Anil Agarwal regrets $8 bn Vedanta aluminium project in India

Complex govt procedures are delaying project approvals in India, impeding businesses, Agarwal said.

 

New Delhi/Mumbai: Billionaire Anil Agarwal, who controls London-based Vedanta Resources Plc, said he regrets investing $8 billion on an aluminium complex in India that’s faced a shortage of raw materials.

“I could either invest in Vedanta Aluminium or I could have bought Asarco,” Agarwal said in an interview with Bloomberg TV India in New Delhi aired on Friday, referring to US copper miner Asarco Llc. “If you ask me today, I regret it.”

Complex government procedures are delaying project approvals in India and impeding companies, Agarwal said. His Sesa Sterlite Ltd has seen its iron-ore business slump following court-imposed mining bans in two states, while the group’s failure to obtain a mining permit for bauxite in the eastern state of Odisha has driven the aluminium unit into losses.

“Its aluminium project is a dead investment because of lack of raw material,” Giriraj Daga, Mumbai-based analyst at Nirmal Bang Equities Pvt. Ltd, said in a phone interview. “There is no horizon for this business unless they are able to secure their own bauxite.”

 

     Industrialists including            Agarwal,       Naveen Jindal     and    Kumar Mangalam Birla have faced project delays in India.

Vedanta lost a bid in 2009 to acquire Asarco for more than $2.5 billion, cheering investors and boosting the company’s stock at the time.

“I would have done better if I had bought Asarco,” said Agarwal, whose net worth is calculated at $2.8 billion, according to the Bloomberg Billionaires Index. It would have been a feather in my cap.

 

Local Tribes

 

Vedanta Aluminium is running below capacity after failing to get approval from local tribes to mine bauxite.

Vedanta would have been better off by not investing in the aluminium business at all, Abhishek Shukla, an analyst at Societe Generale said in an e-mail. Some factors that make it a poor investment include government red tape and too much spending by the company without clarity on bauxite supplies.

Vedanta rose as much as 1.3% to 907 pence and traded at 902 pence as of 11.07am in London. Shares of Sesa Sterlite, which controls Vedanta Aluminium, gained 4.6% to Rs.183.10 at the close in Mumbai.

Asked if doing business in India is more difficult than elsewhere, Agarwal replied: “That’s for sure.”

His employees have to run from “table to table” for permission to re-open the company’s iron-ore mine in the southern state of Karnataka, months after a court partially lifted a ban on mining there, he said.

 

Mining Bans

 

India, which exported 101.5 million tonnes of iron ore in the year to March 2010, banned mining in two of the nation’s biggest producing states in August 2011 and September last year as it probed charges of illegal mining. Exports dropped to 18 million tonnes in the year ended 31 March, while companies have been forced to import, according to the Federation of Indian Mineral Industries. The court-ordered bans have since been eased. Companies still require government clearances.

India has the potential to produce as much as 700 million tonnes of the steel-making ingredient if it simplified its policies and quickened approvals, Agarwal said. The nation produced about 140 million tonnes in the year ended 31 March.

Agarwal said he plans to devote most of his personal wealth to philanthropy, in particular, eradicating malnutrition in India under a Vedanta project called “Khushi”, which means happiness. BLOOMBERG.

 

 

AKANKSHA SHANU

PGDM 1st SEM. 

Tehelka rape live: Tarun Tejpal offers to surrender passport in Goa court, bail hearing underway Read more at: http://indiatoday.intoday.in/story/tarun-tejpal-arrest-goa-bail-plea-sexual-assault-shoma-chaudhury/1/327154.html

11.09 am: Prosecution seeks 14-day custody for Tejpal.
Tarun Tejpal offers to surrender passport in Goa court.
10.35 am: Tejpal's family and lawyer at the Panaji sessions Court.
10.30 am: Tejpal's bail hearing underway.

                                                                                 Tejpal reaches Crime Branch
9.31 am: Ahead of hearing on his bail petition, Tehelka Editor Tarun Tejpal on Saturday visited the Crime Branch office on Saturday and said he was cooperating in the investigation.

Police sources said Tejpal, who has been accused of sexually assaulting a woman reporter in the magazine, was not quizzed and stayed for 10 minutes.

"We have joined the investigation started by the Crime Branch yesterday. We will join today also," Tejpal told reporters after coming out of the office.

