Sector Spotlight - Livemint.com

RCom unveils 1paise per SMS, opens new front on tariff war

PTI — Fri, 27 Nov 2009 09:26:00 GMT

Mumbai: Reliance Communications on Friday introduced 1paise per SMS plan taking the tariff war to the data front from voice calls.

The Anil Ambani group company launched a plan under which 1paise will be charged per SMS and at a monthly rental of Rs11, Reliance Communications president Mahesh Prasad said here.

Telecom minister A Raja recently had said telcos need to bring down SMS rates which are currently at 50-60paise per SMS.

Other operators are likely to follow suit.

Reliance Communications stocks were down 1.54% at Rs166.30 in the afternoon trade on the BSE.

Bank of Baroda says UAE loan book exposure 7-8%

Reuters — Fri, 27 Nov 2009 08:39:00 GMT

Mumbai: State-run Bank of Baroda has exposure of 7-8% of its loan book in the United Arab Emirates, a top official told Reuters on Friday.

The lender’s total UAE exposure stands at around Rs10,000 croreout of a total loan book size of Rs1.5 trillion, chairman MD Mallya said over the telephone.

At 12.02pm, shares in the bank was down 5.44% at Rs517, the bank index down 3.97%, and the broader Mumbai market lost 3.09%.

Dubai’s debt problems revived concerns about the health of the global financial system and exposure of Indian lenders to the Middle East.

“Our exposure includes both corporate and retail accounts and not only the real estate portfolio,” Mallya said.

The funds had been disbursed in all the Emirate constituents like Abu Dhabi, Bahrain, Oman and not only in Dubai, Mallya said.

“We see no slippages in the accounts so far. These are good performing assets,” he said, adding he is not contemplating any action on its exposure in the Middle East.

Dubai’s debt problems come at a time when Indian bank loan growth was crimped to 9.8%, from average 30%, growth levels a year ago following global economic downturn.

Unitech, DLF assure no exposure to Dubai

Reuters — Fri, 27 Nov 2009 05:19:00 GMT

New Delhi: Unitech Ltd, India’s No. 2 listed real estate firm, has no exposure to Dubai, its managing director Sanjay Chandra said on Friday.

“We have no business or exposure to either business from Dubai, nor any borrowings from Dubai,” he told Reuters.

Shares in the company were down 4.3% at Rs74 by 10:41am, in a Mumbai market that had fallen 2.3%.Shares in Unitech’s bigger rival DLF were down 5.1% at Rs336.20.

Earlier, a DLF spokesman said the company had no exposure to Dubai.

L&T’s Dubai exposure at $20-$25 mn

Reuters — Fri, 27 Nov 2009 04:32:00 GMT

Mumbai: The engineering conglomerate Larsen & Toubro’s exposure to Dubai is in the range of $20 million to $25 million, a senior company official told a television channel on Friday.

Developer DLF and Punjab National Bank said they had no current exposure to Dubai.

“The expopsure is somewhere between $20 million to $25 million in terms of several retention amounts which are due, which if things go from bad to worse can become suspect receivables,” L&T’s executive vice president, Shankar Raman, told TV channel CNBC-TV18.

“We have no exposure as yet,” R.I.S. Sidhu, chief general manager at Punjab National Bank, said over the telephone.

PC sales drop 3.1% for Sep quarter y-o-y

Lison Joseph — Thu, 26 Nov 2009 20:26:00 GMT

Mumbai: Sales of personal computers (PC) in the country for the quarter ended September reached almost 2.2 million units, a decline of 3.1% from the corresponding period last fiscal, according to data released by technology researcher IDC India.

However, PC sales, which include desktop and notebook computers, for the quarter marked an increase of 24% over the previous quarter ended June.

The sequential growth was led by demand from government purchase as well as festive season sales.

“The July-September quarter experienced a strong boost from newfound consumer confidence that reflected in increased demand during the festive season,” said Kapil Dev Singh, IDC country manager. “This performance underlines the recovery in the India PC market.”

PC sales have grown for the last three consecutive quarters after dropping from 2.3 million units in the September quarter last fiscal to 1.6 million units in the quarter ended December.

lison.j@livemint.com

Government reiterates Ambani, NTPC gas disputes are different

P.S. Patnaik / Bloomberg — Thu, 26 Nov 2009 19:22:00 GMT

The Indian government reiterated that the natural gas supply dispute between the billionaire Ambani brothers was different from one between Reliance Industries Ltd (RIL) and state-owned NTPC Ltd.

