Sources tell NDTV that HCC chairman Ajit Gulabchand has appointed Kotak and ICICI Securities to manage the Lavasa initial public offering, which will be about Rs 2000 crore.

Lavasa, India’s first planned hill city, is spread over 20000 acres and is about 60 kilometers from Pune.

Sources say the Lavasa IPO, at 15-20 per cent of total valuation is slated to hit the market by 2010-end and the DRHP with SEBI is likely to be filed in the next two months.

HCC holds 65 per cent in Lavasa though its subsidiary HCC Real Estate. Other big investors in the project are Avantha Group and Venkateshwara Hatcheries.

Lavasa is completing the first phase and people will start occupying the township this year itself. This would be a fillip for HCC which has been languishing due to low margins.

Shareholders of the construction company could see some value unlocking if investors take well to the IPO, one of many real estate IPOs planned in the coming year.

“There will be value unlocking for the HCC shareholders when the IPO hits the market,” said Upendra Kulkarni, director and CEO of Fortress Fin Services.

The first phase of Lavasa has been successful and the work has started on the second phase, which spells good things for HCC. However, Lavasa is no less than a 15 year project, for total value to come in.

[Story Source]

This post was submitted by Anil Kumar Chaudhary.

According to data, on a net basis, they have invested Rs 967 crore in Sensex firms and pulled out about Rs 7,123 crore from non-Sensex companies (largely mid-cap firms). This essentially shows that FIIs have largely been risk-averse in the past quarter.

FIIs have raised their stakes the most in companies such as Phillips Carbon (8.2%), Bank of Rajasthan (6.6%) and Srei Infrastructure Finance (6.23%). They have hiked stakes by more than 4% in GMR Infrastructure and Dhanalaxmi Bank and by more than 3% in Axis Bank, Zensar Technologies, Bajaj Finserv and South Indian Bank.

In terms of actual investments, FIIs have invested the most in State Bank of India (Rs 2,126 crore). They have also pumped in a sizeable amount in private sector banks like Axis Bank (Rs 1,776 crore), HDFC Bank (Rs 937 crore) and ICICI Bank (Rs 693 crore).

Major Sensex firms in which they have invested substantially include HDFC (Rs 759 crore), Larsen & Toubro (Rs 645 crore) and Hero Honda (Rs 478 crore). Banks, with their larger weight in major indices, have been the clear favourites with FIIs. “The economy is on a firm footing and is set to grow by 8-9%. This will spur credit growth, which in turn will help the banking industry,” said Andrew Holland, CEO – Equities, Ambit Capital. The 3G auction, which has eased the fiscal burden on the government, will also help the banking sector, feel experts.

Among Sensex firms, FIIs have invested Rs 5,839 crore in nine companies and pulled out Rs 4,872crore from six others. They have reduced their stakes in heavyweights like Tata Steel (4%), Maruti Suzuki (1.03%), Infosys Technologies (0.52%) and Reliance Industries (0.39%). The outlook for Tata Steel has been negative because commodity prices have taken a hit in the last quarter due to turmoil in global economy, reckon experts.

[Story Source]

RBI effect: Banks hike deposit rates up to 75 bps

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Banks hike deposit rates, but lending rates may stay unchanged

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IDBI Bank integrates home fin unit

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Bank borrowing from RBI crosses Rs 60,000 crore

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This post was submitted by Harshit Agrawal.

Vineet Nayar, chief executive of HCL Technologies, who created a debate with his ‘employee first, customer second’ philosophy, tells that many Indian tech firms are only serving shareholders and are ignoring their employees.

He adds that the traditional metrics of evaluating employers, such as through attrition, are obsolete, and says the industry needs to reinvent itself for the ‘Facebook generation’.
Excerpts from the interview:

Many organisations will find it difficult to put customers second. What do you really mean by ‘employee first, customer second’?

The first question you need to ask is what business are you in, and what should the company be focused on to deliver value. The second question is, who creates that value? And the answer is, employees. Management will have to be accountable for enthusing employees and ensuring they create value. It’s management’s business to enthuse and enable value creation in terms of employees.

I think today, we have four stakeholders — shareholders, employees, customers and society. Unfortunately, we are in the stranglehold of only one stakeholder, the shareholder.
If the same transparency and resolve that management has for shareholders exists for the employees too, you will enjoy huge success. But you will do it only if you see it as a strategy for growth and not merely as an HR strategy.
I saw it as a strategy for growth and I did it because I think it’s a fantastic way to grow. Management should be accountable to employees the way it is to the shareholders.

As a business leader, what are the top workforce challenges you face?

Most of our business models have become irrelevant. In my mind there are many CEOs across industries who are at the edge of a building that is on fire, because the employees’ trust in the management is at its lowest, the business models have become more and more obsolete because they have become commoditised, the price points are lower.

So how these top management folks run their companies and what they do is going to be tested really big between 2010 and 2015.

