Sensex ends above 21K; Healthcare, FMCG stocks major gainers

The BSE-benchmark Sensex rose about 0.5 per cent at the closing session on Wednesday due to persistent buying in Healthcare, FMCG, TECk and Power sector stocks amid firm global cues.

The 30-share BSE index Sensex was up 104.96 points or 0.5 per cent at 21,033.97 and the 50-share NSE index Nifty was up 30.8 points or 0.5 per cent at 6,251.70.

On the BSE, healthcare index was up 1.19 per cent, followed by FMCG 1.12 per cent, TECk 0.66 per cent and power 0.51 per cent. Only auto and PSU indices lost investors' support and were down 0.05 per cent and 0.03 per cent, respectively.

Bharti Airtel, Dr Reddy's, Hindalco, ICICI Bank and Bajaj Auto were the top five Sensex gainers, while the top five losers Wipro, SSLT, HDFC Bank, SBI and L&T.

Asia-Pacific economic update

The International Monetary Fund (IMF) in its Asia-Pacific regional economic update said: "Asia will remain the global growth leader, although we have lowered our growth forecasts. Growth for Asia as a whole is forecast to remain robust at around 5 per cent in 2013 and about 5.25 per cent in 2014. Since last spring, expectations of Fed tapering have ignited capital outflows from many emerging markets. The adjustment process has mostly been orderly and the Fed’s September decision to delay tapering has eased outflow pressure. However, India and Indonesia have seen more concerted pressure.

This tightening in external funding conditions is expected to weigh on growth in emerging Asia. In addition, domestic structural impediments such as supply bottlenecks in India and declining returns to investment in China, will also be a drag.

In India, the fallout from recent financial stress has led to a lower growth forecast. But where inflationary pressures are already elevated and there is reliance on foreign inflows — such as India and Indonesia, monetary policy will likely need to be further tightened.''

Investors and traders await a US private payrolls report and the outcome of the US Federal Reserve meeting that ends later tonight.

Any euphoria over the Fed continuing its $85-billion-a-month stimulus package will only be short-lived due to mixed data emanating from the US.

Last night, the US consumer spending data showed encouraging signs but car sales dropped, raising concerns over economic recovery.

European stocks rose to their highest level in more than five years as companies from Eni SpA to Volkswagen AG posted profit that exceeded estimates. US stock index futures and Asian shares were also up.

Torrent Power surges despite reporting consolidated net loss of Rs 29.29 crore in Q2

Torrent Power is currently trading at Rs. 80.40, up by 2.85 points or 3.68% from its previous closing of Rs. 77.55 on the BSE.

The scrip opened at Rs. 77.00 and has touched a high and low of Rs. 83.25 and Rs. 76.20 respectively. So far 512298 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 198.00 on 01-Jan-2013 and a 52 week low of Rs. 67.00 on 06-Aug-2013.

Last one week high and low of the scrip stood at Rs. 83.70 and Rs. 75.85 respectively. The current market cap of the company is Rs. 3833.92 crore.

The promoters holding in the company stood at 53.44% while Institutions and Non-Institutions held 25.46% and 21.10% respectively.

Torrent Power has reported results for the second quarter ended September 30, 2013.

The company has reported a net loss of Rs 26.07 crore for the quarter as compared to a net profit of Rs 161.25 crore for the same quarter in the previous year. However, total income of the company has increased by 3.10% at Rs 2298.10 crore for quarter under review as compared to Rs 2228.98 crore for the quarter ended September 30, 2012.

On the consolidated basis, the group has reported a net loss of Rs 29.29 crore as compared to a net profit of Rs 164.37 crore in the same quarter previous year. However, total income of the group rose 3.60% to Rs 2320.41 crore for quarter under review as against Rs 2239.83 crore in corresponding quarter previous year.

Market loses momentum but still positive

Some buying activity is seen in realty, healthcare, banking and consumer durables sectors on BSE, while auto, metal, FMCG and oil & gas are losing sheen.

At 12:55 PM, S&P BSE Sensex is 20,987 up 58 points, while CNX Nifty is at 6,239 up 18 points.

BSE Mid-cap is at 6,030 up 24 points, while BSE Small-cap is at 5,872 up 44 points.

Some buying activity is seen in realty, healthcare, banking and consumer durables sectors on BSE, while auto, metal, FMCG and oil & gas are losing sheen.

Bharti Airtel, Dr Reddy's Lab, ICICI Bank, BHEL, Bajaj Auto, HDFC and TCS are up on BSE, whereas Wipro, M&M, SSLT, Tata Power, L&T, Tata Motors and ONGC are showing some weakness.

Bharti Airtel gained 4.37% on the news that the company posted a net profit of Rs. 17844 million for the quarter ended September 30, 2013 as compared to Rs. 17916 million for the quarter ended September 30, 2012.

Reliance Industries has overtaken ONGC to emerge as the top Indian firm in the Platts Top 250 Global Energy Company Rankings for 2013. ONGC held on its 22nd ranking. RIL is 0.08% up on BSE.

Tata Steel is planning to cut jobs at Scunthorpe, Workington, Teeside, according to media reports. The scrip is 0.2% up on BSE.

Ranbaxy Laboratories's consolidated sales were Rs. 27.5 bn (Q3’12: Sales Rs. 26.7 bn) impacted by the new pricing policy and trade concerns in India and the absence of any post exclusivity sales during the quarter. Ranbaxy is 0.12% down on BSE.

McNally Bharat Engineering is 2.43% up on BSE. The company's South African subsidiary received an order worth Rs2.29bn to set up a fluorspar beneficiation plant for miner Sephaku Fluoride Ltd in that country.

The RBI (Reserve Bank of India) in its Second-Quarter Review of Monetary Policy 2013-14 on Tuesday hiked the repo rate by 25 bps (basis points) to 7.75%. The central bank kept the CRR (cash reserve ratio) unchanged at 4%.
The repo rate is the rate at which banks borrow from RBI and one basis point is equivalent to 0.01%.

