INDIA BUSINESS WORLD - MAY 2006
THE MONTH THAT WAS

News & important developments from the most prospective of the New World markets……. India. Our effort is to provide you with the latest and relevant developments that take place in the Indian business, economic and legal environment.

ECONOMIC & LEGAL NEWS

PRAMOD MAHAJAN PASSES AWAY : After battling for over 12 days, the neversay-die Pramod Mahajan gave up the fight. BJP loses its chief strategist, networker, CFO...

PARLIAMENT OKAYS BILL TO HALT MCD DRIVE : The Congress and the BJP on Monday got together to ensure the passage of a bill proposing a one-year moratorium on the demolition and sealing drive against unauthorised constructions in the National Capital Territory of Delhi.

OFFICE OF PROFIT BILL PASSED AMID NDA WALKOUT FROM LOK SABHA : The Left parties displayed their clout in the ruling dispensation when they got the UPA government pass a bill scrapping 18 posts from the list of offices of profit. The Bill,

LARGEST FALL IN BSE'S 150 YEARS : IT was the perfect storm. The Indian markets had been teetering on a knife-edge fora while. But on Thursday, the tight-rope walk ended. A convergence of global and domestic events knocked the market off the cliff and sent it crashing into the abyss.

BOTH BIRLAS AS WELL LODHAS DECLARE JUDGMENT AS VICTORY : THE Birlas are triumphant, despite a last-minute division bench stay. “It's a landmark judgment” was the universal refrain at Birla Buildings on Friday afternoon,

NO CAPITAL GAINS TAX ON EQUITIES : Foreign Institutional Investors (FIIs) can breathe easy now and continue to bet on the India growth story. Finance minister P Chidambaram has ruled out imposition of long-term capital gains tax on equities traded on the Indian bourses.

IOC LOOSING RS 100 CR DAILY ON SALES BELOW COST OF PRODUCTION : Indian Oil Corporation (IOC) is bleeding Rs 100 crore daily due to the sale of petrol, diesel, LPG and kerosene below the cost of production and the proposed price hike would not be sufficient to cover its loss.

GOVT. MOVES TO BULLDOZE DEMOLITIONS : THE bulldozers are set to come to a stop in Delhi. The Lok Sabha on Friday passed a Bill that proposes a one-year moratorium on punitive action against unauthorized constructions in the national Capital.

FOREIGN EXCHANGE RESERVES HIT $162 B : THE country's foreign exchange reserves rose $1.7 billion on account of massive mop up by the central bank during the week ended May 5 to touch a new high of $162.4 billion

SECURITISATION OF ASSETS HITS BANKS : THE RBI guidelines on securitisation of standard assets issued earlier this year have hit the market, affecting active players such as Citibank, Standard Chartered Bank and ICICI Bank, among others.

INDIA PREFERS TO GO DUTCH : THE NETHERLANDS has emerged the largest recipient of overseas Indian investment, surpassing traditional favourites.

BSNL LOCAL CALL RATES TO LANDLINES CUT 75% :   BHARAT Sanchar Nigam Ltd (BSNL) has revised the pulse rate for local calls made to fixed-line subscribers of private operators to 180 seconds from the existing 45 seconds.

GOVT. REJECTS REPORT ON NETAJI DEATH : THE mystery over the death of Netaji Subhash Chandra Bose deepened on Wednesday with the M K Mukherjee Commission inferring that he did not die in a plane crash in 1945 and the government rejecting the finding.

ASEAN FTA READY TO TAKE OFF IN JANUARY : HERE'S the final word on the India-Asean free trade agreement (FTA) ––bigger than any other trade pact that India has entered into so far.

BULLS HIT : Mayhem on Monday: The bottom literally fell off the market as Sensex went into a free 1,111-point fall. It bounced back, but investor confidence didn't.

UPA WINS THE DAY FOR ARJUN : THEUPA leadership, has given its nod to the Mandal II proposal and said the enabling legislation will be passed by Parliament during the monsoon session.

SEZ POLICY DEADLOCK PUTS 40 PROPOSALS ON BACK BURNER : EVEN as the finance ministry has locked horns with the commerce & industry ministry over the policy on special economic zones (SEZs),

OFFICE OF PROFIT BILL PASSED AMID NDA WALKOUT FROM LS : THE Left parties displayed their clout in the ruling dispensation when they got the UPA government pass a bill scrapping 18 posts from the list of offices of profit.

