Air India pilots to get Sep pay in two days

With an impending stir threat by its pilots, Air India is likely to pay the September salaries of its employees in two days and incentives and allowances by November 10, airline sources said on Thursday.

Talks were held with banks and financial institutions for working capital loans to arrange the amount for payment of salaries, productivity-linked incentives (PLIs) and flying allowances to the employees,including the pilots,they said.

Sources also said the management of the cash-strapped airline was making all efforts to pay the dues of the employees very soon, including the salaries by October 31 and PLI and allowances by November10.

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PE funds' exit could shake up BPO space

The coming months could see a spate of mergers & acquisitions in the Indian business process outsourcing (BPO) space, with several private equity funds looking at exercising the exit option.

Investment banking officials said PE firms generally invest for 5-7 years and then cash out. In some of their current investments, the normal investment cycle is either over or coming to an end. Last year, several funds had to postpone their exit because of the global meltdown.

Sources said several PE funds have opened channels with top IT firms, exploring the exit options.

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Wipro net profit rises 19 percent in Q2

Wipro Ltd on Tuesday reported a 19% jump in its net profit for the second quarter. Its revenue increased 6% year-on-year.

The company, the country’s third largest software service exporter which also makes soaps, light bulbs and hydraulic equipment, earned a net profit of Rs 1,162 crore for the quarter ended September 30, 2009 against Rs 978 crore earned in the same quarter last year. Its revenue stood at Rs 6,917 crore in Q2 against Rs 6,507 crore a year ago.

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Free branching tops banking reform plan

The government is considering far-reaching reforms in the banking sector, including giving banks the freedom to open branches in Tier-3 and Tier-4 cities, and granting 15 new licences to smaller banks for the first time in almost 11 years.

Prime Minister Manmohan Singh is learnt to have discussed several reform measures with Reserve Bank of India governor D Subbarao in the second week of October. They also discussed the idea of giving foreign banks full national treatment by suggesting they incorporate in India as wholly owned subsidiaries.

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Raja faced objections from then DoT secy Mathur

Communications and IT minister A Raja, who is under fire with the CBI conducting an enquiry into the alleged irregularities in licensing and spectrum allocation to eight new operators in January 2008, had faced severe opposition from his then secretary DS Mathur over the entire process.

The opposition from Mathur, most of which are recorded in files, was so strident that he refused to sign any files on the matter till his retirement. Mathur retired on December 31, 2007 and licences were granted towards the end of January 2008. One of the main objections of Mathur was that no new licence and spectrum could be granted without an “equitable and transparent policy”.

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It's two out of three for the Congress

The Congress coasted to power in Maharashtra for the third consecutive term and won a landslide victory in Arunachal Pradesh, but its gamble in Haryana failed to pay off, with the party falling short of a majority. Overall, the Congress victory will help the UPA consolidate further and push for more economic reforms.

The Congress-NCP combine, which has been ruling Maharashtra for the past ten years, got 144 seats out of a total 288, needing one more for a simple majority. With rebels of both parties and independents winning 49 seats, the ruling alliance may not have difficulty in mustering up the required number. The Congress-NCP combine marginally improved upon its performance of the last state elections, when it got 140 seats.

The Congress, which will continue to have the chief minister’s post, secured 79 seats

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United Spirits QIP raises Rs 1,600 crore to pare debt

United Spirits Ltd (USL), the world’s third-largest spirits maker by volumes, has raised Rs 1,615 crore through the placement of shares with institutions at Rs 913.70 each. The issue was launched on October 14 and closed on Wednesday.

The company issued 17.68 million additional shares, accounting for 16.4% of the existing capital, and will take its current share capital to 125.59 million after the issue, which was at a 0.9% discount to the Rs 921.75 closing price on the NSE on opening day.

Fund raising by USL follows the failure of its recent talks to sell a minority stake to Diageo Plc and private equity players.

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Air India, Indian Airlines call centres set to merge

Even as Air India's demand for equity infusion of Rs 5,000 crore is expected to be considered by a group of ministers on Wednesday, along with its financial restructuring plan, the state-owned carrier has inched a step closer towards integration of the IT platforms of Air India and the erstwhile Indian Airlines.

After being embroiled in legal battles, the call centre operations of Air India and Indian Airlines will finally be serviced by InterGlobe Technologies (IGT), which was awarded the contract for the common call centre in January this year.

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Win 7 launch may need finmin update first

India could miss the worldwide launch of Microsoft’s new Windows 7 operating system on Thursday, as the retail consignment of the software has not been cleared by the customs authorities, which is demanding physical proof of the software licence. Windows 7 is one of the most anticipated launches in recent times from Microsoft.

