KEC, RPG, NITEL boards okay share-swap ratios

KEC International, the infrastructure company of RPG Enterprises, today announced share swap ratios for the shareholders of RPG Transmission (RGPT) and National Information Technologies (NITEL) following the decision to merge RPGT and NITEL with KEC.

RGPT shareholders will get 4 shares of KEC for every 9 shares and NITEL shareholders will get 2 shares of KEC for every 15 shares.

The share swap ratio was announced today after the boards of these three companies approved the mergers. The merger scheme also proposed spinning of the investment division of KEC into a separate entity. The appointed date for the merger is fixed on October 1 and the merger formalities, including the receipt of the required approvals, are expected to be completed by end-March.

The merger would create the largest tower manufacturing company in the world with a capacity of 1,40,000 mega tonne (MT) per year, with almost double the size of its immediate competitiors such as Kalpatharu Power and the transmission business of Asea Brown Boveri (ABB), Ramesh Chandak, MD of KEC, said.

The combined entity will have a turnover of Rs 2,538 crore with an EBITDA of Rs 301 crore and a combined order book of Rs 5,000 crore, he added.

"Major tower capacities are in India, Mexico, Turkey, Saudi Arabia, Brazil and Yugoslavia. Leveraging the expertise of telecom infrastructure space through NITEL will be a major advantage for KEC as it enables integration of project and asset management, improved resource utilisation, procurement, finance and administrative cost savings. Further, this will
help KEC to participate in larger tender projects," he said.

The Rs 60 crore NITEL is involved in creating communication network infrastructure and has bagged four clusters under Universal Service Obligation (USO) fund - an obligation on the part of telecom operators to create infrastructure in rural areas, for setting up 384 cell sites in Chattisgarh, Mizoram and Meghalaya.

KEC , one of the largest companies in EPC of transmission lines, has laid over 58,000 kms of lines in over 40 countries and is executing projects in 16 countries. It had entered into the North American market this year bagging two major projects.

RPGT, a Rs 400 crore company, came under the RPG fold in 1994 and is one of the oldest company in transmission and railway electrification business in India.




Dhanalakshmi aims at Rs 8000cr business

Dhanalakshmi Bank Limited is aiming to achieve Rs 8,000 crore business by the end of this fiscal. The bank's total business as on March 2007, touched Rs 5,016 crore with Rs 16.14 crore net profit, VS Somanath, deputy general manager, Dhanalakshmi Bank, said here.

In the current year, the bank will add about 40 new branches across the four southern states as part of its strategy to reach the Rs 8,000-crore mark, he told the media. It currently has 181 branches, 26 extension counters and 66 ATMs, and shares arrangements with Cashtree.

In the current year, the bank is laying more thrust on agricultural advances in Andhra Pradesh. This year, the bank will provide Rs 400 crore loans, particularly to the sugarcane growers in Andhra, he added.

As of March 31, 2007, 150 branches of the bank were brought under the core banking solution.

“We have reduced our net NPA to 1.75 per cent by March 2007 from 2.44 per cent. Our target is to reduce it to 1 per cent by the end of this fiscal,” he said.




Andhra Bank Kakinada zone net up 41%

The Kakinada zone of Andhra Bank registered 40.64 per cent growth in net profit for the quarter ended June 30, 2007, at Rs 26.23 crore, compared with Rs 18.65 crore in the corresponding quarter last fiscal.

The zone surpassed the deposit target of Rs 1,392 crore by achieving Rs 1,436 crore while advances stood at Rs 1,418 crore, as against the target of Rs 1,395 crore.

Deposits were up 19.17 per cent in the first quarter from Rs 1,205 in the corresponding quarter last year and advances grew 22.13 per cent from Rs 1,161 crore during the same period last year.

Total business of the zone crossed Rs 2,854 crore compared with Rs 2,366 crore as on June 30, 2006.

The credit deposit ratio (CDR) stood at 98.75 per cent as against 96.38 per cent as on July 30, 2007. NPAs were down to Rs 5.09 crore from Rs 13.26 crore in the corresponding first quarter last year. Fee-based income during the quarter increased to Rs 1.07 crore from Rs 14 lakh in last year’s first quarter.