The Union government had already submitted documents to say the two cases were different, additional solicitor general Mohan Parasaran told the Supreme Court (SC) in New Delhi on Thursday. The government had not filed an affidavit on its stand, Ram Jethmalani, lawyer for Anil Ambani-owned Reliance Natural Resources Ltd (RNRL), told SC.

Reliance Natural filed an application in SC in September to make NTPC, India’s biggest power producer, a party in the dispute with RIL. The utility and RNRL are fighting separate lawsuits seeking to enforce agreements requiring RIL to supply them gas at 44% less than a government-set price.

In the hotbed: A file photo of Reliance Industries’ drilling rig at the D6 block in the Krishna-Godavari basin.

RIL, controlled by Mukesh Ambani, is trying to overturn a lower court ruling to honour a gas-supply agreement reached when the Ambani family business was divided in 2005.

RIL, which won a bid to supply gas to NTPC at $2.34 per million British thermal units (mmBtu) for 17 years, says the fuel can’t be sold at less than the government rate.

The Supreme Court 1 October dismissed NTPC’s challenge of a Bombay high court order that allowed RIL to alter its stand on the gas price.

RIL was permitted to amend its written statement and cite a federal government decision that natural gas is public property and that the state is the sole authority to decide the price.

RIL never indicated in its bid that the gas price was subject to government approval, Jethmalani said.

The panel of judges headed by Chief Justice K.G. Balakrishnan directed the government to file an affidavit on its stand in the NTPC lawsuit.

The government has said its production-sharing contract with RIL must prevail over private sale arrangements. It set the price of gas at $4.20 per mmBtu in 2007 and later selected fuel-starved fertilizer and power producers as priority customers.

Jethmalani said RNRL isn’t challenging the government’s policy. The government and RIL can’t use the policy to dishonour a bona fide contract, the RNRL lawyer said.

The gas utilization policy is, in any event, not applicable to RNRL, said Jethmalani.

The policy states that the utilization of gas will take into account the outcome of the court cases. This is evidence of the policy being prospective in nature.

Siemens Ltd mulls merger with group company

C.H. Unnikrishnan — Thu, 26 Nov 2009 19:16:00 GMT

Mumbai: Siemens Ltd, the Indian subsidiary of the German engineering and electronics conglomerate Siemens AG, is considering a proposal to merge another group company Siemens Healthcare Diagnostics Ltd with itself.

Siemens Healthcare Diagnostics is a subsidiary of Siemens group company, Siemens Diagnostics Holdings of Netherlands.

The company is engaged in the business of diagnostics equipment such as scanners, X-ray and other imaging systems in the world market, including India.

Siemens Healthcare Diagnostics posted a net profit of Rs5.3 crore on sales of Rs165.36 crore in the year 2008-09. The company posted a net loss of Rs2.21 crore in the previous year.

Siemens has informed the stock exchanges that its board will take a decision on the proposal at its meeting scheduled for 30 November.

Siemens Ltd, which posted a net profit of Rs692 crore on sales of Rs9,349 crore in the financial year ended 30 September, also operates a healthcare equipment and technology division in India.

Though both these companies are currently present in the Indian healthcare market, their products don’t compete each other. Siemens Ltd, in its note to stock exchanges, has not mentioned the reason for the merger.

A sector analyst, who didn’t want to be identified, said the move would create better synergies for both the companies as they can leverage the customer base that they haveat present in the Indian healthcare and diagnostics market.

A Siemens Ltd spokesperson didn’t elaborate beyond saying that a decision is going to be taken at the board meeting to discuss the proposal.

Siemens Health shares rose 2.06% to close at Rs1,315.15 on Bombay Stock Exchange on Thursday.

Gulu Mirchandani transfers stake to sons

Vijaya Rathore — Thu, 26 Nov 2009 18:58:00 GMT

New Delhi: Mirc Electronics Ltd’s chairman and managing director Gulu Mirchandani has transferred 17.5 % equity in the firm to his sons Kaval G. Mirchandani and Sasha G. Mirchandani.

After the transfer, Kaval Mirchandani’s shareholding in the company, which is known for the popular Onida brand of electronic products, will go up to 8.81 % compared with 0.03 % ealier. Sasha Mirchandani’s shareholding would stand at 8.79%.

