Bank of Baroda seeks Rs 1,800-cr capital infusion from Govt

Public sector lender Bank of Baroda (BoB) has sought a Rs 1,800-crore capital infusion from the Centre.

The capital infusion would be through the preferential allotment of shares.

“We have sought a capital infusion of Rs 1,800 crore. It is likely to be through preference shares,” S.S. Mundra, Chairman and Managing Director, BoB, told presspersons on the sidelines of a FICCI Banking Conclave.

According to Mundra, the Centre would take a consolidated look into the matter.

The Government, currently, has a stake of 55.4 per cent, with headroom to bring it down to 51 per cent.

BSE Sensex down over 700 pts on selling pressure

Continuing its downward slide, the BSE benchmark index Sensex fell by over 700 points in afternoon trade on Friday on selling pressure in almost all the sectors amid depreciation of rupee value.

At 2.02 pm, Sensex was down 742.21 points at 18625.38. Similarly, Nifty was down 209.70 points at 5532.60 during the same time.

All the sectors were trading in red. The sectors that saw the maximum selling pressure were consumer durables, banking index (bankex), capital goods, metal, oil and gas, public sector undertakings (PSU), fast moving consumer goods (FMCG), auto, IT and healthcare.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 19,297.11 points, was trading at 18,905.01 points in the pre-noon session, down 462.58 points or 2.39 percent from Wednesday's close at 19,367.59 points.

The Sensex touched a high of 19,310.95 points and a low of 18,817.25 points in the trade so far.

The S&P BSE consumer durables index tanked 510.80 points, bankex plummeted 514.53 points, capital goods index dipped 282.19 points, metal index dropped 240.60 points, oil and gas index slipped 178.99 points, PSU index slid 139.07 points, FMCG index plunged 110.99 points, auto index nosedived 156.05 points, IT index fell by 107.37 points and healthcare index went down by 114.84 points.

Gold prices jump above Rs. 30000 on weak rupee, global cues

Gold prices breached the psychological Rs. 30,000 barrier in first hour of trade on the Multi Commodity Exchange on Friday. A sharp rise in prices in global markets and continued depreciation in the Indian rupee pushed up the gold prices, analysts said.

Commodity trading strategist Chirag Kabani told NDTV that gold prices have jumped tracking U.S. bond yields, which hit a 52-week high on strong U.S. data. Traders are concerned that the U.S. Federal Reserve could soon start tapering its massive stimulus leading to outflows from risk assets such as stocks to safer assets such as gold.

Gold futures for August delivery traded 3.5 per cent or Rs. 1,013 higher at 30,199. Silver for August delivery traded at Rs. 49,564, rising 6.5 per cent or Rs. 2,991 per 1 kg as of 11.21 a.m.

Gold was holding near two-month highs in global markets and was headed for its best weekly gain in over a month, while silver prices traded near a three-month high.

Dharmesh Bhatia of Kotak Securities told NDTV that the hike in import duty on gold from 8 per cent 10 per cent and the sharp fall in the rupee will continue to drive gold and silver prices.
The rupee breached the 62 mark against the U.S. dollar today, surpassing the previous all-time low of 61.80 hit just last week.

"The trend will continue to be bullish. We are expecting 4-5 per cent rally in gold and silver prices," Mr Bhatia added.

A firming trend in the domestic spot markets ahead of the upcoming festive and marriage season led to covering up of short positions by speculators driving prices higher, traders added.

Brokerages downgrade Titan on RBI's new measures; stock plunges

Shares of Titan Industries BSE -11.76 % plunged over 11 per cent following downgrades by brokerages after the latest move by the Reserve Bank of India (RBI) on gold imports.

The RBI, in a flip-flip move, has again modified the regulations on gold imports whereby the domestic buyers would be allowed to buy the yellow metal only against upfront payment.

According to analysts, as a result, Titan BSE -11.76 % Industries' gold model leasing will be discontinued which will have a negative impact on the stock.

Early, this week, the government increased the import duty on gold to 10 per cent. The government also increased excise duty on refined gold bars to 9 per cent vs 7 per cent.

Most brokerages have downgraded the stock on concerns that the volatile regulatory environment will hurt the company's business model.

"After banning in June-13 and reversing the ban in July-13, the RBI has again discontinued the gold leasing. The 80:20 import procedure has also become stringent, which may lead to gold shortage in the upcoming festive season. Titan's repute should provide sourcing advantage, yet, higher financing costs results in 6-7 per cent EPS cut over FY15-16," the CLSA report said.