Ironically, the problem stems from an industry-friendly move in Budget 2009-10, which changed the tax structure on packaged software by partially exempting it from excise duty. As a result, packaged software is taxed in two parts. While the cost of the media (the CD containing the program) would attract excise duty, the license would attract only service tax.

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Re rally helps FII returns zip past Indian peers

The steady slide of the greenback has seen foreign institutional investors in India laughing their way to the bank. As the rupee is appreciating, FIIs have more than doubled their returns from the Indian market this festive season compared to their domestic counterparts. In the last one month Dollex-30, the dollar-denominated version of the BSE Sensex, has gained over 7.62% compared to the benchmark Sensex’s gain of 3.68%. On a yearly basis too, FIIs have earned 10% more than domestic investors since the Sensex has given a return of just 73.69% compared to the 83.35% gain in Dollex-30.

The Dollex-30 reflects the change in stock prices as well as currency values, and enables foreign investors to measure their equity returns in real terms, both in respect of domestic and international currencies.

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Anil blasts `biased' report but auditor stands firm

Two days after the government-appointed auditor's report that rapped Reliance Communications Ltd for inflating revenues to the stock exchanges and under-reporting revenues to the government came to light, chairman Anil Ambani on Thursday charged the audit firm, Parakh & Co, of professional misconduct and playing into the hands of corporate rivals.

In an audio-call, Ambani said he would approach the Institute of Chartered Accountants of India (ICAI) about the alleged professional misconduct of the auditor and the Securities and Exchange Board of India (Sebi) for a probe into the hammering of his group's stocks over the past few days.

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HDFC Bank profit rises 30%

Despite slower credit offtake, HDFC Bank, the country’s second largest private sector lender, reported a 30.21% rise its quarterly net profit, helped by non-interest income. The bank recorded a net profit of Rs 687.46 crore for the second quarter ended September 2009 against Rs 527.98 crore in the same quarter last year.

The bank’s net profit followed a 32% jump in the quarterly profit for Axis Bank, another private bank.

HDFC Bank’s gross advances rose 9% to Rs 1, 15,104 crore. Its gross and net non-performing assets,

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Platinum hikes UB Holdings stake to 11%

Australian fund manager Platinum Investment Management Ltd has increased its stake in United Breweries Holdings Ltd, the investment arm of Vijay Mallya’s UB group, to a tad under 11%. The fund reportedly mopped up the shares from the open market. Platinum Investment manages close to $14.55 billion through various investment vehicles.

The stake hike comes close on the heels of the UB group’s decision to call off talks with Diageo and a clutch of private equity majors to offload shares in flagship United Spirits Ltd to raise over $300 million and mitigate its overwhelming debt burden. United Spirits has a total debt of over Rs 6,500 crore on its books.

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No takers for half the new Nelp blocks, global majors shy away

The spat between the Ambani brothers, the global meltdown and financial & technical constraints including a shortage of rigs have affected the bidding process for Nelp-VIII and CBM-IV. On the last day of bidding, on Monday, the directorate general for hydrocarbons (DGH) has received bids for only 36 of the 70 blocks that were on offer. Australia’s BHP Biliton and UK’s BG and Cairn Energy were the only notable foreign companies that joined the bid.

Mukesh Ambani-led RIL, which recently pleaded for a three-year moratorium on exploration citing unavailability of deepwater rigs, shunned the auction, though it showed interest in one coal-bed methane block that is on auction separately. RIL has surrendered 14 blocks to the government after spending Rs 1,400 crore in unsuccessful exploration. RIL had won 45 blocks in the new exploration licensing policy (Nelp) rounds.

Essar Oil was the most aggressive bidder, placing bids for six coal-bed methane (CBM) blocks.

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Anil offers olive branch, but Mukesh sceptical

Anil Ambani sprang a surprise in India’s biggest corporate battle on Sunday by sending out a letter to estranged brother Mukesh Ambani suggesting a rapproachment just a week before the Supreme Court heard the two companies.

However, RIL, while welcoming the statement, urged Anil Ambani to put his sentiments into action. “(we hope) it is a positive change in the negative and malafide campaign launched by R-ADAG… RIL sincerely hopes that any overture for rapproachment to end acrimony is sincere and in no way related to the ongoing hearing of the case in the honorable Supreme Court,” a statement issued by RIL said.

