>IN BRIEF

Lagardeset tovisit India today

AmidtheInternationalMonetaryFund cautioning

Indiaagainstheadwindstoitseconomicgrowth,

FundchiefChristineLagardewillvisitthecountry

fortwodays,startingMonday.Lagardeislikelyto

meetPrimeMinisterNarendraModiandFinance

MinisterArunJaitley. 4

>

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15 dead in suicide blasts in Pakistan

At least 15 peoplewere killed and about 80

others injured on Sunday when Taliban suicide

bombers attacked two churches during Sunday

mass in a Christian colony in Lahore. 15

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Murdered techies body broughtback

Mourners paid their last respects to information

technology professional Prabha Arun Kumar

(41), stabbed to death in Australia, whose body

was brought to Bengaluru on Sunday.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Flipkart may be listed on Nasdaq

Flipkart is believed to be working on an

international listing, with Nasdaq in the US

emerging as the preferred destination. Experts

say before an initial public offering, expected in

12 to 18 months, the company must strengthen

its financials and organisational structure. 16

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Cong might harden stance

TheallegedsnoopingonCongressvice-

presidentRahulGandhibyanassistantsub-

inspectoroftheDelhiPolicethreatenstodent

theNarendraModigovernmentsreforms

agenda,astheCongressis likelytoadoptan

aggressivestancefollowingtheincident. 16

>

Commercial mining of

coal to be allowed

SHREYA JAI

New Delhi, 15 March

I

n the first major step

towards opening the

coal mining sector, the

governmentwill start allo-

cating coal blocks to state

governments for commer-

cial mining. The move,

likely in a month, will put

an end to the Centres 41-

year-old monopoly over

commercial sale of coal.

The coal ministry will

allot non-operational

mines to state govern-

ments for commercial

miningandsale of coal for

end use in the iron, steel,

cement and allied sectors.

This will bring business

and revenue to coal-rich

states, which have so far

receivedonly royalty from

private companiesmining

coal for captive use.

Non-operational

mines fromschedule-Iwill

be allotted to state govern-

ments to extract coal for

commercial usage and

market sale. States could

thensell this coal to theutilitiesunder theirumbrellaor

anyprivatecompanyforvariousenduses,asspecified in

theordinance, saida seniorofficial. This ispursuant to

anenablingprovisiononcommercialminingandsaleof

coal in the coal ordinance (special provisions), 2014.

Sources say theCentre is already in talkswith states

to allotmines for commercial use.

However, a lot will depend on the fate of the ordi-

nance in the Rajya Sabha, which has referred it to a

select committee. So far, theordinancehasbeenprom-

ulgated twice.

The coal ministry will also issue guidelines for the

appointmentofminingdevelopmentoperators (MDOs)

bystates. It is likely theguidelineswill beannouncedby

April.

Companies such as

Adani Enterprises,

Reliance Power and

Monnet Ispat are likely to

benefit from the move.

These companies plans to

operate as MDOs were hit

when the Supreme Court,

in August 2014, cancelled

all coal block allocations

through the past two

decades.

The coal ordinance has

inserted section 3A in the

CoalMinesNationalisation

Act toenable jointventures

by central and state gov-

ernments and their com-

panies, andanyothercom-

pany, for mining

operations in India inany

form, either for own con-

sumption, sale or for any

other purpose, in accor-

dancewitha licencegrant-

edby thestategovernment

concerned.

Theordinanceclassifies

minesand their assets into

three schedules. The first

has all the 204 mines de-

allocated by the Supreme

Court. Now,mines under this schedulewill be allotted

to states. Subsequently, the government will consider

commercialmining by private companies.

There are 74 mines with specified end use in the

power, steel and cement sectors. These mines are

under the second (42 operationalmines) and third (32

mines in various stages of development) schedules. Of

these, the coal ministry has allocated 40 mines with

specified enduses to private companies, throughane-

auction. The government received bids for revenue

amounting to ~2.35 lakh crore through 30 years, to

coal mine-bearing states.

It is also allocating 42 mines to states and state-

owned companies for specified end uses.

