Business
Kochi Metro not to have Korean technology
Feb 15th
NEW DELHI: Kochi Metro will not be having the Maglev (magnetic) technology as mooted earlier. Instead standard gauge on the lines of the Delhi Metro will be used.
Delhi Metro Rail Corporation chief Mangu Singh informed this on a day when former DMRC chief E Sreedharan reached the Capital. The magnetic levitation technology, as used in Metros in Korea, was first mooted by Sreedharan himself.
It is learnt that the ‘Metro Man’ will be meeting senior officials of various ministries with regard to the Kochi Metro project.
It was argued that Korean adaptation of Maglev for Kochi Metro would make the project cheaper by about 20 per cent and that the system in Korea needed slimmer pillars than what was now being planned for Kochi Metro.
Sreedharan had said that it (Maglev technology) will reduce the construction cost by 20 per cent and the running cost by nearly 25 per cent. But the new DMRC chief has decided to stick to the widely accepted standard gauge system.
“Initially, we had thought about having the magnetic technology. But, after assessing both the positives and negatives of both the systems, we decided to favour the latter as it is more reliable,” Mangu said, adding that Sreedharan has agreed to the use of standard gauge for Kochi Metro.
The new Delhi Metro Rail Corporation chief expressed satisfaction at the progress of Kochi Metro.
“The Kochi Metro is making satisfactory progress and we hope everything will work out fine. The DMRC is giving high priority to Kochi Metro,” Mangu said.
The DMRC chief said that the crucial meeting of the Public Investment Board might take place soon and then it will be moved for Cabinet’s approval.
The Urban Development Ministry had on Monday moved the Kochi Metro note to the Finance Ministry.
Source : http://ibnlive.in.com/news/kochi-metro-not-to-have-korean-technology/230422-60-122.html
We will exit Vodafone in 12-18 months: Ajay Piramal
Feb 7th
Piramal Healthcare, which turned cash-rich after it sold its formulations business to Abbott, has made two investments in Vodafone India, taking its stake to 11 per cent. Even after investing almost Rs 6,000 crore, Ajay Piramal, chairman of the company, insists it is a short-term investment. He talks to Katya B Naiduabout exit options, risk profile of the investment and regulatory worries in the telecom sector. Edited excerpts:
Do you expect a larger play in Vodafone India, with an 11 per cent stake? What kind of managerial role will Piramal play?
We will have a seat on the board, and will be represented by Rajesh Laddha (the chief financial officer of Piramal Healthcare). Whatever responsibilities the board has, those will be taken care of. Running of the company will be done by Vodafone.
For us, this is a short-term investment. We have been looking for such opportunities to invest in companies which have a good track record and go with the India growth story. We think this is an investment in that direction. We will exit in the short term, i.e. between 12 and 18 months. The first option is through an initial public offer. If that does not go through, we would look at selling it back to Vodafone itself or to another company.
What kind of returns do you expect from the investment? Did Vodafone assure you any guaranteed price, if you were to sell the stake back to it?
The returns we expect are in the same region of our last investment, i.e. 17-20 per cent. At the valuation we have done, we feel confident we will get our returns at the end of the period. No, we have not been given any price guarantee. But, we will expect the same return.
Would you be looking at any more investment in Vodafone?
No.
How would you fund the investment in Vodafone? How much cash do you have on your balance sheet?
We had Rs 1,200 crore on our balance sheet before the Vodafone investment. Now, we do not have any cash on the balance sheet. We would be raising short-term loans of Rs 1,800 crore from banks and financial institutions to close the deal. We have clarity on the repayment because at least for the next three years, we will get almost Rs 2,000 crore (from the Abbott deal). Today, our net worth is Rs 11,500 crore. Our rating is AA for debt. All these mean we have enough access to fundings. With regard to cost of funds and availability, we are in a strong position.
The telecom sector is going through a variety of regulatory issues. Vodafone, too, had to face some, after the government cancelled its 3G roaming pacts. So, what kind of risks do you see in your investments?
