Deadline for PAN card for MF investors extended to Dec

Market regulator SEBI has changed the rules again.

 

Now you don't need to possess a PAN card by the 2nd of July, if you want to invest in Mutual Funds. That deadline has been pushed to the end of December. But now, you must show that you have applied for a PAN card. But if you're applying for micro-pension, you don't even need to show that.

 

But the mutual fund industry feels the need for proof of application will dampen retail interest. 

 

AP Kurian, Chairman, AMFI says, "This would impact the momentum and interest of the common investors particularly the low income group and those who live in the tier two and tier three cities."

 

The mutual fund industry had been lobbying hard for a relaxation of the deadline, as it feared it would lose out heavily to ULIPs who have no such requirement. Moreover, with the industry trying hard to penetrate deeper into lower income groups, a mandatory pan would have been a deterrant.

Women's wear looking westwards?

Women's outfits seem to be looking westwards. After floundering for years, the Rs 400 crore Western women's wear segment seems to be ready for takeoff. It could triple in three years.

 

It's not just workwear. Mudra Garments' Van Heusen brand has garments for various occasions in its eight-month-old Western women's wear range. The revenues are small, but the company is betting big with exclusive outlets for women and selling its brand at department stores.

 

Hemu Javeri, President, Madura Garments said, "For Van Heusen, we would like it to be 5-7% in the next year or two, in the overall business. The main hurdle is distribution and if we get more distributors, I do not see why in five-seven years' time, the women wear is as big as men's wear. That is how it is abroad."

 

And as more female wardrobes give space to western wear, brands like Excalibur, Proline and Zodiac are sewing up entry plans.

 

In the past four to five years, men's wear brands like Allen Solly and Arrow, which expanded into women's wear, have not quite taken off. Experts say that is because the fits and styles were stuck in the trappings of men's wear.

 

Other players like ITC Wills and Benetton pinch the pocket. Retailers like Westside and Shoppers' Stop offer in-house labels for this price-conscious customer

 

Neeti Chopra, Head, Marketing, Westside said, "They have to keep thinking of the value of what they are buying because always at the back of their minds, they want to buy more. Consequently, price plays a very big factor in their minds."

 

A Technopak study shows that Western suits, coats and blazers grew best value wise in the segment. Trousers, skirts, tops and T-shirts followed.

 

It is a tough task for women's apparel companies. They need to constantly launch fresh designs as many women prefer exclusive designs to mass-produced ones. Besides, women are more prone than men to switch brands if an outfit catches their fancy.

Mumbai, a global financial hub?

Maharashtra become the first Indian state to hold its own investment forum in New York this week, reports CNBC-TV18.

Many Mumbaikars say they feel at home in New York, finding common ground in geography, soaring skylines, the daily bustle and of course, the frenetic pursuit of money. And some prominent Mumbai residents currently in the Big Apple for the Maharashtra Investment Forum held at the Metropolitan Club, found the admiration is mutual.

Said Vilasrao Deshmukh, Chief Minister, Maharashtra, "They feel it is a second home. That feeling is already there because of the cosmopolitan culture of Mumbai and English speaking population."

Over 180 delegates grilled the state government officials and industry experts on some of the major hurdles faced by foreign investors in Maharashtra.

Ajit Ranade, who is the Chief Economist, Aditya Birla Group emphasised on the need for infrastructure. He said that, "The main focus is on infrastructure, power, roadways, ports - everybody seems to be aware of port congestion at JNPT."

And on the question of Mumbai emerging as a global financial hub, Maharashtra's Chief Minister acknowledged there was still work to be done.

Said the CM, "We have to do more on infrastructure. Slums and lot of encroachments need some time and some more money."

Maharashtra is the first Indian state to hold its own Investment Forum in New York, on the lines of the annual India Investment Forum.

When the organisers started marketing the Maharashtra Investment Forum a few months ago, some investors who'd never heard of the state, wanted to know if Maharashtra was a developing country. Now thanks to the positive response, the event is likely to return to New York next year.

