LCC Infotech Launches LCC Brand Of Laptops

LCC Infotech Ltd has informed that subsequent to the launch of LCC designer PCs, the Company received tremendous response and has also launched its range of LCC Laptops. The Laptops will be sold under the LCC PC banner and range from Intel based Celeron priced only at Rs 22,000 to Intel based Core2Duo laptop priced at Rs 28,000. The Company has taken this step to capitalize on the growing demand for LCC PC and using distribution muscle and attractive prices. LCC Laptops will be distributed throughout West Bengal by Alco Infotech that has a dealer / reseller network covering over 4O0 locations. This gives LCC an added advantage of better penetration and also enables it to cater to the growing demand of laptops that as per International Data Corporation is growing at an annual rate of 8085%.

Sun TV Launches FM Station At Varanasi

Sun TV Network Ltd has announce the launch of its Radio Station at Varanasi under the brand S FM from December 29, 2007 through its Subsidiary South Asia FM Ltd. This Station can be heard at 93.5 MHz frequency in Varanasi. The programs will cater to the audience of all age groups.

With the launch of this FM Station, the total operational FM Stations of the Company goes up to 18 as it already operates at Chennai, Coimbatore, Tirunelveli, Visakhapatnam, Bangalore, Hyderabad, Jaipur, Bhubaneswar, Tirupati, Madurai, Tuticorin, Lucknow, Bhopal,Pondicherry, Kozhikode (Calicut), Indore and Vijayawada.

The Company hold licenses for 45 FM Radio Stations across India, and will be one of the largest radio broadcasters in India when all the remaining 27 stations become operational.

ITC To Manufacture Paper Cups In Hyderabad

Hyderabad: ITC Limited is all set to commission a 25,000-tonne per annum capacity facility at a cost Rs 35 crore at its Bollaram unit in Hyderabad for production of elemental chlorine-free (ECF) paperboard to be used for manufacture of paper cups.

The paperboard produced at the new facility will be supplied to small and medium enterprises (SMEs) for manufacture of ECF Spectra cups.

The paper cups manufactured by the SMEs will be marketed by ITC, said the source. ITC has decided to partner SMEs to popularise the usage of paper cups, which has been growing rapidly in the country over the last few years. In future, the company would be entering into a partnership with 20-25 SMEs when it would enlarge the market coverage and distribute the product nationwide. Currently, the paper cups are being test marketed in Hyderabad and Secunderabad through 400 retail outlets According to Dhobale, ECF Spectra cups are odour-free, allowing the consumer to enjoy the true taste of the beverage. These cups will be available in pack sizes of 25 and come in vibrant colours to add to consumer''s delight.

Web Icon Set To Be Discontinued

The browser that helped kick-start the commercial web is to cease development because of lack of users. Netscape Navigator, now owned by AOL, will no longer be supported after 1 February 2008, the company has said. In the mid-1990s the browser was used by more than 90% of the web population, but numbers have slipped to just 0.6%.

In particular, the browser has faced competition from Microsoft''s Internet Explorer (IE), which is now used by nearly 80% of all web users. While internal groups within AOL have invested a great deal of time and energy in attempting to revive Netscape Navigator, these efforts have not been successful in gaining market share from Microsoft''s Internet Explorer, said Tom Drapeau on the company''s blog.

India Upbeat In Business, Says Survey

Riding on expectations of higher growth, increased inventory levels and greater employment generation, business confidence for the period starting October till end of the current fiscal is upbeat, says a survey by a leading Indian industry chamber.This is much higher than the same survey conducted for the period April-September 2007-08, the survey by the Confederation of Indian Industry (CII) indicated.

The CII business confidence index (CII-BCI) showed the current situation index (CSI) and expectations index (EI) was higher among non-manufacturing firms as compared to manufacturing firms.As many as 59 per cent of the respondents indicated the gross domestic product (GDP) growth rate to be around 9 per cent, while 22 per cent indicated 9 to 9.5 per cent.About 87 per cent of firms expressed plans to increase investment during October March 2007-08 and 59 per cent have revealed capacity utilization in the range of 75 to 100 per cent.

A large number of firms also expressed their decision to increase the value of production. About 66 per cent of the companies surveyed have already increased their scale of production during the first half of 2007-08.All these are expected to generate considerable employment by the second half of the upcoming financial year.

Despite a surging rupee against the weakening dollar, exports would continue to increase. However, the sector continues to face procedural delays, which acts as long-standing hurdle for exporters, which raises transactions costs and needs to be addressed urgently, the chamber said.

Cos Set To Connect India Via Voip

NEW DELHI: Now making calls over the internet will not be confined to just Delhi and Mumbai. The entire country will have access to the voice over internet protocol (VoIP) service in the New Year. Over half-a-dozen companies including Sterlite Optical, Aksh Optifibre, Indus Online and Smart Broadband are in the race for providing internet telephony (VoIP) on the BSNL platform. The number is expected to go up in the next few days.

BSNL had invited expression of interest (EoI) for providing VoIP service earlier this month and had asked companies to submit their proposals by December 28. The company has, however, extended the date for submitting the EoIs as new enquiries were pouring in. “We have decided to extend the date of EoI submission by at least a week,” said a BSNL official. Sources said that January 6 is likely to be the new deadline. Only four companies will be chosen by BSNL for providing the service.

Presently, MTNL is the only company providing VoIP service through a tie-up with Aksh Optifibre. This facility is limited to subscribers of New Delhi and Mumbai only because of the limited reach of the company. Initially, BSNL had plans to start internet telephony service by the end of the year. However, the move got delayed because of last minute enquiries and requests for clarifications from a number of interested parties.

The state-owned company has divided the country into two zones — the North West and South East zones for offering the VoIP service. In each zone the company would offer franchisee to two companies. However, one company cannot get franchisee for both the zones. The BSNL offer will also be open to those who do not have a PC at home. Such customers will be required to subscribe to BSNL’s broadband connection (for monthly rentals starting at Rs 199) and buy an analog telephone adaptor for about Rs 1,500.

On the tarrif front, BSNL is set to match MTNL. This implies, tariffs for those who make PC-to-PC calls are likely to be as low as 10 paise per minute, while a call made from a PC to a landline or mobile abroad would cost a little over Re 1 per minute on account of the termination charges. BSNL also plans to offer this service in its 2.5 million plus PCOs in the country.

Existing license holders, too, were interested in providing the service on BSNL platform but the pre-bid document does not permit existing license holders to participate in the bidding process. “We are confident of winning the bid as amongst companies which are not existing license holders ours is the only one which has got experience in providing the VoIP service on a large scale through our partnership with MTNL,” Aksh Optifibre managing director K S Choudhuri said.

Interestingly, there is hardly any interest among private license holders in offering the service on their own as they are afraid of incurring losses due to the comparatively low profit in the business. But BSNL’s entry into this segment is set to change the market dynamics and force other operators to follow suit even if it eats into their revenues from ISD calls.

Textile Sector In Knots On Rupee Rise

NEW DELHI: A stitch in time saves nine, goes the famous saying, but the rapid rise in rupee value caught India's textile exporters almost off-guard in the year gone by as they struggled to remain globally competitive.

Textile firms not only fought the hardening rupee, but also had to bear high interest, raw material costs and poor infrastructure in the year they will not forget in a hurry.

While 2007 began on a promising note with government extending the popular Technology Upgradation Fund Scheme for the 11th plan period, the jubilation did not last long.

The over 12 per cent rise in rupee against the US dollar began eating into profits of textile exporters, with many units forced to down shutters as they failed to cope with the rupee rise. The sector, one of the biggest job generators, was among the worst-hit due to the decline in dollar value.

The government had set an export target of USD 25 billion for 2007-08. However, impact of an appreciating rupee was there for all to see when during the first quarter, exports of textiles and clothing declined over 14 per cent to USD 4.01 billion. In April alone, exports fell 18.23 per cent. Textile exports in 2006-07 stood at USD 18.73 billion, falling short of the targeted USD 19.73 billion by about five per cent.

Faced with declining profits and exports, textile exporters were forced to lay-off workers on a large scale.

"The entire textile and clothing industry is going through a grave crisis. About 35,000 jobs have been lost and the number may run into several lakh by the year-end if corrective measures are not taken," Confederation of Indian Textile Industry Chairman P D Patodia said. Exports would fall short of the target by USD 7 billion, he added


Falling margins and exports saw the industry indulge in hectic parleys with Commerce Minister Kamal Nath, Finance Minister P Chidambaram and even Prime Minister Manmohan Singh.

Of the over Rs 5,200 crore relief package doled out by the government for the exporting community, textile industry saw some succour in the form of upward revision of duty drawback and duty entitlement passbook scheme rates and import duty cuts on man-made fibres and their intermediates.

Government Bonds Continue To Rule Firm

MUMBAI: Prices of government bond continued to rule firm due to persistent buying by banks and corporates, while call rates moved up on good demand from borrowing banks to meet current obligations in the overnight call money market here on Friday.

Select government bond prices rose by 20-45 paise. The 8.20 per cent government stock maturing in 2022 rose to Rs 101.74 from Rs 101.32 previously while its yield dropped to 7.99 per cent from 8.04 per cent.

The 8.33 per cent government security maturing in 2036 also moved up to Rs 101.84 from Rs 101.37 previously while its yield slipped to 8.16 per cent from 8.20 per cent.

The 7.95 per cent government security maturing in 2032 looked up to Rs 97.75 from Rs 97.35 previously while its yield eased to 8.16 per cent from 8.20 per cent.

The 7.38 per cent government security maturing in 2015 moved up to Rs 97.88 from Rs 97.65, the 7.49 per cent government stock maturing in 2017 to Rs 97.77 from Rs 97.57 and the 7.99 per cent 2017 to Rs 101.17 from Rs 101.00.

