By Kartik Goyal - Apr 1, 2011
India’s manufacturing grew for a 24th straight month, adding to the case for higher interest rates to curb price gains.
The Purchasing Managers’ Index was unchanged at 57.9 in March from February, when it accelerated at the fastest pace in three months, HSBC Holdings Plc and Markit Economics said in an e-mail today. A number above 50 indicates expansion.
The report shows that consumer demand in India remains strong, posing inflation risks even after the most aggressive rate increases among Asia’s major economies. India’s manufacturing inflation rate jumped 1.19 percentage points in February from January, the most in 10 months.
“The momentum in India’s manufacturing sector held up well in March, suggesting that growth is not an immediate concern,” Leif Eskesen, an economist at HSBC in Singapore, wrote in the report. “This calls for further tightening of monetary policy to tame inflation pressures.”
The Bombay Stock Exchange’s Sensitive Index fell 0.2 percent at 1:07 p.m. in Mumbai, while the yield on the 8.08 percent bond due in August 2022 was little changed at 8.08 percent.
Exports climbed 49.7 percent to $23.6 billion in February, the most in 11 months, the commerce ministry said in a report in New Delhi today. Imports gained 21.2 percent to $31.7 billion, narrowing the trade deficit to $8.1 billion.
Budget Support
Demand may find more support from Finance Minister Pranab Mukherjee’s budget for the fiscal year starting today that plans to spur spending and exempt incomes below 180,000 rupees ($4,036) from tax, higher than the previous threshold of 160,000 rupees.
Prime Minister Manmohan Singh’s coalition aims to put more money in the hands of voters to help them cope with rising prices and shore up support for five state elections in 2011.
Governor Duvvuri Subbarao on March 17 increased the central bank’s repurchase rate by a quarter-point to 6.75 percent after he raised the inflation forecast for the second time since late January. The benchmark wholesale-price inflation rate would reach 8 percent by March 31, 2011, compared with 7 percent estimated on Jan. 25, he said. The price-gauge was 8.31 percent in February.
India has raised rates eight times since the middle of March 2010, compared with three in China and four in South Korea. Indonesia lifted its reference rate in February for the first time this year after opting not to join counterparts in boosting rates in 2010.
Credit Growth
India’s banks are lending at a faster pace than the central bank’s target, reflecting the need for higher borrowing costs to curb consumer spending.
Commercial loans rose 23 percent from the previous year as of March 11, above the 20 percent rate prescribed by the Reserve Bank of India.
Car sales by companies including Maruti Suzuki India Ltd., the nation’s biggest carmaker, rose to a record for the second month in February, the Society of Indian Automobile Manufacturers said March 9.
India’s $1.3 trillion economy may expand by as much as 9.25 percent in the year starting April 1, the finance ministry forecast in February.
In China, manufacturing growth accelerated for the first time in four months, easing concern that monetary tightening may lead to a sharp slowdown in the world’s second-biggest economy.
The Purchasing Managers’ Index rose to 53.4 in March from 52.2 in February, the China Federation of Logistics and Purchasing said in a statement on its website today. A separate PMI released by HSBC Holdings also gained.
India faces additional risks to inflation from oil, Governor Subbarao said March 29.
India imports three-quarters of its energy needs and oil has surged 26 percent in the past 12 months, stoked by political turmoil in the Middle East and Libya that threatens supplies.
To contact the reporter on this story: Kartik Goyal in New Delhi at kgoyal@bloomberg.net.
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Friday, April 1, 2011
Thursday, March 31, 2011
Vodafone pays $5bn for Essar stake
By Andrew Parker in London and James Fontanella-Khan in Mumbai
Published: March 31 2011 10:47 | Last updated: March 31 2011 11:08
Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/1c775758-5b6b-11e0-b965-00144feab49a.html#ixzz1IFDhNgBU
Vodafone is to pay $5bn to buy the Essar conglomerate out of the UK mobile phone group’s Indian business.