"RBI's hawkish policy on gold imports remains a key concern even while we believe that Titan is among the best plays on discretionary consumption. We downgrade the stock to 'Sell' and cut our price target to Rs 245/share," the report added.

JP Morgan is of the view that regulatory headwinds continue to weigh on Titan's stock performance. It has reduced FY14/15 EPS by 2 per cent/4 per cent building higher interest cost.

The brokerage has downgraded the stock to neutral from overweight and lowered target price to Rs 265 from Rs 285.

Credit Suisse has also reduced the target price to Rs 271 from Rs 305 on concerns over rising uncertainty in regulatory measures. While, it is of the view that earnings impact will be limited for Fy14, the brokerage has cut multiples to 23x from 25x.

Goldman Sachs expects 30-40bps lower jewellery EBIT margins for the company. It has downgraded the stock to 'Neutral' from 'Buy' as it sees higher funding cost for gold jewellery for FY14-16E. The target price has been cut from Rs 291 to Rs 260.

At 11:47 a.m.; the stock was at Rs 241.40, down 11.69 per cent, on the BSE. It touched a high of Rs 252.50 and a low of Rs 235.

On the NSE, the stock was at Rs 240.50, down 12.02 per cent. It touched a high of Rs 252.50 and a low of Rs 235.30.Rs 241.25, down 11.74 per cent, on the BSE. It touched a high of Rs 252.50 and a low of Rs 235 in early trade.

Rupee gains marginally to 62/$ despite partial capital control

The Indian rupee opened slightly higher on Friday despite the government imposing restrictions on foreign exchange outflows and gold imports on Wednesday in a new attempt to prop up the currency.

The partially convertible rupee traded at 61.33 and is not far from an all-time record low of 61.80 hit last week. The currency had closed at 61.43 on Wednesday.

The Reserve Bank of India's latest steps to support the currency included cutting the amount of overseas direct investments allowed by Indians.

Separately, the central bank banned imports of gold coins and bars, which constituted about 36 per cent of total billion demand in India last year, and will require domestic buyers to pay cash for the yellow metal, among other measures.

The steps came as data showed the headline inflation rate jumped above the central bank's target range of 4 to 5 per cent in July for the first time since March, making it even harder for the bank to refocus on supporting India's slowing economy.

The Indian authorities fear continued falls in the rupee will exacerbate the current account deficit in the short term, deter investment and further curb growth in Asia's third-largest economy.

RBI's action to tighten rupee liquidity in mid-July and other steps have failed to halt the slide in the currency, which set new record lows on August 6.

Indian Overseas Bank increasing network

Indian Overseas Bank is aggressively increasing its network and has opened about 1,000 branches in the last three years. It will be opening 3,000th branch of the bank on August 17 at Vaniankudi by Union Finance Minister P. Chidambaram and will inaugurate another branch at Kothakottai in Pudukottai District on August 18.

The bank has reported a fall of 46.11% in its net profit at Rs 125.80 crore for the quarter, as compared to Rs 233.44 crore for the same quarter in the previous year.  However, total income from operation of the bank has increased by 14.52% to Rs 6187.15 crore for the quarter under review as compared to Rs 5402.85 crore for the quarter ended June 30, 2012.

Gold demand from India, China may hit record in 2013

India's gold demand could reach a record 1,000 tonne this year as consumers buy for the festival and wedding season in the second half, the World Gold Council said, which may scuttle the country's efforts to curb its imports and a trade deficit.

Demand from China, which is on course to challenge India's position as the top gold consumer this year, could also soar to a record 1,000 tonnes in 2013, the WGC said.

Strong physical buying from the world's biggest consumers, who account for nearly 60 percent of global demand, will help prop up prices of the metal that have shed about 20 percent this year after 12 consecutive annual gains.

Consumer demand has however not been enough so far to compensate for a sharp drop in investor appetite this year, the WGC said in its quarterly report on Thursday.

India, which wants to keep imports below 850 tonne in 2013, has raised import taxes three times in eight months. On Wednesday, it banned overseas purchases of gold bars and coins to rein in dollar spending.

But the resilience in Indian demand has offset government efforts to curb imports, which revived in July after dropping in June.

"We've seen that demand is robust," Somasundaram PR, WGC's India managing director, told Reuters. "Once the monsoon is over, rural incomes will rise and that will have its own impact on demand."

