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Chennai: Is there a tax implication in the $1 billion-lift that Reliance Industries Ltd (RIL) gained by divesting its 4 per cent stake in Reliance Petroleum Ltd (RPL)? “Nil,” says V.K. Subramani, a practising chartered accountant and a tax expert.
As reported, RIL sold 18.04-crore equity shares held by it in RPL for a consideration of Rs 4,023 crore. Subtracting the cost of acquisition of Rs 360.80 crore (at Rs 20 per share), long-term capital gain amounts to Rs 3,662.20 crore.
“Long term, because the shares were held by RIL for more than 12 months,” explains Subramani, in an e-mail interaction with Business Line, from his Erode office, interpreting the provisions of the Income-Tax Act, 1961 in the context of the Reliance transaction.
“Since the shares have been sold through stock exchange in India and subjected to the Securities Transaction Tax, the long-term capital gain is eligible for complete tax exemption under Section 10(38),” he adds.
A caveat, though, is that the long-term capital gain becomes liable to tax if the company pays tax on book profits dealt with in Section 115JB of the Act.
He refers to the Proviso to Section 10(38) inserted by the Finance Act, 2006, which provides for inclusion of long-term capital gain from shares (and units of equity oriented fund), while computing book profit under Section 115JB. An amendment that is applicable from assessment year 2007-2008 onwards.
“Thus, if the income tax on RIL’s income computed as per the normal provisions of the Act is more than the income tax computed based on certain adjustments given in Section 115JB, no tax is payable on this long-term capital gain,” elaborates Subramani.
“On the contrary, if the income tax on RIL’s income as per regular provisions is less than the tax computed under Section 115JB adjustments, the gain would suffer tax at 15 per cent plus surcharge and cess.”
Whether the actual tax paid by RIL in the recent past was on regular income or book profit under Sec 115JB cannot be ascertained, he observes. “For, this is not usually disclosed in the annual reports.”
That apart, the transaction highlights the deft use of market buoyancy to offload a small fraction of holdings to have tax-free income, he opines.
“The deal poses no tax implication to RPL as the company did not payout anything from its coffers.”
ICICI Bank and NTPC witnessed much activity among the mutual fund portfolios in the month of October 2007. NTPC was picked up by Reliance Equity Advantage Fund - Retail (4,990,015 Shares), UTI Index Select Equity Fund (1,825,224 shares), UTI Mastergrowth 93 (700,000 shares). And the same was sold by Morgan Stanley Growth Fund (2068925 shares), DSP Merrill Lynch Equity Fund - Regular (770022 shares), ICICI Prudential Equity and Derivatives Fund - Wealth Optimiser - Regular (503,086 shares).ICICI Bank was preferred by Bank BeES (1,698,748 shares), HDFC Equity Fund (1450,000 shares), Franklin India Flexi Cap Fund (663,271 shares) and was sold by Franklin India High Growth Companies Fund (408,283 shares), ICICI Prudential Dynamic Plan (400,000 shares) and DSP Merrill Lynch Equity Fund - Regular (253,692 shares).
Detergent maker Nirma Ltd unveiled its plans to buy US-based soda ash producer Searles Valley Minerals (SVM) for an undisclosed sum. When the deal is wrapped up, Nirma would lead the producers'' market in soda ash (sodium carbonate), a key ingredient to make soaps and detergents. SVM''s annual production stands at 1.9 million tonnes. Nirma''s existing manufacturing capacity is one million tonnes. Soda ash is a high-volume, low-value product and finds application in production of detergents, glass and chemicals.
Besides Nirma, there are four soda ash producers in India - Tata Chemicals, Gujarat Heavy Chemicals Ltd, DCW Ltd and Tuticorin Alkalis Chemicals & Fertilisers. According to company sources, Nirma expects the acquisition to boost annual revenues to more than Rs 35 billion. Competition in the sector is mainly price based. Soda ash constitutes about 25-30 per cent of the domestic chlor-alkali market with SVM being the only US producer of soda ash, sodium borates, boric acid and sodium sulphate.
Kolkata: The motor insurance segment is likely to break-even as rates of premium have gone up in the segment post de-tariffing of the insurance industry earlier this year. The segment that constitutes nearly 45 per cent of the non-life insurance market, was making losses earlier, especially,in the commercial vehicles segment, the source said. The total market for non-life insurance was estimated at Rs 25,000 crore. Though income from premium has gone down in the property,fire, engineering segments, health, and third party liability insurance in case of private and commercial vehicles has seen a rise in income, he added.
Riding on this, the company collected Rs 4000 crore from premium incomes this year up to October, compared to Rs 3500 crore last year. United India recorded an overall growth rate of 5 per cent for period up to October this year as compared to 7 per cent for the same period last year, on accounts of rates of premium going down post de-tariffing. The sectors that came under de-tariffing were fire, engineering,motor, and workmen compensation. The second stage of de-tariffing will see policy de-control, after the first stage that saw price de-control. United India had posted a net profit of Rs 520 crore for the last fiscal, and was hopeful of bettering it this financial year.
Hyderabad: Syndicate Bank is eyeing a total business of Rs 15,000 crore from its operations in Andhra Pradesh during fiscal 2007-08, up from Rs 13,250 crore last year. The Hyderabad City Region, which has 54 branches is expected to reach Rs 7,000 crore (Rs 6,000 crore). The Manipal-headquartered bank plans to open two new branches at Vanasthalipuram and Ramnagar in Hyderabad. It also plans 4 ATMs by the end of the fiscal in the City, said the source.
In Andhra Pradesh, the Bank has 5 Regions and a network of 336 branches. It has 38 ATMs. The new ATMs in city are proposed at ICFAI, South Central Railway Headquarters, Big Bazar in Ameerpet and the Hyderabad Central. The target group for the loans is the Small and Medium Enterprises (SMEs), students for education, self-employed persons, traders, housing loans etc. Of the Rs 65 lakh the SMEs got Rs 10 lakh, housing Rs 20 lakh and education the maximum of Rs 35 lakh. The Regional also topped in the performance of the Synd Sona scheme for the sale of gold coins to the public in the entire country in the last four months. About 46-48 kgs of gold coins was sold. The mobile van to open account launched as part of the financial inclusion initiative has also got 3000 accounts in the last two months, with a deposit mobilization of Rs 8 crore.