Vodafone said that put and call options were being exercised, under which Essar would sell its 33 per cent stake in Vodafone Essar, the UK group’s Indian business, for $5bn cash.
The deal should bring an end to an increasingly acrimonious dispute between Vodafone and Essar over how to value the Indian conglomerate’s minority stake in Vodafone Essar.
In 2007 Vodafone bought a 67 per cent controlling interest in what was then Hutchison Essar for $10.9bn. It was then renamed Vodafone Essar.
India has turned into an expensive and unpredictable project for Vodafone. The Indian authorities are pursuing Vodafone for $2.5bn in tax that the authorities maintain is due on the 2007 deal. Vodafone said no tax is due.
At Vodafone’s 2009-10 results, it took a £2.3bn writedown on its Indian business – a move acknowledging the fierce competition in the country.
In 2007, Vodafone granted options to Essar that would enable the conglomerate to sell its stake for $5bn, or to dispose of part of its 33 per cent shareholding at an independently appraised fair market value.
In January, Vodafone objected to Essar’s plans to place part of its 33 per cent stake in an Indian public company. Vodafone feared the move would give an inflated market value to Vodafone Essar.
But on Thursday Vodafone said Essar had decided to sell its entire Vodafone Essar stake for $5bn.
Vodafone owns 42 per cent of Vodafone Essar directly, and a further 18 per cent indirectly. This 18 per cent is held by Indian partners of Vodafone that do not include Essar.
Vodafone has options over a further 7 per cent of Vodafone Essar, taking the UK group’s total interest to 67 per cent.
Indian rules bar Vodafone from owning more than 74 per cent, and the UK group said it would maintain compliance with the regulations after the transaction with Essar is completed.
Copyright The Financial Times Limited 2011. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Published: March 31 2011 10:47 | Last updated: March 31 2011 11:08
Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/1c775758-5b6b-11e0-b965-00144feab49a.html#ixzz1IFDhNgBU
Vodafone is to pay $5bn to buy the Essar conglomerate out of the UK mobile phone group’s Indian business.
Vodafone said that put and call options were being exercised, under which Essar would sell its 33 per cent stake in Vodafone Essar, the UK group’s Indian business, for $5bn cash.
The deal should bring an end to an increasingly acrimonious dispute between Vodafone and Essar over how to value the Indian conglomerate’s minority stake in Vodafone Essar.
In 2007 Vodafone bought a 67 per cent controlling interest in what was then Hutchison Essar for $10.9bn. It was then renamed Vodafone Essar.
India has turned into an expensive and unpredictable project for Vodafone. The Indian authorities are pursuing Vodafone for $2.5bn in tax that the authorities maintain is due on the 2007 deal. Vodafone said no tax is due.
At Vodafone’s 2009-10 results, it took a £2.3bn writedown on its Indian business – a move acknowledging the fierce competition in the country.
In 2007, Vodafone granted options to Essar that would enable the conglomerate to sell its stake for $5bn, or to dispose of part of its 33 per cent shareholding at an independently appraised fair market value.
In January, Vodafone objected to Essar’s plans to place part of its 33 per cent stake in an Indian public company. Vodafone feared the move would give an inflated market value to Vodafone Essar.
But on Thursday Vodafone said Essar had decided to sell its entire Vodafone Essar stake for $5bn.
Vodafone owns 42 per cent of Vodafone Essar directly, and a further 18 per cent indirectly. This 18 per cent is held by Indian partners of Vodafone that do not include Essar.
Vodafone has options over a further 7 per cent of Vodafone Essar, taking the UK group’s total interest to 67 per cent.
Indian rules bar Vodafone from owning more than 74 per cent, and the UK group said it would maintain compliance with the regulations after the transaction with Essar is completed.
