Firing on many cylinders

January 2, 2013 By Leave a Comment

G.D. Raja, Managing Director, GD Foods & Beverages Pvt Ltd

The number 60, prominently written on the registration plate of the BMW 3-Series car, almost reads as ‘GD’. Sensing my inquisitive look, he said, “Yes, it’s 60, and it’s my idea,” he says, with a triumphant grin on his face. “It stands for Gunasekaran and Devaghi, my parents. All my vehicles have the same number,” says 32-year-old G.D. Raja.

Raja has a chain of businesses – commodity broking (Adventures India), instant coffee export, a chain of coffee pubs (Goodmorning Café), logistics (LRG Logistics), real estate (GD Shelters), jewellery retail (GD Gold Garden) and a play school (GD Public School).

Ask him whether he became an entrepreneur by accident or was forced upon him, he says, “No, no. It’s purely by choice.” His father, who runs a transport business in Chennai, wanted to see him as a top-level executive in a big corporate house. Despite his father’s persuasion, he chose not to take part in any campus interviews when he was doing his MBA at Bharathidasan Institute of Management, Tiruchi. “Because, I was very stubborn that I should start something on my own,” says Raja, founder CEO of the GD Group of companies.

In 2003, after he completed his MBA, he ventured into a business as planned, with an initial investment of Rs 3 lakh, which he “borrowed” from his father. He took distributorship of food products from various manufacturers.

He stocked and distributed many products from packaged atta, maida to asafoetida to provision stores from a small portion of a building in Chennai. There was an 8-10 per cent margin. As most of the products were sold on credit, and the shop owners did not pay on time, it often landed him in financial problems. “During such a crisis, my friend, Rajam, who studied with me at BIM, used to bail me out by lending money from her salary.” But, that did not go on for a long time. At one point, the situation worsened and he could not even pay the rent for the portion he had taken on lease. He quit the distribution business.

And that is when the idea of having his own brand struck him, and they (Raja and Rajam) finally narrowed down on instant coffee. It was in early 2004, when Sunrise and Bru were the dominant players in the market. When approached, Consolidated Coffee Ltd at Hyderabad readily agreed to manufacture for him. ‘Goodmorning Cafe’ was born. He positioned it as a B2B product and sold it to commercial establishments, “as this segment was not very brand conscious”.

The first month sales were Rs 8,000 but in three years, the annual turnover went up to Rs 4 crore. CCL could not meet his demand, as it had to meet its own export orders. In a tight spot again, he decided to set up his own manufacturing facility. Though many banks rejected the project because of his age and lack of collateral, thankfully, State Bank of Hyderabad agreed to extend the loan. “That was the breakthrough for us,” says Raja. In late 2011, when he was 31, he set up his instant coffee manufacturing facility at Andimadam in Ariyalur district of Tamil Nadu, with a 200-tonne-a-month capacity. After that there was no looking back.

As there were a lot of enquiries from overseas, he started exporting too. Now the unit is converted into a 100 per cent export-oriented-unit. The unit is now being expanded to manufacture 750 tonnes a month.

He extended his coffee export business by foraying into ‘coffee pubs’, under the brand Goodmorning Café. It’s a chain of five outlets, now only in Chennai.

In between, in late 2004, as he had “a lot of free time in the evenings”, he started a commodity broking firm, Adventures India. The peak business time for the Commodity Exchange is towards the evening (to coincide with the New York exchange). “I learnt that commodity market has a higher potential than the stock market, and took membership from MCX,” he explains.

He positioned his broking firm as an ‘exclusive commodity broking firm’. Due to lack of awareness, he had a tough time bringing in investors. His perseverance paid. Now Adventures India carries out transactions worth Rs 600 crore a day. “We are South India’s leading commodity broking firm with more than 200 branches across the country,” says Raja.

His logistics business too has an interesting story behind. He invited P.R. Ramasubrahmaneya Rajha, Chairman of the Ramco group, as the chief guest to inaugurate an Adventures India outlet in Rajapalayam. During their conversation, Rajha asked him to start a transport business, with a promise to award Ramco’s contracts in that region. LR Logistics was started with 30 trucks. And, now it runs 54 trucks, exclusively for Ramco.

Now his group employs a little over 300 people. “My dream is to expand the business and employ at least 1,000 people by 2015,” says Raja.

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Gov. Scott (R-ALEC) Walker’s billionaire donor pays nothing (zero) in State Corporate income tax

May 16, 2012 By Leave a Comment

Billionaire Diane Hendricks, the anti-labor donor who contributed $500,000 to Gov. Scott Walker to make Wisconsin a red state is the largest donor to help fight his recall. Hendricks’ firm pays zero State Corporate income tax. Walker is under

more scrutiny since the besieged Governor’s conversation with his benefactress billionaire was outed in a video with the Governor declaring his ‘Divide and Conquer’ strategy.

