RBI may hike rates from April 2010: Citi

New Delhi: The Reserve Bank is likely to reverse its soft rate regime by as early as April next year and increase its key policy rates by 125 basis points each by 2010-end due to rising food prices, global financial major Citigroup has said.

“Headline inflation is now rising, inflation momentum is notably picking up the most in India ... Korea is still likely to hike first in Q1, 2010, followed by India and Singapore by April 2010,” Citi economist Anushka Shah said in a note.

Rising food prices have pushed the wholesale price-based inflation (WPI) into positive zone and the consumer price index for industrial workers into double digits, Shah said.

Food accounts for 57 per cent in CPI and 14 per cent in WPI.

Going forward, she expects prices to stay firm though improved pulse production and high foodgrain stocks could be mitigating factors. The headline WPI is likely to rise to 5 per cent levels by December, she said.

“We expect RBI to begin its policy tightening cycle in 2010 and expect 125 bps of cumulative hikes in 2010. This would take the repo and reverse repo rate to 6 per cent and 4.50 per cent respectively, by the end of 2010,” she said.

Currently, the repo rate (rate at which RBI lends to banks) is 4.75 per cent and the reverse repo rate (at which RBI borrows from banks) is 3.25 per cent. Since October 2008, RBI slashed 425 bps in repo rate and 175 bps in reverse repo.

“Key factors to watch out for on this front are trends in credit and non-oil import growth,” she added.

Anil gives up Rs 50cr in salary, fees

New Delhi, Sept. 27 (PTI) :Anil Ambani has foregone salaries and commissions of over Rs 50 crore from his group firms in 2008-09 as part of an austerity measure. He will, however, still get over Rs 50 crore as sitting fees and the previous year’s commissions. As chairman of five of his group’s listed firms — Reliance Communications, Reliance Capital, Reliance Power, Reliance Infrastructure and Reliance Natural Resources — he was paid Rs 52.078 crore as sitting fees along with commissions from these firms for fiscal 2007-08. During 2007-08, Anil's elder brother Mukesh Ambani, the chairman and managing director of Reliance Industries, was the top-paid executive in the country with a total remuneration of Rs 44.02 crore. However, Mukesh’s remuneration for 2008-09 is not known as Reliance is yet to come out with its balance sheet for the year. RIL on gas margin R.P. Sharma, Reliance Industries’ president (gas business), has written to power secretary H.S. Brahma to justify the marketing margin on the sale of KG gas. Sharma said the levy was essential to cover risks and costs incurred in the marketing of gas. Brahma had earlier questioned the margin as NTPC had asked his ministry to seek a specific confirmation for the levy from the government. Anil Ambani group firm Reliance Infra had refused to pay the levy, terming it as illegal. This prompted RIL to issue a notice for suspension of fuel supply for “default”. NTPC has sought to know whether the margins levied by RIL had the government’s approval.

Nissan to launch sports car Z370 in India in 2010

MOHALI: Nissan Motor will roll out its new sports car 'Z370' in India in 2010 as part of its strategy to offer more variants to the

Nissan Cars Nissan's Clean Diesel vehicle X-TRAIL

Indian customers.

"Nissan will launch its sports car Z370 in the Indian market and is expected to be rolled out in January 2010," Hover Automotive India (marketing partner of Nissan, India), vice-chairman, G M Singh told reporters today during the launch of new dealership here.

"Though the market for sports car in India is limited now, but we think over a period of time, the market for such cars will increase," he said.

The company will also unveil its small car Micra hatchback on new platform in 2010 in the Indian market. "Micra will come out with three variants of petrol and diesel...moreover, it will be developed entirely on a new platform," he said.

The price range of Micra could be close to Rs 5 lakh, he informed. Nissan has planned to introduce nine new variants in India by 2012. "Out of the nine models, five of them will be manufactured in its facility that is coming up in Chennai, while, rest of them will be Completely Built Units (CBU)," he said.

At present, Nissan has two models 'Teana' and 'X-Trail' for the Indian market, priced between Rs 21 and 25 lakh.

L&T bags Rs 2-k cr power plant order

Mumbai:

• Soon after bagging over Rs 5,000 crore worth of orders from the Oil and Natural Gas Corporation (ONGC) for the Mumbai High North (MHN) process platform and living quarter's project, Larsen & Toubro (L&T) on Thursday said it has received a Rs 2,000-crore order from GMR Energy Limited, a GMR Group company, for setting up a 2x384 mw gas-based power plant at Vemagiri, near Rajamundry in Andhra Pradesh, on a lumpsum turnkey basis.