We don’t see any risk because ours is really a short-term play. The sector issues will not affect us, as we have more than one option.
Piramal is a pharma company. Will these short-term investments make it risky for the sector investors who consider it a defensive sector?
I don’t think we will remain a pure pharmaceutical company anymore. We will be a diversified conglomerate. I think the investors will have to appreciate that. Our responsibility is to maximise shareholder value and if that means we can make short-term investment where we can maximise short-term value, we can do that. That’s what we are trying to explain. If we can get 17-20 per cent returns, any analyst would realise it is better than investing in a stock. It is our job is to increase shareholder value. At the same time, we are looking at long-term investments in pharma.
What are the areas that you will be investing in pharma?
One is of course the drug discovery business, which is going to grow, and in the long-term, become a fully integrated pharma company. I’m pretty confident we’ll be launching a new chemical entity. We are investing in the over-the-counter space in India. The third area is contract manufacturing, and the fourth area would be critical care.
Vodafone ruling another reason for govt to work up
Jan 23rd
That Vodafone has benefitted to the tune of Rs 12,000 crore with the recent Supreme Court ruling saying it’s not liable to pay capital gains tax on the transactions to take over Hutch Essar is a small portion of the ruling. The larger implication of the ruling based on a holistic view of the Indian tax legislations is something that the government has to take note of rather seriously.
The Tax Justice Network Project (UK) in its report published in September, 2005, stated that, “The role played by tax havens in encouraging and profiteering from tax avoidance, tax evasion and capital flight from developed and developing countries is a scandal of gigantic proportions”.
The project recorded that one per cent of the world’s population holds more than 57% of total global worth and that approximately US $ 255 billion annually was involved in using offshore havens to escape taxation.
This is an amount which would more than plug the financing gap to achieve the Millennium Development Goal of reducing the world poverty by 50% by 2015.
Justice KS Radhakrishnan, of the three judges in the Vodafone case, says India is considered to be the most attractive investment destinations and, it is believed to have received $37.763 billion in FDI and $29.048 billion in FII investment up to March 31, 2010.
FDI inflows it is reported were of $ 22.958 billion between April 2010 and January, 2011 and FII investment were $ 31.031 billions.
Reports are afloat that millions of rupees that go out of the country are only to be returned as FDI or FII.
Round Tripping is another form of economy tripping device which involves export of Indian money to tax heaven Mauritius or similar country and then return it to India in the form of FDI or FII. An Indian Company, with the idea of tax evasion can also incorporate a company off-shore, say in a Tax Haven, and then create a wholly-owned subsidiary (WoS) in Mauritius and after obtaining a Mauritius Tax Residency Certificate (TRC) may invest in India.
Large amounts, therefore, can be routed back to India using TRC as a defense. However, corporate veil can pierced into threads if it is established that such an investment is black money or hidden capital. It is nothing but ‘circular movement’ of capital known as Round Tripping. The government can scrap a transaction which is fraudulent and against national interest. But how often has the government exercised this power is a matter for any body’s guess.
It is time the government put in place stringent legislative measures to plug the loopholes in the existing laws and ensure that only a genuine corporate structure set up for purely commercial purpose and indulging in genuine investment is recognised.
Air India Strike: Not much impact in Chennai
Jan 15th
A strike by a section of pilots of Air India did not have much impact in Chennai, said the airport sources.
On Saturday, the national carrier cancelled two of its flights from New Delhi and rescheduled the departure of another flight from Chennai to New Delhi.
Air India sources said the departure of flight AI 440 from Chennai to New Delhi was rescheduled and it left Chennai around 8.45 a.m.
The cancelled flights included AI 439 and AI 801, both from New Delhi to Chennai. While the first flight’s scheduled arrival time is 8.55 a.m. the second one’s arrival time is 7.25 p.m., the sources added.