"There are also a lot more marriage and festival dates in October and November in the fourth quarter," said Somasundaram, who estimated full-year demand between 900 tonne to 1,000 tonne for both India and China.

Hitting the upper end of that range would be record annual consumption for both the countries, he said.

The rural population accounts for about 60 percent of gold demand in India, where the precious metal forms an essential part of a bride's dowry and is considered auspicious as a gift or offering at religious festivals.

India's demand reached 566 tonne in the first half of the year, a 50 percent jump but still lower than China's 600 tonne, the industry-funded WGC said in its report.

Demand this year has been particularly strong as falling prices have prompted consumers across the world to buy bullion in the form of jewellery, bars and coins.

Analysts say India's moves to curb imports have been unable to stifle demand, thus pushing local prices to around USD 50 an ounce above London spot prices.

RECORD BUYING IN CHINA

China's gold-buying spree in the first six months of the year is likely to continue into the second half amid festivals and uncertainty about the economy, which has seen a slowdown in nine out of the past 10 quarters.

"The falling gold price is key. But there are also other macroeconomic conditions that are pushing (the Chinese) to gold," said Albert Cheng, WGC's managing director for the Far East region.

Fears of an economic slowdown and lingering worries over a credit crunch are increasing gold's appeal as a safe haven in China, he said.

The demand from India and China has partly compensated for the near 600-tonne outflow from gold-backed exchange-traded funds. Global gold demand for the second quarter fell 12 percent because of the ETF outflows.

Signing of Memorandum of Understanding for implementation of Solar Power Project

NHPC has inked a Memorandum of Understanding (MoU) with Uttar Pradesh New & Renewable Energy Development Agency, Department of Additional Sources of Energy, Government of Uttar Pradesh on August 08, 2013 at Lucknow for implementation of solar power project in state of Uttar Pradesh. Initially, a 50 MW solar energy power project is proposed to be implemented at Parason, Tehsil Kalpi, Jalaun district, Uttar Pradesh.

NHPC is engaged in the planning, development and implementation of an integrated and efficient network of hydroelectric projects in India. It executes all aspects of the development of hydroelectric projects, from concept to commissioning.

UCO Bank introduces product for Indian Armed Forces

UCO Bank has introduced an exclusive product for the Indian Armed Forces including paramilitary forces on Independence Day. As per this new product, the bank will offer a zero-balance savings account with overdraft facility for in-service and retired armed personnel.

The bank has reported a rise of 41.01% in its net profit at Rs 511.11 crore for quarter ended June 30, 2012, as compared to Rs 362.46 crore for the same quarter in the previous year. Total income of the bank has increased by 5.93% to Rs 4668.81 crore for the quarter under review as compared to Rs 4407.39 crore for the quarter ended June 30, 2012.

Sensex dives 370 pts, Bank Nifty dips 3%; Titan falls 12%

The market has opened weak. The Sensex falls 115 points at 19252.11. The Nifty is down 54 points after opening above 5700. About 133 shares have advanced, 199 shares declined, and 26 shares are unchanged.

The market has opened weak. The Sensex falls 115 points at 19252.11. The Nifty is down 54 points after opening above 5700.

About 133 shares have advanced, 199 shares declined, and 26 shares are unchanged.

Titan Industries slumps 12 percent as it faces three majoe downgrades in last 24 hours on the back of gold import duty hike. The government increased import duty on gold, silver and platinum to 10 percent with a view to arrest the declining value of rupee and contain the fiscal deficit to 3.7 percent of the GDP.

The government has also raised the duty on gold ore/ concentrates/dore bars and silver dore bars ranging from 7 percent to 10 percent.

The Indian rupee opened marginally higher at 61.35 per dollar versus 61.43 yesterday.

Himanshu Arora, Religare said, "The rupee may weaken further as inflation surged to 5.79 percent. Sustained dollar demand from importers, especially oil firms may underpin the dollar against the rupee. The currency may range between 61.28-61.70/USD."

The euro rose back to 1.33 to the dollar. The dollar index slipped to 81.15 levels. The dollar yen was around 97.