A Sessions court is slated to hear his anticipatory bail plea at 10 am today. The judge had yesterday given him interim protection against arrest till this morning.

Tejpal landed at Dabolim airport on Friday evening and was escorted by a police team to the crime branch office in Dona Paula, Panaji, for interrogation.

Sources said the senior journalist was questioned for over 90 minutes. He will be brought to the North Goa sessions court on Saturday morning, where his bail plea will be heard again.

On Friday morning, the ex- editor of Tehelka managed to dodge a combined team of Goa and Delhi Police that visited his residence in Jangpura, his flat in Gurgaon and his sister's house in search of him. A police officer told MAIL TODAY that the Goa police had not been able to get in touch with Tejpal since Thursday evening. This made them send a team to Delhi to check his whereabouts. The Police also raided the late Ponty Chadha's farmhouse in Chhatarpur but had to return empty- handed.

Pradeep k Shukla

PGDM 1 Sem

Govt considering ITC, L&T, Axis stake sales to pare deficit

The ministry intends to ask the Cabinet to approve the proposal to meet its target of Rs54,000 crore in total share sales in the year ending 31 March 

India faces a slump in economic growth that’s hurting tax revenues, adding pressure on the govt to sell some of its stake in ITC, L& T and Axis, worth a combined Rs47,400 crore at current prices, to help contain the budget deficit. Photo: Pradeep Gaur/Mint

New Delhi: India is seeking to revive the option of selling some government stakes in ITC Ltd., Larsen & Toubro Ltd. and Axis Bank Ltd. to raise funds, three finance ministry officials with direct knowledge of the matter said.

The ministry intends to ask the Cabinet to approve the proposal as pressure grows on the administration to meet its target of Rs54,000 crore ($8.7 billion) in total share sales in the year ending 31 March, said the officials. They asked not to be identified as the plans aren’t public.

The officials said a final decision has yet to be taken and didn’t give a time frame for the approval process. The government’s attempt since the end of 2011 to set up a fund management company for the stocks, which would then pledge them as collateral to secure loans, has stalled.

India faces a slump in economic growth that’s hurting tax revenues, adding pressure on the government to sell some of its stake in ITC, Larsen & Toubro and Axis, worth a combined Rs47,400 crore at current prices, to help contain the budget deficit. Prime Minister Manmohan Singh’s goal is to shrink the gap to a six-year low of Rs4.8% of gross domestic product this fiscal year

NITESH KUMAR

PGDM 1ST 

LIVEMINT

Jet Airways needs to cut costs, Naresh Goyal warns employees

 Jet, which operates 113 aircraft to 76 destinations, has been the first existing airline to benefit from the government’s decision in September 2012 to allow foreign airlines to invest as much as 49% in local airlines. Pradeep Gaur/Mint

New Delhi: Jet Airways (India) Ltd chairman Naresh Goyal has warned employees that the airline needs to cut costs as it combines its network with that of Abu-Dhabi-based Etihad Airways PJSC, which has bought a 24% stake in Jet.

The warning comes after Jet announced a record loss of nearly Rs.1,000 crore in the September quarter and analysts said that a major part of the infusion from Etihad may have been wiped out.

The deal was worth $900 million (around Rs.5,616 crore today)—$379 million in equity in the airline, $150 million in equity in Jet Airways’ frequent flyer programme, $70 million from the sale and leaseback of three pairs of Heathrow airport slots and $300 in million debt financing.

 

 “The months ahead will be critical and we would need to work as a team to deliver strong commercial, operational and financial benefits for all our stakeholders, by creating operational synergies, rationalizing costs and expanding the footprint of our international network,” Naresh Goyal wrote to employees on 20 November, announcing the formal closure of Etihad’s stake purchase. Mint has reviewed a copy of the message.

Jet, which will soon have to compete in India with Singapore Airlines and AirAsia’s local units, declined to comment on Goyal’s letter.

Jet, which operates 113 aircraft to 76 destinations, has been the first existing airline to benefit from the government’s decision in September 2012 to allow foreign airlines to invest as much as 49% in local airlines.

 

 Goyal said Etihad representatives James Hogan and James Rigney have joined Jet Airways’ Board and their “vast expertise and immense experience, will further enhance the performance of Jet Airways and equip it to surmount any challenge that may come its way”.