Copyright The Financial Times Limited 2011. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Wednesday, March 30, 2011
Emaar seeks valuation of India assets
Firm may be preparing to exit most of its India portfolio; valuation exercise routine, says local partner MGF
Madhurima Nandy
Bangalore: Emaar Properties PJSC, Dubai’s largest real estate firm, has asked consultants and investment bankers to value Indian joint venture (JV) Emaar MGF Land Ltd’s land bank and other assets in the country.
The move may be preparatory to the builder of Dubai’s Burj Khalifa, the world’s tallest tower, exiting the bulk of its portfolio in India, two people familiar with the development said.
Emaar Properties is reviewing its assets in India and is in talks with investment bankers, said a third person directly involved with the negotiations. “We are having discussions with them,” said this person, adding that no final decision had been taken.
The firm and its local partner said such valuation exercises were routine and that there was no move to break up the assets.
“Emaar MGF, on a regular basis, values its assets for banking or allied purposes. Emaar Properties, as an investor, also gets similar valuations done across its investments and business, in various geographic markets, including India,” Emaar MGF said in a joint email response. “There is no move to split the asset portfolio of Emaar MGF.”
Alongside an enterprise valuation that entails taking stock of Emaar MGF’s inventory, ongoing projects and land bank, separate mandates or assignments have been given to property consultants for sale prospects of various components. Emaar MGF’s asset portfolio is estimated to be at least Rs 5,000 crore by property consultants.
Emaar Properties has a 43.86% stake in New Delhi-based Emaar MGF, a JV formed in 2005 with the Guptas of MGF Developments Ltd, who own the remaining stake. Shravan Gupta is the executive vice-chairman and managing director of Emaar MGF.
The Dubai company has appointed Standard Chartered Bank in India to put an estimate to the value of its holdings in the JV and oversee the entire process, which may take three-six months to conclude, said the first two people mentioned earlier. A Standard Chartered Bank spokeswoman declined to comment.
“Once the valuation is done, they (Emaar Properties) will discuss and identify potential buyers with their investment banking team,” said one of the persons familiar with the development cited above, adding that the Dubai company is looking to eventually exit from India. “Options include selling to the joint venture partner, who has the first right of refusal, or sell to a third person.”
Emaar MGF has 11,340 acres of land and 44 (residential, commercial and hospitality) projects in over 20 cities. Emaar Properties has total assets of $17 billion (Rs 76,000 crore), of which international assets are valued at $6.12 billion.
In 2010, Emaar Properties posted a net operating profit of $826 million, 31% higher than the corresponding figure of $633 million in 2009, according to a release. Its retail and hospitality subsidiaries contributed significantly to the revenue.
In India, however, Emaar has put its multi-crore hospitality and retail plans on the back-burner, focusing more on residential projects.
Emaar MGF has been exiting some of its hospitality projects and partnerships. It recently sold a seven-acre property in Kolkata, where it had planned to develop a Marriott hotel, for Rs 250 crore to a consortium of developers, including Kolkata-based Mani Group and Bangalore-based Sattva Group.
The latter is now pursuing the hospitality project, said a person involved in the process.
Sattva Group chairman and managing director Bijay Agarwal confirmed the deal, but didn’t comment on the price.
“As part of its financial and business strategy, the company raises funds from various sources, including monetizing assets held for a longer term,” Emaar MGF said in a statement. “The Kolkata hospitality project was part of such an initiative. The company continues to look at such opportunities from time to time.”
Last year, UK budget lodging chain Whitbread Plc bought the 50.1% stake held by Emaar MGF in their JV. Whitbread is now developing hotels under the Premier Inn brand in India on its own.
Emaar MGF is also in talks with a few private equity funds to raise money for projects through a special purpose vehicle. The move comes after three aborted attempts by the firm to raise money from the equity market. It filed a draft red herring prospectus (DRHP) for the fourth time on 4 October, slashing the amount sought to be raised to Rs 1,600 crore from a Rs 7,000 crore target in 2008. The money will be used to repay loans, pay development charges and redeem preference shares. Debt as of 28 February stood at Rs 4,674 crore.