RIL to explore investment opportunities in Iraqi oil fields

Reliance Industries is exploring investment opportunities in the oil and gas fields of Iraq, chairman Mukesh Ambani reportedly said.
This move came after the company divested its holding in two blocks in Kurdistan.
"Petroleum minister Veerappa Moily has asked us to consider investing in Iraq," Ambani said on the sidelines of a programme.
Mukesh Ambani reported "We have not yet decided on investing in the Nasiriya giant oil field and the accompanying refinery project but all options are being evaluated.
In March, Iraq had shortlisted Reliance Industriesand six other global energy firms for developing the Nasiriya oilfield.

Further RBI clarification on import of gold

Government of India and the Reserve Bank of India have been receiving several requests for clarifications on the  operational aspects of the scheme of imports put in place in terms of the  above circular. There have also been representations to change certain aspects of the scheme. Taking into account all these representations and in consultation with the Government of India, it has been decided to issue the following clarifications/modifications in supersession of all the earlier instructions:

Certain restrictions were imposed on the import of various forms of gold by nominated banks/nominated agencies/ premier or star trading houses/SEZ units/EoUs which have been permitted to import gold for use in the domestic sector.
Government of India and the Reserve Bank of India have been receiving several requests for clarifications on the  operational aspects of the scheme of imports put in place in terms of the  above circular. There have also been representations to change certain aspects of the scheme. Taking into account all these representations and in consultation with the Government of India, it has been decided to issue the following clarifications/modifications in supersession of all the earlier instructions:
Import of gold in the form of coins and medallions is now prohibited.
It shall be incumbent on all nominated banks/nominated agencies and other entities to ensure that at least one fifth, i.e., 20%, of every lot of import of gold imported to the country is exclusively made available for the
purpose of exports and the balance for domestic use. A working example of the operations of the 20/80 scheme envisaged in terms of the present instructions is given in the Annex. This shall be monitored by customs authorities, and will be implemented port-wise only.
Further, nominated banks/ nominated agencies and other entities shall make available gold for domestic use only to the entities engaged in jewellery business/bullion dealers and to banks authorised to administer the Gold Deposit Scheme against full upfront payment. In other words, supply of gold in any form to the domestic users other than against full payment upfront shall not be permitted.
The nominated banks/agencies/refineries and other entities shall ensure that there is no front loading of imports, particularly in the first and second lots of imports. Such imports shall be linked to normal quantities of gold supplied to the exporters by the nominated banks/agencies and shall not exceed the highest quantity supplied during any one year out  of last three years. The quantity thus arrived at, however, will not be
imported in one or two lots only. As a thumb rule, imports of more than maximum of  two months of requirements of the exporters in a lot would be considered unusual. Illustratively, if the gold supplied to exporters by a bank during the last three years is say, 30 tonnes, 40 tonnes and 60 tonnes respectively, imports in terms of this circular shall be based on highest of three i.e. 60 tonnes. Further, import of 50 tonnes( two months
export of 10 tonnes for exports and 4 times the amount for domestic use, totalling 50 tonnes) will be considered unusual. In case of nominated banks not having a previous record of having supplied gold to the exporters they would need to seek prior approval from RBI before placing orders for import of gold for the first lot under the 20/80 scheme.
The 20/80 principle would also apply for the henceforth import of gold in any form/purity including gold dore, whereby 20 per cent of the gold imported shall be provided to the exporters. This will be administered and monitored at the refinery level for each consignment at the time of such imports. This will also be monitored by the customs authorities. The refinery shall make available for domestic use only to the entities engaged in
jewellery business/bullion dealers and to the banks authorised to administer the Gold Deposit Scheme against full upfront payment and sale of gold against any other form of payment shall not be permitted. Further, the import of gold dore is permitted only against a licence issued by DGFT.
Any authorisation such as Advance Authorisation/Duty Free Import Authorization (DFIA) is to be utilised for import of  gold meant for export purposes only and no diversion for domestic use shall be permitted.
Entities/units in the SEZ and EoUs, Premier and Star trading houses are permitted to import gold exclusively for the purpose of exports only.
AD Category I banks are advised to strictly ensure that foreign exchange transactions effected by / for their constituents are compliant with the above instructions. Head Offices of nominated agencies / International
Banking Divisions of banks would be responsible for monitoring operations of the revised scheme taking into account transactions put through different centres. In respect of gold released for  the purpose of exports, AD
Category I banks will also put in place a special mechanism to monitor realization of  export proceeds  as per the extant regulations and any contraventions/ unusual developments in this regard should be reported forthwith to the concerned Regional Office of the Reserve Bank of India.
Government of India will be issuing separate instructions, if any, to the customs authorities/DGFT to operationalise and monitor the above requirements for import of gold.
The above instructions will come into force with immediate effect. Authorised dealers may please bring the contents of this circular to the notice of their constituents and customers concerned.
The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999), and are without prejudice to permissions / approvals, if any, required under any other law.