The mode of proposed acquisitions is by way of Inter se transfer. The date of proposed acquisition is 30 November, 2009 or any date thereafter, the company informed stock exchanges.

Kaval Mirchandani heads the LCD TV division in Mirc Electronic, while Sasha is the managing director of a private equity firm.

Gulu Mirchandani held about 35.85% in Mirc Electronics. He bought out his brother Sonu Mirchandani’s stake last year and gained further control over the company.

Jubilant FoodWorks to look beyond Dominos

Vijaya Rathore — Thu, 26 Nov 2009 18:43:00 GMT

New Delhi: Fast food chain operator Jubilant FoodWorks Ltd, earlier known as Dominos India Pvt. Ltd, is considering expansion in its brand portfolio by bringing more international food brands to the country.

Jubilant FoodWorks which is the master franchisee of Dominos Pizza in India is currently holding discussions with several international food brands.

“Since inception, we have been restricted only to Dominos. But now the plan is to add more brands and services to our offering,” Ajay Kaul, chief executive officer, Jubilant FoodWorks, told Mint.

“We will get food brands other than pizza to India in foreseeable future,” Kaul said, without sharing specifics. Besides bringing in new brands, the company is also looking at working on new distribution channels such as airports and railway stations.

The company plans to add around 65 new outlets across India in the current year. Currently, the company has around 270 outlets across the country. “The plan is to populate the cities where we are currently present and also enter smaller towns at the same time. For instance, in the last 18 months, we have opened stores in 23 new cities,” Kaul added.

The promoters of HT Media Ltd, which publishes Mint, and promoters of Jubilant FoodWorks are closely related.

Ranbaxy launches generic version of Valtrex in US

Radhieka Pandeya — Thu, 26 Nov 2009 18:36:00 GMT

New Delhi: In what could be a huge relief for India’s largest drug maker, Ranbaxy Laboratories Ltd has launched its generic version of GlaxoSmithKline Plc’s (GSK) herpes drug Valtrex in the US in time to take advantage of a marketing exclusivity.

Huge relief: Ranbaxy Laboratories MD and CEO Atul Sobti. Ramesh Pathania / Mint

Ranbaxy, the first to file an application for the drug in the US, had been granted a 180-day marketing exclusivity by the US Food and Drug Administration (FDA). But Ranbaxy had submitted the application from Dewas, one of its two sites issued a warning letter by FDA, and investors and analysts were unsure if the firm would be able to launch the drug in time to maintain its exclusivity.

A Ranbaxy spokesperson confirmed the development, adding the drug was launched on 25 November in the US in 500mg and 1g tablets.

Valtrex (valacyclovir) had sales of $2.2 billion (Rs10,186 crore) in the US in 2008. Ranbaxy was expected to make $150-200 million from its copy of Valtrex. Ranbaxy won the 180-day marketing exclusivity after a settlement with GSK in 2007.

Ranbaxy shares closed 1.79% up at Rs430.05 each in a weak Mumbai market.

“People had doubts about Ranbaxy’s first to file (FTF) pipeline being secure due to the FDA issues. Valtrex being launched on time means that they are well in control of (the) situation. It restores confidence in their FTFs since previously their FTF launch of generic Imitrex was delayed by five months,” said an analyst with a foreign brokerage.

Delay in project lands DLF in the dock again

Shabana Hussain — Thu, 26 Nov 2009 18:10:00 GMT

New Delhi: India’s largest realtor, DLF Ltd, is again in the cross hairs of its customers. Buyers who had invested in the company’s commercial office project in south Delhi are demanding a refund from the developer, alleging that the project is delayed and the company has not obtained approval for the project.

The project, DLF Towers in Okhla, south Delhi, was launched in March 2008, when real estate prices were at a high and before the global slowdown hit the Indian real estate sector.

In the last one year, however, commercial rental values have fallen by around 15-30%, according to real estate consultant CB Richard Ellis.

Long wait: The construction site for DLF Tower in Okhla, Delhi. Buyers want a reduction in line with the correction in realty prices. Rajkumar/Mint

Spread over 5 acres, the project will have three towers. Around 300 buyers had booked space in DLF Towers, which is expected to be completed by March 2011.