Jack Norman at the Institute for Wisconsin’s Future disclosed this revelation (Gosh, I love the Internet):

During a three-month period in 2012, Hendricks donated $500,000 to Walker’s campaign, according to the Wisconsin Democracy Campaign. She is the largest single donor to the governor’s anti-recall campaign, outspending even fellow billionaires Sheldon Adelson (Las Vegas casinos) and Richard DeVos (Amway).

Hendricks, whom Forbes magazine says is worth $2.8 billion, heads Beloit-based ABC Supply Company, which the magazine calls “the nation’s largest roofing, window and siding wholesale distributor” with annual sales approaching $5 billion.

ABC Supply may be a huge money-maker for Hendricks, but the Wisconsin corporate income tax returns she files claim the company makes not a penny in taxable profit.

ABC Supply paid exactly $0.00 in state corporate income tax in 2005, 2006, 2007 and 2008, according to the state Department of Revenue. Tax data for more recent years were not available when the information was requested from the department.

Hendricks helped make headlines last week when a video emerged of a conversation she had with Walker in Beloit. In the video, Hendricks asks Walker: “Any chance we’ll ever get to be a completely red state and work on these unions and be-come a right-to-work state? What can we do to help you?”

Walker replied: “Well, we’re going to start in a couple weeks with our budget adjustment bill. The first step is we’re going to deal with collection bargaining for all public employee unions, because you use divide and conquer.” [Milwaukee Journal Sentinel]

Hendricks is well-known as a financial backer of conservative causes and candidates. Her political donations in Wisconsin date as far back as a $1,000 gift to then-Gov. Tommy G. Thompson in 1991, ac- cording to the Wisconsin Democracy Campaign.

And she speaks out herself in favor of low taxes and less regulations. The opening sentence in an op-ed she wrote in 2010 for USA Today says: “Taxing job creators is a sure way to stop the engine of economic growth.”

Well, she’s found a way to get around paying any state income tax on her business. After all, state tax law is full of plenty of loopholes for her lawyers and accountants to work with. It’s not known which loop- holes ABC Supply used to avoid income taxes.

ABC Supply was founded in 1982 by Hendricks and her late husband, Kenneth Hendricks. She was a very active partner while he was alive and has been running the company since his death five years ago.

(My bold)

This is significant. While Walker claims he is not battling the middle class, he’s teamed up with a billionaire businesswoman who was afforded every Corporate loophole to avoid taxation while partnering with the Governor to eradicate union rights.

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Infosys says seeks acquisitions worth up to $700 mln

October 29, 2011 By Leave a Comment

SHANGHAI (Reuters) – Infosys Ltd, India’s No.2 software services exporter, is looking for acquisitions worth up to $700 million, Infosys’ Executive Co-Chairman Kris Gopalakrishnan said on Thursday.

India’s IT sector, which feeds off increased outsourcing by companies looking to cut costs, is expected to face pricing pressure and a decline in new orders as Europe struggles with a debt crisis and the United States battles an economic slowdown.

Infosys and its local rivals also face stiff competition from global players including IBM and Accenture for large outsourcing deals from global corporations.

(Reporting by Melanie Lee; Editing by Fayen Wong)

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Boeing profit lifted by commercial, defence sales

October 29, 2011 By Leave a Comment

REUTERS – Strong demand for commercial and military aircraft lifted quarterly earnings at Boeing Co, making the builder of the new 787 Dreamliner the latest big-ticket manufacturer to ease fears about global economic conditions.

The results and a higher 2011 profit forecast sent Boeing shares 5 percent higher. The stock also gained on news of the first commercial flight of Boeing ‘s high-profile, carbon-composite Dreamliner.

The profit beat from the world’s largest aerospace and defence Company was the latest in a string of recent upbeat reports from other top manufacturers like Caterpillar Inc, United Technologies Corp and Honeywell International Inc.

“I think we’re completely headed in the right direction and this is another piece of the puzzle to indicate we are,” said Andrew Bodner, president of Double Diamond Investment Group.

“If you look at corporate earnings, that’s been one of the strong points of pulling us out of any recession,” he said.

Boeing shares, a Dow Component, closed 4.5 percent higher at $66.56 on the New York Stock Exchange .

(For a graphic on Boeing ‘s earnings, see http://link.reuters.com/net64s)

DREAMLINER

Boeing ‘s earnings were reported on the day of the first commercial flight for Boeing ‘s long-delayed 787 Dreamliner, a lightweight, carbon composite widebody. The plane-maker recently made its first delivery of the 787 and the 747-8 Freighter — both years behind schedule.

Boeing said on Wednesday it would calculate the profitability of the 787 program based on 1,100 planes. This was the first indication from Boeing as to when the plane-maker expected that program to turn a profit.

