology.
Wednesday, March 19, 2008
NTPC to build 750 Mw plant in Assam
National Thermal Power Corporation (NTPC) will invest Rs 4,375.35 crore for setting up a coal- based thermal power project of 750 Mw (3x250 Mw) at Salakati in Kokrajhar district of Assam.
The project would come up at the site of the existing non-operational Bongaigaon thermal power station (4x60 Mw).
According to an official release issued today, an agreement has been executed between NTPC, the government of Assam and Assam Power Generation Corporation (APGCL) for transferring the existing infrastructure of the Bongaigaon power station to NTPC.
The project would come up at the site of the existing non-operational Bongaigaon thermal power station (4x60 Mw).
According to an official release issued today, an agreement has been executed between NTPC, the government of Assam and Assam Power Generation Corporation (APGCL) for transferring the existing infrastructure of the Bongaigaon power station to NTPC.
Tuesday, March 18, 2008
Audi to invest Rs 192 cr in India
German luxury car maker Audi has grand plans in India and is going to invest ¤ 30 million (Rs 192 crore) by 2015 in production alone. Audi India, Audi’s national sales office, was set up in Mumbai last year. Currently, Audi’s India portfolio has a limited range on offer: TT, A8, A6, A4 and Q7. Local assembly of the A6 has started from the company’s plant in Aurangabad and the same will begin for A4 by this year end. Rupert Stadler, Chairman, Board of Management, AUDI AG, spoke to Aminah Sheikh on the sidelines of the Germany car makers’ annual press conference in Ingolstadt.
Maruti's new Swift 'Dzire' by month end
India's leading car maker Maruti Suzuki said that it will launch the much-awaited mid-sized sedan, Swift 'Dzire' by the end of this month. The car is based on the highly successfull platform of the Swift and will eventually take the place of the phased out Esteem.
Price of the car was not divulged by the company however industry sources say that it should be priced in the Rs 5-6 lakh range.
Maruti claims that the Dzire will sport class-leading features that have never been offered in any entry-level sedans in India. For instance, the dash board will house a fully integrated stereo on with steering mounted audio controls. It will also have a fully automatic climate control system, dual front airbags and anti-lock braking system (ABS).
Price of the car was not divulged by the company however industry sources say that it should be priced in the Rs 5-6 lakh range.
Maruti claims that the Dzire will sport class-leading features that have never been offered in any entry-level sedans in India. For instance, the dash board will house a fully integrated stereo on with steering mounted audio controls. It will also have a fully automatic climate control system, dual front airbags and anti-lock braking system (ABS).
Lintas, Pinstorm sign deal for digital ads
Lintas Media Group (LMG) today announced a no-equity performance alliance with Indian digiital advertising firm Pinstorm to scale up its digital advertising division.
LMG, together with Pinstorm, has committed to generate revenue in excess of Rs 100 crore in the first year of their alliance through the pay-for-performance model.
The move is expected to give LMG a first-mover advantage in the pay-for-performance model in India. The two companies say that advertisers in India are more keen on adopting the digital platform than ever before. This is because digital media offers an accountable and transparent method of measuring performance unlike traditional media like television and print where an advertiser can only estimate the target audience it was able to reach through advertising.
Lynn de Souza, director, LMG, said: "Ad firms have to work like brokerage houses wherein they have to manage the budget allocated by advertisers to buy media and earn through commissions. The pay-for-performance model in digital advertising is a vastly different model that gives the exact value-for-money derived by clients through advertising with us."
In the pay-for-performance model, the agency pays for the media and the creative and advertisers pay for the results. Lynn believes this model will eventually generate greater revenue and return on investment (ROI) for advertising agencies.
Mahesh Murthy, founder, Pinstorm, said: "We hope this model will change the way advertisers think about budgets, and that they are percieved less as a cost and more as an investment. At Pinstorm, we make it simple by asking a client to only pay for the results we deliver, which could be in the form of payment per consumer reached or per product sold through the digitial platform."
Pinstorm uses proprietary technologies across search engine marketing (SEM), search engine optimisation (SEO), e-mail, SMS advertising, online and display advertising, online community creation and blog management. Some of Pinstorm's clients in India include Jet Airways, HSBC, Taj Hotels and Sharekhan.
