Breaking News & Stocks

Satyam to invest Rs 250 cr to open 104 screens by 2010

New Delhi, April 06: Multiplex chain Satyam Cineplexes plans to open 104 screens across the country in the next two years entailing an investment of Rs 200-250 crore.



"We have already acquired 65 screens at Haridwar, Rohtak,
Mysore, Greater Noida, Ludhiana, Gurgaon and Jalandhar. We
will spend between Rs 200-250 crore on our expansion," Satyam
Cineplexes Managing Director Deven Chachra said.

The multiplex chain, which currently operates 12 screens
in three multiplexes in the national capital, now plans to go
for lease model.

"We plan to have all the cineplexes in malls as the
retail prices are going through the roof. This is very
different from our current model wherein we own all our three
cineplexes," he said.

Satyam plans to raise funds for expansion from either
private equity or strategic alliance.

"We are looking for strategic alliance with overseas
players as well for funding our expansion," he said, adding
that nothing has been finalised yet.

"We would hit the bourses in next three years if we
raise the capital through equity," he said.

On the back of the expansion plans, the company hopes
that its revenue would increase from Rs 48 crore in the last
financial year to Rs 325 crore by 2011.

PNB to enter credit card business on its own

New Delhi, April 06: After RBI shot down Punjab National Bank's proposal to form joint venture with American International Group Inc for the credit card business, the bank has decided to venture into the space all alone in next six months.

"We plan to launch credit card on our own during the year," a senior Punjab National Bank official said. Hopefully, by September-October the credit card business should be up and running, he said.

The bank would not set up a subsidiary for it but it would be handled by a division, he added.

Last year, the PNB board had given approval to form a joint venture with Venture Infotech Global Pvt and American International Group Inc (AIG) consortium. However, the proposal was later shot down by RBI.

The bank currently offers co-branded international credit card in alliance with Hong Kong Shanghai Banking Corporation Ltd (HSBC), while for the debit card the bank has tied-up with Mastercard.

With operationalisation of its credit card, the tie-up with HSBC would cease exist, he said adding, the bank would ensure that the existing credit card holders do not have any problem.

Among other Indian public sector banks, State Bank of India and Bank of Baroda have separate subsidiaries for credit card business, while Bank of India is considering to venture into the space.

-Street may witness volatility on Q4 results, global cues

Mumbai, April 06: Investors on Dalal Street are likely to continue witnessing volatility this week, driven by quarterly earnings by corporates and global cues, as analysts believe impact of soaring inflation may have been discounted.

The benchmark index Sensex closed at 15,343.12 on Friday with a loss of 489.43 points, as concerns of rising inflation and a new accounting amid continued fears of a US recession took its toll on the market sentiments.

"The impact of inflation has been discounted to some extent and in the present situation markets are likely to stabilise... markets have become matured enough to digest negative news," SMC Global Vice President Rajesh Jain said.

Analysts also believe the stock-specific activity would rule the roost depending on the guidance given by company managements for FY 2009 at the time of announcing fourth quarter results.

IT bellwether Infosys Technologies would kickstart the earnings reporting season on April 15, following which the corporate earnings would dictate market trend in near term.

Meanwhile, disclosures by companies regarding the foreign exchange derivatives products would also be a major concern for the investors, analysts said.

Foreign inflows are also expected to direct some trend in the domestic market and unlike previous week, foreign institutional investors' contribution in buying equities once again turned negative in the week ended April 4.

FIIs have made a net sale in the equities market to the tune of Rs 1,740.60 crore in the first week of April. While in 2008 so far, FIIs have sold a net shares worth Rs 13,173.30 crore.

Mutual funds' also did not fare better than FIIs during April, as they purchased equities worth Rs 1455.30 crore and sold shares valued at Rs 1936.80 crore indicating a net sale of Rs 481.50 crore in the first week of April.

Inflation has galloped to seven percent for the week ended March 22, on higher prices of food, vegetables, minerals and manufactured items, even as measures to tame prices are expected to take effect only in 2-3 weeks.

Inflation growth in the previous week was 6.68 percent and was 6.54 percent in the corresponding week a year-ago.

The 75 basis points Fed rate cut on March 18, has widened the spread between the US and India's main short-term lending of 7.75 percent, but the Reserve Bank of India is unlikely to follow suit as the rising inflation still remains a concern, analysts added.