M&M to partner Nissan Renault' for $3K car project

Nissan Renault's Carlos Ghosn said today that Mahindra & Mahindra would be the natural partner for the company's 3000-dollar car. The project was at a preliminary stage, and for now, it remains focused on selling its low cost Logan in India.

Atlantis Lands Safely in California - The landing coverage

The following events took place prior to the start of today's landing
coverage:

At 10:25 a.m. EDT, Atlantis was given the go-ahead from Mission Control to
close the 60-foot-long payload bay doors in preparation for landing.

Astronaut Steve Lindsey is in the air to provide weather reconnaissance at
the Shuttle Landing Facility at Kennedy, relaying weather information to
Mission Control in Houston. Astronaut Scott Altman is ready to take off in a
T-38 jet aircraft at Edwards to monitor the weather conditions for the
secondary landing site.

Atlantis commander Rick Sturckow was instructed to go for "Ops 3" at 10:42
a.m. This action transitions the software to the onboard computers that is
used for entry and landing.

The Atlantis crew members donned their orange launch-and-entry suits and
after suiting up, will take their assigned seats for reentry. Commander
Sturckow and Pilot Lee Archambault have been seated and are going through
their checklists.

Mission Control is discussing the "go/no go" for fluid loading. This means
the astronauts will drink large amounts of fluids to aid them in their
re-acclimation into Earth's gravity. Each crewmember will drink
approximately 40 ounces of water -- about eight ounces every fifteen minutes
-- and take salt pills to help them increase their fluid volume. Crewmembers
will drink chicken consume, orange-aid or water.

12 p.m. - Welcome to the coverage of the landing of Space Shuttle Atlantis,
coming to you from the NASA News Center at Kennedy Space Center in Florida.
The orbiter is set to land today after a challenging but successful mission
to the International Space Station.

Both landing opportunities were waved off yesterday due to possible
thunderstorm activity over the Florida landing site. There are five landing
opportunities today; two at Kennedy and three at Edwards Air Force Base in
California.

12:07 p.m. - Mission Control has waved off the first landing attempt at
Kennedy. There are potential showers in the area of the landing facility
violating weather constraints.

12:10 p.m. - The second landing opportunity at Kennedy would be at 3:55 p.m.
and 3:49 p.m. EDT at Edwards. The flight controllers are weighing both
options with Kennedy being the preferred landing site.

12:20 p.m. - Space Shuttle Atlantis is 213 statute miles above the Pacific
Ocean in orbit around the Earth.

12:53 p.m. - Astronauts Steve Lindsey and Scott Altman have taken to the
skies on the east and west coast to monitor weather conditions for both
Kennedy and Edwards landing opportunities.

Atlantis has two different runway options when landing at Kennedy: Runway 33
at the Shuttle Landing Facility is used when the orbiter comes in from the
southeast and Runway 15 is used when it comes in from the northwest. The
runway determination is largely based on wind direction and speed.

1:11 p.m. - Altman is flying a Shuttle Training Aircraft, a modified
Gulfstream business jet. The aircraft is built to mimic the orbiter's glide
to Earth. He can then relay to Atlantis what to expect if the orbiter should
land at Edwards today.

1:25 p.m. - If landing is scheduled for Edwards Air Force Base, a ferry
flight to bring the orbiter back to Kennedy for processing could take place
after about 7 days.

1:35 p.m. - Mission Control has given the crew the go ahead for fluid
loading.

1:50 p.m. - After assessing the weather data flight controllers had to wave
off the second landing opportunity for Kennedy. The forecast for Edwards
appears to be clear.

1:55 p.m. With NASA planning to land Atlantis at Edwards Air Force Base in
California, the orbiter would fire its Orbital Maneuvering System engines at
2:43 p.m. EDT, 11:43 a.m. PDT.

1:57 p.m. - The landing time for Edwards would occur at 3:49 EDT, 12:49 PDT
with deorbit burn a little less than an hour prior.

2:12 p.m. - Fifty space shuttle missions have landed at Edwards Air Force
Base. The most recent was STS-114, when Discovery landed at the California
base in 2005.