“We are trying to make this the number one zone in Andhra. We have already occupied the second position among all the 16 zones. The Kakinada zone stood first in the country in the bank linkage of self-help groups (SHGs). The zone lent Rs 114 crore to 21,544 SHGs in East Godavari district. It stood first in the county under the bank assurance mobilising 33,500 policies,’’ Andhra Bank Kakinada zonal manager Y Prasad said.

Gross NPAs of the zone declined to Rs 5.83 crore as on March 31, 2007, from Rs 14 crore last year, which is perhaps the lowest among all the zones of Andhra Bank, he said.



Fearing Q1 redux, sugar firms court Maya govt

For the country’s sugar barons, all roads these days lead to Lucknow. After reporting poor results for the April-June quarter, they have started lobbying with the Mayawati government for lower sugarcane prices before their mills start production in October.

Some sugar mills have also moved court challenging the state government’s formula for fixing cane prices. The mills are watching the development with bated breath.

Industry insiders say such a development will also suit the state government, which otherwise will face the political fallout of reducing the administered prices. There are about 7 million sugarcane farmers in Uttar Pradesh.

In the last crushing season (October 2006-May 2007), while cane prices were raised about 8 per cent, sugar prices fell 30 per cent due to a bumper harvest. As a result, all sugar mills in the state reported a loss for the April-June quarter. Also, cane arrears to farmers stand at an all-time high of Rs 2,300 crore in the state.

If there is no relief on the cane-price front, the losses will be higher in the coming quarters as the mills are adding new capacities. The crushing capacity in the state is expected to go up from 711,000 tonnes crushed daily (tcd) to 802,000 tcd in October.

While Bajaj Hindusthan will increase its capacity from 95,000 tcd to 136,000 tcd, Balrampur Chini plans to add 19,000 tcd, taking the company’s capacity to 74,000 tcd next season.

More capacities would mean companies incurring higher losses next season as a result of higher output, which would depress prices further. The country’s production is likely to cross 30 million tonnes next season, 2 million tonnes more than this season.

“Even if the state-advised cane price remains at this year’s Rs 125-130 per quintal, the cost of producing one quintal sugar will be Rs 1,350 (including transportation). With conversion charges, the cost of producing one quintal sugar will be Rs 1,750, meaning a loss of Rs 500 per quintal since the sugar price may dip to Rs 1,250 per quintal. If a company produces 1 million tonnes of sugar, it could incur a loss of up to Rs 500 crore,” said Kishor Shah, director-cum-chief financial officer, Balrampur Chini.

With the state’s total output estimated at 10 million tonnes next year, the industry’s losses may touch Rs 5,000 crore.

If the cane price is not reduced, it is certain that a number of small sugar units may not be in a position to even begin operations. If this happens, the farmers will have no one to sell their cane to. This would force them to move to other crops, said industry sources.

While most mills in the state have diversified into co-generation and distillery to hedge the losses from sugar, the revenues from these are just 10-20 per cent of the total. Moreover, with a drop in the prices of molasses and the delay in the ethanol-blending programme, the distillery business has become less profitable.

“The mills in Uttar Pradesh pay a higher cane price than in states like Maharashtra or Karnataka. The UP mills have to compete with sugar from states where the production cost is low. Moreover, these states are providing fiscal sops to sugar mills”, said a UP miller.

“The ad-hoc nature of cane price is hitting the farmers and affecting the companies. The government should take a rational view on cane price that is sustainable in the long term”, said Nikhil Sawhney, vice-president, Triveni Engineering.



I-T to scan filings of builders with Rs 5cr sales

Concerned over huge tax evasion in the realty sector, the income-tax department is likely to scrutinise tax returns of all real estate players — be it a property dealer or a builder — with annual turnover of Rs 5 crore in the current fiscal.

“The Central Board of Direct Taxes (CBDT) has asked the field income-tax officials to sent scrutiny notices to all builders having an annual turnover of Rs 5 crore or more,” a finance ministry source said.

An official comment from the ministry on the issue could not be obtained.

The official said through these notices assessing officials could ask builders to appear before them to explain the sources of income, net profit and the tax deducted at source. The builders could also be asked to disclose details of income and expenditure during the past three years.

