India Business Journal Magazine March 2015

 

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CONTENTS YOUR GATEWAY TO INDIA INC. MARCH 2015, Rs 35 EDITOR AMIT BRAHMABHATT ASSISTANT EDITOR SHRIVATSA JOSHI ADVERTISING MANAGER WILLIAM RUMAO REGIONAL MANAGER VINEET PANT (DELHI & NCR) GRAPHIC DESIGNER RENUKA SAWANT ADVISORY PANEL SHASHIKANT PATEL JITENDRA SANGHVI REGISTERED OFFICE 102, RAJASTHAN TECHNICAL CENTRE, PATANWALA ESTATE, GHATKOPAR (W), MUMBAI 400 086. INDIA PHONE: 6703 0250/6703 0251 FAX: +91 22 6703 0251 EMAIL: mail@ibj.in BUREAU CHIEFS AHMEDABAD: B D RAWAL CHENNAI: G JACINTH DELHI: RANJANA ARORA KOLKATA: DIPANKAR SEN COVER STORY JAITLEY's GAMBIT Budget 2015-16 tries to recharge economic growth with tax tweaks and business-friendly measures, reaching out to a wide crosssection of society. 24 Viewpoint ..........6 Cleaning Up The Coal Mess News Round-Up A brief on news, tie-ups, appointments and awards ...........8 Global Affairs ..........46 New Greek Tragedy: The eurozone stares at a fresh crisis as Greece's antiausterity Syriza government looks to renegotiate the bailout terms. Management Mantra ..........48 Focus On Execution: Dilip Chenoy, MD & CEO, National Skill Development Corporation Global Wrap-Up ..........50 A quick round-up of news and current affairs across the world Readers' Lounge ..........52 Catch up with new book launches - Startup Leadership - Zillow Talk - Caravans Cricket ..........16 Bowling Over: TV manufacturers and DTH operators ride the world cup mania and line up freebies and big offers to woo Cricket-crazy customers. Straight Talk ..........18 "We Are Here To Acquire And Not Be Acquired": Vishal Sikka, MD & CEO, Infosys Printed and published by Amit Brahmabhatt for Issues Analysis and Research Pvt Ltd and published from 102, Rajasthan Technical Centre, Patanwala Estate, Ghatkopar (W), Mumbai 400 086 and printed at Graphtone (India) Pvt. Ltd., A1/319, Shah & Nahar Indl. Estate, Lower Parel, Mumbai 400 013 Processed at Graphtone (India) Editor: Amit Brahmabhatt Volume X, No 9 Issue date March 1-31, 2015 Released on March 1, 2015 EDITORIAL ASSOCIATE Corporate Report ..........20 Cashing Out: As it battles SEBI's ban on accessing capital market, DLF taps new avenues to fund ongoing projects and reduce debt. Face To Face ..........22 "Residential Rooftop Plants Not Right For India": Ratul Puri, Chairman, Hindustan Power Projects SPECIAL REPORT B-SCHOOL PLACEMENT: GLAD TIDINGS Buoyed by an upbeat business sentiment, placement season 2015 is promising to outdo last year's good show. Star Talk ..........54 Forecast by Bejan Daruwalla Knowledge Zone ..........56 - Ajay Singh, Chairman, SpiceJet - The Budget Process - Spiritual Corner: Worries Hot Seat ..........58 Shipra Tripathi, Vice-President, Kirloskar Brothers Press Trust of India MARKETING ASSOCIATE Milage ads & events SUBSCRIPTION RATES India Rs 420/- for 1 year (12 issues) Overseas Rs 1,860/- or US$32 for 1 year (12 issues) Add Rs 50/- for outstation cheques www.indiabusinessjournalonline.com 32 INDIA BUSINESS JOURNAL 4 MARCH 2015

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VIEWPOINT Cleaning Up The Coal Mess G The first round of e-auction has turned out to be a win-win situation for all. Undoubtedly, the auction is the best thing to happen to the sector in recent times. The transparent process removes discretion, corruption and other ills associated with the earlier coal mine allotment process. But the auction process does raise a relevant question. Will mining activity be viable, going forward? 6 MARCH 2015 loom around the coal sector has made way to immense optimism. The change in sentiment is triggered by the successful first round of coal block e-auction that ended last month. Uncertainty had engulfed the sector last September after the Supreme Court had cancelled allocation of 214 mines. The government was quick to take charge and sort out the mess in the coal sector in flat five months. Junking the arbitrary allotment process through a screening committee, the government embraced the e-auction route. The result of the first round of e-auction of 19 blocks has turned out to be a win-win situation for all. The State governments stand to gain from production-linked payments over mine life, with proceeds of the auction going to the States. According to estimates, coal-rich States will get over Rs 1,00,000 crore through e-auction and an additional Rs 12,800 crore royalty in the next 30 years. Power utilities benefit from tariff savings. Besides, end-use companies, such as power, steel and cement manufacturers, get a greater control over their vital coal supplies. Eighteen of the 19 