Bangalore: Tata Communications Ltd, an overseas carrier controlled by India’s Tata group, agreed to acquire 50% of China Enterprise Communications Ltd as part of a venture to sell computer-network services in China.
Tata Communications International, a unit of Tata Communications, will buy the stake from investors including China International Trust and Investment Corp., the Mumbai-based company said in a statement to the Bombay Stock Exchange (BSE) on Wednesday.
The investment in China is part of a plan to spend as much as $2 billion (Rs8,580 crore) over three years to expand Tata Communications’s businesses in India and overseas, Srinivas Addepalli, senior vice-president for corporate strategy, said in a telephone interview. The carrier is interested in raising its stake in the Chinese venture, he said.
“Surely, as and when regulations ease, we as the operator would want to increase our stake and they as the financial investors may be willing to sell their stake to extract some returns beyond the current stake sale,” Addepalli said. Current regulations don’t allow more than 50% foreign holding.
Formerly known as Videsh Sanchar Nigam Ltd and acquired from the Indian government, Tata Communications had on Tuesday said profit in the fiscal year ended 31 March fell 41% to Rs304 crore. Revenue declined 12% to Rs3,450 crore.
In China, the operator will sell services including virtual private network or VPN connections that work on the Internet Protocol standards, Addepalli said. He declined to give financial details. Bloomberg
Tata Communications shares fell Rs13.05, or 3%, to Rs420.8 at the close of trading in Mumbai. BSE’s benchmark index, Sensex, dropped 1.8%.
India stocks not safe from inflation
Hong Kong: Mainland China, Taiwan and Hong Kong are best placed in Asia to face accelerating inflation while Thailand, Indonesia and India are the worst positioned, Morgan Stanley said.
The brokerage has moved “overweight” on Taiwan’s stocks, suggesting investors hold more of the country’s shares than are represented in benchmark indexes, analysts led by Malcolm Wood said in a research note on Wednesday. “China is best positioned in the region, given its absorption of record oil prices, decelerating food inflation, strong currency and low core inflation,” the analysts said. “Thailand is suffering from its high oil intensity, rapidly accelerating food inflation, and rising core inflation.” Bloomberg
Sebi to relook mutual fund regulations
Mumbai: Capital market regulator Securities and Exchange Board of India, or Sebi, plans to set up an advisory committee for mutual funds to re-look regulations governing the sector, a top official said.
“We are planning to set up an advisory committee for mutual funds within a month,” Sebi chairman C.B. Bhave said at a mutual fund summit. The committee would be on the same lines as that for primary markets, he added.
“We, as a regulator, are also looking at mutual fund regulations. The appointment of the advisory committee is a step in the direction of mutual fund regulations,” he said. “It is quite some time since we made those regulations and a lot of changes have taken place in the mutual fund industry since then.”
The Sebi chairman said a platform similar to the depository services for the securities market should exist for mutual funds as well. PTI
Citicorp Banking sells stake in Lupin
Mumbai: Indian drug maker Lupin Ltd said on Wednesday Citicorp Banking Corp. has sold 1.74 million shares, reducing its stake in the drugmaker to 4.25%. Shares in the company ended at Rs700, down 2.6% in a weak Mumbai market. Reuters
US to lag in tech growth, PwC says
New York: Watching television, gaining access to the Internet and listening to music on mobile phones will be a viable business in the next few years, says a study by a consulting arm of PricewaterhouseCoopers, or PwC. But while marketers and advertisers have much to cheer in the coming digital revolution, the fastest growth will be in emerging markets, with the US lagging behind.
Overall global consumer spending both online and by mobile phones is expected to grow 21.8% annually, to $234 billion by 2012, according to the study that PwC expects to release on Wednesday. By contrast, spending in the US will grow at a rate of 16.1%, to $75 billion. The firm said there was more opportunity for Internet and mobile entertainment growth in countries like India and China because people there would use phones as a primary source of entertainment.