LMG, together with Pinstorm, has committed to generate revenue in excess of Rs 100 crore in the first year of their alliance through the pay-for-performance model.
The move is expected to give LMG a first-mover advantage in the pay-for-performance model in India. The two companies say that advertisers in India are more keen on adopting the digital platform than ever before. This is because digital media offers an accountable and transparent method of measuring performance unlike traditional media like television and print where an advertiser can only estimate the target audience it was able to reach through advertising.
Lynn de Souza, director, LMG, said: "Ad firms have to work like brokerage houses wherein they have to manage the budget allocated by advertisers to buy media and earn through commissions. The pay-for-performance model in digital advertising is a vastly different model that gives the exact value-for-money derived by clients through advertising with us."
In the pay-for-performance model, the agency pays for the media and the creative and advertisers pay for the results. Lynn believes this model will eventually generate greater revenue and return on investment (ROI) for advertising agencies.
Mahesh Murthy, founder, Pinstorm, said: "We hope this model will change the way advertisers think about budgets, and that they are percieved less as a cost and more as an investment. At Pinstorm, we make it simple by asking a client to only pay for the results we deliver, which could be in the form of payment per consumer reached or per product sold through the digitial platform."
Pinstorm uses proprietary technologies across search engine marketing (SEM), search engine optimisation (SEO), e-mail, SMS advertising, online and display advertising, online community creation and blog management. Some of Pinstorm's clients in India include Jet Airways, HSBC, Taj Hotels and Sharekhan.
Piaggio to launch petrol three-wheelers
Three-wheeler manufacturer Piaggio Vehicles is planning to introduce petrol- and gas-based versions of its vehicles.
Ravi Chopra, chairman and managing director, Piaggio India, said today that the development of engines that will run on petrol and gas is currently on, and an announcement of the company's entry into the petrol three-wheeler segment can be expected "soon."
Chopra said the company enjoys 55% share in the diesel three-wheeler segment and 36% in diesel passenger vehicles. "The market is expanding, and we feel the need to be present in all the segments of the three-wheeler category," Chopra said indicating a market potential of 100,000 petrol and gas three-wheelers every year.
Piaggio also launched the Extra and Extra LD (Long Deck) versions of its diesel three-wheeler in the Pune market.
Ravi Chopra, chairman and managing director, Piaggio India, said today that the development of engines that will run on petrol and gas is currently on, and an announcement of the company's entry into the petrol three-wheeler segment can be expected "soon."
Chopra said the company enjoys 55% share in the diesel three-wheeler segment and 36% in diesel passenger vehicles. "The market is expanding, and we feel the need to be present in all the segments of the three-wheeler category," Chopra said indicating a market potential of 100,000 petrol and gas three-wheelers every year.
Piaggio also launched the Extra and Extra LD (Long Deck) versions of its diesel three-wheeler in the Pune market.
Fraud big concern for India Inc: KPMG
Undetected fraud within companies is the highest concern of corporate India. India is perceived as a fraud haven with over 75% respondents to a KPMG survey considering fraud remaining undetected as their highest concern followed by inadequacy of anti-fraud measures and unethical behaviour of employees.
The dual impact of the two concerns leads to an environment where both inclination and opportunity co-exist. This could mean that organisations in India that remain passive in their approach to deal with fraud may be a perfect breeding ground for fraud, suggests the findings of the latest KPMG report on fraud.
Over 80% of the respondents accept that fraud is a problem in the corporate environment in India, and another 70% believe that fraud will increase over the next two years. There has been a rise of approximately 54% in the number of fraud victims from KPMG’s previous survey in 2006.
Deepankar Sanwalka, head, forensic services, KPMG India, said: "With the increase in the number of business transactions combined with the lack of effective monitoring, frauds are a real time threat for most corporates in India. It comes as a surprise that even the larger companies operating in India do not have adequate risk management strategies. Soon, companies operating in the Indian marketplace shall be under greater pressure to implement better practices in corporate governance, corporate disclosure and risk management."
The findings of the KPMG report suggest that the threat of fraud comes mostly from within the organisation. Majority of the respondents believe that employees pose the maximum threat to an organisation, and senior management as compared to other employees is more likely to commit fraud.
The inherent responsibilities and trust associated with senior positions, ability to over-ride internal controls, internal knowledge and access to confidential company information that come with the managerial position create the risk that fraudulent acts may occur. Next to employees, the maximum threat is perceived from suppliers and service providers.