A decision in this regard was recently taken as part of the annual action plan of the department to take measures for meeting direct tax collections' target of Rs 2,67,490 crore and unearth black money in the realty sector.

“It has also come to our notice that many builders are selling flats by taking money partly in cash, and not disclosing it in the annual returns,” the source said. He said though many builders were taking money from home buyers in advance, they showed income in tax returns only after the completion of projects. Information collected from banks was collated in this regard, he added.

The source said stiff scrutiny norms for property deals was the result of the high-level of activity in the real estate market, and the government wanted to ensure that people were paying taxes and there was no black money in circulation.

For the returns filed till July 31, they said, income-tax officers could serve the scrutiny notice by July 31, 2008.

The source said, “The CBDT has also asked I-T officials to review the statements of builders’ bank accounts, match withdrawals with expenses, including those on credit cards.”



Novartis loses Glivec case, may not move SC

The Madras High Court today dismissed the petition filed by Swiss pharmaceutical major Novartis against the validity of a specific clause - 3(d) - in the Indian Patents Act that restricted patenting of minor improvements of known molecules.

Dismissing the petition, which said that 3 (d) violated the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement and provided "unguided power" to patent controllers to reject applications for patents on the ground that they are not inventions, the court advised Novartis to approach the dispute settlement forum of the World Trade Organisation on TRIPS-related complaints.

The company had approached the High Court in February 2006 after its patent application on Glivec, a cancer drug, was rejected by the Patent Office due to the 3(d) provisions enshrined in the Patent Act. Section 3(d) disallows patenting of minor improvements in known molecules or derivative of a known substance unless they differ significantly in properties with regard to efficacy.

“We disagree with this ruling. We, however, may not appeal to the Supreme Court. We are awaiting the full decision to better understand the Court’s position. Our actions advanced this essential debate in India - now local and international leaders in both industry and academia recognize the inadequacies of Section 3(d) and are raising serious concerns about the deficiencies of the Indian patent system,” Ranjit Shahani, vice-chairman and managing director, Novartis India said.

Though the challenge by Novartis on India's patent system has been dismissed by the Madras High Court today, it is also fighting a case before the Intellectual Property Appelate Board (IPAB) in Chennai on the decision of the Indian patent office not to give a product patent for its cancer drug Glivec.

"We expect the appellate board to conduct an independent and impartial review of our appeal and ensure transparency of the decision-making process," Shahani said.

Meanwhile, Novartis AG International said the company was concerned on the Indian court ruling and the decision would discourage investments in innovation needed to bring better medicines to patients.

“It is clear there are inadequacies in Indian patent law that will have negative consequences for patients and public health in India,” said Paul Herrling, Head of Corporate Research at Novartis.



SBI launches carbon credit finance

State Bank of India (SBI) has signed MoUs with Mitcon Consultancy Services, Ecosecurities India and Cantor CO2E India for jointly providing one-stop solutions to industries for clean development mechanism (CDM) projects and emissions trade.

The MoU was signed by Mrs. Bharati Rao, deputy managing director & chief credit officer, in the presence of chairman O P Bhatt and other senior functionaries of the bank in Mumbai today.

"As India’s largest bank, we have a strategic role to play in addressing environmental issues - both in terms of the risks they pose and the new opportunities they create. SBI proposes to provide a single point delivery of services related to carbon credits/clean development mechanism (CDM) under the Kyoto Protocol to our customers. These include, apart from finance to implement CDM projects, advisory services and value-added products like securitisation of carbon credit receivables, carbon credit delivery guarantees and escrow mechanism for carbon credits. With its large base of SME customers, SBI sees the possibilities for aggregating/bundling of individual CDM projects from SMEs into viable-sized lots as a specific and special area of thrust," Bhatt said.



Nasscom for education reforms to check attrition

With attrition emerging as a major problem for the ITeS/BPO industry, Nasscom has urged the Union government to relax norms and rules governing the education sector to improve the quality of human resources.

