Bangalore: Mobile ad network, Vserv is planning to follow the InMobi path by targeting emerging markets for growth. The two-year-old start-up is set to establish an office in Singapore next month. With this, the Mumbai-based venture hopes to expand its reach in South East Asia.
"Developers from other countries use our product but that has been a result of online marketing. With offices in other markets we would like to expand our marketing reach," says Dippak Khurana, co-founder and CEO of Vserv. The venture's product, AppWrapper, adds advertisements to a developer's mobile application or apps and can be used on basic feature phones that have mobile internet browsing and on smartphones.
InMobi, which claims to have delivered mobile advertisements in 165 countries, had focused on countries like Indonesia, South Africa and Malaysia before entering the more developed US and Europe markets. InMobi, which is counted among the largest mobile ad networks in the world, raised $200 million from Japan's Softbank in September last year.
The rise in mobile penetration and mobile internet usage has spurred the growth of mobile advertising. Industry estimates put the total number of mobile phone subscriptions at over 5 billion and a Cisco study has estimated that 788 million people across the world will access internet solely through the mobile phone by 2015.
The surging numbers have a direct impact on mobile advertising and according to industry research firm Informa Telecoms & Media, mobile advertising revenue will cross $24 billion in 2015 and the largest contributor will be the Asia Pacific region.
Vserv's Khurana claims that over 10,000 apps run AppWrapper. "Only 30% of our product downloads happen in India. The rest comes from South East Asian countries like Indonesia and Vietnam, followed by Middle East and Africa," says Khurana, who hopes to have a physical presence in these markets by year-end.
Khurana hopes to replicate the learnings in India across emerging markets. "The Indian market is representative of the emerging markets, in terms of devices and usage, so what succeeds here can be replicated elsewhere," says Khurana, who is targeting to reach $100 million in revenues in three years.
Success in my Habit
Thursday, January 12, 2012
US-based financial planning major enters India
ew Delhi: With rapid increase of high net worth individuals (HNWI), India has emerged as an attractive market for wealth management. The latest entrant is Ameriprise , the largest financial planning company of the US. The 117-year old company has a client base of over 2 million in US.
At present, the company manages assets of over $600 billion through its mutual funds and life insurance companies in US and Europe. However , in India, it will start operation with financial planning for individuals having annual income of over Rs 20 lakh.
Most of the large companies that are operating in the financial planning space are either banks, life insurance companies or mutual funds. Ameriprise will be the first multi-billion dollar company which will operate only in financial planning space in the country. "This shows our commitment and seriousness to financial planning space,'' said Kim M. Sharan, president - financial planning and wealth strategies.
"With its trilliondollar economy, India is not only an important market from a business perspective, but also one where our unique approach to planning could truly transform the way consumers manages their finances," said James M Cracchiolo, chairman and CEO of Ameriprise Financial.
Sharan said, "As a financial planner we give complete solution to our clients so that they can meet their requirements when they arise.'' On the issue of slowing down of the economy and poor returns of the investments from the various class of assets, Sharan said when the market is not performing , investors need advises to maximize their returns. When the market is going up, anybody can make money and advisors are not required.
Chairman of Ameriprise India Bimal I Gandhi said to begin with, the company would start its operations from Mumbai and Delhi. Later it will expand its operation in the other parts of the country. Gandhi said before starting its operation, it has customized various models of investments . It would not copy the American model for Indian market, he said.
At present, the company manages assets of over $600 billion through its mutual funds and life insurance companies in US and Europe. However , in India, it will start operation with financial planning for individuals having annual income of over Rs 20 lakh.
Most of the large companies that are operating in the financial planning space are either banks, life insurance companies or mutual funds. Ameriprise will be the first multi-billion dollar company which will operate only in financial planning space in the country. "This shows our commitment and seriousness to financial planning space,'' said Kim M. Sharan, president - financial planning and wealth strategies.
"With its trilliondollar economy, India is not only an important market from a business perspective, but also one where our unique approach to planning could truly transform the way consumers manages their finances," said James M Cracchiolo, chairman and CEO of Ameriprise Financial.
