Domestic Newsletter

Wheat output crosses Govt target

India's wheat production touched 78mn tons in the 2007-08 season, higher than what the Government had projected. "Wheat production touched 78mn tons this year," Food Corporation of India (FCI) Chairman and MD Alok Sinha said. As per the Government's third advance estimates, wheat production was projected at a record 76.78mn tons in the 2007-08 season, compared with 75.81mn tons in the previous year. Spurred by record production and higher minimum support price, FCI and other government agencies have so far procured 22.14mn tons of wheat as against the target of 15mn tons. Wheat procurement was 11.13mn tons last year. Sinha also said that he was confident about attaining rice procurement target of 27.5mn tons by September.

Airlines announce another price hike

Air India, Jet Airways, Kingfisher-Deccan combine and low-cost carrier SpiceJet raised air fares following the recent hike in jet fuel prices. The new charges are being added to the basic fare and do not include taxes and surcharges levied by various airlines. Air India, Jet and Kingfisher increased base fares for up to 750 km by Rs1,000, between 750 km and 1,000 km by Rs2,250 and beyond 1,000 km by Rs3,000. New Delhi-based SpiceJet increased the fuel surcharge. The fuel surcharge for up to 750 km has gone up by Rs300 and beyond 750 km by Rs550. In the case of Deccan, for distances below 750 kms, the minimum base fare will now be Rs500; for distances between 751 kms to 1000 kms the minimum base fare will now be Rs1500 while for distances over 1001 kms, the minimum base fare will now be Rs2000.

Sahara gets reprieve from RBI

The Reserve Bank of India (RBI) allowed Sahara India Financial Corp. to accept new deposits maturing till June 2011. SIFCL is hereby directed not to accept any new deposit which matures beyond June 30, 2011 and to stop accepting installments of existing deposit accounts also with effect from that date, RBI said in an order which followed two meetings between Sahara group and RBI officials. In its earlier order on June 4, RBI had barred SIFCL from accepting fresh deposits from the public and had directed the company to repay the depositors on maturity. RBI said that the fresh order is being given after taking into consideration all the oral and written submission made by SIFCL and to protect the interests of depositors.

Ranbaxy, Pfizer to settle all Lipitor cases

Ranbaxy and Pfizer agreed to settle all litigations against each other, involving the US drug major's cholesterol-reducing treatment Lipitor. The two companies also agreed to settle patent cases regarding Pfizer's Caduet and Quinapril. Ranbaxy will have a license to sell generic versions of Lipitor and Caduet in the US effective November 30, 2011. Ranbaxy was the first generic challenger to the listed Lipitor patents and, as such, holds the rights to 180 days of marketing exclusivity in the US. However, the deal means a delay of 20 months in launching generic Lipitor. Lipitor has global sales of more than US$12bn, with the US alone accounting for US$8bn. Caduet has worldwide sales of US$400mn.

The agreement on Lipitor litigations covers US, Canada, Australia, Belgium, Netherlands, Germany, Sweden and Italy. Pfizer and Ranbaxy also resolved their disputes regarding Lipitor in Malaysia, Brunei, Peru and Vietnam. The settlement also resolves all patent litigation with Ranbaxy relating to Accupril in the US and Viagra in Ecuador. But, the patent infringement litigation between Pfizer and Ranbaxy relating to Lipitor will continue in five other European countries - Finland, Spain, Portugal, Denmark and Romania.

Anil Ambani to join hands with Spielberg: reports

Anil Ambani is dreaming big as far his group's proposed foray into Hollywood is concerned. The Reliance-Anil Dhirubhai Ambani Group (ADAG) is in talks with Steven Spielberg's DreamWorks SKG to form a joint venture, the Wall Street Journal (WSJ) reported. The move may help Spielberg finance his exit from Viacom's Paramount Pictures later this year, the US-based business daily reported in its online edition. ADAG may give DreamWorks up to US$600mn for the new venture and DreamWorks may raise another US$500mn through debt financing, WSJ said. ADAG is likely to get a large stake in the new company, it added. The proposed JV is expected to make six films a year and distribute the same through a Hollywood studio.

