New Delhi: India can maintain 9% growth rate in the medium term with more effort, despite the soaring price of oil in the global market, Planning Commission deputy chairman Montek Singh Ahluwalia said on Tuesday.
“I believe that the 9% growth rate that we are talking about for the Indian economy can be maintained even with present level of oil prices,” he said.
However, the task becomes more difficult because the “actions to manage oil prices, pass on oil prices, improve efficiency, reduce dependence on oil and look for other sources of energy become more important,” he added. Ahluwalia also said that though rising inflation is a serious problem, “there is no reason to alter our medium-term objective”.
India has achieved more than 9% gross domestic product (GDP) growth in the past three years, and economy observers are predicting a moderation in the growth in the current fiscal year.
The Planning Commission, Ahluwalia said, was of the view that it is possible to handle the oil price situation without hurting the confidence of investors in the economy in the medium term. The growth momentum can be maintained even with the current level of oil prices, he added. “Soaring oil prices have pushed the inflation rate to more than 11% and the Reserve Bank of India is expected to announce more measures to tighten monetary policy to check rising prices,” he said.
Meanwhile, Pakistan planners gave their Indian counterparts some cues on tackling rising oil prices and soaring inflation, saying the country plans to introduce direct subsidy to the poor and owners of two-wheelers and small cars.
“What we are trying to do is to introduce what we call the Benazir card, which will give Rs1,000 per month to every poor and disadvantaged households,” Salman Faruqui, deputy chairman of the Pakistani Planning Commission, said after meeting Ahluwalia. Under the proposed scheme, owners of two-wheelers and small cars (up to 800cc) would be provided limited quantity of fuel at subsidized rates. The Benazir card is expected to provide direct subsidy to five- seven million poor people and cover about 20% of Pakistan’s population.
Mahindra expanding used-car business
Mumbai: Utility vehicle maker Mahindra and Mahindra Ltd is expanding its used-car business, as it gears up to open 300 owned and franchise outlets under its FirstChoice brand. Mahindra has raised Rs80 crore through a private placement by Phi Advisors, a private equity fund, in its subsidiary FirstChoice Wheels to finance its expansion.
FirstChoice targets to sell 100,000 vehicles a year by 2013 through its 300-strong retail chain, including 30 franchise super stores that can display 200 cars, according to FirstChoice’s chief executive Vinay Sanghi. Mahindra estimates the market for used-cars at 1.5 million vehicles annually, and expects the industry to reach a size of Rs50,000 crore in the next five years. Staff Writer
Bachchans, Reliance Big Entertainment plan JV
Mumbai:Reliance Big Entertainment Pvt. Ltd (RBE) is joining hands with actor Amitabh Bachchan and family to form a joint venture that will produce, market and distribute films, according to a senior executive at the Mumbai-headquartered firm. While RBE is a majority shareholder in Adlabs Films Pvt. Ltd, the new initiative will be separate, the executive added.
The Bachchan family, which includes actors Abhishek, Aishwarya Rai and Jaya Bachchan, will be the creative force behind the venture, the executive said, adding that they will play lead roles in the venture’s productions. While he refused to disclose financial details, the executive said that a clutch of senior directors has already been signed by the initiative. He added that the initiative was unrelated to Amitabh Bachchan Corp. Ltd, a production company owned by the actor.
RBE last month announced ambitious plans to invest up to $1 billion to finance films by eight Hollywood production companies promoted by actors and directors, including George Clooney, Nicholas Cage, Tom Hanks, Brad Pitt and Chris Columbus, among others. Staff writer
Inventus debuts with $125mn fund for India
Bangalore: Venture capital firm Inventus Capital Partners, which has been present in India since late 2007 but not invested in any companies so far, has launched a $125 million (Rs536 crore) fund which will focus on early-stage technology companies addressing global and local markets. The company said the fund will invest in businesses such as consumer Internet and media, mobile services, embedded software, information technology (IT) and IT-enabled services.
Inventus is promoted by Silicon Valley-based angel investor and founder of The Indus Entrepreneurs (TiE), Kanwal Rekhi. The fund plans to invest in 15-20 companies over the next four years with the average investment being between $1 million and $2 million. The fund could invest up to $7 million in one company. “We would like to go for syndicated deals, particularly if the fund requirement exceeds $2 million,” says Rekhi. A syndicated deal is where a group of investors put in money into a company.