Satyam Computer Service, Indian global consulting and information technology service provider, has become the first Indian sponsor of FIFA World Cup, having been selected as the official IT service provider for 2010 and 2014 events in South Africa and Brazil respectively. According to a FIFA announcement, the software group, based in Hyderabad, is the fourth sponsor of the 2010 World Cup. It has also bagged contracts for two FIFA Confederation Cups that will take place within the same period.
Anheuser-Busch, McDonald''s and MTN are the other groups to sign up for the 2010 World Cup.FIFA President Sepp Blatter and Satyam Chairman and founder Ramalinga Raju confirmed the partnership on Saturday at a signing ceremony on the eve of Africa''s first taste of world cup action, the 2010 FIFA World Cup preliminary draw. As the official IT service provider during both the world cups in 2010 and 2014, Satyam will play a crucial role in developing the IT event management system for FIFA and its service partner for IT, hospitality and accommodation, as well as local organising committees during the next seven years.
Chennai: Indian Bank has not renewed around Rs 1,500 crore of high cost deposits that matured after September. The bank was paying between 8.5 per cent and 9 per cent on these deposits.
M.S. Sundararajan, Chairman and Managing Director, Indian Bank, says the bank can afford to say ‘no’ to deposits without hurting its ability to lend.
Recently, the Government allowed re-capitalisation bonds to be classified as bonds that are eligible for SLR status. Thus, about Rs 4,700 crore of Government-gifted bonds became tradable in the market.
Investments
With this, Indian Bank’s SLR investments work out to about 34 per cent of deposits, against the mandatory 25 per cent. It can raise resources cheaper by selling its investments than by accepting high-interest deposits.
Sundararajan says that even the no-cost current account and savings account deposits and the low-cost short-term deposits are increasing at a pace that would take the bank’s total deposits up by 20 per cent at the end of the year over last year. Credit growth is slower, at around 17 per cent. That, Sundararajan says, is a concern.
“We have around Rs 4,000 crore of advances in the pipeline - sanctioned but not disbursed,” he told Business Line. The bank is trying to expedite disbursements. Today, the demand is more for term loans and less for working capital. Term loans typically take time to be drawn.
Micro credit picking up
At the other end of the spectrum, micro-credit is picking up. Indian Bank, according to its Chairman, realises that there is plenty of scope to lend to the urban poor. It has opened seven branches in the current year - at Patna, Vijayawada, Hyderabad, Nadiad, Kollam, Kolkata and (a second one in) Chennai. Today, there are 11 ‘micro sat’ Indian Bank branches, that do only micro-lending.
The last was opened recently at Thiruvanmiyur in Chennai. “On the very day of opening, we disbursed Rs 10 crore to a self-help group,” Sundararajan told Business Line.
The bank aims that each of the 11 branches should disburse Rs 25 crore before the end of this year. Currently, the bank’s micro-credit portfolio is Rs 700 crore and the bank is confident of building the book to Rs 1,000 crore.
“It is worth doing this business. Margins are very good and recovery is 99 per cent,” Sundararajan said.
It seems to be raining goodies on mobile phone owners these days. After the bonus of number portability announced earlier, the Telecom Regulatory Authority of India (TRAI) has announced that it intends to put a cap on the different schemes being offered by the telecom companies to the consumers at large.
There are several aspects of the 'different schemes' offered by telecom companies that are confusing if not downright misleading from the consumer's viewpoint. To start with, the multiplicity of schemes itself leads to a very confusing situation where the new entrant finds it impossible to find his way out of the web of schemes.
There are schemes where the rent is static and the rates of calls are low; there are others where the rent is adjusted against calls made; and still others where SMS is offered at a low rate or caller ID facility is offered free of charge - all this to lure the unwary consumer into a scheme which will make him spend more on his cell phone.
There are some people who have studied the subject in great detail and come to the conclusion that most schemes make very little difference in the final bill of the average consumer who uses his cell phone in a limited manner, though there could be substantial differences in the case of those who use their mobiles or landlines to make a very large number of calls.
Then, there are other schemes, which are available to the privileged few, who the service providers feel are 'special customers'. These are usually corporates which use a very large number of telephone lines and the sheer volume of calls made by the company in their individual capacity or collectively by their executives in their personal life, leads to special packages tailor-made to suit their needs.
There are sometimes schemes which are revealed to only a select few persons and not available to the common people for reasons best known only to the cell phone companies.
All this is then superseded by the schemes which are sold on door-to-door campaigns by direct sales agents (DSA), many of which are attached with onerous clauses.
In general, the consumer expects and has a right to a small number of 'talk plans' from the telecom providers which must be simple to use and easy to understand.
The hidden clauses in the various talk plans amount to unfair trade practice in consumer law and the TRAI has done the right thing in suggesting a scheme in which the schemes would be reined in, before the courts are forced to intervene.
ICICI Bank on November 25 began another initiative for the Small and Medium Enterprises that are into healthcare, the CHESILAB Expo 2007. The idea is to showcase the latest range of medical equipments, scientific Instruments and Laboratory Equipments. It also provides the perfect platform for exchange of ideas and networking among the industry leaders and professionals. It will provide opportunities for SMEs into healthcare to purchase the best of equipments with easy finance options for their spot bookings. The highlight of the event is ICICI Bank''s Medical Equipment Pavilion, showcasing a range of the latest medical equipments from leading manufacturers, available at exclusive prices along with spot sanctions and special schemes. Over 2000 doctors from Chennai, Coimbatore, Madurai, Trichy, Pondicherry as well as from Karnataka, Andhra Pradesh & Kerala are excepted to visit the expo. Targeted to small & medium hospitals, the event will have 100 stalls across medical equipment, laboratory & scientific equipment. Mr.Thiru V K Subburaj, IAS, Hon''ble Secretary, Department of Health & Family Welfare, Government of Tamil Nadu is the Chief Guest for the event. Dr N Mohandas, President, Indian Medical Association-Tamil Nadu Chapter is the Guest of Honour and the inaugural ceremony was presided over by Dr D Viswanathan, Vice-Chancellor, Anna University, Chennai. The first edition kick started in Chennai today, November 23, 2007 to be followed in Pune, Ahmedabad and Bangalore and will finally culminate in SME Expo - Medical Equipments 2008 in New Delhi in February 2008.