blocks that went under the hammer were operational mines. Intelligent design of the auction system, combining reverse bidding for the regulated power sector and forward bidding for the unregulated sectors, did play a major role in ensuring that the auction process went about smoothly. In the reverse auction, the bidder offering the highest discount to the price of coal worked out on the basis of the notified price of Coal India (CIL) is the winner. This brings down tariff of power obtained from such coal blocks. Meanwhile, the forward auction for coal blocks of unregulated sectors, such as steel and cement, saw prices on offer higher than those of CIL for similar grades of coal. The first phase of auction has set the tone for allocation and discovery of value of natural resources. The success of coal auction is likely to be replicated by States for allocating other natural resources, such as iron ore, alumina and chrome, within their respective purview. Undoubtedly, the auction is the best thing to happen to the sector in recent times. The transparent process removes discretion, corruption and other ills associated with the earlier coal mine allotment process. But the auction process does raise a relevant question. Will mining activity be viable, going forward? In coming years, coal mining will need to be more socially and environmentally sustainable. It will also need to address expectations of coal workers, including their wages. The cost of land acquisition can only shoot up further. With such costs, will aggressive discounted bidding, as seen in the reverse auction, not squeeze margins and make mining unviable? The case of aggressive bidding for ultra mega power projects in the past, which ultimately unravelled as discounted power tariffs could not sustain, remains a cruel reminder if how things can go wrong. As more phases of auctions unfold - the second round beginning from March 4 with 21 blocks on offer - the aggression in bidding is likely to tone down as the upcoming blocks are mostly undeveloped. Having cleaned up the coal sector, the government now needs to move ahead and make mining a viable operation. For this, the base price of coal needs to be more close to reality than that linked to the artificially low CIL price. More importantly, there is a strong case for commercial mining to bring players with proven core competence into the sector. The second option will, however, have to wait for a while as it is a political hot potato. INDIA BUSINESS JOURNAL

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NEWS ROUND-UP MISCELLANEOUS Andhra, Telangana get Centre's special sops The India for automatic exchange of tax info India government last month announced the much-awaited financial and special development package for Andhra Pradesh and a slew of concessions for the industrial sector of both Andhra Pradesh and Telangana. The funds for Andhra Pradesh include Rs 500 crore as ad hoc support to bridge the resource gap for the current financial year as well as Rs 350 crore as special development package for backward areas in Rayalaseema and north coastal districts. The Rs 350 crore has been released according to Section 46 (2) and Section 46 (3) of the Andhra Pradesh Reorganisation Act, 2014. New hybrid PPP model for roads unveiled The government A third of total FMCG sales via Net by 2020 With a boom in online shopping, the internet is expected to influence $35 billion (around Rs 2,17,000 crore) worth of sales in the fast-moving recently unveiled a new version of the public-private partnership (PPP) model in the road sector. The new hybrid annuity model envisages developers contributing 60 per cent of the investment and the government bringing in the remaining 40 per cent. The government will also acquire 90 per cent of the land, estimate traffic and collect the toll, which means developers will be spared the uncertainty over revenues as also the task of collecting the toll. In return for constructing, operating and maintaining the roads, concessionaires will get from the government a biannual annuity and a fee. consumer goods (FMCG) category in India by 2020, according to a report by Google and Bain & Co. The report adds that the internet will influence one-third of the total sales in the FMCG sector in the next five years. The influence will be the most for categories like male grooming, infant care and beauty products. has asked G-20 countries for fast implementation of the automatic exchange of tax information. This will help in tracking illegal money kept in foreign banks. Speaking at a meeting of the G-20 finance ministers and central bank governors in Istanbul, Turkey, last