Andhranews

Mumbai, Aug. 29: “The government of Maharashtra will give special incentives to Nagpur airport to make it a cargo hub,” said Mr Praful Patel, civil aviation minister, on Tuesday. He was speaking at a function to mark the signing of an MoU between Boeing and the government of Maharashtra to set up a maintenance, repair and overhaul (MRO) facility in the State.

He also said that a decision would be taken within a month for the airports in Chennai and Kolkata. Mr Patel said that the bidding process for the Navi Mumbai airport will begin soon and is expected to be completed by 2007. The airport would start operations by 2011-12. Moreover, the government will set up a second national flying institute at Gondia, Maharashtra, for which it is looking for a joint venture (JV).
“Entry to foreign airlines will not be allowed anymore, and we will go slow in issuing fresh licences to domestic airlines,” added Mr Patel.

Boeing on Tuesday said that the company will invest $118 million to set up the facility as part of it India commitments, following the Rs 35,000-crore deal with Air India. The venture, to be set up near Nagpur, will serve as an MRO facility to the Boeing family of airplanes for the entire southeast Asia. “The MRO will be set up on 25-50 acres of land belonging to the Airports Authority of India (AAI). AAI will transfer the land to the Maharashtra Airport Development Authority, which is developing an international cargo hub in Nagpur,” a top government official said. Boeing had received proposals from six Indian states, including West Bengal and Karnataka for the facility.

The Maharashtra government has already cleared the international passenger and cargo hub project. Maharashtra Airport Development Corporation will hold 51 per cent stake in the venture while the rest will be owned by the Airports Authority of India. While announcing its largest-ever deal for purchase of 68 aircraft with Air India, Boeing said it will set up the MRO facility in the country, besides offset deals worth Rs 8,500 crores, enabling the Indian firms to participate in aircraft development programmes.

Kolkata, Aug 29: Ispat Industries Limited (IIL), a holding company of Pramod K. Mittal and Vinod K. Mittal promoted-Global Steel Holdings, will set up an iron ore pellet plant at Visakhapatnam. “We have decided to set up an iron ore pellet plant with a foreign technology partner at Vizag with a capacity of two to three million tonnes. The technology partner will be shortly finalised,” Ispat chairman Mr Pramod Mittal said on Tuesday.

Interacting with mediapersons after the 21st annual general meeting (AGM) of the company in the city, Mr Mittal said that they were evaluating the cost required for setting up the plant and the details were yet to be finalised. However, a company official disclosed that the plant would cost around Rs 800 crore. The project will be completed in 30 months from the zero date and will be promoted through a special purpose vehicle (SPV). However, its financial details are yet to be finalised.

Ispat might also enter a mining venture with the initial target of captive consumption, Mr Mittal indicated. “We have submitted bids for iron ore mines with a few State governments, but I cannot reveal names,” Mr Pramod Mittal, brother of Lakshmi Nivas Mittal of Arcelor-Mittal, said.

Mr Pramod Mittal was also hopeful that Ispat’s fortunes would change in a couple of years. Earnings, before providing for interest and depreciation, is expected to be Rs 1,695 crore in 2006-07, the company said in its annual report. In 2005-06, Ispat incurred a loss of Rs 1,098.51 crore after considering accumulated losses of the erstwhile Ispat Metallics India Ltd.

New Delhi, Aug. 29: Closer trade ties between India and Germany, specially among the small and medium enterprises (SMEs) of the two countries has a promising future, said Union commerce minister Kamal Nath. The sentiment was echoed by visiting German federal minister of economics and technology Michael Glos.

Mr Glos said that with closer cooperation between Indian and German SMEs, the two-way trade could cross the Euro 10 billion mark. On his part, Mr Nath said that SMEs from Germany should find outsourcing to India a competitive option. Stating that Germany is already among India’s leading trade partner, Mr Nath said that both the countries can synergise their respective strengths to take bilateral trade to a new high.

Mr Nath, calling for closer trade and economic engagement with Germany, expressed hope that German companies would show greater engagement with India, especially in infrastructure, IT, bio-technology, pharmaceuticals and the automobile sectors. He also expressed hope that Germany would take advantage of India’s investor-friendly climate. Highlighting the potential between the SMEs of the two countries, Mr Nath said that he was happy that Mr Glos was accompanied on this visit by not only a big business delegation, but a large segment of SMEs.