• "L&T has a long relationship with GMR Group and has built the Hyderabad and Delhi airports for them. GMR has the confidence that L&T can complete the projects within the tight schedule," an L&T spokesman said. L&T is focusing on growth in the power sector and at present has an order backlog of over Rs 8,000 crore in this sector. This is expected to grow further by the end of the financial year, he added.

• As part of GMR's new order strategy, L&T-Sargent and Lundy, a subsidiary of L&T, will carry out the plant integration and detailed engineering, using propriety technology of Sargent & Lundy LLC, USA. L&T will design and manufacture critical equipment for the plant. While the ONGC project is expected to be completed in 33 months, the new GMR order project will be executed on fast track and completed in the 11th Plan.

Mercedes unravels its new E-Class

New Delhi, Sep 23 (PTI)

• German luxury car maker Mercedes Benz today launched a brand new version of its sedan E-Class in India priced at Rs 46.98 lakh (ex-showroom,Delhi). The new E-Class comes with a 3.5 litre V-6 petrol engine, which would be locally assembled here.
• The company has so far sold a total of 11,000 units of the existing E-Class in the country. Mercedes Benz India had last month launched a special edition of its sedan C-Class also in an attempt to boost sales.
• Earlier the company had projected a dip in sales this year compared with 2008. However, it expects to register impressive growth next year onwards.
• Mercedes Benz India Managing Director and CEO Wilfried Aulbur had said this year the company would be lagging a little behind than its sales in 2008. Last year Mercedes Benz India had sold 3,625 units in the Indian market.

HUL to go for another ad ‘blockade’, this time on Zee

MUMBAI: After the Star burst, it’s now the Zee dhamaka. For the second time in a week, Hindustan Unilever (HUL) will block ads of all other advertisers for an entire day on a chosen network.

On Thursday, 25 channels of the Zee Network will air ads only of brands that belong to HUL’s portfolio of personal and skin-care categories like Lifebuoy, Dove, Ponds and Fair & Lovely.

While ‘advertising roadblocks’ such as this one have been witnessed in the past, what sets HUL’s blitzkrieg apart is the unprecedented scale and the money involved. It is believed that the entire exercise is costing HUL Rs 18-20 crore, Levers said that it does not comment on speculation regarding ad spends. At a time when most marketers are closely monitoring every rupee spent this sudden splurge has both confounded and amazed the marketing and advertising community.

To get an idea of the scale here’s a look at some of the numbers. At roughly 10 minutes of commercial time for every hour of broadcast, the ad shower on the Star Network meant that Hindustan Unilever consumed roughly 37 hours of advertising time and telecast nearly 4500 advertising spots (assuming that each spot has an average of 30 seconds) all on a single day. Sources within the Star Network say that Levers has paid a 100% premium and that the cost of the entire day, including the premium, would be well over Rs 10 crore for such an exercise. It is believed that a similar amount is being spent on Zee as well.

Tata Motors launches Freelander 2 in India

Mumbai: After officially launching the Jaguar Land Rover (JLR) brand in the country two months back, the new owner of the British iconic brands, Tata Motors, on Tuesday launched the Freelander 2, a sports utility vehicle from the Land Rover stable in India. It will start selling the Land Rover 2010 range models from this November. The company will be getting the 2010 Ranger Rover and Range Rover Sports in November followed by Discovery 4 by the end of December. It has stopped the sale of Discovery 3 and managed to sell only two of them.

Priced between Rs 33.8 lakh to Rs 45 lakh (ex-showroom Mumbai), the 2.2 litre diesel Freelander 2 comes in three variants—S, SE and HSE. Talking at the occasion, Rajiv Dube, president, passenger cars unit, Tata Motors, said, “There are no competing models in the market in terms of breadth and capacity. Our Freelander 2 fulfills all these requirements of a customer. It widens our JLR offering in India.” He added that the company expects to attain volumes of 2,000 units of Freelander 2 per annum in the years to come. Till now, the company has managed to sell 20 units of JLR.