"It is not just IT sector or BPO, which is facing attrition. All growing sectors like banking and financial services and retail are facing tremendous shortage of human resources. Unfortunately, government rules do not allow private industries to start educational institutions," Genpact CEO & president Pramod Bhasin said at the Nasscom ITeS/BPO Summit.

He pointed out that India has the capacity to produce world class human resources. "But the curriculum has to be updated. Our educational resources have to be mobilized. It is important to produce quality human resources because clients now are not only coming for cost, but also for quality," he added.

The attrition rate in voice-based BPO is in excess of 50%. Similarly, the attrition rate in non-voice BPO ranges between 20-30%, according to industry estimates. The BPO sector estimates that training costs are increasing, at $300 per person.

"Attrition has become a nightmare. We need candidates with technical and managerial skills. Our government universities are empty by afternoon. Why can't we use the classrooms for training? We are even ready to train the trainers," Bhasin contended.

Dell International Servcies MD Ganesh Lakshminarayanan pointed out that only 4% of the graduates passing out of the colleges are entering BPO sector. "Another 10% do not want join BPO...There are wrong perceptions, starting from the family level. When we go to clients, we say India is producing abundant human resources. Eventually, we do not get the required number because of quality," he said.

EXL Services CEO Vikram Talwar said cost issues, coupled by the rupee appreciation and wage inflation, was hampering the growth of BPO sector. "The industry is still in the growth phase. It is trying to make itself competitive through operational excellence. But resource crunch is one area, which needs to be addressed," he added.

BPO firms are now moving to secondary and tertiary cities in search of quality talent with attrition increasing in the top IT clusters. FirstSource Solutions, which started with two centres in Mumbai and Bangalore, has now spread to eight cities.

FirstSource Solutions CEO Ananda Mukherji said: "There is a salary difference of 25-30% between IT clusters and secondary cities. This is high time that BPOs go to secondary and tertiary cities to improve profitability and cut down attrition."




BPO jobs may go in-house due to low savings

Below expected cost savings achieved by outsourcing of IT services are forcing a number of corporates in western countries to think over bringing part of their jobs back in-house, according to a new study.

The report released today by International technology research agency Forrester said organisations in North America and Europe plan to continue their outsourcing initiatives despite cost-savings concerns, but at the same time, many of them also plan to bring some elements of outsourcing portfolio back in-house.

As per the report, 36% of the firms surveyed agreed that cost savings from services were lower than expected and another 28% of respondents believed that their providers are unable to respond rapidly to changing business needs.

"Although relatively few outsourcing clients say the quality of work that IT services and outsourcing partners perform is poor, they nevertheless have concerns about their providers and the cost effectiveness of outsourcing," Bill Martorelli, Principal Analyst, Forrester said in the report.

In addition, many respondents indicate that they intend to bring some services, or some element of services, back in-house after outsourcing them, the report said.

"This also suggests they no longer view outsourcing as a one time activity but as part of a continuum with significant fluidity in between phases," Martorelli said.

However, the clients have substantial plans to outsource various IT activities, suggesting that expectations for growth in the industry are well founded, he added.



Punj Lloyd bags Rs 590cr Bina Refinery order

Punj Lloyd, a global EPC services provider in energy and infrastructure domains, has got a Rs 590 crore contract for building a sulphur block at Bina Refinery of Bharat Oman Refineries at Bina, Madhya Pradesh.

According to an official release issued by the company to the BSE today, the lump-sum turnkey contract entails engineering, procurement, construction and commissioning assistance (EPCC) services.

The scope of work includes a 360 TPD Sulphur Recovery Unit, 470 TPH Amine Recovery Unit, 360 TPD Tail Gas Treatment Unit and 125 TPH & 49 TPH Sour Water Stripping Units. The project is scheduled to be completed within 25 months. This will be the largest process unit in a grass root refinery for the company, which has executed 6 other sulphur recovery units in the country, the release said.

With this, the order backlog (anticipated revenues from the uncompleted portion of existing contracts as on June 30, 2007 and contracts obtained thereafter) for the group stands at Rs 16,480 crore.



Orissa sugar industry urges for more credit to cane growers

The representatives of sugar industry in Orissa have asked for a separate line of credit for the sector by the National Bank for Agriculture and Rural Development (Nabard).