CHINNA VEEDUS 'R' BIG PROBLEM: INDU MARRIAGE ACT HAS NO PLACE FOR THE SECOND FAMILY : TILL death do us part is fine. But what follows is partition and that turns messy in the case of a string of wealthy industrial families where second wives,

OFFICE OF PROFIT BILL SENT BACK BY PRESIDENT KALAM :   IN A major embarrassment to the Manmohan Singh government, President A P J Abdul Kalam, on Tuesday, returned the Office of Profit Bill, reports Our Political Bureau from New Delhi.

BUSINESS NEWS

RUPEE LOSES 23 PAISE TO END AT LOWEST LEVEL THIS YEAR : THE rupee ended the day at 46.09 — its lowest level in '06 — losing nearly 23 paise compared to Friday's close of 45.88/89.

RANBAXY SCIONS TALK PEACE : MAX India chairman Analjit Singh will file a probate application regarding the will of late Bhai Mohan Singh in the court next week.

INDIA IBM'S FASTEST GROWING MARKET : IBM India, which is set to host Sam Palmisano, its global chairman in Bangalore between June 6-7, has posted a 61% increase in domestic revenues for the first quarter (Jan-March) of this year as against a year ago.

MALAYSIAN NAVIS TO BUY NIRULA'S FOR 90 CR: MALAYSIAN NAVIS TO BUY NIRULA'S FOR 90 CR : AFTER being in the market for a year or so the country's original western style fast-food chain Nirula's is finally tying up with Malaysia-based Navis Capital Partners to sell its operations.

VC, PRIVATE EQUITY FIRMS SEAL 31 DEALS WORTH $1.6 B IN 40 DAYS : The venture capital and private equity scene in India is on a roll. Since the beginning of April to May 10 this year (just 40 days), the country has seen 31 deals worth $1.6 billion (Rs 7,200 crore).

ADANIS 48-ACRE MUMBAI DEAL RAISES REALTY BAR : The Ahmedabad-based Adani Group has finalised India's largest land deal with the Housing Development and Infrastructure Ltd (HDIL) for Rs 2,250 crore to develop a commercial and retail hub in Mumbai's landmark commercial business district, the Bandra Kurla Complex (BKC).

FRINGE BENEFIT TACK : AHOST of companies in the software, telecom, banking, FMCG and insurance sectors have decided to restart contributions to employees' superannuation fund from this fiscal.

POOR CAN RETIRE TO PENSION : IT'S a small beginning. But if things move as planned, India's 360 million workers, specially the poorer among them, will be able to retire with some money and dignity soon.

ICICI BANK UPS HOME LOANS RATES YET AGAIN,SAYS WON'T HURT DEMAND : ICICI Bank expects housing loans to grow by 30% during the current financial year despite the half percentage point hike in interest rates announced on Friday — its second hike this year.

FROM JUNE, MUMBAI CALLS COST DELHI RATES :  COME June 1, calling Mumbai will be cheaper for Delhiites using MTNL landlines.

INDIA ADOPTS SUPER RICE PAKISTAN HIT :  Islamabad had a monopoly on Super basmati. Now that New Delhi can officially export the same rice, Pakistan could end up losing up to 40% of the global market.

I-T TO GIVE SARAL A COMPLEX :  SARAL may become complex. The finance ministry is planning to introduce a four-page Saral form where assesses will have to mention their major household expenditure.

I-T SCRUTINY NOT TO BE AT TAXMAN'S WHIM :  Individuals and corporates dreading the taxman knocking at the door for a “random scrutiny” may relax.

KARVY STAYS DP, BUT CAN'T OPEN NEW ACCOUNTS :  IN A breather to Karvy Stock Broking in the alleged irregularities case in initial public offers

APRIL BURST: SURGE IN CORPORATE LOAN OFFTAKE :  FOR the first time in several years bank loans to corporates and retail customers have grown in the first few weeks of April

ELECTRICAL GOODS MAKERS CORNER 24% OF TOTAL FDI INFLOW IN 2005 :  IF improved macro fundamentals have encouraged India Inc to invest in new projects,

TAXMEN NOW EXCISE MF UNITS :  The central excise department has indicated that service tax will apply on entry & exit loads. Rattled by the letter, some funds have sought legal advice.

ON LONG HAUL,MTNL TO DITCH BSNL :  NLD Bids From All Players To Be Invited As Delhi-Mumbai Provider Feels Tariffs For Carrying Its Long-Distance Traffic Are Far Lower Than 65 Paise A Minute it Pays.

LISTED COS CAN PLACE SECURITIES WITH QIBS :  IN AN initiative that may encourage Indian companies to raise money in the local markets rather than overseas,

FIIS & FIS CORNER 5.6% OF RELIANCE PETROLEUM IPO :  LEADING FIIs Goldman Sachs, Fidelity and large domestic institutional investors such as LIC,

EGYPT PUTS WEIGHT BEHIND ORASCOM'S HUTCH STAKE :  THE political sensitivities and shareholding tussle in Hutch Essar Ltd (HEL) have a taken on a new turn.