India Inc expects inflation to flare up

New Delhi, April 06: As if inflation at its highest level in about three years was not enough, nearly two-third of executives in India expects the rate of price rise to further flare up in the next six months, according to a new survey.

However, this pessimism level regarding the inflation among the Indian executives is much lower when compared to the places like China, Europe, North America, other developing markets and the overall Asia-Pacific region.

According to the report titled "Economic and Hiring Outlook, First Quarter 2008: A McKinsey Global Survey," as many as 64 percent of Indian executives expect the rate of inflation to rise in the next six month, while only 20 percent expect a decline in the rate of price rise.

About 15 percent of Indian executives expect the inflation rate to remain unchanged in the next six months, the survey found.

The survey was conducted in March, presumably before the government data showing the rate of inflation at 7 percent was released on April 4.

According to the survey, the percentage of executives expecting a rise in rate of inflation is less than India only in Latin America, where 58 percent said they expected it to rise in their country from current levels in the next six months.

In comparison, those expecting rise in inflation were 70 percent in China, 69 percent in Europe, 75 percent in North America, 76 percent in other developing markets and 79 percent in Asia-Pacific.

According to the report, the executives` fears of inflation have risen and the proportion of business representatives who expect to be able to raise prices (of their products) has fallen.

"Over past six months of economic turmoil, executives` fears of inflation have increased substantially," McKinsey said.

Globally, 72 percent of respondents said they expect higher inflation over the next six months, compared to 39 percent in a previous survey six months ago.

For the survey, Australia, Hong Kong, Japan, New Zealand, Philippines, Singapore, South Korea and Taiwan were also included in the Asia-Pacific region.

The survey further stated that about 83 percent of the respondents expect a slowdown in the us to "have a somewhat or very negative effect on their national economies over the next year."

In India, about 74 per cent of the executives surveyed believe that a slowdown in the American economy would have a negative effect on the country.

However, only 21 percent of executives report that the linkage between their national economies and the US has tightened over the past three years, the survey revealed.

Interestingly, about 61 percent executives in China expect better economic performance from their country in the near term.

According to the report, the responses were gathered in the first half of march as the credit crisis continued to expand and drive down stock markets across the world.

CII against interest rate hike to combat inflation

New Delhi, April 06: Industry chamber CII has opposed any move to increase interest rate by the Reserve Bank to combat inflation, saying that it would result in further fall in industrial production.

The Reserve Bank, which is scheduled to announce its annual monetary policy on April 29, is under pressure to increase interest rates to dampen the inflation, which touched three year high of 7% on March 22.

The industry is apprehending that the government and the central bank could sacrifice GDP growth to check inflation by favouring hike in interest rate. It would hit their profit margins as demand for products would fall due to rising cost.

"With global economic conditions worsening along with increasing price trend of commodities internationally, any move that will choke investments in the economy will add to the declining IIP (industrial production) and prolong a turnaround," CII said in a statement.

The apex bank could send a signal that interest rates would be cut to stimulate investments and growth or in a worst-case scenario, maintain status quo on monetary measures, it said.

It claimed that restricting demand to manage supply side constraints would not augur well for growth, the industry body said.

It pointed out that the current inflation has been a supply side driven phenomenon which needs to be dealt cautiously so as to not sacrifice growth over price stability.

"Any monetary measures that are aimed at controlling inflation should be judiciously employed so as to not sacrifice growth," CII said.

REC to raise Rs 16,000 cr in FY09

New Delhi, April 06: State-run Rural Electrification
Corp on Sunday said it targets to raise in the fiscal 2008-09 a
sum of over Rs 16,000 crore, up about 38 percent from Rs
10,000 crore mopped up in the previous year.



The company expects to disburse Rs 40,500 crore in
2008-09, REC Director (Finance) H D Khunteta said.

"As per our present commitments, we would require to
borrow over Rs 16,000 crore in 2008-09, against about Rs
10,000 crore last fiscal," he said, adding that if need be the
company would raise further amount with board`s permission.

REC, a prime lending institution to the power sector, is
also looking to increase its borrowing limit to Rs 60,000
crore from the present Rs 45,000 crore, he said.