Addressing a business meeting on “Partners in Excellence — Strengthening the Indo-German Bond”, organised by Ficci, Mr Glos invited Indian companies to take advantage of the technological capabilities and innovativeness of German companies to turn out efficient and more competitive products.

Hyderabad, Aug. 29: Aviva plc, the fifth-largest insurance company in the world, said on Tuesday it will be transferring over 5,000 third-party vendor staff to its offshore division, Aviva Global Services (AGS), over the next year.

Aviva has built the offshore BPO roles in partnership with three vendor partners — EXL, WNS and 24/7 Customer. “This is but one transaction in our strong relationship with our three BPO partners. The transition is expected to be seamless and transparent to the UK business units, our employees as also to the end customers,” Mr John Ainley, chairman of AGS, said in a statement.

Aviva has operations in Noida, Pune, Bangalore, Chennai and Colombo, Sri Lanka. “In sequence, the transfers will cover Bangalore, Colombo and Pune with the Aviva 24/7 Customer facility in Bangalore being the first to be fully transferred by January 1, 2007. The remaining transfers will be completed by January 1, 2008, in partnership with WNS and EXL. The transfers would only cover the special purpose vehicle [SPV] organisations — NCOP, WNS Colombo and Ntrance — created specifically for the purpose of transfer, by EXL and WNS respectively,” the statement said.

Hyderabad, Aug. 29: The Taj Group of Hotels and SriLankan Holidays, the leisure arm of SriLankan Airlines, said on Tuesday they have jointly launched a holiday package from Hyderabad. The joint promotion will be open till end-September, SriLankan Airlines’ and Taj Hotels’ group officials said.

According to E. Venkatram Reddy, managing director of Nagarjuna Travels, the General Sales Agent for SriLankan Airlines, the airline had designed the package because there was substantial potential for leisure travel in Andhra Pradesh. “SriLankan Airlines, the largest international carrier into India, is offering special packages that include airfares and stays at Taj Hotels in Sri Lanka and in Kerala. SriLankan Holidays works with a global network of hotels and tour operators to offer holidaymakers travel packages in the airline’s 49 destinations in 28 countries,” Asha Kumar, regional manager, Andhra Pradesh for SriLankan Airlines said.

Ms Kumar said packages start at Rs 18,840 per person plus taxes for three nights. “This is the first time that packages have been developed encompassing two countries,” she said. Ms Kumar said that as part of the package, travellers can decide on their itinerary, either staying at the Taj hotels in Sri Lanka throughout the duration or shop at “duty free” at the Bandaranaike International Airport in Colombo, before flying to Kerala for holidaying at various Taj properties.

Mr Reddy said tourists can fly from Hyderabad to Colombo, then to Kerala, and return to Hyderabad via Colombo. The Bandaranaike International Airport had been renovated with a new pier and aerobridges and a new Business Class lounge. The participating Taj hotels in Sri Lanka include the Taj Samudra in Colombo, the Taj Exotica in Bentota and the Airport Garden Hotel near the international airport, said Vinod Kumar, sales manager, domestic leisure and conferences.

In Kerala, the participating hotels include the Taj Malabar in Kochi, the Taj Residency in Ernakulam, the Taj Garden Retreat in Kumarakom, the Taj Green Cove Resort in Kovalam, and the Taj Garden Retreat in Varkala, he said.

Mumbai, Aug. 29: There was a tug of war between the Sensex heavyweights during the day but the Sensex ended on a very positive note up 87.33 points at 11,706.85, the highest closing since May 17. The Sensex saw an intra-day high of 11,739.77. The Nifty closed up 24.60 points at 3425.70, after seeing an intra-day high of 3434.95.

The positive sentiment was in line with the Asian markets which were uniformly up. The Nikkei was up 127.97 points, the Hang Seng 160.99, the Straits Times 28.28 and the Kospi 16.72. The turnover on both the exchanges was relatively good at a total of Rs 34,047 crores with the F&O sector accounting for Rs 25,890 crores.

The market breadth was not encouraging with 435 stocks advancing and 478 ending in the red. One of the reasons for the good sentiment all over was declining crude prices which settled at $71 per barrel at close.

Will the Tech Mahindra hefty listing at 44 per cent premium to the issue price on Monday, remove the inauspicious spell cast on the IPO market ? Indications are that the bad period could be over at least for a while. The IPO market was rocked with uncertainty after the stock market went into a tail-spin in May/June.