Chief Executive Jim McNerney previously said he expected the program to be profitable from “day one” based on the company’s usual accounting practices.

In other Boeing commercial programs, the initial accounting block is much smaller. For the 767, 777 and 757 programs, the block was closer to 400 planes.

But early demand for those planes was much weaker than for the record-setting 787, which had more than 800 orders years before its first delivery. So Boeing spread its 787 investment over the larger accounting block.

“They’re going to be profitable from day one with very small margins,” said Alex Hamilton, managing director of EarlyBirdCapital. “It’s a little bit of a break from historical precedent, and that’s a luxury they were given with such a large backlog.”

Now analysts want to know if Boeing can ramp up its production rate for the plane to 10 per month by the end of 2013, as promised. The current rate is two per month.

Boeing also said on Wednesday it expected a delay in the first delivery of a slightly bigger version of the Dreamliner, the 787-9, which was previously scheduled for delivery to Air New Zealand in late 2013.

In a regulatory filing, Boeing said, “With successful completion of the 787-9 critical design review we have assessed the schedule and first delivery is now expected in early 2014, although we continue to look for opportunities to regain schedule.”

EARNINGS BEAT

Boeing , which competes with EADS unit Airbus , said third-quarter profit rose to $1.1 billion, or $1.46 per share, from $837 million, or $1.12 per share, a year earlier.

The average Wall Street earnings forecast was $1.10 per share, according to Thomson Reuters I/B/E/S.

For the full year, Boeing raised its earnings per share guidance to a range of $4.30 to $4.40, “reflecting strong core performance.” Its previous forecast was $3.90 to $4.10.

The company, however, narrowed its 2011 revenue forecast to between $68 billion and $70 billion, from $68 billion to $71 billion previously.

“This was a good operating performance at both ( Boeing Commercial Airplanes) and defence,” aerospace analyst Robert Stallard of RBC Capital Markets said in a research note.

“We think airline demand and the backlog remains robust, and Boeing ‘s cash position should start to improve as 787 and 747-8 inventory starts to ship,” he said. “We think these two drivers will overwhelm other issues going forward — if Boeing can execute.”

Boeing , which splits its business between defense and commercial airplanes, said third-quarter revenue increased 4 percent from a year earlier to $17.7 billion, while its order backlog grew to $332 billion from $323 billion at the beginning of the quarter.

Revenue for Boeing ‘s commercial airplanes division increased by 9 percent to $9.5 billion on increased deliveries of its airplanes.

Boeing delivered 127 commercial airplanes in the third quarter, including 100 of its best-selling 737 narrowbodies and 21 widebody 777s. The number of deliveries was up slightly from the 124 reported for the year-ago quarter.

Boeing gets paid for its airplanes at delivery. Its commercial airplane delivery guidance for 2011 is now about 480, down from previous guidance of 485 to 495.

Revenue for Boeing ‘s defense, space and security business was $8.2 billion in the quarter, steady from a year ago. The company also reported 10 percent operating margins for the division, an improvement over 8.4 percent a year earlier.

Despite military budget constraints, Boeing noted strength in programs such as tanker and Growler.

Matt Collins, an industrials analyst at Edward Jones, noted “impressive profitability” for Boeing ‘s defense business. But he warned of challenges ahead.

“Budget constraints mean Boeing can’t count on revenue growth here so they’ll have to handle costs well for the business to contribute to earnings growth,” Collins said.

(Reporting by Kyle Peterson; Editing by Matthew Lewis, John Wallace, Phil Berlowitz)

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SBI expects 100-125 bps rise in savings bank fund costs

October 29, 2011 By Leave a Comment

MUMBAI (Reuters) – State Bank of India, the country’s biggest lender, expects its average funding cost for savings bank accounts to rise 100-125 basis points, its chairman said Friday.

“I think that’s going to be inevitable. We are prepared for some pressure on the cost of saving bank funding,” Pratip Chaudhuri told television channel CNBC-TV18 in an interview.

The RBI on Tuesday deregulated the savings deposit rate, the last administered bank rate in India. Within hours, YES Bank increased the rate it offers on such deposits by 200 basis points to 6 percent from the earlier mandated 4 percent.

The deregulation of the rate is expected to spark off competition among banks to garner low-cost deposits. New banks, like YES Bank and Kotak Mahindra Bank are expected to be more aggressive in mopping up such deposits.

Savings bank deposits comprise about 34 percent of SBI’s total deposit base, Chaudhuri said. Of the bank’s total savings deposits, 30 percent have a balance of more than 100,000 rupees.

The RBI, while deregulating the rate on Tuesday, did not put a floor on the savings rate or restrict the number of times banks may change the rate. It does require that each bank offer a uniform interest rate on savings deposits up to 100,000 rupees.

Chaudhuri, however, said SBI would not take the first call among the larger banks on raising the savings bank rate.

