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India clears Tata Tele, Virgin tie-up

Mumbai, March 29: India has given the green light to the tie-up between telecoms operator Tata Teleservices and UK`s Virgin Mobile, after it was convinced the combination was legal, a newspaper said on Saturday.

The Department of Telecommunications (DoT) had sought clarification from Tata Teleservices after a lobby group of telecom operators had demanded the government inquire into the legality of the tie-up.

DoT had decided the tie-up was not operating as a mobile virtual network operator (MVNO), based on Tata Teleservices` argument that it had no partnership for use of network or spectrum with Virgin and the tie-up was purely for non-license activities, the report said.

Earlier this month, Virgin Mobile, a unit of British communications group Virgin Media, launched a youth-focused service in India through Tata Teleservices.

This had lobby group, Cellular Operators Association of India, demanding the government check if the tie-up meant Virgin was entering India as a Mobile Virtual Network Operator (MVNO).

MVNOs, which do not own networks or spectrum but rent it out from other operators, are not permitted in India.

Tata Teleservices and its subsidiary, Tata Teleservices (Maharashtra) Ltd, operate in 20 of India`s 23 telecom zones.

Richard Branson`s Virgin Group operates flights to London from India and has a minority stake in private FM radio operator, Fever, controlled by HT Media.

Virgin Comics is partnering India`s Studio 18 and broadcaster UTV Software Communications Ltd for publishing, television, film and gaming.

Exports to top USD 200 bn in FY`09`

New Delhi, March 30: Leaders of Indian industry are confident of exports topping USD 200 billion in fiscal 2008-09 despite a strong rupee, says a survey.

Indian exports have the capability to register 20 percent growth annually that would reinforce the country as a key player in the global market, but only if the government follows a stable policy, said the Confederation of Indian Industry (CII) survey.

Indian industry honchos have urged the continuation of export promotion schemes such as Duty Entitlement Pass Book (DEPB), Export Promotion Capital Goods (EPCG) and Duty Free Import Authorisation (DFIA) in the upcoming foreign trade policy (FTP) for 2008-09.

The survey also suggested giving more power to regional and zonal offices of the directorate of foreign trade.

Some other measures suggested by the Indian corporate sector to encourage exports, despite a strong rupee and a global slowdown, are improving infrastructure, high transportation costs, poor road linkages with ports and setting a target of a maximum of 10 hours turnaround time at ports for all goods by 2010.

Another important area that needs to be looked at is sea freight, which has seen a staggering 61 percent increase in the last one year leading to exports becoming uncompetitive.

The chamber also pointed out that exporters are eagerly waiting for such a scheme to be introduced in the FTP that would seek to exempt all kinds of duties and help them obtain raw material at a cheaper rate so that Indian products can become competitive at the international markets.

“India should focus on an expanded trade basket and value added exports by moving ahead in the value chain and start focusing on manufacturing high-end products to compete in the global market,” CII said.

“There is a need for India to start concentrating on knowledge arbitrage instead of labour arbitrage - new technology, design, branding etc. - for enhancing our products and to get wider acceptability in the international market,” it added.

Another sector that needs a major thrust in terms of funding is the small and medium enterprises (SME) segment. This can prove to be extremely effective in pushing exports, the survey said.

The survey also suggested greater focus on facilitation of visa used by exporters for business purposes.

HDFC Bank moves to rural India

New Delhi, March 30: Country's largest private sector lender in terms of branch network, HDFC Bank is moving its BPO activity to the semi-urban area by hiring about 2,000 people in next two months.

The move is expected to bring down the operation by about 50-60 percent primarily due to cheaper human resources and real estate cost.

The bank will soon open 400-seater BPO in Trupati, the second one after Nellor in Andhra Pradesh, sources close to the development said.

The Mumbai-based bank is expected to have 2,000 people working (at these two BPOs) by June, sources said.

Going forward, the capacity would be ramped up along with widening of the scope of operations, sources said.

