Roundup: Events of the fortnight
Mahindra Satyam's CEO C.P. Gurnani and Tech Mahindra's Vice
Chairman and MD Vineet Nayyar announce the merger of the two companies
in Mumbai.
Mahindra Satyam's CEO C.P. Gurnani and Tech Mahindra's Vice Chairman and MD Vineet Nayyar
Tech Note: Mahindra Satyam's CEO C.P. Gurnani and Tech Mahindra's Vice Chairman and MD Vineet Nayyar announce the merger of the two companies in Mumbai. The consolidated entity, with combined revenues of about $2.4 billion, is set to become the fifthlargest software services exporter by market value.
See also www.businesstoday.in/techm-satyam
CORPORATE
The last word has not been spoken in the Vodafone tax case. The Supreme Court has dismissed the government's review petition and has affirmed its earlier ruling that put overseas transfers of shares outside the Indian tax net.The government is now all set to raise a fresh demand on Vodafone. Similar cases involve Shantha Biotech's acquisition by Sanofi Aventis, SABMiller Plc's global acquisition of Foster's Group, the purchase of a stake in Idea Cellular Ltd from AT&T by Aditya Birla Nuvo Ltd and Tata Industries.
In the latest Thomson Reuters-INSEAD Asia Business Sentiment Index, Indian companies were more positive about their businesses. They expect pick-up in domestic economic growth in 2012/13 after last year's slump.
Housing prices in India have increased 284 per cent since 2001, according to Lloyds TSB International Global Housing Market Review. This amounts to an average annual rise of 14 per cent. Russia (209 per cent) and South Africa (161 per cent) are just behind in the table. Overall, emerging markets are hot favourites.
The 2G spectrum scam has taken a back seat with the Comptroller and Auditor General estimating that the government lost Rs 10.7 trillion (one trillion equals one lakh crore) by not auctioning coal blocks between 2004 and 2009. This is six times the presumtive loss of Rs 1.76 lakh crore in the 2G scam. The CAG Vinod Rai, in a letter to the Prime Minister, regretted the media leak, saying it was not the final report.
Flag Telecom, controlled by Anil Ambani's Reliance Communications (RCom), has filed papers on the Singapore stock exchange to raise up to $1.5 billion through an initial public offering. The move comes at a time when RCom, which has the second-largest subscriber base in the country, has been trying to cut its long term debt ($6.9 billion as of December).
ECONOMY
New Railway Minister Mukul Roy partially rolled back passenger fare hikes announced by predecessor Dinesh Trivedi. This is expected to leave a hole of up to Rs 4,000 crore in the budgeted gross traffic receipts.
The Reserve Bank of India has tightened gold loan guidelines for non-banking finance companies, restricting their gold loan size to 60 per cent of the value of gold jewellery. Many companies have been extending up to 95 per cent of the value of the jewellery as loans. NBFCs whose gold loans make up 50 per cent or more of financial assets are required to maintain Tier-I capital of 12 per cent by April 1, 2014. Separately, in a breather for NBFC-micro finance institutions, RBI has deferred the deadline on asset classification and provisioning norms to April 1, 2013.
A government panel will now devise new methods to assess poverty. The Plan panel has come under fire for estimates showing anyone earning over Rs 28 per day in urban areas and Rs 22 per day in rural areas is not poor. The Prime Minister said the Tendulkar panel report, which puts the number of poor at 37.5 per cent of the population, and the earlier estimates, were not all inclusive.
The US has exempted Japan and 10 European Union nations from financial sanctions meant to pressure Iran over its nuclear programme. But India and China, Iran's top two crude oil importers, are not exempted.
51% Rise in non performing assets of public sector banks in 2011. They shot up to Rs 1.03 trillion (1 trillion equals one lakh crore) as on December 2011, from Rs 68,597.09 crore a year ago.
$2 billion Foreign direct investment received by India in January, an annual growth of 92 per cent. Cumulative inflows touched $26.19 billion for April-January in the current fiscal year. Services ($4.83 billion) and pharmaceuticals ($3.20 billion) topped the list of sectors drawing inflows.
$3 billion Estimated global airline profits in 2012, down from previous estimate of $3.5 billion by IATA.
MARKETS
Reliance Communications and Reliance Power, part of the Anil Dhirubhai Ambani Group (ADAG), will be excluded from Nifty 50 index from April 27. The companies will be moved to the Nifty Junior Index. Reliance Power and RCom have significantly high promoter group holdings of approximately 80 per cent and 70 per cent, respectively, leading to relatively lower value of the average free float over the past six months.
State Bank of India, the country's largest bank by assets, has received the approval of its shareholders to raise about Rs 7,900 crore via a preferential allotment of shares to the Union government. The capital infusion will increase the government's shareholding in SBI to 61.58 per cent from 59.40 per cent now.
COMING UP
The IMF-World Bank spring meetings in Washington DC will focus on the state of the global economy and financial markets from April 20-22.
G-24 meetings will be held from April 16 to 22, again in Washington. The conference will coordinate the position of developing countries on monetary and development issues. The G-24 is currently chaired by Finance Minister Pranab Mukherjee.
Starting April 1, cheques and other monetary instruments will have only threemonth validity, instead of six as at present.