“We will have to see how other banks play it out and then we will take appropriate policy action,” he said.

He said the increase in the savings bank rate would not be uniform — for higher value accounts it may be 100 basis points, but for lower value deposits it may be 50 basis points or less.

At 2.15 p.m., shares in SBI were up 2.1 percent at 1,906.10 rupees in a firm Mumbai market.

(Reporting by Subhadip Sircar; Editing by Rajesh Pandathil)

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End of the road for gold?

September 26, 2011 By Leave a Comment

No, surely not. However it is time to be cautious for sure. What are the risks in gold? Or is it that there are no risks at all, as some readers would like to believe?
Well let us look at some of the risks:

1.    It is not an essential commodity: You cannot eat gold. If prices go beyond a point, people will just not consume it! It is not air or water.

2.    Remember in the year 2008 gold lost MORE THAN 30% of value — clearly the hedge theory goes. A hedge asset SHOULD move in the other direction, not in sympathy.

3.    In the 1980s gold lost about 65% of its value in about 2 years time! Remember both these events happened against a not very strong currency — the US dollar!!

4.    When fear subsides, and things return to normal, the law of demand and supply will apply to all assets — including gold.

5.    The Chicago Mercantile Exchange has a very high margin now for gold — and CME is a good reader of volatility. Expect volatility, margin calls, and sales by the lenders — all these do not sound good.

6.    No income generating capability: If you go wrong in a portfolio of good shares (i.e. prices have fallen!) at least you are sure of getting a 2% to 4%p.a. return in dividends. This is not great, but will FORCE lenders / investors to discount the cashflow and arrive at a new price. If the company does well, dividends will increase, forcing the value to go up. Sadly in case of gold, I have to hope that there is a GREATER FOOL THEORY and I will be able to find him, so that I can sell. This is not easy.

The author P V Subramanyam is a Chartered Accountant by qualification and a financial trainer by profession. Writing being a passion he also regularly pens his thought in his blog Subramoney.com

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2G relief for Tata, Ambani and Radia

July 13, 2011 By

NEW DELHI: The Delhi high court on Wednesday refused to hear a plea seeking direction to the Central Bureau of Investigation (CBI) to include industrialists Ratan Tata and Anil Ambani along with lobbyist Niira Radia as co-accused in the 2G telecom spectrum case. The court termed it a “rubbish plea”.

“I will not pass any order. You argue at your own peril,” Justice Ajit Bharihoke warned, asking Delhi-based journalist M Furquan to withdraw the petition, which also sought prosecution of DMK chief M Karunanidhi's wife, Dayalu Ammal. “I may impose a fine for filing a rubbish plea,” the judge told Furquan when the petitioner said he intended to argue the case. “I will notallow you to approach anywhere. Withdraw your petition.”

Furquan agreed to withdraw the petition but requested the court to give him the liberty to approach the Supreme Court. The judge told him he could go wherever he wanted but the HC would not entertain his plea.

Furquan approached the HC after the sp

ecial CBI court rejected his application seeking a similar order. Special Judge O P Saini had said no third party would be permitted to “alter or interfere” with the ongoing CBI probe in the case.

The court had noted that both the applications—one of them by Furquan and the other by a Delhi-based businessman—had failed to put forth any new evidence warranting the need for the inclusion of these persons as accused in the case.

“Cognizance of the police case has already been taken and no further investigation can be ordered by the court at the instance of third parties, who are not even remotely connected with the issue,” the special court had remarked.

“The police case can't be altered beyond recognition at the instance of third parties, whose motives are unknown and (who) are also not in possession of any new evidence,” the special court said and imposed a Rs 10,000 fine each on the petitioners. “The applications are not only devoid of substance but contrary to law and deserve to be dismissed with heavy cost as applications after applications of this nature are being filed by third parties, resulting into loss of precious time of the court,” it noted while dismissing the case.

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Treacherous Road Awaits Toyota’s Recoveryby Japan

June 10, 2011 By Leave a Comment

TOKYO (Nikkei)–The strong yen and ascendant foreign rivals are expected to threaten Toyota Motor Corp.’s (7203) post-quake recovery as the automaker rushes to bring back production levels and reclaim the lost share in foreign markets.

Japan’s top carmaker announced Friday that its global production, including the Lexus luxury brand, will edge up 1% to 7.39 million vehicles for the year ending next March. By lifting output in the second half, Toyota hopes to make up for the downfall caused by supply-chain disruptions.

“In Japan, some models will start to regain lost ground from the July-September period,” Executive Vice President Satoshi Ozawa told a news conference, underscoring a faster-than-expected recovery in production.

