'Sivaji' to net Rs 25 cr in profit: Pyramid Saimira

    

P S Saminathan, MD, Pyramid Saimira Theatre, is a happy man today with the film Sivaji releasing in 200 screens in India and 52 screens in Malaysia.

The movie is being released in Andhra Pradesh, Karnataka, and Tamil Nadu with around 6.78 lakh seats per day. Swaminathan believes that going by the advance reservation, this film is a blockbuster. "In fact, the first screening is around 5 am in the morning instead of 9 am due to the amount of pressure from moviegoers," he added.

The company has made an investment of more than Rs 26 crore in the film. "Going by the advance reservation, we are expecting a topline of Rs 50 crore from this film," he said.

Swaminathan expects the film to run for more than 100 days going by the audience response. As for Malaysia, we will have an additional Rs 15 crore.

On whether Pyramid Samaira has introduced premium pricing, Swaminathan said the company has not introduced premium pricing because in south India, especially in Tamil Nadu, deferential pricing is not allowed. Nevertheless, black markets do run because of the demand supply problem, he added.

Small car makers making it big?

Big auto component makers like Bharat Forge and Mahindra better look out. A new wave of car parts makers is building muscle through foreign acquisitions.

 

The front-fork components, made in Aurangabad by Endurance Technologies, are sold to Yamaha and Piaggio through an Italian company Piaoli Meccanica. Now Endurance plans to buy out the company after buying 40% earlier this year. Endurance, which has acquired 3 European firms for about 50 million euros, is part of a new wave of component makers going global and it has a strategy to avoid competition, from India or outside, while acquiring a company.

 

"Our strategy has been to try and avoid an auction process. We've tried to go in fast and close the transaction fast so that we don't have to go through an auction process. In an auction the price goes haywire," says Anurang Jain, MD, Endurance Technologies.

 

With such strategies and expansion in the domestic market, the Rs 1500 crore endurance is eyeing a turnover of Rs 5,000 crore in 3 years, and plans to list before then.

 

 

Like the bigger players, namely Bharat Forge and M&M, getting prestigious customers of Europe and N America is one of the reasons for the new wave of companies to go for acquisitions. Another reason forcing them to do so is to maintain high growth rate. Precision, for example, says it is crucial for it to sustain the annual growth rate of about 50 %, which it has achieved in the past 5 years.

 

Jamshedpur-based RSB group, which is half of endurance's size with a Rs 650 crore-rupee turnover, has a similar story to tell. it bought a 30 million-dollar transmission component maker, miller brothers, for 19 million dollars. That's because besides meeting quality standards, proximity to customers is crucial to boost overseas business.

 

"That's one reason why small companies are going to acquire. Another reason is product and process technology," says RK Behera, Chairman, RSB Group.

 

RSB is set to acquire a European company of about 10 million euros to expand its construction equipment component business. Others are also on a buying spree. Bangalore-based Suprajit Engineering is looking for a company in Europe and North America and Solapur based Camshaft manufacturer precision is looking for one as well. As pressure on component makers in the us and Europe increases from their customers, smaller Indian companies are going all out to make their mark in the global automotive industry.

Coimbatore next stop on IT map; realty to boom

Coimbatore's real estate market is set to change, with IT parks, hotels and malls being planned. But if you want to invest in property here you just might have missed the bus. 

Suressh Menda has been in Coimbatore's property market for the past 20 years. This director of Coimbatore-based Presidium Constructions says the market here has never been so excited by hopes of an IT boom.

Menda says, "Housing will go up tremendously, correlated with that activity like mall-building, will also go up. You require hotels for industry to be placed there, so it's a whole cycle that is going to take place linked to the ITES industry here."

Over the next two-and-a-half years, 5 to 10 million sq. ft. will be developed for IT. Three dedicated IT special economic zones are expected. Besides, hotels will take up about 10 lakh sq. ft. of land. The Taj, Meridien and Kennilworth are reported to have acquired land for their projects. Coimbatore also looks set to change the way it shops.

He says, "Avanashi Road is at the center of high-street shopping in Coimbatore, but like this city, this road does not have a single shopping mall. All that is going to change over the next two to three years, when four million sq. ft. of retail space will come up on either side of this road."

In anticipation of all this activity, property prices have already increased by 300%, in some cases. Now experts say a correction is expected.