Many big names held back their IPOs and the brave hearts like Reliance Petro and GMR went ahead. Reliance Petro listed at an impressive Rs 100 against an issue price of Rs 60, though the stock is now languishing at around Rs 62.

The GMR issue did list at 213, which was a wee bit above the issue prices of Rs 210, and is currently trading at around Rs 225. Analysts had predicted a healthy listing for Tech Mahindra, though some people still had the GMR experience in mind. But as things turned out it was a bonanza for those who had bought it.

Bubble zone or for real?

The market looks like getting into bubble zone by crossing the 11,700 mark quite rapidly. Very few analysts are ready to say that the downside is over and that there will be an upside from here. The reason: uncertainty over US moves in West Asia against Iran’s nuclear position. So, though crude oil prices have receded a bit, there is no saying when they could spurt.

Valuations for Indian market

Citigroup, in its paper on Indian equity strategy, feel that the value zone for India will be there only if the Sensex falls below 9,000. The Citigroup researchists noted in April that the Indian market’s valuation moved into bubble zone because of the relentless foreign and local fund flows. Then came a 20 per cent correction from the May 10 peak which Citigroup says is a good sign as the “one-way speculative momentum and froth has been taken out of the market.”

The research paper said that 2006 would be the year of consolidation for the Indian stock markets and overvaluations and excess optimism would be weeded out after three years of a strong performance. Earlier this year, Citigroup and some other foreign brokerage houses had said that the ideal valuation for the Sensex would be 8,500-9,000.
Citigroup has now upped this fair valuation for the Sensex to 9,800 and by mid-2007 predicts 10,700.

Insider trading and M&As

An interesting development in the United States is the spotlight on what they call illicit trading ahead of deal announcements. They say it is becoming a systemic problem. According to an analysis of the biggest US mergers over the past 12 months, trading in the securities of 41 per cent of the companies receiving buyout bids was abnormal and suspicious in the days and weeks before those deals became public. This meant that those who bought shares, obviously on insider information, were richer by 40 per cent.
The study according to the International Herald Tribune was conducted for the New York Times by Measuredmarkets, an analytical research firm.

Need a study in India

One wishes that there was such an institute here in India that could do such a study. It would find a huge can of worms. Trading on insider information before mergers and acquisitions and even before an IPO, is second nature to those who are privileged with information about possible mergers and acquisitions. Also when a company is coming out with an IPO, some unscrupulous promoters start jacking up the company’s scrip so that they can put a hefty premium on the stock. This is so rampant that it is surprising that the regulator has not caught anyone yet. It is public knowledge and some investor groups have even taken up the issue. So, it will be interesting to see what happens in the US and if it is able to tackle this menace.

What’s the conventional use for a Sony PlayStation? If you guessed gaming, you are right on the money. But if you also thought out of the box, and guessed that there are other uses for a PS, you got the money shot too. Because the bright sparks at Stanford University in California have found a new use for the PS: to leverage the PS’s computing power to find further the research into cancer, Alzheimer’s disease and other illnesses.

According to Stanford University, its researchers plan to use the cell processor power of Playstation3 to perform calculations for the Folding@Home project, which simulates protein behaviour to give scientists clues about the disease process. The molecular simulation project allows researchers to study Alzheimer’s Disease, Huntington’s Disease and some cancers.

Researchers described the development as a major advance in capabilities that were once possible only with supercomputers. While the cell microprocessor helps perform calculations to simulate protein folding, the graphic chip of the Playstation 3 system will show the protein folding process in real-time, using new image technologies, according to the researchers.

“With this new technology, as well as new advances with GPUs, we will likely be able to attain performance on the 100 gigaflop scale per computer,” folding project team members announced on their website. “With about 10,000 such machines, we would be able to achieve performance on the petaflop scale.” Stanford University said researchers said the PS3 client and GPU will help push calculations to the 10 petaflop scale, which would mean the project will outperform the fastest supercomputers. They said they are testing the ATI GPU client software and plan to announce an open beta by the end of September. The university launched the Folding@Home project in 2000.

It is one of several projects that link extra computing power from hundreds of thousands of PCs to create networks as strong as supercomputers to perform scientific calculations. IBM’s World Community Grid is currently powering AIDS research. The objective of Folding@Home is to understand protein folding, misfolding, and related diseases.
What is protein folding and how is folding linked to disease? “Proteins are biology’s workhorses — its ‘nanomachines.’