The overnight call money rate ended higher at 7.85 per cent as against 7.65 per cent yesterday. The 3-day call money rate ended at 7.60 per cent after moving in a range of 7.90 per cent and 7.50 per cent.

The Reserve Bank Of India (RBI), under the Liquidity Adjustment Facility (LAF) accepted 24 bids of Rs 33,865 crore at the three days repo auction at the rate of 7.75 per cent.

SEBI Paves Way For Real Estate Investment Trusts

MUMBAI: The Securities and Exchange Board of India (SEBI) on Friday outlined a set of draft regulations for the functioning of real estate investment trusts (REITs), paving the way for implementation of this scheme in India early next year.

The draft includes various prerequisites for any entity to launch a REIT scheme, including the valuation aspect, which has been considered a key roadblock to the launch. The market regulator said every such scheme should appoint an independent property valuer, who will value all the real estate under the scheme after physical inspection.

One of the proposals is that the REIT should be in the form of a trust created under the Indian Trusts Act. Trustees should be either a scheduled bank, trust company of a scheduled bank, public financial institution, insurance company, or a body corporate. A scheme should be launched by a trust and be managed by a real estate investment management company, with both parties having to register with SEBI. Only close-ended schemes can be launched by the trusts, and these schemes have to be listed on the stock exchanges mentioned in the offer document.

“The valuation methodology shall follow the ‘valuation standards on properties’ published from time-to-time by the concerned Indian institute or the international valuation standards issued from time-to-time by the International Valuation Standards Committee,” the draft proposal said, while listing the requirements of the independent principal valuer.

On investment limitations, SEBI said a REIT, under all its schemes, should not have exposure to more than 15% of any single real estate project. While it can buy uncompleted units in a building, which is unoccupied and non-income producing or in the course of development, the aggregate contract value of such real estate should not exceed 20% of the total net asset value of the scheme at the time of acquisition, the market regulator said.

Further, it said REIT, under all its schemes, should have not exposure to more than 25% of all the real estate projects developed, marketed, or financed by the same group of companies. The scheme is prohibited from investing in vacant land or participating in property development activities. The market regulator has put some restrictions on the borrowing capabilities of a REIT scheme for funding investments and operating expenses.

Accordingly, a scheme cannot borrow more than one-fifth of the value of the scheme’s total gross assets. While the scheme can mortgage its assets for such borrowings, the REIT should disclose its borrowing policy in its offer document, including its maximum borrowing limit, the draft said.

The market regulator said the scheme shall distribute not less than 90% of its annual net profit after tax as dividends every year to unit- holders. “The real estate investment trust shall determine any revaluation surplus credited to income, or gains on disposal of real estate, which shall form part of net income for distribution to unit-holders,” the draft proposal said.

Indiabulls, SocGen arm form life insurance JV

MUMBAI: Indiabulls Financial Services (IBFSL) and Sogecap, the insurance arm of Societe Generale (SocGen), have formed a 74:26 joint venture to enter the domestic life insurance market. IBFSL had short-listed German insurance major Ergo and SocGen for its proposed insurance foray and talks were on with both foreign firms during the last four months. Senior IBFSL officials said the life insurance venture will be initially capitalised with Rs 300 crore, of which SocGen has contributed Rs 150 crore for its 26% stake.

Sogecap will own 26% of the paid-up capital of the new insurance joint venture named Indiabulls Societe Generale Life Insurance while the remaining stake will be held by the Indian firm. Indiabulls has already got permission from the Reserve Bank of India (RBI) for investing in the JV. The JV has also initiated the approval process with IRDA. AK Shukla, former chairman of LIC, has been appointed as the non-executive chairman of the JV company.

SocGen has a very strong India presence through a JV with SBI in SBI Mutual Fund in which it owns 35%. SocGen had recently also bought out Apeejay Finance, a Kolkata-based NBFC, and is looking at retail financing opportunity in India. Sogecap is currently running the life insurance business in over 10 countries and is the third-largest insurance company in France.

Gagan Banga, CEO, Indiabulls Financial Services, said his company has been focusing on the insurance sector and has built a very scalable distribution set-up. “Thanks to a strong partner like SocGen, who already understands the Indian landscape because of their long-standing JV with SBI, we will be among the top three life insurance players within three years,” said Mr Banga.

SocGen ranks among the top 10 banks in Europe and is also planning to enter the Indian retail banking space subject to regulatory approvals. “Given the fact that IBFSL is one of the largest retail financial services companies with over a million customers, the life insurance foray marks a natural step forward in its quest to diversify beyond mortgage and consumer financing and stock broking,” another IBFSL official said.

IBFSL has a pan-India presence through its 600 offices in over 200 cities and this distribution network will help the life insurance company to start operating at scale very quickly. Sources close to the deal said the company expects to capitalise the life insurance company to the tune of Rs 2,000 crore over the next three years and is targeting to start collecting first year premium of over Rs 5,000 crore by 2010.

Indiabulls is already the largest corporate agent for Max New York Life and will collect premium exceeding Rs 100 crore in the current financial year for Max New York Life. Sogecap has currently contributed to 50% of the capital for 26% stake and has undertaken to continue to contribute to 50% in all capital infusions for the next three years.

IBFSL will now represent the financing business and will also hold the various new initiatives like life insurance, asset management and the proposed multi-commodity exchange in JV with MMTC, at a subsidiary level.

NTPC To Infuse $3.3 Bn To Expand Capacity

Mumbai: NTPC has decided to put in 18 per cent more to spruce up power generation capacity in the year starting April 1 to help meet growing demand. The company plans to infuse $3.3 billion next year, most of it on coal-fired generation capacity, said the source. India''s government estimates the nation loses an estimated 2 percentage points of annual growth to electricity shortages and has plans to add 78,577 megawatts by 2012 to help beat peak hour shortages of up to 13 per cent. NTPC plans to raise its output to 51,000 megawatts in the next five years.

The company will add three new coal-fired units in northern India by March next year, increasing its generation capacity to more than 30,000 megawatts from the current 28,334 megawatts. The company has decided to postpone plans to set up new gas-fired power projects by two years.

NTPC is in talks to import natural gas from Nigeria where it is negotiating a contract to build a 700 megawatt gas- fired plant, he said. The company is also in talks to buy coal from Indonesia. Of this, $127 million will be invested through NTPC''s joint venture with state-owned steelmakers Steel Authority of India, Coal India, National Mineral Development Corp and Rashtriya Ispat Nigam.

BT Optimistic On Indian Enterprise Segment

New Delhi: BT is bullish on the Indian enterprise segment as more and more companies are realising the advantage of outsourcing their communication needs. Mr Sudhir Narang, the newly named Managing Director of BT''s India operations said that convergence of networks and applications is happening in a major way in India. It is already happening on the network side and we are already seeing it happening on the applications side as well. Mr Narang will lead BT Global Services strategy, growing the company''s presence and spearheading services in India.

Dabur India To Enter Milk Segment

New Delhi: Dabur India is mulling to enter the milk segment to tap the Rs 100 crore milk-based beverages market. The company, which sells fresh juice in the beverage segment, is exploring the possibility of entering into the milk-based drink segment but has not set any time frame to roll out the product.

Dabur would be the latest entrant into the segment after global beverage giants, Pepsi and Coke, announced their plans to tap the milk-based drinks market in India. Past few months have been witnessing heightened activity in the flavoured milk category as two major players Nestle and Amul had staged an entry in the market. Besides, other players such as Britannia, Mother Dairy and Parle are also working on the flavoured milk project.

Indo-Russian Trade To Get Zubkov Boost

NEW DELHI: Renewed efforts by India and Russia to intensify bilateral trade will get a further push when Russian Prime Minister Viktor Zubkov comes calling on New Delhi in February. The joint task force, set up recently to monitor the implementation of the programme recommended by the joint study group on enhancing bilateral trade, will be given fresh directions to carry out its operations.


Efforts are being made by the two sides not only to increase bilateral trade to $10 billion by 2010 but also pave the way for a comprehensive economic cooperation agreement (CECA). Trade between the two countries stood at an estimated $ 4 billion in 2006-07.


A commerce ministry official said it was not possible to go in for a CECA at once as Russia was yet to acquire market economy status and become a WTO member. “I think a CECA between India and Russia is feasible after two years,” he said.

Russian minister for trade German Gref will accompany the PM and hold talks with his Indian counterpart Kamal Nath on what steps need to be taken to facilitate trade. The agenda for the meeting will be firmed up soon, the official added.

Banks' Profit Growth Trails Income

Banking sector has been hit by rising cost of funds. According to an analysis of 47 banks in the listed domain, interest income has gone up by 35%, while profits grew by only 24% for Q2’08. In comparison, growth was 37% in topline and 46% in bottomline for Q1’08. The decline in profit growth is despite nearly 45% increase in other income. While private sector banks outperformed with 47% growth in income, public sector enterprises also showed a decent performance with 30% growth.

On the cost front, banks have been hit by a sharp rise in interest expended, which rose by as much as 50%. As a result, average cost of deposit has increased from 4.75% to 5.08%. Interest expended now accounts for 70% of interest income, up from 62% in Q2’07. As a result, gross profit rose by 23% despite lower increase in staff and other cost.

An important change has been a lower-than expected increase in staff costs for most PSBs, even though new generation private sector banks saw a sharp rise in staff cost because of large recruitment to meet their aggressive expansion targets.

Despite the slower profit growth, there has been an improvement in some of the balance sheet items. While net NPA has declined to 0.8% from 1.1%, PAT to net worth has increased sharply to 15% from 9%. Further, 18 out of 47 banks showed an improvement in capital adequacy ratio (CAR). 23 out of 47 had their CAR above 11% as against the regulatory minimum of 9%.

