New Delhi: While Renault SA looks to strengthen its grip on the low-cost vehicle market globally, progress in India with sales of the Logan, the car it is selling with Indian auto maker Mahindra and Mahindra Ltd, has been lagging expectations and the car maker is now looking at changing its strategy for the model in the country.
Patrick Blain, executive vice-president of sales and marketing at the French auto maker, has told trade publication ‘Automotive News’ that he does not expect sales of the sedan to achieve the 50,000-unit target that has been set for 2008, having sold just 12,700 units in the first half of the year.
Blain added that because it is now fighting for a share of a smaller market, Renault “may need to revise the product strategy for the Indian market”. The 2008 target for Logan sales has been revised to between 25,000 and 30,000 units. ‘Mint’ could not independently verify the news.
GVK Power in talks with 3 PE funds to sell equity
Hyderabad: Infrastructure firm GVK Power and Infrastructure Ltd is in negotiations with three global private equity (PE) funds to offload up to 25% equity in its power business, according to group chief financial officer Isaac A. George.
“Several PE funds have been approaching the company expressing keen interest in picking up stake in our power vertical, with some of the PE funds apparently more attracted by the low...price of the company in a depressed stock market,” he added. But, George said GVK is not interested in offering stakes to any PE funds at current market prices.
“According to our own assessment, based on discounted cash flow methodology, our intrinsic value is far higher than the current market value,” he maintained. But, George refused to say what that “intrinsic” value might be, adding: “We cannot reveal that. (It) will become a benchmark for the PE firms to negotiate.”
GVK Power’s shares closed traded at Rs31.15, up 3.66%, on Monday, having been as high as Rs93.50 in the past year on the Bombay Stock Exchange. George said the value arrived at by the company was somewhat lower than the year’s high. “Three PE funds have already started due diligence exercise and we expect the process to be completed in the next three-four weeks,” he said, while declining to name them.
The ‘Financial Chronicle’, in a story earlier this month, said GVK is in talks with PE entities that include Blackstone Group LP, General Atlantic and Carlyle Group to raise up to $150 million (Rs640 crore). The paper did not disclose the source of its information.
GVK group promoters hold 60.8% in GVK Power. C.R. Sukumar
Rajnigandha makers complain on copycat ad
New Delhi: Manufacturers of mouth freshener Rajnigandha, Dharampal Satyapal Group (DS), have filed a written complaint with the Advertising Standards Council of India (ASCI) and issued a legal notice to Kothari Products Ltd, makers of tobacco mouth freshener Pan Parag, for copying it’s campaign tagline ‘Choice of Young India’ of it’s brand Meetha Mazaa, in the new Pan Parag commercial. “Meetha Mazaa that comes under the Rajnigandha brand launched its nationwide campaign in March with the tagline ‘Choice of Young India’ and the same tagline was used in a campaign launched by Pan Parag last month. So we have filed a complaint with ASCI and sent the company a legal notice,” said the DS group spokesperson.
“We have sent our legal reply to both parties and are in discussion with them,” was all the company spokesperson for Kothari Products was ready to disclose. Staff Writer
Fidelity International arm launches fund
Mumbai: Fidelity International’s Indian asset management company on Monday announced the launch of its Fidelity Flexi Gilt Fund, an open-ended gilt scheme that will invest in central and state government bonds as well as other securities, guaranteed by the government. The scheme will open for subscription on 23 July and close on 31 July. Sameer Kulkarni will manage this fund. Staff Writer
HSBC appoints new CEO for Asset Management
Mumbai:Hongkong and Shanghai Banking Corp. Ltd (HSBC) has appointed Vikramaaditya as chief executive officer of HSBC Asset Management (India) Pvt. Ltd.
Vikramaaditya takes over from Sanjay Prakash, who will take up a senior position within the HSBC Group, an HSBC release said. Vikramaaditya, who joined the HSBC Group in 1998, was heading HSBC Securities and Capital Markets India Pvt. Ltd, the bank’s brokerage arm. Kapil Seth, until now head of corporate banking in South India, will take over Vikramaaditya’s role at HSBC Securities Services. Anita Bhoir
Sanjoy Narayan is HT’s new editor-in-chief
New Delhi:HT Media Ltd on Monday named Sanjoy Narayan editor-in-chief of its flagship English daily Hindustan Times. Narayan, who quit as editor of ‘Business Today’ on Friday, will join HT on 18 August.
“As Editor-in-Chief, Sanjoy will be responsible for all the print editions of Hindustan Times as well as for the online editions. Sanjoy will also be responsible for working cross-functionally with other departments and, in particular, for working closely with marketing, with a view to further strengthening our brand and increasing readership,” HT Media vice-chairman Shobhana Bhartia said in an internal memo.
Narayan comes into a position that has been vacant for a year, after Chaitanya Kalbag left in July 2007. A 26-year veteran of Indian journalism, Narayan previously worked at ‘The Telegraph’ newspaper and ‘Business World’ magazine published by the ABP Group, and ‘The Economic Times’ published by Bennett, Coleman and Co. Ltd. He has been editor of ‘Business Today’ since 2000. He declined to comment on the development. Staff Writer
ING Vysya Bank posts 60% rise in Q1 net profit
Bangalore: Bangalore-based ING Vysya Bank Ltd posted an increase of 60% in its net profit in the first quarter to Rs40.63 crore from Rs25.32 crore. The bank’s net interest income rose by 52% to Rs157.97 crore, while fee and other income went up to Rs127.88 crore from Rs85.83 crore, driven by strong growth in both retail and wholesale segments.
As of 30 June, the bank’s capital adequacy ratio stood at 10.38%. Its deposits grew by 24% to Rs20,381 crore, while advances increased by 22% to Rs14,433 crore. As of 30 June, the bank had 411 branches, 39 extension counters, 28 satellite offices and 214 ATMs. Deepti Chaudhary
Canara Bank’s net profit falls 49% in first quarter
Bangalore:Canara Bank’s fiscal first-quarter net profit tumbled 49% from a year earlier as the Bangalore-based lender set aside money to cover investment losses, bad loans and tax payments. But, operating profit rose 15% in the three months ended June, the bank said on Monday.
Net profit fell to Rs122.68 crore in the quarter, from Rs240.55 crore a year earlier. The bank made total provisions of Rs581 crore in the period, including Rs401 crore for investments, Rs140 crore for non-performing assets and Rs40 crore for taxation. Excluding the provisions, the bank said net profit would have been up 54%.
Operating profit rose to Rs704 crore from Rs612 crore in the year-ago period. “Due to rising inflation and sharp increase in bond yield, the bank took a hit on its investment portfolio,” said A.C. Mahajan, chairman and managing director.
Bank profits have been dented by rising bond yields, which move inversely to price. The yield on the benchmark 10-year government bond, around 7.5% at the beginning of the calendar year, has now risen to 9.5% as the central bank raised interest rates to curb inflation.
This has forced banks to provide money to cover mark-to-market losses on their government bond portfolios. Marking to market is an accounting practice of valuing an investment in line with its current market price.
Canara Bank’s total income—interest and non-interest income combined—rose by 8% to Rs4,099.05 crore.
Net interest income, or the difference between what it earned from loans and paid for funds, rose to Rs1,019 crore from Rs894 crore.
The state-owned lender expects business to exceed Rs300,000 crore by March 2009, including more than Rs175,000 crore in deposits and Rs1,25,000 crore in advances. Deepti Chaudhary