Mumbai: Reliance Life Insurance will get capital infusion of around Rs 1,500 crore until 2010. The company''s current capital base stands at Rs 900 crore. The capital investment of Rs 1,500 crore from the company''s parent, Reliance Capital, would meet its growth needs in the next three years. He said the company had so far raked in Rs 930 crore in new business premium, against Rs 930 crore in the whole of last fiscal. In the first six months of the fiscal, the company raked in Rs 650 crore in new business premium, a growth of 165 per cent against Rs 245 crore in the year-ago period.
The company''s agency force of 1.4 lakh agents will also be expanded to two lakh in the next six months. The company is currently present in 500 towns and by next year, it expects to increase its presence to 1,000 towns. Around 90 per cent of the company''s business comes from unit-linked insurance plans. The company is eyeing at expanding its product suite and plans to soon file a health insurance product with the Insurance Regulatory and Development Authority. Reliance Life Insurance on Nov 21, unveled a new product called Reliance Child Secure Plan.
Mumbai: Religare Enterprises Ltd, a financial services firm lists on the BSE and the NSE on Nov 21, at a premium of 75 per cent against the offer price of Rs 185 at Rs 323.75. The stock saw a high of Rs 601, a low of Rs 323.75, before it closed at Rs 525.30 on the NSE, whereas on the BSE it was trading at a high of Rs 600, a low of Rs 323.75 finally closing at Rs 521.70. The total quantity traded was 1,60,54,884 shares and 1,11,98,090 shares on the NSE and the BSE respectively. Religare Enterprises Ltd in their initial public offering offered 75.7 lakh shares in the price band of Rs 160-185 to mop up Rs 121-140 crore.
Core Projects & Technologies Ltd has announced that coming together in a Higher Education project using the Space Age technology developed by the NASA sponsored Center of Higher Learning (CHL), the Company has signed a Memorandum of Understanding with the Indira Gandhi National Open University (IGNOU) for setting up Visualisation Learning Centres at all IGNOU centers in India.
The revolutionary project will create education content using space age technology -
Cave Automatic Virtual Environment (CAVE) - developed by scientists of the Center ofHigher Learning (CHL) - at the NASA Stennis Space Center, Mississippi. The Company hasexclusive rights for this technology from CHL for the Asia Pacific region.
Deployment of this technology in classrooms will greatly enhance the ability of studentsto understand complicated topics. It will also enable them to conduct innovativeexperiments leading to cutting edge Research and Development efforts. The inherenttalent and potential instudents will be exploited by the use of such advanced technology.
This project of the Company with IGNOU will change the landscape of instructional technology and significantly improve the efficacy of learning materials, thus enhancing the quality of education and helping the education system to churn out professionals of the highest caliber, matching international standards.
The Company will maintain a staff of visualization scientists trained by CHL to develop a substantial library of Immersive 3D Education Software titles. The Company and its partners will cover subjects ranging from Biology, Anatomy, Chemistry, Molecular Science, and Physics to training topics for Medical, Engineering, and Vocational students. The Company will create a path for a more effective way for students to learn subjects and explore concepts that were previously only available in the dry confines of textbooks.
New Delhi: Reliance Industries Ltd (RIL) has re-forayed its Cauvery asset, despite suffering a minor setback in the deepwater block. The company has already tested hydrocarbon success in one of the two wells it had drilled in the block. Once the drilling process is completed, the company will decide on the kind of hydrocarbon testing it would like to undertake in the well. RIL has already drilled about 3,800 metres and mulls to go up to 4,500 metres in the third well. In August, Reliance was unable to finish the hydrocarbon testing in the second well due to technical snags. Deciding against resuming activity in the abandoned second well, the company, based on the seismic surveys, decided to carve out another area in the block.
Before venturing into the block earlier this year, it had completed the 2D seismic survey of the exploration area. RIL, which is the operator of the CY-D5 block, had declared availability of hydrocarbon reserves in the asset. In the block, initially, RIL held 90 per cent participating interest, with Hardy Exploration & Production (India) Inc holding the rest. In the first zone as per the initial tests, RIL has witnessed 550 barrels per day of oil and one million cubic ft per day of gas, while in the second it found 31 million cubic ft per day of gas and 1,200 barrels per day of condensate.
3i Infotech Ltd has announced that the Company recently unveiled its expansion plans in Chennai. The Company announced the launch of its first International Data Centre (IDC), which will offer managed hosting services for application and disaster recovery solutions. As part of its strong foray in the $41.5bn** managed services market, 3i Infotech announced the launch of its Remote IT Infrastructure Management Services through its Global Network and Security Operations Center (GNSOC). The Company is also setting up mini centres of excellence (GOES) for Operating Systems: Microsoft, Red Hat Linux, AIX, Solaris, Databases : Oracle, MS SQL, MySQL, DB2, Messaging Solutions and IT Security Labs for Ethical Hacking and Vulnerability Assessments and niche Application Infrastructure solutions.
Located in 3i Infotech''s 7-storey Chennai facility, the IDC, GNSOC and COEs will be jointly spread over 25,000 sq ft area. Out of this, the IDC, which conforms to the Tier III International Data Standard, will alone occupy a total of 6000 sq ft area, with all access controls, CCTV, UPS, Precision AG along with Rack and cage facility. The centre will provide secure data centre hosting facilities for its clientele in India and across the globe. The GNSOC will provide customers with Remote IT Infrastructure Monitoring and Management Services with a 24/7 IT Helpdesk. With an operating area for around 75 people, the remote infrastructure set up is spread across 3000 sq ft area.
Commenting on the launch, Mr. Hari Padmanabhan, Dy. Managing Director of the Company, said 3i Infotech today offers an unparalleled range of products across the insurance, banking & financial services, manufacturing and distribution landscape and we will continue to expand and deepen our product portfolio across the verticals we are focused on. Customers in this space, however, are today looking at driving larger scale in their business at lower implementation cost.
i-flex Solutions Ltd has informed that the Company and IZB Informatik-Zentrum, a Munich-based IT- and telecommunication service provider for the financial sector, on November 21, 2007 announced a strategic partnership to deliver a full range of banking application services to German banks. To this end, IZB Informatik-Zentrum will be using FLEXCUBE®, i-flexs flagship product, to deliver value-added application providing services (ASP) tailored to the specific needs of German banks.
IZB Informatik-Zentrum is a subsidiary of Sparkassen Informatik, Frankfurt, the leading IT service provider for savings banks in Germany and one of the largest IT service providers in Europe. Through the partnership, i-flex and IZB Informatik-Zentrum will deliver banking application services, including core banking, lending, risk and internet banking functions as well as the integration and allocation of specific German banking services according to German banking regulations, to private and public banks throughout Germany.
