Cabinet approves changes to SBI Subsidiaries Bank Act

The Cabinet approved changes to the State Bank of India Subsidiaries Bank Act, reports CNBC-TV18.

That will eventually allow the subsidiaries of the bank to implement stock splits and allow demat trading in these shares.

The bill also allows SBI to reduce its holdings in each unit to 51%. Currently, SBI owns stakes ranging from 74% to 100% in the units. The SBI Bill will next be considered in Parliament.

Following the news, shares of SBI subsidiaries like State Bank of Bikaner rose two percent, State Bank of Mysore shares rose 10 percent and State Bank of Travancore shares rose five percent. SBI shares rose 1.7 percent to Rs 1,053.

No service tax on exports: Kamal Nath

Commerce and Industry Minister Kamal Nath has announced the annual supplement to the Foreign Trade Policy. According to the policy, the export target for FY08 stands at USD 160 billion. Nath feels that this policy will help the handloom and handicraft sector.

NK Minda Group to supply auto parts for Rs 1 lakh Tata car

The NK Minda Group will supply auto parts for the Rs 1 lakh small car project of the Tatas even as it looks to shed up to 22 per cent stake to raise around Rs 250 crore.

The Minda Group has also floated a joint venture with a leading European company, Valeo, in which the Indian company has picked up a 37 per cent stake. The rest is with the Valeo Group. The total investment in the company is around Rs 100 crore.

The Minda Group's Managing Director, Mr Nirmal K. Minda, told Business Line that his company has signed a letter of intent with Tata Motors for supply of parts such as switches and horns for the Rs 1 lakh small car. Tata Motors is expected to launch its small car in 2009.

Raising funds

Mr Minda said the company is planning to raise around Rs 250 crore through the private equity route. The total investment over the next few years is expected to be about Rs 600 crore. He said the publicly listed Minda Industries would be willing to shed up to 22 per cent stake to raise funds for expansion of its company. The public holding in Minda Industries is around 27 per cent.

Mr Minda said his group is taking several steps to upgrade its plants in the country to match the quality of international vendors. 'We expect more international vendors to set up their plants in the country, as their customers like Nissan and Renault are setting up huge plants here. Hence, competition among auto parts' suppliers will intensify,' he said.

The group has earmarked about 4 per cent of its annual turnover towards investing in R&D as well as focussing on acquiring companies abroad. 'Such acquisitions will give us access to world class technology, which is extremely important for us to compete globally,' he pointed out.

The N K Minda Group also has a tie up with the Ashok Minda Group for collaborating together in overseas projects. The Minda Group formally split in 1996 with brothers, Nirmal and Ashok forming separate companies.

During the third quarter of 2006-07, MIL posted a 14.25 per cent increase in net profit to Rs 4.11 crore while sales grew 44.76 per cent to Rs 97.55 crore.

BMW to invest 60 mn euro in India

BMW expects to spend 60 million Euros in India over five years

The car maker plans to invest about 20 million euro to set up a Chennai assembly plant.

Sources say that it might reach 80 million euro over the next five years. Around 72 acres of land adjacent to the the car maker's plant has been acquired for the expansion.

Rupee may touch 41-mark: StanChart Bank

Callum Henderson, Head of Currency Strategy of Standard Chartered Bank comments on the rupee's nine-year high.

According to him, the market is surprised by the pace of rupee appreciation. He does not see the rupee rally ending. In his view, it may take a shot at the 41-mark.

When inflation comes down, there may be a correction. He also adds, Indian growth is strong, which is attracting capital flow. High Indian interest rate is attracting carry trade in the rupee.

Courier companies to increase rates?

Ministry of Communications has proposed a minimum rate that courier companies should charge for carrying letters below 150 grams.

The proposed cabinet note has redefined letters, to include all written communication. The note also proposes that parcels up to 150 grams should be sent only via Indian Post and not through courier.

Couriers must charge at least 5 times postal services for parcels over 150 grams. Urgent packages must be delivered at 2.5 times Speed Post rates.

ESPN asked to comply with signal sharing rules

The Telecom Regulatory Authority of India (TRAI) today asked ESPN to immediately restore signals of its sports channel to the Maharashtra-based Shah Cable Network.