PM's I-Day Speech: No freebies announced, but some promises made

Prime Minister Manmohan Singh's Independence-Day address to the nation from Red Fort on Thursday - the final one before the 2014 general elections - was no shower of freebies or announcement of populist schemes. Instead, it was a recollection and review of nine years of the United Progressive Alliance (UPA) government.

While the PM said work would start on two new ports, eight airports, new industrial corridors and rail projects over the next few months, he expressed satisfaction that some schemes for the poor had worked well and more were in the offing. The speech sought to reinforce the belief that UPA would continue with what it believes is its unique selling point - "new rights to the common man, leading to his social and economic empowerment".

Emphasising agricultural growth over the nine years of UPA, Singh said record production had enabled the food security law, which would soon be passed. He highlighted that rural wages, too, had increased much faster during this period and said the National Rural Employment Guarantee Scheme had provided employment to tens of millions in rural areas.

He conceded measuring poverty was a difficult task but added, no matter what the definition, "it cannot be denied that the pace of reduction in poverty has increased after 2004".

Singh enumerated the strides in education - through the mid-day meal scheme, the right to education and the fact that the number of young men and women going to college had more than doubled over the past nine years.

Eight new IITs, seven New IIMs, 16 new Central universities and 10 new NITs had been opened, he said. All of these were poised to give the country the benefit of the demographic dividend.

Though unexpected, Singh accepted the government's skill-development programme had not had the desired result: "In the area of skill development, we could not initially achieve as much progress as we wanted. But now the pace has picked up. We have established the National Skill Development Authority a few months back. We will shortly launch a new scheme, under which those who have successfully acquired new skills will be given a grant of about Rs 10,000, he said.

BRPL struggles to pay dues as blackouts loom

BRPL officials say they have helped improve electricity supplies in Delhi since the distribution business was privatised

Gopal Saxena, the chief executive of power distribution company BSES Rajdhani Power Ltd (BRPL), run by Anil Ambani-controlled Reliance Infrastructure Ltd, faces a tough choice.

He could break a mandate to supply around-the-clock electricity to 1.8 million customers in south and west Delhi, or he could wait for two power utilities to make good on threats to cut off supplies to his company unless they are paid $590 million owed in late payments.

Either way, the capital of Asia's third-largest economy is facing the prospect of blackouts.

His dilemma underscores the rot in India's power sector after years of rising debts, fuel supply shortages, corruption, red tape and tariffs kept artificially low by populist politics. In the sweltering summer heat last year, the country suffered a mass blackout, affecting an area where 670 million people live.

Such problems have hobbled Prime Minister Manmohan Singh's efforts to fix India's chronic power shortages, which are a drain on economic growth - now at its lowest rate in a decade - and sap the competitiveness of its businesses.

"Unfortunately we have not had a cost-reflective tariff from the regulatory commission, which has imposed severe burdens on us," Saxena told Reuters in an interview in his Delhi office. "We are faced with Hobson's choice: I have to supply power 24/7. I don't have the money to pay. Now if I do not pay, somebody is going to cut off the power, or somebody has to pay the cost."

Reliance took over BRPL in 2002 in partnership with the Delhi state government. It was a rare foray by a private company into the power distribution business, which is mostly controlled by India's 28 states.

BRPL officials say they have helped improve electricity supplies in Delhi since the distribution business was privatised there, but at a big cost to their company.

The tariffs they are permitted to charge by a state electricity regulator have risen nearly 70% since 2002, but the cost of buying electricity from generation companies and supplying it has shot up by more than 300%, Saxena said.

As a result, BRPL now owes $770 million in late payments to more than a dozen power utilities. Two of these, Pragati Power Corporation Limited (PPCL) and Indraprastha Power Generation Company Limited (IPGCL), have threatened BRPL with an ultimatum to either pay up or lose the power, Saxena said. Ironically, both the generators are run by the Delhi state government.

The threat means BRPL might be forced to cut power supplies by 25-30% for a period of four hours at peak times.

A spokesman for IPGCL could not be reached for comment. The general manager for finance at both companies declined to comment, as did a company secretary for PPCL.