A differentiating feature between private and public sector banks has been growth in advances, which was around 55-60% for private against 40-45% for PSU Bank. Private sector banks have further increased their share in aggregate non-interest income, to 24% from only 15% in September ’06. Private banks have been more aggressive in their fee-based activities like letter of credit and guarantees. As a result, their share in contingent liability is also quite high.

Among major banks, SBI saw a profit growth of 36%, against growth of 32% in interest income. The bank gained from a near-constant staff cost, which helped it outperform the aggregate set in terms of profit growth. In the private sector, ICICI Bank saw a growth of 44% in interest income, although profit growth slowed to 33% due to cost pressure under all heads.

Results of half year ended September 2007 have witnessed improvement in operating income/average asset ratio and provision/average asset ratio as compared to previous year. Moreover, interest expended cost/operating income has marginally improved from 52% to 53%. shikha.sharma1@timesgroup.com

Corporate Insurance Covers Become Cheaper

Mumbai: Insurance companies have begun offering IT, IT-enabled services, business process outsourcing and non-manufacturing companies with policies due for renewal on January 1 discounts of more than 60 per cent.

The move follows the insurance regulator allowing non-life insurance companies full pricing freedom from January 2008. As much as 70% of corporate policies are renewed from January to April. Around 10 per cent of corporate policies, mostly those of multinationals, are renewed on December 31 and January 1. Most insurers typically allow profitable clients a maximum discount mandated by the insurance regulator in January this year, when it allowed non-life insurers partial pricing freedom. Insurers could offer discounts of up to 51.25 per cent of the erstwhile tariff rates on individual rated products (those risks for which the sum insured is more than Rs 10 crore), up to 43.75 per cent in the case of class-rated products (those risks for which the sum insured is less than Rs 10 crore) and 20 per cent on motor own damage for private vehicles.

However, brokers said insurance companies were willing to leverage full pricing freedom to offer clients with a low-risk profile deeper discounts of up to 65 per cent. Media and entertainment companies, chemical companies manufacturing hazardous chemicals and manufacturing companies, which have a bad claims ratio would not, however, be offered such discounts.

Insurance companies were not raising discounts on premiums for motor own damage covers and workmen compensation covers were unchanged. Besides the four public sector insurers, private insurance companies like ICICI Lombard, Bajaj Allianz and Royal Sundaram, which have a large share of engineering companies in their portfolios, are also offering competitive rates in engineering covers. Among engineering covers, insurers are quoting discounts of over 60 per cent for project insurance covers. Under property insurance policies, fire and business interruption covers are seeing large discounts.

Essar Hazira SEZ Fate To Be Decided Next Week

NEW DELHI: The fate of the Essar SEZ in Hazira, under finance ministry lens for alleged flouting of SEZ rules, will be decided next week when the board of approval (BoA) will take up the case in its meeting to come to a conclusion.

Although the law ministry had given the project a clean chit after examining the matter, the finance ministry is not yet convinced. Now, BoA will take a final call on whether the SEZ should be allowed to carry on or whether its license should be revoked. The revenue department representatives will also attend the BoA meeting.

The revenue department, in a report, had said that the land on which the Essar SEZ was set up was not vacant when the company filed its SEZ application. It had claimed that it was against SEZ rules which specified that the land identified for SEZs should be vacant. There was, therefore, a case for revocation of its license.

The law ministry, approached by the commerce ministry for its opinion on the case, however, absolved Essar of the charges by stating that vacant land would not only include land that is barren but also that which is available with the developer and is free from encumbrances. The finance ministry, though, is not convinced about this interpretation of the word vacant.

The finance ministry had also accused Essar of evading duty and manipulating records. While the company can get away by paying the stipulated fine for these offences, if it is established that the land on which the Hazira SEZ has come up was not vacant prior to the application, the project could lose its SEZ status and all the tax sops which come with it.

According to commerce ministry sources, Essar originally did not have plans of building up an SEZ on the location. In 2004, Essar was actually planning to increase the capacity of its steel plant in Hazira.

However, in 2005, it decided to invest in a steel SEZ instead to benefit from the tax concessions given to SEZ units. It approached the government with a proposal for a steel SEZ in December 2005. The revenue department’s contention is that Essar had already built structures at the existing site before it applied for the SEZ status.

Essar officials, however, claim that the Rs 60-crore spent on the land before the SEZ was applied for was related to activities such as project planning, awarding of contracts, grant of advances and piling of the coastal area land by pouring concrete.

This, they say, does not amount to building of structures. Essar, in a letter to the commerce ministry, had pointed out that while some construction had happened on the land, the area was devoid of economic activity.

Videocon To Enter Power Sector

Videocon Industries, consumer electronic goods maker, may hive off its power business by January 2008 and it may sell stake in power business to private investors or partners. Analysts say Videocon''s power business may be worth around Rs 15,000 crore when compared with the yet to be listed Reliance Power.

Videocon on Wednesday called bids from global engineering equipment companies for its $1.5 billion power plant in Gujarat. Videocon plans to invest $5 billion in power projects and intends to build 5,000 megawatts of electricity generation capacity in the states of Gujarat, West Bengal and Chhattisgarh.

It is already turning to the overseas community in a big way. Market analysts say Videocon has been organising several road shows in global markets like Singapore, US and London to woo international investors. Market watchers say with merchant bankers like Morgan Stanley and Lehman Brothers on board, a big private equity placement may be on the cards.

India Inc Looks At Noida For Expansion

Move over Gurgaon. IT and ITeS companies are now flocking to Noida for expansion. Gurgaon has long been the preferred destination for IT and ITeS companies. Experts say, corporates are now looking at Noida to expand their operations. Companies like Hewitt, Oracle and Sapient have already expanded to Noida, after setting up shop in Gurgaon. The Noida-Greater Noida expressway, and sector 62 have emerged as the hot spots in Noida. Prashant Bhatnagar, Director, Hiring, Sapient said, One of the reasons that we considered options outside of Gurgaon, was the astronomical real estate prices in Gurgaon.

Indian Workers Encounter The Dark Side Of Outsourcing

Outsourcing of jobs to India has a dark side for workers taking those jobs from people in the U.S. and Europe. Rajesh Mahapatra, a reporter for The Associated Press, in India provides a riveting look at the physical and psychological impact on some workers as they seek to deal with stress, long hours and other demands. Call centers and other outsourced businesses like software writing, medical transcription and back-office work employ more than 1.6 million young men and women in India, mostly in their 20s and 30s, who make much more than their contemporaries in most other professions. They are, however, facing sleep disorders, heart disease, depression and family discord, according to doctors and several industry surveys.

Online Social Networking Frenzy Points To Internet's Future

Online social networking websites saw their ranks swell and values soar this year as everyone from moody teenagers and mellow music lovers to mate-seeking seniors joined online communities.

Google's freshly released "Zeitgeist 2007" reveals that seven out of the 10 hottest topics which triggered Internet queries during the year involved social networking.

A Top Ten list compiled by the world's most-used search engine includes British website Badoo, Spanish-language Hi5, and US-based Facebook.

Video-sharing websites YouTube and Dailymotion are on the list, along with the Club Penguin online role playing game where children pretending to be the flightless birds "waddle about and play" together.

Virtual world Second Life, where people represented by animated proxies interact in digitized fantasy settings, is the final social networking property in the Zeitgeist Top Ten.

The world has only seen "the tip of the iceberg" when it comes to online social networking, says MySpace vice president of business development Amit Kapur.

"It is a natural step in the evolution of the Web," Kapur told reporters. "The Web is getting more personal. I think you are going to see much more of that happen on every website across the Web."

MySpace aspires to become people's homes on the Internet, with profile pages serving as online addresses as well as springboards to online music, video, news and other content conducive to their tastes and interests.

"It is a next-generation portal," Kapur said. Industry statistics show Facebook membership more than doubled in the past year to about 55 million, while reigning champion MySpace grew 30 percent to top 110 million.

One in every four US residents uses MySpace, while in Britain it is as common to have a profile page on the website as it is to own a dog.

"We are very social animals and this allows us to ramp it up to a whole other order of magnitude," says professor Jeremy Bailenson, who heads a Virtual Human Interaction Lab at Stanford University in Northern California.

A strong appeal of online role-playing games and virtual worlds is that they free people to "interact as their ideal self and not their real self," according to Bailenson.

"You can be whatever age you want -- 20 forever -- dress any way you want, be any gender you want, and be socializing with zillions of people at once all the time," Bailenson told reporters.

His lab has created 3-dimensional digitized models customized with people's facial expressions and mannerisms.

"You can make a digital version of you that is animated so your grandkids' grandkids could put on a helmet and you can read them a story from the grave," Bailenson said, adding virtual communities offer a sense of immortality.

Tax Watch: Your Effective Take-Home Salary May Increase

Over the years, due to the reduction in the effective tax rates, the tax exemptions and deductions available to individuals/salaried employees have reduced. One such relief is provided for under Section 10 (10CC) of the Income-Tax Act, 1961, whereby, the tax paid by the employer, on nonmonetary perquisites is not considered to be taxable income in the hands of employees.

Two issues need to be addressed in this context:

Tax paid by the employer — “perquisite” or “salary” Whether tax paid by the employer is a perquisite or salary is not expressly stated under the Act. One view is that the tax being an obligation of the employee and met by the employer is to be treated as a perquisite. The other view is that the tax paid by the employer is no different from the salary paid to the employee and that it is merely an allocation of salary towards taxes.

If tax paid is a perquisite — whether monetary or non-monetary ?

If the tax paid by the employer is considered to be a perquisite, the next issue to be addressed is whether it is a “monetary payment” or a “non-monetary perquisite” .
The phrase “monetary payment” and “non-monetary perquisites” has not been defined under the Act and different views are expressed as to their classification. This distinction is important as it has a direct impact on the taxability of the employee, in terms of single or multiple grossing up and hence, the overall cost for the employer .