We are obsessed with size today. But I think at HCL we are not into the business of drawing lines, we are in the business of making graphs, which is what Apple is doing, Google is doing and even Amazon is doing, by recreating business both on how they run it, and what they do. So you have to innovate on both what you do, and how you do it, because the building is already on fire. Quarter after quarter, companies give out their attrition rates and it becomes a metric for everybody to evaluate them as employers.
As India’s $60-billion IT industry comes out of recession and prepares to chase the $100-billion goal, rising attrition, commoditising of workforce and wage inflation are among its top worries.

[Story Source]

Attrition worries TCS, over 7,000 employees quit in Q1

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Air India employees stage strike days after fatal crash

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This post was submitted by Harshit Agrawal.

The Reserve Bank of India (RBI) is mulling the option of making its regular monetary policy reviews a more frequent affair than the quarterly mode at present.

Keen to restore the waning elasticity of its policy stance to the altered dynamics of the globalised world of money and finance, the central bank is looking at the western model of once-a-month to six-weekly huddling together to decide on interest rates and other policy instruments.

The RBI move comes at a time when monetary authorities across the world have already adopted a much more coordinated approach to policy than ever before, following the global economic crisis which kept all of them on their toes.

Monetary authorities in advanced economies meet much more frequently than RBI for policy reviews.

According to official sources, the RBI has already conveyed its views on changing the frequency of its regular policy reviews to the government.

The RBI has resorted to inter-policy rate hikes thrice since the October 2009 quarterly review, but there is still a significant lag between its policy response and what it is meant to achieve.

The Federal Open Market Committee (FOMC), a wing of the US Fed Reserve and the main organ of the country’s monetary policy, meets eight times a year for “regular” policy review, besides its rather frequent “special meetings” and telephonic conferences.

The European Central Bank formulates its monetary policy once in a month, while its governing council meets fortnightly. The Bank of England’s Monetary Policy Committee meets for two consecutive days every month.

The RBI move is in the overall interest of providing the right amount of money supply for the nation to ensure growth with stability – the stated goal of the monetary authority. Chiefly, two factors have prompted the RBI to consider increasing the frequency of its monetary policy reviews.

One, the increased volatility of macro-economic variables in the post-financial meltdown global economy and two, the perceived inconstancy of the way monetary policy tools interact with financial markets.

Moreover, a change in inflation dynamics has also caused the RBI to rethink policy frequency. Analysts have started noting that rather persistent high inflation that India currently witnesses and the situation in other developing economies are rather dissimilar.

Unlike in 2008, global commodity prices have much less to do with the India’s high inflation. Besides, the inflation is now also caused by demand-side pressures resulting from high nominal income growth. Also, it co-exists with relative strengthening of the rupee against other currencies.

The RBI also reckons that interest rates have to be reviewed more frequently as billions of dollars are being shifted out of US money-market funds to emerging market equities and debt, including corporate bonds that India is giving an impetus to in its bid to deepen its markets.

Analysts reckon that quicker policy responses could help reduce the volatility of bond and exchange rate markets. However, there is apparently no consensus yet on whether the RBI should immediately move towards a regime of more frequent policy reviews.

“Monetary policy always comes with a lag, although the western authorities take reviews much more frequently and puts the analytic behind the decisions public for greater transparency. Interest rates impact the western economies more profoundly as they are much more leveraged,” said Abheek Barua, chief economist, HDFC Bank.

Apart from frequent policy reviews, monetary authorities in the west are also slightly more consultative in their approach.

The governor of the Bank of England, for instance, writes an open letter to the Chancellor whenever the inflation target (2%) is missed by more than one percentage point on either side, explaining the reasons for the same.

The FOMC minutes are published for public debate. Similarly, after each fortnightly meeting of the ECB governing council, a statement is issued on the outcome of discussions and the bank president holds a press conference. Of course, RBI issues a monthly bulletin, but its decision-making process might not be as transparent as FOMC’s or Bank of England’s.

The FOMC meets eight times a year despite the fact that the law mandates only four. At every regular meeting, the committee votes on the policy changes to be implemented during the intervening period.

“With the macro-economic and monetary developments being more dynamic and the global situation rather uncertain, it might be of help if the RBI assesses the situation on a more frequent basis,” said Crisil chief economist Dharmakirti Joshi.

The Reserve Bank of India (RBI) is mulling the option of making its regular monetary policy reviews a more frequent affair than the quarterly mode at present.

Story Source

This post was submitted by Harshit Agrawal.

The 30-share BSE Sensex closed at 17,471.03, down 143.45 points or 0.81% and the 50-share NSE Nifty fell 47.95 points or 0.91% to settle at 5,241.10. However, the Nifty July futures ended at 6 points premium.

How will the market reverse through earnings season?

Amit Dalal, Executive Director, Tata Investment Corporation Ltd said that the market is going to remain dull. According to him, even the earning season will not give the kind of kicker that we normally expect it.

He reasoned that this is mainly because it has been now almost three quarters where we have been seeing a very high growth and good numbers and the base had become quite high.

“So the expectations from earnings and valuation expansion that one would want will perhaps not be there from almost all sectors across,” Dalal added.

