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ADAG disappointed at R-Power listing

Mumbai, February 11: Disappointed by the poor showing of Reliance Power shares on the day of listing, Anil Ambani Group on Monday said that losses for market bigwigs, including Mukesh Ambani’s Reliance Industries, ICICI Bank and other blue chip Companies, were much higher at up to 40 per cent.

In a bid to ward off criticism that the poor showing of Reliance Power on its debut pulled down the market, an ADAG spokesperson said: “A very large number of pivotals, including RIL, ONGC, NTPC, DLF, ICICI Bank, BHEL, L&T etc have actually all declined in a much larger range of 20-40 per cent in the same period (since the IPO opened on January 14).”

"The Reliance Power stock has simply been marked-to- market for this decline (across the market) on the day of listing," a group spokesperson, highly agitated by the all-round attack on the company, said.

"We are naturally disappointed that Reliance Power stock closed lower (at Rs 372.5 a share) than the IPO price (of Rs 450) on the first day of listing.

"... We remain extremely confident of delivering superior long term returns to our over four million shareholders, on their investments in the Reliance Power IPO," the spokesperson said summing up the performance of the stock, which had listed at Rs 547.80 but slipped into red within a minute.

Asked if retail investors had lost over Rs 475 crore in the debut trade, particularly in a company owned by an Ambani, he replied in the affirmative.

"The decline is not specific to Reliance Power and instead mirrors the sharp meltdown in global capital markets over the past three weeks," he said, adding that since the time of IPO the Sensex has plunged 20 per cent, while Reliance Power stock was down 17 per cent from the issue price.

To prove the point, the group compiled the performance of the market, as also the market leader Reliance Industries` Group, which according to them, had lost over Rs 170,000 crore in total value against less than Rs 1,30,000 crore of the group led by Anil Ambani.

Stating that investors (excluding promoters) had lost over Rs 52,000 crore, including Rs 1,772 crore in Reliance Power, in the Anil Ambani Group companies from January 14 levels, the company said the corresponding losses were much higher at over Rs 75,000 crore in the group led by Mukesh Ambani.

Reliance Power IPO had opened on January 15.

It listed a dozen other blue-chip companies, including ONGC, NTPC, Siemens, Tata Power, ICICI Bank etc, to say all of these had lost close to Rs 4.5 trillion in market capitalisation, consequent to which investors suffered losses of Rs 1,46,000 crore during this period.

Losses to non-promoter investors in each of these companies is much higher than Rs 1,772 crore suffered in Reliance Power.

In terms of percentage also, Reliance Power`s 17 per cent loss is lower than 20-40 per cent decline seen in the share prices of these companies from January 14 levels.

Bureau Report

Thursday February 14, 03:12 PM RBI says inflation still high





By Rajkumar Ray

NEW DELHI (Reuters) - India's inflation rate is still high by world standards and needs to be brought down further, the deputy governor of the central bank said on Thursday.

Inflation, as measured in wholesale prices, breached 4 percent in late January, its highest in nearly five months, and analysts have said the upswing meant the Reserve Bank of India was unlikely to loosen rates anytime soon despite slowing growth.

"Our inflation is still high by world standards and it needs to be brought down further," Rakesh Mohan said at the Institute of Economic Growth in New Delhi.

"The RBI's objective has been to ensure liquidity and still keep inflation and interest rates low."

Inflation is below the central bank's target of 5 percent for now, but it is expected to head up further in the weeks ahead due to high food and fuel prices, which are expected to remain a challenge in the 2008/09 fiscal year that starts on April 1.

At a policy review last month, the central bank left its key interest rates steady, saying inflation risks persisted. It had raised rates five times in 10 months from June 2006 to tackle inflation and credit growth in Asia's third-largest economy.

Benchmark 10-year bond yields rose 1 basis point to 7.47 percent as traders saw Mohan's comments as a sign that the central bank was unlikely to cut rates in the near term, despite worries about global growth and turmoil in financial markets.

Last week, the statistics office said India's economy was expected to grow 8.7 percent in 2007/08, slowing from the previous year as higher interest rates dent consumer demand.

