Need to Know | Daruwalla named new IBA deputy chairperson

Need to Know | Daruwalla named new IBA deputy chairperson

Mumbai: Homai A. Daruwalla, chairperson and managing director (CMD) of Central Bank of India, has been appointed as deputy chairperson of Indian Banks’ Association, with effect from 1 October. T.S. Narayanasami, chief of Bank of India, is the industry lobby’s chairman.

Daruwalla, a chartered accountant, took charge as CMD of Central Bank of India on 30 June 2005. Earlier, she was executive director at Oriental Bank of Commerce between August 2004 and June 2005.

— Staff Writer


Read, Lundal are new Vodafone regional heads

London: Vodafone Group Plc., the world’s leading mobile communications company, named Nick Read as chief executive officer (CEO) of the Asia-Pacific and Middle-East region, and Morten Lundal as CEO for Central Europe and Africa.

Read, currently head of the company’s UK business, and Lundal, who heads the West Asia and Africa region, will report to Vodafone CEO Vittorio Colao, the Newbury, England-based company said in an emailed statement .

Vodafone said 9 September that the management of Eastern Europe, West Asia, Africa and Asia will be split in two from 1 January. Vodafone has made acquisitions in Turkey and India in the past two years to counter slower growth in Europe.

— Bloomberg


Bankers urge RBI to ease liquidity crunch

Mumbai: Ahead of the mid-term review of annual monetary policy on 24 October, Reserve Bank of India (RBI) governor D. Subbarao on Monday met heads of commercial banks in Mumbai. The bankers, representing industry lobby Indian Banks’ Association, urged the governor to take steps to ease the liquidity crunch in the banking system. Four deputy governors — Rakesh Mohan, V. Leeladhar, Shyamala Gopinath and Usha Thorat—were also present at the meeting.

A public sector bank chief who was present at the meeting said, “Bank credit has been growing at 26%. With other avenues of capital raising drying out, industry is coming to banks for their fund requirement. Considering the tight liquidity condition, we are not able to meet their demand."

RBI infused a record Rs90,075 crore in the banking system on Monday to help banks tide over their short-term asset liability mismatches.

The bankers asked the governor to consider a cut in the statutory liquidity ratio, or SLR. Under the SLR norms, Indian banks are required to invest 25% of their deposits in government bonds. The bankers also asked RBI to exempt infrastructure loans from SLR and cash reserve requirement. The banks are currently required to keep 8% of their deposits with RBI as cash reserve.

State Bank of India chairman O.P. Bhatt, Bank of Baroda chairman and managing director (CMD) M.D. Mallya, Union Bank of India CMD M.V. Nair, Canara Bank CMD A.C. Mahajan, Citigroup CEO Sanjay Nayar and Axis Bank CMD P.J. Nayak were at the meeting.

— Anita Bhoir


Govt to cross debt target on populist spending

Mumbai: India will overshoot its borrowing target this fiscal by almost a fifth as the government spends more to win voters before elections due by May, economists say.

Asia’s third largest economy will sell more bonds and bills than planned to honour commitments to pay higher salaries, guarantee new jobs, write off farm loans and subsidize energy costs, according to a Bloomberg survey of 10 traders and economists.

The government, which kept planned debt sales within its budget target in a schedule published last week, is likely to boost the amount in the months ahead, all 10 respondents said.

“The fiscal situation is out of control," said Prasanna Ananthasubramaniam, a fixed income analyst in Mumbai at ICICI Securities Ltd. “The government hasn’t raised the borrowing target but it will still have to boost bond sales to meet the wage hikes, subsidies, loan waivers and job guarantees."

The government will exceed the six-month target by 71% as it adds auctions from January to March, raising a total Rs67,000 crore for the half-year period, according to the median estimate in the survey. That would increase the amount raised for this fiscal year to Rs1.73 trillion, surpassing the target of Rs1.45 trillion.

— Bloomberg


Bachat Lamp Yojana: CFLs to be sold for Rs15

New Delhi: Compact fluorescent lamps (CFLs) will now be available at merely Rs15 for households in Visakhapatnam, thanks to carbon credits. The scheme will soon be extended to major cities and towns all over the country. For now, the UN executive board, which registers projects to earn carbon credits, has approved the distribution of CFLs in Visakhapatnam.