The broadcaster has also been asked to comply with TRAI rules and furnish a compliance report within two days.

ESPN had discontinued signals of its sports channel Star Sports, alleging that the cable operator was re-transmitting them to hotels and commercial properties, which was not a part of the contract.

The regulator, however, pointed out that in case of a dispute, the broadcaster would still have to give three- week notice to the cable operator, as well as put out notices, one in a regional language, in two local newspapers.

The same also applies to cable operators, who are not allowed to stop retransmission of any channel without a three-week notice to the broadcaster.

Barclays, ABN AMRO merger plan in 48 hrs

Barclays and ABN AMRO have given themselves 48 hours to agree to a merger after a rival consortium proposed a three-way break-up of the Dutch bank, reports CNBC-TV18.

The Royal Bank of Scotland is keen to talk with ABN about a plan to split the bank between the Royal Bank of Scotland, Spain's Santander and Belgo-Dutch banking and insurance group Fortis. Sources familiar with the matter say ABN will not open its books to the consortium until it has more details on their plans.

Google to buy Doubleclick for USD 3.1bn

Google has agreed to buy Doubleclick for USD 3.1 billion in its biggest-ever acquisition to gain software for creating and measuring internet advertising campaigns.

The acquisition is a windfall for Hellman & Friedman. The San Francisco-based private equity firm had bought Doubleclick for USD 1.1 billion in 2005. Google will pay cash for the acquisition.

The move also extends Google's lead over Microsoft and Yahoo in the USD 29 billion online advertising market.

Major changes in Indo-UAE Tax Treaty

According to sources, there has been a major change in the Indo-UAE Tax Treaty. The tax exemption on capital gains as part of the treaty has been withdrawn. A Limitations of Benefits clause has been introduced in the Indo-UAE Treaty.

India will export mangoes, import motorbikes from US

In an admittedly odd exchange of sorts, India would be exporting its exotic mangoes to the US this season in return for allowing motorcycles from the Milwaukee-based Harley-Davidson Inc's (HOG) of the US to India.

At a meeting on Indo-US Trade Policy Forum here, the Union Commerce and Industry Minister, Mr Kamal Nath, said, "The good news is that our mangoes are going to America and Harley Davidson is coming here."

For Indian fruit growers, the good news has come after 18 years since the US banned mango imports from here on concerns about Indian farmers were using too many pesticides. Instead, the farmers now irradiate the fruit to kill any pests, rendering the mangoes fit for consumption and in keeping up with sanitary standards of US agriculture administration.

Meeting norms

On the motorbike, the Minister's remarks were followed up by the Directorate General of Foreign Trade (DGFT) who issued a notification promptly, permitting import of motorcycles of engine capacity 800 cc or above. The DGFT said the imported motorcycles must meet Euro III emission norms.

BMW Mini in India, by 2009

BMW now comes with a made in India tag and soon they will look at sourcing auto components from India for other markets. There is more good news as BMW plans to drive in its iconic small car - the Mini into India, by 2009.

 

BMW may have been a late entrant into the Indian market, but it is certainly stepping on the gas. The company launched its 3 series last month and expects to sell more than 1,000 vehicles in India this year.

 

Soon, the BMW 5 series, expected to roll out in the next two months.

 

Local assembly of the 3-series has helped BMW price the car at Rs 27 lakh; this even though there is just 10% localisation of the parts.

 

Only the seats for the 3-series and door panels for the 5-series are produced locally. BMW says it is looking at increasing localisation and will look at sourcing auto components for its other plants from India.

 

This 3-series model is expected to constitute bulk of the sales in India. BMW India sold 257 units of completely built cars in 2006. The company will also expand its dealer network to every metro city in the next two years.

Should you still invest in IT stocks?

Everytime the rupee goes up - the fortune of IT companies takes a beating. The last two quarters have been particularly tough - the rupee has gone up by almost 5%. So should one still invest in IT stocks at this juncture with the uncertain US economy and rupee appreciation?

Wipro earns over two thirds of its revenue from the US, so do Satyam, Infosys and TCS. Therefore, every time the rupee appreciates, the revenues of IT companies depreciate.