AshwinMuthiahsfirmplans$1-bnUSplant

SURAJEETDASGUPTA

NewDelhi, 15March

Inwhat looks likean innovativealliance

betweenanIndianbusinessunit andan

Indian-Americanatthehelmofaffairsin

the US, the Ashwin Muthiah-led AM

International is set to make a major

investmentinLouisiana,withassistance

fromthatstatesgovernor,BobbyJindal.

AM International, which has a con-

trollingstakeinChennai-basedSpic,will

setupanammoniamanufacturingplant

at an investment of $1 billion. Jindal,

borntoIndianimmigrantsintheUSand

speculated to be theRepublicanPartys

nominee for the 2016 US presidential

elections,hasofferedthecompanyaper-

formance-based $5.6-million grant to

offset the projects infrastructure costs.

Muthiahs companywill alsoget the

benefits of the states quality jobs and

industrial tax exemption programme,

which offers tax incentives for compa-

nies to start operations in Louisiana.

According to sources, AM

Agrigen Industries, a subsidiary of

Muthiahs Singapore-headquartered

AM International, which will execute

the project, has selected a St Charles

Parish site in Louisiana to develop the

potential 800-tonne ammoniamanu-

facturing facility. Feasibility studies

for the project are underway and the

company has secured an option to

purchase 650acres of land for theproj-

ect. It has also received the requisite

environmental permits to operate

such facilities.

AMInternationalhas60percentstake

inSpic,amanufacturerofureainIndia.It

alsoholds17percentstakeinTamilNadu

PetroProducts, amanufacturer of linear

alkylbenzene,heavyalkylbenzene,heavy

normalparaffin,epichlorohydrine,caus-

tic soda, chlorine, ammonium chloride

and hydrochloric acid; Manali Petroc-

hemicals, inwhichtheholdingcompany

has 40 per cent stake, produces propy-

leneoxide,propyleneglycolandpolyols.

ItalsoholdsstakeinGreenstarFertilizers,

whichmanufactures phosphatic fertilis-

ers.AMInternationalwhollyownsWilson

International, a trader of upstream and

downstreamproductsrelatedtofertilisers.

When contacted, Muthiah con-

firmed therewas a proposal to set up a

plant in the US but declined to give

details. Sources close to the company

said the move was an attempt by the

MAChidambaramgroupscion tochart

anewanddistinct course for thegroup

he had inherited.

Sources said construction of the

plantwas likely tobegin inthe lastquar-

terof2015andbecompletedinabout30

months. AM Agrigen Industries plans

to tap a mix of global investors, apart

fromroping incompanieswithwhich it

willhaveofftakeagreements forammo-

nia to fund the project. The bulk of the

investment will come from the groups

holding company,AM International.

The company will look to leverage

theUShighest-density inter-andintra-

state natural gas pipeline network,

besides lowandstablepricesbecauseof

abundant supply of natural gas, a key

raw material for producing ammonia.

AMAgrigen,whichwillproduceammo-

nia forcustomers in theUSandEurope,

thinksmanufacturing in theUSismore

cost-efficient than in India, thanks to

the availability of cheap gas there.

Muthiahs proposed investment is

seenas substantial, considering Indian

companies total foreign investment

stood at about $2 billion globally as of

January thisyear, according toReserve

Bank data.

Streetawaitsnewtriggers

tosustainmarketrally

KRISHNA KANT

Mumbai,15March

Dalal Street iswaiting for new triggers for the

market rally to continue. Valuations in the

banking and financial segment, at the fore of

the rally, are at an all-time high, limiting fur-

ther upside in the near term. Market players

say now, top companies in underperforming

sectors such as information technology, con-

sumergoods, oil andgas, power, telecomand

metals shouldstartdelivering to take themar-

ket to newhighs.

The top 15 banking and financial compa-

nies are trading at a 10-yearhighvaluationof

18.1 times their trailingearningsand2.3 times

their latest book value. Together, financial

stocks account for 30 per cent of the Nifty,

against 24 per cent a year earlier and the pre-

vious high of 27 per cent (in March 2013).

These stocks includeStateBankof India, ICI-

CI Bank, HDFC, HDFC Bank, Axis Bank,

PunjabNational Bank, Canara Bank, Bank of

Baroda, YESBank, IndusIndBank and IDFC.

Through the past 12 months, the Bank

Niftyhas risen55percent, outperforming the

benchmarkNifty, which is up 33 per cent.

