Indian Economy - News & Updates - Archive

[white_pawn]

Govt plans big-bang divestment​

4 Jun 2009, 0049 hrs IST

NEW DELHI: With Left Flag out of sight, the government is planning a big-bang disinvestment in the state-owned PSUs. It plans to raise over Rs
25,000 crore in 2009-10, not only to reduce fiscal deficit but also for expansion of public sector enterprises.

The disinvestment department, which was out of action for some time due to strong opposition from the Left parties against any selloff of government stake in PSUs directly or indirectly, has again come under the limelight. Leading merchant bankers are approaching the department's officials to get business in near future.

A senior merchant banker said the department is ready with a number of proposals of stake sales in the coming months. Draft prospectus of PSUs like Oil India, National Hydro Power, RITES and UTI Asset Management Company have already been cleared by Sebi. As the sentiment in the equity market is much better now, these companies may decide to go ahead with their public issues soon.

A senior government official said when the Sensex was hovering around 6,000 points in 2003-04, the government could raise Rs 15,500 through divestments. With Sensex around 14,500 now, government can think of raising anything upwards of Rs 25,000 crore.

The main chunk of fund, a source said, would come from the divestment of government stakes in blue chip companies like BSNL, MMTC, NMDC, Coal India, NTPC and NALCO. Disinvestment of up to 10% in BSNL alone could fetch around Rs 20,000 crore.

Similarly, the market capitalisations of MMTC and NMDC are at present around Rs 1,60,000 crore and Rs 1,40,000 crore respectively, with government's holdings around 99%. Divestments in these companies can also raise substantial funds, the source added.

According to a Religare report on disinvestment, a government committee had already recommended selloff of stakes in 25 companies. But, because of opposition from Left parties, the government could not proceed. As the scenario has changed now, government is likely to go ahead with disinvestment of its stakes in these companies.

Besides these companies, government had also planned to do strategic sale in many other companies but could not proceed due to opposition from allies. In Bharat Aluminium, the government had sold 51% stake to Sterlite Industries, which is now called Vedanta. As per the original agreement with Vedanta, the government should sale the remaining stake also. As management has been already transferred to the private partner, the government is considering to exit the company.

Govt plans big-bang divestment - India Business - Business - The Times of India

 

[white_pawn]

Malaysian, Russian cos may bid for WiMAX​

4 Jun 2009, 0035 hrs IST

AMSTERDAM: Russian operator Yota and Malaysian operator Packet One are in serious talks with several Indian firms to enter India's Broadband
Wireless Access (BWA) market and are also likely to emerge as bidders in the WiMAX auctions scheduled to be held later this year.

The spread of mobile broadband is recognized by the government as being crucial to India's development objectives, especially in rural areas in the areas of M-care, M-commerce, M-learning and M-governance.

"We are open to coming in as a consultant with a minority stake or as a majority player bringing in the financial investment, experience and team to the Indian market," Yegor Ivanov, Yota's director, business development, told TOI.

According to Ivanov, Yota is already in talks with MTNL to launch its WiMAX rollout in Delhi and Mumbai in a franchisee role along with a local partner. The total project cost is estimated to be in the range of $200 to $250 million.

These negotiations, which are being conducted with the help of Intel Capital are expected to conclude by the end of June, he confirmed. Yota also admitted to being in talks with the Sun group and the Tatas for a partnership to enter the WiMAX space though he said the talks are not concrete at this stage.

Yota has set aside $0.5 billion for international expansion. "Depending on the business case, we will invest this money in either India or China. We have some intentions to bid for WiMAX spectrum when the auctions are announced, but these are not concrete. We are still planning our entry strategy," he said.

Yota, which launched commercial Mobile WiMAX services in Moscow and St Petersburg on June 1 and Packet One Networks (P1) a Malaysian converged telecom, broadband and Wimax service provider are probably the only global operators to declare a serious investment appetite in India.

"We will bid in India's WiMAX auctions along with a local partner," Michael Li, CEO, Packet One told ToI. According to him, the mobile broadband opportunity in India is immense. India, Pakistan and Bangladesh together serve a broadband population of a little over 2 million which shows the tremendous room for growth.

However, US operator Clearwire, which was also reported to have interest in bidding for WiMAX spectrum in India clarified that it does not have the investment appetite. Clearwire's interest in international networks is only in helping other operators build networks. "We will not be investing our own money but are willing to offer our expertise to help governments and operators make the right technology choice," Barry West, president, Clearwire told ToI.

Clearwire recently launched mobile WiMAX services in Atlanta and Georgia and expects to launch in a total of nine new cities this year. It also plans to convert major fixed-wireless markets like Chicago, Philadelphia, Honolulu and Charlotte to mobile WiMAX.

WiMAX boasts of 475 deployments in 140 countries. According to Ron Resnick, WiMAX Forum president, the older HSPA technology available for mobile broadband is 2.5 times the cost of WiMAX with just one-third of its throughput. "The other potential competing technology which works on a GSM platform is LTE or Long Term Evolution but it is at least two years away from hitting the market," he said.

 

[Rajkumar]

Sensex closes above 15K for 1st time since Sept '08


The benchmark indices gained strength in the last hour of trade ahead of the government's much-awaited announcement on the budget date. The Union Budget would be held on July 3, 2009. The Rail Budget would be presented on July 1 while the Economic Survey would get announced on July 2.

This rally was led by infrastructure (capital goods + power), telecom, pharma, banking, realty and select cement stocks, which helped the Sensex to close above the 15,000 mark for the first time since September 2, 2008. The broader indices outperformed the benchmark indices and kept the market breadth strong.

The 30-share BSE Sensex closed 137.78 points or 0.93% higher at 15,008.68, after seeing an intraday high of 15,026.03 and low of 14,599.43. The 50-share NSE Nifty touched an intraday high of 4582.20 and low of 4453.45, before closing at 4572.65, up 0.93% or 41.95 points. Both indices had traded lower in the first half of the trade.

L&T, ICICI Bank, HDFC, Bharti, HUL, BHEL, Reliance Industries, Reliance Communication, Reliance Infrastructure, DLF and HDFC Bank were being supportive to the markets. However, the sell-off in metal and select technology stocks capped the gains.

President Pratibha Patil, in her first address to the joint session of both houses of Parliament, said that government's stake in public sector undertakings (PSUs) will not fall below 51%. She added that the government will prepare a roadmap to list public sector units.

 

[Neo]

India keen on swift EU free trade deal ​

Thursday, June 04, 2009

NEW DELHI: India said on Wednesday it wanted the swift conclusion of a free trade agreement with the European Union and expected some progress when the next round of talks takes place here next month.

“India is committed (to a) very fast and expeditious conclusion of this agreement we are making progress,” Commerce Ministry Joint Secretary Neeraj Gupta told reporters.India and the EU have had a strategic partnership agreement since 2004 and talks on an free trade agreement began last year, but progress has been slow.

The two sides are due to hold another round of talks in New Delhi in July. After six rounds the two parties have not been able to arrive at a consensus on the level of trade to be covered under the deal that would eventually eliminate duties on goods.

The European Union is India’s largest commercial partner, ahead of China, with annual bilateral trade around 60 billion euros (85.4 billion dollars). But India ranks only ninth behind South Korea in the EU’s list of major trading partners a position the French government described last year as “abnormal.”

Europe wants to boost ties with the emerging Asian economic giant, which is seen as a relative haven of stability in an often volatile region. The south Asian giant’s nearly 1.2-billion population and growing middle class represent a huge market for EU companies. The European Union is increasingly looking towards the massive growth potential of Asian markets.

 

[Neo]

To be continued here.