Analysts estimate that every 1% rise in the rupee reduces profits by 30-40 basis points. Most IT companies buy hedges to protect against currency fluctuation. But here's where the cookie crumbles.

Brokerage house CLSA says - Wipro will be the worst hit amongst IT companies since in the last quarter, it reduced its hedge by 50%. Infosys did so by 4%. But on the other hand, Satyam increased its hedge by 60% and TCS by 14%.

So companies like TCS and Satyam lose less if the rupee rises and if it depreciates - they only forego a premium. So if the rupee continues to appreciate, IT stocks will fast lose currency in the markets.

Dipan Mehta, Member of BSE believes that there is some element of uncertainty, which has come in on account of some specific problems in the industry. According to him, it would be safer to switch to high performing software product companies, which are available at good valuations and with growth prospects.

With IT czar Infosys' earnings barely 24 hours away, Prabhat Awasthi of Brics Securities does not expect a major fall in the stock. He mentions, "We believe business across tier I vendors has been extremely strong and there is really no major sign of slow down. So we think that there is unlikely to be a major fall in this stock post earnings release and guidance release because it's already reacted down from its peak quite significantly."

Even with such negatives playing in the sector, experts like Sangeeta Purushottam of Religare Securities and Dilip Bhat of Prabhudas Lilladher, believe that the IT sector has still the potential to outperform the Sensex and that it can be looked as a defensive bet.

Purushottam says, "The concern in the IT sector has really been the appreciation of the rupee. So as rupee finds some level of stability and we get some guidance from Infosys these will be the key factors to drive this sector. Also the concerns of people are going to be on how the next year will be as there are some emerging concerns on growth slowing down in the US. So these are the key factors, which are driving it, but some of them could settle down. So on balance, if we compare it to the Sensex earnings, this sector still has the potential to actually perform better than Sensex earnings."

According to Bhat, " In times when the markets are very unsure and probably slightly in a bearish phase, technology is always the best defensive sector. But our biggest worry is the strengthening rupee and despite 30-35% volume growth, we have still not seen any reasonable sign of price increase for them. Both the worries remain very strong, but still as what I said, it is at best a defensive sector to play in the current markets and maybe one should just wait for Infosys result particularly because that will set the tone."

Hospitality sector may see Rs 52K cr investment

Over the next two years, close to 80,000 hotel rooms are expected to come up in various categories across the country, according to Mr M.N. Javed, Deputy Director-General, Union Ministry of Tourism.

Currently, India has some 1,975 hotels with over one lakh rooms.

However, it is estimated that there is still a shortfall of about 1,50,000 hotel rooms.

"It is estimated that over the next two years 70,000-80,000 rooms will be added across different categories throughout the country," Mr Javed told Business Line.

Industry experts said that such a development would attract investments to the tune of Rs 52,000 crore.

BharatMatrimony goes in for in-film placement

Though the most popular theme in Indian cinema is love and marriage, matrimonial services don't seem to have zeroed in on this medium to build their brands. But now, in what is probably the first instance, online matchmaker BharatMatrimony.com has tied up with Eros Entertainment's Namaste London for an endorsement and a screen shot.

Mr Uday Zokarkar, Business Head, Bharat Matrimony Centre, told Business Line that the company went in for in-film placement as it played an important role in reaching larger audiences, non-resident Indians included.

"Bollywood's a great connector, and crossover movies especially so," Mr Zokarkar said. Namaste London starring Katrina Kaif and Akshay Kumar, is, among other things, about staying rooted in one's own value systems. This theme sees the heroine's father keen on finding a match from India for his Britain-born-and-bred daughter and putting her profile on BharatMatrimony to find a "nice Punjabi boy" for her.

"Getting their children married is a challenge for parents in families that live outside India," Mr Zokarkar said, adding that the movie reflected this reality that was being borne out in BharatMatrimony's own experience. Hence, the brand fit.

RComm, Sun TV ink pact for mobile content

Reliance Communications has entered into an "exclusive long-term agreement" with Sun Network Ltd to broadcast the company's television content on mobile handsets with GPRS and video viewing capability.

Initially, content from the Sun TV channel will be available to Reliance subscribers.

The company is planning to broadcast other Sun Network channels later.