Agreeing to him, Ajay Parmar, Head – Institutional Equities, Emkay Global Financial Services Ltd said that the first quarter is a leaner one.

Parmar added that it will be very crucial because we are going to see some changes in the last quarter strength that is the raw material increase is likely to be seen.

“The EBITDA margins are likely to be little under pressure so this quarter will be very crucial for the trend of the market. People have been factoring this on a conservative level almost growth of 12-15%,” Parmar explained.

Elaborated Sudarshan Sukhani, Technical Trends that the market could go up but it doesn’t look as if there is enough momentum for it to go up however it might even surprise us.

What is the strategy to cope up?

Parmar advised that it is best to be more stock specific. He recommended some companies from the pharma, auto and agri inputs companies like fertilisers, seeds pesticide.

In the pharma sector, Torrent, Cadila, Rallies, Coromandel International are the best pick, he said. Bajaj Auto, Hero Honda and Mahindra & Mahindra are the top picks in the auto sector, he added.

“Some of the banking stocks which I believe are available or the PSU stocks which are available at reasonable good price to book value ratios,” he added further.

News Source

The Indian rupee fell to its lowest in almost a month on Wednesday, after the euro’s fall from a seven-week peak triggered dollar demand from importers and a weakness in global stock markets underpinned sentiment.

The partially convertible rupee ended at 47.0150/0250 per dollar, off an intraday low of 47.1550, weakest since June 9 and about 0.3 per cent lower than Tuesday’s close of 46.89/90.

“A shaky euro pushed the rupee lower as there was uncertainty whether it would stay at the current peak levels,” said a senior dealer with a foreign bank in Mumbai. He expects the rupee to trade in a range of 46.90 to 47.10 a dollar on Thursday.

The euro slipped off seven-week highs against the dollar on concerns about the global economic recovery and as investors scrutinised details of plans to test the financial health of European banks.

A European committee of bank supervisors will outline on Wednesday the methodology for stress tests of about 100 banks but German banking sources said the test would exclude a haircut on German sovereign bonds.

Lower local share prices also hit sentiment, traders said. The benchmark BSE share index fell 0.8 per cent, hurt by weaker global markets, concerns on recovery in the US economy and nervousness about the European banking stress test.

Foreign funds have bought around $6.8 billion worth of Indian equities so far in 2010, after pumping in $17.5 billion in 2009.

Dealers said a few foreign banks were buying dollars cheaper locally to sell at a higher rate in the offshore non-deliverable forward (NDF) market.

The one-month offshore non-deliverable forward contracts were quoted at 47.25/35, higher than the one-month onshore forward rate of 47.22 at close of trade.

In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange and MCX-SX ended at 47.1875 and 47.19 respectively. The total traded volume on the two exchanges at about $6.1 billion.

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The People’s Bank of China set the yuan’s daily mid-point at 6.7980 against the dollar on Tuesday, the highest level since the yuan’s revaluation in July 2005, signaling the central bank could allow the yuan to rise again for the day.

Spot yuan opened at 6.7968 against the dollar, but then rose to as high as 6.7900 in early trade, up 0.11 percent from the close on Monday, when it jumped 0.42 percent.

The yuan may rise or fall 0.5 percent from its mid-point each day, but it has moved only a small fraction of its band in most trading sessions since it was revalued by 2.1 percent to 8.11 per dollar on July 21, 2005.

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The rupee rose to its highest in more than a month on Monday, after China’s move to allow a gradual appreciation of the yuan lifted major currencies against the dollar.

A stronger domestic stock market also raised expectations of a build-up of capital inflows in the coming weeks. The partially convertible rupee ended at 45.7450/7550 per dollar, 0.9% stronger than Friday’s close of 46.16/17.

It had climbed as high as 45.58 in early trade, its strongest since May 18. “China’s move helped the rupee on Monday, but by Tuesday, I see a pullback in the rupee to 45.90/46.0 levels,” said a senior dealer with a private bank.

The index of the dollar against six major currencies was down about 0.3% at the time of the close of local trade. Rise in local shares also lifted sentiment, traders said.

One-month offshore non-deliverable forward contracts were quoted at 45.48, weaker than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on NSE and MCX-SX ended at 45.79 and 45.78, respectively, with the total traded volume on the two exchanges at about $7.3 billion.

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Passenger car sales overlooked price hikes to rise 40% while two-wheeler sales increased 22.07% in April. Likewise, commercial vehicles rode a swell of investments in infrastructure to jump more than 64%.

But the industry is in no mood to celebrate because of stresses and strains on capacity. Society of Indian Automobile Manufacturers (SIAM) says the sector will clock 10-14% growth in 2010-11 compared to a 26% growth a year ago.

Consultants, industry experts and auto CEOs say demand forecasts have halved because of capacity troubles.

“A number of vehicle makers as well as key suppliers cut back on production when the slowdown hit. Since the demand turnaround was faster than expected, the capacity crisis has hit the sector suddenly,