RIL TO INVEST $6 B IN KG, SEES GAS OUTPUT IN 2 YRS :   RELIANCE Industries (RIL) is looking at gas production from the KG Basin in Andhra Pradesh by the middle of 2008.

STERLITE SENDS NOTICE TO GOVT ON BALCO :  SEEKING to acquire the residual 49% stake in Balco, Sterlite Group has sent a legal notice to the government alleging a “breach of shareholders agreement”.

SHYAM BAGS GSM LICENCE IN UK :    SHYAM Telecom has got a licence for providing GSM-based cellular mobile services in Britain.

DOMESTIC TOURISM TO TOUCH $121.4 B :  THE tourism industry in India is likely to generate $121.4 billion (over Rs 5,44,500 crore) of economic activity by 2015, according to the World Travel and Tourism Council (WTTC).

UNITECH CUTS NATION'S TOP REALTY DEAL IN NOIDA :    THE largest deal in the recent history of Indian real estate was sealed on Tuesday with Unitech quoting a winning Rs 1,582 crore for 340 acres of land in Noida.

JET-SAHARA OPS NOT A MONOPOLY :  PAVING the way for the merger of Air Sahara with Jet Airways, the investigating arm of the Monopolies & Restrictive Trade Practices Commission (MRTPC) has cleared the Rs 2,300-crore deal from the monopoly perspective.

NTC TO SELL 10 MILLS FOR RS 4,000 CR : THE Mumbai real estate market may get hot again as National Textile Corporation (NTC) is planning to sell 10 of its mills in prime locations.

FIZZLED OUT: MALLYA DROPS TAITTINGER BID :   UB CHAIRMAN Vijay Mallya, who had emerged as the highest bidder, may still end up losing the battle for Taittinger Group's champagne assets, as the seller Starwood Capital is poised to ink a deal with French bank Credit Agricole and a section of the Taittinger family.

NEW DEVELOPMENTS AND JOINT VENTURES

WIPRO BUYS NORTH-WEST'S SWITCH BIZ FOR RS 102.2 CR : WIPRO Consumer Care and Lighting has acquired the switches business of the Delhi-based North-West Switchgear for an upfront consideration of Rs 102.2 crore in an all-cash deal.

HERO HONDA NET UP 20%, TO PAY 1000% DIVIDEND : BIKE market leader Hero Honda ended fiscal 2005-06 with a 20% growth in net profits to Rs 971.34 crore, up from Rs 810.47 crore last fiscal.

RCOVL NET UP 42% AT RS 440 CR : RELIANCE Communications Ventures (RCoVL), the telecom arm of the Anil Dhirubhai Ambani Group (ADAG), has posted 42% q-o-q jump in net profit to Rs 440 crore during the quarter ended March 31 ‘06 as subscriber numbers grew and margins expanded.

CITI BUYS 9% MORE IN HDFC : THE Indian financial services sector is witnessing one of the most dramatic stories. Citigroup, the world's largest financial services player, has acquired 9.27% in HDFC — India's top mortgage lender and one of the most valuable brands.

JAYPEE GROUP ACQUIRES GUJARAT ANJAN CEMENT : IN YET another consolidation move in the cement industry, the Jaypee group has struck a deal to acquire Gujarat Anjan Cement, which is implementing a 1.2-million cement plant in Kutch, Gujarat.

RELIANCE CAP ACQUIRES 1% STAKE IN VIDEOCON : THE Anil Ambani group-owned Reliance Capital has acquired close to 1% in Videocon Industries (VIL),

GEORGE SOROS BUYS 1% STAKE IN GMR INFRA :   QUANTUM Group of Funds (QGF), which is directly or indirectly controlled by billionaire and high-profile investor George Soros,

WIPRO TECH BUYS US CO FOR RS 46 CR :   Continuing with its strategy of acquisitions and expanding its range of offerings, Wipro Technologies

ICICI EMERGES TOP MORTGAGE PLAYER :  IT'S BEEN a different kind of race unlike the cola wars or the FMCG duel between HLL and P&G as ICICI bank emerges as the dominant force in the Indian mortgage market.

HINDALCO INKS MOU WITH MP FOR RS 7,700-CR GREENFIELD SMELTER : THE Aditya Birla Group flagship, Hindalco Industries, has entered into a memorandum of understanding (MoU) with the Madhya Pradesh government to set up a green field aluminium smelter project in the state for an estimated Rs 7,700 crore.

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