Anil Ambani’s Reliance Natural Resources Ltd is locked in a legal battle with RIL over the price and terms of supply for natural gas from the offshore K-G D6 fields. In his suo moto

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Per second plan optional: Trai to vet new schemes

The Telecom Regulatory Authority of India (Trai) will examine the recently launched low-tariff schemes of the mobile operators to ensure that the schemes do not have hidden charges that would dupe consumers. The tariff war sparked off by these schemes and reports of a seconds-based billing plan by the regulator had led to a crash in telecom shares this week.

Upon his return from Geneva from an international conference on Thursday, Trai chairman JS Sarma clarified that he does not intend to make operators shift form the current per minute pulse rate billing system to a per second system. An interpretation along these lines of his statement in Geneva earlier this week had appeared in a section of the media.

The Trai chairman said he would come out with a consultation paper to examine the feasibility

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Banks expect rates to remain stable this year

RBI Governor D Subbarao’s statement on Tuesday about an early exit from the accommodative monetary policy sent bond yields soaring and it seemed to have belied bankers’ expectation that the rate would remain unchanged in the near term.

Speaking at the G-30 international banking seminar in Istanbul, Subbarao said policy rates (in India) may have to be tightened ahead of those in advanced economies. Yields on the 10-year benchmark paper closed at 7.24% against 7.16% on Monday as treasury managers anticipated a hike in the benchmark rates and a resultant fall in bond prices. Yields on bonds move inversely to their prices. The yields also moved as state governments borrowed another Rs 9,000 crore from the markets. The rupee too jumped 1.3% to 46.88 a dollar, the strongest level since Oct. 1, 2008.

Bankers, however, said they do not expect a rate hike anytime soon. The RBI will announce its mid-year review of the monetary policy on October 27.

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National survey for job data and forecast to begin

Starting this month, the Centre is kicking off an unprecedented employment survey to capture employment data across all sectors as well as generate future projections for the job market based on employers' outlooks. The decision to undertake an annual employment survey comes on the back of the global slowdown, which forced the Centre to order quick quarterly surveys to assess the extent of joblosses in the worst-hit industries.

While employment is a key economic indicator and moves markets across the world, India's official economic statistics, included in reports such as the Economic Survey, simply skip the job numbers. The only official report on employment comes out every five years, when the National Sample Survey Organisation (NSSO) releases data on employment and unemployment. The NSSO and Central Statistical Organisation also reveal employment trends in the Annual Survey of Industries, but this only includes formal manufacturing jobs and the findings are released after a few years'lag.

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Lessons from crisis: ECBs now need insurance cover against default

Companies raising overseas loans are being asked to buy insurance cover against loan default, which raises their borrowing costs by at least 150 basis points. Despite a drastic improvement in the liquidity situation globally, lenders are reluctant to lend long-term funds to foreign firms.

Bankers arranging overseas loans for Indian companies said a majority of the ECB deals that have been cut in the past few months are in the form of export credit agency or ECA loans. These agencies, which can be government-owned or private companies, provide an insurance cover against default on a credit taken by a company from overseas lenders.

This helps in transferring the risk of default from overseas lenders—who are otherwise flush with liquidity but do not want to take chances to the ECAs.

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Wipro GE to integrate operations

The Indian arm of the $17-billion GE Healthcare is bringing all its remaining stand-alone businesses and manufacturing units under the umbrella of its 19-year joint venture with Wipro Ltd. “The consolidation would lead to more effective management and resource utilisation and help accelerate growth for GE Healthcare through the existing JVs large distribution network,” Jeffrey Immelt, GE’s global CEO, said in New Delhi on Friday.

The consolidation under the JV implies that Wipro GE Healthcare, which currently distributes around 85% of GE Healthcare’s products and solutions in the country, would now be the sole distributor and exclusive vehicle for GE Healthcare’s activities in India.

It would also mean that the three units, GE Healthcare’s Life Sciences, GE Healthcare Medical Diagnostics and GE Healthcare Medical Systems—which manufactures X-ray products

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Bharti MTN talks collapse again

In the end, the hurdles proved insurmountable. For the second time in as many years, Bharti Airtel and South Africa’s MTN failed to reach what would have been an historic $23-billion agreement to create the world’s third largest mobile firm with over 200 million subscribers, revenues of $20 billion and operations spanning 24 countries from the Cape of Good Hope to Bay of Bengal.

While Bharti shares were unaffected because news of the talks’ collapse came after trading hours, MTN shares at the time of going to press had lost 5% on the Johannesburg stock exchange and trading in its scrip had been halted at the company’s request. The South African rand lost 2% against the dollar.

While last year’s talks ended because of a surprise last-minute demand by MTN that Bharti becomes its subsidiary,

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