Recent decision of the Special Bench of Delhi Tribunal

In a recent decision, the Special Bench of Delhi Income-Tax Appellate Tribunal has held that the tax paid by the employer on behalf of the employee would constitute a “perquisite” . Further , such tax payment to the government would not constitute monetary payment to the employee and therefore not subject to multiple grossing up.

Overall saving in the cost for the employer

As an illustration, if the employer agrees to pay Rs 100 net of tax salary to the employee in India and the tax rate is 34%. Then, if such a tax payment by the employer is considered to be a “non-monetary perquisite” then only Rs 34 shall be added to the taxable income of the employee. Whereas, if such tax payment by the employer is considered a “monetary payment” then Rs 34 will be subject to multiple grossing up and Rs 52 will be added in the taxable income of the employee, so that after paying a tax of 34% on Rs 152, the employee receives Rs 100 (approximately) net of tax salary.

More beneficial in case of employers not having taxable income

A down side of such relief is that the employer is not eligible to claim corporate tax deduction for such tax paid by it. This exemption, however, is important in case of employers enjoying tax holiday or those having no taxable income or losses in India, as their’s being no taxable income, no corporate tax deduction is claimed and hence, this relief is worth considering. The above ruling may be challenged by tax authorities at higher levels, however , till then this is a welcome ruling to claim relief and optimise overall employment costs by the employer.

Insurance Sector Likely To Touch Rs 2-Lakh Cr By ’10

NEW DELHI: The country’s insurance sector is likely to touch Rs 2,00,000 crore mark by 2010 as against the current Rs 50,000 crore. Both life and non-life insurance sectors are likely to grow by over 200%, while the private sector insurance business is likely to grow at 140% due to adoption of aggressive marketing techniques, state-owned insurance companies would grow at 35-40% during the same period, according to industry body Assocham.

“On account of intense marketing strategies adopted by private insurance players, the market share of state-owned insurance companies such as GIC, LIC and others have dropped to 70% from over 97% five years ago,” said Assocham president Venugopal Dhoot.

The private insurance companies are offering 35% rate of return (RoR) to its policy holders as against RoR of 20% being offered by state-owned insurance companies. This has increased the share of private sector insurance companies in the total insurance business.

Moreover, while the state-owned insurance companies such as LIC and GIC offer limited number of policies, private companies offer vast number of policies with better premium, Assocham said. India’s life insurance premium is 1.8% as a percentage of GDP while it is 5.2% in the US, 6a.5% in the UK and 8% in South Korea, the Assocham study said.

Interestingly, the private sector insurance players have started exploring rural markets in which so far the state-owned companies had a monopoly. The chamber has projected that the share of private players in the rural markets would increase substantially as they have generated faith among their rural customers.

The rural market offers tremendous growth opportunities to insurance companies and therefore, the chamber has suggested that companies should develop viable and cost-effective distribution channels, build awareness and gather confidence of consumers.

Sun TV Launches FM Station At Vijayawada

Sun TV Network Ltd has announced the launching of its FM Radio Station at Vijayawada under the brand S FM from December 25, 2007 through its Subsidiary Kal Radio Ltd. This Station can be heard at 93.5 MHz frequency in Vijayawada. The programs will cater to the audience of all age groups.

With the launch of this FM Station, the total operational FM Stations of the Company goes up to 17 as it already operates at Chennai, Coimbatore, Tirunelveli, Visakhapatnam, Bangalore, Hyderabad, Jaipur, Bhubaneswar, Tirupati, Madurai, Tuticorin, Lucknow, Bhopal, Pondicherry, Kozhikode (Calicut) and Indore.

The Company hold licenses for 45 FM Radio Stations across India, and will be one of the largest radio broadcasters in India when all the remaining 28 stations become operational.

200 Selected By ICICI Pru In Recruitment Drive

Vizianagaram: The recruitment drive conducted for the posts of Executive Trainee Guide-I by ICICI Prudential Life Insurance received good response from students in the district. About 200 students from various colleges participated in the selections conducted at Gayatri Degree College and 22 candidates have been selected for the jobs. Among the selected candidates, there are eight students from Gayatri Degree College and seven students each from RK College and BVK College. The recruitment was conducted in the presence of the company representatives Pradeep Kumar, V Aravind, Ramana Rao, Gayatri Degree College director GY Naidu, principal G Devi Venkatesh and placement officer B Ramprasad.

Your ATM Transactions May Cost A Lot Less Soon

MUMBAI: This could possibly be the best Christmas gift from the Reserve Bank of India to bank customers. The central bank has proposed to allow customers of one bank to withdraw cash from ATMs of other banks free of charge from April 2009.

In a draft paper on pricing and access to ATMs, RBI said that current charges for cash withdrawals from third-party ATMs should be capped at Rs 20 per transaction, from March 31, 2008. It has also mandated a freeze on existing charges that are lower.

The bold proposal has produced sharp reactions even before details could be worked out. Banks that are paying lakhs of rupees as rent every month for ATMs in prime locations are worried about their investments. But smaller banks who are yet to build their own networks are very happy with the proposal. The industry association has also expressed its concerns.

“It is not being fair to the bigger banks which have larger networks, and will come in the way of innovation. Smaller banks will want to piggyback on their networks, and it doesn’t make perfect business sense.” said K Unnikrishnan, deputy chief executive, Indian Banks’ Association. He added that there is a considerable cost of cash-replenishment and security for the bank maintaining ATMs.

“We welcome the central bank’s attempt at bringing in transparency to the system. However, this could lead to a slowdown in setting up of ATMs, if the banks do not get a fair price for the use of their services, especially by customers of other banks,” says Aspy Engineer, vice-president, alternate channels, Axis Bank. Others feel that banks may isolate themselves from shared payment networks and issue cards that work only in their captive ATM network.

However, there are also banks which support the move. “We welcome such a proposal as it will increase the inter-operability of ATMs.” said Vivek Wig, head of retail banking at Centurion Bank of Punjab. A banker with a large public sector bank said the move will act as a dampener for its ATM expansion plan as there is no incentive to make large investments. Also, banks can no longer look at the ATM-interchange fee as a business model that generates a large stream of revenue. The draft has not made it clear as to what will happen to these charges post-April 2009, he added.

RBI has sought feedback on the draft. Incidentally, the draft has been circulated by banks days after RBI’s technology subsidiary, the Institute for Development and Research in Banking Technology (IDRBT), waived off the switching fee it charged banks for inter-bank transactions. This reduction in the transaction cost, according to RBI, is expected to be passed on to the customers by the banks.

Wipro's President To Resign

Wipro has announced that Ramesh Emani, president of telecom and product engineering solutions of the company has resigned from the company with effect from 11 January 2008.

Consequent to this change Sudip Nandy, will be the president of telecom and product engineering solutions of Wipro.

The company made this announcement during the trading hours today, 24 December 2007.

ONGC Videsh Wins Two Exploration Blocks In Brazil

Oil & Natural Gas Corporation has announced that OVL bagged two exploration blocks in Brazil, viz. deepwater block 470 in the highly prospective espirito santo basin and shallow water block 1413 in another highly prospective Santos basin, amid stiff competition from International companies on 27 November 2007.

The first development well for coal bed methane (CBM) has been spudded on December 2007 at the drill-site Pad-B in Parbatpur, near Bokaro Steel City of Jharkhand.

ONGC achieved the unique distinction of becoming the first-ever Indian company in the Fortune Magazine's annual (2007) list of the world's most admired companies. This is based on a survey of Fortune Companies across the globe, conducted by the Fortune magazine, in association with Hay Group.

The board has approved the 2nd pipeline replacement project along with necessary modifications, at a cost of Rs 2553.25 crore, to be implemented over a period of 3 years.

The ONGC board approved the phase-III development of PY-3 field at a Capex of US$ 35.9 million (Rs 147.19 crore), which is 40% of the total investment of US$ 89.75 million. ONGC holds 40% stake in the field; other stakeholders are HOEC (21%), Tata Petrodyne (21%) and Hardy Exploration & Production (18%). This phase-III development of the field will enhance the recovery by 10.52 MMSTB.

The company made this announcement during the trading hours today, 24 December 2007.

Itochu To Buy Power Plant In US From Tenaska

Itochu Corp, Japan's fourth-biggest trading company, said on Monday it would buy a gas-oil fired power plant in Virginia with generation capacity of 315 megawatts from Tenaska Inc for an undisclosed sum.

The Nikkei business daily reported the purchase value at around 20 billion to 30 billion yen ($175-263 million). Itochu will buy the plant, which can power 300,000 households, from Tenaska Power Fund LP, an affiliate of Tenaska Inc, in February.

An Itochu spokesman said the acquisition of the Virginia facility will raise Itochu's net power generation capacity to 440MW. Marubeni Corp, the most aggressive investor among Japanese trading houses in overseas power assets, had a net overseas capacity of 5,800 MW as of August this year.

Indian Bank Sells MVR Bad Loans To Arcil For Rs 180 Cr

CHENNAI: After years of struggle to recover loans it gave to troubled and controversial MVR Group which is engaged in cashew exports, Indian Bank has sold the non-performing assets (NPAs) to Arcil, an asset reconstruction company (ARC), for Rs 180 crore, sources said.

The loans were given to various companies of MVR Group in the late eighties and early nineties. These, along with similar lending, turned as bad loans and caused much headache to the bank forcing it to report a huge loss of over Rs 1,300 crore in 1996-97.

While the exact principal amount it gave to MVR Group could not be ascertained, the amount the group owes to the bank, including interest, is over Rs 1,000 crore, a senior bank official told ET. This is an independent deal, outside the Rs 1,700 crore of NPAs it plans to sell off to ARCs, he said.