Does skyscraper boom herald economic doom
Jan 15th
Hong Kong, China (CNN) – The bigger they are, the harder they fall. That’s the tenet behind the Skyscraper Index which tracks a link between construction booms of tall buildings and economic busts over the past 140 years.
Some say the facts are bizarrely coincidental. Others say the numbers don’t lie. But if true, the latest Skyscraper Index report from Barclays Capital suggests both China and India are due for economic doom because of their current skyscraper boom.
In no mincing of words, BarCap adds that China is the world’s “biggest bubble builder.”
The country already has half the world’s existing buildings higher than 240 meters – the minimum height for skyscrapers.
But China is not stopping there. It’ll add another 66 in the next six years. That’ll nearly double its current collection from 75 to 141. You see, China has 53% of the 124 skyscrapers currently under construction around the world. (And if you think they can’t do it, think again. China has challenged itself to put up a 30-story building in just 15 days. It’s set to open January 18.)
As for India, the world’s second most populous nation only has two skyscrapers, both in the financial capital of Mumbai. But that’s going to change quickly.
In the next five years, 14 more skyscrapers will shoot up around India. That includes the Tower of India, the world’s future second-tallest tower. (The current number two is the Taipei 101 in Taiwan.)
Andrew Lawrence is the man behind the Skyscraper Index. The Director of Property Research at Barclays Capital here in Hong Kong explains the index like this: “Skyscraper construction is characterized by bursts of intense activity with easy-to-get credit, rising land prices and excessive optimism. But by the time those skyscrapers are finished, the economy has slipped into recession.”
And with China and India pushing skywards over the next several years, history’s boom and bust cycle suggests their economies may then crash back to the ground sometime near the end of this decade.
Just look to the past. In 1930, New York’s Empire State building, pictured above left in 1938, opened as the world’s tallest skyscraper rising 381 meters high. That was just as the Great Depression began to darken the U.S. economy. That lasted for more than 10 years.
In 1997, the Asian financial crisis hit just after the 452-meter Petronas Towers in Malaysia opened to take the crown of world’s tallest building.
Most recently in 2009, the Burj Khalifa opened and remains the world’s tallest skyscraper at just over 828 meters. And guess what, that event coincided with Dubai nearly going broke and heralded the Great Recession that we’re all trying to claw back from now.
And there are many more examples. So as China and India build higher and higher, there’s reason to be that much more leery of two looming financial fallouts in Asia.
We’re likely familiar with the adage “Build it and they will come”. But the person who penned that likely wasn’t thinking of economic meltdown.
Hydrogen-powered three-wheeler ‘HyAlfa’ makes debut
Jan 10th
The world’s first hydrogen-powered three-wheeler, ‘HyAlfa’, was showcased at the 11th Auto Expo here today.
Part of a development project dubbed ‘DelHy 3w’, a fleet of 15 HyAlfa three-wheelers will run on an experimental basis at Pragati Maidan, where a hydrogen refuelling station has also been set up.
The India Trade Organisation Promotion (ITPO) will use the vehicles on an experimental basis.
HyAlfa has been developed under a joint project by the United Nations Industrial Development Organisation (UNIDO) International Centre for Hydrogen Energy Technologies (ICHET), Mahindra & Mahindra and IIT-Delhi, with support from the Ministry of New and Renewable Energy.
Carbon-free fuel
“The aim of this project is to convert vehicles so that they can carry and use hydrogen — a carbon-free fuel — and thus remove all pollutants,” Mahindra & Mahindra President (Automotive and Farm Equipment Sectors), Mr Pawan Goenka, told reporters here.
He said the vehicle is not yet ready for commercial production and further fine-tuning will be required before moving in that direction.
“Moreover, we also have to look at the commercial viability of running a hydrogen-powered three-wheeler as the cost of hydrogen will be around Rs 250 per kg, which is not affordable at all,” he said.
CNG three-wheeler
Asked about the possible price of HyAlfa, he said: “When the product is on mass production, it will cost Rs 20,000 to Rs 25,000 more than a CNG three-wheeler.”