N Ananthanarayanan, Regional Director, JLL-Meghraj, says, "What's happened is that Coimbatore had a sympathy rise along with Chennai, but with prices in Chennai itself flattening out, it looks like Coimbatore will also flatten out."

Like Chennai, Coimbatore's population mix will also change. Experts say between 25,000 and 30,000 IT workers will come into Coimbatore in the next two or three years. That will keep firm the demand for quality housing.

Intel gears up for launch of `Classmate PCs'

Intel is gearing up for the launch of the Classmate PC or laptop, expected to cost around Rs 10,000-12,000 and aimed mainly at the educational segment, as part of its `World Ahead Programme.' The process of product customisation is on, according to Mr B. Suryanarayanan, Director (Sales & Marketing Group), Intel India.

He said that while Intel was looking at the issue of establishing a manufacturing facility in the country, he did not anticipate any immediate decision.

Speaking to newspersons, he said the company was working with its OEM partners for the launch of the Classmate PC in the form of laptops. (The company brochure describes it as a "mobile learning-assistant educational solution" that Intel developed specially for students in emerging markets.)

It wants to train them and know whether they would be customising any product and would be adding any value to it.

The process that precedes a product launch to familiarise different segments involved to assess their comfort level is now on. The launch would depend on the results obtained during the pilot stage.

RIL valuation: Analysts just can't get it:

The valuation of Reliance Industries by equity analysts could well be a case of the ends justifying the means. Most brokerage firms have valued the stock between Rs 1,600 and Rs 1,750. The range may not seem very wide considering the volatility of earnings in some of the businesses that RIL is seeking to increase its presence.

But what is surprising is that the values assigned to the individual businesses by these analysts show a huge variation. Typically, the valuation of a company with diversified interests is based on the sum of the parts. ETIG compared a number of valuation reports from some well-known research houses, and these reveal some interesting numbers.

Consider for instance, the upstream business of Reliance, which is largely the KG basin oil & gas discoveries along with a number of smaller reserves. This has been valued between Rs 300 and Rs 720 per share of RIL, depending upon which report you choose to believe.

There are differences elsewhere too – the value of RIL's retail foray has been pegged at a low of Rs 61 to a high of Rs 155. These two numbers imply that RIL's retail venture could be worth between Rs 8,500 crore and Rs 21,600 crore. To put that in perspective, the two large listed retail companies in India – Pantaloons and Shopper's Stop — have a combined market capitalisation of about Rs 7,700 crore, well below the lower end of the band.

Assigning a value to the stock is no mean feat, when you look at the number of businesses, though not all of them are related, that the company is into. Petrochemicals and refining is the bread and butter of the group. Then there is oil and gas exploration, recently commenced retail operation, shares in group companies and the proposed special economic zone venture. Finally, the company also owns a significant chunk of its own shares, referred to as 'treasury stock', formed at the time of the merger of Reliance Petroleum with itself.

Not all research houses have valued all the parts. Some have left out the smaller E&P assets ,while others did not subtract the debt. Some have left out the treasury stock, which accounts for about 12% of the company's shares.

The wide variation in the values of the individual business, but the relatively narrow difference in the final value has given rise to talk that analysts decide the target price and then assign relevant values to the various parts so that they add up to the whole. An analyst working with a leading research house says that the practice is common in some quarters. "Our job is to take the limited information available and then use that to take a view on a company," he adds, on condition of anonymity.

The big question then seems that why do analysts have to resort to such measures? One reason seems to be the low level of information available on the company. In case of upstream businesses, this could be because the regulator doesn't allow disclosures on discovery volumes till they are duly certified. However, that is not the case always as in the case of Reliance Retail. However, the official communication from the company is silent on facets such as investment figures, near-term plans or even revenues from this business. The total investment that has gone into retail so far is reportedly over Rs 4,000 crore.