RBI Governor Raghuram Rajan, in his second policy review, has cut MSF (marginal standing facility) rate to 25 bps to 8.75%. The central bank expects GDP at 5% in FY13-14 and CPI to remain at or above 9%.

The Federal is expected to maintain the pace of its monetary stimulus today.

Nikkei closed 176 points up at 14,502, while Hang Seng is at 234 points up at 23,043.

PVR consolidated net profit at Rs 27.66 cr in second quarter

Multiplex chain operator PVR Ltd today reported a consolidated net profit at Rs 27.66 crore for the second quarter ended September 30.

The company had posted a consolidated net profit of Rs 16.14 crore in the same quarter of the previous fiscal, PVR said in a filing to the BSE.

Net sales during the period under review stood at Rs 363.11 crore, while in the same period last year it was Rs 192.12 crore, it added.

This year’s result is not comparable with that of last fiscal due to the acquisition of Cinemax India in the March ‘13 quarter, the company said.

In January this year, PVR had announced it was acquiring 69.27 per cent stake from the promoter group of Cinemax in an all-cash consideration of Rs 395 crore through its subsidiary Cine Hospitality.

For the half-year ended September 30, the company’s net profit stood at Rs 41.62 crore and the same for the year-ago period was Rs 23.95 crore.

Net sales for the first half was at Rs 697.56 crore, while in the year-ago period it was Rs 370.74 crore.

Shares of PVR Ltd were trading at Rs 558 for a share in afternoon trade, up 7.07 per cent from the previous close on the BSE.

Urban cooperative banks misused for money laundering

Urban Cooperative Banks (UCBs), which hold deposits of over Rs 2 lakh crore, are being misused for money laundering causing alarm to the Government.

The matter of misuse of UCBs, over which there is dual control by central or state governments through multi-state cooperative societies or state cooperative societies, was discussed during a recent meeting of Economic Intelligence Council (EIC), chaired by Finance Minister, P. Chidambaram.

The meeting, which was attended by senior officials of the Central Economic Intelligence Bureau (CEIB), Reserve Bank of India and Finance Ministry, stressed for devising ways to check money laundering through these banks.

The problem of irregularities in the UCB is of “grave nature” given its wide reach and penetration across the country in the light of its 8,100 plus branches which have huge deposits to the tune of Rs 2.09 lakh crore and advances worth Rs 1.35 lakh crore.

“The issue also acquires serious proportions because it jeopardises the hard earned money of the public which is put at stake due to non-adherence to the RBI regulations or instructions and also letting the banking channels being abused by unscrupulous people in laundering money which can play havoc with the financial health, safety and security of the country,” the minutes of the meeting says.

A report on Gujarat-based cooperative bank has indicated the opening of 9,166 forged savings accounts in the name of the deceased person to launder black money amounting to Rs 161 crore which was deposited and withdrawn immediately, a senior CEIB official said quoting discussions held on the matter in the past meetings of the EIC.

Several gross irregularities were also noticed in RBI reports relating to inspection of another such bank based in Uttar Pradesh.

LIC Housing Finance soars on reporting 28% growth in Q2 net profit

LIC Housing Finance is currently trading at Rs. 211.75, up by 4.15 points or 2.00% from its previous closing of Rs. 207.60 on the BSE.

The scrip opened at Rs. 209.25 and has touched a high and low of Rs. 213.90 and Rs. 208.50 respectively. So far 4, 65,000 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 300.00 on 02-Jan-2013 and a 52 week low of Rs. 152.00 on 04-Sep-2013.

Last one week high and low of the scrip stood at Rs. 214.60 and Rs. 198.45 respectively. The current market cap of the company is Rs. 10,688 crore.

The promoters holding in the company stood at 40.31% while Institutions and Non-Institutions held 43.88% and 15.47% respectively.

The company has reported 27.57% rise in its net profit at Rs 310.07 crore for the quarter ended September 30, 2013 as compared to Rs 243.05 crore for the same quarter in the previous year. Total income of the company has increased by 23.66% at Rs 2302.41 crore for quarter under review as compared to Rs 1861.86 crore for the quarter ended September 30, 2012.

LIC Housing Finance is the second largest housing finance player in India. It has one of the widest networks of over 205 offices across the country and representative offices at Dubai & Kuwait.

Praj Industries strengthens on forming wholly owned subsidiary in Namibia

Praj Industries is currently trading at Rs. 38.50, up by 0.25 points or 0.65% from its previous closing of Rs. 38.25 on the BSE.

The scrip opened at Rs. 39.00 and has touched a high and low of Rs. 39.10 and Rs. 38.10 respectively. So far 16968 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 2 has touched a 52 week high of Rs. 53.15 on 05-Dec-2012 and a 52 week low of Rs. 30.00 on 02-Aug-2013.

Last one week high and low of the scrip stood at Rs. 42.25 and Rs. 37.50 respectively. The current market cap of the company is Rs. 682.35 crore.

The promoters holding in the company stood at 32.58% while Institutions and Non-Institutions held 14.19% and 53.23% respectively.

Praj Industries has formed a wholly owned subsidiary (WOS) by name Praj Industries (Namibia) (Proprietary) in Windhoek, Namibia. This subsidiary has been formed to look after company’s business in Namibia.

Praj Industries is a Process Engineering and Technology Company offering innovative end-to-end solutions for biofuels, brewery, industrial processes and water and wastewater treatment systems.

IRDA extends deadline for phasing out old plans till Dec 31

The earlier deadline was October 1

The Insurance Regulatory and Development Authority (IRDA) has extended the deadline for phasing out the old products in traditional segment till December 31, according to a media report.

The earlier deadline was October 1. Also, the sale of highest net asset value (NAV) products in the unit-linked product segment has been banned from October 1 onwards.