The orbital maneuvering system engines are crucial for entry. The two
engines housed in the pods at the end of the orbiter, act as a brake in
space that allows the orbiter to fall into the atmosphere back to Earth.

2:16 p.m. - Atlantis will shortly be given the command for deorbit burn
scheduled for 2:43 p.m. EDT. The deorbit burn will slow Atlantis by 200 mph,
causing it to fall out of orbit and begin the descent for landing.

2:19 p.m. - Mission Control has given Atlantis the go for deorbit burn!

2:23 p.m. - There are less than 20 minutes until the deorbit burn for
Atlantis. The orbiter is being reoriented so its tail is in the direction of
travel.

2:30 p.m. - With less than 15 minutes left to go before the deorbit burn,
Mission Control is in constant communication with astronaut Scott Altman,
who is flying the Shuttle Training Aircraft, regarding the weather at
Edwards.

2:43 p.m. - DEORBIT BURN! Flight control confirms Atlantis' two engines are
burning normally as the vehicle begins its descent toward Earth. During the
burn, Atlantis flies upside down and backwards to decrease its speed.

2:46 p.m. - The orbiter will perform a series of roll maneuvers, banking
first to the right and then to the left to help slow down its speed as it
descends for a landing.

2:48 p.m. - The convoy of landing support vehicles is moving to the staging
point on the runway at Edwards.

2:53 p.m. - The Atlantis crew is now maneuvering the shuttle to the best
position for landing on Runway 22 at Edwards. The orbiter is less than an
hour from touchdown.

2:56 p.m. - The crew of STS-117 will be dumping excess fuel overboard.

3:05 p.m. - After nearly two weeks in space, Atlantis and the crew are
headed home.

There are six main events in the landing sequence: deorbit burn, entry
interface, maximum heating, exit blackout, terminal area and approach and
landing.

3:10 p.m. - All APUs, or auxiliary power units are working normally. These
units power pumps used to power Atlantis' hydraulic systems.

3:18 p.m. - Atlantis is approaching entry interface, which usually takes
place at an altitude of about 80 miles and more than 5,000 statute miles
from the landing site. At this point in the landing phase, the orbiter
begins to feel the first effects of the Earth's atmosphere.

Sunita Williams is riding back to Earth lying on her back. She has lived in
the weightless conditions aboard the International Space Station since
December. It is common for astronauts returning from long-duration missions
to recline during the return to Earth to ease the transition back to
gravity.

3:23 p.m. - Atlantis is traveling 25 times the speed of sound.

3:25 p.m. - Atlantis is traveling at 16,500 miles per hour and will perform
a series of roll maneuvers, banking first to the right and then to the left
to help slow its speed as it descends toward landing. Early in this segment
of reentry, the orbiter's orientation is controlled by the aft steering
jets.

3:29 p.m. - During reentry and landing, the orbiter is not powered by
engines and flies like a high-tech glider, relying first on its steering
jets and then its aerosurfaces to control the airflow around it.

3:35 p.m. - Atlantis is traveling at a speed of 15,000 miles per hour.

3:38 p.m - Atlantis is at 165,000 feet and traveling at 10,000 feet per
second.

3:43 p.m. - Commander Rick Sturckow is now controlling Atlantis and he has
Runway 22 in sight.

3:49 p.m. - Touchdown! Atlantis has safely landed at Edwards Air Force Base
in California.

3:50 p.m. - Atlantis' wheels have come to a stop. Welcome home, Atlantis,
after completing a journey of more than five million miles.

3:53 p.m. - The crew will now work through a checklist for shutting down the
orbiter and "safing" the vehicle.

3:58 p.m. - The external tank umbilical doors have been opened.

4:02 p.m. - The crew has been given the okay to begin powering down the
onboard computers and will be able to depart the orbiter in about 45
minutes.

4:06 p.m. - The orbiter's three APUs have been shut down.

4:08 p.m. - The astronauts have been cleared to remove their orange
flight-and-entry suits. Work to safely shut down Atlantis' systems is
continuing.

4:11 p.m. - The recovery operations convoy has arrived. When the vehicle is
considered safe from all potential hazards and free of toxic gases, the
purge and coolant umbilical access vehicle moves into position at the rear
of the orbiter.