Stefanie Kane, a partner in the entertainment, media and communications consulting firm, said old media companies would be big players in the digital revolution. “The world is not going to change dramatically,” she said. “The established media companies will dominate revenues for the future.” NYT
Plethico Pharma eyes companies in US, Brazil
Mumbai: India’s Plethico Pharmaceuticals Ltd plans to buy one company each in the US and Brazil in the next couple of years, spending a total $150 million, a top official said on Wednesday.
Plethico plans to bid for a “nutraceutical” firm in the US, and has also signed a preliminary confidentiality agreement with another nutraceutical firm there, Sanjay Pai said, adding the aim is to strike one deal for $80-$100 million.
“There are so many good deals coming our way in the US right now in the nutraceuticals space,” Pai said. “People have started approaching us for acquisitions after Natrol.”
Last year, Plethico acquired US-based branded nutritional products maker Natrol Inc. for about $81 million. Nutraceuticals are food extracts used as dietary supplements.
In Brazil, Plethico is in talks with two companies, one a herbal products maker and the other a maker of allopathic and over-the-counter products, Pai said. One of these firms could be acquired for about $50 million, he added. “Brazil is a great market. It offers great volume and decent margins,” he said, adding the market offered 15-20% earnings before interest and tax margins. “We have been looking for acquisitions in the US, Brazil and the UK. Somehow, there have been no juicy deals forthcoming in the UK so far.” Reuters
Unitech to develop tech park in Madhya Pradesh
Bhopal: The Madhya Pradesh cabinet has decided to appoint Unitech Ltd as its developer for a software technology park here. The cabinet, presided over by chief minister Shivraj Singh Chouhan, took this decision late on Tuesday, an official release said.
The government has allotted 219.63 acres to its information technology department in Barwai village near the airport here to set up the software technology park. It has also appointed Madhya Pradesh Electronics Development Corp. as the nodal agency for this, the release said. PTI
Dish TV posts March quarter loss
Mumbai: Dish TV India Ltd, India’s top private direct-to-home satellite operator, posted on Wednesday a net loss of Rs1.15 billion ($26.8 million) for the quarter that ended on 31 March on gross operating revenue of Rs1.36 billion. Comparable figures for the year-ago period were not immediately available. The board also approved raising Rs11.4 billion through a rights issue. Reuters
Deutsche Bank’s profit rises in FY08
Mumbai: German lender Deutsche Bank AG has clocked a 77% jump in its profit after tax, or PAT, at Rs386.11 crore in the fiscal year to March as against Rs218.22 crore in the previous fiscal.
Total income rose 51% at Rs2,461.71 crore as against Rs1,625.37 crore, while the total assets of the bank increased 40% to Rs24,713 crore in the fiscal year from Rs17,715 crore in the previous year, a statement said here on Wednesday.
Deutsche Bank’s total advances increased 81% to Rs8,960 crore from Rs4,945 crore, while deposits surged by 97% to Rs13,755 crore as against Rs6,978 crore last fiscal.
The bank increased its retail banking and credit cards clients in the country to over 5,20,000, up 115% over the previous fiscal. PTI
Aurobindo Pharma quarterly net dips
Mumbai: Drug maker Aurobindo Pharma Ltd posted a 2.7% dip in quarterly stand-alone net profit due to higher taxes, depressing the shares. For the quarter that ended on March, Aurobindo’s net profit was Rs760.8 million, after taking a hit of about Rs190 million in taxes due to transfer of dossiers to the company’s European unit, said a company official declining to be named.
The profit for the year-ago period was Rs781 million. The official also forecast revenue of $800 million (Rs34.32 billion) for the year to March 2009, up from Rs25.52 billion in 2007-08. “With higher capacity utilization for formulations, a higher focus on lifestyle disorder drugs and a tapering off of our investment phase ... we should be able to touch $1 billion in revenue by fiscal 2010,” he added.
Shares, which fell as much as 6.4% to a day’s low of Rs325.50 after the results, provisionally ended 5% lower at Rs330.40 in a weak Mumbai market. Reuters
Shyam Group, Spanco in JV to buy Spectranet
New Delhi: Telecom firm Shyam Group and IT services company Spanco Telesystems and Solutions Ltd have formed a venture to buy Spectranet Ltd, the Internet service provider division of Punj Lloyd Ltd, for an undisclosed amount.