Early this year, a group of 80 buyers formed DLF Towers Okhla Allottees Association to demand a refund on the grounds that the project is running behind schedule and on DLF’s own assurance that it will give a refund if the project does not get the required approvals within a year of booking. The association now has 232 members.

Buyers also want a reduction in price in tune with the correction in commercial realty prices. According to the association, its members have been allotted space at the project at Rs5,000-18,000 per sq. ft. The members claim that since there has been a 40-50% decline in commercial property values, DLF should give them a discount.

The firm, however, has not yet announced an exit policy for buyers of its Okhla project.

This is not the first time that DLF has been in trouble with buyers who wanted a refund on the basis that the project is delayed. Earlier, this year DLF was forced to refund money to some buyers of its Garden City project in Chennai, even after it slashed apartment prices there.

More recently, since November, DLF has been refunding money to some buyers of its New Town Heights project in Gurgaon, who had asked for a refund even though the company reduced prices by 20%.

Buyers of the Okhla project allege that DLF has not obtained a “change in land use”, which is required since a commercial project is being developed on land meant for industrial use. According to the “application for provisional allotment”, a copy of which is with Mint, the firm has said that if it is not able to allot space to buyers within a year of signing the booking form due to non-sanction of building plan, DLF will refund the payment made by buyers along with an annual interest of 9%.

“After 20 months of launching the project, there is only a deep hole dug in the ground at the site,“ said Bob Seagal, a buyer in the project. “And according to the booking form if approval is not taken within 12 months, buyers can take a refund... But DLF is not ready to give us a refund,” he said.

According to a right to information query filed by the association with the Municipal Corporation of Delhi and Delhi Development Authority in September, a copy of which is with Mint, permission has been granted to the project for construction as an “industrial project”. Building plan and layout plans have also been sanctioned for an industrial project.

A visit to the site also revealed that excavation process is going on at the site.

DLF’s spokesperson said that the firm has obtained all the required approvals and construction is in full swing at the site.

“We are committed to deliver the project on schedule as promised,” the spokesperson said. He, however, declined comment on whether the firm has paid the requisite conversion charges for getting the end-use classification changed from industrial to commercial.

According to Anuj Puri, chairman and country head, Jones Lang LaSalle Meghraj, the current law does not prohibit developers from launching a project or starting construction on a project without approval. “But, this also depends from state to state. In Punjab, for instance, a developer cannot launch a project without approvals,” he clarified.

Renu Shankar, another buyer who has paid around 55% of the total amount of around Rs60 lakh, said that she realized that the land was meant for industrial use only in December, when she received the booking form.

“When we invested the money in March, the agreement was not given to us,” she said. “I was not informed about all this by the agent who sold the space... Had I known I would not have invested,” she lamented.

Following the slowdown which forced many developers to halt or delay construction of several projects due to a liquidity crunch, buyers have increasingly turned the heat on developers for failing to adhere to project construction schedules.

The country’s second largest real estate developer, Unitech Ltd, has been faced with demands for refund for its residential project Capella in Greater Noida. Another Delhi-based realtor, Vatika Ltd, is also facing a similar situation for its township project India Next in Gurgaon.

Pfizer pins hopes on Aurobindo, does not rule out Indian buys

C.R. Sukumar — Thu, 26 Nov 2009 18:08:00 GMT

Hyderabad: Drug maker Pfizer Inc., the world’s largest by revenue, is banking on its alliance with Aurobindo Pharma Ltd to turn around its generic medicines unit and drive overall growth, president and general manager David Simmons said.

Boost in profile: A file photo of (left) Aurobindo chairman P.V. Ramaprasad Reddy and Pfizer president and general manager David Simmons. The alliance with Aurobindo would help boost Pfizer’s established drugs unit, Simmons says. Bharath Sai / Mint

The drug maker will also consider buying factories in India. “Where an acquisition looks very attractive financially, we would certainly consider it,” he said in a recent interview.

In May, Pfizer acquired rights to sell 55 tablets and five injectable drugs from Hyderabad-based Aurobindo in at least 70 emerging countries. These medicines treat conditions such as cardiovascular ailments and central nervous system disorders.

New York-based Pfizer is under pressure as several of its medicines such as its cholesterol drug Lipitor go off-patent in the next couple of years. These drugs contribute nearly 40% of its revenue.