month Minister of State for Finance Jayant Sinha called for "full and fast implementation" of automatic exchange of information within the agreed timeframe. has selected MillenniumIT as its partner to scale up its trading and surveillance system for futures and forwards segments, which will be adapted by the first quarter of 2016 calendar year. The next-generation system will provide a faster trading engine, giving a big advantage to the trading members of the country's leading commodities and derivatives exchange. The new trading system will provide a more dynamic experience to users with features such as tick-by-tick MillenniumIT to scale up trading at NCDEX NCDEX TIE-UPS Airports Authority of India has decided to collaborate with the global airlines body, International Air Transport Association, to address the training needs of its staffers. Public sector body SCOPE and the University of Cambridge of the UK have signed an MoU to set up a central Indian academy for State-owned enterprises to provide orientation programme to executives on MARCH 2015 INDIA BUSINESS JOURNAL 8

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Verbatim... broadcast and ease of executing complex trading strategies like butterfly and straddles, NCDEX adds. 52 per cent. According to the data from NSE, the average daily turnover of trades through mobile phones stood at Rs 156 crore in 2014, up from Rs 64 crore in 2013 while internet-based daily average trading turnover rose to Rs 1,836 crore in 2014, up 52 per cent from Rs 1,206 crore in the preceding year. Number of investors trading through internet and mobile phones increased by 17 and 101 per cent respectively last year. MISCELLANEOUS Non-PDS kerosene sale freed from controls The government has freed sale of non-public distribution system (PDS) kerosene oil from regulatory control to ease availability of marketpriced kerosene. The government has amended the Kerosene (Restriction on Use and Fixation of Ceiling Price) Order, 1993, to free all activities of storage, transportation and sale of white kerosene (marketpriced kerosene or non-PDS kerosene) from regulatory control. Subsidised kerosene sold through PDS is blue in colour while the marketpriced fuel is colourless. The move is expected to reduce demand for diverted PDS kerosene by improving availability of non-PDS kerosene in the open market. "We need checks and balance, but we should ensure a balance of checks. We cannot have escaped the Licence-Permit Raj only to end up in the Appellate Raj!" Raghuram Rajan GOVERNOR, RBI through mobile phones soared by about three times last year at the National Stock Exchange (NSE) while internet-based trades rose by running public sector enterprises. Reliance Power has inked an MoU with the Rajasthan government to develop 6,000 mw of solar power projects across the State over the next 10 years. TeamLease Skill University and the Union Labour Ministry have joined hands to promote apprenticeship in the country and appoint 5,00,000 apprentices in the next three years. NSE sees spurt in trading via Net, mobiles Trading country's renewable energy sector is looking at attracting $200 billion (about Rs 12,40,000 crore) in investments as several domestic and international companies are queuing up to tap the potential of green power. "We are looking at nearly twice the amount of interest than what our target is with investments of $200 billion," revealed Union Power Minister Piyush Goyal recently. The government is targeting to take the share of renewable energy in the total energy produced from 6.5 to 12 per cent in the next three years. Renewable energy to get $200-bn investment The "After nine months (of Modi government), there is a little bit of impatience creeping in as to why this is taking so long having effect on the ground." Deepak Parekh CHAIRMAN, HDFC "The long shadow of three Cs - CBI, CVC and CAG - is leading to a lack of initiative and decision-making at all levels of the government." Anil Ambani CHAIRMAN, ADAG Rs 25,000-cr savings for government via DBT Implementing direct benefit transfer (DBT) for food subsidy will help the government save Rs 25,000 crore by eliminating costs associated with procurement, distribution and storage of foodgrain, notes CRISIL. Apart from saving money for the government, implementing the DBT, which would entail cash transfers into beneficiary accounts instead of food material, will also push up consumption in the economy, adds the rating agency. "It's an irony that after having seen lethargic governments, you today have a government which is criticised for being too fast." Arun Jaitley FINANCE MINISTER "No amount of foreign exchange reserves can cushion when there is extreme volatility or external shocks." H R Khan DEPUTY GOVERNOR, RBI INDIA BUSINESS JOURNAL MARCH 2015 9