The insurance regulator had brought out a new set of guidelines for life insurance products in February. While the minimum death benefit and surrender value was altered for traditional product customers who stay invested in a policy for a longer period, in the case of unit-linked products (Ulips) insurers had to intimate customers about changes in the yield of the Ulip every month.

The rules had also banned the sale of highest NAV products, since they were not in customer interest.

Silver futures rise to Rs 50,968 per kg

Silver prices rose 0.14 per cent to Rs 50,968 per kg at the futures trade today largely in tune with a rising trend in precious metals overseas amid covering-up of short positions by speculators.

On the Multi Commodity Exchange, silver for delivery in March traded higher by Rs 72 or 0.14 per cent to Rs 50,968 per kg in a business turnover of 9 lots.

Similarly, the white metal for delivery in December traded higher by Rs 44 or 0.11 per cent at Rs 49,489 per kg in a turnover of 481 lots.

In the international market, silver prices were up by 0.13 per cent to trade at $22.55 an ounce in Singapore.

Market analysts said besides short-covering by speculators, a firm trend overseas on expectations that the US Federal Reserve will maintain its aggressive stimulus after a government shutdown hurt the economy, boosted the silver futures here.

Ranbaxy dips on disappointing Q3 earnings

The stock has dipped nearly 6% at Rs 364 in early morning deals on the Bombay Stock Exchange.

Ranbaxy Laboratories has dipped nearly 6% at Rs 364 in early morning deals on BSE after reporting a consolidated net loss of Rs 454 crore for the third quarter ended September 2013 (Q3) due to forex loss. The pharmaceutical company had profit of Rs 754 crore in a year ago quarter.

The company incurred a forex charge of Rs 360 crore during the reported quarter, against forex gain of Rs 393 crore in the same period last year, Ranbaxy said in a statement.

The consolidated net sales also grew marginally by 3% at Rs 2,750 crore against Rs 2,670 crore in the corresponding quarter of previous year.

The company said sale impacted by the new pricing policy and trade concerns in India and the absence of any post exclusively sales during the quarter.

Ranbaxy Laboratories expects to achieve sales of Rs 130-135 billion

Ranbaxy Laboratories expects to achieve sales of Rs 13,000 crore to Rs 13,500 crore for 15 months period ending March 31, 2014. This does not consider any sales accruing form First-to-File (FTFs) which shall be accounted for as they materialize.

The company has reported a net loss of Rs 842.23 crore for the third quarter ended September 30, 2013 as compared to a net profit of Rs 552.19 crore in the same quarter previous year. Total income of the company has decreased by 3.74% at Rs 1470.18 crore for quarter under review as compared to Rs 1527.36 crore for the quarter ended September 30, 2012.

On the consolidated basis, the group has reported a net loss after taxes, minority Interest and share of proflt/(loss) of associates at Rs 454.17 crore as compared to a net profit of Rs 754.17 crore in the same quarter previous year. However, total income of the group rose 1.93% to Rs 2827.73 crore for quarter under review as against Rs 2774.23 crore in corresponding quarter previous year.

Gold futures up at Rs 30,206 per 10 gm

Gold futures traded a shade higher at Rs 30,206 per ten gram today as participants enlarged positions amid a firm trend overseas. Besides, covering-up of short positions by speculators also supported the upside.

On the Multi Commodity Exchange, the yellow metal for delivery in December gained Rs 60 or 0.2 per cent to trade higher at Rs 30,206 per 10 gram in a turnover of 708 lots.

Similarly, far-month February contracts moved up by Rs 45 or 0.15 per cent to Rs 29,901 per 10 gram, clocking a business volume of 19 lots.

Analysts said that a firm trend in the global market on expectations that the US Federal Reserve will maintain its aggressive stimulus after a government shutdown hurt the economy, influenced gold prices at the futures trade here.

Globally, gold gained 0.1 per cent to $1,344.50 an ounce in Singapore today.

The Great Indian Coal Scam-I: Coal controversy looms large on Tata group companies

Tata Steel, Tata Sponge and Tata Power feature among companies that have benefitted from the govt's colossal loss, as per the CAG

More than a year after the Comptroller & Auditor General (CAG) tabled the coal block allocation report in the Parliament-- which indicted the government for an estimated loss of Rs 1,86,000 crore while allocating coal blocks--the Central Bureau of Investigation is expected to file more first information reports (FIRs) against private sector companies.

It has already filed 14 FIRs till now and plans to file chargesheet against some companies soon.

Tata Steel, Tata Sponge and Tata Power feature among the 57 private sector companies that have benefitted from the government's colossal loss, as per the CAG.

Tata Steel has been allotted two semi coking coal blocks--Kotre Basantpur and Panchmo--in Jharkhand, having combined reserves of 250 million tonne. The Ganeshpur thermal coal block, linked to a power project, with reserves of around 137 million tonne in Jharkhand was allotted jointly to Tata Steel and Adhunik Thermal Energy.

While Kotre Basantpur and Panchmo were allotted on August 11, 2005, Ganeshpur was allotted on May 28, 2009. But years after the allotment, the blocks are still non-producing, primarily due to want of clearances.

Tata Steel did not respond to questions put forward by Business Standard, but the company's managing director, H M Nerurkar, had said last year that there was no scam in coal allocation.

"There was a policy and people have followed the policy. Coal is just a pass-through. If coal prices increase, it would be reflected in power rates. What is the scam? Lots of figures are coming up, but there are many issues like lease issue and mine and environment clearances,” Nerurkar had said last August.

Tata Steel officials had said in earlier interactions that the public hearing for the Ganeshpur block was over, but some of procedures were still pending, before the block was handed over to the companies. On the other hand, the legal formalities for the Kotre Basantpur and Panchmo had been processed by the state government and the central government's nod was awaited. The lease for these two blocks, linked to Tata Steel's brownfield expansion at Jamshedpur, were originally with Coal India and the transfer took some time, as well. That's Tata Steel's version.