See also www.businesstoday.in/techm-satyam
CORPORATE
The last word has not been spoken in the Vodafone tax case. The Supreme Court has dismissed the government's review petition and has affirmed its earlier ruling that put overseas transfers of shares outside the Indian tax net.The government is now all set to raise a fresh demand on Vodafone. Similar cases involve Shantha Biotech's acquisition by Sanofi Aventis, SABMiller Plc's global acquisition of Foster's Group, the purchase of a stake in Idea Cellular Ltd from AT&T by Aditya Birla Nuvo Ltd and Tata Industries.
In the latest Thomson Reuters-INSEAD Asia Business Sentiment Index, Indian companies were more positive about their businesses. They expect pick-up in domestic economic growth in 2012/13 after last year's slump.
- Car prices are on the rise, following the excise duty hike in the Budget. Tata Motors and Honda Siel Cars India have increased car prices by up to Rs 35,000 and Rs 94,000, respectively. The German luxury car maker Audi has raised prices of its fully built units by 13-14 per cent, and the prices of the models produced in India have increased by 3.4 to 3.7 per cent.
Housing prices in India have increased 284 per cent since 2001, according to Lloyds TSB International Global Housing Market Review. This amounts to an average annual rise of 14 per cent. Russia (209 per cent) and South Africa (161 per cent) are just behind in the table. Overall, emerging markets are hot favourites.
The 2G spectrum scam has taken a back seat with the Comptroller and Auditor General estimating that the government lost Rs 10.7 trillion (one trillion equals one lakh crore) by not auctioning coal blocks between 2004 and 2009. This is six times the presumtive loss of Rs 1.76 lakh crore in the 2G scam. The CAG Vinod Rai, in a letter to the Prime Minister, regretted the media leak, saying it was not the final report.
Flag Telecom, controlled by Anil Ambani's Reliance Communications (RCom), has filed papers on the Singapore stock exchange to raise up to $1.5 billion through an initial public offering. The move comes at a time when RCom, which has the second-largest subscriber base in the country, has been trying to cut its long term debt ($6.9 billion as of December).
- Apple Inc, under new CEO Tim Cook, has finally announced plans to utilise its massive cash mountain of nearly $100 billion. The company plans to initiate quarterly dividends of $2.65 a share in the fourth quarter of the fiscal 2012. The board of directors have also authorised a $10 billion share repurchase agreement which would commence in fiscal 2013. In a new record, the company sold three million iPads within three days of the launch of the latest version.
Tim Cook
ECONOMY
New Railway Minister Mukul Roy partially rolled back passenger fare hikes announced by predecessor Dinesh Trivedi. This is expected to leave a hole of up to Rs 4,000 crore in the budgeted gross traffic receipts.
The Reserve Bank of India has tightened gold loan guidelines for non-banking finance companies, restricting their gold loan size to 60 per cent of the value of gold jewellery. Many companies have been extending up to 95 per cent of the value of the jewellery as loans. NBFCs whose gold loans make up 50 per cent or more of financial assets are required to maintain Tier-I capital of 12 per cent by April 1, 2014. Separately, in a breather for NBFC-micro finance institutions, RBI has deferred the deadline on asset classification and provisioning norms to April 1, 2013.
A government panel will now devise new methods to assess poverty. The Plan panel has come under fire for estimates showing anyone earning over Rs 28 per day in urban areas and Rs 22 per day in rural areas is not poor. The Prime Minister said the Tendulkar panel report, which puts the number of poor at 37.5 per cent of the population, and the earlier estimates, were not all inclusive.
The US has exempted Japan and 10 European Union nations from financial sanctions meant to pressure Iran over its nuclear programme. But India and China, Iran's top two crude oil importers, are not exempted.
51% Rise in non performing assets of public sector banks in 2011. They shot up to Rs 1.03 trillion (1 trillion equals one lakh crore) as on December 2011, from Rs 68,597.09 crore a year ago.
$2 billion Foreign direct investment received by India in January, an annual growth of 92 per cent. Cumulative inflows touched $26.19 billion for April-January in the current fiscal year. Services ($4.83 billion) and pharmaceuticals ($3.20 billion) topped the list of sectors drawing inflows.
$3 billion Estimated global airline profits in 2012, down from previous estimate of $3.5 billion by IATA.
MARKETS
Reliance Communications and Reliance Power, part of the Anil Dhirubhai Ambani Group (ADAG), will be excluded from Nifty 50 index from April 27. The companies will be moved to the Nifty Junior Index. Reliance Power and RCom have significantly high promoter group holdings of approximately 80 per cent and 70 per cent, respectively, leading to relatively lower value of the average free float over the past six months.
State Bank of India, the country's largest bank by assets, has received the approval of its shareholders to raise about Rs 7,900 crore via a preferential allotment of shares to the Union government. The capital infusion will increase the government's shareholding in SBI to 61.58 per cent from 59.40 per cent now.
COMING UP
The IMF-World Bank spring meetings in Washington DC will focus on the state of the global economy and financial markets from April 20-22.
G-24 meetings will be held from April 16 to 22, again in Washington. The conference will coordinate the position of developing countries on monetary and development issues. The G-24 is currently chaired by Finance Minister Pranab Mukherjee.
Starting April 1, cheques and other monetary instruments will have only threemonth validity, instead of six as at present.
