ONGC likely to share LPG, kerosene subsidy burden
New Delhi: The Indian government is mooting a proposal to transfer some of the subsidy burden on LPG and kerosene on to ONGC. Presently, IOC, HPCL and BPCL take the entire burden of this subsidy. These companies sell LPG at Rs 90 per cylinder and kerosene around Rs 2.35 per litre below market prices. In the process, so far during this fiscal, they have lost around Rs 3,200 crore.

"The modalities of this option are many. One could be to regulate the full market price that ONGC gets from the refiners for the crude it sells to the latter. Another could be to regulate the gas price that ONGC accrues," a top petroleum ministry official was quoted as saying. The upstream major produces 15 per cent of the domestic LPG requirement from the natural gas produced by it. The company also meets a third of India's crude requirement.
Back to News Review index page  

M&M fails to acquire Valtra units
Mumbai: Mahindra & Mahindra, which was in race to buy the tractor business of Valtra Oy AB, Finland, and Valtra do Brasil Ltd, Brazil, from their owner Kone, has lost out. M&M does not see it as a setback and says its growth plans would continue. If the company's bid were to be successful, it would have been among the biggest such acquisitions abroad by an Indian company.

Kone has signed an agreement for the sale of the tractor business, including its subsidiary Sisu Diesel, to US-based AGCO Corporation. The purchase price is euro 600 million and the transaction is subject to approval of the competent authority.
Back to News Review index page  

UB group eyes greenfield route for expansion
Mumbai: Vijay Mallya's UB group is now looking at the greenfield route for expansion. The new plants will be located in Rajasthan, Orissa, West Bengal and Uttar Pradesh. Two of these will be set up by United Breweries and two by Millennium Alcobev (MABL).

MABL is a 40:40:20 joint venture between United Breweries, the UK-based Scottish & Newcastle and MABL managing director Ravi Jain. Jain was quoted as saying: "The decision to invest in greenfield breweries has been taken following an internal evaluation by the group. We feel that these projects are more viable than acquisitions considering the falling implementation costs."
Back to News Review index page  

Tata Steel sees prices to stabilise
Bangalore: Tata Steel managing director B Muthuraman said steel prices in the domestic market will stabilise in the coming months, notwithstanding a record surge in the consumption during the first four months of the current fiscal year. He said steel consumption in India has increased by nearly 50 per cent in the first four months of the current fiscal, when compared to the corresponding period last year.

"As a result of robust activity in the housing and industrial construction as well as the golden quadrilateral and infrastructure projects, the demand would continue to be on the rise. In the long run, prices are likely to stabilise for flat products too," he said. Muthuraman said prices could stabilise in the next six months when the supply-demand would be more rationalised with the coming up of new small and medium plants. "Demand from the automobile segment and consumer and industrial appliances is also encouraging."
Back to News Review index page  

Hexaware offloads stake in Mentorix
Mumbai: Global software company Hexaware Technologies has sold its entire 34.2-per cent stake in the US-based Mentorix Technologies to Lionbridge Technologies Inc, in a cash deal worth $7.5 million. Hexaware had invested $3.35 million in 2001 for its stake in Mentorix.

"We had invested in Mentorix to create value for the company and after about two years of incubation and nurturing, we have decided to sell our stake as we find the price and timing apt for such a move," said Rajesh Ghonasji, chief financial officer, Hexaware. Mentorix is into outsourcing of e-learning solutions dedicated to provide solutions for the educational needs of the clients. Grant Thornton, the global accountancy and business advisory firm has done the valuation for Mentorix.
Back to News Review index page  

Mallya counter offer for Herbertsons
Mumbai: In a bid to control Herbertsons, liquor baron Vijay Mallya and his UB group are making a counter offer to the shareholders of Herbertsons. This follows an open offer made by Kishore Chhabria to acquire an additional 20 per cent stake in Herbertsons. UB group companies McDowell & Company and Phipson Distillery, along with UB Holdings, as persons acting in concert, have made a offer to acquire 43 lakh fully paid equity shares of Herbertsons, representing 45.2 per cent of the outstanding equity capital at Rs 200 per share.