A couple of years ago, the bank considered making some recovery by selling about 30 grounds owned by MVR Industries in Guindy. If the sale had gone through, the bank would probably have realised considerable sum. But there were court injunctions related to the title and other problems as well, the official said. Selling off such loans to asset reconstruction companies was made possible because of a change in legislation in 2002.

Petron Engineering - Receipt of two Orders from Madras Cements Ltd, Ariyalur, Tamil Nadu

Petron Engineering Construction Ltd has informed that the Company has received following two Orders from M/s. Madras Cements Ltd Ariyalur, Tamil Nadu for:

1. Erection, Testing & Commissioning of Electrical and Instrumentation Equipment for Ariyalur Project valued at Rs 6.00 Crores (Rupees Six Crores only).

2. Supply of Electrical and instrumentation materials for Ariyalur Project valued Rs 3.61 Crores (Rupees Three Crores Sixty One lakhs only).

Local Bpos Get A Call From Home

BANGALORE: The Indian economy is on the upswing and mostly consumer-led. With companies across sectors like retail, real estate, telecom and BFSI going after the same customer, there is one factor which could help them beat competition — better and faster customer service. Here’s where BPOs come in.

This need has put the local Indian BPO industry on the fast track. According to Nasscom data, the domestic BPO market was estimated at Rs 6,600 crore in 2006 and is expected to grow to Rs 30,000 crore in 2011. The segment is growing at about 40% CAGR.

Says Firstsource Domestic Business head Sanjeev Sinha, "We see a lot of leading Indian brands wanting to differentiate themselves based on customer service – both back-office and front end services. They are now willing to invest in quality customer care and are eager to adopt global best practises. We expect companies to partner with BPO players to ensure scalability and consistent service delivery."

Stating that the potential of domestic BPO work continues to attract new players to partake in the economic growth and fulfill the huge demand, HTMT Global Solutions (HGSL) National Operations & International Business Development senior vice-president BN Narasimha Murthy adds, that "some of the key verticals that are experiencing huge growth include telecom, BFSI, retail, airlines & travel."

Experts opine that in-demand backoffice services include sales of credit cards, managing service centres and call centres and processing payrolls. Some of the companies who have outsourced work locally include Bharti Airtel, HP, Dish TV, Barclays and State Bank of India.

This segment is also where the mid-sized firms like HTMT, Firstsource and Infovision are outracing their more well-known peers like Wipro BPO. They already account for a majority of the domestic BPO revenues though some largely-export-oriented players have now started to look at the Indian market to ward off the rupee impact.

This group of companies also employ staff of between 3,000 and 9,000 people each focused on domestic clients. This figure is expected to grow rapidly in next two-three years.

For instance, Infovision’s president Aditya Gupta says that his company currently employs 10,800 people, out of which over 9,500 people work for the domestic market. "We want to be a Rs 1,000-crore company by 2010 and our headcount will grow to 25,000 staff out of which 22,000 people will be employed in the domestic market,".

ULIPS May Have To Give Details Of Spendings On St

HYDERABAD\MUMBAI: Investors in Unit-Linked Insurance Plans (ULIPS) will now get a break-up of charges and the exact amount available for investment during the premium payment period. This move will ensure greater transparency and better returns for investors in a booming stock market.

The Insurance Regulatory Development Authority of India (IRDA), which has reviewed the cost-structure in ULIPS, has a circulated a benefit illustration to life insurance companies. The new norms will come into force once the regulator gets a feedback from life insurers.

ULIPS are popular savings instruments as they offer protection in terms of life cover and flexibility in investments to the policyholder. A part of the premium is invested in equities or government bonds, depending on the choice made by the policyholder.

The investments are akin to a mutual fund. The returns are reflected in the increase in the value of the unit, mirrored in the net asset value declared by the company. Going by the benefit illustration, insurers have to give a break-up of the premium to be paid for each policy year along with a charges statement, said an official of a private insurance company.

Charges at the start of the year will include premium allocation charge, policy administration charges, rider charge, if any, mortality charge and any other charges. The difference between premium payable each year and total charges will be the amount available for investment.

Insurers will also have to list out charges at the end of each policy year, factoring in the interest rates approved by the insurance regulator in the file and use application. These charges will include fund management charge, surrender charge and any other charge. The policy holder and the marketing official selling the product will be signatories to the premium-cum-charges statement.

Any change in the charges while under-writing or finalising the deal will also have to be approved by the policy holder. The exercise is aimed at ensuring that the policy holder is fully aware of the cost structure and investment risks. Insurance regulator C S Rao has earlier told ET that IRDA had received several complaints on mis-selling of ULIPS during the course of inspection of life insurance companies.

Some insurers, however, fear that an extensive illustration will drown the policy holder in too much detail.Gaurang Shah, MD, Kotak Life Insurance said “I am strongly in favour of benefit illustrations as they help compare the yield between different investments”.

But he feels that the basic objective of the illustration should be to enable policy holders compare the yield. Another insurance official who did not wish to be named said that no product discloses distribution charges. He adds that publishing commission charges may increase the pressure to rebate.

The regulator decided to review the cost structure on Ulip’s after the ban on sale of actuarial-funded products. The products were withdrawn on the grounds that they were too complex for an ordinary investor to comprehend. The lack of transparency allowed agents to aggressively market the products without informing investors of the restrictive features.

According to reports, in many cases ULIPS have been sold as investment schemes such as those offered by mutual funds. What is not made clear to the policy holder is the fact that of every Rs 100 invested in the first year, a substantial portion goes towards commissions and other charges.

Hence, if a Ulip were to be sold to an individual with an investment horizon of only three years, most schemes are likely to result in generating returns lower than expected because of the front-ended charges.

Currently, there are around 70-75 ULIPS offered by life insurers. In most cases, the cost structure is front-loaded, with the agent’s bulk of the commission being paid in the first year. This results in lower returns in the initial phase.

Kansai Nerolac Plans To Cash In On Housing Boom

Kansai Nerolac is reorienting its decorative paints strategy to leverage the recent boom in the housing sector. The company is sprucing up its emulsions business as part of this strategy. The company is all set to splurge nearly Rs 50 crore for a decorative paints branding exercise in 2008-09, a major slice of which will go into promoting the emulsion paint category. The company is increasing its emulsion paints capacity. The company has just acquired over 50 acres at Hosur to set up a greenfield water-based emulsion paints unit at a capital outlay of Rs 67 crore. The company is likely to start construction in February 2008.

IT Sector Facing Shortage Of Skilled Manpower

Information Technology Minister Andimuthu Raja had exuded confidence a few weeks back that exports from the IT and ITeS sector would reach $80 billion by 2011. But the industry is worried whether their prospects would be short-circuited by the severe shortage of skilled manpower. A survey conducted by Nasscom pointed out that over 850,000 IT services and 1.4 million ITES-BPO professionals would be in demand by 2010. However, out of the 4.4 lakh technical graduates, nearly 2.3 million other graduates and over three lakh post-graduates every year, only a quarter of the technical graduates and a little more than a tenth of the general college graduates are found suitable.

If shortage of skilled graduates plagues the entry level, the middle level management faces a severe crunch due to attrition. Outgoing NASSCOM President Kiran Karnik raised a basic issue while articulating on poor talent pool.

Bharti Looks At Big Apple As Starter For Retail Feast

Bharti Enterprises is likely to buy Big Apple, the Delhi-based supermarket chain with 65 stores. Bharti''s acquisition blueprint in the retail sector may be a replay of its telecom business, where the group built up a pan-India mobile presence by acquiring telcos such as JT Mobile in Karnataka and Andhra Pradesh, Skycell in Chennai and Hexacom in Rajasthan.

Bharti plans to start retail operations in March by opening its first small format retail store in North India while the cash and carry business in partnership with Wal-Mart will start in the third quarter of next year. Acquisition of regional retail chains is likely to give Bharti a headstart in terms of locations, a readymade supply chain and operations. Bharti plans to invest $2-2.5 billion in retail by 2015. It is planning pan-India operations and is looking at approximately 10 million square feet of retail experience across all cities in India with a population of over one million. Big Apple is jointly promoted by Lalwani Holdings and the Chaurasia Group, which have interests in real estate and FMCG. Big Apple stores started operations in 2005 and the chain is now 65-store strong with an area exceeding 100,000 sq ft. It clocked a turnover of Rs 155 crore last year. The company works on minimum overhead costs and has a customised product mix that suits the area where it is located. As western-style supermarkets take off in India and large companies enter the business, a consolidation is likely. Small regional chains, unless backed by a large group, have limited funds to expand and scale up, and will look for joint venture partners and buyers. The process has already started. Wadhawan Retail, which runs Spinach retail chains in the west, took over Delhi''s Sabka Bazaar and Home Store as well as the management contract of Maratha Stores in Mumbai. Similarly, AV Birla group''s retail arm took over Trinethra stores in the south. Reliance Retail took over Adani Retail in Gujarat but steep valuations in other states kept it away from acquiring more.

Life Insurers Want 4-Yr Grace For Carrying Forward Losses

NEW DELHI: The private life insurance industry has sought an additional four-year grace period to carry forward its losses since most insurers have failed to break even, even after eight years of operations. In its pre-Budget recommendations to the finance ministry, the industry has also sought a separate limit for long-term savings. “Typically, life insurance companies take longer to break even since it is a long-term gestation business.

At present, losses can be carried forward only up to eight years. In our meeting with the finance ministry, we have submitted that the period for carry forward of losses should be increased to 12 years. Some companies continue to make losses even after a decade of operations,” said Max New York Life Insurance MD & CEO Gary Bennett.

“There are substantial expense overruns in the initial years. This can lead to a deficit or reduce the surplus in the life fund. Companies should be allowed to carry forward tax losses and set (them) off against future taxable surpluses,” an analyst said. It will lead to a reduction in the tax liability over the years, as a result of which the capital requirement for the company reduces, he added.