This announcement comes in the backdrop of banks and financial institutions in Germany looking to outsource their IT infrastructure and maintenance. By opting for banking services delivered on an ASP model, these institutions will be able to focus on their core business functions, thus servicing their end-customers more efficiently, while reducing their overall operational costs.
Oliver Trancart, CEO of i-flex solutions b.v., highlighted the importance of this partnership: Partnering with IZB Informatik-Zentrum gives us access to a huge share of the German banking market, reinforcing our investment and commitment to the largest banking market in Europe. It offers banks the unique possibility to get a wide range of services, from solution outlining and implementation to application service and maintenance out from a single source using FLEXCUBE. It also considerably enriches our experience of the German market, helping augment our knowledge of highly specific regional requirements.
Gitanjali Gems Ltd has informed that the Company is entering into an Agreement with Netherlands based ARMO Netherlands Finance B.V. to form a Joint Venture Company by way of subscription to equal number of equity shares of Morellato India Pvt Ltd.
Further the Company has informed that, the proposed Joint Venture will carry on the business of importing, wholesale, distribution and manufacture of watches, leather goods, writing instruments, jewellery and other products under the brand names Morellato, Miss Sixty, just Cavalli, Molccole, John Galliano, Roberto Cavalli, Philip Watch, Pirelli, Pirelli Pzero, Sector, Moschino and such other brands as may be agreed between the Joint Venture Partners.
ICICI Bank has overtaken Lehman Brothers in m-cap stakes. As the big high street names take a hit, the market worth of ICICI Bank has swollen, placing it in a position to pip Lehman Brothers, at least in terms of market capitalisation. The market cap of ICICI Bank is now at $33.01 billion, compared to that of Lehman Brothers which is pegged at $33.06 billion.
The spectacular increase in stock prices at home has also boosted the worth of not just ICICI Bank, but also the country''s largest bank State Bank of India (SBI). ICICI Bank''s asset base is close to $91 billion (Rs 3,64,944 crore). Impressive as they sound, the fact remains that Indian banks have a long distance to travel before they can catch up, especially, with Chinese banks. On a market cap basis, Chinese banks such as Industrial and Commercial Bank of China ($338 billion), China Construction Bank ($223 billion) and Bank of China ($208 billion) figure among the list of top three banks internationally. The average price to book value of banks in India and China are traded at near to similar levels, where Chinese banks are at 7.78 times book value while Indian banks are at 6.79 times.
Mumbai: Government funds of Singapore, Dubai and Abu Dhabi are eyeing a 5 per cent stake in Reliance Power in a private placement ahead of its proposed initial public offering, the Economic Times said on Monday.
Private equity firm Blackstone Group was also in talks for the stake, valued at around $1 billion, it said, citing investment banking sources. Reliance Power may dilute 2.5 to 5 per cent to sovereign funds, private equity firms and financial institutions, with a lock-in period of one year, the paper said.
Reliance Power, an Anil Dhirubhai Ambani Group company, has announced plans to sell a 10.1 per cent holding, which media reports have said may raise $2.8 billion, making it India's biggest IPO, excluding the private placement.
The group controls Reliance Power through subsidiaries including Reliance Energy Ltd, which owns 50 per cent.
A spokesman for the group declined comment on the report.
Reliance Power is awaiting the market regulator's approval for the IPO, which sources have said the firm hoped to price at the end of November or early December.
The issue is managed by UBS, ABN AMRO, JPMorgan, Deutsche Bank, Enam Securities, ICICI Securities, JM Financial and Kotak Mahindra Capital.
Macquarie India and SBI Capital Markets are co-managers.
Gitanjali Gems Ltd has informed that the Company has acquired Rogers Ltd. Inc., a retail jewelry chain in United States.
The Company has acquired 100% stake in this specialty retailer, which operates 46 stores in US with current revenues equivalent to USD 80 Million. Rogers Ltd. Inc. is headquartered in Middletown, Ohio and operates under brand names Rogers Jewelers and Andrews Jewelers.
As a privately held, family owned Company, Rogers Ltd., Inc. was originally founded in 1920 and since then it has grown front a one store operation to a Company with 46 stores. Rogers is a mall based jeweler appealing to a target customer of middle aspirations to middle upper income mass affluent consumers, who value quality and long standing relationships with trusted family jewelers.
The growth of this Company over the years comes from an unwavering commitment to high quality jewelry, trust, integrity and financial stability.
This acquisition by Gitanjali in organized US jewellery market is a landmark step for the industry and a significant step towards moving up the industry value chain, which will offer a range of synergies to Gitanjalis existing operations. Gitanjali will not only have access to a large US consumer base, but leveraging Rogers existing retail infrastructure will give Gitanjali a better control over the entire value chain in the jewelry business.
By way of this acquisition Gitanjali has taken one more step ahead in the direction of getting control over in the value chain, which will boost the Companys plans to expand its retail presence in India and overseas.
Plethico Pharmaceuticals Ltd has announced that on November 18, 2007 it has agreed to acquire Natrol, Inc., a leading manufacturer and marketer of nationally branded nutritional products in the United States of America. Under the terms of the effective merger agreement, all outstanding Natrol shares will be acquired for a cash purchase price of USD4.40 per share, for an expected aggregate purchase price of approximately $80.7 million.
The acquisition will be effected by an initial general tender offer by a wholly owned subsidiary of Plethico for all of the outstanding shares of Natrols common stock, at $4.40 net per share in cash, followed by a second-step, cash-out merger in which all remaining untendered Natrol shares will be acquired at the same net cash price per share. All Natrol stock options will receive cash equal to the excess, if any, of $4.40 over their exercise price.
The tender offer is subject to certain conditions, including the valid tender in the offer of a majority of the fully diluted Natrol common stock, and other customary conditions. Certain stockholders of Natrol, owning in the aggregate approximately 42.3% of Natrols outstanding common stock, have committed to tender their shares in the offer. Natrol expects the tender offer to be commenced on November 27, 2007. The tender offer will remain open for a minimum 20 business days from commencement, subject to extension under certain circumstances.
Shashikant A Patel, Chairman & Managing Director of the Company, stated, We are pleased to announce this acquisition, which will help Plethico to consolidate its position as a leading global Herbal / Nutraceutical player. The acquisition brings under our fold a truly professional entity which has a very strong presence in the US in addition to operations in the United Kingdom and Hong Kong.
