Govt Panel recommends hiking anti-dumping duty per truck tyre to $ 135, Govt currently levies anti-dumping duty of $ 99 per truck tyre

Govt Panel has recommended hiking anti-dumping duty per truck tyre to $ 135. Govt currently levies anti-dumping duty of $ 99 per truck tyre. Anti-dumping duty hike is mooted to curb Chinese tyre imports.

Import of radials for commercial vehicles from China reached an all-time high in the first quarter this fiscal and it looks like it is just the tip of the iceberg. As per industry estimates, from a nominal 11,000 tyres per month in 2004, tyre imports have shot up to 68,000 per month in the first quarter this year, raising its share from 1.2% to over 8%. The increase is despite the provisional anti-dumping duty imposed on imported bias tyres from China and Thailand in October last year.

However, Chinese tyres are fast losing their shine in India. The price advantage of Chinese tyres, which was already under pressure due to imposition of provisional anti-dumping margin on truck, bus tyres and increase in reference price for valuation of import duties on passenger car radials- is now set to have waned further.

The Chinese authorities also have withdrawn the 5% export subsidy and increased freight charges by 20% for export to India.

India currently imports 85,000 CV tyres and 125,000 radial tyres for passenger cars and MUVs a month, almost 4% of the total consumption of tyres in India. Of the total imports, 70% is imported from China.

Despite provisional anti-dumping measures and the recent increase in reference price by the customs authority, imports were gaining pace in last 3 months due to Rupee appreciation.





Don't expect large-scale price increases, retail prices may not move up much, expect cement demand to be much higher in FY09, FY10, Grasim & Ambuja Cement top picks: Macquarie

Rakesh Arora from Macquirie said price increases have been reported by Rs 2-3. We do not expect large-scale price increases. Retail prices may not move up much, cement companies may raise. We are bullish on cement companies, 15-25% ahead of consensus estimates.

Greenfield expansions are getting delayed which is positive on demand-supply equation. First capacity increase will come from Grasim. Forecasting 5 MT of cement shortage this year. We expect cement demand to be much higher in FY09, FY10. Grasim & Ambuja Cement are our top picks. Ambuja’s price target is at Rs 168.




No signs of top being formed in the mkt, can go higher: Ramesh Damani

Ramesh Damani, Member, BSE, said that there are no signs of top being formed in the market, the market can go higher. There is good value across Small, Mid and Large cap segments.

He further said that public participation in the market is very low while there are some signs of excess in private equity market. About market liquidity, he said that concerns of liquidity tightening over next few months remains.

The companies with 15-20% growth are available at single digit price-earning ratio, he quoted. This is not a bad time to put fresh money into the market, he finally said.





Vedanta puts India Foils on block, value seen at Rs 250-300 Cr, deal works out at Rs 88/shr

Vedanta group company India Foils, the country’s largest aluminium foils maker, is on the block, report says. Vedanta has appointed KPMG to scout for potential suitors for the unit, which it bought from the BM Khaitan group in 2000. India Foils could be valued between Rs 250 crore and Rs 300 crore due to its market leadership and technology advantage.

At market price of India Foil at around Rs 9 per share, the Rs 250 crore deal works out to be Rs 88 per share.

The move comes as parent Vedanta Resources sharpens focus on being a commodity player, reducing exposure to high-expertise, value-added categories. An official Vedanta spokesperson declined to comment. The Kolkata-based India Foils accounts for a fifth of the Indian foil market, catering to consumer goods and pharmaceuticals industries. Last year, the company posted sales of Rs 237 crore, a growth of 24% as an expanding retail sector boosts demand for packaged goods.

The Anil Agarwal-promoted Vedanta, which owns mines and smelting units across the world, wants to consolidate its mining strengths and exit downstream areas. The $ 6.2 billion major is India’s largest producer of zinc and the second-biggest producer of copper. It is also a large producer of aluminium with a capacity of four lakh tonne, marginally behind Hindalco’s 4.10 lakh tonne.

Though the foils segment commands double the margins, volumes here are not large enough. High technical expertise and uninterrupted electricity supply make it a niche area for metal companies. It is typically considered an expert category; hence, most integrated companies don’t want to have foils as they can’t devote much focus on it.

Apart from Vedanta, the other large integrated aluminium player in India is Hindalco Industries. The 40,000-tonne local foil market is currently served by other players such as PG Foils and Ess Dee Aluminium.

India Foils, which has also had a technical collaboration with France’s Pechiney, had last year attracted interest from the world’s largest aluminium company, Alcoa. But it couldn’t be confirmed whether Alcoa is still interested.

Hindalco and Sterlite were once locked in a closely fought battle for India Foils, when metal prices had stagnated and companies moved into high-value categories to counter the slump. Commodities typically function in a cycle and the trend reversed in 2002 after China emerged as the largest consumer of steel and non-ferrous metals. This was also the time when Hindalco consolidated its position in another downstream unit Indal, which was earlier jointly owned by Canadian major Alcan.