Inventus said it is open to syndicated deals with other Venture Capital firms such as Helion Venture Partners, IDG Ventures India, Nea-IndoUS Ventures and Ojas Venture Partners. It said that it would announce its first deal in a few weeks but refused to divulge further details. Deepti Chaudhary
UTI AMC plans to hit market in mid-July
New Delhi:UTI Asset Management Co. Ltd’s much-awaited initial public offering (IPO) is most likely to open for subscription in middle of next month.
The board of the company, including representatives from the sponsors— State Bank of India, Life Insurance Corp. of India, Punjab National Bank and Bank of Baroda, held a meeting on Tuesday evening to discuss the future course of action in this regard.
The three-month window for the IPO that received the Securities and Exchange Board of India approval in April, closes on 22 July. In such a scenario, the company will either have to come with its IPO before 22 July or will have to postpone the IPO.
Several factors have delayed the offering that aims to raise about Rs2,000 crore.
“Bad market condition coupled with the sponsors’ advice has resulted in the delay,” said a senior official with UTI AMC. “In all likelihood, the IPO should be out by the second or third week of July.”
UTI AMC plans to sell 38.8% stake being held in equal proportion by the four sponsors. The proposed offering puts the company’s valuation at more than Rs5,100 crore, or about 10% of total assets under its management.
In December, when Eton Park purchased 5% stake in Reliance Capital Asset Management, the fund house was valued at Rs10,000 crore, or 13% of the assets under its management then. Similarly, IDFC valued Standard Chartered AMC at 5.8% of its assets under management, while buying it for $205 billion (more than Rs 800 crore) on 10 March. Sandeep Singh/HT
Mumbai makeover man Sanjay Ubale resigns
Mumbai:The man in charge of Mumbai’s Rs43,000 crore makeover has resigned, becoming the latest in a long line of civil servants to abandon government service for the private sector.
Sanjay Ubale was overseeing the city’s transformation for the last five years from his post as secretary (special projects) in the General Administration Department. Ubale opted for voluntary retirement, chief secretary Johny Joseph said.
“I have put in my papers, but it would be premature to speak about my future plans since the government is yet to accept my resignation,” Ubale said. “I enjoyed working with the Maharashtra government, but it’s time to move on.”
Ubale had for the last year also headed the Maharashtra Urban Infrastructure Development Company (MUIDC), which facilitates private investment for public projects.
He has been associated with the city’s makeover since consultancy firm McKinsey & Co. first drafted a blueprint in 2003. State secretariat officials said Ubale would probably join one of India’s largest private sector business groups. Ketaki Ghoge/Hindustan Times
Worli-Nariman Point sealink to be scrapped
Mumbai:The state government has decided to scrap the Worli-Nariman Point sealink, the second stage of the Western Freeway, in favour of an underground tunnel. The first stage of the freeway is the Bandra-Worli sealink.
That’s not the only sealink plan that’s changing. The 21.75-km Sewri-Nhava sealink, which was to be built by private bidders, may now be built by a state-appointed contractor.
Announcing the turnaround on the Worli-Nariman Point sealink at the inauguration of the city’s first skywalk at Bandra, Chief Minister Vilasrao Deshmukh said: “A tunnel would be less expensive than a sealink.” Ironically, the state had obtained environmental clearance for the sealink only last year.Ketaki Ghoge & Bhavika Jain/HT
Dalian, Beijing among new tech destinations
New Delhi:Cities such as Dalian, Beijing, Auckland and Kuala Lumpur are some new Asian locations that are being considered to be optimal for global delivery of tech services in 2008, primarily due to government support having changed in these locations over the last six months as well as rising labour costs in competing destinations, according to a study by advisory firm International Data Corp., or IDC.
IDC’s latest global delivery index for Asia Pacific says that changing economics and market drivers are shaking up the market for global delivery locations within the region. Other optimal locations include Bangalore, New Delhi, Mumbai, Manila, Shanghai and Brisbane. Regina Anthony
Microsoft pips Infosys, SBI in reputation survey
New Delhi: Information technology companies continue to enjoy the best reputation among corporates in India for the second consecutive year, according to the third annual study on corporate reputation by Taylor Nelson Sofres Plc. (TNS), a leading UK-based market research group.
Microsoft India Pvt. Ltd debuts at top spot pushing Infosys Technologies Ltd to second position, with State Bank of India occupying the third spot, while Intel India, Maruti Suzuki India Ltd and Tata Consultancy Services Ltd take the next three spots, according to the study titled ‘India 2008 TNS TRIM Corporate Reputation Manager’ study, which is based on views of 2000 respondents comprising managers, opinion leaders and final year students across the country on a company’s perceived strengths and weaknesses.
