Bangalore: G. R. Gopinath, the founder of Air Deccan, India’s first budget carrier, will invest $200 million, or Rs800 crore, in a new cargo airline and logistics firm, Deccan Cargo, that will begin operations by the the end of the year.
Gopinath’s announcement comes after months of speculation about his next move after his company Deccan Aviation Ltd was acquired by the Bangalore-based UB Group, which also owns Kingfisher Airlines Ltd. The two airlines have merged and will be known as Kingfisher Airlines Ltd once the Karnataka high court gives its nod.
New venture: G.R.Gopinath, founder of Air Deccan. (Photo: Hemant Mishra/ Mint)
Gopinath said he would own 100% of Deccan Cargo, which will start operations with around nine A-310 aircraft it has leased. The money will come from his personal funds, he added.
“It is a totally different business. Here we need to deliver goods from one place to another in 24 hours,” said Gopinath, now vice-chairman of Deccan Aviation, who will run the cargo airline independent of the existing carrier.
Jude Fonseka, a former managing director of Federal Express Corp., or Fedex, has been made the chief executive of the cargo airline, which is setting up warehouses and bases in different parts of the country. “In a country as large as India, logistics is still a nightmare. There is huge opportunity for a integrated logistics provider,” said Gopinath.
Several companies are looking to tap growing demand for air cargo movement. Jet Airways (India) Ltd and Kingfisher Airlines intend to start dedicated cargo operations, and the business has attracted several new entrants such as Bangalore-based Quikjet Cargo, Hyderabad-based Flyington Freighters Ltd, Mumbai-based Avicore Aviation Pvt. Ltd and New Delhi-based Aryan Cargo Express Pvt. Ltd.
India’s international and domestic cargo market in 2006 was 1.5 million tonnes, up 10% from the previous year.
Gopinath, who owns around 8% stake in the merged Kingfisher-Deccan entity, said he would sell some stake to raise funds for his cargo airline.
Israel firm seeks stake in Tata Teleservices
Jerusalem/Bangalore: Koor Industries Ltd, an Israeli holding company with interests in agrochemicals and telecommunications, is seeking to expand its international presence with the acquisition of a “significant minority holding” in India’s Tata Teleservices Ltd.
Koor sent a non-binding letter of intent to invest 2 to 2.5 billion shekels (Rs2,308 crore) in the Indian telecommunications company, Koor said in a statement to the Tel Aviv Stock Exchange on Thursday. There’s no certainty a deal will be reached, Koor said.
Tata Teleservices, Tata group’s closely held mobile phone operator, plans to raise more than $1 billion (Rs4,000 crore) by selling as much as 30% of the company to private equity firms or other investors, ‘The Economic Times’ reported on Thursday. Rajeev Narayan, Tata Teleservices’s vice-president, corporate communications, said the company doesn’t comment on market speculation. Spokeswoman Suroor Hussain had earlier denied the report, saying the company had no plans to sell a stake.
BlackBerry: foreign cos may monitor content
New Delhi: The government may hire foreign firms to monitor content sent through BlackBerry email service after the technology licensor Research In Motion Ltd (RIM) said it does not have any system to encrypt communication.
“RIM says they do not have any system by which the contents on BlackBerry could be encrypted. Some other companies are coming forward to assist and we may seek their help,” officials in the government said.
Blackberry enables subscribers to receive and send emails in the form of SMS through mobile phones. The service has come under official scanner, as communication sent using it is routed through servers located abroad and cannot be intercepted by security agencies here.
The officials did not name the company that has offered to help monitor BlackBerry content.
L&T likely to sell its ready-mix cement unit
Mumbai: India’s biggest engineering company Larsen and Toubro Ltd (L&T) may sell units including the ready-mix cement division, chairman A.M. Naik said.
A sale would not happen this year, Naik told ‘CNBC TV-18’ on Thursday.
Holcim Ltd, the world’s second biggest cement maker, has been contacted by L&T, spokesman Peter Gysel said on Thursday.
L&T, based in Mumbai, aims to sell units that are not part of its main engineering and construction business. The company last December separated the ready-mix unit into L&T Concrete, which has annual sales of Rs1,000 crore, and it sold a cement-making division to Grasim Industries Ltd in 2004.