This is the first such attempt by any major bank in the country, sources said adding, to start with these BPOs will do only data entry work of the bank, and hopefully of other bank's or financial intuitions, insurance companies eventually.

The Nellor Centre opened early this year, manned by 140 people all hired locally, is currently operational.

Lower human resource cost and real estate would result in significant saving of operations cost for the banks estimated about 50 percent.

Talking about the social benefits, sources said, the idea is to create job opportunities locally and help the local youth earn his living without the need to relocate to metros.

Most of these places have a annual family income of Rs 12,000 per annum, whereas the bank is paying them four to five times that approximately (Rs 4,000-4,500 per month), sources added.

Fin Min examining Essar Power`s FDI proposal

New Delhi, March 30: The Finance Ministry is believed to be examining a proposal by Ruias-led Essar Group to bring in foreign investment of up to USD 2 billion (about Rs 8,000 crore) through Mauritius-based Essar Power holdings in Essar power.

"The Essar Power's proposal of bringing USD 2 billion was discussed by the Foreign Investment Promotion Board (FIPB) in its meeting held on Friday, but it has been deferred," official sources said.

The company has been asked to provide further details about the investment. Once recommended by the FIPB, the proposal is expected to be considered by the Cabinet Committee of Economic Affairs (CCEA) due to large size of foreign investment, the sources said.

The Essar Power, an arm of Essar Group, plans to bring over foreign investment through Essar Power Holdings (EPH) for equity investment in its proposed power projects across the country.

When contacted, the company officials declined to make any comment.

The sources, however, said that Essar Power, which is an unlisted company, proposes to transfer anywhere between 70 percent and 100 per cent equity to EPH.

The company has plans to invest over Rs 20,000 crore in the power sector in the next 1-2 years, although EPH would provide funds only for the equity stake.

Essar Group, which operates in the steel sector as well, also proposes to set up number of captive power plants apart from thermal and wind power projects in Jharkhand, Chhattisgarh and Tamil Nadu.

The sources said FIPB has also sought the comments of ministry of power and ministry of coal on the proposed investment. The Finance Ministry is also likely to closely examine the source of funding, share holding pattern of the EPH, they added.

Essar power has sought one-time government approval to bring USD two billion of FDI, although it proposes to invest around Rs 4,000 crore in the equity of power projects in the first year after getting approval.

The remaining amount is likely to be invested in the equity stake. With the present capacity of 1,200 mw, Essar Power aims to generate 6,000 mw by 2012 and is setting up plants in various states.

Pepsi, Cognizant among US` 50 best corporate performers

New York, March 30: Global beverage giant Pepsico and outsourcing major Cognizant, both headed by Indian-origin persons, figure on a list of '50 best corporate performers' by US financial magazine BusinessWeek.

However, both the companies – Indra Nooyi-run Pepsico and Francisco D'Souza-headed Cognizant Technology – have dropped from their previous year rankings.

While PepsiCo has managed to beat arch-rival Coca-Cola in the annual BusinessWeek 50 list, it has fallen one rung from its previous year's ranking. Cognizant has shed seven places from its 2007 rank.

PepsiCo, which has Chennai-born Nooyi at the top as its Chairman and CEO, has been ranked at 31st position in this year's list, where Cognizant has been placed at 19th.

D'Souza, who was part of Cognizant's founding members, had become its President and CEO with effect from January 1, 2007.

The list, based on metrics such as sales growth and investment return, has been topped by US-based retailer Coach, biotechnology major Gilead Sciences, speciality metals firm Allegheny Technologies, telecom giant Verizon and energy company Questar at the top five positions.

Apple, which makes digital music player iPods and Mac personal computers, has been placed at sixth place, while consumer goods giant Colgate-Palmolive is at seventh.

The companies were selected from among the constituents of S&P 500 index on two key metrics – return on investment and sales growth over the past three years and return on equity and assets growth for financial service firms.

