Govt holds talks with states to buy DPC power
New Delhi: The Central government has directed the Central Electricity Authority, CEA, to discuss the possibility of power-deficient states buying power from the Dabhol Power Company, DPC as it has agreed to reduce the cost of power.
The power minister Suresh Prabhu said that in response to the discussions in the negotiating committee and reported willingness of DPC to reduce cost of power, directions have been issued to CEA for discussions with power-deficient states on the quantity of power they can absorb and the tariff at which it can be sold.’
The Centre’s initiative comes in the wake of the decision taken by the Maharashtra State Electricity Board not to buy power from the power project after months of wrangling over cost of electricity and payment problems.
In Mumbai, Indian lenders to Dabhol power plant began a meeting to devise a strategy to salvage the project. The lenders, led by IDBI, are discussing ways to counter a possible move by foreign lenders to enforce guarantees on their loans to the project.
Foreign lenders of the project are meeting next week in Singapore to discuss the fate of their loans.
The main lenders to the project are IDBI, ICICI, SBI, Industrial Finance Corporation of India and Canara Bank. The lenders are also discussing Tuesday’s decision by MSEB to stop power purchases from the Dabhol unit.
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Mediclaim premium to rise
New Delhi: The General Insurance (Public Sector) Association (Gipsa) recently received the government’s sanction to go-ahead with the revision of Mediclaim’s premium rates. These are being raised by 30 per cent from June.

Gipsa decided, at a meeting some time back, that current premium levels were "unsustainable" in the context of the consistently "deteriorating" business in this segment, and much steeper losses expected during the last financial year. Also, since the insurers have decided to rope in third-party administrators (TPAs) for claim management services, the overall cost of administering the cover was set to go up anyway. The premium increase will be effected for both individual and group Mediclaim policies, according to authoritative sources.
The General Insurance Corporation (GIC) has been running the scheme on behalf of the government through its four subsidiaries. With delinking of their operations from GIC, the four arms work with a consensual approach under the aegis of Gipsa.
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Investment bankers in soup as business faces downturn
Mumbai: With the stock markets in turmoil and depleting volumes on the exchanges, all resulting in a drastic fall in the number of initial public offerings, IPOs, merchant bankers have resorted to cut-throat price-cutting in order to grab business. The fees for IPOs have come down from 1-2 per cent to 0.50 per cent (50 basis points). Investment bankers fear that with no possibility of IPOs scene perking up in near future, the fee accrual on this account will be minimal.

The name of the game now is private equity placement where fees can be as high as 2-3 per cent. Some of the investment banks are also planning to sell mutual funds.

Other activities of investment banking are no longer generating sufficient returns. The fees and charges have not only been slashed to unbelievable levels, some of them are going as far as taking the entire debt on their books (as an investment) to offload it later, merchant banking sources said.

The fees charged for private placement have now drastically come down from 0.25 per cent (25 basis points) to around 0.05 per cent (5 basis points). According to sources, recently some deals have been struck at as low as 0.02 per cent.

Underwriting fees have also come down from 0.50 per cent to 0.20-0.25 percent.

Sources say that charges for managing open offers are no better, with some bankers doing it at cost.

However, fees are still high on American depository receipt/ global depositary receipt (ADR/GDR) - (could be even 3 per cent) and cross-border acquisitions. But very few Indian merchant bankers are on the scene.
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BSE halves arbitrator’s fee for Century Consultants investors
Mumbai: The Bombay Stock Exchange (BSE) has decided to waive the institution fee and halve the arbitrator’s fee from Rs 3,000 per case to Rs 1,500 per case per arbitrator for the beleaguered investors of Century Consultants Limited (member of the BSE). This step is expected to alleviate hardships faced by investor’s while filing the arbitration references against the broking firm.

In a statement BSE said the reduction of 50 per cent in the arbitration charges was because of a goodwill gesture extended by the arbitration panel with regard to the Century Consultants’ case.

Thus, for claims up to Rs 10 lakh, an investor has to pay only Rs 1,600 (including Rs 100 for a stamp paper) instead of Rs 4,100 earlier. For claims above Rs 10 lakh, an investor has to pay only Rs 4,600 as against Rs 10,100 earlier, the statement said.
The BSE has received around 275 complaints against Century Consultants and the exchange is expected to appoint outsiders to act as arbitrators. Century Consultants was accepting deposits from small investors and was issuing post-dated cheques (PDCs) guaranteeing 24 per cent returns per annum.
This modus operandi helped the company create a huge corpus, used to rig up share prices of Cyberspace Ltd, a company promoted by Arvind Johri, one of the owners of Century Consultants.

Cyberspace share prices were rigged from a meagre Rs 55 in April 1999 to Rs 1,480 in January 2000.
It is alleged that Arvind Johri and other promoters of the broking firm duped hundreds of investors to the tune of over Rs 150 crore and fled.

The economic offences wing of the Lucknow police nabbed them recently.
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