On a timeframe for accomplishing this, V.G. Somasekhar, Hub Head, Tamil Nadu and Kerala, Reliance Communications, told Business Line that Reliance could launch all 20 Sun Network channels immediately, but was waiting for viewer feedback to determine future broadcasts.

Both companies did not disclose details of investment or revenue sharing involved.

Sebi ready for common accounting system, US SEC has resvns

At the thirty-second IOSCO conference, the annual global conference of market regulators from across the world, which is on in Mumbai currently, most regulators, except the US Securities and Exchange Commission, or US SEC, agreed to a common accounting system.

The International Financial Reporting Standards, or IFRS accounting standards is a common global accounting framework and has been agreed upon by most regulators, but it is the global "Big Brother" US that has reservations.

Market regulators want a common global accounting framework so as to make transactions easier. It is ironical to see that while the Sebi has expressed its keeness to move to the IFRS system, the US SEC is not ready - at least not for full convergence.

Jet takes over Sahara for Rs 1450 cr

Ending months of acrimony and legal disputes, Jet Airways today struck a deal to buy out Air Sahara for Rs 1,450 crore after clearance by a three-member arbitration panel.

"They (Jet and Sahara) have signed an agreement by which Jet takes over all the shares of Sahara for a price of Rs 1450 crores. Rs 500 crore was already paid, Rs 400 crore on or before April 20; the balance in equal annual instalments, payable from March 31, 2008, 2009, 2010, 2011, which will be interest-free. These are the important parts of the transaction, and we have informed the stock exchange," Jet's counsel, Harish Salve announced before the eager media today.

When probed for more, he declared, "The big news is that the two airliners have ended their dispute amicably and it's back in the skies again, as far as Jet is concerned."

On its part, Air Sahara seems to be content too. Air Sahara President, Alok Sharma  told  today that both the parties were happy with the deal and that the adjustments on assets will go back to the promoters.

Jet Airways Chairman Naresh Goyal said this price represents a 40% discount to the originally agreed price. He expressed his conviction in the deal saying, "There is no change in what was said in January, again in March; and I still say that there is no change in the thinking in the commercial sense. Commercially, it was good for the shareholders at that time. Keeping in mind the present condition aviation, it is again going to be very good, as far as the deal is concerned.  What we are doing is going to help the shareholders," he said.

Both, Salve and Goyal refused to divulge anything more, but promised to be more elaborate on the 16th of this month.

The deal was signed after the panel comprising British judge Lord Stein and Supreme Court Justices S P Bharucha and Jeevan Reddy, vetted the draft proposal prepared by Jet and Sahara.

This is the second merger in the country's aviation industry after the two state-owned air-carriers, Air India and Indian Airlines announced their merger last month.

TRAI may bat for mobile customers

The Telecom Regulatory Authority of India could come to the rescue of thousands of mobile phone customers who have been disconnected by operators despite submitting valid verification documents to their respective operators.

Consumer groups have written to TRAI seeking its intervention after a number of mobile consumers complained that the operators left them in the lurch over the past few days.

Mr Anil Kumar of Telecom Watchdog said, "We have written to TRAI citing examples of how consumers who have submitted valid papers have been disconnected. There are quite a few such subscribers on whose behalf we have approached the telecom regulator."

When contacted, senior TRAI officials said that they were examining the complaints and will intervene if required.

Sharing feed with TataSky: Sun TV gets interim stay

Sun TV has secured interim stay from the Madras High Court on the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) order asking it to share its signals with the Direct-to-Home provider TataSky.

"On Thursday (April 5), we filed writ petitions before the Hon'ble High Court, Chennai, challenging the orders passed by TDSAT in the matter of TataSky. The said writ petitions were admitted and the Hon'ble High Court granted an order of interim stay," Mr Y. Anil Kumar, General Counsel, Sun TV Network Ltd, told Business Line.

Earlier on March 19, the TDSAT in an interim order asked Sun TV to provide all its 20 channels on a-la-carte basis to TataSky at 50 per cent of its declared cable tariff.

The DTH service provider had also filed a petition in the Delhi High Court but later withdrew the case after the TDSAT took up the petition.

TataSky had contested Sun TV's decision not to provide signals to the DTH operator saying that it was resulting in a loss for the company.