Also, current provisions mandate that insurance companies must list within 10 years of operations. Under Section 6AA of the Insurance Act, 1938, Indian promoters have to scale down their stake to 26% within 10 years of operations. This amendment is being considered by the group of ministers (GoM) set up to examine the comprehensive insurance legislation.

Insurance companies, which are into their eighth year of operations, might not be ready to go public yet, since they are yet to break even. According to Sebi rules, a company may list only after three years of registering profits. Insurance companies, however, are already being valued at skyrocketing levels. For instance, ICICI Financial Services — the proposed holding company — has been valued at more than $10 billion post-issue.

Over 75% of the value of this holding company is estimated to be on account of ICICI Prudential Life, in which ICICI Financial Services will hold 74%, thereby placing an implied value of around $10 billion on the life business.

On measures to encourage long-term savings, Aviva India MD Bert Paterson said, “We recommend a separate limit for deductions under Section 80C for long-term savings instruments such as life insurance. Most people are investing only Rs 1 lakh at present in both long-term and short-term saving instruments. Currently, the Rs 1 lakh deduction under Section 80C also includes short-term saving instruments such as some mutual funds and fixed deposits. Life insurance and pensions are the only segments of financial services that address the needs of individuals in the long term. Hence, the government should look at encouraging people to save for the long term by providing a separate limit for long-term savings.”

IBM Buys Solid Information

International Business Machines Corp said on Friday it has agreed to buy in-memory database software provider Solid Information Technology from private owners for an undisclosed sum. Solid’s largest owners were private equity firms Apax Partners and CapMan.

Solid is expected to have 2007 sales of around e10 million ($14.4 million), Vesa Wallden, a member of Solid board said.

IBM said the acquisition is expected to be closed in the first quarter of 2008. “IBM’s acquisition of Solid Information Technology supports the company’s growth strategy and capital allocation model, and it is expected to contribute to the achievement of the company’s objective for earnings-per-share growth through 2010,” IBM said in a statement.

TCS Wins Core Banking Customer In China

MUMBAI: Close on the heels of Bank of China contract which it won earlier this year, Tata Consultancy Services (TCS) has announced another core-banking order for China's Guangdong Provincial Rural Credit Cooperative Union (GDRCC).

The value of the contract could not be ascertained but N Ganapathy Subramaniam, who heads TCS Financial Solutions, said the implementation would be across 7,000 branches.

According to IDC estimates, the Chinese market for banking IT solutions in 2006 was $818 million, up 23.3% from its 2005 value.

SBI, PNB To End Zonal Offices To Boost Efficiency

MUMBAI: In a bid to reduce the turnaround time, two of the country’s largest banks, State Bank of India and Punjab National Bank, have decided to do away with zonal offices. This will reduce one layer of branches reporting to corporate offices.

As a result, nearly 58 zonal offices of SBI will be closed while around 26 zonal offices of PNB will shut down, too. Sources said the move was aimed at making more bank officials available for garnering business.

PNB approved the proposal on December 19 at a board meeting held in Hyderabad. Speaking to ET, bank chairman and managing director KC Chakrabarty said: “The move is aimed at making more people available on the field. There has been duplicity of role between the regional and the zonal office, which had to be refitted. In 2005, Boston Consultancy had recommended to PNB delaying in the reporting structure.”

SBI has about 5,800 to 6,000 officials in its 58 zonal offices and nearly half of them will be made available for sales and marketing while the balance will be absorbed in the local head office (LHO) or regional offices. PNB, on the other hand, has about 2,000 officers and clerks in its zonal office who will be employed in the sales force or sent to strengthen the head office.

So far, branches were reporting to the regional office which, in turn, were reporting to zonal office. In case of SBI, the zonal office reports to local head office, which reports to the central office while in case of PNB, zonal office reports to the head office.

SBI has initiated a pilot project in some centres such as Kerala and Bangalore and now it plans to implement the same in Chandigarh. SBI officials say the move to de-layer is the outcome of the bank’s business process re-engineering (BPR) initiatives and implementation of core banking activities.

Under BPR, branches will primarily undertake the function of marketing and servicing customers while documentation will be done at the back office. SBI has all its top 100 centres on BPR initiative which would involve around 2,400 branches.

BPCL Plans Big Hike In Share Capital

NEW DELHI: If BPCL has its way, its authorised share capital may see a quantum jump from Rs 450 crore to Rs 2,500 crore. The company has sought the government’s approval for the same, which is intended to strengthen the company’s balancesheet and help it raise debt for its future projects.

Confirming the move, a BPCL official said: “There is a need for increasing its authorised share capital as there is very little scope for expansion of capital base. The company has applied to the government seeking approval for increasing the share capital to Rs 2,500 crore and the response is awaited.”

The issued share capital of BPCL has been raised recently to Rs 361.54 crore from Rs 300 crore. Currently, the government holds 54.93% stake in the company. About 9.33% equity stake is held by the BPCL Trust. Together, the government and the trust hold a 64.26% equity stake in BPCL. About 30.68% stake in the company is held by domestic and foreign financial institutions, state governments, mutual funds and insurance companies. Other public shareholding in the company is about 5.07%.

The enhanced authorised share capital would help the company in its ambitious growth plan. Recently, the company announced its proposal of forming a joint venture with the US-based Matrix Marine Fuels LLC in Singapore for ratcheting up its bunkering business. BPCL would have 50% equity stake in the company.

Besides focusing on its core business of fuel retail, BPCL is actively involved in exploration and production (E&P) of hydrocarbon. It has been awarded blocks in the sixth round of the new exploration licensing policy (NELP-VI) and is also pursuing E&P activities abroad. Its wholly-owned subsidiary Bharat PetroResources and Videocon Industries together signed an agreement with EnCana Corporation, Canada, and 749793 Alberta to buy shares of EnCana Brasil Petroleo Limitada, Brazil.

The transaction is for ten deep water offshore exploration blocks in Brazil. BPCL has also signed a farm-in agreement for acquiring participating interest in the North Sea (in the UK) blocks — 48/1b and 48/2c. Its partners in the consortium are Encore (NNS) and Encore Petroleum (25%), NWE Southern Cross UK (25%), Tata Petrodyne (25%). BPCL is having a 25% participating interest in the project. The operator of the project is Encore.

Maruti To Shed Small Carmaker Image

NEW DELHI: At a time when most auto companies are thinking small, India's original small carmaker is thinking big. Maruti-Suzuki's new managing director Shinzo Nakanishi plans to overhaul the company's image as a predominantly low-cost mini and small car manufacturer to one that offers premium vehicles that sport contemporary look and feel.

A change of image would not see a shift to gas guzzling SUVs or premium sedans but instead see the entry of vehicles like Kizashi, an A4 segment car in the same league Toyota Corolla and Honda Civic. While Kizashi was still a concept car, Nakanishi mentioned Splash and A-Star, the new concept car to be showcased at the Auto Expo next month, as two specific vehicles that would hit the Indian roads soon.

Asked if new models would mean that the company could phase out or withdraw some existing ones, he said, it would not be the case. "There is no plan to phase out Maruti 800, WagonR or Omni. Suzuki is widening the range of models on offer. We have launched five new models in the last two years. We have an aggressive plan for new model launches going forward as well," he told TOI in an interview.

"We have been developing global models which are European in overall styling and design, and carefully modified to suit local markets. What this means is that Indian customers get international levels of quality and design, at the same time as customers in other key markets," he said.

With the European market on the horizon, Maruti intends to turn India into an an exclusive hub to manufacture small cars. "I believe that Maruti Suzuki is ready to play a much bigger role in Suzuki's global operations, and my task will be to make that happen. Maruti Suzuki's manufacturing capability has reached a level where we want to make small cars exclusively in India for export to Europe," said Nakanishi, who took over from Jagdish Khattar on Wednesday.

Maruti, which sold 6.75 lakh cars in 2006-07, is investing Rs 9,000 crore for upgradation and capacity expansion, and Nakanishi said it planned to introduce more global models in India in the coming days as it worked towards changing its image of being a predominantly low-cost car manufacturer.

By 2010, Suzuki plans to export 100,000 units of the new model A-Star to Europe. "What is significant is that we now have a new world-class facility at Manesar. Maruti's manufacturing capability has reached a level where Suzuki wants to make small cars for Europe exclusively in India.

Saraswat Bank Acquires Nashik Cooperative Bank

MUMBAI: The country's largest co-operative bank, Saraswat Co-operative Bank, has announced the acquisition of the Nashik Peoples Co-operative Bank, which has an accumulated loss of Rs 40 crore.

With this acquisition, Saraswat Bank will now have 141 branches across the country. The number is expected to go up to 153 after the existing 12 extension counters are converted into full-fledged branches, Saraswat Bank Director Eknath Thakur told reporters here.

This is the fifth acquisition by Saraswat in the last two years. The bank is understood to have plans to buy two-three more banks in the next four years.

"We have a target to acquire 10 lakh more customers by 2011. For this, the bank will have to acquire a few more banks and we are in talks with 2-3 troubled banks," Thakur said.

The bank has set a target of achieving Rs 1 lakh crore business in the next 10 years. The bank also denied the rumors that its Board has plans to convert the bank into a private sector one in the near future.

"We will be maintaining the co-operative status until we reach that size (of a private sector bank).

Now, Kiosks Come Up To Upgrade Mobile Content

AHMEDABAD: Logging on to websites for downloading latest mobile ringtones, games and music is a passe. Uprgading your cell phone in an instant is now possible as you shop in a mall, sip your favourite drink, or just walk into a mobile kiosk. With the growing retail wave about to wipe off the hassles with GPRS and connectivity, the future for Indian mobile value added services (MVAS) seems bright.