“In principle we are interested in such opportunities,” Holcim’s Gysel said. “It is too early to say more.”
Lafarge SA of France, the world’s biggest cement maker is also a possible buyer, ‘The Economic Times’ newspaper reported on Thursday, citing company director K.V. Rangaswami. Aditya Birla Group, which controls Grasim, India’s third biggest cement maker, and Ultratech Cement Ltd are also interested in the ready-mix unit, the paper reported.
L&T lost 0.8% on Thursday to close at Rs2,776.20 on the Bombay Stock Exchange.
India FY08 indirect tax receipts exceed target
New Delhi: India’s indirect tax receipts for 2007-08 exceeded the annual target and were at Rs2.79 trillion, an official said on Thursday, prompting analysts to predict that the government is set to meet the budget deficit.
A slowdown in industry coupled with import duty cuts on edible oils and corn last month fuelled speculation that the indirect tax collections may fall short of target.
P.C. Jha, chairman of Central Board of Excise and Customs (CBEC), said receipts from excise duty, a levy collected at the factory gate, were slightly less than the revised target and were at Rs1.25 trillion during 2007-08.
But customs receipts at Rs1.04 trillion exceeded the annual target, he said. The customs duty receipts mirrored a robust 30% growth in imports until February.
Service tax collections were more than Rs50,000 crore and the final figure could be higher as the tax authorities were yet to assess the books of all 550,000 service tax payers.
“The budget estimate and the revised estimate (of Rs2.78 trillion in indirect taxes) for 2007-08 have been achieved and exceeded,” he said.
The CBEC chief said he was confident that the targets for 2008-09 would also be achieved, although recent duty cuts could dent revenue growth. “It’s normal that duty cuts will lead to some revenue loss.”
Apeda schemes get cabinet approval
New Delhi: The cabinet committee on economic affairs (CCEA) has given approval for Agricultural and Processed Food Products Export Development Authority (Apeda) schemes during the 11th plan period.
The schemes comprise an outlay of Rs229 crore and Rs200 crore for infrastructure development and for transport assistance , respectively. Growth at a CAGR of 11.5% for the APEDA monitored products is targeted during the next 5 years, going up from Rs21,150 crore to Rs 36,510 crore.
The CCEA also gave its approval for finalizing issues relating to the market access and rules of origin for the third round of the Global System of Trade Preferences (GSTP) Agreement during the GSTP ministers meeting in Ghana later this month.
The cabinet committee also gave its nod to invest Rs205 crore in Hindustan Coca Cola Holdings Pvt Ltd by its parent company to fund capital expenditure in their subsidiary , Hindustan Coca Cola Beverages Ltd.
India invites bids to manage pension scheme
New Delhi: India’s largest pension fund on Thursday invited bids from fund managers to manage its flagship scheme, with a corpus of more than Rs1.56 trillion, an advertisement in ‘The Times of India’ newspaper said.
The government-run Employees’ Provident Fund Organisation (EPFO) said that portfolio or fund managers have to be registered with either the Securities and Exchange Board of India or the Reserve Bank of India to qualify for the job.
Fund managers have to send their applications to EPFO by 30 April, it said. For details, click www.epfindia.gov.in or www.epfindia.com In January, EPFO said it would pay an 8.5% interest to its subscribers, numbering more than 43 million, on their contributions for the year ended 31 March.
Orchid Chem sees block deals for 1.76% equity
Mumbai: Multiple block deals in shares of Orchid Chemicals and Pharmaceuticals Ltd were struck on Thursday for a total of 1.16 million shares, or 1.76% equity, at an average price of Rs320.64 each on the Bombay Stock Exchange (BSE).
On Wednesday, Morgan Stanley acquired a 3.8% stake in Orchid through bulk deals at an average price of Rs313.42 each, data from BSE and National Stock Exchange showed.
Over the last fortnight, several institutions and investors have been actively acquiring stakes in Orchid since Solrex Pharmaceuticals Co., believed to be part of Ranbaxy Laboratories Ltd, bought 14.55% stake in Orchid.