Lipitor, the world’s best-selling drug that fetched $12 billion (Rs55,000 crore) in 2008, or a quarter of Pfizer’s annual revenue, suffered a 9% drop in the September quarter mainly due to prescription benefit programmes and because poor and uninsured patients are increasingly opting for copycat versions of the drug.

To counter the impact of the patent expiry and competition from generic drugs, Simmons said Pfizer is implementing a three-pronged strategy to expand its portfolio.

“We can partner with companies like Aurobindo and in-license their products. We can make them (products) at our own manufacturing plants, where we have a unique capability. Or, we can acquire a company with the assets,” he said.

The alliance with Aurobindo, Simmons said, would help boost Pfizer’s established drugs unit, which sells prescription drugs that are losing sales to generic competition. “By 2011, we are going to turn it (established drugs unit which he heads) into a growth engine for Pfizer.”

The unit contributed at least one-fifth of Pfizer’s $48 billion revenue in 2008, or close to $10 billion. In the September quarter, its sales fell 12% while the firm suffered a 3% drop in revenue at $11.62 billion.

According to Pfizer’s website, the global established products market, which was at $270 billion in 2006, is expected to grow to at least $500 billion by 2011.

Ravi Agrawal, an analyst with brokerage Edelweiss Securities Ltd, said Pfizer has a 4% market share in the established products business globally and aims to grow faster than the market.

“Pfizer has carved out emerging markets and established products business units in a strategic initiative to create smaller and more focused units,” he said. “While the emerging markets unit focuses on Pfizer’s initiatives in rest of the world markets, the established products unit focuses on products that have lost marketing or patent exclusivity in the developed markets.”

Aurobindo, Agrawal added, was likely to emerge as a key supplier to Pfizer’s generic drug needs.

The firm would “supply to Pfizer’s emerging markets unit for the generic portfolio and for the established products segment for developed markets including Greenstone (Pfizer’s generic pharma subsidiary) in the US”, he said.

Simmons said Pfizer was upbeat about its product pipeline and the drug maker’s focus was on optimizing its patent-protected products and the innovative portion of the portfolio. Eleven of the firm’s 25 new drugs are in late-stage studies.

High debt levels burden textile exporters even as orders surge

Madhurima Nandy — Thu, 26 Nov 2009 17:16:00 GMT

Export orders at large textile firms have risen in the past few months as demand from the US and the UK markets return, but these companies are still under pressure from significant debt on their books.

Earnings for the three months ended 30 September signalled a recovery in the sector, but the crisis is far from over for the larger firms, analysts said.

Large exporters have spread themselves thin through big-ticket acquisitions and aggressive expansions of production facilities in the past year, when textile exports had hit a bottom. This has led to soaring debt levels. “Balance sheet pressure will continue to be a bottleneck for most textile firms and unless sufficient equity is infused, leverage will be a concern,” said Jaibir Sethi, analyst, consumer and retail, at the India research arm of Noble Group, a British investment bank.

Though some firms have sold assets like land and restructured debt to lower their debt-to-equity ratio, they continue to explore options to bring down the ratio further.

With a debt of Rs6,900 crore, Alok Industries Ltd, one of India’s largest integrated textile manufacturers, plans to sell properties and land in Mumbai as well as dilute stake in its UK retail subsidiary, Grabal Alok UK Ltd, to strategic investors. It also plans to raise Rs800-1,000 crore to repay borrowings.

Alok Industries’ order books for the next three months are full at Rs900 crore, but high debt and increasing interest cost will remain a concern, Anand Rathi Financial Services Ltd said in an 18 November report.

Textile exports, which forms 5% of the country’s gross domestic product and 4% of the global textile and apparel trade, fell 7.3% in the first half of 2009-10, but have stabilized in the past two months.

On the back of two acquisitions—Hartmarx Corp. for $119 million (Rs551 crore) and premium Italian shirting firm Leggiuno SpA for an undisclosed price, the Nitin Kasliwal-promoted S Kumars Nationwide Ltd has piled on debt that stands at Rs2,400 crore, compared with Rs1,783 crore in the quarter ended 31 March.

The company, which didn’t put the brakes on aggressive expansions even during the downturn, got a shareholder nod to raise Rs1,000 crore by selling securities to institutional investors. S Kumars has a debt-to-equity ratio of 1:1. “The debt increased on our balance sheet because it added on the debt of the two acquired companies,” chief financial officer Jagadeesh Shetty said.

