FDI in India

Chandrasekhar Atreya
23 Aug, 2010
New York City

Stocks in Mumbai traded sideways. Maruti Suzuki may be forced to limit exports as the domestic market demand surges and the automaker struggles with a market share decline. Foreign investment in real estate projects in India soars 60-fold in the last five years.

[R]5:00 PM Mumbai – Stocks in Mumbai traded sideways. Maruti Suzuki may be forced to limit exports as the domestic market demand surges and the automaker struggles with a market share decline. Foreign investment in real estate projects in India soars 60-fold in the last five years.[/R]

Indian stocks traded sideways to finish marginally up in Monday’s trading.

The Sensex 30-stock Index gained 0.04% or 7.53 to close at 18,409.35.

Faced with increasing competition in the local market, Maruti Suzuki India is thinking of limiting exports to 15% of its total output in order to concentrate on meeting requirements in the country.

“Maruti Suzuki as a company should perhaps deliberately not attempt to export a large part of its output, but keep its exports to about 15% of production,” Maruti Chairman R.C. Bhargava wrote to shareholders in its annual report for the year March 2010. In the April-July period this fiscal, the company sold 282,488 cars representing 47.68% share in the overall market of 5,92,405 units, falling below 50% for the first time.

Indian Overseas Bank on Saturday announced an increase in its lending rate by 50 basis points in line with the industry trend. The Benchmark Prime Lending Rate will be 12.5% with effect from August 23, the bank informed the Bombay Stock Exchange.

Even as Vedanta is embroiled in controversies surrounding mining in Niyamgiri Hills for its refinery there, the London-listed company has sent a clear signal that it means business and it would continue to be a part of Orissa’s industrialization drive by commissioning the first of its 4 X 600 megawatt power plant at Jharsuguda on Saturday.

Oil and Natural Gas Commission Corporation’s 726 megawatt project in Tripura will help resolve the power crisis in the electricity-starved northeastern region of India by 2012, ONGC officials said Saturday.

ONGC is setting up the unit in Palatana, 65 kilometers south of capital city Agartala, expecting to commission it by March 2012.

The Energy and Resources Institute on Saturday said it has managed to collect all the oil sludge, tar balls and oil stained sand from Awas Beach near Alibaug and start the bio-remediation process using its acclaimed Oilzapper technology.

Foreign direct investment in India’s booming real estate and housing market jumped 60 times between 2005 and 2010, according to data collected by a newspaper. Times of India data showed that in 2005, investment in real estate soared from Rs 171 crore to Rs 13,586 crore in the fiscal year ending in March 2010.

Bombay Stock Exchange, Asia’s oldest stock exchange, tied up with Google for cashing in on the revenue from ads on its Web site.

“BSE has tied up with Google for a couple of months initially on a trial basis for posting non-broker advertisements on its Web site,” sources said.

Having shifted its manufacturing operations to Vadodara in Gujarat, cigarette-maker, Golden Tobacco has put a 5.5 acre parcel of land near Mumbai international airport on the block, which could fetch the company up to Rs 100 crore.

The plot located in the Marol Industrial Area near Chhatrapati Shivaji International Airport, is sold by Golden Tobacco through an online auction.

Itochu Corp aims to boost the output of organically grown cotton in India by providing financial aid to small farmers who shun the use of chemicals. Accreditation for organic cotton production requires at least three years of chemical-free cultivation, with small producers facing dwindling income for that period. As a result, the trading house will pay a premium of 20% to 30% over regular cotton during the course of transition.

Last year Itochu bought some 400 tons of pre-organic cotton from some 900 farmers in North India and plans to buy 500 tons from 1,100 producers this year. With around 4,000 farmers wanting to make the switch to organic, Itochu plans to procure 1,000 tons from 2,000 producers in 2012.

India’s engineering exports jumped about 26% to $3.21 billion in July year-on-year, mainly due to revival in the U.S. demand.

“Demand is reviving in the U.S. but still there are less orders from the European markets,” Engineering Export Promotion Council Executive Director R. Maitra said.

The energy consumption of India Inc’s information and communications technology infrastructure is forecast to grow 30% to over 31 trillion-watt hours by 2014, a study by global research firm Gartner said.