Mohan, who outlined the challenges facing policy makers as India seeks 10 percent-plus growth rates in the next five years, said excessive credit growth could lead to an asset price bubble.

He said revenues need to be raised if the government wanted to meet its targets to lower the budget deficit and implement the recommendations for a pay rise for public service employees.

Economists say the government should not consider a surge in tax revenues as a windfall for it to spend as it has some big-ticket costs coming up, such as pay rises to over 3 million government workers in the next fiscal year.

BSESN 17,766.63 817.49 (4.82%)


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Sarkar murder case: Pappu Yadav gets life


Poll panel divided over notice to Sonia
Project Tiger beset with controversies
Vijayan re-elected as Kerala secretary
CBI seeks to book Amit Kumar's clients




NDTV Correspondent
Thursday, February 14, 2008 (Patna)
A special CBI court in Patna on Thursday has sentenced RJD MP from Madhepura in Bihar to life imprisonment, for the murder of a CPIM leader Ajit Sarkar.

Former MLA Rajan Tiwari and one Anil Yadav have also been given life terms.

Reacting to court's verdict, Pappu Yadav said, ''I accept the court's decision. I have told the court that I am innocent.''

Ajit Sarkar was shot dead in Purnea on June 14 in 1998.

Pappu Yadav is lodged in Delhi's Tihar Jail, he was moved out of Patna's Beur Jail after it was found that he was holding durbars inside the prison, using cellphone and other facilitie

Europe Market Strong : Ftse 100 5,909.30 +29.20 +0.50% Dax 7,010.23 +36.56 +0.52 Cac 40 4,897.41 +42.01 +0.87

N-deal after Bush term: Karat


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NDTV Correspondent
Tuesday, February 12, 2008 (Kottayam)
The CPM has once again taken the offensive on the Indo-US nuclear agreement.

Party general secretary Prakash Karat has said the CPM is determined not to let the deal go through till President George W Bush's term is over.

Karat has said his party will not allow the UPA to finalise a safeguards agreement with the International Atomic Energy Agency till the US presidential elections are over.

He said his party was now in the final stages of the struggle against the nuclear deal.

Karat said India could discuss the nuclear energy issue with other countries like France, Britain, Russia after a new US President is elected in January 2009.

A department of

don't want to be the PM: Zardari


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Munizae Jahengir
Thursday, February 14, 2008 (Lahore)
Just five days ahead of the general election in Pakistan, the Pakistan People's Party (PPP) co-chairman and Benazir Bhutto's husband Asif Zardari has told NDTV that he is not in the running for the prime minister's post.

Zardari said the PPP was yet to decide on its prime ministerial candidate, but that he wanted to step back and concentrate on the party's development.

He said the PPP would like to form a coalition government if it came to power.

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Press Trust of India
Thursday, February 14, 2008 (Islamabad)
Stability and security in Pakistan will improve if Musharraf resigns, says a new survey conducted by BBC World Service.

It implies that the support base for President Pervez Musharraf has dramatically fallen in the country.

Almost half the respondents termed his controversial re-election in October last year, while he was still army chief, invalid.

Only 25 per cent of respondents in the survey said that security would get worse if Musharraf were to quit, while 64 per cent of them said stability and security would improve if he 'were to resign now'.

Twenty-nine per cent of Pakistanis regarded Musharraf's oath taking as president, last November, valid while 49 per cent said it was invalid.

The respondents were divided about whether the February 18 general election would be free and fair, as 44 per cent said they were 'very or somewhat confident' that they will be impartial.

However, 46 per cent said they are 'not very confident or not at all confident' about the polls being fair.

A total of 1,476 Pakistanis participated in the poll conducted last month by Gallup Pakistan for BBC's Urdu service.

The survey supported the findings of another recent poll conducted by the US-based International Republican Institute (IRI), which too suggested that support for Musharraf had eroded.