Participating in a meeting convened by the Orissa regional office of Nabard to discuss issues related to sugar industry in Orissa, Chairman of Orissa Federation of Sugar Industries, Jagneswar Babu said that to ensure full capacity utilisation of the existing sugar mills in the state, 45,000 hectares of land was needed to be brought under the cultivation of sugarcane against the existing 16,000 hectares.

He added if sugarcane cultivation in 50 per cent of this land was done with bank assistance, the total bank credit required, at a rate of Rs 45,000 a hectare, was Rs 101 crore. He said under the current sugarcane financing arrangement, credit flow to the sector was as low as 20 per cent.

He further suggested that the financial package announced by the Central government for co-operative sugar mills should be extended to the sugar mills in the private sector. Similarly, the term loans availed by the co-operative sugar mills from commercial banks and the government may be considered for restructuring. He said that the interest rate on credit limit should be same as the crop loan.

To ensure monitoring of the credit flow to the sugarcane sector, the State Level Bankers’ Committee (SLBC) was urged to prepare a data base on disbursement of loan to the sector. Such a monitoring would enable the bankers and other stake holders to keep a watch on the credit flow to the sector, said Arabinda Padhee, director (agriculture), Orissa government. He called upon the sugar mill owners to strengthen their own research and development (R&D) facilities for supply of better quality of seeds.

S A Kareem, chief general manager, Nabard, said timely and adequate credit to sugarcane growers, bringing more land under sugarcane cultivation, restructuring of the term loans provided to sugar industries, insurance coverage of sugarcane crop and investment credit for sugar complex would bring relief to the ailing sugar industry of the state.

Trailokya Mishra, chairman, Nayagarh Sugar Complex, urged the state government to prepare a road map in line with the policies adopted in states such as Maharastra, Uttar Pradesh and Tamil Nadu for a vibrant sugar industry in the state.

Registrar of co-operative societies, Orissa, K C Mohanty said despite a clear-cut circular by Nabard, the co-opeartive banks in the state were not extending any term loan to the sugar sector.



NCDEX pegs member net worth at Rs 50 lakh

The National Commodity & Derivatives Exchange (NCDEX) has asked its members to maintain their minimum net worth requirement at Rs 50 lakh, failing which the exchange would block an amount based on the size of deficiency in the minimum net worth. The exchange has also threatened to disable the terminals in some cases.

In a circular issued to its members, the exchange said those with a membership of the NCDEX would have to maintain a minimum net worth of Rs 50 lakh and for those with memberships of the NCDEX and commodity exchanges, the minimum net worth would be Rs 75 lakh.

Members were expected to ensure that the net worth was maintained at the minimum prescribed level on a continuous basis during the currency of their membership of the exchange, it said. The exchange has asked members to submit a fresh net worth certificate from a chartered accountant to be submitted by August 31, in cases where the net worth of any member falls below the Rs 50 lakh limit.

If such members whose net worth is below Rs 50 lakh do not submit fresh net worth certificates in support of increase in their net worth to the prescribed level by August 31, or those who have submitted a fresh net worth certificate but the net worth certified is found to be below the prescribed level, the exchange would block an amount, based on the size of deficiency in the minimum net worth, of their base capital (BC) or additional base capital (ABC), the exchange said.

The blocked amount would not be counted for margin purposes and no exposure limit would be available against the said blocked amount, the exchange clarified.

In case of members, whose net worth has fallen to zero or has become negative, the exchange would block an amount of Rs 15 lakh of their BC or ABC forthwith.

Such members would have to improve their net worth and report to the exchange within 3 months of the date of notice to them regarding blocking of their BC or ABC, failing which the trading terminal would be disabled, unless specifically permitted by the exchange, it said.

The members, who are also members of one or more commodity exchanges, whose net worth has fallen below the prescribed level of Rs 75 lakh, but not below Rs 50 lakh would get time of two financial years and six months thereafter (starting from the financial year-end when they first report a fall in net worth below the prescribed level) to increase the same to Rs 75 lakh or more.



Sugar glut impacts UP khandsari units

High sugarcane prices together with lower khandsari price, has dealt a severe blow to the khandsari industry in Uttar Pradesh.