Sharan said, "As a financial planner we give complete solution to our clients so that they can meet their requirements when they arise.'' On the issue of slowing down of the economy and poor returns of the investments from the various class of assets, Sharan said when the market is not performing , investors need advises to maximize their returns. When the market is going up, anybody can make money and advisors are not required.
Chairman of Ameriprise India Bimal I Gandhi said to begin with, the company would start its operations from Mumbai and Delhi. Later it will expand its operation in the other parts of the country. Gandhi said before starting its operation, it has customized various models of investments . It would not copy the American model for Indian market, he said.
Gamesa commissions blade unit in Gujarat
Mumbai: Global wind energy major Gamesa has commissioned a Rs 175-crore blade making factory at Vadodara, Gujarat.
The plant, scheduled to produce 390 blades in 2013, will make components for its 850-kW and 2-MW turbine systems.
The manufacturing facility, which has produced its first blade for the 850-kW turbine, will primarily route supplies to the northern States, including Gujarat, Rajasthan, Madhya Pradesh and Maharashtra.
This is part of the €60-million investments Gamesa had announced in March, 2011 to strengthen its manufacturing base in India to tap rising demand in the wind energy market. The company intends to complete its investment plans by building a factory to produce nacelles (cover that houses all generating components in a wind turbine) in Tamil Nadu.
“This marks another step towards cementing our manufacturing base in India, where we are also implementing our best technology and practices in wind turbine production,” said Mr Ramesh Kymal, Chairman, Gamesa India.
Gamesa also operates as a wind farm developer in India, where it has a portfolio of wind farms exceeding 2,100 MW of combined capacity at varying stages of development.
In May 2011, Gamesa Wind Turbines, the Indian subsidiary of Gamesa Corporacion, signed a $2-billion agreement with Caparo Energy India for supply and commissioning 2,000 MW of turbine capacity in India. The deal was said to be the biggest in India and among the largest in the world.
The plant, scheduled to produce 390 blades in 2013, will make components for its 850-kW and 2-MW turbine systems.
The manufacturing facility, which has produced its first blade for the 850-kW turbine, will primarily route supplies to the northern States, including Gujarat, Rajasthan, Madhya Pradesh and Maharashtra.
This is part of the €60-million investments Gamesa had announced in March, 2011 to strengthen its manufacturing base in India to tap rising demand in the wind energy market. The company intends to complete its investment plans by building a factory to produce nacelles (cover that houses all generating components in a wind turbine) in Tamil Nadu.
“This marks another step towards cementing our manufacturing base in India, where we are also implementing our best technology and practices in wind turbine production,” said Mr Ramesh Kymal, Chairman, Gamesa India.
Gamesa also operates as a wind farm developer in India, where it has a portfolio of wind farms exceeding 2,100 MW of combined capacity at varying stages of development.
In May 2011, Gamesa Wind Turbines, the Indian subsidiary of Gamesa Corporacion, signed a $2-billion agreement with Caparo Energy India for supply and commissioning 2,000 MW of turbine capacity in India. The deal was said to be the biggest in India and among the largest in the world.
Trinidad may offer India access to more LNG
Kolkata: The Prime Minister of the Trinidad and Tobago, Ms Kamla Persad-Bissessar, on Tuesday said that her country is keen to attract Indian fashion, entertainment, education, agriculture-technology and maritime industries. Though she did not make any direct commitment, she indicated Trinidad and Tobago may “offer” India access to the much needed LNG (liquefied natural gas).
Talking to select journalists over dinner in Kolkata, Ms Bissessar, the Indian origin, first woman Prime Minister of the republic of 13 million people, said that the Caribbean nation has policies in place, to offer India (or any other nation of its choice) more LNG.
The meeting was organised by the Global Organisation for People of Indian Origin (GOPIO) in collaboration with Bengal Chamber of Commerce and Industry.
Trinidad and Tobago owns majority stake in the oil and gas fields. India's LNG imports from the country have come down in the recent years. Though Ms Bissessar did not confirm if Indian imports from the Caribbean should witness an improvement, she was clear that she would explore possibilities.