Before proteins can carry out these important functions, they assemble themselves, or fold. The process of protein folding, while critical and fundamental to virtually all of biology, in many ways remains a mystery,” the posting on Stanford University’s website says.

New Delhi, Aug. 29: Under attack from Anil Dhirubhai Ambani Group (ADAG) for alleged discrimination in evaluation of Coal Bed Methane (CBM) blocks, oil regulator DGH on Tuesday mounted a counter offensive, saying ADAG never questioned the criteria for bid evaluation before the tender closed.

Director General of Hydrocarbon V.K. Sibal, who is fully backed by the petroleum ministry on the issue, told reporters that DGH recommended award of 10 CBM blocks strictly in line with the criteria laid down in the notice inviting offers. “If certain bid evaluation criteria were unclear, why did they (Anil Ambani group) not ask for clarification. While most of the bidders sought clarification, they never asked a single question in the four-month period between February (when the bid offer was made) and June 30 when bids closed,” he said.

It was only on July 28 after evaluation was completed, that the consortium of Reliance Natural Resources Ltd-Reliance Energy Ltd-Geopetrol, which was a clear winner in four out of the 10 CBM blocks, raised doubts on 3-marks for technical capability in two more blocks. Pooh-poohing the claims of the consortium that it was kept in the dark about the evaluation parameters till the submission of the bids, the petroleum ministry had earlier said there was no discrimination and that it was ready for any scrutiny including in a court of law.

Mr Sibal said there was resistance about the technical and fiscal package offered by adag as some felt it was impractical to implement the aggressive bid. “(but) I put my foot down and told my officers that we want to encourage new entrants.” “I have come here to create trust and transparency in the system. I am not favouring or disfavouring anyone. For me the most important issue is prospecting of oil and gas and for me everyone is equal and is evaluated on the same parameters,” Mr Sibal said.

Chennai, Aug. 29: Suguna Poultry Farm Ltd, the flagship company of the Rs 1,100-crore Suguna Group, is expanding its operations into Northern India, and is planning to invest Rs 50 crores for contract framing in Punjab and Haryana. “We have started our operations in Punjab six months ago and will be shortly entering Haryana. We are planning to invest Rs 50 crores in the next three years, empowering more than 1,000 farmers in the region,” said Mr B. Soundararajan, managing director of the Suguna Group.

In contract farming, the company provides chick, feed and vaccine to farmers and after 42 days of growth, the company buys back the chicken from the farmer at the market rate. The Coimbatore-based company, which has established a strong presence in the broiler segment, has chalked out plans to enter into the layer section.

The company had recently tied up with Germany-based Lohmann group. “Through our tieup with the Lohmann Group, we will bring LSL-Lite, the top chick brand in the world, to the Indian farmers,” Mr Soundararajan said. The layer operations will add over Rs 150 crores to its revenue in the next three years.

“We will soon initiate livestock marketing through retail chain ensuring complete hygiene. Product variants, co-branding with add-on product items to the chicken, chicken kiosks are among the immediate future plans,” said Mr Chander Rajgopal, general manager (marketing), Suguna Poultry Ltd. The company, which closed the year 2005-06 fiscal with revenue of Rs 1,053 crores, is aiming a turnover of Rs 1,600 crores in the current fiscal. About 20 per cent of its revenue is coming through exports.

New Delhi, Aug. 29: The European Aeronautic Defence and Space Company or EADS, an aerospace giant, on Tuesday said it will invest euro 2 billion (about Rs 11,000 crore) over the next 15 years in India. The company, which owns 80 per cent in Airbus, will set up a technology centre in the country, which will also include Airbus’ engineering centre. The centre is expected to start operations from next year.

“India is a priority country for EADS as it offered market potential and solid aerospace and defence competencies,” EADS CEO Tom Enders said. Mr Enders said the company will also facilitate the creation of training centers for pilots and mechanics as well as maintenance and distribution centres in India. The EADS Technology Centre will become a major employer in the aerospace and defence sector in India with the potential to create up to 2,000 jobs, he asserted.

This campus-style institution will bring both the EADS subsidiaries and the Indian partners under the same roof, performing engineering and information technology services. The decision on the location of the centre will be made soon. Operations are expected to begin in the second quarter of 2007 and the entire campus will be inaugurated in early 2008.

Central to the EADS campus will be an engineering unit called the Engineering Centre Airbus India. It will be a 100 per cent owned subsidiary of Airbus and will represent the biggest on-site unit owned by an EADS division.