Further upside in financials is limited.

Otherheavyweights in sectors suchasoil and

gas, capital goods and metals should start

contributing to take the rally forward, says a

senior analyst at a city-basedbrokerage firm.

Suchhighexposure toa single sector is a risk

to themarket in thenear term,asacorrection

in thestockpricesofbanksand financialswill

pull down the overall market even if other

stocks dowell.

In thepast, suchpeakshavebeen followed

byperiodsofunder-performancebybanking

and financial stocks.Overall, however, finan-

cials have been out-performing the broader

market since early 2007, resulting in a steady

rise in their index weight. In March 2006,

financials accounted for 17.6 per cent of the

Nifty companies combined free-float (non-

promoter)market capitalisation.

Many say financials and other high-beta

stocks could be hit first if foreign capital

inflows to Indiadecline. Bankingand finan-

cial stocks have been the biggest gainer of

the strong FII (foreign institutional invest-

ment) inflow into India. If the trend reverses

or the flows moderate, it could adversely

affect valuations in the sector andpull down

the broader market, says Dhananjay Sinha,

head (institutional equity), Emkay Global

Financial Services.

In the past year, pharmaceutical compa-

nies, too, have been a net contributor to the

market rally, outperforming thebroadermar-

ket. The National Stock Exchange pharma

index has risen 63 per cent in the past 12

months, helping the Nifty touch a new high

during theyear.The top fourpharmacompa-

nies in thecountryaccount for6.4per centof

theNifty, against5.9percentayearearlierand

2.3 per cent five years ago.

Analysts attribute this to the strong oper-

ational and financial performance of Indian

pharma companies on the back of higher

exports to theUS.

Turn to Page 4

>

STATSGURU

Business Standard looks at how the automobile sector,

a bellwether for economic recovery, has been doing 4

>

START-UP CORNER

Only serious job seekers wanted

In just a year, Bengaluru-based myNoticePeriod.com has over 400

paid clients and 85,000 job seekers, and has raised ~18 crore,

IITTIIKKAA SSHHAARRMMAA PPUUNNIITT

&

AANNIITTAA BBAABBUU

report 2

>

BUSINESS LAW

The case of missing women

in the boardroom

Many companies are likely to

miss the April 1 deadline for

putting women on their board

of directors.

SSUUDDIIPPTTOO DDEEYY

finds out why 12

>

BRAND WORLD 14

>

Frooti growsupwitha

newlook

Totargettheyouth,

Frootihaschanged

its looksandtaste.

SSAAYYAANNTTAANNIIKKAARR

reports

COMPANIES P2

Checking out the jungle

with entrepreneurs

Jungliceo.com has wowed new business

owners by allowing them to network

while watching the lions and tigers in the

wild. It plans to turn 500 entrepreneurs

wild by next year.

NN SSUUNNDDAARREESSHHAA SSUUBBRRAAMMAANNIIAANN

reports

BS SPECIALS ON MONDAY

ECONOMY P4

Exports likely to

contract in FY15

For a third time in six

years, exports are likely

to contract, owing to

lower global prices and

not enough

diversification.

NNAAYYAANNIIMMAA BBAASSUU

reports

Is online transaction

trulyonline?

The initialprocess tocommencea

financial transactionstill requires

paperworkanddocumentation.

Thiswillnotchangeuntilacentral

repositoryandcommondemat

accountsare inplace.

PPRRIIYYAANNAAIIRR&&

TTIINNEESSHHBBHHAASSIINN

report 10

>

NEW HORIZONS

| In 1970, the Union government took over

mining, according to the Coal Mining

Nationalisation Act

| Coal ordinance 2014 enables commercial

mining by Indian and foreign companies,

states and private joint ventures

| Allocating coal blocks to states likely to begin

in a month

| The move will bring business to mining

development operators

| Companies such as Adani Enterprises and

Reliance Power to benefit

Mines to be allotted to states for mining and sale of coal

As Business Standard looks

ahead to its 40th

anniversary in March, we bring you a

special series on Indias journey

through the past 40 years. SEE

THE STRATEGIST (separate section) to read

Havells Indias Chairman & MD

Anil Rai Guptas account of how the

brand became a well-known name

in the electrical trade circles of Delhi

HAVELLS:GROWING

BRICKBYBRICK

Valuationsof financialsalreadyata 10-yearhigh

Proposed ammonia

unit in Louisiana has

secured major sops

from that state

MONDAY, 16 MARCH 2015

20pagesin2sections

MUMBAI (CITY)