Other major firms on the list include Starbucks (16), Goldman Sachs (21), Amazon.com (23), AT&T (27), Lehman Brothers (33), Google (34), Microsoft (41), Moody's (44), Coca-Cola (45) and ExxonMobil (50).

BusinessWeek noted that a number of firms are riding the crest of different business or macroeconomic cycles and about two dozen of them are "benefiting from powerful cross-border economic and management trends."

"That includes companies such as Cognizant Technology Solutions, which has emerged as a leader in managing the outsourcing of back-office functions to India and elsewhere."

About Pepsico, the report said it derives more revenues from food products than from fizzy beverages and international sales accounted for about 40 per cent of its revenues in 2007.

Noting that Nooyi has an international background that suits the company perfectly, the report said that Pepsico has a "propitious portfolio, big on healthier snacks and strong in faster growth markets outside the US."

Describing Cognizant as one of the fastest growing Indian outsourcers, the magazine said the firm's revenues climbed 50 per cent to USD 2.1 billion in 2007.

"It concentrates on US and European clients, a handful of industries, and just three core services software programming, business process outsourcing, and managing computer equipment," it noted.

Besides Pepsi and Cognizant, Google, Goldman Sachs, Amazon.com, Lehman Brothers and Moody's have also dropped from their previous year's rankings. Google has dropped to 34th position from its first position in BusinessWeek 2007 list.

However, those like Apple, Colgate-Palmolive, Microsoft, Starbucks, Verizon, AT&T, Coach, Gilead and CB Richard Ellis have improved their rankings since last year. Firms like Coca-Cola, ExxonMobil, Nvidia and BJ Services were not on the list last year.

Injured Sachin makes way for Kaif in Ahmedabad Test

Chennai, March 30: Batting maestro Sachin Tendulkar has been ruled out of the second Test of the Future Cup series against South Africa scheduled to commence on April 03 at Ahmedabad, Dilip Vengasarkar, the chairman of selectors said.

During the post match press conference, Indian captain Anil Kumble had revealed that the Little Master had `aggravated` a niggle (groin strain) during the Chennai Test. He said that Tendulkar`s repeated trips to the dressing room through the day were due to an upset stomach and also a `slight groin strain` and had hoped that he will recover in time.

Former team physiotherapist John Gloster had earlier, this month, submitted a report on the team`s return from Australia, saying Tendulkar was carrying a groin strain that required three weeks of rest. However, Sachin had claimed he was fully fit.

After almost two years in wilderness, Mohammad Kaif is set to reap benefits for his consistent showing in the domestic circuit as he replaces Sachin Tendulkar in the 14 member Indian squad for the next Test. The middle order batsman from Uttar Pradesh played his last Test for India against West Indies at Kingston in 2006.

Fast bowler Ishant Sharma, who sat out the first Test owing to a finger injury will miss the second Test as well as a ‘precautionary measure’.

"Because of Sachin Tendulkar`s re-aggravation of right groin injury during the fourth Test (in Australia) when he was fielding on the fourth day, his playing for second Test against South Africa is doubtful," cricket board secretary Niranjan Shah later announced in a media release here.

"Selection committee has decided to replace Sachin Tendulkar by Mohammad Kaif for the second Test against South Africa to be played at Ahmedabad," he said.

Shah also said that though captain Anil Kumble also sustained a groin injury during the drawn Chennai match, he was expected to play in the second Test though a final decision would be taken on the eve of the Ahmedabad tie.

"Kumble received right groin injury while bowling on last day of first Test. For precautionary measure he was rested from fielding," shah said.

"Physiotherapist Paul is confident that he will be available to play second Test match. Final decision in this regard will be taken on April 2," he added

Dena Bank to write off Rs 200 cr as waiver, eyes 24 % rise

Mumbai, March 30: Targeting a business growth of 24 percent in the next fiscal, state-owned Dena Bank will write off Rs 200 crore under the loan waiver package announced in the Union Budget.

"Dena Bank will write off about Rs 200 crore worth agriculture loans," bank's chairman and managing director P L Gairola told reporters here.