Between the sugar years 2005-06 and 2006-07 (October-September) when the number of sugar mills in the state increased from 131 to 149, the number of khandsari units went down from 468 to 366.

In percentage terms, 21.8 per cent of the units shut down in these two years, which is the highest between the two seasons.

The state government had increased the state advised price (SAP) of sugarcane from Rs 115-Rs 120 a quintal in 2005-06, to Rs 125-Rs 130 in 2006-07.

High sugar production of about 28 million tonnes in the current year, against the 19.2 million tonnes produced last year, has impacted prices of both sugar and khandsari. Sugar prices went down from Rs 1,800 to Rs 1,300 a quintal in the past year, and khandsari prices came down from Rs 1,700 to Rs 1,200 a quintal.

“While sugar mills were able to run for the whole season because of better cash flows and diversification, we were unable to survive the entire season as our losses were mounting,’’ said Bal Krishnan, a khandsari unit owner in Brijnathpur village of Ghaziabad district. ‘’Our khandsari sells at Rs 100 a quintal cheaper than sugar, but it has to compete with sugar.”

A medium-size khandsari unit with a crushing capacity of 1,700 quintals a day directly employs about 60 people. The recovery rate averages of khandsari units is 4 per cent-4.5 per cent, against 10 per cent in sugar mills. The units also have to pay a cane purchase tax of Rs 1.50 per quintal.

“The khandsari business is not profitable anymore. While their production cost is higher than sugar mills, they have to buy sugarcane at a similar price. Moreover, khandsari sells at a price lower than sugar,” said Arun Khandelwal, member of Gur, Khandari and Grain Merchants Association, Muzaffarnagar.




ITC aids farmers in new techniques

Tobacco major ITC has extended its frontline demonstration of modern cultivation techniques to cover over one lakh farmers this year, in an ambitious private-public initiative that was launched last year.

ITC’s Choupal Pradarshan Khet (CPK) programme, launched in 95 districts of Uttar Pradesh, Madhya Pradesh, Maharashtra and Rajasthan, is supported by the state governments and various companies engaged in the manufacture and sale of agricultural inputs.

Bharat Petroleum Corporation (BPCL), which sells lubricants to farmers, has extended financial support for this ambitious programme which aims to motivate farmers to adopt best practices in farming.

The Soybean Processors Association of India (Sopa) is also contributing to the initiative.

According to S Sivakumar, chief executive, international business division, ITC, the programme comprises 40,000 CPKs of an acre each in the current kharif season and there will be 60,000 CPKs in the rabi season.

The crops covered under the programme are paddy, soybean, cotton, sorghum, maize and bajra in the kharif season and wheat, pulses, bajra and mustard in the rabi season. The programme will also cover vegetable farming in Andhra Pradesh, Punjab and Haryana.

Last year, ITC held 15,000 CPKs, which helped improve yields of various crops by 14 to 29 per cent.

Sivakumar said ITC would also use the programme to understand the reasons why many farmers are unwilling to adopt modern practices of cultivation. “Real farm-level data is critical for any extension work in the future,” he pointed out.

Through this programme, ITC will essentially provide farmers technical consultation and supervision of crops. Technical aspects include soil-testing, balanced fertilisation, foundation seed and seed treatment, water management, weed management, integrated pest management and post-harvest management. The company has deployed over 600 trained personnel for the programme.

The farmers would be charged a nominal Rs 150 each to enroll in the programme, while the actual cost works out to over Rs 2,000.

“It has been decided to charge the farmers to ensure that they are more attentive. Besides, they will be able to demand services from the field staff in the programme,” Sivakumar said.

The CPK programme depends on the Indian Meteorological Department for weather forecasts, the Indian Council of Agricultural Research for farm practices, state agricultural universities and departments of agriculture to answer farmers’ queries, seed corporations and fertiliser companies for inputs, insurance companies for weather insurance and banks for credit.





'Imports may be less than forecast'

India may import less wheat this year than the government’s forecast of 5 million tonnes because of rising production and higher prices, a US Foreign Agricultural Service attache said.