Reiterating her interest in strengthening economic social bonding with world's largest democracy, the Prime Minister said that her country is keen to project itself as a “location” for Bollywood films. “We are looking at Bollywood to come to Trinidad and Tobago in a big way.”
Also high on the priority list is attracting high profile Indian fashion designers to Trinidad. “I have met some reputed fashion designers from India and they promised to participate in the fashion week in October 2012,” she said.
Ms Bissessar was in the city to pay tribute to “The Kolkata Memorial” — created on January 11 last year at Kidderpore dock in the city, in memory of the Indian labourers taken to far away lands by the Britishers from 1834 through the 1920s. She also visited her ancestral village in Buxur district in Bihar.
Talking to select journalists over dinner in Kolkata, Ms Bissessar, the Indian origin, first woman Prime Minister of the republic of 13 million people, said that the Caribbean nation has policies in place, to offer India (or any other nation of its choice) more LNG.
The meeting was organised by the Global Organisation for People of Indian Origin (GOPIO) in collaboration with Bengal Chamber of Commerce and Industry.
Trinidad and Tobago owns majority stake in the oil and gas fields. India's LNG imports from the country have come down in the recent years. Though Ms Bissessar did not confirm if Indian imports from the Caribbean should witness an improvement, she was clear that she would explore possibilities.
Reiterating her interest in strengthening economic social bonding with world's largest democracy, the Prime Minister said that her country is keen to project itself as a “location” for Bollywood films. “We are looking at Bollywood to come to Trinidad and Tobago in a big way.”
Also high on the priority list is attracting high profile Indian fashion designers to Trinidad. “I have met some reputed fashion designers from India and they promised to participate in the fashion week in October 2012,” she said.
Ms Bissessar was in the city to pay tribute to “The Kolkata Memorial” — created on January 11 last year at Kidderpore dock in the city, in memory of the Indian labourers taken to far away lands by the Britishers from 1834 through the 1920s. She also visited her ancestral village in Buxur district in Bihar.
Hungary invites Indian investments in auto sector
Chennai: Hungary is keen on investments from India in the automobile sector, particularly auto components.
Addressing the members of the Southern India Chamber of Commerce and Industry here on Wednesday, Mr Janos Terenyi, Ambassador of Hungary in India, said there are huge capacities in his country that were supplying components to bus and truck manufacturing companies in the erstwhile Soviet bloc. The country now needs investments to revive those units, he said.
Bilateral trade
Hungary is an important member of the European Common Market and the European Union, and with its strategic location in the heart of Europe it can provide an important gateway to Europe. Currently, bilateral trade between India and Hungary is estimated at $30 million.
Pointing this out, Mr Terenyi said, the trade between the two countries is on the upswing, and collaboration, co-operation and joint promotion between the two countries in the fields of automobile and auto components sectors will further this.
Besides, he said his country is interested not only in improving the business and trade relationship with India but also the political, economic and cultural relationship. “We want to maintain the whole spectrum of relationship with India,” he said.
Talking about Chennai, he said the city, which is described as the Detroit of Asia, is likely to become the manufacturing hub of the world. “And, we would like to explore investment opportunities here in other sectors too.”
Road-shows planned
According to him, Hungary is planning road-shows in Delhi, Mumbai, Kolkata and Chennai in the second half of the year. These shows, to be jointly organised by the Hungary Chamber of Commerce and Industry and association of industry bodies, will be specific to the business needs of each city.
Earlier, Mr Jawahar Vadivelu, President, SICCI, said in his welcome address that India's exports to Hungary have touched $270 million. And about 58 per cent of India's imports from Hungary comprise mobile phones and chemicals.
Addressing the members of the Southern India Chamber of Commerce and Industry here on Wednesday, Mr Janos Terenyi, Ambassador of Hungary in India, said there are huge capacities in his country that were supplying components to bus and truck manufacturing companies in the erstwhile Soviet bloc. The country now needs investments to revive those units, he said.
Bilateral trade
Hungary is an important member of the European Common Market and the European Union, and with its strategic location in the heart of Europe it can provide an important gateway to Europe. Currently, bilateral trade between India and Hungary is estimated at $30 million.