Khunteta said the company had on March 31, 2008 raised
Rs 1,000 crore by issuing bonds in the overseas market.
The bonds, due to mature after five years, carry an interest
rate of 9.45 percent.

The company raised Rs 1,640 crore through its initial
public offer in February. REC listed with a 19 percent
premium on the Bombay Stock Exchange.

Shares of the company closed at Rs 102.45, down 1.82 on
the Bombay Stock Exchange on Friday.

REC, hit the capital markets with 15.62 crore equity
shares on February 19. The issue got oversubscribed more than
27 times.

The company had set the IPO price band at Rs 90-105. It
later fixed the issue price at Rs 105 a share. The issue
constituted about 18.18 percent of the fully diluted
post-issue capital of REC.

SC transfers Shoppers Stop`s IPO case to Mumbai

New Delhi, April 06: The Supreme Court has allowed retail chain Shoppers Stop's plea seeking transfer of cases related to its IPO to the Bombay High Court.

A bench headed by Justice P P Naolekar transferred the matter related to public interest litigation, which is pending before the Guwahati High Court, to the Bombay High Court.

It, however, dismissed other petitions as they had become infructuose.

Earlier, in 2005 the apex court had permitted Shopper's Stop to go ahead with its Rs 150-crore Initial Public Offer (IPO) of 69,46,033 equity shares scheduled to open from Wednesday.

The order came after hearing the petition that had challenged a Guwahati High Court order that had restrained the company from proceeding with its IPO.

Shopper's Stop said multiple proceedings in various High Courts might result into the delay and would cause irreparable damage.

While pointing out that no court other than the courts in Mumbai have the jurisdiction to deal with the matter as its registered office is there, the transfer petition said: "It is just and convenient that the courts in Mumbai deal with the matter relating to the IPO, though the PIL may have been filed anywhere, because all records of the petitioner company are at mumbai and all clearances, approvals, filing are available at Mumbai."

The PIL filed by the north east investor association before the High Court had raised the issue whether SEBI can give permission to a company whose promoter directors have been disqualified from acting as directors under the Companies Act, 1956.

RBI may act ahead of policy to attack inflation: Bankers

Mumbai, April 06: Some bankers expect Reserve Bank to take some pre-emptive steps even ahead of the Annual Monetary Policy on April 29, to counter rising inflation, which touched to 7 percent on March 22.

"There are expectations that RBI may take pre-emptive measures before the annual policy on April 29... The government has taken some steps which will take some time to show results," Indian Banks' Association Chairman M B N Rao said.

RBI had stated in its policy that it could respond swiftly as and when required to ensure price stability, Rao said.

Echoing similar views, private sector Yes Bank Managing Director and CEO Rana Kapoor said RBI could tinker with key rates anytime, even before the annual policy.

"Inflation number has come as a shock... We expect 0.25 percent hike in the Repo rate and a quarter percentage hike in the cash reserve ratio," Kapoor said.

Though some bankers feel inflation spiralled due to supply side constraints and not overheating in economy, it could prompt the apex bank to take tight monetary measures like raising short-term lending and borrowing rates and squeezing money supply by raising the Cash Reserve Ratio (CRR) to check inflation expectations.

Repo rate is the rate at which the reserve bank lends to banks against securities. CRR is the statutory cash balances banks maintain with the apex bank. A 0.25 percent CRR hike would sterilize rs 7,000-8,000 crore from the system.

"Anticipating a hike, we are seeing some adjustments like firming of deposit and lending rates," Kapoor said.

IBA Chairman Rao feels that monetary measures would have limited impact as the crisis was due to high food and oil prices globally.

He said Reserve Bank could hike incremental CRR or impose selective credit control instead of using the tools of Repo or a CRR hike.

"RBI could have a focused targeting through selective credit control on commodities, though it is like going back on liberalisation. Also, the incremental CRR will ensure in sterlising the additional funds into the system," he said.

He, however, said a CRR hike would have only marginal impact on the system as there was enough liquidity in the system to meet credit requirements.

Pointing out that global factors are fueling inflation, ICICI Bank Managing Director and CEO K V Kamath said: "I am sure policy makers both at the monetary level and in the ministry will work together to ease supply side constraints."

RBI might hike CRR to absorb excess liquidity instead of raising interest rate, felt Crisil Principal Economist D K Joshi.