4:16 p.m. - The crew transport vehicle has pulled up to the orbiter. There
are beds and comfortable seats inside so the astronauts can receive medical
checks immediately after returning to Earth.

4:22 p.m. - The main gear (rear wheels) touchdown was at 3:49:38 p.m., nose
gear was at 3:49:49 p.m., wheels stop was at 3:50:48 p.m. for a total
mission time of 13 days, 20 hours, 12 minutes and 44 seconds.

Now that Atlantis has landed, it will have about six months to be readied
for its next flight: STS-122. It will again fly a new segment to the
International Space Station.

4:43 p.m. - Once Atlantis is determined "safed," all crew members will exit
the orbiter and enter the crew transport vehicle, a modified "people mover."
There will be a physician on board to facilitate the brief medical exams.

4:56 p.m. - The crew has entered the crew transport vehicle and are
undergoing their medical checkups.

5:10 p.m. - Some of the crewmembers will take their typical walk around the
orbiter for one last look at the ship.

The astronauts and their families will be flown to Houston, Texas, for their
well-deserved reunion after a very successful mission.

'Sivaji' is box office boss

It was the biggest ever release in recent times. Touted to be the most expensive Indian film ever – the recently released Rajinikanth starrer 'Sivaji' created a lot of noise. And as the earnings at the box office shows, the hype might have been worth it.

 

A week after the release of 'Sivaji', there are still no tickets available at some theatres in Chennai. As the boards outside declare, tickets are sold out till June 26. This despite the fact that 'Sivaji' has released in a record 18 screens in the city.

 

Mahesh a Rajini fan said, "Tickets are not available. But we'll try to get it somehow and watch it."

 

Another Rajni fan, Christopher said, "You have to wait for at least three hours to get hold of a ticket and you have to book it at least two days in advance."

 

Yet another Rajni fan, Imtiaz said, "I went to three theatres, but still no tickets."

 

'Sivaji' opened at over 850 screens and so the expectations from the producers are already high. The movie opened with a record 600 plus prints in Tamil Nadu alone.

 

Meanwhile, 160 of them were distributed in the US, the UK, Malaysia, Singapore and Australia. Over 320 prints have been released in Telugu for Andhra Pradesh.

 

According to reports, 'Sivaji' has become the first-ever Tamil film to find a place in the UK Top 10 at No. 9. Filmed at a budget of Rs 85-90 crores, the revenue figures projected for 'Sivaji' from Tamil Nadu alone is 60-70 Crores. It's estimated to have grossed over 25 crores over the last one week in the state.

 

Overall, the film could be expected to gross over 150 crores from ticket sales alone. The producer's strategy to release a large number of prints, so as to rake in revenues within the first few weeks of release, seems to have paid off.

 

MS Guhan, the producer of 'Sivaji' said, "Our role-model here is not to run for a long time to take revenues the way Kollywood or Bollywood is doing today. We want to change the perception and say, if you run it for so many days, it doesn't make a difference, but it's how the revenue comes back to the distributors and exhibitors."

 

It's a week after the movie hit the theatres and 'Sivaji' is still running to packed houses even now. Moreove, by the looks of it, the film is sure to break some records at the box office.

Six Indian companies make it to BusinessWeek's top-100

Six Indian companies have made it to the 2007 Information Technology 100, BusinessWeek's ranking of the top 100 global technology performers. The list includes companies in Web retail, telecom, wireless, and technology product and software services.

The Indian companies are: Bharti Airtel, Tata Consultancy Services, Infosys, Wipro, Satyam Computer Services and HCL Technologies. The US-based Cognizant Technology Solutions, which has most of its development centres in India, is also in the list. This year cable companies that expanded into telecom were also included, says BusinessWeek on its Web site.

Bharti was the top ranking Indian company in the list, but dropped to 14th this year from the 10th place last year. Satyam dropped to 73 from 48 last year while Infosys, TCS and Wipro have moved up, and HCL made it to the list this year.