Pointing this out, Mr Terenyi said, the trade between the two countries is on the upswing, and collaboration, co-operation and joint promotion between the two countries in the fields of automobile and auto components sectors will further this.
Besides, he said his country is interested not only in improving the business and trade relationship with India but also the political, economic and cultural relationship. “We want to maintain the whole spectrum of relationship with India,” he said.
Talking about Chennai, he said the city, which is described as the Detroit of Asia, is likely to become the manufacturing hub of the world. “And, we would like to explore investment opportunities here in other sectors too.”
Road-shows planned
According to him, Hungary is planning road-shows in Delhi, Mumbai, Kolkata and Chennai in the second half of the year. These shows, to be jointly organised by the Hungary Chamber of Commerce and Industry and association of industry bodies, will be specific to the business needs of each city.
Earlier, Mr Jawahar Vadivelu, President, SICCI, said in his welcome address that India's exports to Hungary have touched $270 million. And about 58 per cent of India's imports from Hungary comprise mobile phones and chemicals.
Haryana govt wants Gurgaon BPOs to hire local talent
The Haryana government wants the BPO companies in Gurgaon to conduct campus interviews in state-owned colleges to motivate students to acquire skills that would help them get jobs in industries dealing with IT-enabled services (ITeS).
Sources in the state education department said that the industry leaders can choose the college in the region from where they want to kick off this initiative. It has been some time since the state government has been discussing the possibility of designing the college syllabus in such a manner that it makes the state's youngsters more employable.
While Gurgaon has emerged as the major BPO hub in north India, the manpower requirement is met from either Delhi or its adjoining cities. Confirming that the state government is thinking of incorporating subjects in college curriculum to meet the industry requirement, higher education secretary S S Prasad said that a high-level task force is looking into the suggestions made by the industry. Prasad was in Gurgaon to attend a workshop on Monday with the Nasscom representatives and top industry leaders.
This was also attended by deans and senior faculty of about 25 colleges besides representatives from companies such as Cognizant, Fidelity, IBM, Genpact and WNS. The education secretary said that the task force under the chairmanship of the chief secretary is meeting on January 20 to give concrete shape to the proposals made by the BPO industry. "The curriculum should be relevant to the industry. There is a need to fill the gap that exists between the industry and our education system," Prasad added.
It was decided in the workshop that the industry and the academia would jointly organize faculty training workshops, summer internships, industry visits for faculty and students, focused grooming of select interested students to help achieve early results and organize job fairs and campus interviews.
Subinder Khurana, chairman, Nasscom regional council, said that the focus is on improving infrastructure, expanding the industry footprint and increasing employment of local talent in the industry. Rakesh Kapoor, managing director of Summit Technologies, said that the education initiative is targeted at increasing the absorption of local talent in the IT/ BPO industry.
Sources in the state education department said that the industry leaders can choose the college in the region from where they want to kick off this initiative. It has been some time since the state government has been discussing the possibility of designing the college syllabus in such a manner that it makes the state's youngsters more employable.
While Gurgaon has emerged as the major BPO hub in north India, the manpower requirement is met from either Delhi or its adjoining cities. Confirming that the state government is thinking of incorporating subjects in college curriculum to meet the industry requirement, higher education secretary S S Prasad said that a high-level task force is looking into the suggestions made by the industry. Prasad was in Gurgaon to attend a workshop on Monday with the Nasscom representatives and top industry leaders.
This was also attended by deans and senior faculty of about 25 colleges besides representatives from companies such as Cognizant, Fidelity, IBM, Genpact and WNS. The education secretary said that the task force under the chairmanship of the chief secretary is meeting on January 20 to give concrete shape to the proposals made by the BPO industry. "The curriculum should be relevant to the industry. There is a need to fill the gap that exists between the industry and our education system," Prasad added.
It was decided in the workshop that the industry and the academia would jointly organize faculty training workshops, summer internships, industry visits for faculty and students, focused grooming of select interested students to help achieve early results and organize job fairs and campus interviews.
Subinder Khurana, chairman, Nasscom regional council, said that the focus is on improving infrastructure, expanding the industry footprint and increasing employment of local talent in the industry. Rakesh Kapoor, managing director of Summit Technologies, said that the education initiative is targeted at increasing the absorption of local talent in the IT/ BPO industry.