DLF Ltd has announced that the Company has attracted participation of private equity real estate funds in its township projects by diluting 49% equity stake at a premium, in seven residential projects to a Merrill Lynch & Co entity for a consideration of Rs 1481 crore.
The mid-income housing projects, located in Chennai, Bangalore, Kochi and Indore would get fully developed in about 7 - 8 years time frame.
In a related but separate transaction, the Company has also diluted 49% of its equity stake at a premium, in another middle-income housing project in Panchkula, Haryana to Brahma Investments, for a consideration of Rs 194 crore.
Speaking on the development, Mr. T C Goyal, MD, of the Company, said, as a part of its strategic objective, DLF continues to remain focused on keeping its net economic interest in homes business to a ten year development horizon. Accordingly, these two transactions shall help DLF unlock its investments in land resource for the eight projects and also help in increasing rate of return to DLF shareholders. Besides resulting in positive NAV accretion for DLF, the transactions would provide good returns for the PE investor.
National Aluminium Company (Nalco), the largest producer and exporter of aluminium in the country, plans to establish an aluminium park at Angul to encourage consumption of the metal within the state. Most of the aluminium produced by the public sector blue chip company, at present, is either exported or sold outside the state for further value addition. Out of the average 30,000 tonnes of aluminium produced per month by Nalco''s smelter at Angul, 28,000 tonnes are send outside the state, with only 2,000 tonnes being consumed in the state. The proposed aluminium park is hoped to increase the metal consumption within the state to at least 20,000 tonnes per month.
Both national and international aluminium players would be infused to establish downstream units in the proposed park to facilitate more metal sales within the state. Meanwhile, Nalco''s plan to establish a second smelter plant along with a captive power plant in Orissa depends on the company being allotted additional bauxite mines and coal block for the project. Nalco, which has been looking for location in West Asia and South-east Asia to establish a smelter plant, had earlier announced to have a smelter plant with annual capacity of 500,000 tonne in Orissa, its second after the Angul facility, provided the company was assured of raw material linkage for the project.
Mumbai: GTL Ltd has acquired the Malaysia-based ADA Cellworks - a player in the network planning and optimisation space - in an all cash deal of $25 million (Rs 100 crore).
The acquisition will give GTL an opportunity to cement its presence in the fast growing Southeast Asian markets and benefit from ADA’s long-term relationships with telecom vendors and service providers globally, Milind Bengali, head of mergers and acquisition, GTL, told Business Line.
GTL International, a subsidiary of GTL Ltd, will purchase the 100 per cent stake of ADA from the promoters, Intel Capital and Malaysian Venture Capital Management.
ADA Cellworks offers radio and transmission planning, network services, in-building design and project management, and has competencies developed in implementing virtual planning and optimisation and WiMAX.
The company has experience in executing over 80 projects across 24 countries with significant presence in China, Indonesia, Taiwan and India. ADA Cellworks expects revenue of approximately $31 million for fiscal 2008.
The acquisition will strengthen the services of network planning and design, network operations and maintenance, and professional services of GTL.
“The acquisition marks GTL’s foray into profitable markets such as Taiwan and China. We now see a lot of network optimisation opportunities in these geographies,” said Bengali.
It will also strengthen GTL’s relationships with leading telecom technology providers such as Nokia Siemens Networks, Alcatel Lucent, Motorola, Ericsson and Huawei.
Madurai: RBI is poised to regain its position and market share among the public sector banks (PSBs) as at the time of nationalisation.
Currently in 7th place, the bank is working to secure a market share of 4.25 per cent by the end of this fiscal, according to its Chairperson and Managing Director, H.A. Daruwalla.
Speaking to Business Line here on Friday, Daruwalla explained the strategy.
A decision has been taken to rework the credit portfolio. This includes curtailing real estate exposures, bringing down corporate lending and keeping the retail lending at about 25 per cent. Large branches in metros have been focussing on financing corporates, semi-urban branches on the SMEs and the rural branches on agricultural lending.
CBS adoption
In the adoption of Core Banking Solution, currently 703 out of the 3233 branches are brought under the network and by March’08, a total of 1000 would be covered. The bank has secured authorisations to open 183 new branches by March and already 129 of them have been opened. As at the end of September 2007, the business volume stood at Rs.1,45,000 crore, she said.
The bank is also concentrating on human resources development for improving the performance. In the contemporary scenario, survival of the fittest being the option, merger and acquisitions are suggested and ‘while I am inclined to think about the same, right now there is none in consideration’, she added.
The focus is on para-banking activities and non-fund incomes. ‘The aim is to become a one-stop shop for all banking activities’, she said.
Speaking about the performance of the bank, she said that the net NPA stood at 1.41 per cent and the bank made a net profit of Rs 222 crore at the end of September. The ATM strength would be raised to 350 by the end of this fiscal, she added.
The latest Master Circular No. 96/7/2007-ST dated August 23, 2007, issued by the Tax Research Unit (TRU), clarifying technical issues related to service tax, has compounded the confusion in respect of the extent of applicability of service tax on the real-estate sector.
The first step in taxing construction industry services was taken by the Government in 2004, when it brought Commercial and Industrial Construction Services within the service tax net, effective September 10, 2004, which was expanded to cover ‘Completion and Finishing Services,’ effective June 16, 2005.
The Government also expanded the scope of the service tax levy on the sector by bringing services rendered in relation to construction of residential complexes having 12 or more units into the tax net, with effect from June 16, 2005.
Applicability of service tax
There has been a lot of confusion on the applicability of service tax on the various players in the sector - pure developers/estate builders, builder-developers, contractors, sub-contractors, and so on due to the inconsistent stand taken by the various arms of the Government, from time to time.
The CBEC (Central Board of Excise and Customs), through a Circular No. 80/10/2004-ST dated September 17, 2004, had clarified that “Estate Builders” (presumably this was supposed to mean developers/builders who had contracted out the construction activity to contractors) are not covered under the ambit of these services and it is only the hired contractors engaged by these builders who are to be taxed.
Based on this clarification, pure developers who had employed contractors, took a view that no service tax was applicable to them.
Though this Circular was issued in relation to Commercial and Industrial Construction Services, the logic was equally applicable to services rendered in the construction of residential complexes as well.
Contradictory stands
This clear view of the Government was changed by a Circular issued by the Director-General of Service Tax, Mumbai, dated February 16, 2006, wherein a contrary view was taken, to the effect that builders who employ contractors would also be liable for service tax, based on the Supreme Court’s decision in K. Raheja Development Corporation vs State of Karnataka [2005 NTV (Vol 27)-243].