Mobile content providers are tying up with phone stores for setting up the kiosks that allow customers to preview and purchase downloads such as ringtones, themes, wallpapers, games and music videos at prices ranging from Rs 15 to Rs 40.

The kiosks have two components: a digital touch screen, which has a user interface allowing the customers to choose from the list of options and a server which allows the transfer simply through Bluetooth, data cable or memory cards.

Explaining why such mobile stores will gain ground in India, Rajiv Hiranandani of Mobile2win says: “Low broadband penetration has been the biggest challenge for Indian MVAS industry to expand. A large chunk of mobile users still do not have GPRS access and even if they do, they do not know how to buy mobile content.” Agrees Hungama Mobile CEO Neeraj Roy: “Less than 20% of mobile subscribers in India use GPRS and about 65% have cell phones that support rich content.”

Another advantage of the kiosks is presence of an attendant who can assist customers. It is for this reason that retailing is being seen as a good way of reaching the largely untapped rural market. “Expansion of mobile subscriber base beyond cities presents a great opportunity to the MVAS industry to grow.

Almost 50% of the internet subscribers are from rural India; mobile phones have permeated to smaller towns, cities and villages expanding the opportunity for adoption and use of value-added services,” says Mr Hiranandani. “More than 10% of the total revenue would come from rural markets as operators expand and retail models are made available in these areas,” he adds.

Essar group has invested $250 million (Rs 1,100 crore) to create a pan-India network of retail telecom outlets branded ‘The MobileStore’. It launched 40 stores across all major as well as tier II cities. The stores offer telecom solutions and a host of unique value-added services.

Similarly, there are 25 MobileNXT retail stores spread over cities including Bangalore, Chennai, Delhi, Kolkata, Lucknow, Mangalore, Manipal, and Mysore. MobileNXT has also struck sales tie-ups with Shoppers Stop and Tata’s Star India Bazaar.

Planet M and Cafe Coffee Day outlets across the country will soon have kiosks where Hungama mobile would provide the content. The company has tied-up with Mobile Magic, a Nagpur-based retail chain of mobile phone store. Targetting 80% of the non-GPRS of 225 million mobile phone users it offers a catalogue of 500 movies and 5,000 songs. It plans to reach across 10,000 retail outlets within two years.

Jump Games, one of the leading game developers, for the launch of its Hanuman Returns mobile game recently, had set up two kiosks to get the game directly into mobile phones via Bluetooth. Encouraged by the positive response, the company plans to set up more such kiosks in Mumbai and Pune.

“We are in talks with a lot of multiplexes, malls and other popular joints to set up kiosks where people can choose from an array of game options, download and pay upfront,” says Jump Games CEO Salil Bharagava.

ONGC Ropes In ENI, BG, Norsk For NELP-VII Bid

MUMBAI: India’s biggest oil producer Oil and Natural Gas Corporation (ONGC) has teamed up with European majors to jointly bid for the next round of National Exploration and Licensing Policy (NELP). The state-owned oil company has roped in ENI of Italy, British major BG and Norwegian firm Norsk Hydro to jointly bid aggressively for deep and ultra deep water blocks and shallow water blocks in the seventh round of NELP bidding, said sources close to the development.

“They have proven technologies in deep water drilling and we seek their expertise. The potential of India’s East Coast is well established with the recent gas discoveries by Reliance, GSPC and ONGC,” said a senior ONGC official. ONGC has tried to rope in others like the US major Chevron Corp for the bidding, but did not get a very encouraging response from the global major.

This year, the government has for the first time given additional weight to domestic companies that tie up with global corporations with experience in deep-sea oil and gas exploration. The move is aimed at attracting more global oil giants to bid under NELP - VII. In its largest auction so far, offering 57 blocks, the government hopes to attract investment commitments of up to $3.5-$4 billion.

Of the 57 oil and gas blocks, nine are in shallow water, 19 in deep sea and 29 on-land. Bidding for NELP-VII will close on April 11, 2008, and the entire process is expected to be completed within six months Global oil majors such as Exxon-Mobil, Chevron and Royal Dutch Shell have been absent in the earlier rounds.

British Gas is the only significant oil company to have acquired blocks. ONGC has traditionally bagged the largest number of blocks offered during the sixth round of NELP bidding.

Meanwhile, Norsk Hydo already has a presence in India through a participating interest ONGC’s KG basin block, where the company says it has discovered gas. ENI too has bagged a couple of exploration blocks in India in association with ONGC and Cairn India.

Kingfisher-Deccan Means Big Losses Too

MUMBAI: The merger between Kingfisher Airlines and Deccan Aviation may have created one of the biggest airlines in India, but the new grouping is also among the biggest loss makers in terms of accumulated losses.

The combined accumulated loss of the merged entity totals about Rs 2,000 crore, putting it in the same league as firms like Fertilizer Corporation of India, Eastern Coalfields, Konkan Railway, Tata Teleservices (Maharashtra), Idea Cellular, ITI, going by the previous fiscal numbers.

The figures for FY07 alone indicate that the combined entity would have a loss of Rs 993 crore, second only to Fertiliser Corporation’s Rs 1,432.59 crore. The numbers highlight the difficult road ahead for the Vijay Mallya-Captain Gopinath-led management as they seek to build a profitable business amidst high costs and intense competition.

The combined entity may have market share and fleet size but is financially on a weak wicket. The debt burden of the combined entity is over Rs 500 crore and is likely to rise further as it borrows more to buy new planes and maintain operations. Deccan’s net debt alone for the year ended June 2007 was Rs 350 crore.

The combined operations will need about $250-300 million over the next two quarters and we may look at private placement of shares, UB group chief financial officer Ravi Nedungadi said. The Kingfisher-Deccan combined revenue is likely to top Rs 3,500 crore for the year ending March 08 but that is little comfort for the company battling shrinking margins and stiff competition.

Even the most profitable airline, Jet Airways was forced to report a loss for FY06. The company has turned around this year but other airlines have not been so lucky. Kingfisher Airlines posted a massive loss of Rs 577 crore for the year ended March 2007, while Deccan Aviation recorded a loss of Rs 419 crore.

Industry experts don’t see a major turnaround in fortunes at least for the next one year as it will take some time for the benefits of consolidation to sink in and margins to improve. Deccan Aviation lost 6% to Rs 277 on Thursday, while UB Holdings, which owns Kingfisher Airlines, rose 5.5% to Rs 1,144.

But the losses don’t perturb the Mumbai-based Kingfisher Airlines. The company believes that the loss is in tune with its plans for Deccan and that it can break-even in 2008.

“A major part of the loss came from high costs and other investment that are needed for our proposed international foray,” said a senior group executive who didn’t want to be named. “Then, other cost factors such as investment in training, route expansion and other investments will bring in returns in the near future,” he added.

The airline management expects 2008 to be a milestone with profitability rising due to increased scale of operations and lower costs. An analyst tracking the sector said the merger would prove beneficial “as it will give Kingfisher access to international routes. Now with the merger they would be able to get lucrative international routes and in Jet we are already seeing the effect of the profits coming in from international routes.”

India's top spirits maker UB group, which runs Kingfisher Airlines, bought a 26% stake in Deccan in May through United Breweries (Holdings) and subsequently raised it to 46%. Deccan will be called Kingfisher Airlines after the merger and the charter operations of Deccan will be spun off into a separate firm to be equally owned by Deccan's founder G.R Gopinath and the UB group, Deccan said.

“The merger will be structured in such a way to allow us to carry forward the accumulated losses,” Nedungadi said. The two airlines have a combined loss of about Rs 20 billion and this can be set off against future profits. Nedungadi said the maintenance and engineering divisions will remain with the combined airline for now. UB group will also look at rationalising capital expenditure.

IRDA Clears IDBI Plans For Life Insurance Foray

NEW DELHI: Insurance regulator IRDA on Wednesday cleared proposal by IDBI-led insurance joint venture to enter life insurance business.
“IDBI Fortis Life Insurance, a joint venture life insurance company promoted by IDBI, Federal Bank and the Netherlands Fortis Insurance International, has been registered as a life insurer under the Insurance Act,” IRDA said.

HPCL Buys 1 Mn Barrels Azeri Light

NEW DELHI: Hindustan Petroleum Corp Ltd, the third-largest state-owned refiner, bought Azeri Light crude in its tender for February loading, the third month it has chosen the Caspian grade, a trade source said on Thursday.

The tender was awarded to Japanese trading house Mitsui, the source said. The one million barrel cargo was thought to have been sold at a small discount to Dated Brent, but this could not be confirmed. In its previous tender, HPCL bought one million barrels of Azeri Light crude from BP.

HPCL initially had no plans to tap spot markets for crude purchases this fiscal year, but the company resumed issuing tenders after it deferred the shutdown of its 110,000 barrels per day Mumbai refinery until next year.

HPCL has the capacity to process 260,000 bpd of crude oil.

LIC Receives IRDA Clearance For Health Product

New Delhi: Life Insurance Corporation of India has received the Insurance Regulatory and Development Authority''s (IRDA) nod for its health insurance product LIC Health Plus. The corporation now mulls to unveil the product in the market during the first week of January as against the earlier target of last week of December. The product will be on the lines of floater plan, which would give the policyholder the option to take health insurance cover for his immediate family. They feel that a cashless model is not in favour of the customer as many hospitals are not accepting such a facility and also in many cases we found that they are charging more if a patient comes with an insurance cover that offers cashless treatment.

The product will offer a combination of hospital cash and surgical benefit where a lump sum will be paid towards list of surgeries covered under the policy and will also involve a part payment from the patient''s side. LIC is aiming to give health cover to close to one crore families in the first year of the launch of the product and expects over Rs 5,000 crore of revenues. The TPA would first advise the company on the permissibility of the claim who would in turn instruct the bankers to issue the claim cheque to its health insurance policyholders.