Meanwhile, operating profit is likely to plunge 36% this fiscal year, assuming a currency rate of 82 yen to the dollar. This would mean the yen is stronger than last fiscal year by 4 yen. Each one-yen rise versus the dollar lowers Toyota’s operating profit by about 30 billion yen a year. The yen’s strength against the dollar is expected to eat into the operating profit by 100 billion yen this fiscal year, even after factoring in the yen’s weakening against the euro and the Australian dollar.

Unlike domestic electronics manufacturers, which can offset the impact of a stronger yen by buying parts from Asian suppliers, Japan’s auto industry relies on the domestic market for most of its parts. The currency rate is “beyond the limits of the industry’s ability to continue production in Japan,” Ozawa said, adding that even President Akio Toyoda, a proponent of keeping as much production as possible in Japan, is aware of the limitations.

Toyota ranked No. 1 worldwide in sales volume for a third straight year in 2010. But General Motors Co. may take Toyota’s crown this year.

“We don’t care about being No. 1 in the world,” Ozawa said, stressing the importance of putting customers first in car making. The statement appears to reflect Toyota’s regret about its aggressive pursuit of growth, which led to a loss of focus on profitability.

Germany’s Volkswagen AG and South Korea’s Hyundai Motor Co. are quickly gaining prominence in North America and Asia, with foreign exchange rates in their favor. While a quick rebound in production has served as a reminder of Toyota’s resilience, concerns remain whether the automaker can maintain its competitive edge against foreign rivals by keeping up its research and investment amid lackluster earnings.

(The Nikkei June 11 morning edition)

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Rupee down by 3 paise against US dollar in early trade

April 19, 2011 By Leave a Comment

MUMBAI: The rupee on Tuesday recovered its initial sharp losses in line with the local equities and late dollar demand, still it ended lower by three paise against the US currency.

A weak dollar overseas amid early fall in local equities and fresh capital outflows led the rupee to resume down at 44.55/56 a dollar from 44.45/46 at the Interbank Foreign Exchange (Forex) market.

It immediately touched a low of 44.7050 as the Bombay Stock Exchange benchmark Sensex was down by nearly 115 points in morning deals and Foreign Institutional Investors (FIIs) pulled out USD 178.57 million on April 18 as per SEBI data.

However, later the rupee touched a high of 44.45 before concluding at 44.48/49 as the Sensex rebounded from early losses and ended up by about 31 points or 0.16 per cent.

Late dollar demand from importers too helped the rupee to bounce back.

Meanwhile, the US crude oil was trading above USD 106 a barrel.

Alpari Forex (India) CEO Pramit Brahmbhatt said, “Euro’s loss against the greenback affected the rupee, which went down to two-and-a-half week low and looking towards the volatile local equities USDINR spot pair is expected to touch 44.75.”

“The trading range for the USD/INR will be between 44.25- 44.75 tomorrow,” he added.

Meanwhile, the dollar index, consisting of six major currencies was down by 0.23 per cent in the European market, steming the rupee to fall to the minimum level.

The rupee premium for the forward dollar finished lower on fresh receivings by exporters. The benchmark six-month forward dollar premium payable in September closed down at 146-148 paise from 148-150 paise on Monday.

Far-forward contracts maturing in March also eased to 301-1/2-302-1/2 paise from 302-304 paise previously.

The Reserve Bank of India has fixed the reference rate for the dollar at Rs 44.68 and the euro at Rs 63.53.

The fell back to Rs 72.51/53 against the pound sterling from Monday’s close of Rs 72.34/36 and also softened against the euro to Rs 63.54/46 from Rs 63.50/52 previously.

It, however, continued to rule weak against the Japanese yen to Rs 53.84/86 per 100 yen from its last close of Rs 53.66/68.

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Exports post highest growth of 37.5% at $245.90bn in FY 2011

April 19, 2011 By Leave a Comment

NEW DELHI: Exports registered the highest ever growth of 37.5 per cent at USD 245.9 billion during 2010-11, demonstrating a robust demand for Indian merchandises not just in the western economies but in new markets like Latin America as well.

Exports for March rose by a handsome 43.9 per cent to USD 29.1 billion compared to the growth in the same month in the previous financial year.

“This is the highest annual percentage growth (in a financial year),” commerce and industry minister Anand Sharma said after releasing the trade data.

The stellar performance in exports has been made possible despite uncertainty in several European economies which are marred by debt crisis.

Imports on the other hand grew at a lesser pace of 21.5 per cent despite increasing pressure on crude oil prices. Imports for 2010-11 aggregated USD 350.3 billion, leaving a trade deficit of USD 104.4 billion.

Imports in March totalled USD 34.7 billion, up 17.3 per cent year-on-year.

The country’s total merchandise trade has almost touched USD 600 billion — half of India’s gross domestic product of USD 1.2 trillion.

Sharma said while the government has not fixed any target for the current fiscal, “… we will continue to strive to increase it”.

India aims to achieve merchandise exports of USD 450 billion 2013-14.