The government had announced a Rs 60,000 crore loan waiver package for farmers which has to be implemented by June end this year while the banks would be provided adequate liquidity in the next three years.

"We expect a 24 percent topline growth in business in next fiscal. The bank has also targeted a 50 percent rise in the customer base from about 95 lakh presently," he said.

He said the bank would set focus on agriculture, SME, retail and corporate segments in next fiscal which have been the key growth-drivers in the current fiscal.

Besides, a 22 percent growth was expected in advances while the deposits would rise by 22 percent, he said.

Presently, Dena Bank has a deposit base of Rs 32,000 crore while advances stood at Rs 23,000 crore.

Yesterday, the bank launched Dena international gold debit card and internet banking services. The gold card debit card will enable customers to withdraw up to Rs 1.5 lakh per day in the point of sales terminals across the world and up to Rs 50,000 from the ATMs, Gairola said.

The bank has already covered 100 branches under the core banking solution and plans to bring another 750 in the next two years, he said.

As a part of its efforts to enhance the customer-base, the bank also launched the internet-banking facility to enable the customers perform basic banking operations through internet.

Tata Power to dilute stake in holdings for funds
31 Mar, 2008, 0715 hrs IST............

New Delhi: Tata Power, the country's largest private electricity generator, today said it will disinvest holdings or sell assets to funds expansion activities, estimated to cost Rs 6,000 crore.

The company estimates a requirement of Rs 6,000 crore to fund its projects under implementation, Tata Power said in a presentation.

The company would raise its power generation capacity to 12,861 MW by 2013.

Of the Rs 6,000 crore, Rs 2,900 crore would come from internal accruals and Rs 1,900 crore would be raised by issuing warrants and preferential shares.

The remainder would be raised through "disinvestment of various holdings or assets" and "equity dilution through warrants, preferential issue and rights if required," the company said.

The company would require Rs 24,000 crore till 2012. While Rs 6,000 crore would come from its own resources, Rs 18,000 crore would be raised through debt from domestic banks, institutions and capital markets

Rupee breaches 40-mark on inflows, rate hike hopes
29 Mar, 2008, 0300 hrs IST. ................................

MUMBAI: The rupee breached the psychological 40-mark against the US dollar on Friday, after hovering above the 40-mark for nearly a month. The local currency gained strength versus the greenback, tracking considerable inflows, coupled with expectations of a rise in interest rates.

The local currency gained 20.50 paise to close at 39.89/90, rising from its previous close of 40.09/10 amidst a surge in the stock market and falling US dollar. The currency rose to 39.84 levels during the day.

The inflation figure of 6.68%, which superseded all estimates, forced some traders to sell dollars in order to mobilise rupee funds. The inflation figure has risen from the last week’s level of 5.96% and is way above the Reserve bank of India’s (RBI) comfort level of 5%.

There is a widespread speculation that the central bank will swing into action by hiking its cash reserve ratio (CRR) — the amount of funds banks have to park with RBI. Finance minister P Chidambaram hinted at this as well on Friday evening, when he said that interest rates were the most effective tool to combat inflation.

At the same time, RBI deputy governor Rakesh Mohan said that seasonal spikes and falls in inflation would continue, but the central bank aimed to control inflation at 5%.

According to market sources, there was considerable inflow of dollars into the Indian market. “One foreign bank, in particular, experienced heavy dollar inflows, which resulted in a spike in the rupee early in the day,” said a dealer with a private bank.

There have been huge amounts of foreign direct investment (FDI) as well as FII investments into India, with the year-end coming up. Inflows have also risen after the US Federal Reserve cut its Fed funds rate by 75 basis points last week.

In a departure from the normal trend, the central bank did not intervene in the currency market in an attempt to stem the rupee’s rise on Friday. Usually, the RBI intervention in the market is in the form of nationalised banks buying dollars. Forward premia rose as well, with the one-month contract ending the day at 3.94% (3.79%). The six-month contract rose to 2.13% (2.09%) while the annual contract ended the day at 1.53% (1.46%).