“Emaar MGF has refiled its DRHP with Sebi (Securities and Exchange Board of India), and we are awaiting clearances from the regulator,” the firm said.
“While the real estate market has stabilized since 2010 and prices are also not rising any more, the capital markets remain a good option. The question is when and how,” said Ajit Krishnan, leader (real estate practice), Ernst and Young. “The credentials of the developer and its execution record would determine” the share sale’s success.
Emaar MGF was criticized for the construction of the 2010 Commonwealth Games village in Delhi for which it also got a Rs 700 crore bailout package from the Delhi Development Authority. The company rejected accusations against the village.
“The controversies, as have been reported in the past, dwelled on various extraneous issues and multiplicity of agencies simultaneously involved at the Games facilities,” Emaar MGF said.
madhurima.n@livemint.com
Copyright © 2007 HT Media All Rights Reserved
Madhurima Nandy
Bangalore: Emaar Properties PJSC, Dubai’s largest real estate firm, has asked consultants and investment bankers to value Indian joint venture (JV) Emaar MGF Land Ltd’s land bank and other assets in the country.
The move may be preparatory to the builder of Dubai’s Burj Khalifa, the world’s tallest tower, exiting the bulk of its portfolio in India, two people familiar with the development said.
Emaar Properties is reviewing its assets in India and is in talks with investment bankers, said a third person directly involved with the negotiations. “We are having discussions with them,” said this person, adding that no final decision had been taken.
The firm and its local partner said such valuation exercises were routine and that there was no move to break up the assets.
“Emaar MGF, on a regular basis, values its assets for banking or allied purposes. Emaar Properties, as an investor, also gets similar valuations done across its investments and business, in various geographic markets, including India,” Emaar MGF said in a joint email response. “There is no move to split the asset portfolio of Emaar MGF.”
Alongside an enterprise valuation that entails taking stock of Emaar MGF’s inventory, ongoing projects and land bank, separate mandates or assignments have been given to property consultants for sale prospects of various components. Emaar MGF’s asset portfolio is estimated to be at least Rs 5,000 crore by property consultants.
Emaar Properties has a 43.86% stake in New Delhi-based Emaar MGF, a JV formed in 2005 with the Guptas of MGF Developments Ltd, who own the remaining stake. Shravan Gupta is the executive vice-chairman and managing director of Emaar MGF.
The Dubai company has appointed Standard Chartered Bank in India to put an estimate to the value of its holdings in the JV and oversee the entire process, which may take three-six months to conclude, said the first two people mentioned earlier. A Standard Chartered Bank spokeswoman declined to comment.
“Once the valuation is done, they (Emaar Properties) will discuss and identify potential buyers with their investment banking team,” said one of the persons familiar with the development cited above, adding that the Dubai company is looking to eventually exit from India. “Options include selling to the joint venture partner, who has the first right of refusal, or sell to a third person.”
Emaar MGF has 11,340 acres of land and 44 (residential, commercial and hospitality) projects in over 20 cities. Emaar Properties has total assets of $17 billion (Rs 76,000 crore), of which international assets are valued at $6.12 billion.
In 2010, Emaar Properties posted a net operating profit of $826 million, 31% higher than the corresponding figure of $633 million in 2009, according to a release. Its retail and hospitality subsidiaries contributed significantly to the revenue.
In India, however, Emaar has put its multi-crore hospitality and retail plans on the back-burner, focusing more on residential projects.
Emaar MGF has been exiting some of its hospitality projects and partnerships. It recently sold a seven-acre property in Kolkata, where it had planned to develop a Marriott hotel, for Rs 250 crore to a consortium of developers, including Kolkata-based Mani Group and Bangalore-based Sattva Group.
The latter is now pursuing the hospitality project, said a person involved in the process.
Sattva Group chairman and managing director Bijay Agarwal confirmed the deal, but didn’t comment on the price.