New Delhi, Aug. 29: The finance ministry on Tuesday said that three health projects totalling $662 million, which were held up for more than a year, have now been approved by the board of executive directors of the World Bank. Lending to the Indian health sector, the three projects had been stalled about a year-and-half back, owing to irregularities noticed in the procurement of the RCH I (Reproductive and Child Health) project.

It is learnt that finance minister P. Chidambaram had written a letter to the World Bank president in this regard, trying to dispel the “misgivings” that the World Bank may have had. As an initiative from the finance ministry, the commitment to have a fully “transparent procurement processes” that conforms to the highest standards was emphasised by the finance minister in his dialogue with the World Bank president. The World Bank board, which met recently, gave clearance to the health sector lending in India.

It is learnt that the approval of India’s health sector projects received unanimous support of all the executive directors in the board. According to the finance ministry, a governance and accountability action plan was jointly drafted to bring about greater transparency in the procurement processes in the health sector.

The finance minister has also emphasised that the delay by the World Bank in sanctioning these projects was gravely hurting the delivery of health services to poor people in the country. A finance ministry statement noted that the board of the World Bank has not only praised the pro-poor programmes of the Indian government and its achievements and importance of the health project in attaining the millennium development goals (MDGs), but also the strong commitment shown by India.

Hyderabad, Aug. 29: Suven Life Sciences Ltd, a Hyderabad-based pharmaceutical contract research and manufacturing company, said on Tuesday it has signed an agreement with Eli Lilly and Co., a US-based global pharmaceutical company, to collaborate on the pre-clinical research of molecules in the therapeutic area of central nervous system (CNS) disorders.

“This effort is a collaboration between Suven and Lilly, with scientists from both parties working together in a team. Their goal is to identify potent, oral compounds that selectively modulate the specified G-Protein Coupled Receptor for the target CNS disease,” said Dr Ramakrishna Nirogi, vice-president, drug discovery of Suven Life Sciences.

Suven will receive payments from Lilly and potentially downstream payments if the identified candidates are selected by Lilly for further pre-clinical research and development. “This is our first true research collaboration with a global pharmaceutical company,” said Mr Venkat Jasti, vice-chairman and CEO of Suven.

New Delhi, Aug. 29: In the midst of a number of disputes surfacing in the petroleum sector, the Planning Commission is all set to recommend an oil regulator besides a defined pricing mechanism for sensitive petro products as part of the Integrated Energy Policy. The expert group, headed by Planning Commission member Kirit Parikh, is understood to have recommended sweeping changes in the current fuel pricing mechanism, restructuring subsidy on renewable energy sources, setting up a coal regulator, long term coal contracts for the power sector and budgetary support for R&D in the energy sector.

The committee is expected to submit its recommendations to plan panel chief Montek Singh Ahluwalia on Wednesday, where the assent is also on constituting an “appellate tribunal” on fuel besides setting up a regulator for the entire petroleum sector.So far, Director General of Hydrocarbon (DGH), a part of the petroleum ministry, is functioning as a sectoral regulator.

On renewable energy sources, the committee is likely to recommend restructuring subsidy in a way that its benefits accrues at the level of delivery. “There is a need for introducing efficiency benefit mechanisms including incentive-based schemes to promote renewable energy,” sources pointed out.The policy also talks about setting up of a regulator for the coal sector, to monitor regulated coal prices for 80 per cent of the coal and prices for the remaining coal, including e-auctions and operation of captive coal blocks.

“The committee has suggested revising long-term fuel supply for the power sector and revising coal price contracts on a six-monthly basis. The prices would be formula-based, commensurate with international prices of coal,” sources said.The committee has said that the prices should not be market-oriented and that in fixing coal prices, there was a need to be sensitive to inflation and cost of expansion of power projects, while arguing that coal would be the mainstay of energy for the next 40 to 50 years in the country. Suggesting that the power sector would be the end-user of gas after fertilisers, petrochemicals and domestic users, the committee has recommended that gas pricing should not be based on cost of production.

The committee also suggests budgetary support be provided to encourage research and development in the energy sector. The policy calls for an independent board to govern the fund, with representations from the Department of Science and Technology, the Planning Commission and the ministries of coal, power and petroleum.

The approved
* Reproductive and Child Health-II Project ($350 million)
* National Tuberculosis Control Project-II ($170 million)
* Karnataka Health Systems Development and Reform Project ($142 million)