The fact that the Supreme Court’s decision was rendered in the context of applicability of sales tax on a civil works contract and had nothing to do with service tax, was not appreciated.
It was, however, apparent that the Department was more concerned with the huge differentials that exist between the rates charged by contractors to developers and those charged by the latter to the purchasers of flats, in terms of loss of service tax revenues rather than the legality of the levy on developers. Based on the DG’s circular, developers/estate builders who had employed contractors came under a lot of pressure to pay service tax.
Even as the CBEC and the Service Tax Department took contradictory stands, the TRU issued a Clarification dated August 1, 2006, on the levy of service tax on the construction of residential complexes.
KEC International Ltd has announced that the Company has bagged two major project wins in Abu Dhabi and Algeria worth Rs 391 crores and Rs 246 crores respectively through an international competitive bidding process.
In Abu Dhabi, the Companys job, to be completed in 24 months, is for the Abu Dhabi Transmission & Despatch Company (TRANSCO). It is a turnkey job of 400 KV double circuit and quad circuit transmission lines of 173 kms. length connecting Fujairah substation to Sweihan substation.
In Algeria, for SONELGAZ, the Company will undertake a turnkey job of 400 KV single circuit transmission line from Cheffia to Ain Bedia and from R. Djamel to Djendouba. This project has a completion period of 15 months.
The size of these wins underlines KECs status as among the largest and most sought after Transmission EPC players in the world. The win of Abu Dhabi is our single largest win, in dollar terms, ever. I am delighted with the growth in our international operations through the year thus far, said Ramesh Chandak, Managing Director, of the Company.
In a lighter vein, Mr. Chandak concluded, This is the best Diwali gift for KEC and its stakeholders.
Mumbai: SKF, global suppliers of bearings, seals and other related products, is infusing Rs 420 crore in India to establish two new manufacturing units. The company was investing Rs 150 crore in its upcoming plant in Uttarakhand and another Rs 270 crore in a new plant in Ahmedabad. While the Uttarakhand unit will cater to the automotive and two-wheeler industries, the Ahmedabad facility, which is hoped to begin production by the first quarter of 2009, will manufacture large size industrial bearings. The SKF group, which has 120 production units spread across 24 countries, first began trading operations in Kolkata in 1923 and has two bearing manufacturing plants in Bangalore and Pune.
The company was optimistic on the wind energy sector for its products in India, which was in the process of increasing its capacity from the present 7,113 MW to 45,000 MW. SKF had developed a new family of bearings that decrease energy consumption by at least 30 per cent compared to standard ISO products.
ICICI Prudential Life is betting big on health business, a new area for life insurance companies. About 12-15% of the life plans that the private-sector life insurer writes every month are said to be health products. The firm, which has created a specialised team dedicated to selling benefit products, is likely to unveil a category-specific campaign shortly. Also on the anvil are plans to explore new planks within the category such as reimbursement policies that are similar to mediclaim products from general insurance companies.
Currently, the scope of the healthcare market is estimated to be around Rs 60,000 crore and the share of insurance is less than 1%. Moreover, over 80% of the market is indemnity driven and is largely covered by mediclaim. ICICI Prudential Life Insurance, said, It is a big challenge to create awareness and understanding of the need of health insurance products.
As a category, health insurance is generally is not a top of the mind product.
The company has put up a dedicated team to sell health insurance products, for which, it is spending on training frontline distribution teams. It plans to cross sell and up-sell to the existing base. ICICI Prudential currently has a portfolio of hospitalisation plans and critical and specialised illness products.
New Delhi: State-run steel giant SAIL would invest about Rs 1,600 crore to build processing units in seven states to meet the growing demand of the metal in the country.
"Steel Authority of India Limited (SAIL) will build eight processing units in seven states at the cost of Rs 200 crore each," Steel Minister Ram Vilas Paswan told the Economic Editors' Conference here today.
The units would be set up in Bihar, Uttar Pradesh, Assam, Himachal Pradesh, Rajasthan, Madhya Pradesh and Jammu and Kashmir.
Paswan pointed out that by 2020, the sector would witness investments of Rs Rs 8,70,640 crore and the country is set to become the world's second largest producer of steel before 2015-16.
"During 2006, India emerged as the fifth largest crude steel producing country in the world and is set to become the second largest global steel producer before 2015-16," he said.
"Going by the estimate of Rs 4,000 crore investment per million tonne of additional capacity, the steel sector is likely to witness an investment of Rs 2,76,880 crore by 2012 and Rs 8,70,640 crore by 2020," he said.
Projecting that India's steel production will be nearly 124 million tons by 2012, Paswan said the country is likely to achieve an annual capacity of around 275 million tons by 2019-20.
Public sector SAIL and RINL are executing corporate plans to increase their respective capacity to more than 26 million tons and 6 MT by 2011-12. Private firms Tata Steel, Essar Steel and JSW would also raise their capacity to 13 MT, 14.5 MT and 11 MT respectively.
Bangalore: Columbia Asia Hospitals Pvt Ltd has announced that it has tied up with DLF Home Developers Ltd to develop hospitals.
DLFH will construct Columbia Asia-designed hospitals on land within DLFH townships and lease it to the hospital chain. DLFH’s parent, DLF Ltd, has 289 million sq ft of developed property and an additional 615 million sq ft planned.
The alliance would allow Columbia Asia to leverage the DLFH’s expertise in developing and building commercial properties, it said.
“We do not have sufficient numbers of people to manage the speed of our growth,” Rick Evans, Managing Director of the Malaysia-based healthcare group, said. Columbia Asia has launched its first hospital in Bangalore and is building five more in Kolkata, Palam Vihar, Patiala, Mysore and Bangalore. It owns 13 additional locations independent of the tie-up with DLFH.
The group is owned by over 150 private equity companies, fund management organisations and individuals.
Private sector diesel and petrol sellers have increased prices of auto fuels even as the high international crude oil prices are worrying the UPA government and keeping its oil companies guessing on what will be the government decision.
Sources told DNA Money, Reliance Industries Ltd and Essar Oil, the biggest private players in petroleum retailing in the domestic market, have increased petrol and diesel prices in the range of Rs 4.5 to Rs 5 a litre even at the cost of losing market share to the government-owned company.