On an average, a CNG three-wheeler costs close to Rs 2 lakh.
Commenting on the development, UNIDO-ICHET Managing Director, Mr Mustafa Hatipoglu, said the DelHy 3W project aims to demonstrate hydrogen technologies developed by Indian partners for the Indian transport sector.
Project coordinator, IIT-Delhi Professor L.M. Das, said HyAlfa marks a journey of 20 years from “laboratory to land’’.
ITPO Chairperson-cum-Managing Director, Ms Rita Menon, said the hydrogen-powered three-wheeler could play a role in moving towards a newer, sustainable and eco-friendly mode of transportation.
“We are happy to be a part of this project and are especially excited about the cargo version,” she said, adding that her organisation plans to submit a report within three months on the vehicle’s performance to the project organisers.
Source : http://www.thehindubusinessline.com/companies/article2787739.ece?homepage=true
India gold, copper seen extending losses on global cues
Dec 29th
MUMBAI: Indian gold futures are likely to extend the previous session’s losses on Thursday morning, in line with a fall in the world market, which fell to a three month low, analysts said.
The most-active gold for February delivery on the Multi Commodity Exchange (MCX) ended 1.34% lower at 27,281 rupees per 10 grams on Wednesday.
A weak rupee may limit the fall, analysts said. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal and copper. It fell early on Thursday in anticipation of outflows as worries about Europe’s economic health sent the euro tumbling and Asian equities weakened.
The most-active copper for February delivery on the MCX closed 0.91% lower at 399.55 rupees per kg in the previous session.
London copper fell on Thursday, dropping for a second straight session as a firm dollar weighed, while investors eyed an important Italian bond auction later in the day for further trading cues.
New iPhone? No thanks, say cash-conscious Europeans
Dec 23rd
By Tarmo Virki | Reuters – Thu, Dec 22, 2011
(Reuters) – Weakening economies and falling prices of rival smartphones are hurting sales of Apple iPhones across Europe, data from research firm Kantar Worldpanel ComTech showed on Thursday.
The October roll-out of Apple’s iPhone 4S boosted its position in Britain and United States, but the new phones failed to excite interest in continental Europe, where Apple’s share of the fast-growing smartphone market slipped.
The smartphone industry is dominated by Google , which has stormed the market with its free Android platform.
“In Great Britain, the U.S. and Australia, Apple’s new iPhone continues to fly off the shelf in the run-up to Christmas. However, this trend is far from universal,” said Dominic Sunnebo, global consumer insight director.
Apple’s market share in the 12 weeks to end-November rose to 36 percent in the United States from 25 percent a year earlier and in Britain to 31 percent from 21 percent, Kantar said.
However, in France its share slipped to 20 percent from 29 percent and in Germany to 22 percent from 27 percent. Similar drops were seen in Italy and Spain.
“The French market is showing increasing signs of price sensitivity,” Sunnebo said.
In part, the European sales of the expensive Apple model were hit by weakening economies across the continent.
Euro zone GDP grew just 0.2 percent in the third quarter and most economists expect it to contract in the fourth and also in the first three months of next year, sending the bloc back into recession after its two-year recovery from the worst global financial crisis since the 1930s.
The euro zone’s own crisis with government debt has scared off investment and eaten into business and consumer confidence, particularly since August when investors intensified their scrutiny of the bloc’s problems.
European consumers are keeping a lid on their expenses as government spending cuts and job losses deprive companies of demand for goods and crush exports.
Google had market shares of between 46 and 61 percent in all markets. Cellphone makers like Samsung Electronics <005930.KS>, Sony Ericsson <6758.T>, LG Ericsson <066570.KS> and Motorola Mobility all use its Android platform in their phones.
“In Germany, Android achieved a dominant 61 percent share of smartphone sales in the latest 12 weeks, with the Samsung Galaxy S II the top selling handset,” Sunnebo said.