Commerce secretary Rahul Khullar said imports figures may be revised upwards leading to a trade gap increasing to USD 110-115 billion.

The good show by exports has lessened worries on the current account deficit, which Khullar said, is likely to be at USD 25-35 billion.

Engineering goods grew 84.7 per cent to USD 60 billion led the show, followed by Petroleum products at USD 42.5 billion (up 50.5 per cent).

Gems and jewellery grew 15.4 per cent to to USD 33.5 billion, drugs and pharmaceuticals 15 per cent to USD 10.3 billion.

Khullar said while there has been an improvement in demand in the US an even in EU, “my hunch is that export growth (also) came from new markets, particularly from Latin America.”

Since the export growth had bottomed out in 2009-10, expansion in the last fiscal looked good under the low base impact.

However, “even if this base effect was not there the export growth would have been around 30 per cent,” Khullar said.

When asked if the growth rate is sustainable, he said it will be a “pipe-dream” given the global economic outlook.

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ONGC Lost Rs 9 cr 400 Tonne Of Crude Oil During Strike

December 25, 2009 By Leave a Comment

ONGC Lost Rs 9 cr 400 Tonne Of Crude Oil During Strike

Oil and Natural Gas Corporation (ONGC) has lost Rs 9 crore and 400 tonne of crude oil production in the last three days due to the 96-hour ONGC bandh called by the All Assam Students Union (AASU) from Monday in upper Assam.

According to an ONGC spokesman here, oil drilling, transportation and production operations were severely hit following the bandh causing the PSU oil firm to lose Rs 3 crore a day and 400 tonne of crude in the last three days.

Drilling operations and production in the Rudrasagar, Geleky, Lakwa and other oil fields in the district had almost come to a standstill even as an attempt was being made to maintain production from the safety point of view, the spokesman said.

ONGC Onshore Director Ajit Hazarika told PTI that this halt in the oil flow during winter has caused loss in terms of both money and natural resources.

“There is a danger of wax formation in the oil wells which will negatively affect oil exploration,” he said.

Stating there was no proposal to separate ONGC-Assam Assets from ONGC, Hazarika said AASU should withdraw its bandh in the interest of the people of the state as ONGC-Assam Assets would be exclusively for the state and will not be privatised.

-Business Standard.

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Andhra Bank Raises Rs 600 cr Via Bonds

December 25, 2009 By Leave a Comment

Andhra Bank Raises Rs 600 cr Via Bonds

Andhra Bank has raised Rs 600 crore by selling bonds in two tranches in current month.

The bank raised Rs 280 crore by issuing upper Tier-II bonds. The annual coupon of for this issue was 8.70 per cent. The issue opened on December 14, 2009 and closed on December 15, 2009. “It was fully subscribed on the date of the opening of the issue,” the company said in a notification to the National Stock Exchange.

Another Rs 320.00 crore were raised by issuing lower Tier-II bonds. This issue opened on December 15, 2009 and closed on December 21, 2009. The coupon rate was 8.55 per cent payable annually.

The book runners for the issue were Andhra Bank Merchant Banking Division, Darashaw & Company, AK Capital Services, Axis Bank and ICICI Bank.

-Business Standerd.

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KEC International | KEC International wins six new projects worth Rs 550 Crore

December 19, 2009 By Leave a Comment

KEC International | KEC International wins six new projects worth Rs 550 Crore

KEC International, a global leader in the power transmission EPC business has won major orders in Algeria and Abu Dhabi worth Rs 474 crore and Rs 76 crore respectively.

In Algeria, for CEEG Spa, KEC will undertake five turnkey projects of 400 KV, 200 KV and 60 KV covering both single and double circuit transmission lines worth Rs 474 crore. The total length of these five projects is 858 KM and the completion period ranges from 12 to 18 months.

In Abu Dhabi, KEC will execute a project of modification and reallocation on existing lines with design and supply of Emergency Line Restoration System (ERS) in Ruwais and Shuweihat for Abu Dhabi Transport Authority/ Ghantoot Transport & Gen. Cont. Est. This project is to be completed within 12 months. The value of this order is Rs 76 crore.

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World stocks hit new 14-month high after BoA

December 3, 2009 By Leave a Comment

LONDON (Reuters) – World stocks hit a fresh 14-month high on Thursday while oil also rose after Bank of America said it would repay $45 billion of taxpayer bailout funds in a move which injected optimism into the financial sector.

Wall Street also looked set for a positive start.

The European Central Bank left its key interest rates on hold at a record low of 1 percent as expected. It was expected later to reveal new staff forecasts which would underpin its gradual process of phasing out its financial crisis support.

The low-yielding dollar came under pressure, sending dollar-priced gold to record highs above $1,225 an ounce, as BofA news encouraged investors to chase equities, commodities and other risky assets.