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NEWS ROUND-UP PUBLIC SECTOR Four State-owned steel plants planned The NMDC Chairman Narendra Kothari government has decided to set up four steel plants in Chhattisgarh, Jharkhand, Odisha and Karnataka at an investment of about Rs 60,000 crore. These will be the first State-owned, greenfield projects that will come up in the steel sector in almost four decades. The new plants will add 24 mt of steel-producing capacity. Central PSUs, such as SAIL, RINL and NMDC, will collaborate with State governments and form special purpose vehicles to set up the projects. The government has set a target of 300 mt of steel production capacity by 2025 from the current 101 mt. are lower than Rs 19.46 a litre loss that oil firms were incurring on kerosene sale and Rs 235.91 per LPG cylinder two months ago. After the diesel price was deregulated last October, only two products remain subsidised. PSU banks have to tap market for capital PSU NMDC posts record Q3 turnover, sales growth NMDC HAL bags Rs 1,090 crore defence contract Hindustan Aeronautics (HAL) has won a defence contract worth Rs 1,090 crore to produce and supply 14 Do-228 aircraft to the Indian Air Force. The contract also includes supply of six reserve engines, one flight stimulator and related equipment. HAL's Do-228 aircraft are manufactured by its transport aircraft division in Kanpur. The division had previously supplied 125 Do228 planes for the defence and other customers. The Do-228 is a multi-purpose, fuel-efficient, lightweight, twin turboprop machine with a retractable tricycle landing gear. recently registered its best-ever third quarter (Q3) results ended December 2014 with a 4 per cent rise in turnover to Rs 2,946 crore. Its nine-month turnover in the April-December 2014 hit Rs.9,528 crore. The country's largest iron ore miner posted a net profit of Rs 1,593 crore in the third quarter and Rs 5,075 crore in the nine-month period under review. The company also clocked its record nine-month ore production at 22.50 mt, growing at 12 per cent over the production in the year-ago period, between April and December 2014. The State-owned miner registered an 8 per cent increase in iron ore sales at 22.83 mt during the nine months of 2014-15. country's largest oil refiner will be setting up an ethylene glycol project along with associated facilities at its Paradip refinery at an investment of Rs 3,752 crore. and Rajasthan and one solar project of 500 mw in Andhra Pradesh. Earlier, thermal power company had joined hands with the Uttar Pradesh government to develop a 375-mw solar power park in the State. The State-run power producer has an installed capacity of 43,128 mw and is targeting to raise it to 1,28,000 mw by 2032. banks will have to raise funds from the capital market to meet capital requirement norms in the absence of adequate financial support from the government, according to rating agency Moody's. For the current financial year, the government has earmarked Rs 11,200 crore for capital infusion in State-owned banks. Unless the government materially increases the capital allocation to these banks, they will have to tap the capital market, adds the rating agency. The government has adopted new criteria, in which banks that are more efficient will be rewarded with extra capital. Mahila Bank to open 35 more branches Govern- IOCL lines up over Rs 7,800-cr expansion Maharatna PSU, has committed to add 10,000 mw through solar projects over the next few years. The company recently floated a notice inviting tenders for four solar projects of 250 mw each in Andhra Pradesh, Madhya Pradesh, Telangana NTPC to add 10,000 mw of solar power NTPC, a Indian Oil Corporation (IOCL) will be investing Rs 7,812 crore to upgrade fuel quality at its two key refineries and undertake other expansion projects. The State-owned company's board recently approved an investment of Rs 1,843 crore in upgrading the 13.7-mt Koyali refinery in Gujarat to produce Euro-IV complaint petrol and diesel. Another Rs 1,327 crore will be spent on similar fuel quality upgrade project at its Barauni refinery in Bihar. The ment-owned Bharatiya Mahila Bank has proposed to open 35 more branches, taking the total to 80 by next month. Besides, it is launching a mobile application as a part of strengthening its services in the country. Oil firms' LPG, kerosene sale losses dip Losses on sale of subsidised LPG and kerosene oil have dropped by over 30 per cent as international oil