“As part of its financial and business strategy, the company raises funds from various sources, including monetizing assets held for a longer term,” Emaar MGF said in a statement. “The Kolkata hospitality project was part of such an initiative. The company continues to look at such opportunities from time to time.”
Last year, UK budget lodging chain Whitbread Plc bought the 50.1% stake held by Emaar MGF in their JV. Whitbread is now developing hotels under the Premier Inn brand in India on its own.
Emaar MGF is also in talks with a few private equity funds to raise money for projects through a special purpose vehicle. The move comes after three aborted attempts by the firm to raise money from the equity market. It filed a draft red herring prospectus (DRHP) for the fourth time on 4 October, slashing the amount sought to be raised to Rs 1,600 crore from a Rs 7,000 crore target in 2008. The money will be used to repay loans, pay development charges and redeem preference shares. Debt as of 28 February stood at Rs 4,674 crore.
“Emaar MGF has refiled its DRHP with Sebi (Securities and Exchange Board of India), and we are awaiting clearances from the regulator,” the firm said.
“While the real estate market has stabilized since 2010 and prices are also not rising any more, the capital markets remain a good option. The question is when and how,” said Ajit Krishnan, leader (real estate practice), Ernst and Young. “The credentials of the developer and its execution record would determine” the share sale’s success.
Emaar MGF was criticized for the construction of the 2010 Commonwealth Games village in Delhi for which it also got a Rs 700 crore bailout package from the Delhi Development Authority. The company rejected accusations against the village.
“The controversies, as have been reported in the past, dwelled on various extraneous issues and multiplicity of agencies simultaneously involved at the Games facilities,” Emaar MGF said.
madhurima.n@livemint.com
Copyright © 2007 HT Media All Rights Reserved
Tuesday, March 29, 2011
India tries hand at cricket diplomacy
By James Lamont in Mohali
Published: March 29 2011 17:21 | Last updated: March 29 2011 19:45
Manmohan Singh, India’s prime minister, has seized on Wednesday’s cricket clash between India and Pakistan as a possible balm for his administration’s woes over corruption and a paralysed parliament.
In one of the warmest cross-border gestures for several years. Mr Singh has invited his Pakistani counterpart, Yusuf Raza Gilani, to attend the semi-final World Cup match.
The contest at the Mohali stadium near Chandigarh, capital of the northern state of Punjab, is the biggest sporting contest between the two nations on Indian turf for a decade.
India’s news has for days been dominated by the impending battle with bat and ball, which has pushed the fighting in Libya and Japan’s nuclear crisis to second place and fuelled a burst of advertising.
The game is a sell-out, attracting tens of thousands of fans from all over the country, among them politicians and business leaders. It will be played amid tight security, similar to the protection given to the Commonwealth Games when thousands of security personnel were brought to New Delhi, the capital, last year.
Mr Singh has promoted peace between the two nuclear-armed rivals, which have fought three wars since partition, when Pakistan was split out of British India in 1947 as a Muslim majority state.
At the centre of the dispute is the divided territory of Kashmir, which is claimed by both New Delhi and Islamabad.
The 78-year-old Mr Singh, who was born in what is now Pakistan, has said – to the discomfort of some of his advisers – that the two countries “share the same destiny” and bemoaned the economic cost of the stand-off.
However, he has expressed misgivings about the absence of a negotiating partner across the border, who could deliver a regional peace settlement to end decades of mistrust and hostility.
Likewise, Pakistan’s president, Asif Ali Zardari, has voiced his regret that Mr Singh has not picked up on his cues to bring the two traditional rivals closer, and wind down the military threat on both sides of the border.
Fans display photographs of Indian cricket players
Cricket fans in Jammu, northern India, get in the mood for their country’s clash with Pakistan in the World Cup semi-final on Wednesday
Last month, New Delhi softened its stance, saying it wanted to restart peace talks, covering all issues, halted after the devastating commando-style attacks by Pakistani militants on Mumbai, India’s financial capital, in November 2008.