According to respondents, supplier kickbacks is the most prevalent type of fraud being faced by the organisations today. The maximum risk faced by respondents in the future would be in the form of theft of intellectual property or frauds related to e-commerce and IT.
Most organisations use IT to conduct business but surprisingly only 27% respondents use technology to proactively identify the red flags. This shows that their fraud controls have not kept pace with technology and can be improved considerably if organisations would use data-driven technology in their fraud control frameworks.
The dual impact of the two concerns leads to an environment where both inclination and opportunity co-exist. This could mean that organisations in India that remain passive in their approach to deal with fraud may be a perfect breeding ground for fraud, suggests the findings of the latest KPMG report on fraud.
Over 80% of the respondents accept that fraud is a problem in the corporate environment in India, and another 70% believe that fraud will increase over the next two years. There has been a rise of approximately 54% in the number of fraud victims from KPMG’s previous survey in 2006.
Deepankar Sanwalka, head, forensic services, KPMG India, said: "With the increase in the number of business transactions combined with the lack of effective monitoring, frauds are a real time threat for most corporates in India. It comes as a surprise that even the larger companies operating in India do not have adequate risk management strategies. Soon, companies operating in the Indian marketplace shall be under greater pressure to implement better practices in corporate governance, corporate disclosure and risk management."
The findings of the KPMG report suggest that the threat of fraud comes mostly from within the organisation. Majority of the respondents believe that employees pose the maximum threat to an organisation, and senior management as compared to other employees is more likely to commit fraud.
The inherent responsibilities and trust associated with senior positions, ability to over-ride internal controls, internal knowledge and access to confidential company information that come with the managerial position create the risk that fraudulent acts may occur. Next to employees, the maximum threat is perceived from suppliers and service providers.
According to respondents, supplier kickbacks is the most prevalent type of fraud being faced by the organisations today. The maximum risk faced by respondents in the future would be in the form of theft of intellectual property or frauds related to e-commerce and IT.
Most organisations use IT to conduct business but surprisingly only 27% respondents use technology to proactively identify the red flags. This shows that their fraud controls have not kept pace with technology and can be improved considerably if organisations would use data-driven technology in their fraud control frameworks.
GM to launch second small car in India
General Motors today said that it will launch a second small car in India in the next two years as it looks at emerging markets to make up for sluggish sales in the US.
A late entrant in the country’s small car market, GM sells the Chevrolet Spark at around Rs 300,000. "We need something lower than what we have got now,” GM Group Vice-President David Reilly said today, adding: “I think if we could find a vehicle for less than that, it would not only benefit India but could benefit other places also.”
Reilly did not disclose the targeted price of the new model but said that it would not compete against the Tata Nano. Tata Motors had unveiled the Nano, the world's cheapest car at Rs 100,000, in January and had said the new four-seater would roll out later in the year from its West Bengal factory.
Helped by a lower excise duty of 12 per cent (against 24 per cent for bigger cars), small cars make up almost three quarters of car sales in India. The market leader in this segment is Maruti Suzuki.
General Motors, which had launched the Spark last year, has a three per cent share. It sold around 2,800 units of the car per month. The company has a manufacturing plant in Gujarat and is building a second facility near Pune in Maharashtra. The company also plans to build an engine plant in India, but Reilly would not share details.
"We are still in some negotiations ... We absolutely intend to go ahead with it," he said, adding that the company would give further information within the next two months. Reilly said sales growth in emerging markets would outpace any softening in established markets like the United States and would help maintain the firm's total global sales expansion. “I don't predict a slowdown, but this year, the US would be tough," he said.
A late entrant in the country’s small car market, GM sells the Chevrolet Spark at around Rs 300,000. "We need something lower than what we have got now,” GM Group Vice-President David Reilly said today, adding: “I think if we could find a vehicle for less than that, it would not only benefit India but could benefit other places also.”
Reilly did not disclose the targeted price of the new model but said that it would not compete against the Tata Nano. Tata Motors had unveiled the Nano, the world's cheapest car at Rs 100,000, in January and had said the new four-seater would roll out later in the year from its West Bengal factory.
Helped by a lower excise duty of 12 per cent (against 24 per cent for bigger cars), small cars make up almost three quarters of car sales in India. The market leader in this segment is Maruti Suzuki.
