Pune: The country’s largest commercial vehicle maker, Tata Motors Ltd, has decided to shut production at its Jamshedpur facility for medium and heavy vehicles for three days beginning Thursday to tide over plummeting demand.
”The block closure at Jamshedpur from 6 November to 8 November is to match the production with demand of vehicles produced at the Jamshedpur plant to avoid build-up of inventory either in the company or with our dealers,” a Tata Motors spokesman said on Wednesday.
JM Financial ‘out of Tata Motors rights issue’
Mumbai: FinanceAsia.com, part of a Hong Kong-based financial magazine, reported on Wednesday that JM Financial Consultants Pvt. Ltd is backing out from its agreement to underwrite part of Tata Motors Ltd’s rights issue to raise Rs4,145 crore, but did not give a specific reason.
The investment bank has now agreed to underwrite only a small portion of the 67.8% of one of the tranches in the rights issue. Tata Motors had invested about Rs3,000 crore in the rights issue, while JM Financial had put in Rs300 crore. Tata Motors and JM Financial Consultants did not immediately respond to email and telephone queries.
The rights issue was to raise funds to pre-pay a part of the $3 billion bridge loan taken by the automobile company to acquire the Jaguar and Land Rover brands.
Tata Sons, in addition to its entitlement of 33.4% in the rights issue, ended up buying 84.3% of the tranche with reduced voting shares. It also bought 91.7% of the other tranche of ordinary shares, for which it was the sole underwriter from the start, forking out a combined $739 million, FinanceAsia reported on its website.
The two tranches each consisted of about 6.4 crore shares, it added.
As per the offer document to shareholders, Tata Motors offered 642 million ordinary shares at Rs340 apiece and 642 million shares with limited voting rights, or A-shares, at Rs305 apiece, which commanded one vote for every 10 A-shares. Existing shareholders were entitled to buy both classes of shares on the basis of one ordinary share and one A-share for every six existing shares.
Cabinet may approve highway toll policy
New Delhi: The Union cabinet is likely to approve a new highway toll policy on Thursday that will provide the basic mechanism for fixing toll rates for highway stretches across the country.
According to an official in the highways department under the shipping and road transport ministry, as of now, toll rates are revised every year and highway contractors are compensated in full as per the increase in the Wholesale Price Index, or WPI. He didn’t want to be named.
But under the new policy, only 40% of the WPI will be taken into account while revising the toll rate. This is apart from a fixed component of a 3% increase every year. All two-lane highways will be tolled. If the cost of structures built such as overbridges is more than Rs50 crore, there will be an added component to the basic toll rate.
Around 60 highway construction packages out of around 320 projects awarded under the National Highway Development Programme were “build operate and toll” projects under which the company constructs and earns revenue through user charges.
—K.P. Narayana Kumar
DIPP hires CMIE to compile new IIP series
New Delhi: To compile a new series of the Index of Industrial Production, or IIP, at an early date, the department of industrial policy and promotion, or DIPP, which falls under the Union ministry of commerce and industry, has entered into an agreement with private-sector economy and corporate tracker Centre for Monitoring Indian Economy (CMIE) to collect the data from industrial units, DIPP said in a statement on Wednesday.
Mint had reported this on 4 November. “The renewed effort of the DIPP utilizing the services of CMIE could facilitate the release of the new IIP series at an early date,” the statement said. The new IIP series will be based on 1999-2000 base year and an expanded basket of items. CMIE would not reveal the data it would collect to anybody other than DIPP.
Guidelines for dedicated exchanges for SMEs out
Mumbai:The Securities and Exchange Board of India, or Sebi, on Wednesday released norms for setting up dedicated stock exchanges for small and medium enterprises, or SMEs.
SMEs are currently traded on leading exchanges. Dedicated exchanges for SMEs will be corporate entities and have to demutualize within two years, according to the new norms. These will also need to have a minimum net worth of Rs100 crore with terminals across the country and an online surveillance mechanism to check manipulation. To be recognized as an SME exchange, the exchanges will also have a minimum trading of Rs1 lakh in order. Stocks will be traded by placing orders or quotes and trading members will be registered with the exchange as well as Sebi.
No plan to cut workforce after 12% staff left: DLF
Mumbai: DLF Ltd said it had no plans to cut its workforce after a slump in equities and weaker demand for new homes in a slowing economy led to a 4% drop in Q2 profit.
The number of DLF employees fell 427, or 12%, to 3,266 at the end of September, from 3,693 as of 30 June, according to the company’s website. DLF said it doesn’t plan to hire more people to fill those vacancies.
Ministry asks hoteliers to slash room tariffs
New Delhi: The tourism ministry, on Wednesday, asked hoteliers to slash room tariffs by 10-15%, in order to meet the slowdown in tourism in the country because of the global economic crisis.
This was discussed at a meeting organized between Sujit Banerjee, who took over as the new secretary of ministry of tourism from Shilabhadra Banerjee on 3 November, and five members of the Federation of Hotels and Restaurants Association of India (FHRAI), at the direction of Ambika Soni, minister of tourism and culture, a statement issued by the ministry said.