India, the world’s second-biggest wheat consumer, probably will import about 3 million tonnes in the marketing year that began in April as it seeks to build inventories, the attache said in a report posted at the weekend on the US Department of Agriculture Web site.

So far this year, India has contracted to buy only 511,000 tonnes at an average price of $326 a tonne. The government forecasts that domestic production will rise to 74.9 million tonnes during the year, 1.6 higher than a previous forecast. That’s still too little to meet rising demand in the nation of more than 1 billion people, according to the report.

“Unless a dramatic increase in wheat yield takes place, wheat imports are here to stay,’’ the attache said.

India’s public distribution programme, which supplies grains at subsidised prices to the poor, acquired 11.1 million tonnes of wheat this marketing year, less than the expected 15 million tonnes, the attache said.

Measures taken to obtain the wheat included the banning of trading in wheat futures and monitoring private stockpiles.

Those steps “reduced wheat availability in the free market causing a premature strengthening of wheat prices this year,” the attache said.




Govt undecided on wheat imports

India, which is importing wheat for a second year, has good reserves of grain now and may seek bids for fresh purchases after assessing local supplies, Agriculture Minister Sharad Pawar said.

“Fortunately, our position is good and whatever the country’s requirement is, that stock plus a little more is available with government today,’’ Pawar said in an interview in Bangalore on Friday. ‘’We are watching the overall season and then will decide when to float a tender’’ for buying wheat.

India had 13.3 million tonnes of wheat in state warehouses as of May 31, less than the 17.1 million tonnes the government needed to store by July 1.

On July 10, India purchased 511,000 metric tonnes from Cargill Inc, Toepfer International and Riaz Trading for a record $317 a tonne to $330 a tonne to ensure sufficient supplies of the grain and curb inflationary pressures.

India may reduce the tax on import of wheat flour to boost supplies, Pawar said. The government is also yet to decide on selling wheat from its reserves to bread and biscuit makers to prevent a rise in prices ahead of the peak festival season beginning next month.

Increased imports by India may support prices that are trading near a record on the Chicago Board of Trade, the world’s biggest grains market.

India’s wheat output, forecast at 74.89 million tonnes this year, may fall short of demand as rising incomes stoke demand for breads, biscuits and noodles in the world’s fastest growing major economy after China.

India likely harvested 1.6 per cent more wheat than forecast by the government in the year ended June 30 as good weather and higher prices encouraged farmers to boost planting, Agriculture Secretary PK Mishra said in New Delhi on July 19.

“Whatever reports we are getting about rains is quite good,’’ Pawar said.

Production probably reached 74.89 million tonnes, exceeding the 73.7 million tonnes forecast in April, Mishra said. India produced 69.35 million tonnes last year. The government will announce final crop estimates by the end of January.



Major FIIs bought stocks as market fell

Jitters in overseas markets sent the domestic bourses crashing twice in the past eight days, but foreign investors were busy grabbing stocks – seeing attractive buying opportunities after the 1,000-point plunge.

Some big names of the FII clan, including Merrill Lynch, Morgan Stanley and Citigroup, purchased stocks worth over Rs 676 crore between July 27 and August 1, when the market recorded its two biggest crashes of this fiscal.

Interestingly, most purchases were recorded on these two days only, even as the overall market sentiment was bearish following the 542 and 615-point fall in the benchmark Sensex. An analysis of the bulk and block deals recorded on the stocks exchanges show that foreign funds purchased shares worth Rs 676.32 crore in the period when the Sensex tanked over 1,000 points in two routs between July 27 and August 1.

Besides, the funds are believed to have purchased additional stocks in smaller quantities, but their exact estimates could not be known. Bulk deal refers to trading in a company’s shares for over 0.5 per cent of the total shares of the firm listed on the exchange. During this period of six trading sessions, the Sensex closed below the 15,000 mark on two occasions.

Morgan Stanley did some big time shopping during the period buying shares worth over Rs 487 crore in six companies, including Ansal Infrastructure, GVK Power Infrastructure and IDFC among others in bulk deals on the BSE. In contrast, it offloaded shares worth just Rs 2.98 crore in the past seven trading sessions.