Within sectors, Microsoft leads among tech firms as do State Bank of India and Maruti in the financial services and automobile sectors. In engineering and infrastructure category, Reliance Industries Ltd leads while Nestle India Ltd outdid Hindustan Unilever Ltd in the fast moving consumer goods segment. Staff Writer
Big FM in pact with Singapore Media Corp
New Delhi: Big 92.7 FM, the radio division of Adlabs Films Ltd, said on Tuesday it has entered into a partnership with Singapore-based Media Corp Pte. Ltd to offer Bollywood music to the large Indian population in that country. The international music station of Media Corp at the 96.3 FM frequency will offer Bollywood content—music, trivia, comedy and interviews—for three hours every day from 5pm to 8pm. During this band, the station will be branded as Big Bollywood 96.3 FM. “We will handle content, marketing as well as sales for this time band. Of Singapore’s population, 7-8% are of Indian origin and this is targeted at them,” said Tarun Katiyal, COO, Big 92.7 FM. Philip Koh, managing director of Media Corp’s radio division, said this initiative fills a vaccum for quality entertainment options for Indians in Singapore. Staff Writer
TV Today net profit up 10% to Rs13.5 crore
New Delhi:TV Today Network Ltd, the New Delhi-based broadcaster of television channels such as Aaj Tak and Headlines Today, said net profit for the quarter ended 31 March rose 10.19% to Rs13.5 crore on account of better utilization of inventory and a 15% hike in ad rates. Total income during this period rose 14.62%, to Rs70.2 crore, up from Rs61.2 crore during the corresponding period last fiscal. “Despite a highly competitive environment and escalating costs in the form of salaries etc., we are happy that we have been able to post a healthy increase in our profits,” said G. Krishnan, CEO, TV Today. Krishnan added that the company will launch new channels during this calendar year. He added that advertising packages that combine all four of the network’s channels contributed 80% of its revenues while only 20% came from channel-specific deals. For the fiscal ended 31 March, the firm posted a profit of Rs43.5 crore, up 39.8% from 31.1 crore during the previous fiscal. Staff Writer
Broadcast Initiatives to sell 51% to HDIL Infra
New Delhi: Broadcast Initiatives Ltd, a group company of Sri Adhikari Brothers Television Network Ltd, which is in the business of broadcasting said it will sell a 51% stake in the company to HDIL Infra Projects Pvt Ltd.
In a filing with the Bombay Stock Exchange, Broadcast said it would sell stake through a combination of preferential allotment of equity shares, mandatory open offer and sale of shares by the present promoters of Broadcast. The board of directors of Broadcast has decided to issue on a preferential basis 6 million shares at Rs36.50 a share, to HDIL Infra. The proposed preferential allotment will trigger an open offer by HDIL Infra to acquire a minimum of 20% stake in Broadcast Initiatives at a price that will be determined as per the SEBI guidelines. The promoters of Broadcast have also signed an agreement with HDIL Infra to transfer shares to the company to make sure that HDIL holds 51% stake in Broadcast Initiatives. Shabana Hussain
Bahujan Samaj Party sacks general secretary
Bangalore: The Bahujan Samaj Party, or BSP, has sacked its national general secretary P.G.R. Sindhia, a former Karnataka minister for the party’s poor performance in the May assembly polls in the southern state. Sindhia had joined BSP, the party that holds power in Uttar Pradesh, late last year after he broke ties with H D Deve Gowda, head of the regional Janata Dal (secular) in end 2006. Though the BSP increased its share of votes polled to 2.9% from 1.7% of the votes polled in the previous assembly elections in 2004, it could not secure even one assembly seat. The party stood second in nine of the 224 assembly seats, while its members lost the mandatory deposit in 187 constituencies by polling less than 5,000 votes. Staff Writer
UK fashion house signs deal with Indian retailer
New Delhi: British fashion boutique Alexander McQueen will open six stores in India in five years through a retail and distribution partnership with TSG International Marketing Pvt. Ltd. The first store is expected to open in New Delhi in autumn 2008, followed by Mumbai and Bangalore.
TSG holds exclusive retail and distribution rights to the Alexander McQueen brand in India and will work closely with the brand to strategically develop the business.
“It is exciting to be entering this market where we have not previously been represented. It will be a new frontier to strengthen our growing portfolio of stores and wholesale accounts worldwide,” said Jonathan Akeroyd, chief executive officer at Alexander McQueen.
“We look forward to this partnership and feel it is a tremendous compliment to our existing brands,” said TSG’s chief Charu Sachdev. Staff Writer