How India calculates inflation

Rising inflation was the most recent ticklish political issue that hit the Manmohan Singh government. But was inflation rising because of price rise in essential commodities? Or was it because of the 'erroneous method' of calculating inflation?  Some economists assert that India's method of calculating inflation is wrong as there are serious flaws in the methodologies used by the government.  Economists V Shunmugam and D G Prasad working with India's largest commodity bourse -- the Multi Commodity Exchange -- have come out with a research paper arguing that the government urgently needs to shift the method of calculating inflation.  Saying that there are serious flaws in the present method of calculating inflation, the paper India should adopt methodologies in developed economies.  So how does India calculate inflation? And how is it calculated in developed countries? India uses the Wholesale Price Index (WPI) to calculate and then decide the inflation rate in the economy. Most developed countries use the Consumer Price Index (CPI) to calculate inflation.  Wholesale Price Index (WPI)  WPI was first published in 1902, and was one of the more economic indicators available to policy makers until it was replaced by most developed countries by the Consumer Price Index in the 1970s.  WPI is the index that is used to measure the change in the average price level of goods traded in wholesale market. In India, a total of 435 commodities data on price level is tracked through WPI which is an indicator of movement in prices of commodities in all trade and transactions. It is also the price index which is available on a weekly basis with the shortest possible time lag only two weeks. The Indian government has taken WPI as an indicator of the rate of inflation in the economy.  Consumer Price Index (CPI)  CPI is a statistical time-series measure of a weighted average of prices of a specified set of goods and services purchased by consumers. It is a price index that tracks the prices of a specified basket of consumer goods and services, providing a measure of inflation.  \CPI is a fixed quantity price index and considered by some a cost of living index. Under CPI, an index is scaled so that it is equal to 100 at a chosen point in time, so that all other values of the index are a percentage relative to this one.  Economists Shunmugam and Prasad say it is high time that India abandoned WPI and adopted CPI to calculate inflation.  India is the only major country that uses a wholesale index to measure inflation. Most countries use the CPI as a measure of inflation, as this actually measures the increase in price that a consumer will ultimately have to pay for.  "CPI is the official barometer of inflation in many countries such as the United States, the United Kingdom, Japan, France, Canada, Singapore and China. The governments there review the commodity basket of CPI every 4-5 years to factor in changes in consumption pattern," says their research paper.  It pointed out that WPI does not properly measure the exact price rise an end-consumer will experience because, as the same suggests, it is at the wholesale level.  The paper says the main problem with WPI calculation is that more than 100 out of the 435 commodities included in the Index have ceased to be important from the consumption point of view.  Take, for example, a commodity like coarse grains that go into making of livestock feed. This commodity is insignificant, but continues to be considered while measuring inflation.  India constituted the last WPI series of commodities in 1993-94; but has not updated it till now that economists argue the Index has lost relevance and can not be the barometer to calculate inflation.  Shunmugam says WPI is supposed to measure impact of prices on business. "But we use it to measure the impact on consumers. Many commodities not consumed by consumers get calculated in the index. And it does not factor in services which have assumed so much importance in the economy," he pointed out.  But why is India not switching over to the CPI method of calculating inflation?  Finance ministry officials point out that there are many intricate problems from shifting from WPI to CPI model.  First of all, they say, in India, there are four different types of CPI indices, and that makes switching over to the Index from WPI fairly 'risky and unwieldy.' The four CPI series are: CPI Industrial Workers; CPI Urban Non-Manual Employees; CPI Agricultural labourers; and CPI Rural labour.  Secondly, officials say the CPI cannot be used in India because there is too much of a lag in reporting CPI numbers. In fact, as of May 21, the latest CPI number reported is for March 2006.  The WPI is published on a weekly basis and the CPI, on a monthly basis.  And in India, inflation is calculated on a weekly basis.

Reliance Cap wants to enter i-banking

Reliance Capital, the non-banking finance arm of the Anil Dhirubhai Ambani Group (ADAG), is planning to foray into investment banking to broaden its offerings in the financial sector.

The company, which has presence in asset management, retail broking and insurance businesses in the country, intends to start the investment bank in partnership with a foreign player, a person familiar with the development said. He, however, declined to divulge further details.

Reliance Capital's vice-chairman Amitabh Jhunjhunwala is said to be overseeing the initiative and the company has initiated talks to rope in key executives.

A Reliance Capital spokesperson declined to comment on the development. An email query to the company did not elicit any response. According to bankers, Reliance Capital's partner for the investment bank could be a foreign firm with no presence in India till now.

Some of the names taking the rounds are the US-based Bear Stearns and Paine Webber. Investment bankers said Reliance Capital would provide the knowledge of local markets, while the foreign partner would bring in the technical expertise. The proposed launch comes at a time when there is a surge in capital raising activity in India, with several cross-border mergers and acquisitions (M&A) firming up.