Bank of America (BAC.N: Quote) has launched the sale of $18.8 billion worth of securities, which are expected to be priced on December 7, according to a term sheet obtained by Reuters.

World stocks have erased all the losses suffered after Dubai announced a standstill last week on billions of dollars of debt held by its conglomerate Dubai World, with investors shifting focus back to risk-friendly expectations that the world’s central banks would keep interest rates low for some time.

“This is certainly one of the reasons for the positive market sentiment today,” said Joerg Rahn, chief investment officer at wealth management company Marcard, Stein & Co in Hamburg.

“I’d also say that economic optimism is returning following some days of losses earlier in the month.” MSCI world equity index .MIWD00000PUS rose as high as 302.45, its highest level since late September 2008, and was holding pretty close.

The FTSEurofirst 300 index rose 0.3 percent, while emerging stocks .MSCIEF rose 0.8 percent.

The Markit survey showed the euro zone’s service sector expanded for the third consecutive month in November, underpinning the recovery optimism, although the expansion was at a slower pace than reported early last week.

“We remain positive on European equities over our investment horizon of 12 months,” Standard & Poor’s European Investment Policy Committee said, adding that its 2010 year-end forecast implied a 12 percent upside from current levels.

“We believe that the credit markets are more likely capable than not of absorbing slated government debt issuance, given that long-term rates are still low and inflation expectations are stable.”

U.S. crude oil rose 60 cents to $77.23 a barrel after slipping a day earlier on a larger-than-expected build in U.S. crude inventories.

German government bond futures, the euro zone benchmark, fell 31 ticks.

The dollar .DXY fell 0.3 percent against a basket of major currencies while the yen fell 0.6 percent to 87.88 per dollar.

(Additional reporting by Christoph Steitz; Editing by Victoria Main)

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Nano to go hybrid way, get facelift: Tata

December 1, 2009 By Leave a Comment

Less than a year after the launch of the Nano comes news that the car is going to have a hybrid and is even getting an exterior facelift. Talks of an electric version of the Nano have been in the air for a while now, but reports on Monday said Ratan Tata, chairman of Tata Motors (TATAMOTORS.BO : 660.9 +31.4), told a South Korean newspaper about his interest to make his dream project join the environmental-friendly trend. However, the chairman did not elaborate on the possible timeline for the launch of the cheap hybrid versions.

Tata Motors shares closed at Rs 660.90, up 4.99%, on Monday on 30-11-2009 the BSE (^BSESN : 17198.27 +272.05).

At the 63rd annual general meeting of the company in Mumbai, the chairman had hinted at the subject and talked about the progressing work at the company on alternate fuel technology, including hybrids. He had said, “We are working on an eco-car in Thailand, electric vehicles and hybrids.”

The company also talks about use of bio-diesel and ethanol across Tata companies. Tata had also talked about a car project the company is working on with a France company, which will run on compressed air. He, however, expressed doubt about the project, saying “it may or may not happen”. Till October, the company has delivered 10,518 units. The Nano delivery had started in July this year.

Further, the newspaper quoted the company considering exporting Tata Motors’ light truck, Ace, to South Korea, and also assembling or manufacturing the model in its South Korean plant. Further, Tata was quoted saying that the group is interested in Vietnam and evaluating the US market, in which it is yet to make active investments.

The Indian conglomerate is also studying investments in automobiles, software and hotel businesses, as well as biofuel in South American markets such as Brazil and Argentina.

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ICICI Bank, HUL among world’s best cos for leaders

November 21, 2009 By Leave a Comment

New York: Indian private sector lender ICICI Bank and global consumer goods giant Unilever’s India-based subsidiary have been named in a list of world’s 10 best companies for leaders.

The list, compiled by business magazine Fortune, is topped by global technology giant IBM. Proctor & Gamble has been ranked second, followed by General Mills and McKinsey at third and fourth position respectively.

Fortune said the list has been compiled by ranking the most successful businesses that are the best at developing employee talent.

With a revenue of $7.4 billion and 36,335 employees, ICICI Bank has been ranked at the fifth position. Hindustan Unilever, the Indian arm of Unilever, has been ranked 10th.

About ICICI Bank the magazine said, “ICICI doesn’t just have recruiters trolling for talent outside of the company; it also has 600 employees who act as talent scouts internally, identifying coworkers with leadership potential.”

The internal recruiters tap 5,000 candidates a year, adding that these trainees are the only employees who get company stock options, the magazine said.

Hindustan Unilever, which has 15,000 employees, likes to think of itself as a talent factory. And with more than 1,000 alumni sitting on boards globally, it can certainly make a strong case for that, the magazine said.

Bureau Report

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Over 60% cos listed on BSE see decline in share value

November 21, 2009 By Leave a Comment

Over 60 per cent of companies listed on the Bombay Stock Exchange (^BSESN : 17021.85 +236.2) have seen their share value fall in the last two years, Parliament was informed.

