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.