Citycom, the joint venture company, also announced an investment of Rs500 crore in the next two years to expand services in 10 more cities. Spectranet currently offers services in Delhi, Mumbai and Bangalore.
Commenting on the development, Udit Mehrotra, director of the newly formed JV, said, “We see next generation wire-line, broadband and wireless networks playing a key role in the changing socio-economic structure of India. The acquisition is our endeavour to propel and lead this transformation in the country.” Spanco Telesystems chairman Kapil Puri said, “This joint venture with Shyam’s promoter to acquire Spectranet aligns with the business model and expansion plans of our company. This will mark Spanco’s entry into telecom networks operations, thus presenting an opportunity to leverage the current mobile telecom and broadband boom.” PTI
Sistema gets spectrum in four states
Moscow:AFK Sistema, Russian billionaire Vladimir Yevtushenkov’s holding company, said it obtained the right to radio frequencies in four more regions of India, giving it access to more than 1 billion people. Sistema’s Shyam Telelink Ltd gained frequencies in Gujarat, Karnataka, Kolkata and Orissa regions, where 160 million people live, Moscow-based Sistema said in an emailed statement on Wednesday.
Subsidiary “Shyam Telelink now has spectrum in 19 telecommunications circles, covering 27 Indian states with a population of 1.01 billion people,” Sistema said. Sistema plans to spend as much as $7 billion building a national network in the second-most populous country. Bloomberg
Pascal Lamy slams new US farm bill
Geneva: The head of the World Trade Organisation criticised US legislation on Wednesday that gives hundreds of billions of dollars of subsidies to farmers and said only a global trade deal could redress the balance. “Those who criticise US agricultural policy, quite rightly in my view, need a WTO deal if they want to change things and not just criticise,” WTO director general Pascal Lamy told Swiss French-language radio.
“The Americans have just voted again on massive agricultural subsidies; this is the best proof, if proof were needed, that the only way to change the US positions on agriculture and subsidies is a deal at the WTO,” Lamy said.
The US House of Representatives in mid-May passed a mammoth $290-billion farm bill with a veto-proof majority, which includes subsidies for farmers and help with food bills for the needy. US president George Bush had vetoed the bill but to no avail due to the veto override by the Congress. The WTO’s 152 member states remain mired in an impasse over the Doha round, which was failed to make significant headway since it was first launched in the Qatari capital in 2001. Talks are stuck due to disagreements between rich and poor countries over the removal of subsidies and trade barriers for agricultural and industrial products. AFP
Floods affect 4 districts in Bengal; 54,000 homeless
The monsoons have just arrived, and already two districts of West Bengal—East and West Midnapore—are under water. Some 700 mm of rain in the past three days has flooded the districts, affecting around 1.6 million people and killing at least five, the state’s finance minister Asim Dasgupta said on Wednesday.
These two districts normally receive around 1,600 mm of rain every year, according to Dasgupta. “This is the first time these two districts have experienced such heavy rain so early in the season,” he said.
Two other districts, Purulia and Bankura, were also affected by heavy rain but were not flooded.
After air force conducted an aerial survey of the two worst affected districts on Wednesday, the state government rushed three columns of army, or around 300 personnel, to rescue the marooned.
About 54,000 people might have lost their homes, said the state government, which claimed it had so far rescued 40,000. Dasgupta, who sanctioned Rs2.5 crore for relief work, described the situation as “grim”.
Distribution of relief material will start on Thursday.
Heavy rain has also affected thermal power plants in the state. Five of the six units of the 1,260MW power plant in Kolaghat were shut because of flooding. Peak hour shortage in the state could climb to 500MW, said Sunil Mitra, principal secretary of the power department.
The depression over Gangetic West Bengal that caused the heavy rain over the past three days had weakened and moved north-west towards Jharkhand on Wednesday. But, all rivers in East and West Midnapore are still flowing above danger level. (Romita Datta (Kolkata)