Friday, January 6, 2012
Adani Group commissions country's largest solar project
Diversified Adani Group announced the commissioning of country's largest 40 mw solar power plant in Kutch district Gujarat. For India's largest private thermal power producer, the Solar Power Plant marks Adani's first big foray in the renewable energy sector. Going forward, Adani Group is planning to expand the capacity of this plant to 100 mw. The group is claiming to have commissioned country's largest solar power plant in record time of 150 days starting from foundation stone laying to electricity generation.
"We are pleased to dedicate country's largest solar plant to Nation today. We, at Adani, are committed to protect and encourage better use of natural resources of our country by implementing better technologies. The Solar plant and uses of Super Critical Technology in all of our Thermal Power Plants is a testimony of our commitment towards the environment," said Adani Group chairman Gautam Adani. The solar power plant is using solar PV technology and has over 400,000 solar PV modules mounted on 21,600 structures, which are erected on 130,000 foundations.
The power generated from this solar plant will be evacuated through a 66 KV line linked to a substation in Netra, located 20 kms away from the project site. The project was awarded under Gujarat Solar Power policy of 2009. Adani Power, a company of Adani Group, is currently operating 3,300 MW at Mundra with 4 units of 330 MW and 3 units of 660 MW, and is in the process of commissioning two more units of 660 MW by March 12 to achieve the final plant capacity of 4,620 MW. This will position Mundra as the single largest thermal power plant in India. Within this financial year, Adani Power also plans to commission 1320 MW at Tiroda enhancing operational capacity of Adani Power to 6000 MW by March 12. Further Adani Power plans to commission 6000 mw by March 2012 and 10,000 mw of power generation capacity by March 2013. This capacity will be achieved with Mundra (4620MW), Tiroda (3300MW) and Kawai (1320MW)
"We are pleased to dedicate country's largest solar plant to Nation today. We, at Adani, are committed to protect and encourage better use of natural resources of our country by implementing better technologies. The Solar plant and uses of Super Critical Technology in all of our Thermal Power Plants is a testimony of our commitment towards the environment," said Adani Group chairman Gautam Adani. The solar power plant is using solar PV technology and has over 400,000 solar PV modules mounted on 21,600 structures, which are erected on 130,000 foundations.
The power generated from this solar plant will be evacuated through a 66 KV line linked to a substation in Netra, located 20 kms away from the project site. The project was awarded under Gujarat Solar Power policy of 2009. Adani Power, a company of Adani Group, is currently operating 3,300 MW at Mundra with 4 units of 330 MW and 3 units of 660 MW, and is in the process of commissioning two more units of 660 MW by March 12 to achieve the final plant capacity of 4,620 MW. This will position Mundra as the single largest thermal power plant in India. Within this financial year, Adani Power also plans to commission 1320 MW at Tiroda enhancing operational capacity of Adani Power to 6000 MW by March 12. Further Adani Power plans to commission 6000 mw by March 2012 and 10,000 mw of power generation capacity by March 2013. This capacity will be achieved with Mundra (4620MW), Tiroda (3300MW) and Kawai (1320MW)
IRDA issues uniform ALM norms for insurers
Mumbai: Insurance regulator IRDA has issued uniform asset-liability management norms for insurers to manage their solvency, and asked insurance companies to undertake stress tests to ascertain their ability to meet financial obligations in the event of a crisis.
On examination of the extant norms being followed by insurance companies, IRDA found they were “incomplete and inconsistent. As the mandate by the authority was very broad, each insurer had adopted their own measures in reporting such details”.
“The Asset-Liability Management (ALM) is relevant to and critical for the sound management of the finances of the insurers that invest to meet their future cash flow needs and capital requirements,” IRDA said in a circular.
The guidelines, which would come into effect from April 1, make it mandatory for insurance companies to prepare an ALM policy and have it approved by the Insurance Regulatory and Development Authority (IRDA) by March-end.
“Stress testing being critical in the management of risks and the financial soundness of the insurers… the authority has mandated all insurers to conduct scenario and sensitivity testing,” IRDA said.