However, analysts tracking Reliance Capital are unsure about the value an investment bank could bring to its balance sheet. According to an analyst: "It will depend on the size of the venture (investment bank) and how they plan to go about the business. But as per the trend, the size of the operations can be significant."

Investment bankers from rival firms said Reliance Capital can have a significant presence in the investment banking business, given the fact that it holds minority stakes in various companies across sectors. They feel Reliance Capital could secure fund-raising mandates of
these companies.

Wal-Mart arm Gazeley plans India foray

Retail giant Wal-Mart is strengthening its ties with India. The UK-based logistic space (warehousing and others) provider, Gazeley Ltd, a wholly-owned subsidiary of Wal-Mart, is now planning to set foot in India as early as in July-August this year, industry sources said.

Gazeley holds 12 per cent share of the UK logistic space market and will be the second global logistic player to enter the Indian market after Pro Logis of the US. The latter is a major player in supply chain distribution services.

When contacted, company officials from Gazeley's UK office confirmed the development.

"We are looking at India and have plans to set up office in Delhi," an official told this correspondent. However, the official declined to divulge further details including investment plans in India.

Hi-tech, low-cost ATMs for rural areas?

he air is abuzz with talk of a new hi-tech, low-cost deal for farmers and other rural folk. Hub and spoke models are spoken of, and ATMs wired for bio-and speech-recognition.

Salaries, loan disbursals, proceeds of bulk sales at procurement centres and market yards, and revenue earned by sales to private traders, could be directly credited at a centralised location.

Indiscriminate Lending

Account holders could check that this has been done, or draw on this money at any one of the dozens of ATMs sprinkled all over the place. Tedious visits to branches, time and time again, would no longer be necessary. But, though life would become a great deal easier for account holders, whose numbers would, therefore, increase in leaps and bounds, bankers themselves would need to be pretty nimble to avoid indiscriminate lending and ensure good recoveries.

Customers, too, would face a problem if they wished to deposit cash. ATMs can pay out thousands in a jiffy. But their ability to count is greater than their ability to recognise what they are counting.

They can be `taught' how to scrutinise notes fed into them. But they are slow learners. It would still take them three to five minutes to verify every note. Feeding 100 tenor fifty rupee notes into an ATM would take pretty much all day

Ad spend on cricket falls 20% post World Cup

Advertising spends on cricket have dropped by 20% after the World Cup. After Pepsi, LG is the latest in the brandwagon to shift focus from cricket.

 

India's performance in the 2007 World Cup and the recent Board of Control for Cricket in India, or BCCI, ruling on endorsements has compelled advertisers to relook cricket-based deals. Some companies have decided to wait and see how the issue pans out, but others are looking at alternatives.

 

Industry experts say that ad spends on cricket have dropped by about 20% after the ICC World Cup 2007. Consequently, ad spends on other sports like golf, football, tennis have increased marginally.

 

Cola companies like Pepsi have taken some steps too. Pepsi has increased its association with Bollywood. The latest being the packaging for mango drink Slice, with Jhoom Barabar Jhoom.

 

Sandeep Tiwari, Marketing Head, LG Electronics, said, "We are not renewing the contract for the next cricket World Cup."

 

LG will conduct a nationwide golf tour with 13 events and may also look at launching new campaigns with the golfing theme. Other non-cricket games are also being considered.

 

But sports management firms still have faith in the popularity of cricket and believe that the flirtation with Bollywood and golf is just a blip.

Domain names become hot biz at online auctions

Cyber squatters may have made their life a tad difficult, but enterprising individuals have managed to make an honest living selling domain names - with auction portal eBay India alone recording one sale every eight hours.

Though shell sites named after celebrities and popular businesses like sharukhan.mobi or www.googal.com continue to appear now and then for sale, domain names are fast rising as a separate category of products being sold and purchased on the web.

Sale of domain names is a thriving business in the US and other western countries.

"There has been a significant surge in the sale of domain names on eBay India and at any given point in time, there are over 120 domain names for sale and we even have a dedicated category for listings of domain names," eBay India's Corporate Communications Manager Deepa Thomas said from Mumbai.

Paruchuri Sridhar, an eBay seller specialising in domain names with over 100 transactions to his credit, said business is improving every day while forseeing creation of a niche market in the next one year.