RCOM may begin criminal proceedings against RIL: reports

The feud between the two Ambani brothers over RCOM's proposed merger with South African telecom major MTN doesn't seem to be ending, with the two sides exchanging verbal blows almost on daily over RIL's claim of right of first refusal (RoFR). In the latest round of the war of words, RCOM said it may start criminal proceedings against Reliance Industries (RIL) officials for signing January 12, 2006 agreement, if the latter continues to assert its RoFR to buy a majority stake in RCOM. In its response, RIL said there is no criminality attached to the signing of the agreement dated January 12, 2006. "If any proceedings are adopted, we will not only defend them but will also consider our options for such a malicious action," the Mukesh Ambani owned company said. Earlier, RCOM announced that its negotiations with MTN Group for a potential combination of their businesses were ongoing. The company was reacting to news that RIL had sent a communication to MTN, claiming an alleged right of first refusal to buy a controlling stake in RCOM.

Goldman Sachs buys stake in Shapoorji Pallonji firm

Goldman Sachs (GS) acquired a minority stake in Sterling & Wilson Pvt. Ltd (S&W), a part of the Shapoorji Pallonji Group for US$50mn. S&W is one the leading Mechanical, Electrical and Plumbing (MEP) contracting companies in the country and is amongst the very few companies that have the ability to offer the full MEP package as a one stop solution provider.

Lehman Bros arm to buy 50% in Unitech project

Lehman Brothers Real Estate Partners agreed to invest about US$175mn (Rs7.4bn) to acquire a 50% take in the initial phase of Unitech's master-planned project on the Western Expressway of Mumbai. The project is being jointly developed by Unitech and their local Mumbai partners. The initial phase entails development one million square feet of office space of the total developable area of about 18mn sq ft. Lehman Brothers Real Estate Partners and the Western Expressway JV will each contribute 50% of the construction cost.

Action from Deal Street

Tata Communications signed equity Joint Venture agreement with the shareholders of China Enterprise Communications (CEC) for the acquisition of 50% interest in the Chinese company for an undisclosed amount. This JV will be the first-of-its-kind in the Chinese telecom sector post China's entry into the WTO. CEC is a value-added telecom services and integrated IT solutions provider headquartered in Beijing. CEC was recently awarded a nationwide IP-VPN service license. It has network reach throughout China, with no regional restrictions on its service capabilities. CEC provides VPN connectivity reach into 347 cities in China. This reach complements Tata Communications, which has VPN presence in 120 Indian cities and 19 other major business capitals in North America, Europe and Asia.

Punj Lloyd said it has signed an agreement, to divest interests in its Internet Service Provider ( ISP) division to a Joint Venture (JV) formed between Shyam Group, the promoters of Shyam Telelink, and Spanco Telesystems.

Sintex Industries acquired Digvijay Communication and Networks Pvt Ltd (DCNPL) through its 74% subsidiary Zeppelin Mobile Systems India Ltd (Zeppelin) in the form of a slump sale deal amounting to Rs540mn. The acquired company has a promising set of product / service offerings and it provides its range of solutions to leading Indian OEMs and telecom companies.

Exide Industries, the largest lead acid storage battery company in South Asia, announced acquisition of 51% shareholding in Leadage Alloys India Ltd., a lead smelting company located near Bangalore. Earlier this month, the company's board had approved a maximum investment of up to Rs350mn for such an acquisition.

Sujana Towers buys 51% stake in Mauritius based co

Poor listing for Niraj Cement

Niraj Cement Structural started trading at Rs185 against the issue price of Rs190. The IPO was made in the price band Rs175-190 per share of Rs10 each. The stock closed at Rs191 just managing to stay above its issue price touching an intra-day high of Rs194 and a low of Rs169. The issue was subscribed by only 1.73 times. The non-institutional investor portion got subscribed four times, the retail portion 3.8 times. However, the QIB portion remained un-subscribed. The company said it would use the issue proceeds to fund its capital equipment requirement, and also working capital needs.

Two senior BSE board members resign

The Bombay Stock Exchange's (BSE) non-executive chairman, Shekhar Datta and shareholder-director Jamshyd N Godrej have resigned, according to reports. A spokesman for the exchange confirmed the resignations but did not give any reasons for the same. According to reports, Datta and Godrej resigned citing micro-management of the exchange by some board members. Datta was quoted as saying that he resigned due to differences over the empowerment of professional management. Nobody yet knows what provoked the chairman and Godrej Boyce to quit, although officially Godrej has excused himself on account of lack of time.