Effective procedures
IRDA has asked the insurance companies to determine their ability to meet financial liabilities after taking into account factors like a 30 per cent fall in equity values and a one percentage point decline in yields on fixed investments, among others.
IRDA has issued these guidelines to bring about uniformity in the ALM norms being followed by both life and non-life insurance companies.
IRDA has said that insurers would have to put in place effective procedures for monitoring and managing their asset-liability positions to ensure that their investment activities and asset positions are appropriate to their liability, risk profiles and solvency positions and it should be used to measure the interest rate risk faced by insurers.
The ALM policy should enable the insurers to understand the risks they are exposed to and develop ALM policies to manage them effectively.
On examination of the extant norms being followed by insurance companies, IRDA found they were “incomplete and inconsistent. As the mandate by the authority was very broad, each insurer had adopted their own measures in reporting such details”.
“The Asset-Liability Management (ALM) is relevant to and critical for the sound management of the finances of the insurers that invest to meet their future cash flow needs and capital requirements,” IRDA said in a circular.
The guidelines, which would come into effect from April 1, make it mandatory for insurance companies to prepare an ALM policy and have it approved by the Insurance Regulatory and Development Authority (IRDA) by March-end.
“Stress testing being critical in the management of risks and the financial soundness of the insurers… the authority has mandated all insurers to conduct scenario and sensitivity testing,” IRDA said.
Effective procedures
IRDA has asked the insurance companies to determine their ability to meet financial liabilities after taking into account factors like a 30 per cent fall in equity values and a one percentage point decline in yields on fixed investments, among others.
IRDA has issued these guidelines to bring about uniformity in the ALM norms being followed by both life and non-life insurance companies.
IRDA has said that insurers would have to put in place effective procedures for monitoring and managing their asset-liability positions to ensure that their investment activities and asset positions are appropriate to their liability, risk profiles and solvency positions and it should be used to measure the interest rate risk faced by insurers.
The ALM policy should enable the insurers to understand the risks they are exposed to and develop ALM policies to manage them effectively.
Trai issues norms for better customer services
New Delhi: Telecom Regulatory Authority of India (TRAI) today mandated all operators to set up a complaint centre that would have a toll-free number and can be accessed by a subscriber of even another mobile operator.
Trai’s Telecom Consumers Complaint Regulations, 2012, said such a centre would be responsible in addressing all complaints it receives. Further, all operators have to set up a web-based complaint monitoring system, through which the consumer can track their complaints, according to the regulations.
A two-tier system will replace the existing three-tier complaint redressal mechanism — now comprising call centre, nodal centre and appellate authority — by doing away with the nodal officer. This is because the complaint centres are essentially registration and response centres, and do not deal with the resolution of complaints. They only facilitate registration of consumer complaints — and the level at which a problem is resolved within a company depends on the complexity of the issue involved, Trai said.
Every complaint at the centre will be registered by giving a unique docket number, which will remain in the system for at least three months. The docket number, along with the date and time of registration and the time limit for resolution of the complaint, would be communicated to the consumer through SMS. The customer shall also be informed of the action taken through a texted message over the mobile phone. The service provider will set up a two-member advisory committee in each of the service areas. It will comprise a member from the consumer organisation registered with Trai, and another member from the service provider.
Further, mobile operators will publish a citizen’s charter that will contain different time-frames specified by the authority for various complaints and various procedures related to services -- such as mobile number portability, amount to be deducted and consumer's rights, the regulator added.
Trai’s Telecom Consumers Complaint Regulations, 2012, said such a centre would be responsible in addressing all complaints it receives. Further, all operators have to set up a web-based complaint monitoring system, through which the consumer can track their complaints, according to the regulations.
A two-tier system will replace the existing three-tier complaint redressal mechanism — now comprising call centre, nodal centre and appellate authority — by doing away with the nodal officer. This is because the complaint centres are essentially registration and response centres, and do not deal with the resolution of complaints. They only facilitate registration of consumer complaints — and the level at which a problem is resolved within a company depends on the complexity of the issue involved, Trai said.