Some of Jet’s existing senior employees are, however, quitting.

“My six-year journey with Jet will end in two days,” the airline’s chief commercial officer Sudheer Raghavan said in an email to employees on 27 November. “It takes a resilient team like all in Jet to just keep going despite the massive challenges we faced in the past few years. We ran the dark gauntlet, but I see light ahead.”

“God bless Jet Airways and guide it on its journey to regain its old glory. It has the DNA to survive and succeed,” Raghavan said.

Raghavan said he plans “to take a few months off to do a few things I have been putting off and then I’ll hit the job market again”. Mint has reviewed a copy of the message.

Raghavan was instrumental in building Jet’s route network in recent years and was also the spokesperson for the airline on many public forums.

Jet’s CEO and chief financial officer had quit earlier this year after Etihad moved in.

In his email, Goyal said together with Etihad Airways, Jet will enhance connectivity “through the gateway cities of Mumbai and New Delhi, and, progressively, through other regional gateways across India”.

The airline is likely to align and feed Etihad’s hub at Abu Dhabi, analysts have said.

 

 An analyst said Goyal’s mail was required to prepare employees for changes. “First, now that all approvals have been received, a formal announcement to the employees was needed. Perhaps in not so pompous language, but needed nevertheless,” said Jet’s former CEO Steve Forte, adding, “Secondly, reading between the lines, the message is preparing the employees to upcoming changes both in management, organization and work ethics/standards, etc.”

He said Jet will most likely be an Etihad-controlled airline now. “If Etihad has it its way, there will be several changes in management and they will run the airline. I see it as a positive trend,” he said.

Jet’s stock fell 0.09% to Rs.294.05 on BSE, while the exchange’s benchmark Sensex gained 0.56% to close at 20,534.91 points.

vikash chandra mishra

PGDM 1st year

source: Mint

Tehelka case: Goa court stops police from arresting Tejpal till 2.30pm

NEW DELHI: A few hours after Tehelka magazine's founder-editor Tarun Tejpal's residence was raided in Delhi, his lawyers moved the district sessions court in Panaji for anticipatory bail on Friday morning.

The sessions court has given interim protection from arrest till 2.30pm on personal bond of Rs 20,000. Court will give its order on Tejpal's interim bail application at 2.30pm.

Tejpal had withdrawn on Thursday the anticipatory bail which he had filed in Delhi high court.

Raunaq Rao, counsel for Tejpal, has said that they have moved anticipatory bail before the sessions court in Panaji.

"The police want to apprehend Tejpal despite our wish to cooperate in the matter. There is no need to take Tejpal in custody. What is the use of putting him in the cell?" Rao said.

Early on Friday morning, Goa Police raided Tehelka magazine's founder-editor Tarun Tejpal's house in New Delhi in a bid to arrest him but returned empty handed after finding that he was not there.

Armed with a non-bailable warrant, the team reached the residence of Tejpal, who has been accused of sexually assaulting a woman colleague, in Jungpura area of South Delhi a little after 6am and spent over 90 minutes.

One of the officials later said they did not find Tejpal in the house. Crime branch personnel from Delhi Police also accompanied the Goa Police team.

Tejpal's wife Geetan Batra refused to divulge to the police any detail of his whereabouts, police said.
The police action came after they rejected Tejpal's request for time till Saturday to to appear before them for the investigation into his involvement in the case of sexual assault that had allegedly taken place at a hotel in Goa earlier this month.

After the rejection of his request, Tejpal's lawyer said he would appear before the police on Friday in Panaji and extend "complete and full cooperation" in the investigation.

Goa police, however, on Thursday moved a court and secured a non-bailable warrant against 50-year-old Tejpal.

On Wednesday, Goa Police had directed Tejpal to appear before it by 3pm. The direction had come after the victim, who has alleged that she was sexually assaulted by him in a lift in a five-star hotel in Goa, recorded her statement under Section 164 of CrPC before a magistrate in Panaji.

The controversy also saw resignation of Shoma Chaudhury as managing editor of Tehelka, who is being accused of attempting to cover up the matter.