Orchid shares closed 12.46% lower at Rs279.30 on BSE.
Derivative losses are manageable: Kochhar
Mumbai:ICICI Bank Ltd’s joint managing director Chanda Kochhar on Thursday said losses on account of derivative transactions by the corporate sector were lesser than the profits it has earned, implying that risks to the Indian financial sector on account of such deals was manageable.
Derivative is a financial contract whose value is designed to track the return on stocks, bonds, currencies or some other benchmark.
“It is not a very large systemic issue. It (loss) is something that can be absorbed by the corporate sector,” she said. “We have seen many corporates making profits out of such transactions...I think it is unfair to say that corporates did not understand the product (derivatives),” Kochhar said.
Taqa, Tata in talks to build India power plant
Abu Dhabi:Abu Dhabi National Energy Co. (Taqa) said it is in talks with Tata group about developing a power plant in India, part of plans to boost its generating capacity in the country more than 30-fold.
State-controlled Taqa is also looking to develop three power and water stations in Saudi Arabia, in a venture with privately owned Al Zamil Group, chief executive Peter Barker-Homek said in Abu Dhabi late on Wednesday.
“We should finalize soon with India’s Tata group to build a power plant in India in a joint venture where Taqa would take a stake,” Barker-Homek said, without being more specific.
Govt likely to postpone NELP-VII bid date
New Delhi: The government is likely to postpone the last date of bidding for the 57 oil and gas blocks on offer for the seventh round of New Exploration Licensing Policy (NELP) by two weeks to 9 May to facilitate a clarification on tax breaks for the exploration and production sector.
The last date for bidding is being pushed back from 25 April to allow finance minister P. Chidambaram to clear the air on the seven-year income tax holiday for oil and gas production, when he replies to the Finance Bill in Parliament in next couple of weeks, officials said. “There is no formal decision yet, but this is the line of thinking and an announcement is likely soon,” an official said.
No evidence of steel cartel, minister says
New Delhi: A day after finance minister P. Chidambaram accused steel and cement manufacturers of “behaving like a cartel,” Union minister for steel, Ram Vilas Paswan, and the new minister of state for steel, Jitin Prasada, spoke in different voices on the issue on Thursday.
Prasada said in Lok Sabha on Thursday that there was “no evidence of cartelisation” by steel makers.
“The steel prices are determined by market forces, such as demand and supply and international prices,” Prasada said. “However, no evidence on cartelization by steel companies in determining steel prices has been brought to the notice of the ministry of steel.”
Prasada contradicted the finance minister, who had told Lok Sabha on Wednesday, “Cement and steel manufacturers are behaving like a cartel… we have to break this logjam.”
Prasada also contradicted Paswan, who echoed Chidambaram’s views and asserted on Thursday, “Essar, Jindal and Ispat raised their prices by Rs5,000 from midnight on the same day. As you are different companies with different costs of production, how can rates be enhanced at the same point of time? This hints towards a concerted move.”
-Ashish Sharma & PTI
Tax holiday likely for small IT companies beyond 2009
New Delhi: The government may extend income-tax holidays to small and marginal IT companies beyond 2009, IT and communications minister A. Raja said on Thursday. Exemption from paying income tax for IT companies is to end in 2009.
“I have met the prime minister (on the issue). The prime minister is inclined to give some relief.... We are of the view that small and marginal enterprises should not suffer. The matter is under consideration,” he told the Rajya Sabha.
Raja said he had also met finance minister P. Chidambaram on extending the tax break for another 10 years, but the “finance minister had some reservations.”
The extended tax breaks should not go to big and flourishing companies who have already utilised the previous tax breaks, he said, but did not specify when a decision would be taken.
The minister said the slowdown in the US economy has so far not had any overall significant direct impact on the growth of the Indian IT-BPO sector. However, the share depreciation of the dollar over the past year has added significant margin pressure on the IT industry.
Raja said the industry body, National Association of Software and Services Companies (Nasscom), does not have any information on reduction in salaries in the IT industry, but there had been indications that annual increments to employees may be slightly lower. It is estimated that IT exports will be worth around $40.3 billion in 2007-08 against $31.3 billion in 2006-07.