Rates in the inter-bank call market closed at 6% after transactions worth Rs 13,499 crore were carried out. Rates had opened at 7% and rose to a high of 7.25%. Rates in the market for collateralised borrowing and lending obligations ended the day at 4.51% after transactions worth Rs 37,582 crore were struck. Repo rates, on the other hand, ended the day at 7.50% after transactions worth Rs 19,253 crore were conducted.

Dealers feel that cash conditions tend to improve in April, the start of the fiscal year, as government spending kicks in. It is believed that chances of a hike in the cash reserve ratio (the proportion of deposits that banks have to maintain as cash with RBI) are larger than a hike in the key interest rates (the repo and reverse repo rates).

Nikkei falls 1.5 per cent, caution rules ahead of data
31 Mar, 2008, 0903 hrs IST. .........................

TOKYO: Japan's Nikkei average fell 1.5 per cent on Monday, with investors locking in profits following last week's sharp gains and before a raft of key economic data. Financial shares were under selling pressure, with Japan's third-largest bank Mizuho Financial Group down 3.1 per cent, after their US peers fell on concerns about potential dividend cuts.

Trading house Marubeni Corp plunged more than 6 per cent after Lehman Brothers said it planned to sue Marubeni for repayment over a case of suspected fraud. "Friday's gain was simply dressing, so it would be naturally followed by profit-taking," said Fumiyuki Nakanishi, group manager of investment research department at SMBC Friend Securities.

He was referring to institutional investors' buying to boost the value of their portfolios before Japan's fiscal year wraps up on Monday. Toyota Motor Co fell 3.6 per cent to 5,050 yen, becoming one of the top drags on the Nikkei after a 2.5 per cent gain on Friday.

"Investors found it hard to make moves following falls on Wall Street and ahead of (the Bank of Japan's) tankan and employment data," said Noritsugu Hirakawa, strategist at Okasan Securities. Investors will be closely watching the BOJ's quarterly tankan survey of corporate sentiment on Tuesday to gauge how much the global market turmoil has affected the Japanese economy.

Among other key data, a US jobs report on Friday will be watched for further clues on the health of the world's largest economy. The benchmark Nikkei ended the morning session down at 12,627.83. The broader TOPIX fell 1.8 per cent to 1,221.23.

The market shrugged off early data showing that Japan's industrial output fell less than expected in February.

DOUBLE WHAMMY FOR MARUBENI

Marubeni, one of Japan's top five trading houses, tumbled to 729 yen after a person briefed on the matter said Lehman Brothers had been fleeced of more than $355 million in a case that the U.S. investment bank believes was perpetrated by two employees at Marubeni.

Marubeni's stock was also hit by the trading house's announcement on Friday that its UK financial subsidiary would write down 17.6 billion yen after its portfolio value fell sharply amid turmoil in credit market. Lehman is trying to recover a loan to a fund headed by Asclepius Ltd -- a now-bankrupt unit of LTT Bio-Pharma Co Lehman had believed the money was backed by Marubeni.

Marubeni as well as rival trading houses and nonferrous metal shares were also sold due to falls in commodities such as copper. Mitsui & Co Ltd slid 3.3 percent to 2,035 yen and Itochu Corp lost 3.5 per cent to 984 yen. Gold and copper producer Sumitomo Metal Mining Co Ltd fell 4.1 per cent to 1,873 yen. Rival Mitsubishi Materials Corp slid 4.6 per cent to 433 yen. Japan's three largest banks all fell, with Mizuho Financial Group down at 374,000 yen. Adding to investor concerns about the US financial sector, Oppenheimer & Co analyst Meredith Whitney said Citigroup Inc, Wachovia Corp and other US banks are likely to announce dividend cuts in April because their earnings will not support currently scheduled payouts.

Trade was light, with 690 million shares changing shares, compared with last week's morning average of 740 million. Declining shares beat advancing ones by five to one.