Chaudhury sent her resignation on Thursday as there was speculation that she may also be named in the FIR for certain alleged acts of commission and omission after the scandal became public.                                                                                                                                                                            akanksha shanu


                                                                                                                                            pgdm 1st year         source-2013-15                                                                                                                                             

Economy probably recovered slightly in July-September quarter

New Delhi: India’s economic growth probably picked up slightly in the September quarter, but weak investment levels have tempered hopes that strong rural demand and a rebound in exports will drive a sustained recovery ahead of elections due early next year.

A Reuters poll of 40 economists showed gross domestic product (GDP) likely expanded 4.6% year-on-year, only two basis points above the previous quarter, which was the lowest in four years.

The statistics office will release the data at 5:30 pm on Friday.

If the forecast materialises, it would mean the fourth successive quarter of economic growth below 5%, far below the 8% the government says is needed to reduce poverty and provide jobs for its burgeoning young population.

“A combination of weak investment, high inflation and tight monetary policy would not let India’s economic recovery gather steam anytime soon,” said Miguel Chanco, Asia Economist at Capital Economics in Singapore.he ruling Congress party is pinning its hopes on a growth rebound to help win back voters in a national election expected by April. Opposition prime ministerial candidate Narendra Modi has made the depressed economy a central plank of his campaign.

After a successful decade of chaperoning Gujarat state’s economic growth, Modi is viewed by some as the saviour of the country’s battered growth story.

Economic growth virtually halved in two years to 5% in the fiscal year that ended in March — the lowest level in a decade in which Congress has dominated Indian politics. Most economists surveyed by Reuters last month expect the fiscal year to March 2014 to be worse.

A pickup in rural consumer spending after a strong monsoon raised farm yields and a rebound in merchandise exports have spurred hopes among India’s policymakers that the worst may be over.

The monsoon also replenished hydroelectric reservoirs, leading to higher electricity generation.

But the economy is facing headwinds from other quarters. Persistently highinflation has suppressed consumer demand in the urban areas that drive India’s economy, and businesses remain wary about expanding their capacity in a situation akin to stagflation.

Looming national elections expected by April next year are also credited with a dampening effect.

Prime Minister Manmohan Singh has expedited clearances for big ticket infrastructure projects but many businesses now prefer to wait until the next government is formed before they commit to new projects.

“Political stability and policy credibility are paramount to corporates making long-term investment decisions,” Nomura said in a note on Tuesday.

Investment slowed to a decade-low of 1.7% last fiscal year.

Goldman Sachs expects investment growth to ease further to 1.2% this fiscal year, dragging down overall economic growth to 4.3%. The government is more optimistic, forecasting growth in the year of between 5 and 5.5%.

The downturn has hit government finances, making it tougher for finance minister P. Chidambaram to deliver on his promise to narrow the budget deficit to a six-year low of 4.8% of gross domestic product this year.

With revenues under pressure and his reputation on the line, Chidambaram is expected to wield his budget knife to hit the deficit target. Such a move inthe backdrop of weak corporate investments could further dent long-term economic prospects. 

Concerns about the high budget and current account deficits combined to help drive the rupee currency to record lows earlier this year.

The economic malaise has also doubled bad loans at Indian banks since 2009 to 4.2% of total loans, raising concerns over the health of the country’s financial system. REUTERS

 pratima kumari

pgdm 1st sem

 

 

 

 

Air India Dreamliners to be grounded for repairs

Boeing will begin repair work on its snag-prone Dreamliners from Sunday.

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NEW DELHI: US aircraft major Boeing will begin repair work on its snag-prone Dreamliners from Sunday. It will carry out both software upgrades and some hardware replacements in Air India's B-787s. All airlines globally using the Dreamliner have been facing issues with this brand new plane.

"We have 10 Dreamliners. About seven to eight of them will need different amount of work as the newer ones that have joined the fleet recently have those upgrades. We will be grounding our Dreamliners one by one to carry out repairs. This grounding for repair by Boeing is coinciding with our schedule grounding for normal checks," said a senior AI official.

AI is looking forward to the repairs as software errors have meant that the cockpit gets too many warning signals on this plane. For safety reasons, these warnings cannot be ignored. Almost every time, we have found these warning to be erroneous but this has meant delaying flights and causing passengers' inconvenience.

People rightly expect a flight on a brand new plane to be on time. That unfortunately has so far not been happening with the Dreamliner," said the official.