Though CFLs are currently sold in the market for between Rs70 and Rs150, the differential will be recovered by the project sponsors through sale of carbon credits.

CFLs use much less energy than the older incandescent bulbs, thereby emitting less global warming gases, such as carbon dioxide. This helps earn carbon credits, which are bought by companies in developed countries.

The project will be implemented with the help of Osram, East AP Power Distribution Co. Ltd, and the bureau of energy efficiency in the power ministry. It is the first of the ministry’s Bachat Lamp Yojana, which is aiming to provide CFLs to all households across the country at an equivalent price of ordinary bulbs.

The scheme was announced by Union power minister Sushil Kumar Shinde last year.

A similar project, also supported by the bureau of energy efficiency, is in the UN pipeline for approval and 10 other projects are under preparation on similar lines.

Mint had reported on this scheme on 3 August 2007.

— Padmaparna Ghosh


Areva to start talks with India on reactors supply

Paris: Areva SA, the world’s largest nuclear reactor maker, will start talks to supply several reactors to India once the Asian country signs a cooperation accord with France this week. “A nuclear cooperation accord between France and India will enable discussions to start about supplying reactors to India," Patricia Marie, a Paris-based spokeswoman for Areva, said on Monday by telephone.

India and France will sign a nuclear cooperation agreement when Indian Prime Minister Manmohan Singh meets French President Nicolas Sarkozy in Paris on 30 September, or two-three days later if more time is needed to work out details, an aide to the French president had said earlier.

— Bloomberg


India, Nepal talk flood control, hydropower

Bangalore: Officials from India and Nepal met in Kathmandu on Monday to discuss ways to generate hydroelectric power and prevent flooding.

Water resources secretary Umesh Panjiyar and his Nepalese counterpart Shanker Prasad Koirala are looking at plans for hydroprojects on “many rivers", Indra Raj, a commissioner at the water resources ministry, said in a telephone interview from New Delhi. “The dams can help produce electricity and also help in irrigation and flood control. It is a mutually beneficial relationship."

— Bloomberg


2:11 swap for Aztecsoft merger with MindTree

Mumbai: Computer services provider MindTree Consulting Ltd, set up by former Wipro Ltd executives, will pay Aztecsoft Ltd shareholders two shares for every 11 held, valuing the company at Rs257 crore.

MindTree’s board approved the terms of the acquisition at a meeting on 26 September, according to a statement sent to the Bombay Stock Exchange on Monday. The purchase price offers a 25% premium over Aztecsoft’s closing price on Friday. Bangalore-based MindTree agreed in May to acquire 33% of Aztecsoft, and to make an offer for an additional 20% under Indian takeover rules.

— Bloomberg


Indian unit of IBM had 9.6% market share in ’07

Bangalore: The Indian unit of International Business Machines Corp. (IBM) had a share of 9.6% of the local IT services market, estimated to be around $ 5.57 billion, or Rs26,415 crore, in 2007, according to technology research and forecast firm IDC, IBM said in a press statement. It earned the market share by driving large-scale business transformation deals with customers such as Idea Cellular Ltd and DLF Ltd, the statement added.

IBM, Wipro Ltd, Tata Consultancy Services Ltd, HCL Technologies Ltd and Datacraft India, are the top five players in the Indian IT services market, a spokesman at the external PR agency of IDC said, but did not provide market share of the other four firms.

“The India domestic IT services market has grown to be over US$ 5 billion in 2007 and this growth can be attributed to the growth in number of outsourcing contracts being signed up in the country," said Praveen Sengar, senior manager for software and services research at IDC India in the statement.

— K. Raghu


Jerry Rao quits EDS to pursue other interests

Bangalore: Jaithirth (Jerry) Rao, the chairman of the Asia Pacific advisory board of EDS Inc, has quit the firm to pursue personal interests, a statement from the company said.

Rao founded MphasiS Ltd in 2001 that was later bought by EDS in 2006. Since then he led EDS India operations as vice-president. “He (Rao) played a pivotal role in the integration of EDS and MphasiS and has been instrumental in enabling clients to leverage this combined strength," said Michael Coomer, chairman of MphasiS and senior vice-president, EDS.