When contacted, a RIL spokesperson offered no comments though Essar sources confirmed the news. A senior executive in one of the companies on condition of anonymity, however, said, "We have increased prices of diesel by Rs 4.5 a litre and Rs 5 a litre on petrol over the PSU prices but it only partially covers our losses since we will lose in sales volumes with PSUs selling at a lesser price."
He said the companies did not have any choice. At a news conference here, Petroleum Minister Murli Deora said, "We don't want to burden poor man...we'll let it (oil price) stabilise then we will take a decision."
DNA Money was the first to report on Monday that petroleum price hike was not on cards for now.
"As the international oil prices are close to $100 a barrel, under recoveries can only go up further and we are very concerned…Appropriate decision on price will be taken at an appropriate time," Deora said.
The government flip-flop on petroleum pricing policy has resulted in a curious situation where the biggest private sector refiner RIL prefers to export its products while also importing diesel and petrol to feed its retail outlets.
"RIL has been buying petroleum products from Essar and also importing for selling through its retail outlets. The net effect is a loss to the company," claimed the private company executive.
Ahmedabad: Reliance Money, the financial services and products distribution arm of Reliance Anil Dhirubhai Ambani Group (ADAG) has tied up with Anarde Foundation, a non-profitable charitable organisation, to popularise a disciplined financial investment culture in the semi-urban and rural areas.
It is targeting the small investors mainly in semi-urban and rural areas through a common platform with the NGO, which invested Rs 1,200 crore in 2006-07 on various rural upliftment and developmental schemes.
Free trading account
The company has unveiled a limited free trading account offer for its consumers in Gujarat through Reliance Money outlets, which could be extended to other States also, said Sudip Bandyopadhyay, Director and CEO, here. The tie-up aims to reach out to more than 22-lakh individuals across 16,000 villages in 79 districts in 18 States, currently being served by Anarde Foundation.
Addressing a press conference along with the Anarde Foundation Chairman, Kapoor Chandaria, Bandyopadhyay said Reliance Money will work with the NGO’s self-help groups to ensure that appropriate financial guidance is available to the rural masses.
The three Reliance Energy (REL) controlled power distribution companies (distcos) in Orissa have proposed to spend Rs 4,065.65 crore in the next five years, according to their business plans submitted to the Orissa Electricity Regulatory Commission (OERC) recently.
The three distribution companies are Wesco, Nesco and Southco, whose nomenclature is based on their areas of operation such as western, northern and southern parts of the state.
Of the total outlay, Wesco plans to spend Rs 1,282.05 crore, while the expenses proposed by Nesco and Southco are pegged at Rs 1,509.54 and 1,274.06 crore respectively.
The money will mainly meet the load growth across consumer categories, so as to reduce the losses, increase efficiency and productivity, augment/replace/retrofit old/obsolete/under-rated equipment, meet environmental, safety, regulatory and other statutory requirements, purchase routine tools and equipment and other miscellaneous expenditure of capital nature.
The infrastructure upgradation includes increasing the 33 kV and 11 kV lines to bring down LT/HT line ratio and implementation of HVDS, increasing 33 kV substations to improve voltage levels and extend reach areas, installation of breaker on 33 KV and 11 KV side, DTR metering and consumer indexing to support energy audit, rural electrification works under Rajiv Gandhi Gramin Vidyut Yojana (RGGVY) and automation of processes by IT intervention in technical and commercial areas.
However, during a hearing on the business plan, OERC raised doubts about the management capability of the three distcos to spend the huge proposed amount towards investment over the next five years “as there is no mention about strengthening human resources for executing works of such stupendous magnitude”.
Similarly, the commission has questioned the sourcing of funds. It pointed out that investments linked to loss reduction, system improvement and cost benefit analysis have to be realistically spelt out. “Distcos are not yet able to furnish the actual technical losses as on today. Unless the base line data is accurate, future projections could turn out to be an exercise in futility”, it observed.
The commission has urged distcos to conduct the technical loss study and make future projections accordingly. The commission also enquired why distcos cannot reach 100 per cent collection efficiency after eight long years of managing the distribution sector.
The commission advised the three distribution companies to conduct regular meetings with government departments for resolving the disputed arrears. It has also sought clarification about the government’s investments in the power sector, especially by way of the Rajiv Gandhi and APDRP schemes.
Bharti Airtel and United Breweries have expressed interest in acquiring, respectively, the Delhi and Bangalore or Mumbai teams in the impending Indian Premier League (IPL) for Twenty20 cricket matches.
A leading Indian private bank and another mobile operator that recently went public are also considering acquiring IPL teams, Board of Control for Cricket in India (BCCI) sources confirmed.
Bharti executives confirmed the mobile service provider’s interest in acquiring an IPL team. Vijay Mallya of United Breweries was not available for comment.
Bharti executives are working on the details of the bids, which are likely to be invited through the BCCI's normal process of tendering.
“Everything will be done through tenders. Those buying the teams will have a right to make their own teams,” said Lalit Modi, chairman, IPL, and BCCI vice-president, adding, “There will be an auction for international players and a separate auction system for Indian players.”
The Indian Premier League, the BCCI's answer to Subhash Chandra's breakaway Indian Cricket League, is slated to have eight teams.
It has already signed on 49 international players including Shane Warne, Glenn McGrath, Shoaib Akhtar, Shaun Pollock, Graeme Smith and Herschelle Gibbs.
The Indian Cricket league, also a Twenty20 competition, initially comprises six teams.
The eight franchise teams of the IPL will participate in a 56-game season. The four top teams will then play the semifinals, and the winners will contest in the championship match.
Kolkata: After Panipat and Paradip, IndianOil is planning the third petrochemicals complex, albeit a smaller one, at Haldia, according to sources.
The company is considering setting up a parazylene plant in the existing refinery complex beginning 2012. The cost and capacity estimates of the project are yet to be finalised.
Parazylene is a petrochemical product and is used as a feedstock in the neighbouring MCC PTA India Corporation Pvt Ltd - a subsidiary of Tokyo-based Mitsubishi Chemical Corporation for producing purified terephthalic acid (PTA).
Delayed coker unit
The parazylene plant coupled with the virtually finalised plan to set up a Rs 350-crore delayed coker unit in the refinery may, however, reduce the availability of naphtha for Haldia Petrochemicals Ltd (HPL).
The delayed coker project will be finalised as soon as the company is given possession of an additional 86 acre land next to its refinery.