Bank of Maharashtra CMD M D Mallya too expects a 0.5 percent hike in the CRR looking at the sharp rise in inflation.

"The CRR hike will not have a major impact and we expect that the interest rates will adjust in the coming months," he said.

Inflation to soar further, likely to touch 7.5 % mark: Assocham
5 Apr, 2008, 1928 hrs IST..........................

NEW DELHI: It seems that consumers in India might not get relief from spiralling inflation in the near future, as ASSOCHAM on Saturday predicted that it would continue to soar for next three to four months, and may even touch the 7.5 per cent mark.

"The Wholesale Price Index (WPI) based inflation rate which is already at the highest in the last three years, could even surpass the 7.5 percent mark," predicts ASSOCHAM President Venugopal Dhoot.

In order to check inflation, the Cabinet Committee on Prices (CCP) chaired by Prime Minister Manmohan Singh on Monday, decided to abolish import duty on all crude edible oils, including palm and soya, and banned the export of non-basmati rice and pulses to contain inflation.

The Central Government also decided to raise the Minimum Export Price of basmati rice to 1,200 dollars per ton from 1100 dollars, to balance the demand " supply in the domestic market and to cut import duty on butter and clarified butter (ghee) from 40 per cent to 30 per cent, besides, the 15 per cent import duty on maize was abolished, applicable on import of up to five lakh tons.

The CCP also advised states to impose limits on stocks of commodities under the Essential Commodities Act, besides asking steel producers not to raise prices.

The study done by the business conglomerate also reveals that the Central Government's efforts to contain inflation will come start-yielding results by August when inflation is likely to fall at of four per cent.

Experts believe that after all possible measures taken by the government, now, everyone is waiting for Reserve Bank of India's (RBI) annual credit policy that will be revealed on April 29.

The industry body has asked the RBI to increase the interest rates, specifically the Cash Reserve Ratio (CRR) to restrain liquidity.

The problem of inflation doesn't seem to be India-centric with China too struggling with a rising inflation rate of over nine percent.

According to analysts, the announcement of Sixth Pay Commission recommendations, and provisions for enhanced expenditure on social sectors in the Budget 2008-09 coupled with rising crude oil prices have also raised expectations about high inflation.

Exporters should change biz models,cut dependence on govt: Survey
6 Apr, 2008, 1634 hrs IST..................

NEW DELHI: Indian exporters, who battled an appreciating rupee through 2007-08, need to make mammoth adjustments in their business modules, besides reducing dependence on government support to enhance their global competitiveness in the current fiscal, a survey has said.

In a survey by Assocham and tradeindia.com, a majority of respondents felt that instead of looking for support from the government, exporters need to study details of changing designs, product development, production facilities and techniques to increase their competitiveness vis-a-vis other nations.

Exporters need to make large-scale adjustments in their business modules as well as streamline operations and study global market expectations, it added.

"The exporters need to adopt mechanisms like forward contracts, shift to other currencies and establish protective clauses in their contracts to safeguard their interests," the chamber said adding that exporting to regions such as West Asia and European Union can partially help nullify the impact of a strengthening Indian currency.

Most respondents were of the opinion that given the changing world scenario, products exported to countries need to change too according to the changing consumer taste and trends, chamber President Venugopal Dhoot said.

Exporters also felt that the export target for 2008-09 can be met if the export sector works in accordance with the changing market trends.

Appreciation of the rupee by more than 9 per cent during April-January 2007-08 led to reduction in realisation of export orders.


Over 67 per cent of the respondents said the government's decision to extend the Duty Entitlement Pass Book (DEPB), coming at the beginning of the fiscal, would give the much-needed relief to exporters.

The DEPB scheme should be extended till 2010 when the Goods and Services tax (GST) comes into effect. However, with the scheme being seen as WTO-incompatible, the government would soon have to find an alternative, it said.

Around 69 per cent of the respondents supported the government's move to push for Free Trade Agreements (FTAs). However, a thorough review of India's FTAs needs to be incorporated. "With no breakthrough in WTO trade talks, FTAs can help integrate India into global trade," Assocham said.

Exporters further suggested that the problem of congestion and pilferage at ports should be tackled on war-footing for sustaining export growth.