India scraps additional customs duty on imported wines & spirits following a complaint by European Union & US in WTO

India has withdrawn Additional Customs Duty instead of State Excise on imported wines and spirits. The Customs Duty on liquor will now remain at 150%, while that on wine has been increased from 100% to the maximum-permissible rate of 150%.

Commerce Secretary GK Pillai told that the government had collected Rs 26 crore from the tax that has been withdrawn. But he expects the government to gain Rs 200 crore on account of cheaper imports.

States will now tax liquor coming from outside their territory, regardless of whether it is imported or locally produced.

The European Union had moved the Dispute Settlement Panel of the WTO complaining of discrimination. It had said that India’s discriminatory taxes were inflating prices of imported spirits and wines by 280% to 550%.




Controversy surrounding BSNL's mega GSM tender likely to resolve, 7.5 Mn lines will be reserved for ITI in Western sector

The controversy surrounding BSNL’s mega GSM tender is likely to be resolved today, when the company's board meets to take a final decision. It is learned from sources in the department of telecom that the 3-G component of the tender is likely to be scrapped. That will bring down the size of the 63 million GSM tender by almost half. It will also bring down the tender price to around $ 90 per line. Sources say a fresh tender for the 3-G portion is likely to be floated at a later date.

Telecom Minister A Raja has decided to disconnect most of the calls taken by his predecessor. But political motives could mean a huge setback for the state owned company BSNL since Raja's moves may stall BSNL's mega GSM tender.

A Raja who had triggered a price renegotiation debate with the lowest bidder Ericsson now wants the 3-G component of this tender to be scrapped, a decision which is likely to be taken by the BSNL board.

3-G, which forms 50% of the 63.5 million lines GSM tender will be scrapped reducing the tender to about 30 million lines. About 7.5 million lines will be reserved for ITI in the Western sector and 22.5 million lines will be set up by Ericsson and Nokia.




Temasek will buy a 4.99% stake in Bharti Airtel, Bharti Enterprises to maintain 45% stake

Singapore government’s investment arm Temasek Holdings will acquire 4.99% stake in the country’s largest private telecom company, Bharti Airtel, as part of separate but possibly back-to-back transactions that will also see Vodafone selling 5.6% in the company.

The net impact of these transactions will be that the shareholding of Bharti Enterprises, the holding company of India’s largest private telco, will rise marginally from its current 45% and the Temasek-Singapore Telecom combine’s holding (Temasek is the largest shareholder in Singtel) will go up to 36%. Temasek deal is worth a little over Rs 8,198 crore (about $ 2 billion).

SingTel holds 30% stake while Vodafone holds 5.62% stake in the telecom major. Other Shareholders, as on Mar 31 include Citigroup Global Markets Mauritius with 1.31% stake, Growth Fund of America with 1.11% stake, CLSA Merchant Bankers with 1.45%, LIC with 1.28% and Morgan Stanley with 1.85%.

Bharti and Vodafone had earlier this year announced that the Newbury-based telco will sell 5.6% equity in Bharti Airtel for $ 1.6 billion in two tranches before November 2008.

This will be Temasek’s second investment in a telecom company in India after it bought 9.9% in Tata Teleservices. Temasek Holdings, the largest shareholder (56%) in Singapore Telecom, holds just over 30% stake in Bharti Airtel.

Bharti executives said despite the deal with Temasek, there will not be a dilution in the promoters’ stake in Bharti Airtel. This implies that the parent company Bharti Enterprises will continue to maintain a controlling interest of a little over 45% in Bharti Airtel. This is because Temasek is indirectly picking up large chunk of the 5.6% stake that British telecom major Vodafone is offloading in Bharti Airtel.

“Vodafone has given us 18 months’ time to buy back its 5.6% direct stake in Bharti Airtel. At the same time, Temasek is picking up stake in one of the Bharti group companies, which translates to a 4.99% indirect stake in Bharti Airtel. Temasek is indirectly picking up the stake that Vodafone will offload. Therefore, net-net, there is no change in the overall shareholding — Bharti Enterprises continues to maintain a controlling interest of over 45% in Bharti Airtel through its subsidiary Bharti Telecom,” a Bharti spokesperson said.

Vodafone had picked up 10% stake in Bharti Airtel in 2005 for $ 1.5 billion. However, following its acquisition of a majority stake in Hutch-Essar for $ 10.9 billion, Vodafone had entered into a share sale agreement with Bharti to sell back the 5.6% direct stake in Bharti Airtel for $ 1.6 billion (Vodafone will continue to hold its 4.39% indirect stake in Bharti Airtel). “The shareholding will be transferred in two tranches, the first before March 31, 2008 and the second by November 2008,” Vodafone had said in May 2007 in a statement after announcing its annual results for the year ended March 31.