“During the period November 9, 2007, to November 9, 2009, of the 3,405 scrips traded at the BSE, prices of 2,116 scrips (constituting 62.14 per cent of the total scrips) have fallen,” Minister of State for Finance Namo Narain Meena said in a written reply in Lok Sabha.

Replying to a question if the government has any record of how many companies have raised money from the share market illegally in the past two years, the minister said it does not have any such information.

However, Meena said a joint mechanism – Coordination and Monitoring Committee (CMC) — between the Corporate Affairs Ministry and market regulator SEBI has been adopted for identifying vanishing companies and settling policy issue regarding delinquent companies/promoters/directors and monitor progress of actions taken against companies.

“Out of those companies that brought out IPOs during 1992-2005, a total of 238 have been identified as vanishing companies, of which 117 have been tracked back as they have been regular in filing statutory returns etc…no company that had raised funds though public issue during the last two years has been identified as vanishing company,” he said.

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Air India offers 20% discount to senior citizens

November 21, 2009 By Leave a Comment

Mumbai: In a bid to woo customers to its first and executive classes on international routes, national air-carrier, Air India, has offered a 20 per cent discount to senior citizens.

Senior citizens (65-years and above), are now eligible for a 20 per cent discount for travel in first and executive classes on international flights, an Air India release said today.

The discount offer, however, is available only on tickets purchased from the airline’s reservation offices in India on the basic fare of market fares.

The special discounted fares will be valid for out-bound travel commencing on or before March 31 next year, it said.

Besides, the discount could be availed only on Air India and erstwhile Indian Airlines
‘ tickets and would be not be applicable on code-share flights, it said.

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Gold price scales a new peak

November 21, 2009 By Leave a Comment

MUMBAI: Hitting new highs is becoming a habit for gold, as it commenced its record-making journey again after a brief overnight pause on the
bullion market here on Friday on hectic buying from stockists and traders supported by positive global cues.

Moving in tandem with the yellow metal, silver too recovered on the back of fresh industrial demand. A slew of reasons are driving the gold rally. Other than eroding dollar valuation, inflated asset prices around the world due to cheap money policies are leading to diversion of funds to buy gold, traders said.

“There is a mad rush for buying gold as everyone wants a piece of it and the trend is set to continue,” they said. Standard gold (99.5 purity) shot up by Rs 105 per ten grams to end at Rs 17,295 from overnight closing level of Rs 17,190. Pure gold (99.9 purity) also rose by Rs 100 per ten grams to finish at Rs 17,380.

Silver ready (.999 fineness) hardened by Rs 160 per kilo to close at Rs 28,885 from Thursday’s closing level of Rs 28,695. In New York, gold futures ended marginally higher on Thursday, as the dollar came slightly off from its highs. Gold for December delivery rose by 70 cents to end at $1,141.90 an ounce. Silver for December delivery was up by 0.2 per cent at $18.455 an ounce.

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Bharti slashes mobile roaming charges, shares fall

November 21, 2009 By Leave a Comment

Bharti Airtel launched yet another new billing plan on Friday, slashing mobile roaming rates by nearly 60 percent and signalling a tariff war in the world’s fastest-growing wireless market was far from over.

The announcement accelerated losses in the shares of Bharti, the country’s top mobile operator. The stock fell as much as 3.3 percent but trimmed losses to 2.7 percent at 284.90 rupees by 0825 GMT in a Mumbai market that was up 0.3 percent.

The price war, aimed at grabbing new users ahead of fresh entrants waiting in the wings, has raised concerns about telecom firms’ profitability. Four new firms, including ventures funded by Telenor and Etisalat, are set to start services this year adding to the existing 11 operators.

Bharti’s market value has slumped more than a fifth this year to about $24 billion and its stock is the second worst performer in the main index that has risen about 72 percent. Rival Reliance Communications has fallen about a quarter in 2009.

Bharti, whose about 115 million users account for more than 23 percent of India’s total mobile subscribers, in September cut call charges within its own network to 50 paise (U.S. 1 cent) a minute and in October launched a low-profit per-second billing plan, reacting to competition.

Tata Teleservices, the No. 6 operator, was the first to launch per-second billing, deviating from the industry norm of per-minute billing. The offer was a roaring success and the firm has topped the new signings for three months in a row.

Bharti’s latest offer will allow users to recieve calls at 60 paise a minute while roaming, and they can make calls at 60 paise a minute within the Airtel network and at 80 paise a minute for calls to rival networks.

Analysts say Bharti still charges about 8-10 percent higher than Reliance’s call prices.

Bharti has said it would be competitive in pricing but had no intention to match the lowest price in the market.

(Editing by Ranjit Gangadharan)

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