Pantaloon Eyes At Retail Expansion

The Kishore Biyani run Pantaloon Retail plans to increase its retail space to 15 million sq ft from the current 6 million sq ft retail space, by the end of the next financial year. The company points out challenges like good quality location at reasonable price as a major hurdle in its expansion drive.

According to the company, further expansion will make it compete with large domestic and international companies entering the retail space. Pantaloon says delay in projects could hurt retail business growth and due to this topline performance in current fiscal may suffer. For this purpose, Future Capital Holdings, the financial arm of the Pantaloon Retail, is planning to raise money from the market through its maiden public issue.

Future Capital aims to increase its asset under management to over $2 billion from the current $1 billion. The company also plans to launch new funds in real estate and private equity business. Analysts say Future Capital listing is likely to boost Pantaloon valuation further.

US Chain Settles Data Leak Case

US retailer TJX, which owns TJ Maxx and UK outlet TK Maxx, has reached an out-of-court deal with a string of banks over a credit card data breach. The scam saw hackers steal details of about 100 million credit and debit card transactions over several years.

The value of the settlement is confidential but includes payments to Visa and US bank associations to cover costs of replacing customers'' cards. The retailer has said that UK customers were not exposed to fraud. TJX said it had also spent about $125m on improving security. The settlement covered class actions in the United States, Puerto Rico and Canada.

Bajaj Auto Demerger Plan Gets Go Ahead

The much awaited demerger of auto giant Bajaj Auto to split into three separate companies got the green signal from the Bombay High Court on Dec 18, thus, clearing the way for Bajaj''s new journey. As per the scheme, Bajaj Auto''s various businesses would be demerged into three newly entities Bajaj Auto, Bajaj Holdings and Investment (BHIL) and Bajaj Finserv (BFL). As part of the scheme, Bajaj Holdings, which will be the new holding company, will own 30 per cent in BFL and Bajaj Auto. Bajaj Auto, which has a surplus of Rs 8,000 crore will have to do away with large part of the money to Bajaj Holdings, which will get around Rs 6,000 crore. Bajaj Finserve will start off with a cash kitty of Rs 800 crore.

Gitanjali Gems - Mou With Mariella Bitrani Fashion Group, Italy

Gitanjali Gems Ltd has informed that the Gitanjali Lifestyle Ltd (GLL), a wholly subsidiary of the Company is signing a Memorandum of understanding (MoU) with Mariella Burani Fashion Group (MBFG) of Italy to form a Joint Venture in India by way of incorporation of a new Company. The proposed new Company will be jointly controlled by GLL and MBFG.

The Objective of the proposed joint venture is to significantly drive growth of MBFGs brands in emerging markets, particularly the Mariella Burani, Baldinini, Rosato, Calgaro and Facco collection in the Far East by capitalising on the expertise contributed by the respective partners. GLL will develop an extensive distribution network which is expected to include 32 monobrand and boutiques and 132 shop in exclusive multi-brands retailers. The Company will provide production, marketing, logistics and distribution expertise based on its extensive know-how of the Indian Market and its existing retail network. MBFG will contribute its consolidated experience in the design, development and international distribution of Italian lifestyle appered, leather goods and Jewellery collections.

MBFG designs, produces and distributes world wide a diversified and complementary range of Luxury apparel, footwear, leather accessory and jewellery collections under its own brands and under license for prestigious international designers. MBFG founded in 1960 by Walter Burani, Chairman & CEO of the Group and listed in the STAR segment of the Italian stock exchange since July 2000, is today international recognized public Company with an established position in the accessible luxury goods market. MBFG manager to provide top quality luxury goods at accessible prices by capitalising on the strength and flexibility provided by Italys industrial districts, world renown for their excellence in the development of luxury products.

Tata Power To Enter Shipping Biz

Mumbai: Tata Power, the country''s largest private sector power company, mulls to enter into the shipping and logistics business in order to facilitate coal procurement for its power plants. The Tata group''s power arm also mulls to mop up Rs 4,000 crore from the international markets. Tata Power will mop up Rs 4,000 crore either via sale of equity via the GDR route or issue of foreign currency convertible bonds (FCCB).

The company will ask the shareholders clearance for getting into the logistic business through a postal ballot. An entry into the shipping business would help it decrease the cost of transporting coal from abroad. With coal becoming scarce in the country, power utilities will have to rely more on imported coal from countries like Indonesia, China and other south Asian countries. The company will quadruple its generation capacity from 2,400 mw in five years. The aimed capacity will not be attained without having a coal commitment from foreign countries. So, the entry into shipping business is actually a logical step forward.

RIL Entry Into Fertiliser Sector Likely To Take Longer

New Delhi: Reliance Industries Ltd''s (RIL) plan to enter into the fertiliser sector is dependent on the yet-to-be finalised New Fertiliser Investment Policy. The company''s proposal will be considered only after the new Policy is in place. Under the proposed policy, the Government mulls to permit establishing of privately-owned plants that will not be bound by current price controls. The policy also proposes to permit the producer to fix the price for the new units at which they want to sell the products. Recently, the Union Minister for Steel, Chemicals and Fertilisers, Mr Ram Vilas Paswan, said that the new draft policy is ready and will put it up before the Cabinet some time in January 2008.

Earlier this year, RIL had submitted a proposal to the Ministry of Chemicals and Fertilisers to establish manufacturing plants having up to four million tonnes capacity. The fertiliser and power companies were opposed to RIL''s proposal to price the gas at the delivery point (Kakinada) at $4.33 per mBtu. The fertiliser sector which is eyeing at increasing production capacity in its existing units, reviving closed fertiliser units and conversion of non-gas based fertiliser plants to gas has projected a requirement of gas during the Eleventh Plan from 41.02 million standard cubic metre per day (MMSCMD) in 2007-08 to 79.36 MMSCMD in 2011-12. Currently, there are nearly 57 fertiliser plants in the country.

Skoda Car Prices Likely To Increase By Rs 20,000

Mumbai: SkodaIndia, a subsidiary of SkodaAuto of Czech Republic (Volkswagen Group), has decided to change the price due to the increasing input costs. A hike of up to Rs 20,000 is hoped on all models. The new pricing for Skoda cars will be applicable from January 1, 2008. The company has made efforts to keep the price increase marginal on all models after having analysed the additional costs. The price has been increased across all variants of Skoda under the broad category of Octavia, Laura and Superb. Currently, the price of Skoda Octavia variants is between Rs 10.5- 11 lakh and the price of Skoda Laura models is around Rs 15 lakh while the top-end Skoda Superb models cost above Rs 22 lakh.

HDIL Scripts Rs 1,000 Cr Multiplex Foray

MUMBAI: Real estate firm Housing Development and Infrastructure (HDIL) has decided to enter the entertainment sector under the brand name Broadway. HDIL will invest close to Rs 1,000 crore to fund its organic as well as inorganic expansion in the country’s multiplex market.

“HDIL Entertainment will be our holding company for our entertainment foray while Broadway will be our brand name for the theatre chain business. We have plans to set up over 150 theatres in major cities by the end of the fiscal 2009.” HDIL MD Sarang Wadhawan told ET.

He said that HDIL entertainment is scouting for acquisition in the theatre chain business and talks are on with various firms in the industry. The current multiplex market size in India is 13,000 screens and the domestic film industry is generating around Rs 8,000 crore of revenue a year. Firms like Adlabs, Pyramid Saimira Theatre, PVR Cinema, Cinemax, Shringar and Inox are the major players in the multiplex industry.

An industry analyst said the multiplex industry, which showed strong growth potential during the past few years, is expected to rake in investments of Rs 2,000 crore in two years. The growing share of entertainment expenditure in the disposable income pie is driving a revolution.

HDIL’s new venture will offer films through its multiplexes and will have a range of gaming centres with food court that will be managed by Broadway. HDIL will set up its first Broadway theatre in Vasai, a Mumbai suburb. This will be followed with the opening of the Broadway entertainment centre at Kandivli somewhere around mid-January next year. The multiplex will have four screens by the end of the current fiscal.

According to media reports, the US entertainment giant Time Warner and Australian company Hoyts are in talks with Indian real estate developers to set up a chain of multiplexes across the country. Industry sources said foreign entertainment players may favour forming partnerships with Indian realty companies since such alliances will help them get properties in prime locations in major cities.

SEBI Suggests Mini Contracts In Equity Derivatives

MUMBAI: Market regulator Securities and Exchange Board of India has suggested the introduction of mini contracts in the equity derivatives market on main indexes to improve liquidity and increase investor participation.

Mini contracts are a fraction of normal derivatives contracts and help individual investors hedge risks of a smaller portfolio. In a note on 'New Products in F&O segment' released late on Monday, the Securities and Exchange Board of India has suggested initially having mini contracts for index futures and options on the 30-share BSE index and 50-share NSE index.

The note, put up on the regulator's Web site for public comments, said the popularity of mini contracts has been increasing globally due to the higher liquidity and the ability to get in and out of a trade quickly with low impact cost.

The regulator has also suggested the introduction of options contracts with longer tenures. At present the maximum life tenure of an options contract is three months. The note proposes to create and disseminate a volatility index. This index would be a measure of market expectations of near-term volatility conveyed by the prices of stock index options or a basket of options on stocks and would be an indicator of investor sentiment. Futures and options on the volatility index may be considered for introduction at a later stage, SEBI said.

Introduction of options on futures on the existing interest rate products traded on exchanges has also been suggested. Introduction of options on futures on interest rates, which are not active in the derivatives segment, is expected to provide liquidity in the interest rate futures segment.

The note also suggests the creation of a bond index and derivatives on this index could be introduced on the lines of equity derivatives. The possibility of exchange-traded single bond futures and exchange-traded credit derivatives could also be explored, it said.