But on November 4, 2010, the coal ministry sent a showcause notice to Tata Steel over an inordinate delay in developing the Kotre Basantpur and Panchmo blocks. The coal ministry 's letter to Tata Steel said that in the review meeting held on June 22 and 23, 2009, the company had assured production in December 2011.

"However in the review meeting held on 20/21 July 2010, it was noticed that no serious efforts have been made by the company to develop the coal block, even after repeated assurances tendered by the company during the period," the letter read. The company was asked to respond in 30 days time, failing which the ministry had said, it could face deallocation.

Tata Sponge, in which Tata Steel has a majority stake, has already drawn the flak for not meeting milestones. Its bank guarantee in respect of Radhikapur (East) jointly allocated to Tata Sponge, Scaw Industries and SPS Sponge Iron, was recommended for deduction last year.

The inter-ministerial group deliberated on the presentation made by the companies and decided against deallocation of the block, but felt that the bank guarantee could be deducted due to shortfall in production.

Another Tata group company, whose name is doing the rounds for not meeting milestones, is Tata Power. Tata Power has a joint block with Hindalco Power Ltd in Jharkhand, which was allocated on August 1, 2007. The block has reserves of 189.823 million tonne and is non-producing, according to the CAG report.

Tata Power shares another block with Monnet Ispat & Energy and Jindal Photo, which is also non-producing. The block was allocated on January 9, 2008 and has reserves of 322 million tonne.

Company	State	Block	Gross reserves (million tonnes)	Date of allotment
Tata Steel	Jharkhand	Kotre Basantpur	148.399	11-Aug-05
Tata Steel	Jharkhand	Panchmo	101.992	11-Aug-05
Tata Steel & Adhunik Thermal Energy	Jharkhand	Ganeshpur	137	28-May-09
Monnet Ispat & Energy, Tata Power and Jindal Photo	Orissa	Mandakini-A	322.796	9-Jan-08
Hindalco & Tata Power	Jharkhand	Tubed	189.823	1-Aug-07
Tata Sponge & Others	Orissa	Radhikapur East	183.429	7-Feb-06
Source: Performance audit of allocation of coal blocks and augmentation of coal production

SEBI relaxes guidelines for primary issuance of debt securities

In a bid to develop the country's corporate bond market, market regulator Securities and Exchange Board of India (SEBI) has relaxed the norms for primary issuance of debt securities by companies.

According to the new measures taken by the SEBI, cash flows generating from the debt securities would have to be disclosed in the prospectus or the disclosure document by way of an illustration. The market regulator has also noted that if the coupon payment date of the debt securities falls on a Sunday or a holiday the payment would be made on the next working day. Furthermore, if the maturity date of the debt securities, falls on a Sunday or a holiday, the redemption proceeds would be paid on the previous working day. These debt securities norms would be applicable to debt securities issued from December 1, 2013.

Moreover, SEBI stressed that the allotment in the public issue of debt securities should be made on the basis of date of upload of each application into the electronic book of the stock exchange. However, on the date of over-subscription, the allotments should be made to the applicants on proportionate basis. Regarding frequent debt issuers, market regulators noted that frequent debt issuers who are in compliance with listing norms, are allowed to disclose unaudited financials with limited review report in the offer document instead of audited results. However, these entities will have to comply with to necessary disclosures including risk factors. These norms would be applicable from November 1, 2013.

In order to enable the investors to forward their grievances to the debenture trustees, the market regulator has asked the companies which have listed their debt securities to disclose the name of the debenture trustees with contact details in their annual report and on their websites from December 1.

Retail deposit rates may rise

Banks might hold on to lending rates for the time being

With Consumer Price Index (CPI)-based inflation at 9.84 per cent in September (provisional data), the Reserve Bank of India (RBI)’s second quarter monetary policy review would provide cheer to investors in debt, primarily for three reasons: First, the RBI statement could goad banks to step up efforts to mobilise deposits. Second, it indicated inflation-indexation bonds linked to consumer inflation would be launched in November-December. And third, lending rates are unlikely to rise in a hurry.

“Going forward, however, the more durable strategy for mitigating mismatches between the supply of, and demand for, funds is for banks to step up efforts to mobilise deposits,” RBI’s policy statement said on Tuesday.

To attract deposits, banks would have to increase rates. While bankers are tight-lipped on the quantum of the rise, there is a consensus deposit rates might be increased soon. “The governor has asked banks to rely on deposits for funds. For that, we will have to work on getting more deposits into the system,” said K R Kamath, chairman and managing director of Punjab National Bank and chairman of Indian Banks’ Association.

RETAIL-FRIENDLY MEASURES

Banks should charge customers for SMS alerts on usage basis,  instead of a fixed fee Banks asked to revise periodicity of interest payments; savings and deposit accounts can earn interest at shorter intervals To launch inflation-indexed national saving securities by Nov-Dec 2013; fixed rate plus inflation payable, compounded half-yearly Committee formed to study options such as SMS-based funds transfer for all type of mobile phones Banks granted extension to put in place security features for card transactions; earlier deadline June 2013

This would only be possible if banks give more real returns on deposits. “If you look at it, today, deposits give negative returns compared to inflation. But the deposit rates would be a function of each bank’s liquidity position,” Kamath added. More clarity on rates would emerge once banks’ asset-liability committees meet in a day or two.

A few banks have already scaled up rates. Last month, State Bank of India raised its retail term deposit rates (below Rs 1 crore) across tenures. For seven-179 day tenures, the rate was raised from 6.5 to 7.5 per cent a year, for 180-to 210 days from 6.5 to 6.8 per cent and for a year-10 years from 8.75 per cent to nine per cent. Similarly, Oriental Bank of Commerce raised its rates by 50 basis points to nine per cent for deposit tenures of two-three years; for tenures of more than three years, the rate was raised to 9.25 per cent. Lakshmi Vilas Bank increased rates on deposits in four maturity slabs by up to 50 basis points.