General Motors, which had launched the Spark last year, has a three per cent share. It sold around 2,800 units of the car per month. The company has a manufacturing plant in Gujarat and is building a second facility near Pune in Maharashtra. The company also plans to build an engine plant in India, but Reilly would not share details.
"We are still in some negotiations ... We absolutely intend to go ahead with it," he said, adding that the company would give further information within the next two months. Reilly said sales growth in emerging markets would outpace any softening in established markets like the United States and would help maintain the firm's total global sales expansion. “I don't predict a slowdown, but this year, the US would be tough," he said.
Sunday, March 16, 2008
Varsities may soon own patent rights
The Union government is likely to enact a law to create uniform legal framework for government-funded research and give universities and research institutions ownership and patent rights for their innovations.
The matter is before the Cabinet and will shortly be moved to Parliament for approval, according to a source close to the development.
The move was initiated by National Knowledge Commission (NKC) Chairman Sam Pitroda as an incentive to encourage innovation, collaboration, licensing and commercialisation in Indian institutes.
The law will be on the lines of the 1980 Bayh-Dole Act of America, which played a part in multiplying the number of patents filed by and granted to universities, the number of universities involved in patenting and licensing of inventions and in the number of new companies that were set up on the basis of new inventions licensed by universities.
Before the Bayh-Dole Act was enacted, America’s federal agencies owned about 28,000 patents, out of which only 5 per cent were licensed to industry for development of commercial products.
The proposed legislation will also help universities and research institutions file patents in their own name and forge commercialisation processes with the industry.
It may also allow the balance of any royalties or income earned after payment of expenses, to be ploughed back into institutes for scientific research and education.
“Giving ownership rights to universities and linking such ownership with the patent system and the market, will make research a much more attractive option,” said a professor working with NKC.
According to the proposal, the government could have ‘march-in rights’ to protect certain public good(s) or matters pertaining to national security.
The government could also be given the right to own an invention where the party decides not to retain title or fails to file the requisite patent application.
Business schools also need to incorporate IPR dimensions in their curricula. “There is also an urgent need to set up IPR cells in major scientific and educational institutions in the country with trained staff, competent in the law and technical aspects of relevant disciplines,” added the professor.
Indian institutes have realised the importance of patenting their innovations and have even begun formulating their own IPR policies.
A professor from IIT-Bombay said: “If this legislation is passed, it will be a good move. In general, institutes in India have not been proactive on this. Academics have to publish their research articles which one should get patented. This move will motivate them to patent their items and get it published.”
The matter is before the Cabinet and will shortly be moved to Parliament for approval, according to a source close to the development.
The move was initiated by National Knowledge Commission (NKC) Chairman Sam Pitroda as an incentive to encourage innovation, collaboration, licensing and commercialisation in Indian institutes.
The law will be on the lines of the 1980 Bayh-Dole Act of America, which played a part in multiplying the number of patents filed by and granted to universities, the number of universities involved in patenting and licensing of inventions and in the number of new companies that were set up on the basis of new inventions licensed by universities.
Before the Bayh-Dole Act was enacted, America’s federal agencies owned about 28,000 patents, out of which only 5 per cent were licensed to industry for development of commercial products.
The proposed legislation will also help universities and research institutions file patents in their own name and forge commercialisation processes with the industry.
It may also allow the balance of any royalties or income earned after payment of expenses, to be ploughed back into institutes for scientific research and education.
“Giving ownership rights to universities and linking such ownership with the patent system and the market, will make research a much more attractive option,” said a professor working with NKC.
According to the proposal, the government could have ‘march-in rights’ to protect certain public good(s) or matters pertaining to national security.
The government could also be given the right to own an invention where the party decides not to retain title or fails to file the requisite patent application.
Business schools also need to incorporate IPR dimensions in their curricula. “There is also an urgent need to set up IPR cells in major scientific and educational institutions in the country with trained staff, competent in the law and technical aspects of relevant disciplines,” added the professor.
Indian institutes have realised the importance of patenting their innovations and have even begun formulating their own IPR policies.
A professor from IIT-Bombay said: “If this legislation is passed, it will be a good move. In general, institutes in India have not been proactive on this. Academics have to publish their research articles which one should get patented. This move will motivate them to patent their items and get it published.”
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