The Union Shipping Ministry has already approved the allotment of land currently under the possession of the closed Hindustan Fertiliser Corporation (HFC) facility at Haldia and the physical handover is expected to take place shortly.
Delayed coker will replace roughly 50 per cent production of black oil (including naphtha) by petroleum coke and improve the distillate yield to over 70 per cent from the existing 65 per cent.
The company will use a part of the reduced naphtha production for production of parazylene and the rest is likely to make its way to HPL, also located in Haldia.
Haldia Refinery currently processes 6 million tonne (mt) crude. The capacity will go up to 7.5 mt once the on-going Rs 1,600-crore hydrocracker project is implemented next year.
Single point mooring
Meanwhile, IOC is expecting a boost to its bottomline beginning December 2007 with the completion of the single point mooring (SPM) facility at Paradip and the connecting crude pipeline to Haldia. The total project cost is estimated to be Rs 1,178 crore.
While the pipeline between Paradip and Haldia is already laid, work is still pending on the sub-sea pipeline connecting the SPM.
India still has a long way to go in becoming financially inclusive. That was the message Reserve Bank of India governor Y V Reddy sent out here. He pointed out that only 30 per cent of India's adult population was financially included as against 98 per cent in Malaysia.
Reddy also underscored India's need to adopt different policies from other Asian economies, given its higher trade and current account deficits. He also drew attention to the 'considerable headroom' other Asian nations enjoyed in the fiscal space.
Earlier, Zeti Akhtar Aziz, governor of Bank Negara Malaysia, the country's central bank, said, "Financial inclusion in Asia is not commensurate with its growth."
Aziz added, "While financial liberalisation can bring a lot of benefits, it will also bring in a great deal of volatility, affecting a country's economic objectives."
The central bankers also spoke of the halted status Asian economies are held in now compared to a decade back. Reddy said, "Asian countries' huge foreign reserves which were criticised a decade back are now said to be playing a balancing role in the global economy."
RPG Group firm KEC International may sign overseas contracts valued at around Rs 900 crore within the next two months in transmission and rural electrification, a top company official said.
“We are close to sealing around Rs 900 crore of orders within the next eight weeks. These overseas contracts are from Namibia, Algeria, Abu Dhabi and Afghanistan,” KEC MD Ramesh Chandak told PTI.
KEC International is a key player in transmission towers construction and recently two group companies, RPG Transmission and NITEL, were merged into it. NITEL is among the top five companies in the telecom tower business.
“The entire physical merger of these three RPG Group companies, which employ around 2,300 persons, should be completed by March next,” he said, adding “post merger, there will be tremendous synergistic benefits accruing to the Group and KEC”.
While the orders from Namibia, Algeria and Abu Dhabi are for transmission towers, the one in Afghanistan is for rural electrification. The Abu Dhabi order is worth Rs 400 crore, Algeria and Namibia around Rs 200-crore, while the rural electrification order from Afghanistan is valued at around Rs 300 crore. Besides, KEC has bagged a Rs 200-crore contract from the state-run Power Grid Corporation in the domestic market.
The company’s order-book presently stood at Rs 4,800 crore, said Chandak.
RPG Group’s entire tower transmission operation will be brought under the KEC umbrella, enabling the corporate entity to give a sharper focus to the business. NITEL is being merged with KEC “as we feel that it has the potential to grow rapidly under the KEC umbrella than on its own”, said Chandak.
Going forward, KEC would continue to focus on its core business segments of transmission towers, rural and railway electrification while telecom towers would comprise a new and important segment for the company, he said.
KEC does not envisage a huge capex programme in the medium-term.
“Our capex is not huge - it will be around Rs 40 crore a year over the next three years, mainly in augmenting our construction equipments and building up our IT systems,” said Chandak.
On funding, he said internal accruals would take care of the company’s requirements to a large extent. “If needed, we can borrow. There is no immediate plan to tap the market or go in for a GDR or an ADR.”
KEC has been growing at a compounded annual growth rate of more than 30 per cent in the last three years and the same growth momentum was expected to be maintained, going forward, said Chandak.
The company had clocked a turnover of Rs 2,100 crore in 2006-07 and profit after tax of Rs 105 crore.
“We expect our turnover to be around Rs 2,500 crore this financial year. With the merger of RPG Transmission and NITEL, this should rise to the vicinity of Rs 3,000 crore,” he said.
* These overseas contracts are from Namibia, Algeria, Abu Dhabi and Afghanistan
* The Abu Dhabi order is worth Rs 400 crore, Algeria and Namibia around Rs 200-crore, while the rural electrification order from Afghanistan is valued at around Rs 300 crore. Besides, KEC has bagged a Rs 200-crore contract from the state-run Power Grid Corporation in the domestic market
* RPG Group’s entire tower transmission operation will be brought under the KEC umbrella, enabling the corporate entity to give a sharper focus to the business.
Domestic financial institutions such as banks and insurance companies have evinced interest to participate in the equity derivatives market as traders.
According to sources close to the development, major domestic banks and institutions such as State Bank of India (SBI), Bank of India (BoI) and Life Insurance Corporation (LIC) have sought the permission of their respective regulators — the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority (Irda) to participate in the equity derivatives market (F&O segment) as traders.
Bankers explained that this would give them an opportunity to take advantage of the market conditions and earn good returns. At present, they can only enter the market to hedge their portfolios.
According to bankers, investment is also an important activity for efficient fund management, especially at a time when the credit offtake is slow and capital adequacy norms have been made stringent for various categories of loans under Basel-II.
Moreover, the participation of banks and insurance companies will build up a good domestic institutional support to the F&O segment, which till now is primarily a domain of foreign investors.
According to insurance companies, the participation in the equity F&O will give them an opportunity to take advantage of the market conditions and earn higher return through trading.
The F&O segment in the equity market is more volatile compared with the cash segment since there is no institutional support from the domestic counterparts as is the case with the cash market.
Therefore, the decision of portfolio investors (FIIs) results in a greater volatility in the market. Since the beginning of the financial year 2007-8 till now, while the turnover in the cash market has grown from Rs 5,938 crore to Rs 28,400 crore, the F&O segment witnessed volumes growing from around Rs 20,000 crore to a high of Rs 1,10,563 crore.
Dealers explained that volumes in the F&O segment were much higher than those of the cash segment since the former did not require cash funding, but only a margin payment to a broker.
Depending on the position at the end of the contract period, transactions in the F&O were settled on a net basis, they added.