“Energy consumption by enterprise information and communication technology infrastructure is forecast to pass 31 trillion-watt hours by 2014. It stood at an estimated 24 TWh by 2009,” Gartner Principal Research Analyst Ganesh Ramamoorthy told PTI.

India allowed two telecom firms to buy equipment from Huawei and ZTE after the Chinese firms agreed to New Delhi’s tighter rules to address security concerns, sources said yesterday.

China’s imports of iron ore from India dropped for a second straight month in July falling 21% to 6,547 tons with heavy monsoons disrupting transport, customs data showed Monday.

Gainers & Losers

ARSS Infrastructure Projects rose 1.4% to Rs 1,320.70 after the infrastructure development company secured new work order worth Rs 103.65 crore from the Chief Engineer, National Highways, Orissa.

Apollo Tyres Ltd. surged 5.6% to Rs 75.95 after the tyre company resumed operations at its unit at Perambra in Kerala from August 21 following a long-term settlement with workers of the unit.

Bharat Petroleum Corporation Limited soared 11.1% to Rs 775.90 after its wholly-owned subsidiary Bharat PetroResources entered into a pact with Norwest Energy, Australia to acquire stake in two shale gas blocks in Australia.

Cipla Limited gained 2.3% to Rs 317.65 after the pharmaceutical company said board will meet on August 25 to consider payment of a special interim dividend for the year ending March 2011, to commemorate 75th anniversary of the company.

CRISIL Limited increased 4.2% to Rs 5,669.00 after the rating research company said its board will meet on August 25 to consider share buyback.

Crest Animation Studios Limited surged 9.9% to Rs 105.75 after the digital animator said its board will meet August 23, to consider a corporate restructuring plan.

Four Soft Limited increased 2.9% to Rs 22.75 after the software solutions company signed a deal with US-based Alba Wheels Up International Inc to implement its order management system and global freight forwarding application.

Indsil Hydro Power and Manganese Limited surged 6.8% to Rs 101.40 after the company reported its board of directors recommended issue of bonus shares in the ratio of 2 shares for every 3 shares held.

ITI Limited soared 5.4% to Rs 43.80 after the telecom products and solutions company received orders worth Rs 270 crore from state-run BSNL.

Jindal Steel & Power Limited gained 2.6% to Rs 707.00 after the sponge iron manufacture company''s subsidiary Jindal Steel Bolivia got 3,000 acres of additional land to start its $2.1 billion steel and power plant in Santa Cruz area of Bolivia.

JK Tyre & Industries Ltd. increased 1.7% to Rs 177.85 after the automotive tyre company it may increase tyre prices by 4% to 5% by the first week of September 2010 to offset rising rubber prices.

Larsen & Toubro Limited rose 0.2% to Rs 1,872.90 after the engineering, construction and manufacturing company secured two projects aggregating Rs 1195 crore from state-run ONGC.

Lakshmi Electrical Control Systems Limited gained 7.1% to Rs 277.20 after the company’s managing director bought additional 4,527 shares of the company via open market purchases in two trading sessions on August 18-19.

Maharaja Shree Umaid Mills Limited soared 5% to Rs 240.65 after the company sold its property located in Jaipur to Om Metals Consortium on August 20 for Rs 158 crore.

Mahindra & Mahindra Limited rose 1% to Rs 624.05 after the company signed an agreement to buy a majority stake in South Korean automaker Ssangyong.

Prime Focus Limited gained 5% to Rs 563.25 after the company said its board will meet on August 27 to consider stock split.

Polaris Software Lab Limited increased 3.6% to Rs 178.75 after the customized software solutions company said its subsidiary Polaris Software Lab Ireland invested $500,000 for a minority 2.5% stake in Tyfone Inc. based in the U.S.

Reliance Capital Limited rose 0.3% to Rs 785.70 after the financial services company said its life insurance unit''s asset under management reached Rs 15,000 crore.

State Bank of Mysore soared 20% to Rs 1,105.95 after the bank said its board will meet on August 25 to consider record date, pricing and the ratio of entitlement of a rights issue.

Tata Global Beverages Ltd rose 4.9% to Rs 116.85 after Chairman Ratan Tata said the company is considering restructuring its operations.

Vardhman Textiles Limited rose 3.5% to Rs 337.00 after the textile producer’s board decided to seek a shareholder approval to raise up to Rs 200 crore from institutional placement of shares.