~6.00

VOLUME XIX NUMBER 152

PARASURAMAN QUITS AS

CARLYLE INDIA MD

THE STRATEGIST SEPARATE SECTION

COST CUTTING: WHAT WORKS

AND WHAT DOES NOT

COMPANIES P2

www.business-standard.com

Howmarketsperformed lastweek

Index on *One-

% Chg over Dec 31, 14

Mar 13, 15 week Local currency in US $

Sensex 28,503 -3.2 3.7 3.8

Nifty 8,648 -3.2 4.4 4.5

Dow Jones 17,749 -0.6 -0.4 -0.4

Nasdaq 4,872 -1.1 2.9 2.9

Hang Seng 23,823 -1.4 0.9 0.7

Nikkei 19,254 1.5 10.3 8.7

FTSE 6,741 -2.5 2.7 -3.0

DAX 11,902 3.0 21.4 4.8

*Change(%)overpreviousweek,Source :Bloomberg,CompiledbyBSResearchBureau

IN SEARCH OF MORE ENGINES

Sectoral weights in the Nifty

Blended valuation of banks

and financial companies

PPrriiccee//eeaarrnniinnggss

PPrriiccee//bbooookk

* Current valuation based on earnings in trailing 12 months

Sources: Bloomberg, Capitaline

The company headed

by Muthiah (pictured)

will get the benefits of

Louisianas quality

jobs and industrial tax

exemption

programme, which

offers tax incentives

for companies

to start operations in

the state

ILLUSTRATION:

AJAY MOHANTY

I

ndian organizations are undergoing

a major shift in the way they

implement IT, and cloud is being

strongly considered as an alternate

form of enterprise computing. Today,

enterprises across the spectrum in

India are relying on cloud technologies

to modernize their computing needs.

Oracle is poised to support this growth

and support customer demand.

Oracles cloud offerings incorporate

advanced capabilities, especially for

social networking and mobile

computing. Oracles mission is to

become the #1 cloud provider in the

world and intends to rapidly grow its

cloud business in India.

Shailender

Kumar,

Managing

Director

Oracle India

said, Oracle

cloud has

more storage

capacity than

Facebook

and over 2

billion

transactions

happen on it

daily, which is more than the number

of credit card transactions. This goes

to show the power and robustness of

our technology. Oracle offers more

SaaS apps than anyone, many of

which were developed in 2014 alone.

Due to its focus on cloud in India,

Oracle India is ramping up its cloud

business with the addition of a

dedicated sales force that will sell

Oracle Cloud solutions.

Companies

in India

across

industries,

have been

using Oracle

Cloud for a

myriad of

business

applications.

Today, both

large

enterprises

and SMBs

are relying on cloud technologies to

modernize their computing needs.

Cloud is rapidly gaining acceptance

as the new model for enterprise

computing in India and Oracle is

witnessing a strong demand for these

solutions, said Niraj Kaushik, Vice

President Applications, Oracle India.

According to Forbes, two-thirds of

Indian CIOs are expecting the majority

of their information technologies to run

on the cloud by 2015. Airtel Learning,

Apollo Hospitals, Jabong.com, Intel,

Aditya Birla Management Company,

Maruti Motors, Hero MotoCorp,

BigTree Entertainment, Sonata

Software, Myntra.com, Kalpataru,

NetApp India, Adobe Systems, Haier,

Thomas Cook, Natures Feast, Sudhir

Gensets are some enterprise

organizations in India that have

recently embraced Oracle Cloud. To

help Indian enterprises realize the

benefit of cloud, Oracle is hosting an

exclusive conference, Oracle

CloudWorld, in Mumbai on 7th April.

The attendance to CloudWorld is by

Invitation only.

Indian enterprises modernize

business with Oracle Cloud

Advertisement

Niraj Kaushik

Vice President Applications

Oracle India

Shailender Kumar

Managing Director

Oracle India