Rao built and developed Citibank Corp.’s consumer business in India, West Asia, Eastern Europe and the UK before founding MphasiS. He is currently on the boards of several firms including IDFC Private Equity, Royal Orchid Hotels Ltd, Purvankara Projects Ltd. Rao writes a column, Conservative Corner, for Mint. MphasiS stock was down 3.79% and closed at Rs179.20 on the Bombay Stock Exchange.

— K. Raghu


Govt can go ahead with smoking ban on 2 Oct

New Delhi: The Supreme Court on Monday upheld the Union government’s bid to impose a ban on smoking in public places starting on 2 October, dismissing an appeal filed by cigarette maker ITC Ltd and the Hotel Association of India. The ban will extend to offices to which the public has access, said the bench headed by justice B.N. Agarwal in New Delhi.

— Bloomberg


Cut-off marks in OBC admissions lower: govt

New Delhi: The Union government on Monday, in its response to an application before the Supreme Court, clarified that the cut-off marks for other backward class, or OBC, students for the admission process in Central educational institutions will be 5-10 marks below that set for general category students.

The five-judge bench headed by Chief Justice of India K.G. Balakrishnan was hearing an application filed by P.V. Indiresan, former director of IIT Madras , seeking a clarification on the April judgement of the Supreme Court that allowed the Union government to implement 27% reservations for OBCs in Central educational institutions.

It also highlighted the apparent confusion over the cut-off marks and dereservation of vacant OBC seats to admit general merit students in the admission rounds for academic year 2008-09 in Central educational institutions as reported in the media.

On whether vacant seats reserved for the OBC category were given to general students, as per the directions in the April judgement, the Union government said it was still awaiting data from different colleges.

— Malathi Nayak


IDFC Private Equity puts $86 mn in Suzlon unit

Mumbai: India’s largest wind turbine maker Suzlon Energy Ltd said on Monday IDFC Private Equity would buy 17.1% in subsidiary SE Forge Ltd for Rs400 crore ($86 million). SE Forge, which specializes in large-scale foundry and forging materials, is expanding capacity at its plants in Coimbatore in Tamil Nadu and Vadodara in Gujarat to cater to the growing demand in the wind energy sector, it said. Suzlon will continue to hold the remaining stake in SE Forge.

“The wind energy sector is expected to maintain its high growth supported by increasing cost-competitiveness of wind energy, high crude prices, thrust for green power and support from governments," Luis Miranda, president and chief executive of IDFC PE, said in a statement.

Suzlon, which also announced on Monday, a rights issue to raise up to Rs1,800 crore, said the funds would be used to buy Martifer SGPS SA’s stake in Repower Systems AG.

Suzlon ’s stock fell in Mumbai trading to the lowest in more than two years after it announced the rights issue. The company’s stock fell 12.19% to close at Rs153.45.

— Reuters/Bloomberg


Anti-infective drugs: Orchid, Merck join hands

Chennai: Chennai-based Orchid Chemicals and Pharmaceuticals Ltd has formed a research collaboration and licensing alliance with US-based Merck and Co. Inc. for the identification, development and commercialization of novel anti-bacterial and anti-fungal compounds.

The deal brings to Orchid an undisclosed amount of money that would be paid upfront by Merck. Also, Orchid will receive payments from Merck amounting to over $100 million (Rs469 crore), depending on the various drug discovery and development milestones that the compounds achieve.

The patent of the molecules developed by the collaboration would be owned by Orchid.

— Staff writer


India plans to sign FTA with Asean in December

New Delhi: Minister of state for commerce Jairam Ramesh said the country will sign a free-trade accord (FTA) with the 10-member Association of Southeast Asian Nations (Asean) in December.

India in August completed free-trade talks with Asean aimed at lowering or eliminating tariffs on products.

The agreement may increase trade between the two to $50 billion (Rs2.34 trillion) by 2010 from the present $38 billion, according to Union minister for commerce and industry Kamal Nath.

The country wants to extend the trade pact to cover services and investments, Ramesh said.

— Bloomberg