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>IN BRIEF
Lagardeset tovisit India today
AmidtheInternationalMonetaryFund cautioning
Indiaagainstheadwindstoitseconomicgrowth,
FundchiefChristineLagardewillvisitthecountry
fortwodays,startingMonday.Lagardeislikelyto
meetPrimeMinisterNarendraModiandFinance
MinisterArunJaitley. 4
>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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
>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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
>
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
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