prices have plunged to multi-year lows. Stateowned fuel retailers are losing Rs 13.32 on sale of every litre of kerosene through the public distribution system and Rs 161.81 per 14.2-kg domestic cooking gas. These (CIL) has prepared a definitive road map to achieve 1 billion tonnes (bt) coal production target by 2020. The world's largest coal miner expects to ramp up its cumulative annual growth rate to 12 per cent from the current 7 per cent. The miner has chalked out plans to achieve 908 mt of coal production. Of this, subsidiaries Mahanadi Coalfields and South Eastern Coalfields have been earmarked production target of 250 mt and 240 mt respectively. Besides, CIL has sealed a joint venture with Indian Railways and mineral-rich State governments to improve rail transit of mined coal. INDIA BUSINESS JOURNAL CIL draws up plans to meet 1 bt target Coal India 10 MARCH 2015

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(Formerly known as Flex Industries Limited) Regd. Office: 305, 3 Floor, Bhanot Corner, Pamposh Enclave, Greater Kailash-I, New Delhi - 110 048 rd UFLEX LIMITED UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER & NINE MONTHS ENDED 31ST DECEMBER, 2014 (INR in lacs) Quarter Ended 31.12.2014 (Unaudited) Q u a r t e r Nine Months Ended Ended 31.12.2013 31.12.2014 (Unaudited) (Unaudited) Year Ended Ended 31.12.2013 31.03.2014 (Unaudited) (Audited) Nine Months Sl. No. Particulars 01. 02. 03. 04. Net sales / Income from operations Other Income Total Income (1+2) Expenditure (a) (Increase)/decrease in stock in trade & WIP (b) Consumption of raw material/traded goods (c) Purchase of traded goods (d) Power & fuel (e) Employees cost (f) Depreciation (g) Other expenditure (h) Total 152976 350 153326 (3413) 94023 2239 7831 10870 7060 22895 141505 4619 7202 1525 5677 -5677 51 21 5707 147403 429 147832 (3669) 93786 1155 7736 9452 6746 21190 136396 5927 5509 340 5169 -5169 97 5266 471924 1184 473108 (6170) 293896 6025 23891 32151 21267 64863 435923 14758 22427 4116 18311 -18311 353 43 18621 438781 1190 439971 (7488) 2686793 15725 24823 27506 20290 57954 407489 17368 15114 1245 13869 -13869 285 14154 586325 2863 589188 (7762) 357787 18091 32673 38639 26708 78538 544674 23327 21187 1512 19675 -19675 488 (1) 20164 05. 06. 07. 08. 09. 10. 11. 12. 13. Interest Profit(+)/Loss(-) from ordinary activity before tax (3)-(4+5) Tax expenses Net Profit(+)/Loss(-) from ordinary activity after tax (6-7) Extra ordinary items (Net of tax expenses) Net Profit(+)/Loss(-) for the period (8-9) Share of Profit/(Loss) of Associate Minority interest Net Profit(+)/Loss(-) after taxes, minority interest and share of Profit/ (Loss) of associates (10+11-12) EPS Basic Diluted 14. 7.90 7.90 7.29 7.29 25.79 25.79 19.60 19.60 27.92 27.92 (Non-statutory advertisement)

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Publisher’s Statement Statement about ownership and other particulars about India Business Journal required to be published under Rule 8 of the Registration of Newspapers (Central) Rule, 1956. FORM IV (See Rule 8) 1. Place of publication : Mumbai 2. Periodicity of publication : Monthly 3. Printer’s name : Amit M Brahmabhatt Whether citizen of India? : Yes 4. Publisher’s Name : Amit M Brahmabhatt Whether citizen of India : Yes Address : 102, Rajasthan Technical Centre, Patanwala Estate, Ghatkopar, Mumbai 400086 5. Editor’s name : Amit M Brahmabhatt Whether citizen of India : Yes Address : 102, Rajasthan Technical Centre, Patanwala Estate, Ghatkopar, Mumbai 400086 6. Names and addresses of : Amit M Brahmabhatt individuals who own the 102, Rajasthan Technical Centre, newspaper and partners or Patanwala Estate,Ghatkopar, shareholders holding more Mumbai 400086 than one per cent of total capital I, Amit M Brahmabhatt, hereby declare that the particulars given above are true to the best of my knowledge and belief. Sd/Dated: 1st March, 2015 Amit M Brahmabhatt, Publisher

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project." A 1 lakh sq ft data centre in Bengaluru is under the planning stage and a 50,000 sq ft data center in Nashik will be set up in addition to the existing one," discloses ESDS MD Piyush Somani. Reliance Infra arms enter defence sector Anil ITC's aim of focusing on non-cigarette FMCG business and achieving revenue of Rs 1,00,000 crore from the new FMCG businesses alone by 2030. ITC had acquired Bengalurubased Balan Natural Food's B Natural brand last year. CORPORATE Ambani-led Reliance Group has announced its foray into defence and aerospace manufacturing sectors. Reliance Infrastructure, which already has presence in areas like power, has set up three wholly-owned subsidiaries - Reliance Defence Systems, Reliance Defence Technologies and Reliance Defence and Aerospace (RDA). RDA will be participating in the utility helicopter programmes for the armed forces. The company will also explore other opportunities including naval platforms, air mobility, avionics and network-centric warfare. Mylan to buy Famy biz for about Rs 5,000 cr Mylan has signed a deal to acquire the female healthcare businesses of Famy Care, a specialty women's healthcare company. The US-based pharmaceutical company will pay $750 million (about Rs 4,650 crore) in cash, and the deal will also include additional contingent payments of up to $50 million (a little over Rs 300 crore). Famy Care will spin off its women's healthcare business under a courtapproved scheme of de-merger and sell it off. Started in 1990 by Jyotiprasad Taparia, Famy Care is the third-largest maker of over-the-counter contraceptive pills and injectables. acquire a 23 per cent stake in debt-ridden wind turbinemaker Suzlon Energy for Rs 1,800 crore. A statement from Suzlon has said that Dilip Shanghvi Family and Associates (DSA) will hold 23 per cent stake in Suzlon Energy after the transaction while Suzlon promoter Tulsi Tanti's family will hold 24 per cent and retain management control by virtue of pooling arrangement for voting. Shanghvi buys 23% in Suzlon for Rs 1,800 cr Dilip Shanghvi, the founder of Sun Pharmaceutical Industries, has agreed to three-dozen general information websites. Reliance Infrastructure has signed an agreement with US-based Innovari to expand in the automated demand-side management sector. Europe-based RUAG Aerostructures and Tata Group company TAL Manufacturing Solutions have joined hands for production and supply of aero-structural components and subassemblies to Airbus 320. Berger Paints India has inked an MoU with the government of the Stavropol, a region of the Russian Federation, for setting up a modern industrial coatings plant. Group company Grasim Industries has decided to merge Rs 1,000-crore Aditya Birla Chemicals India (ABCIL) with itself in line with its vision to unify similar businesses under one company. The move is aimed at consolidating the Aditya Birla Group's chloralkali business into Grasim and strengthening its existing portfolio of viscose staple fibre, caustic soda and allied chemicals in a standalone company. The swap ratio approved by the board is 1 share of Rs 10 each of Grasim for every 16 shares of Rs 10 each of ABCIL, the company said in recent a BSE filing. Grasim seeks synergy in ABCIL merger Adya Birla Tata Communications has won a Rs 124-crore contract from the Kion Group to provide global wide area network services to the latter's 280 sites across 30 countries. Cipla (EU), UK-based subsidiary of Cipla, has entered into a joint venture agreement with Cipla's existing business partners in Morocco - Societe Marocaine De Cooperation Pharmaceutique and the Pharmaceutical Institute to establish front-end presence in Morocco's pharmaceutical market. Facebook has tied up with Reliance Communications to offer the latter's subscribers free access to the social networking site and about INDIA BUSINESS JOURNAL ITC in deal to buy J&J's FMCG brands ITC has entered into an agreement with Johnson & Johnson (J&J) to acquire Savlon and Shower To Shower trademarks and other intellectual property. The company did not divulge the size of the deal. The acquisition of the brands, primarily for use in India, is aimed at expanding the cigarettes-to-hotels conglomerate's FMCG portfolio. The current acquisition is in line with Mukesh Ambani's Reliance Jio (RJio) entering the fray, bids for the auction of spectrum, which begin from March 4, are likely to be fiercely competitive. Last month, RJio announced its participation in the auction together with four other operators - Bharti Airtel, Vodafone India, Idea Cellular and Reliance Communications - whose licences are up for renewal. Tata Teleservices, Aircel and Uninor will also be participating, but Russian operator Sistema Shyam has decided to abstain. CRISIL estimates that operators will have to shell out over Rs 90,000 crore to win spectrum. MARCH 2015 Spectrum auction to heat up with RJio's entry With 13