Though orders have improved and firms have managed to acquire working capital for now, analysts believe some of them would need at least two more quarters to come out of the woods. “Most textile players are banking on the return of demand and rise in orders now after a year-long lull,” said D.D. Sharma, vice-president, retail, Anand Rathi. “Companies will also try to raise money and repay debt to repair balance sheets.”

Mumbai-based Bombay Rayon Fashions Ltd has tried cutting debt, which stood at Rs2,100 crore on 31 March, by raising funds through a variety of ways. It is raising $97 million by issuing global depository receipts and Rs200 crore through an issue of warrants, after mulling options such as selling shares to institutional investors. The money would be used for further expansion and on a new factory in Maharashtra as well as to repay debt.

“The debt has also increased due to the company’s expensive retail acquisitions like Guru, an Italian clothing brand,” said an analyst at a Mumbai-based brokerage, who spoke on condition of anonymity.

Textile, being a capital-intensive business, has pushed companies to restructure debt due to a constant need of working capital. The analyst said firms such as S Kumars, Alok Industries and Bombay Rayon have used their retail business as a major growth driver.

“There are pros and cons to this,” he said. “These are companies which want to grow very fast and have increased their manufacturing capacities even when demand was very low. During this time, they also tried their hands at growing their retail business.”

Arvind Ltd, which has a long-term debt of Rs950 crore, repaid Rs40 crore in the last quarter and expects to grow 15% year-on-year owing to rising exports, chief financial officer Jayesh Shah said.

Celebrity Fashions Pvt. Ltd, a Chennai-based export firm, has restructured part of its Rs180 crore borrowings, of which Rs120 crore is long-term debt. It even sold a factory in 2008 for Rs40 crore. The firm cut its debt by Rs20 crore after a one-time settlement with two banks. “The good part is that our order book is full up to March,” said executive director S. Surya Narayanan. “Though the pricing pressure on exports continue, margins have improved.”

Satyam trials to begin in 3-4 weeks

C.R. Sukumar — Thu, 26 Nov 2009 17:11:00 GMT

Hyderabad: Trials in the multi-crore accounting fraud at Satyam Computer Services Ltd, once the country’s fourth largest software exporter, will begin in three-four weeks, an official of the Central Bureau of Investigation (CBI) said.

A designated CBI court meanwhile posted the hearing on framing of charges against B. Ramalinaga Raju, former chairman and founder of Satyam, and nine others accused in the case to 9 December. It also extended judicial remand for all the accused in the case to the same date.

The CBI official said a special court was being readied with a magistrate and supporting staff in the premises of the metropolitan magistrate court at Nampally, Hyderabad.

Also See Raju ranks fourth in Forbes list ( Graphics )

“CBI is ready for the trials in the case and expects the trial to begin in the next three-four weeks,” he said on condition of anonymity.

On Tuesday, CBI, India’s premier investigation agency, said in fresh charges that it had found evidence of an additional Rs4,739 crore fraud in the Satyam case. This was on top of the Rs7,136 crore in misstated accounts Raju had confessed to in January, and takes the total extent of the fraud to Rs11,875 crore.

The new evidence dragged the stock down 11% the following day, but it bounced back on Thursday on the back of assurances by Satyam’s new management on improving performance and the arrest of client attrition. Satyam shares climbed 2.43% to close at Rs92.75 on the Bombay Stock Exchange on Thursday, on a day the benchmark Sensex index fell by 344 points, or 2%, to 16,854.93.

After spending nearly three months in hospital after he complained of chest pain, Raju was on Thursday discharged from the Nizam’s Institute of Medical Sciences and shifted back to jail. He underwent an angioplasty on 15 September and was then being treated for a liver ailment.

CBI opposed further hospitalization for Raju while responding in court to a petition filed by Raju’s wife Nandini, who offered to bear the treatment expenses and sought his further stay in the hospital. The court has reserved its orders on the issue for Friday.

Graphics by Yogesh Kumar / Mint

PTI contributed to this story.

ONGC plans to discuss oil opportunities with Iran

Rakteem Katakey / Bloomberg — Thu, 26 Nov 2009 17:07:00 GMT

New Delhi: The country’s biggest energy producer, Oil and Natural Gas Corp. Ltd, plans to discuss specific opportunities with executives from National Iranian Oil Co. next week, chairman and managing director R.S. Sharma said.