On whether cyber squatters pose a problem for genuine domain sellers, he said: "I have not faced such problems and squatting itself is no longer a big issue, as original owners of a brand or trademark have many address options like .in, .org, .net... earlier there used to be just the .com address."

Talking about squatting, some of the cyber space properties that are for sale on eBay include shakrukhkhan.mobi and kareenakapoor.mobi for Rs 25,000 each. Also for Rs 25,000, one can buy adult domain name NakedNews.co.in -- with the seller apparently hoping to ride on the popularity of Canada- based Naked News.

ICICI Bank vs HDFC Bank: Which is the better bet?

ICICI Holdings may have completed its 5% stake placement for USD 500 million, sources said, adding that ICICI Holding may have placed stake to multiple investors and the valuation of ICICI Holding may work out to USD 10.2 billion.

This company was recently created by ICICI to hold its 74% stakes in the life and general insurance business. Sources confirm that it has pegged the valuation of its life insurance business, ICICI PruLife, at USD 6-7 billion and the non-life or general insurance at USD 2-3 billion. The 51% stake in ICICI Prudential Asset Management is being put at USD 1 billion.

ICICI Prudential and ICICI Lombard will continue to require large dollops of capital as the life insurance business is growing at 104% annually while the general insurance business is clocking a growth of over 88%.

On the other hand, HDFC Bank will raise Rs 3,114 crore via its preferential offer to Carlyle Group. The HDFC preferential issue consists of 1.8 crore equity-shares, which is 7.11% of the total issued and paid-up capital.

The Carlyle Group will hold 5.6% in HDFC after the preferential issue. HDFC plans to use a part of the money for its insurance business, which needs over Rs 600 crore every year. Part of the funds would be used to maintain HDFC stake in HDFC Bank, said Renu Karnad, ED, HDFC Bank.

The BSE Bankex is up 97 points to 7,564. On the BSE, the ICICI Bank stock is up Rs 10, at Rs 923, while the HDFC Bank stock is up Rs 56 to Rs 1,125. CNBC-TV18 spoke to analyst Hemindra Hazari of Karvy Stock Broking to find out which of the two banks is a better bet.

He is a bit surprised with the timing of the ICICI Bank issue as its results were not up to the mark. "The ICICI Bank issue was a bit of a surprise as when they announced their equity issue, their results were not up to the mark. There is a concern that its RoE may take a hit, so the market is sensitive to ICICI Bank's announcement. On the other hand, HDFC Bank is a very profitable bank. They have made it clear that they are not interested in increasing their market share but they want to grow profitably. In the case of HDFC Bank, the concerns of maintaining profitability are much less than in the case of ICICI Bank," he said.

Hazari feels there is huge difference in both the banks raising of equity. "There is a big difference between ICICI Bank's raising of equity and HDFC Bank's raising of equity. ICICI Bank is using these proceeds to fund its own growth, which is expected to remain high, and its investments in other subsidiaries, which require very large capital like its insurance business. For HDFC Bank, there are no such subsidiaries and hence there is no such concern for the mortgage lender. That's why ICICI Bank requires to raise a larger capital than HDFC Bank," he said.

He sees no problem in banks coming to the market to regularly raise capital. "HDFC needs to maintain a minimum CAR of 12% as they are an NBFC. While in the case of ICICI Bank and HDFC Bank its 9%. Given the fact that the economy is growing, banks need to provide credit so that the economy can continue to grow. We would expect banks in an emerging economy, with high economic growth rates, to regularly come to the market to raise capital.

Hazari prefers HDFC Bank to ICICI Bank. "My first preference would be HDFC Bank as the risks are much lower than in the case of ICICI Bank. One is the sheer size of the issue in the case of ICICI Bank compared to HDFC Bank and the extent of dilution. Secondly, its not very clear whether there will be an ICICI Holding and who will fund the insurance venture. Excluding that, one will find that ICICI Bank has a huge retail exposure and that has been showing some stress in the economy. If there is some problem say on the leverage side and ICICI Bank has really leveraged itself very highly in that area, then there are always going to be concerns. While we do not see these concerns in HDFC Bank," he added.

Mukesh Ambani is India's only trillionaire

Mukesh Ambani is now a trillionaire! A sharp surge in share prices of his group companies has earned the chairman of Reliance Industries a rare distinction of being the only trillionaire in the country.