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NEWS ROUND-UP FINANCE last month received 72 applications - including Repco Micro Finance and UAE Exchange - for small finance banks and 41 applications - comprising RIL, Tech Mahindra, and Airtel M Commerce - for payments banks. These new categories of banks are expected to provide banking services to the poor and marginalised who are outside the ambit of the banking system. The central bank has set up a four-member external committee headed by Nachiket Mor, a director of the central board of RBI, to vet applications for payments banks and another external committee, headed by former RBI deputy governor Usha Thorat, to screen applications for small finance banks. 113 in fray for small, payments banks The RBI recoveries and control on expenses. The Bengalurubased bank posted 7 per cent growth in net interest income at Rs 2,380 crore while its non-interest income rose 38 per cent to Rs 1,176 crore. The bank's gross NPA ratio was 3.35 per cent and net NPA ratio was 2.42 per cent. The lender had a decent capital adequacy ratio at 9.87 per cent with a tier-I ratio of 7.23 per cent. Bank of Baroda net falls 68% at Rs 334 cr Bank of Sundaram to buy out RSA in insurance JV Sundaram Finance will buy out the UK's RSA Group in their joint venture, Royal Sundaram Alliance Insurance Company. Under the deal, RSA will sell its entire 26 per cent equity stake in Royal Sundaram to Sundaram Finance for Rs 450 crore, subject to required regulatory approvals. The UK group's move to quit the joint venture comes in the wake of its decision to exit non-core markets. Sundaram Finance currently holds 49.90 per cent in the joint venture. The acquisition of RSA stake will increase its holding to 75.90 per cent, with the remaining stake held by its associates. withdrawal. The central bank has, however, not specified the minimum tenure of FDs that will be eligible for higher rate of interest. The RBI is expected to issue detailed guidelines on differential rate of interest soon. According to existing rules, all deposits accepted from individuals up to Rs 1 crore have facility for premature withdrawal. SBI leads the pack with a capitalisation of Rs 2,970 crore, followed by BoB Rs 1,260 crore, PNB Rs 870 crore and Canara Bank Rs 570 crore. Higher interest soon for high-value FDs Unbreak- able, high-value fixed deposits (FDs) will soon earn higher rate of interest with the RBI allowing banks to offer differential rates. The higher interest rate will be payable only to FDs of over Rs 1 crore by individuals with no option of premature Central Bank Q3 net doubles to Rs 137 cr Baroda reported a sharp 68% year-on-year drop in net profit at Rs 334 crore for the third quarter ended December 2014 due to a higher provision for stressed loans. Total income of the bank increased to Rs 11,808.34 crore from Rs 10,622.80 crore in the year-ago period. The provision for bad loans increased by 66 per cent to Rs 1,262 crore against Rs 762 crore in previous year's quarter. The bank's gross and net NPAs were 3.85 and 2.11 per cent in the December 2014 quarter as against 3.32 and 1.88 per cent in year-ago period. TIE-UPS ICICI Bank has tied up with UAE Exchange to offer an instant bank transfer service to Indians residing in the UAE. Rs 6,990-cr capital infusion in 9 PSBs soon APPOINTMENTS Gauri Shankar, the senior-most executive director of Punjab National Bank, has been given the additional charge of the bank's MD and CEO. MARCH 2015 The government will soon infuse Rs 6,990 crore in nine public sector banks (PSBs), including State Bank of India (SBI), Bank of Baroda (BoB) and Punjab National Bank (PNB), for enhancing their capital and meeting global risk norms. This is the first tranche of capital infusion, for which the government had allocated Rs 11,200 crore in the Union Budget 201415. Among the beneficiaries, largest public sector lender Central Bank of India's net profit jumped more than two-fold to Rs 137.7 crore in the quarter ended December 2014. The Mumbai-based lender had posted net profit of Rs 61.5 crore in the Q3 of FY14. Total income increased to Rs 7,033 crore from Rs 6,708 crore during the period under review. The bank's interest income grew by 2.68 per cent to Rs 6,524 crore in the third quarter. Bank of India net plunges 70% to Rs 173 cr Bank of Canara Bank profit up 60% at Rs 656 cr Canara Bank's net profit for the third quarter of FY15 rose 60 per cent to Rs 656 crore on tidy earnings from treasury, India's third quarter net profit fell by 70.4 per cent year-on-year to Rs 173.4 crore. Higher provision and employee expenses, slow growth in net interest income and lower other income and operating profit impacted the profitability during the quarter. Net interest income increased by 2.3 per cent to Rs 2,780.2 crore from Rs 2,719 crore in the period under review. Other income slipped by 1.6 per cent to Rs 1,079.7 crore. The lender's gross and net NPAs rose to 4.07 and 2.50 per cent in the December 2014 quarter. INDIA BUSINESS JOURNAL 14

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