Lending rates could see some upward pressure, though this is likely to have a delayed impact. “Some change in lending rates is expected, but the quantum and the timing remains to be seen,” said Arundhati Bhattacharya, chairman and managing director of State Bank of India.

The rise in lending rates would also be a function of the liquidity situation. “Given the rise in repo rate has been compensated by a cut in the marginal standing facility (MSF), the review has doubled the limits of funds to be raised under seven-14-day repos; liquidity is tight in the third quarter of the financial year and the extent of impact on banks’ cost of funds remains to be seen,” said Chanda Kochhar, managing director and chief executive of ICICI Bank. Those planning to take the plunge by investing when the deposit rates rise should wait a while. Currently, fixed deposit rates are lower than CPI numbers. For instance, State Bank of India’s one-year rate of nine per cent is lower than the CPI, which is 9.84 per cent.

With the apex bank proposing to launch inflation-indexation bonds (linked to CPI) soon, it would be a good opportunity to earn higher returns. However, remember these bonds would have a 10-year tenure. Also, the returns would vary, depending on the CPI rate. On the other hand, a fixed deposit, as the name suggests, would earn fixed returns.

SBI opens ‘Zero Balance’ account for girls under ‘Kanyasree’ scheme

State Bank of India’s (SBI) Bengal circle is on a special drive to open savings bank ‘Zero Balance’ account for the girls under the ‘Kanyasree’ scheme of West Bengal government. At a programme held at the Adamas International School, Kamarhati on October 26, 2013, the bank has opened more than 3,000 such accounts in presence of dignitaries.

On the consolidated basis, SBI group registered 11.82% fall in its net profit after taxes and minority interest at Rs 4298.56 crore for first quarter ended June 30, 2013 as compared to Rs 4874.70 crore for the same quarter in the previous year. However, total income of the bank, on consolidated basis, has increased by 12.23% at Rs 52502.29 crore for quarter under review as compared to Rs 46782.70 crore for the quarter ended June 30, 2012.

ICICI Bank opens one new branch in Moga district, Punjab

ICICI Bank, the country’s largest private sector bank, has inaugurated a new branch at Baghapurana, Moga district in state of Punjab. The branch will offer the entire gamut of bank products and will also offer a wide range of NRI services.

Besides, it will also offer rural and agri-related products such as Kisan Credit Card, Agri-Term loan, loans for Micro, Small and Medium Enterprises (MSMEs), tractor loans, commodity-based finance, overdraft (OD) against fixed deposits and various basic savings accounts depending on different customer profiles. The branch will remain open for customer transactions from 9:00 am to 6:00 pm on Monday to Friday and 9.00 am to 2.00 pm on Saturday.

ICICI Bank has over 3,500 branches and extension counters and over 11,000 ATMs spread across the country. Punjab and Haryana region has over 285 branches across the state, of which more than 150 are in rural and semi-urban locations.

JSW Steel posts consolidated net loss of Rs115 cr

Sajjan Jindal-owned JSW Steel posted a consolidated net loss of Rs 115.5 crore in the second quarter against a profit of Rs 691.2 crore, mainly on foreign exchange losses of Rs 851 crore. But it put up a strong operational performance with higher sales volume driven by exports. Its revenue for the quarter rose to Rs 12,796 crore compared to Rs 9,275 crore.
The company hopes to cut foreign exchange fluctuations-related translation losses completely from this quarter onwards. “This will be last quarter where you are seeing such translational losses. We started covering all over exposure from payable side. As on September 30, we have covered 76% and in October, we have covered the balance,” said Seshagiri Rao, joint managing director and group chief financial officer. The company is hedging both its export and import foreign exchange exposure.
Rao claimed that the company's margins in second quarter improved by 2.2% on squeezing various efficiencies and higher export volumes. JSW Steel's exports jumped to 8,50,000 tonne from nearly 3,30,000 tonne in the first quarter. It aims to export at least 3 million tonne of steel this fiscal. South east Asia, Europe and US mainly contributed to exports

The company expects several projects on which it has been incurring capex over the last two years to improve operational performance from the next quarter onwards as they get ready for commissioning, helping it increase volumes, reduce cost and improve product mix. Rao said commissioning of a pellet plant and coke oven battery at its Dolvi unit in this quarter and next quarter would contribute in huge way to improving JSW Steel's consolidated bottomline.

In the second quarter, the the company commissioned several projects at Vijayanagar, including second cold rolled mill complex, corex furnace, blast furnace gas utilization waste heat recovery system and the like.

The ore availability in Karnataka remained under pressure as out of 40 category A and B mines approved by the government, only 15 mines were operating and the remaining 25 are expected to start operations over the next 3-6 months, which will provide an additional ore of 7 million tonne.

The company is, however, hopeful to achieve 100% capacity utilisation next year with an increase in ore availability.

Jayant Acharya, commercial director, indicated that steel demand in the country remained sluggish but is likely to improve in the second half with a revival in export led manufacturing and pick-up in construction activity. For 2013-14, he expected steel demand to grow at sub 3%. The company, which has increased flat product prices by more than Rs 2,000 per tonne over the last two months, is not looking to hike price in November. Achraya said long product prices, which have remained flat, may see some pick-up post December. Overall, the company sees steel prices to have an upward bias going forward following recovery in developed markets.

JSW Steel, which is looking to refinance its loans, plans to raise $600 million via external commercial borrowings this quarter. It will help the company increase its rupee dollar ratio to 52% from 39% as of September 30.

India slips to 134th spot in ease of doing business list: World Bank

Singapore is followed by Hong Kong and New Zealand at the second and third positions, respectively.