When asked about the rationale behind launching of old generation models in the country when the next generation is ready, Rohit Suri, head, premier car division, Tata Motors, said, “At that time we didn’t have the new Discovery 4 available and had to get Discovery 3. But from now on all the 2010 models will be made available to the customers.” He added at present the company has just Freelander from the LR stable since new generation Range Rover and Range Rover Sports are on their way. There will be a price difference of Rs 2-2.5 lakh between the Discovery 3 and Discovery 4.

Abdul Majeed, leader, automotive practice, PwC, said, “The SUV market since the last few years is growing at 18-20%. Freelander 2 will give a stiff competition to brands like BMW, Mercedes-Benz and Audi.” The company will be opening six more dealerships in 2010 across cities including Delhi, Bangalore, Chennai, Hyderabad and Ludhiana. Currently, it has only one dealership in Mumbai.

Uco Bank to raise Rs 2,250 cr

Mumbai: Public sector lender Uco Bank on Thursday said it will raise a total of Rs 2,250 crore by issuing preferential shares to the government and to investors or qualified institutional buyers.

• Shareholders of the bank have approved to mop up the amount by allotting perpetual non-cumulative preference shares on private basis to the government and to various entities on private placement basis, Uco Bank said in a filing to the Bombay Stock Exchange.
• The bank has got approval to allot 70,000 such shares aggregating to Rs 700 crore to the government, the filing added.
• Further, the company would also raise funds up to Rs 1,550 crore by issuing perpetual non-cumulative preference shares to various entities on private placement basis, it said. Shares of Uco Bank today closed at Rs 46.80 on BSE, down 0.53% from previous close.

Pharma market in global top 10 by 2015: Report

The Indian pharmaceutical market will treble to $20 billion from $7.1 billion (2007 figure) by 2015, with a compounded annual growth rate (CAGR) of 12.3 per cent.

A report by the Federation of Indian Chambers of Commerce and Industry (Ficci) with Ernst and Young (E&Y) states that India could be a potential $8 billion market for multinational companies (MNCs), with patented drugs accounting for 8-10 per cent of the total market. With this growth, India would be among the top 10 global pharma markets by 2015.

The report says the product patent regime of 2005, which has enhanced the country’s patent infrastructure, will help in capturing the pharma market. The population in the highest income class is expected to grow to 25 million from 10 million by 2015, driving the affordability of high-patent drugs.

The report mentions that multinational companies are consolidating their presence in India and new entrants are increasing. Companies like BMS and Merck that had exited the Indian market have come back, while others like Daiichi and Ranbaxy are expanding.

The Ficci-E&Y report mentions that in addition, India also has a significant cost advantage in the conduct of clinical trials, including infrastructure, operational, patient recruitment, drug, manpower, data management and processing costs.

Inflation may rise to 6 pc by March next year: RBI

Press Trust of India:New-Delhi

With inflation turning positive after 13 weeks, the Reserve Bank on Friday said the wholesale price index may rise to six per cent by this fiscal end -- a development that may pose challenges to the central bank in maintaining a stable monetary policy.

"We have always said by March it should be five per cent. It may become six per cent," RBI Deputy Governor K C Chakrabarty told reporters on the sidelines of a seminar on financial inclusion.

He said if procurement prices increase 10 per cent every year food inflation cannot be less than 10 per cent. "This is also partially policy oriented ... We want to give more money in the hands of farmers," he said.

When asked whether it will be a challenge for RBI to choose between promoting growth and stemming inflation, he said the challenge is also there.

The wholesale price index turned positive for the first time in 13 weeks, rising to 0.12 per cent for the week ended September 5 on inflating prices of essential food items.

LIC to recruit over 2-lakh agents

Mumbai: Life insurance major, LIC, is planning to recruit more than 2-lakh agents by the end of this financial year, a top company official said.
"We plan to recruit 2-lakh agents-plus in this financial year. So far, we have recruited close to 80,000 agents in this fiscal," Life Insurance Corporation of India's Chairman, T S Vijayan, said.
Presently, the company has 13.5-lakh agents, he said.
LIC is also targeting a growth of 19 per cent in fresh premium collection in FY 10.
"We are expecting a growth of 19 per cent in our fresh premium collection by the end of this year," Vijayan said.
The company collected a premium of Rs 1,57,000-crore in the last fiscal.
Going forward, LIC expects a new premium mix of 50:50 between ULIPs and traditional products, he said.