Similarly, Citigroup Global Markets Mauritius bought shares worth over Rs 26 crore in four deals, while it sold shares worth six crore during the period. Among other major foreign shoppers were Goldman Sachs, Copthall Mauritius Investment and Merrill Lynch Capital Market Espana who were also seen buying stocks during the crash.

In total, the foreign funds sold shares worth about Rs 82 crore during the same period, with most of the sale deals being executed after booking significant gains on investments.

While Merrill Lynch Capital Market sold shares worth about Rs 50 crore, selling by Copthall and Lehman Brothers were relatively small in the range of Rs 4-5 crore.

Interestingly, the FIIs refrained from any big selling or purchase on August 2 and 3, when the Sensex was seen in a recovery mode and gained over 200 points.



HC rejects petition by Novartis

The Madras High Court on Monday dismissed a petition filed by Swiss pharmaceutical major Novartis AG, challenging the constitutional validity of the Sect 3 (d) of the patents (amendment) act 2005, under which its patent application for beta crys talline form of imatinib mesylate, was rejected. Dismissing it, a Division Bench comprising Justice R Balasubramanian and Justice Prabha Sridevan held that the Court cannot decide whether the Act was in accordance with trade related aspects of intellect ual property rights (TRIPS) agreement or not.

The Intellectual Property Appellate Board (IPAB) here on July 21 had rejected the plea by Novartis to exclude a Technical Member from a Bench constituted to hear its appeal against rejection of patent right to one of its product. The firm objected to the appointment of technical member S Chandrasekaran on the IPAB Bench on the ground that he had 'disabled himself' to hear its appeal against rejection of patent right for beta crystalline form of imatinib mesylate, as he had deposed in the counter affidav it filed in the Madras High Court.

"He has disabled himself from hearing the appeal in the capacity of a technical member in the light of deposition made by him, thereby taking a stand in the matter and as such he would not be free from bias," the firm contended.

Rejecting the objection, the IPAB Bench comprising board Chairman M H S Ansari and S Chandrasekaran had stated "the submissions made by Chandrasekaran have no relevance as they were based on his official capacity as a statutory authority before assuming the post of adjudicator and hence must be eschewed from consideration on the facts of the instant matter".

Originally, the company filed an appeal and a petition in the Madras High Court. The appeal challenged rejection of its patent application for beta crystalline form of imatinib mesylate, sold under the brandname Gleevee/Glivec. The petition challenged th e constitutional validity of the provisions of the Patents (Amendment) Act 2005, on the basis of which its application for patent was rejected. Since there was no IPAB Bench, which is the competent authority to hear the appeals against rejection of pate nt, the company moved the appeal in the High Court. During the course of hearing, the Centre notified the constitution of IPAB Bench. Following this, a Division Bench comprising Justice R Balasubramanian and Justice Prabha Sridevan, which was hearing th e matter, referred the appeal by the company, against rejection of patent, to the board. However, the high court had reserved orders on the petition challenging the validity of the provisions of the Patents (Amendment) Act, 2005.




GMR Infra to set up Rs 2,300 cr SEZ in JV with TN govt

CHENNAI: Hyderabad-based GMR Infrastructure Ltd on Monday entered into a joint venture with the Tamil Nadu government to set up a multi-product Special Economic Zone in the State at Rs 2,300 crore investment. An MoU in this regard was signed between the Tamil Nadu Industrial Development Corporation (TIDCO) Chairman and Managing Director, Mr S Ramasundaram and the GMR Infrastructure Director, Mr B V Nageswara Rao here, in the presence of the Chief Minister, Mr M Karunanidhi.

The company aims to create a SEZ with world-class industrial infrastructure, green corridors and ecologically sustainable design, GMR Group Chairman G Mallikarjuna Rao told reporters.

A joint venture company would be formed shortly to implement the project. The SEZ, to come up on 3,300 acres land in Krishnagiri district, is expected to attract investments of about Rs 11,000 crore from traditional industries such as electronics, appare l and engineering, besides IT, ITeS and knowledge-based industries like bio-technology and nanotechnology.

The project may generate exports of Rs 16,000 crore per annum and provide direct employment opportunities to 70,000 people, a company statement said. GMR Infrastructure was selected through an international competitive bidding process.