India has slipped three positions to 134th spot in the latest ease-of-doing business list, which is topped by Singapore, according to World Bank.

In the 'Ease of Doing Business' ranking of 189 economies, India has dropped from 131 spot last year while Singapore continues to remain at the top.

Singapore is followed by Hong Kong and New Zealand at the second and third positions, respectively.

Other nations in the top ten are United States (4), Denmark (5), Malaysia (6), Korea (7), Georgia (8), Norway (9) and United Kingdom (10).

India has been ranked lower at 179 in terms of ease of starting a business in the 2014 list at a time when its government is making efforts to improve the country's business climate. Last year, based on this criteria India was placed at 177th spot.

The ranking of countries are based on various parameters including starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

"The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy.

"Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business," the report said.

India had earlier expressed concerns about the report.

Earlier this year, a World Bank-appointed independent panel of experts, in its review report, had suggested scrapping the ranking system with regard to ease of doing business.

Recently, a government-appointed panel had suggested a slew of measures to improve the country's business climate.

Rupee weakens to 61.50 in early trade

The rupee lost 19 paise to 61.50 against the dollar in early trade at the Interbank Foreign Exchange market today due to appreciation of the US currency against other currencies overseas ahead of the Federal Reserve policy decision.

Increased month-end demand for the dollar from importers also put pressure on the rupee but a higher opening in the domestic equity market capped the fall, forex dealers said.

The rupee had gained 21 paise to close at 61.31 against the dollar in yesterday’s trade after the RBI hiked a key interest rate to curb the price rise and enhanced the liquidity for banks.

Meanwhile, the BSE benchmark Sensex regained 21,000 level by rising 100.25 points or 0.48 per cent to trade at 21,029.26 in early trade today.

Infosys likely to be slapped $35-mn fine

WSJ report says this would be the largest immigration fine ever

The US government was likely to slap a fine of $35 million (Rs 219 crore) on Infosys, India’s second-largest IT services firm, over charges of inappropriate use of visitor visa for business purposes, The Wall Street Journal (WSJ) reported on Tuesday, citing unnamed sources. This would be the “largest immigration fine ever”, it said, adding an announcement on this was expected to be made on Wednesday.

Infosys did not directly reply to a query on whether the case was expected to be settled on Wednesday and if it had to pay such a hefty fine. But it said it was not involved in any systematic visa abuse in the US. “In response to reports attributed to Justice Department officials, Infosys is in the process of completing a civil resolution with the government regarding its investigation of visa issues and I-9 documentation errors. The resolution has not been finalised,” the firm said in a statement. “Infosys denies any claims of systemic visa fraud, misuse of visas for competitive advantage, or immigration abuse,” it added.

The WSJ report said the US authorities were likely to say the Indian IT services major had illegally placed workers on visitor visas, rather than work visas, at clients across its largest market.

The US Justice Department and the Homeland Security Department have been investigating Infosys’ visa practices for over two years. The probe had been triggered by allegations the Bangalore-based firm used business travel documents to place Indian employees on temporary positions in American companies.

Interestingly, Infosys had earlier this month made a provision of exactly $35 million for settlement of the case, which dates back to May 2011, when the company had been issued a sub-poena by the US authorities asking it to furnish details of its business visa use. The provision included legal costs associated with the probe, the company had said.

On its $35-million provision, Infosys CFO Rajiv Bansal had told Business Standard earlier this month: “Based on the way the discussions are today, we felt it was necessary to make the provision. Right now, the discussions are on and based on the assessment of those, we have made the provision,”.

“The fact is, you have to make certain accounting provisions, depending on the situation. We might not use a dollar out of it, or we may spend more,” he had said.

The WSJ report said the US government authorities had found Infosys brought an unknown number of employees for long-term stays in the country on inexpensive and easy-to-get B-1 visas (which cover short business visits) in place of H-1B visas, which are generally hard to get.

The resolution to the case would only include civil penalties and constitute a full resolution to the case, the report added.

Sensex tops 21,000 mark in early trades, Bharti Airtel up 4%

Markets extended gains to open marginally higher led by heavyweights

Markets extended gains to open marginally higher on Wednesday and the Sensex topped the 21,000 mark in early trades led by gains in index heavyweights ICICI Bank, ITC and Bharti Airtel.

At 9:35AM, the 30-share Sensex was up 85 points at 21,014 after hitting an intra-day high of 21,038 and the 50-share Nifty was up 27 points at 6,248

The rupee fell against the US dollar in early trades and was trading at Rs 61.49 compared to its previous close of Rs 61.32.

Asian markets firmed up tracking overnight gains on Wall Street on expectations that the US Fed would continue its monetary stimulus measures. The Nikkei was up 1.2%, Hang Seng gained 0.8%, Shanghai Composite was up 0.8% and Straits Times gained 0.3%.

Rate-sensitive sectors such as Realty, Bankex and Auto indices were among the top gainers in the sectoral indices on BSE followed Power, Oil and Gas indices.

ICICI Bank, Bharti Airtel, ITC, HDFC and Reliance Industries contributed the most to the Sensex gains.

Bharti Airtel was up 3.9% after the company today reported Q2 cosolidated net profit of Rs 512 crore. The revenue stood at Rs 21,324 crore in the quarter. Forex loss at was at Rs 342 crore. The company said that the continued depreciation of rupee contributed to forex loss. Consolidated EBITDA margin came in at 32%.

ITC was marginally up on short covering at lower levels after profit taking was seen in the previous few sessions.

In the financial pack, ICICI Bank was up 1.8%, SBI and HDFC were up 0.5% each.

Sensex losers include, Infosys, HDFC Bank, L&T and Wipro amid profit taking at higher levels.