Every complaint at the centre will be registered by giving a unique docket number, which will remain in the system for at least three months. The docket number, along with the date and time of registration and the time limit for resolution of the complaint, would be communicated to the consumer through SMS. The customer shall also be informed of the action taken through a texted message over the mobile phone. The service provider will set up a two-member advisory committee in each of the service areas. It will comprise a member from the consumer organisation registered with Trai, and another member from the service provider.
Further, mobile operators will publish a citizen’s charter that will contain different time-frames specified by the authority for various complaints and various procedures related to services -- such as mobile number portability, amount to be deducted and consumer's rights, the regulator added.
RBI raises FCCB limit to $750 million
Mumbai: In a bid to give India Inc respite from possible pressures arising from redemption of foreign currency convertible bonds, the Reserve Bank of India on Thursday said eligible borrowers can raise these bonds for up to $750 million or equivalent per financial year for permissible end-uses.
Similarly, corporates in specified service sectors such as hotel, hospital and software can raise FCCBs up to $200 million or equivalent for permissible end-uses during a financial year subject to the condition that the borrowing is not used for acquisition of land.
A FCCB is a hybrid debt and equity instrument issued in foreign currency. Not only does it gives the bondholder regular coupon and principal payments, but also gives the option to convert the bond into shares.
The central bank's move on FCCB comes in the wake of its September 2011 notification whereby the external commercial borrowing (ECB) limit for eligible borrowers under the automatic route was enhanced from $500 million to $750 million or equivalent per financial year for permissible end-uses.
Consequent to the enhancement in the limits under the automatic route, the RBI clarified that the ECB/FCCB availed for the purpose of refinancing the existing outstanding FCCB will be reckoned as part of the limit of $750 million.
The enhancement in the ECB/FCCB comes at a time when India Inc is staring huge FCCB and ECB redemptions in 2011-12.
According to a CRISIL report, repayment of foreign currency convertible bonds and external commercial borrowings and related interest payments add up to nearly $16 billion.
“Corporate debt repayment may continue to exert downward pressure on the rupee through the rest of the fiscal as Indian companies pay back their foreign debt. Considering the prevailing weakness in the equity markets, it would be difficult to swap FCCB repayments with equity or roll them over,” the report said.
The RBI, in its notification, said that consequent to the enhancement in ECB limits, the revised average maturity guidelines under the automatic route would be: ECB up to $20 million or equivalent in a financial year with minimum average maturity of three years; and ECB above $20 million and up to $750 million or equivalent in a financial year with minimum average maturity of five years.
Similarly, corporates in specified service sectors such as hotel, hospital and software can raise FCCBs up to $200 million or equivalent for permissible end-uses during a financial year subject to the condition that the borrowing is not used for acquisition of land.
A FCCB is a hybrid debt and equity instrument issued in foreign currency. Not only does it gives the bondholder regular coupon and principal payments, but also gives the option to convert the bond into shares.
The central bank's move on FCCB comes in the wake of its September 2011 notification whereby the external commercial borrowing (ECB) limit for eligible borrowers under the automatic route was enhanced from $500 million to $750 million or equivalent per financial year for permissible end-uses.
Consequent to the enhancement in the limits under the automatic route, the RBI clarified that the ECB/FCCB availed for the purpose of refinancing the existing outstanding FCCB will be reckoned as part of the limit of $750 million.
The enhancement in the ECB/FCCB comes at a time when India Inc is staring huge FCCB and ECB redemptions in 2011-12.
According to a CRISIL report, repayment of foreign currency convertible bonds and external commercial borrowings and related interest payments add up to nearly $16 billion.
“Corporate debt repayment may continue to exert downward pressure on the rupee through the rest of the fiscal as Indian companies pay back their foreign debt. Considering the prevailing weakness in the equity markets, it would be difficult to swap FCCB repayments with equity or roll them over,” the report said.
The RBI, in its notification, said that consequent to the enhancement in ECB limits, the revised average maturity guidelines under the automatic route would be: ECB up to $20 million or equivalent in a financial year with minimum average maturity of three years; and ECB above $20 million and up to $750 million or equivalent in a financial year with minimum average maturity of five years.
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