There have been instances when aircraft about to take off had to be stopped due to some warning. Coupled with pilot shortage, snags in the Dreamliners have affected AI's on time performance badly. Ironically, it was banking on the newest aircraft to improve its punctuality. A few months back, the wiring of electric ovens in AI's Dreamliners was changed following overheating in them.

Meanwhile, the Directorate General of Civil Aviation (DGCA) has asked AI to prepare a standard operating procedure to ensure that its Dreamliners stay away from cumulonimbus clouds by at least 50 nautical miles of 80-90 km. This order came after the US aviation regulator and Boeing warned airlines that some General Electric engines used on the B-787 and B-747-8 are seeing ice crystal formation while flying through certain clouds and thunderstorms. This is leading to loss of thrust as the passage of the gush of air in the engines is impeded by crystals at the engine's rear.

Japan Airlines has already withdrawn the B-787 from certain sectors like Tokyo-Delhi due to this reason as it says these routes did not allow aircraft the space to fly away 80-90 km from cumulonimbus clouds. An AI official said: "We have issued a company advisory and are analyzing the impact of the latest issue (with the Dreamliner). We are working on DGCA and US regulator's airworthiness directive." 

LOVELY SAMAL

PGDM-1ST

Women account for just 22% of workforce in India

OSLO: As more women come forward to expose incidents of sexual harassment at the workplace, the focus is back on the extremely poor work participation of women in India, just 22.5%, which makes places of work male-dominated spaces. Norway, a country with one of the highest work participation rates for women, about 69%, might have some useful pointers to offer on how to go about changing that.

According to the International Labour Organization (ILO), out of 131 countries for which data was available, India ranks 11th from the bottom in female labour force participation (FLFP). In fact, the National Sample Survey Organization (NSSO) data reveals falling FLFP from over 40% in the mid- 1990s, to 29% in 2004-05, to 23% in 2009-10 and 22.5% by 2011-12.

In contrast, in just over 40 years, Norway, where the ideal of the housewife was strong in the 1950s and 1960s, has successfully pushed up women's labour participation from just 44% to almost 70% currently, compared to 76% among men. Over 80% of mothers with small children are employed in Norway.

This remarkable transformation has been achieved through strong state-backed incentives, regulations, legislation and quotas.

Speaking to the media on the sidelines of the recent conference held in Oslo on Women Power and Politics, Arni Hole, director general of the ministry of children, equality and social inclusion in Norway, explained that the basic Norwegian principle was that no individual, especially a woman, should be forced to choose between family and career.

"It should be possible for men and women to have both career and family," she said, elaborating how the government had expanded the early child care sector, creating thousands of new jobs, and freeing parents, especially women, from homes to do paid work.

All children over the age of one can be enrolled in kindergarten. And up to one year, parents get fully paid leave to look after the baby, which they can divide between themselves, with the father mandated to take a compulsory 10 weeks of that one year as paternal leave.

Not stopping at just providing an enabling environment, the government has also enacted laws to provide quotas for women. The Gender Equality Act of Norway requires 40% of each gender in all government-appointed committees, councils, working groups and delegations since 1988. This has ensured a 47% share for women in governance today. Similarly, the Municipal Act of 1993 mandates that all elected municipal councils shall not have less than 40% of each gender.

Even the private sector cannot escape ensuring gender parity with a 2003 law making it compulsory for publicly listed companies to ensure 40% women on their boards. "At that time, most board members in Norway were men (just 6%were women). The initiative was controversial and many business leaders expressed strong opposition. Now, however, not only are more women serving on boards, but governance in Norwegian companies has also improved," said Ingvild Naess Stub of the Norwegian Foreign Affairs ministry at the Oslo meet. With more women in high level boards and committees, Norway has found it easier to work on strategies and implement decisions to ensure gender equality, which is seen as work in progress as even today women are under-represented among CEOs of companies, in certain professions and in full-time jobs. In contrast, in India, the proportion of women working seems to be dipping. Women constitute just over a fifth of the organised sector workforce. They are mostly to be found in the unorganized sector, marked by poor wages, poor quality of work and absence of social protection of any kind.

The proportion of women in private sector companies is 24.5% of the total workforce compared to just 17.9% of the public sector. In central government jobs, women accounted for 7.6% in 1991, which, almost two decades later, had touched just 10%.

MD NAUSHAD ALAM

PGDM 1 SEM.