On the eve of the match at Mohali, India and Pakistan agreed on Tuesday to allow Indian investigators to travel to Pakistan to question suspects of the attacks. They also agreed to set up a hotline between the two countries to alert leaders to possible terrorist actions.
With a stalled domestic agenda beset by high-profile corruption scandals and an antagonistic Hindu nationalist opposition, Mr Singh senses a possible breakthrough in one of India’s most vexed issues – and a chance to shore up a shaky second term in office.
But cricket diplomacy is a high-stakes game. An Indian victory would give the world’s largest democracy a much-needed confidence boost. Should Pakistan triumph against a highly rated Indian team, bitterness and disappointment would follow.
Shahid Afridi, the Pakistan team’s captain, would then lead his men out in a World Cup final, to be played in Mumbai against Sri Lanka – a bitter pill for even the fairest Indian sports fan to swallow.
Copyright The Financial Times Limited 2011. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2011.
Published: March 29 2011 17:21 | Last updated: March 29 2011 19:45
Manmohan Singh, India’s prime minister, has seized on Wednesday’s cricket clash between India and Pakistan as a possible balm for his administration’s woes over corruption and a paralysed parliament.
In one of the warmest cross-border gestures for several years. Mr Singh has invited his Pakistani counterpart, Yusuf Raza Gilani, to attend the semi-final World Cup match.
The contest at the Mohali stadium near Chandigarh, capital of the northern state of Punjab, is the biggest sporting contest between the two nations on Indian turf for a decade.
India’s news has for days been dominated by the impending battle with bat and ball, which has pushed the fighting in Libya and Japan’s nuclear crisis to second place and fuelled a burst of advertising.
The game is a sell-out, attracting tens of thousands of fans from all over the country, among them politicians and business leaders. It will be played amid tight security, similar to the protection given to the Commonwealth Games when thousands of security personnel were brought to New Delhi, the capital, last year.
Mr Singh has promoted peace between the two nuclear-armed rivals, which have fought three wars since partition, when Pakistan was split out of British India in 1947 as a Muslim majority state.
At the centre of the dispute is the divided territory of Kashmir, which is claimed by both New Delhi and Islamabad.
The 78-year-old Mr Singh, who was born in what is now Pakistan, has said – to the discomfort of some of his advisers – that the two countries “share the same destiny” and bemoaned the economic cost of the stand-off.
However, he has expressed misgivings about the absence of a negotiating partner across the border, who could deliver a regional peace settlement to end decades of mistrust and hostility.
Likewise, Pakistan’s president, Asif Ali Zardari, has voiced his regret that Mr Singh has not picked up on his cues to bring the two traditional rivals closer, and wind down the military threat on both sides of the border.
Fans display photographs of Indian cricket players
Cricket fans in Jammu, northern India, get in the mood for their country’s clash with Pakistan in the World Cup semi-final on Wednesday
Last month, New Delhi softened its stance, saying it wanted to restart peace talks, covering all issues, halted after the devastating commando-style attacks by Pakistani militants on Mumbai, India’s financial capital, in November 2008.
On the eve of the match at Mohali, India and Pakistan agreed on Tuesday to allow Indian investigators to travel to Pakistan to question suspects of the attacks. They also agreed to set up a hotline between the two countries to alert leaders to possible terrorist actions.
With a stalled domestic agenda beset by high-profile corruption scandals and an antagonistic Hindu nationalist opposition, Mr Singh senses a possible breakthrough in one of India’s most vexed issues – and a chance to shore up a shaky second term in office.
But cricket diplomacy is a high-stakes game. An Indian victory would give the world’s largest democracy a much-needed confidence boost. Should Pakistan triumph against a highly rated Indian team, bitterness and disappointment would follow.
Shahid Afridi, the Pakistan team’s captain, would then lead his men out in a World Cup final, to be played in Mumbai against Sri Lanka – a bitter pill for even the fairest Indian sports fan to swallow.
Copyright The Financial Times Limited 2011. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2011.
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