Among other shares, Tata Communications was up 10% at Rs 251 after the company reported a net profit of Rs 80.36 crore for the quarter ended September 30, 2013, on the back of growth in managed services and voice offerings. The company had reported a net loss of Rs 274.24 crore in the corresponding period last fiscal, Tata Communications said in a statement.

In the broader market, the BSE-Mid cap and Small-cap indices were up 0.6% each.

Market breadth was strong with 709 gainers and 287 losers on the BSE.

Bharti Airtel Q2 net down 29% at Rs 512 crore

Total revenues grow 9.9% to Rs 21,324 cr; forex loss at Rs 342 cr

Bharti Airtel Ltd, on Wednesday, reported a 29% drop in net income at Rs 512 crore during July-September 2013 quarter.

The result marks the 15th consecutive quarter of decline in net profit for the country’s largest telecom operator by subscriber base. The telecom major had posted a net income of Rs 721 crore in the corresponding quarter of the previous financial year.

Consolidated average revenue per user in India dropped 4% to Rs 192 during July-September quarter, against Rs 200 during the previous quarter. But an area of worry for telcos has been how to increase average realisation per minute — the money the company makes from customers. Average realisation per minute for voice in India increased just 1% to 36.74 paise from 36.39 paise in the previous quarter. Average realisation per MB for data declined 2% to 30.26 paise from 30.97 paise.

The company's mobile internet revenue has doubled to Rs 1,500 crore during the quarter as against that of the same quarter previous fiscal year.

Bharti Airtel's total revenue grew 9.9% to Rs 21,324 crore during the quarter as against Rs 19,400 crore during the year ago period.

“Mobile internet is now a major engine of growth for Airtel across all geographies. Our sustained investment in this segment will further enhance customer experience and seamless coverage. The revenue growth in Africa reflects the inherent potential in the world's most promising continent. I am also pleased to see the evolution of Airtel Money, a significant service in geographies which are relatively under-banked," said Chairman Sunil Mittal in a statement.

Airtel said that rupee depreciation has resulted in forex restatement and derivative losses of Rs 342 crore during the quarter against Rs 25 crore in the previous quarter.

At the end of September 2013, Bharti’s total net debt burden dropped to $9.6 billion. Bharti’s overall debt increased mainly on account of borrowing to pay for spectrum in India and purchase the Africa operations of Zain Telecom for about $9 billion.

Saradha swallowed Rs 2,000 cr: Panel

Sen commission identifies properties of scam-hit group in 12 West Bengal districts; DMs asked to determine valuations for an auction

The Shyamal Sen commission probing the collapse of the Saradha collective investment scheme controversy has put the size of the scam at Rs 2,060 crore.

This is the estimate of the amount raised by the Saradha group from various depositors, in what turned out to be a Ponzi scheme. The commission is understood to have given an interim report to the West Bengal government, with this figure.

Sources said the central government’s enforcement directorate’s estimate of the size of the scam was higher. “According to their estimate, Saradha raised about Rs 2,400 crore. These are all preliminary estimates,” said an official of the commission.

The panel got about 1.7 million applications. Most of these involved Saradha. But investors in other companies with similar schemes, such as Amazon, Suraha Microfinance, Sunmarg, ICore, Rose Valley and Alchemist, also registered complaints. About 85 per cent of the complaints pertained to individual investments of less than Rs 10,000; the highest amount invested by an individual in Saradha was Rs 27 lakh.

On the basis of the Sen commission's recommendations, the government has begun distributing compensation cheques; it did so earlier in the month for 1,000 Saradha depositors. State Chief Minister Mamata Banerjee had announced a Rs 500-crore fund to compensate the depositors. As this amount would not suffice to compensate all those affected, Sen had earlier told Business Standard that it would recommend the government sell the assets of Saradha to generate funds.

Officials say the commission has identified properties of Saradha in 12 districts of the state. With its report having come, the government has asked the district magistrates concerned to do a valuation of the properties for auction.

“The DMs have been asked to file a report on this. They have been asked to determine the reserve price of the properties for the auction,” a source said.

Besides, 73 vehicles were seized by the authorities from different offices of Saradha across the state. The Commission has asked the transport department for valuations of these vehicles, also to be auctioned.

Vodafone to invest Rs 10,141 cr to raise stake in Indian arm to 100%

Values subsidiary at Rs 28,469.9 cr, 48% less than in Feb '12

British telecom major Vodafone Plc on Tuesday sought the Foreign Investment Promotion Board’s (FIPB’s) approval to bring in Rs 10,141 crore to raise its 64 per cent equity stake in Vodafone India to 100 per cent.

According to its application, Vodafone India has been valued at Rs 28,469.9 crore, compared with Rs 54,672.72 crore in February last year, when Ajay Piramal-controlled Piramal Enterprises had paid Rs 3,007 crore for a 5.5 per cent stake in the company. So, if the existing stakeholders — Piramal Enterprises, Max Group’s Analjit Singh, IDFC and other independent investors — exit at the current valuation, they get 47.9 per cent less than what they would have got in February 2012.

When Piramal Enterprises had bought its second tranche of 5.5 per cent stake in Vodafone India, it had said it expected to get 17-20 per cent return on its investment. Apart from Piramal, Analjit Singh holds 6.2 per cent in the company while IDFC and other individual investors own the remaining 18.8 per cent.

Vodafone’s application to buy out its Indian subsidiary’ partners has come within two months of the government allowing 100 per cent foreign ownership in an Indian telecom company. It is the second foreign telco seeking permission to do so, after Singapore’s SingTel recently received FIPB’s approval to buy Bharti Airtel’s 9.9 per cent stake in a joint venture for international long distance calls.

Earlier, in its 2012 annual report, Vodafone Plc had said it would pay Piramal Enterprises between Rs 7,000 crore and Rs 8,300 crore for its 11 per cent stake if the latter was not given an exit through an initial public offering between August 18, 2013, and February 8, 2014, or if Piramal chose not to participate in an exit through IPO.