Younger brother Anil Ambani is also trailing behind closely with close to Rs 90,000 crore of wealth in the stock market through his holdings in various group companies. Early this year, Mukesh Ambani was ranked 14th by the Forbes 2007 list of world's billionaires.

IPOs that could have made you a millionaire

nvestors who chose the initial public offerings route in May to make their first million must be laughing their way to the bank. After a sluggish first quarter (Jan-Mar 2007) in terms of IPOs, the companies, which have listed in the second quarter especially in May, were fairly strong. Companies like Nitin Fire Protection, MIC Electronics and McDowell have had a dream run on the bourses.

 

First let's see what an IPO is all about. An initial public offer, or IPO, is the first sale of stock by a company to the public.

 

Now, how would these issues make you a millionaire? Assuming that you were allotted a 1,000 shares of Nitin Fire protection at its IPO issue price of Rs 190 per share, your total expenditure would be Rs 190,000. The stock listed today at Rs 332.5 on the NSE, a premium of 75%. This means if you have sold off the shares moments after listing, you would have made Rs 3,32,500 --- a clean profit of Rs 1,32,500. However, if you sold that stock at 9:57 am at a price of Rs 508 on the NSE, you would have made a profit of Rs 3,18,000. This is an oversimplified assumption for a better understanding for the benefit of the reader as a retail investor generally does not get the number of shares that he had subscribed.

Similarly, MIC Electronics listed at Rs 262.5 on May 30 at a premium of 75% to its issue price of Rs 150 per share. Your investment on 1,000 shares in the company, which is engaged in the design and manufacture of True Colour LED video display systems, would be Rs 150,000 and your profit would be Rs 112,500. The stock today is trading at a high of Rs 374 on the BSE, so if you sold at these levels your profit would be Rs 2,24,000.

But does this hold true even for relistings. Let us take the case of McDowell's, which had a base price of Rs 163. The stock listed on May 30 at Rs 195.60. If you had purchased 1,000 shares of McDowell's your investment would have been Rs 163,000 and your profit would be Rs 32,600. The stock was trading at its upper curcuit on May 31 and June 1, respectively. It is currently trading at Rs 339.40 on the BSE, so if you sold at these levels your profit would be Rs 1,76,400.

If you have not invested in any of these stocks and are still eyeing those millions, then you do not need to fret. Nishit Master, Analyst, Anand Rathi Securities, feels that investors can once again take long positions in Nitin Fire Protection as there is still some upside remaining in the stock. Ashu Madan, Regional Head, Religare Securities, believes that MIC Electronics will continue to do well for sometime.

As far as the performance of the company is concerned in the forthcoming months, let's hear it from the management. Nitin Shah, Chairman and MD of Nitin Fire, has said the company will cross a turnover of Rs 300 crore and profits of over Rs 30 crore in FY08.

Those who are eyeing the elusive pot of gold can wait for the mother of all IPOs-- the DLF issue, which is in the price band of Rs 500-550 per share. Wishing you happy millions ahead.

2-wheeler industry seeing slowdown, financers unfazed

The two-wheeler industry is witnessing a slowdown, but interestingly financiers are not complaining.

 

Analysts say that it is due to the fact that sales through finance companies are rising. It grows from around 45-50% to nearly 60% over one-and-a-half year. Finance companies benefit from the increase in expensive models.

 

The sales figures in FY07 show that the motorcycle market fell 13.4%, while the segment above 125cc grew 10% and the two-wheeler finance market grew 11%.

Rising rupee hits 11 sectors reducing exports by 50%

A study conducted by the Federation of Indian Chambers of Commerce and Industry, or FICCI, stated that eleven sectors, accounting for 50% of Indian exports, have been hit by rising rupee. But the Commerce Ministry says that export competitiveness alone cannot determine rupee value.

Commerce Minister Kamal Nath told engineering exporters last week that a rising rupee is a fact of life they will have to learn to live with. This comes after April exports rose 23% over last year, showing no evidence of damage. It may be early yet and the actual impact may be felt in later months.

 

A survey by industry chamber FICCI says that 11 sectors, that make for 50% of exports have been doubly hit - by rising interest rates and an appreciating rupee.