“In import-dependent countries like ours, we have to see where are the future sources of energy supplies,” Sharma said. “Iran, they have the second largest crude oil and gas reserves and they are not very well exploited.”

India is competing with countries, including China and South Korea, for natural resources overseas as output from domestic fields declines and requirements increase in the world’s second fastest growing economy. Domestic demand for oil may grow at as much as 4% in 2010, Sharma said. ONGC’s plans to develop projects in Iran have been delayed by the ongoing attempts to halt the West Asian nation’s nuclear programme.

The meeting with the Iranian delegation is scheduled for 30 November, Sharma said.

ONGC is in talks with state-owned Petropars Ltd to buy a stake in South Pars, Iran’s largest natural gas field, R.S. Butola, managing director of ONGC Videsh Ltd, the overseas unit, said on 6 October. The company discovered gas in Iran’s Farsi block in partnership with refiner Indian Oil Corp. Ltd and Oil India Ltd.

ONGC shares fell 0.41% at Rs1,174.75 even as the Bombay Stock Exchange’s Sensex index lost 2%.

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Air India, ICPA deadlock continues

Tarun Shukla — Thu, 26 Nov 2009 16:48:00 GMT

New Delhi: State-run National Aviation Co. of India Ltd-run Air India’s pilots’ union Indian Commercial Pilots Association or ICPA failed to clear its deadlock with the management on Thursday in the run-up to the strike notice call given from November 30th.

ICPA, with backing of some 800 pilots, is protesting against irregular payments by the carrier and seeking uniform pay scale rules within the carrier. The pilot’s union had given a strike call notice from 24 November but that was later moved to 30 November after conciliation meetings with the management and the chief labour commissioner S.K. Mukhopadhyay last week.

Thursday’s parleys in the capital were expected to result in some resolution between the two sides. ICPA president Capt. Shailendra Singh said that they were called for a meeting with chairman and managing director Arvind Jadhav but were later refused an audience with him. “We don’t want to talk to people who do not have any mandate,” he said referring to the senior directors who held talks on Thursday.

“We have instructed everyone to be on standby for the strike which might happen if talks fail with CLC (on 30 November). We will follow the legal process,” he said.

An Air India spokesman could not be reached for comment.

Deloitte to draw up FACT growth road map

Ajayan — Thu, 26 Nov 2009 16:37:00 GMT

Kochi: “Fertilizers and Chemicals Travancore Ltd has appointed Deloitte Touche Tohmatsu India Pvt. Ltd to prepare a five-year growth and diversification roadmap for the Rs2,000 crore investment plans of the public sector unit,” a senior official said on Thursday.

The company had been making losses since 1998 and came out of it in the financial year ended Marh 2008 when it posted a net profit of Rs6 crore. It posted profit of Rs42.95 crore in fiscal 2009.

George Sleeba, chairman and managing director who is scheduled to retire this month after 34 years with the company, said: “Though things had started looking up, several issues such as a lack of working capital, fertilizer pricing and a host of pending project proposals had led to the union government suggesting a thorough study. In 2003, Deloitte had been appointed as global advisor for the union government’s disinvestment programme for the PSU and which never happened.”

Sleeba said that Deloitte, which had made an in-depth study of the company earlier, was expected to submit the report soon. The report will be sent to the union government for action.

The new projects include setting up a urea plant with an annual capacity of 5 lakh tonnes at an investment of Rs695 crore to be in tune with the availability of liquefied natural gas (LNG) by 2012, revamping and modifying the existing complex fertilizer unit to 10 lakh tonnes annual capacity from the current 6.33 lakh tonne at an investment of Rs200 crore and a Rs750 crore caprolactum production capacity expansion from 0.5 lakh tonne to 1.5 lakh tonnes.

Singapore firm in JV to build ships at Kakinada

P Manoj — Thu, 26 Nov 2009 16:24:00 GMT

Bangalore: Singapore’s Sembawang Shipyard Pte Ltd will set up a $375 million (Rs1,750 crore) yard with a local partner in Kakinada, Andhra Pradesh.

Sembawang Shipyard has floated Sembmarine Kakinada Ltd, a joint venture with Kakinada Seaports Ltd, which operates the Kakinada port, to develop and operate the shipbuilding and repair facility. The joint venture agreement was signed in New Delhi on Thursday.