Pharma sector: What lies ahead?
Hitesh Gajaria
Tuesday, February 12, 2008 (New Delhi)
The Indian pharmaceuticals industry has achieved a lot of traction and momentum in recent years, growing at a Compounded Annual Growth Rate (CAGR) of about 19.9 percent over the last five years. In the same period, the domestic formulations market has grown at a CAGR of 13.3 per cent; formulations exports have grown at 24.6 percent and export of bulk drugs have grown at 32.7 percent.
The industry is now on a high growth path as each these segments are expected to continue to grow at stupendous rates led by a series of socio-economic factors as well as a supporting regulatory environment. The domestic formulations market is expected to report a growth of around 13 percent over the next five years.

Formulation exports and bulk drugs exports are both expected to grow between 25 and 30 percent, giving an overall estimated CAGR of over 20 percent in the next five years.

Last year’s Union budget had quite a few positives for the pharmaceuticals sector. The reduction in the peak customs duty on APIs and drug intermediates from 12.8 per cent to 7.7 per cent (inclusive of 3 per cent education cess) had a positive impact on pharmaceutical players and the extension of weighted deduction of 150 per cent for expenditure relating to in-house research and development for 5 more years until March 31, 2012, provided the much needed continuity in encouraging companies to spend on in house Research and Development activities.

This was imperative post amendment to the Indian Patents Act in 2005, which gave recognition to Product Patents and was one of the key reasons for Indian Pharma companies to seriously embark upon the path to discover New Chemical Entities (NCEs) and New Drug Delivery Systems (NDDS).

Anecdotal evidence of the rising R&D expenditures by Indian Pharma companies both as a percentage of sales as well as in absolute numbers is clearly seen. Reduction in peak customs duty from 12.5% to 10% has made slightly positive impact on MNCs, which imported drugs from their MNC parents.

Service tax exemptions on clinical trials of new drugs have further enhanced India’s scope of becoming a preferred destination for drug testing. However, application of MAT on income eligible for deduction under Section 10A and 10B pertaining to EoUs had a marginal negative impact on companies with significant contributions from EoUs and has led to entrepreneurs exploring ways to conduct business through different legal entities.

This year’s budget should focus on continuing with the positives.

From a taxation perspective, the industry would like the government to consider the following:

Income-tax benefits under Section 35 (2 AB) pertaining to Research and Development expenses should be further extended for at least 10 more years now with the weighted deduction limit increased to 200% from the current 150% This would give certainty and impetus to more long term Discovery led Research and Development spend which coincides with the average new drug discovery cycles of 10-15 years in more developed nations.

* Reduction in excise duty on medicines from 16% to 8% and total excise exemption on 354 drugs specified in the national list of essential medicines.

*Weighted deduction under Section 35 (2 AB) to be extended to R&D expenses incurred outside the premises for clinical trials, on bioequivalence studies and costs of regulatory approvals, especially in foreign markets, which are being targeted for exports by Indian Pharma companies.

* Tax incentives to Indian companies that earn incomes from foreign sources through Out-Licensing deals to encourage the bringing to India the fruits of R&D spends that have been incurred by these companies.

*Abolishing MAT at least for all Export Oriented Units.

*Modifying the provisions of Dividend Distribution Tax (DDT) to avoid the present cascading of this levy, without any relief, by enacting that companies distributing dividends would get credit for the DDT which has been paid on the dividends received by these companies. This is especially relevant for all Pharma Cos spinning off their R&D units into separate downstream subsidiaries / associates.

Some of the concerns that Industry feels may affect its growth potential are uncertainties related to the Draft Pharmaceutical Policies 2006 which proposes to bring 354 essential drugs under the purview of the Drug Price Control Order (DPCO) and uncertainties pertaining to India’s Intellectual Property (IP) regime such as data exclusivity, pre-grant and post-grant opposition. However these issues need to be tackled through dialogue and co-operation between the Industry, the various ministries in Government and all affected stakeholders including Healthcare Providers and NGOs.

Indian Pharma is at crossroads and is in dire need of an inclusive and growth oriented public policy regime that would ensure that it becomes a serious global player across the pharma value chain by realizing its vast potential.