Chennai: The country’s largest tyre maker by sales value, MRF Ltd plans to make tyres for aeroplanes and helicopters at its unit at Medak in Andhra Pradesh, becoming the first local tyre manufacturer to get into aviation.
MRF will invest Rs150 crore in this project that would initially make tyres for the Chetak, the helicopters of state-run military aircraft maker Hindustan Aeronautics Ltd, or HAL.
Till date, the Indian aviation sector including defence uses imported tyres. “We are working on two more military aircraft for the defence department. The specifications are being finalized,” said K.M. Mammen, chairman and managing director, MRF. He refused to divulge further details.
The company has not started any research work for the commercial aviation market, but Mammen said MRF would eventually look at those prospects. Also, MRF hopes the government would partially fund the Rs150 crore project. “I am hoping that at least 50% of the project cost would be borne by the government,” he added.
— Vidhya Sivaramakrishnan
GM to launch new compact car in 2009
Mumbai:General Motors India Pvt. Ltd, or GMI plans to launch a second compact car in the Indian market next year. “We would be launching a brand new model in India in the second half of 2009,” said Karl Slymn, president and managing director, GMI.
He refused to give further details but said the car would be sold in other emerging markets as well.
Slymn was speaking on the sidelines of signing a memorandum of understanding with the Maharashtra government for a power train facility in Talegaon near Pune.
The engine facility, in which the company will initially invest more than $200 million (Rs874 crore), will start production in the first quarter of 2010. It will initially have a capacity to manufacture 160,000 engines a year, which will eventually be increased to 300,000 engines.
— Shally Seth
Inflation rate drops marginally to 12.40%
New Delhi: The inflation held near a 16- year high as floods in half the country damaged crops and disrupted food supplies. Wholesale prices rose 12.40% in the week to 16 August, after increasing 12.63% in the previous week, the commerce ministry said on Thursday. Economists were expecting a 12.78% gain.
Heavy rains have killed at least 1,600 people in 17 states and hurt crops in major grain-producing states such as Punjab, Haryana and Andhra Pradesh. That’s pushed up food costs and may prompt the Reserve Bank of India (RBI) to add to its three interest rate increases since June. “Flooding in some parts of the country and erratic rains in some other areas is causing disruptions in the supply of food articles and driving up their prices,” said Sonal Varma, an economist with Lehman Brothers Inc. in Mumbai. “We expect inflation to peak at 13.5-14% by the end of October.”
The annual June-September monsoon season, which accounts for four-fifths of the country’s annual rainfall, has this year caused flash floods which have already displaced 12.6 million people and killed 18,859 animals, according to the national disaster management office.
Elevated inflation may slow the pace of economic growth. India’s $912 billion (almost Rs40 trillion) economy is forecast to expand close to 8% in FY09, according to the finance ministry, the weakest pace in four years.
RBI last month raised its benchmark interest rate by a half point to a seven-year high of 9%. The reserve requirement for banks was also lifted to 9% from 8.75%.
3 banks named for new IPO payment process
Mumbai: Capital markets regulator Securities and Exchange Board of India, or Sebi, on Thursday named Corporation Bank, Union Bank of India and HDFC Bank Ltd for implementing the new payment process for public issues.
Under the new system, the application money remains in the bank account of the applicant till the allotment of shares is completed. It will be applicable for public issues that open on and after September, the regulator said in a statement published on its website. The existing system requires applicants to pay the money upfront and wait for any refund on shares not allotted until after the listing.
— Staff Writer
BSE gets nod to enter currency futures trading
Mumbai:Bombay Stock Exchange Ltd, or BSE, has received an in-principle approval from capital market regulator Securities and Exchange Board of India, or Sebi, to enter currency futures trading. Asia’s oldest exchange, 133-year old BSE will be the third player in currency futures trading.
The other two are National Stock Exchange, or NSE, and Multi Commodity Exchange. Finance minister P. Chidambaram will launch currency futures at NSE on Friday. A BSE release said it is exploring arrangements with established entities in the foreign exchange market for currency futures trading.
— Staff Writer
Cipla to inject Rs1,700 cr in Indore, Goa expansion
Mumbai: The country’s second largest drug maker by sales, Cipla Ltd is planning fresh investments of more than Rs1,700 crore in Indore and Goa to set up new manufacturing plants as well as expand existing plants.
The investment, spread over nearly two years ending March 2010, will go towards setting up four plants in Indore, and to expand and modernize capacity at its existing plants in Goa, managing director Amar Lulla said.
In an earlier interview, Cipla chairman Y.K. Hamied had said the company might relocate its proposed special economic zone to Indore, after the Goa government changed its policy about allowing such zones in the state.
— C.H. Unnikrishnan
Urban local bodies better than state govts
Mumbai: Rating agency Crisil on Thursday assigned its corporate credit ratings, or CCRs, to 16 urban local bodies, or ULBs. Of these, 10 have received investment grade ratings, with Nashik and Surat being the highest rated. ULBs of Ahmedabad, Nagpur, Kolkata, Vadodara, and Rajkot received ratings, indicating ‘adequate’ strength.
All these ratings have been assigned under a mandate from the ministry of urban development, Government of India, as part of the Jawaharlal Nehru National Urban Renewal Mission. These CCRs will help rated ULBs access the debt market, and will thus play a central role in the development of a municipal bond market in India.
According to Raman Uberoi, senior director, Crisil Ratings, most ratings in the investment grade are significantly higher than the credit risk profiles of the respective state governments.
This means the ratings of ULBs are not constrained by state government ratings, unless there is a heavy dependence on discretionary, ad-hoc government grants.
— Anita Bhoir
Asean completes India,Australia trade talks
Singapore: South-East Asian nations completed free trade agreement negotiations with India, Australia and New Zealand, stepping up the regional bloc’s efforts to increase commerce with its biggest economic partners.
The 10-member Association of Southeast Asian Nations (Asean) and India, will eliminate or lower tariffs on products such as palm oil, coffee, pepper and tea. The pact, estimated to raise trade between the countries by about $12 billion (Rs52,440 crore) by 2010, will be signed in Thailand in December.
“An agreement like this can unlock the potential and allow us to reap the full benefits of trade between Asean and India,” Singapore trade and industry minister Lim Hng Kiang said at a briefing on Thursday.