The total outgo on the offer will amount to Rs 86 crore. The group has appointed Kotak Mahindra Capital Company as the manager to the proposed open offer, which opens on 3 November and closes on 3 December. Chhabria's offer to acquire 19.04 lakh fully paid up equity shares, representing 20 per cent of Herbertsons, is at a price of Rs 90.50 per equity share.
Back to News Review index page  

IBP to sell IOC's branded fuel
Kolkata: IBP Ltd has decided to sell branded fuel (premium and diesel super) of Indian Oil Corporation (IOC) from its own retail outlets (ROs). This is the first instance when any of the four oil marketing majors would be distributing other's product from its ROs. "Our objective is to give best possible service to consumer. IOC products will be sold through those outlets which do not at present sell IBP's own branded fuel, Josh (MS) and Shakti (HSD). This integration will start soon," R S Guha, director (marketing) of IBP, said.

The arrangement is possible since IBP is a IOC group company. It will increase combined sales of branded fuels of IOC as a group. IBP will source IOC's branded products where it does not have storage terminals.
Back to News Review index page  

Cadila Pharma's new cardiovascular drug
Ahmedabad: Cadila Pharmaceuticals Ltd (CPL) has fortified its cardiovascular basket of products with the nitric oxide donating beta-1 blocker, nebivilol, under the brand name, Nodon.
With this product launch, CPL has become the first indigenous bulk manufacturer of nebivilol drug in India. Priced at Rs 49 per 10-tablet strip, Nodon will be available initially only in the 5 mg dosage form and the company is looking at a sale of Rs 6 crore in its first year.

The CPL already has a long list of cardiovascular brands such as Envas, Fovas, Enalapril, Fosinopril and Stpase, the indigenously developed streptokinase drug formulation.
With the launch of nebivilol, CPL has introduced the concept of homocysteine regulation in cardio therapy, directly positioning itself against coronary artery diseases such as myocardial infarction. R Sahni, senior vice-president (marketing), CPL, said the cardiovascular market in India is estimated at Rs 685 crore, of which beta blockers on their own contributed to Rs 187 crore.
Back to News Review index page  

Move to stall Maharashtra Scooters stake sale to Bajaj
Kolkata: A Group of minority shareholders of Maharashtra Scooters Ltd (MSL), a 27:24 per cent joint venture between the Maharashtra Government and the Bajaj group, has decided to initiate legal steps to stall the proposed move over sale of the Maharashtra government's stake in the company to the Bajaj group. The Maharashtra government's holding in MSL is through Western Maharashtra Development Corporation Ltd (WMDC).

C V Desai, a Kolkata broker who along with his family members jointly holds around 5.5 per cent stake in MSL, was quoted as saying that he had already written to the Maharashtra government expressing the minority shareholders' objection to the proposed sale of MSL stake at Rs 50 per share. The offer has been revised to Rs 75 per share recently.
Back to News Review index page  

Reliance Energy may invest Rs 12,000-crore
Mumbai: Reliance Energy Ltd (REL) has proposed to invest Rs 12,000 crore for setting up gas-based power projects with a generating capacity of 3,000 mw in Maharashtra. REL, with a generating capacity of 500 mw, purchases around 600 mw of power daily from Tata Power Company (TPC) to cater to its consumers in the Mumbai suburbs.

REL, which is interested in cashing in on the gas availability of over 14 trillion cubic feet in the Krishna-Godavari basin, has already identified coastal Nagothane in Raigad district for these projects. Reports say that REL's move is crucial, especially when its competitor TPC has already announced its plans to set up 1,000 mw each of projects at Vele, Raigad district and Chandrapur in Vidarbha region.
Back to News Review index page