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Upfront

News that you may have missed last fortnight
Print Edition: July 21, 2013

CORPORATE
Two CEOs of Indian affialiates of US multinationals- PepsiCo India President Manu Anand and Walmart India head Raj Jain - quit in quick succession. Raj Jain, who headed Walmart's joint venture with the Bharti Group for six years, leaves at a time the retail giant is facing allegations of lobbying, violation of FDI norms and protests by political parties over its India entry.

The Supreme Court has dismissed a public interest litigation seeking a probe against Ranbaxy Labor-atories for allegedly manufacturing and selling substandard medicines. The SC bench said that it could not decide the plea against the company on the basis of a judgment passed by a US court against Ranbaxy.

  • Mobile internet rates are falling, and how. A host of companies, including Vodafone, Airtel, Idea Cellular and Tata Docomo have rushed to offer substantial discounts on current rates.
  • After a premature announcement earlier, the consortium of ONGC Videsh Ltd and Oil India Ltd has finally announced the signing of agreements with Videocon Mauritius Energy Ltd to acquire 100 per cent shares in Videocon Mozambique Rovuma Ltd for $2.475 billion. This company in turn holds a 10 per cent share in the Rovuma block, which lies off the coast of Mozambique. The area has the potential to become one of the world's largest natural gas producing hubs with first deliveries of liquefied natural gas expected in 2018.
Anand Mahindra
Anand Mahindra
Tech Mahindra has completed the merger of its unit Satyam Computer Services with itself, making it the country's No. 5 Indian IT services provider. The new merged entity has revenues of $2.7 billion and a team of 84,000 professionals servicing 540 customers across 46 countries. Part of the $16 billion Anand Mahindra-led Mahindra Group, Tech Mahindra bought Satyam in a government-backed auction in 2009 after the founder of the Hyderabad-based company admitted to one of India's biggest accounting frauds.

India has retained its position as the world's third most attractive destination for investment by transnational corporations (TNCs) during 2013/15, according to a survey by UNCTAD. Based on responses of 159 companies, India was ranked after China and the U.S. Australia, Russia and the U.K. slipped down the rankings from last year's survey.

Russia, the world's largest energy producer, and China, the world's largest energy consumer, have signed one of the biggest deals in the history of the oil industry. The $270-billion deal, signed by Rosneft and China National Petroleum Corp, will ensure Russian oil supply to its eastern neighbour for 25 years.

ECONOMY

The banking counter is buzzing with activity. While a host of giants, including the Tata Group and the Birla Group, have lined up for the new bank licences, Mahindra & Mahindra Financial Services Ltd, the non-banking financial company of the Mahindra group, has decided not to apply for a bank licence. Its reasoning: the criteria set by the RBI for getting licences were disadvantageous for large, successful NBFCs like itself, favouring smaller ones instead.

India's current account deficit may widen because of money outflows, Finance Minister P. Chidambaram said. The current account deficit (CAD) in the fourth quarter of 2012/13 was 3.6 per cent of the gross domestic product, lower than market expectations which had forecast 4.4 per cent. The finance ministry is set to review financial and operational performance of about 70 schemes, including mid-day meal, bank recapitalization and rural employment guarantee schemes. The reivew is being done for fiscal 2014 and the medium-term expenditure statement will be tabled in the monsoon session.

The government has allowed Reliance Industries to surrender its special economic zone in Haryana. Interestingly, the company has sought a seventh extension of in-principle approval for setting up of a multi-product SEZ at Raigad in Maharashtra.

1.5% Growth of India's steel production in May this year as compared to the global growth rate of 2.6 per cent. During January-May, India's steel output grew at 3 per cent to 33.5 million tonnes, well above the world average rate of 2.1 per cent to 658 million tonnes.

Rs 6,370 cr Domestic pharma sales in May, registering a growth of 6.8 per cent. For the 12-month period ended May 2013, the pharma market stood at Rs 74,117 crore, a growth of 10 per cent over the same period last year. The anti-infectives market stood at Rs 915 crore, cardiac at Rs 775 crore, gastro-intestinal at Rs 737 crore, pain/analgesics at Rs 520 crore and vitamins at Rs 514 crore.

MARKETS
The Reserve Bank of India has said developers building low-cost or affordable houses can avail foreign currency loans on softer terms than other builders. Developers with three years of experience can raise money through external commercial borrowings, as compared to the earlier norm of five years of construction experience. Low-cost housing involves units priced below Rs 30 lakh each.

Ford India has set a new benchmark in the compact sports utility vehicles market. Its latest entrant EcoSport comes with a starting price of Rs 5.59 lakh (ex-showroom, Delhi). The pricing will give stiff competition to Renault's Duster and Maruti's Ertiga and Mahindra's Quanto.

COMING UP
India could lift foreign direct investment caps on various sectors by the third week of July, finance minister P. Chidambaram said. The Arvind Mayaram panel has suggested raising the FDI cap in multi-brand retailing to 74 per cent, in defence production to 49 per cent and in telecom to 100 per cent.

Gold imports are expected to more than halve to about 150 tonnes in the coming July-September quarter, against the projected 350 tonnes in the current quarter, due to sluggish demand, according to the Bombay Bullion Association.

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