According to the annual report, the company had benchmarked the valuation of its Indian entity between Rs 63,636 crore and Rs 75,454 crore. Compared to this valuation, the current value is 55-62 per cent lower.

“The value Vodafone has shown today is not justified. It could have been based on the company’s individual agreements with the investors at the time of their investments. Also, the previous valuations could have included the expected return from the 3G business, which did not actually come,” said a partner with a Gurgaon-headquartered management consulting firm. “How can Vodafone be valued at this price when Idea Cellular is valued at Rs 10 billion (about Rs 61,455 crore at Tuesday’s conversion rate),” he asked.

Industry experts attribute the erosion in valuation to Vodafone’s low 3G subscriber base. According to PhilipCapital India, in 2012-13, Vodafone India was fourth among operators in 3G user base (with 3.3 million users), while Bharti Airtel had 6.4 million and Reliance Communications (RCom) 7.2 million 3G users.

Prashant Singhal, telecom expert at Ernst & Young said: “This (Vodafone’s proposal) will improve the market sentiment in general — not for its valuation, but due to foreign investments coming in the sector.”

Confirming the move, a spokesperson for Vodafone Plc said: “We have always said we would like to increase our holding in the business and this further investment demonstrates Vodafone’s long-term commitment to India. The total inflow of foreign investment into India as a result of the proposed transactions will be approximately Rs 10,141 crore.”

When contacted, Ajay Piramal said: “I am confirming that we are getting our returns, but I will not be able to share any more information than that.” He refused to comment more on the issue.

Some analysts say the valuations are very conservative and hint at transfer-pricing issues. “The valuation is, in fact, much lower than conservative estimates. This low valuation might open a Pandora’s box, as it is too good to be true,” said Alok Shende, principal consultant and co-founder, Ascentius Consulting.

But Supreme Court advocate and tax expert H P Ranina says: “I don’t think there will be an issue with this, as they are not related parties and there is no associated person. According to the income-tax laws, if there is no associated person, transfer-pricing rules do not apply, he adds.

Kunal Bajaj, an independent analyst, says: “Vodafone is a private company and the owner of the shares can sell it at a valuation it wants.”

The British telco also announced that it would consider providing additional funding to Vodafone India by subscribing to equity shares of the Indian entity, after it had got 100 per cent equity control. “Looking ahead, Vodafone will continue to invest in India to bring the benefits of mobile communications and financial inclusion to more people across the country,” the spokesperson said, declining to give further details.

Dow, S&P 500 end at highs on stimulus hopes, IBM

Economic data supports views that Fed will keep its stimulus intact for several months

The Dow and S&P 500 ended at record highs on Tuesday after economic data supported views that the Federal Reserve would keep its stimulus intact for several months and IBM rallied after the company announced a stock buyback.

IBM gave the biggest boost to the Dow, which led the day's gains. The stock, which also helped drive the S&P 500's advance, jumped 2.7% to $182.12 after the company's board of directors approved another $15 billion for stock buybacks.

In the latest economic data, a gauge of US consumer spending rose in September, but another report showed consumer confidence fell sharply in October because of worries about the impact of the partial government shutdown.

The data added to evidence of sluggish economic growth just as the Fed began a two-day policy meeting. Expectations are high that officials are unlikely to shift monetary policy this week as they wait for more evidence of how badly Washington's budget battle has hurt the US economy.

"The ghosts of tapering are not coming this Halloween," said Omar Aguilar, chief investment officer for equities at Charles Schwab Corp. "The government shutdown pushed the tapering discussion further out."

That's likely to keep a floor under stocks for the near term at least, though longer term, slow growth in earnings and especially in revenue may be a concern, he said.

Limiting some of the day's gains in both the Nasdaq and the S&P 500, Apple shares dropped 2.5% to $516.68 a day after the iPad and iPhone maker delivered disappointing results.

The Dow Jones industrial average gained 111.42 points, or 0.72%, to end at 15,680.35, a record close. The Standard & Poor's 500 Index rose 9.84 points, or 0.56%, to finish at 1,771.95, also a record closing high. The S&P 500 hit another intraday record high at 1,772.09.

The Nasdaq Composite Index advanced 12.21 points, or 0.31%, to close at 3,952.34.

Tuesday's rally brings the S&P 500's gain for the year to date to 24.2%.

In the latest technical issue to befall the Nasdaq exchange, the Nasdaq OMX Group said human error left the exchange unable to transmit index values for nearly 45 minutes, leading to a temporary halt in options trading on some stock indexes.

After the bell, shares of LinkedIn dropped 3.1% to $239.45 after the social networking company for recruiters and job seekers gave a conservative revenue forecast for the fourth quarter and fiscal 2013. LinkedIn shares ended the regular session at $247.14, up 1.7%. Shares of video game publisher Electronic Arts Inc rose 2.8% to $24.80 in extended-hours trading after the company reported a higher quarterly profit. In regular trading, Electronic Arts shares fell 2.8% to close at $24.13.

During the regular session, the Dow also got a boost from Pfizer Inc , which rose 1.7% to $31.25 after the largest US drugmaker reported better-than-expected third-quarter earnings.

As has been the case in recent quarters, more companies have been beating analysts' earnings expectations than revenue expectations. With results in from 281 of the S&P 500 companies, 68.7% have topped profit expectations, above the long-term average of 63%, while just 52.5% have beaten revenue estimates, below the 61% rate since 2002, based on Thomson Reuters data.

Cummins Inc slumped 5.2% to $127.90. It was the S&P 500's worst performer after the US maker of engines and other vehicle components reported lower-than-expected quarterly profit on Tuesday and cut its full-year outlook.

Another decliner was JPMorgan Chase , down 0.1% at $52.73 after a person familiar with the situation said the preliminary $13 billion deal set by the bank's CEO and the US attorney general has hit a stumbling block.