The yard will build and repair vessels and other equipment used for supporting offshore oil exploration and production.

Sembawang Shipyard is a subsidiary of Singapore-listed Sembcorp Marine Ltd, the world’s second biggest oil rig builder. Sembcorp Marine through Sembawang Shipyard will hold a 19.9% share of the ventures’s initial investment of $50 million, with an option to increase it to 40%, the company said in a statement.

Sembmarine Kakinada will be developed in three-phases over three-five years.

Mahindra Satyam hit by new charges; outlook uncertain

Reuters — Thu, 26 Nov 2009 10:43:00 GMT

Bangalore: Mahindra-Satyam shares fell to a 4-month low on Thursday, before recovering, on concerns over its outlook after Indian investigators filed new charges over accounting fraud that hit Satyam earlier this year.

“Investors are playing a blind game until the audited numbers are out. There could be more skeletons hidden in the closet,” said HDFC Securities’ head of private client group V.K. Sharma, who is advising clients to stay away from the stock until there is further clarity.

The stock topped the volume chart, with about 30 million shares traded, nearly three times its average daily volume over the past 90 days. It ended up 2.4% at Rs92.75.

Mahindra Satyam, earlier known as Satyam Computer Services, was acquired by Tech Mahindra in April after the company was hammered by India’s biggest corporate fraud, which came to light in January.

V. V. Lakshmi Narayana, deputy inspector general of India’s Central Bureau of Investigation, told Reuters the extent of the fraud at Satyam could be much larger than the Rs71.36 billion ($1.5 billion) that founder Ramalinga Raju had confessed to in a letter in January.

“All investigations into the accounting and auditing part of the business have been completed, and we are now going to look into the money diversion from the company,” Narayana, who is part of the team probing the fraud, said from Hyderabad.

“Whatever Raju said is not the complete reality.”

Narayana said the agency estimated losses suffered by investors in the wake of the fraud could be up to Rs140 billion.

Mahindra Satyam, which has about 35,000 employees, hoped to restate its accounts by the middle of next year, Atul Kunwar, president of its global operations, said on Wednesday.

Vaibhav Sanghavi, director of Ambit Capital, said, “It’s very difficult to assess the situation until the audited numbers are out.”

Officials at Mahindra Satyam did not respond to requests by Reuters for comment. A Tech Mahindra spokesman declined comment.

Shares in Tech Mahindra, a unit of tractor and utility vehicles maker Mahindra & Mahindra, ended down 1.2%, having earlier fallen as much as 6.5% to a 3-month low.

Kunwar also told the Reuters India Investment Summit on Wednesday that customer attrition had stopped and the company did not need price cuts to win new deals.

On Tuesday, the CBI said it had filed a supplementary charge sheet containing new allegations against Raju and nine others associated with the outsourcing firm.

New charges included that revenues had been inflated by Rs4.3 billion by creating fake invoices and customers, and that forged board resolutions were used to get loans worth Rs12.2 billion.

On Thursday, Bharat Kumar, a lawyer for Raju, told Reuters he could not comment as he had not received a copy of the additional charge sheet the investigating agency had submitted to the court.

When he quit in January, Raju, who is in judicial custody, said profits had been falsely inflated for years and assets overstated.

PC July-Sept sales fall 3.1% on year

Reuters — Thu, 26 Nov 2009 10:10:00 GMT

Mumbai: Personal computers (PC) sales in India fell 3.1% from a year earlier to 2.19 million units during July-September, IT research firm IDC said on Thursday.

However, the sales for the quarter was 24% higher from April-June, indicating the recovery was strengthening, IDC said in a statement.

“The July-September 2009 quarter experienced a strong boost from new found consumer confidence that reflected in increased demand during the festive season,” said Kapil Dev Singh, country manager, IDC India.

“This performance underlines the recovery in the India PC market.”

Desktop PC sales accounted for nearly two-thirds of total PC sales at 1.46 million units, down 6.7% over last year, but up 15.2% over April-June.

However, notebook PC shipments rose 5.2% to 731,707 units on year.

Hewlett-Packard retained the top slot in total PC sales with a market share of 17.1%, followed by Dell and Acer at 11.3% and 11.1% market share respectively.

“Commercial PC sales can be expected to steadily improve as the economy recovers,” said Sumanta Mukherjee, lead PC analyst at IDC India.