TCS moved to 23rd position from 34th last year; Infosys moved 12 places ahead to 30th and Wipro eight places ahead to 49. Cognizant was ranked this year at 70, up from 84th position last year, says the report to be published on July 2 issue of BusinessWeek.

Tata Indicom launching Net radio

Tata Teleservices said it will be offering Internet radio services with its Tata Indicom mobile phone service.

As many as 41 international and domestic radio stations will be available on Tata Indicom phones across all Tata Indicom circles, even in those markets where FM services have not commenced, said a statement from the company.

This service is currently available on the Motorazr V3C, Samsung Wideo and Motorola World Phone handsets, at a subscription charge of Rs 25 for 15 days.

`Tata Indicom Mobile Internet Radio', will offer live streaming world radio-casts in English, Hindi, Telugu, Tamil and other international languages with MP3 quality sound, according to the company.

The product is easy to use and the wireless technology doesn't even get in the way of a musical experience, said Mr Pankaj Sethi, President of value added services, Tata Teleservices Ltd.

"We have identified mobile entertainment as a key growth driver and we are confident that this service will help deliver an amazing radio experience to our customers," he added.

The service offers international music, news and sports radio stations, including Bloomberg, BBC, CNN, Fox Radio, ESPN Radio and Seattle WM.

Is SBI losing the top spot?

SBI may be fighting a losing battle to retain the spot as India's largest bank with the government. Is SBI losing the top spot?

 

SBI is already second in market capitalization. The pre-issue net worth of ICICI stands at Rs 24,313 cr ore. Its post-issue net worth will be Rs 45,000 crore.

 

The net worth of SBI for FY07 stands at Rs 31,300 crore. The SBI may soon cease to be the largest bank in assets as well, given capital crunch.

 

SBI's current CAR is 12.33% and its current capital is Rs 46,000 crore. Its requirement for Basel-II is 1% or Rs 6,000 crore.

 

The government's stake in the SBI is 59.7%. However, it can be cut to 55%. Its fresh shares issuable are 4.5 crore shares. Its capital at current market price is approximately Rs 6,000 crore.

 

SBI's additional loans that may be sanctioned, stand at Rs 48,000 crore and its loan growth in FY07 is Rs. 75,000 crore

Tata Motors launches Winger, Magic

Tata Motors made an entry into the small capacity rural and urban passenger transportation segment with the launch of two new products. The first, a passenger version of the Tata Ace christened Magic and the other, a maxi-van modelled on Renault panel van `Traffic' called the Winger.

While the two new vehicles are diesel products, a CNG version of the Magic will come into the market before the end of the fiscal, Mr Prakash Telang, Executive Director, (Commercial Vehicles), Tata Motors said.

The Magic is a frills-free, last mile affordable transportation solution for the rural commuter that can transport four to seven passengers and baggage. The 9-13 seat Winger, on the other hand, modelled on the smart maxi-van and comes in four basic versions ranging from the Standard to Luxury. It can have applications for both rural and urban transportation as well as be used as ambulances and carrier vans.

Phased launch

Asserting that Tata Motors wanted to change the way people travelled in the country, Mr Telang said the company had decided to introduce the vehicles in a phased manner, starting with Maharashtra and Gujarat initially and subsequently rolling them out nationally.

The Magic has a tubular construction, rexine windows and two gates, one at the back and another on the left side. It meets BS III emission norms and is backed by a 36,000 km/12 month warranty and is currently available in a single model priced at Rs 2.6 lakh (ex-showroom, Pune). It will currently be sold through the existing chain of commercial vehicle dealerships.

Dealership chain

"One cannot rule the option of selling the product through the passenger car dealership chain in the future," Mr Telang added.

The larger Winger offers four basic variants - Standard, Deluxe and Luxury in the flat roof variant and a High Roof deluxe model. It has a `monocoque' construction (for better ride comfort) and a flexible seat configuration that can seat nine to 13 passengers. The vehicle comes with a 1.5 lakh km/18 month warranty, meets BS III norms and comes at an ex-showroom price tag ranging from Rs 4.70 lakh to Rs 6.55 lakh.

 

'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.