 

Jairam Ramesh, Minister of State for Commerce, said, "One way of dealing with a rising rupee is to reduce the transaction cost somewhere and one way of doing that is by increasing the drawback rates. That is for the Finance Ministry to do."

 

Textile exporters met the finance ministry seeking relief last week, and leather exporters will do so next week. Jairam Ramesh says low value garment exporters have been hit. He believes that footwear exporters have weathered the rupee appreciation, as they do not sell to the mass market. In any case, the Reserve Bank cannot address itself solely to the concerns of exporters.

 

Ramesh added, "In my view, export competitiveness is not the sole determinant of the value of the rupee."

 

Price stability and management of capital inflows are other factors that the Reserve Bank will have to consider while managing the rupee's value. Jairam Ramesh says non-price factors are increasingly determining India's export share. For the finance ministry, that is a welcome message from a ministry with which it does not vibe well.

Carmakers go green with eco-friendly acts

Today is the World Environment Day. And, the Indian car companies have taken some of the green measures regarding this.

Indian car companies are not only producing cleaner fuel burning cars, they are also using less energy themselves.

Maruti says its per car energy consumption has declined by a quarter in the last six years. The carmaker has done it with natural lights to light up the shop floor, solar energy, recycling of waste heat and such other measures. The carmaker says it has cut down Carbon Dioxide emissions during car production by 39%.

Others like Tata Motors are trying not to eliminate Carbon Dioxide emissions altogether.

Ratan Tata, Chairman, Tata Motors, says "The company is launching vehicles that run on hydrogen."

Hyundai does not allow rainwater to run down the drain; it recycles wastewater as well. And, it relies on trees to scrub the air. The company says it has planted about one lakh saplings around its car plant.

Honda has bagged the title of greenest automaker for the fourth time in a row. Its FCX concept car is a fuel cell car.

Skoda says its big cars are 100% recyclable. Paints used are water based and the use of hazardous solvents have been practically eliminated.

The govenment says the industry must go beyond tokenism and develop technologies that are environmentally benign but commercially paying.

Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, says "Subsidising or incentivising is important to create demand but not a long-term startegy. Players should develop technology and  there should be a breakthrough."
 
In the past the Indian auto industry has resisted tougher emission standards. It has had to be kicked and dragged by the Supreme Court and NGOs to adopt natural gas in public transportation. Indian car companies now have the confidence in their research and development capability. The government could help by raising the bar.

Laptop may be allowed as handbag on domestic flights

Domestic air travellers may soon be able to carry a laptop along with a small bag as part of their handbag. Currently the rules allow a passenger to carry only one piece of handbag that can either be a handbag or a laptop.

However, after a meeting with the airlines here on Friday, the Government is considering diluting the rules so as to allow a laptop to be carried as a handbag even if the passenger is carrying other small bag onto the aircraft.

"The situation has changed dramatically since the one-piece of handbag policy was introduced.

The number of security personnel on duty at the airports has increased and congestion at most airports has eased.

"So there could be a case for a review of the earlier decision," sources said.

Mother Dairy catching up with HLL in ice-cream market

Mother Dairy is inching closer to Hindustan Lever Ltd in the Rs 800-crore ice cream market. While Amul reigns in the ice-cream market with a dominant share of almost 35 per cent, HLL's Kwality Walls brand has been hovering around 16-17 per cent volume share as per industry estimates.

Mr Paul Thachil, CEO, Mother Dairy, said, "We are looking at having a 14-15 per cent volume share this year and intend taking our ice creams to the southern markets."

Besides Delhi, Mother Dairy ice creams are currently available in Mumbai and Kolkata.

"The southern markets are dominated by local players in the ice-cream category but we have the advantage of our cold chain and retailer network due to our frozen foods brand of Safal.

"Both the products would require the same kind of temperature band," said Mr Thachil.

India joins the trillion dollar GDP club

It is a proud moment for every Indian. The country has joined a select band of nations with a gross domestic product of over one trillion dollars.

 

The Indian economy hit the one trillion dollar mark when the rupee rose and closed above the 41 mark for the first time in nine years on Wednesday. 

 

To be exact, at 40.90 to the dollar, the Indian economy is valued at USD 1.0026 trillion.

 

The US, UK, Japan, Germany, China, Canada, Spain, Italy, Brazil, and France are the other nations in this elite club. For the current financial year, RBI is estimating a GDP growth of 8.5%.