Mumbai: The opening of Botswana as a major diamond trading hub has opened a new window of opportunity for Indian processing companies.
Three diamond merchants from India have secured licences for participating directly in benefication projects there to ensure supply of rough diamonds.
The move assumes significance as setting up diamond processing units will not only assure rough supplies from Diamond Trading Company (DTC), the marketing arm of the world’s largest mining company, De Beers, but also ensure control over price fluctuations, besides sustained supplies.
While Shrenuj & Co had received licences three years ago, the company has spent $5 million so far in developing a small processing unit. Now, the Shreyas Doshi-led company plans to invest another $5-10 million to set up a full-fledged large diamond cutting and polishing unit in Botswana. Suashish Diamonds and Blue Star are the other two companies that have secured licences in Botswana.
“The detailed plan is being worked out. But, we are planning to invest another $5-10 million as working capital for procuring plant and machinery for a large processing unit,” said Doshi, chairman of the company.
Shrenuj & Co started its South African operations in 2009, marking its presence in the 14th country worldwide. This development follows commencement of its manufacturing unit in Botswana in August the same year. These operations in the southern part of the African continent provide continued access to rough diamonds directly from the mining sources. In these times when diamond reserves are dwindling, these developments acquire importance. Through its South African office, Shrenuj gains access to very high quality rough diamonds from all of southern Africa. The company has already been granted a site by DTC Botswana.
Suashish’s principal manufacturing units are in India, with global distribution through subsidiaries and strategic partnerships in all major markets across the world.
Blue Star Diamonds is a private sector company that offers services in gems, jewellery and watches, with annual total turnover of Rs 250-500 crore. The government of Botswana has issued 21 licences so far to global players, of which five have been given to Indian-origin companies.
Success in my Habit
Sunday, February 19, 2012
NIIT bags Rs 300 cr project from Home Ministry
Infotech Solutions vendor NIIT Technologies today said it has bagged a deal worth Rs 300 crore to implement a Union Home Ministry project called the Crime and Criminal Tracking Network System (CCTNS), which will be part of the proposed Natgrid.
The company has been selected as the system integrator in Tamil Nadu, Jharkhand and Uttar Pradesh. It is in active pursuit of similar opportunities in other states as well, a senior company official said. Execution of work is already on in Tamil Nadu and Jharkhand.
"These wins are an endorsement of our leadership in providing IT solutions to the government. We have a history of successful implementations with IT programmes in Defence and home affairs," NIIT Technologies chief executive Arvind Thakur said here on the sidelines of the Nasscom leadership summit.
The CCTNS is a comprehensive and integrated nationwide system designed to help the police investigate crime and detect criminals, on which the Union Home Ministry plans to spend Rs 2,000 crore.
The system is expected to connect and share real-time information and data on crime and criminals from across the country thus strengthening the information base of investigating officers.
After the implementation of the system throughout the country, over 14,000 police stations spanning 6,000 district police headquarters, fingerprint bureaux and forensic science laboratories will be linked to a common IT platform enabling investigating officials to get the data of any criminal at the click of a mouse.
"FIRs and photographs can be made available from any police station to any other police station in real-time, after the project is completed across the country," a company official said.
Recently, NIIT Tech also commissioned a Rs 228-crore 'Intranet Prahari' project for the Border Security Force.
The company has been selected as the system integrator in Tamil Nadu, Jharkhand and Uttar Pradesh. It is in active pursuit of similar opportunities in other states as well, a senior company official said. Execution of work is already on in Tamil Nadu and Jharkhand.
"These wins are an endorsement of our leadership in providing IT solutions to the government. We have a history of successful implementations with IT programmes in Defence and home affairs," NIIT Technologies chief executive Arvind Thakur said here on the sidelines of the Nasscom leadership summit.
The CCTNS is a comprehensive and integrated nationwide system designed to help the police investigate crime and detect criminals, on which the Union Home Ministry plans to spend Rs 2,000 crore.
The system is expected to connect and share real-time information and data on crime and criminals from across the country thus strengthening the information base of investigating officers.
After the implementation of the system throughout the country, over 14,000 police stations spanning 6,000 district police headquarters, fingerprint bureaux and forensic science laboratories will be linked to a common IT platform enabling investigating officials to get the data of any criminal at the click of a mouse.
"FIRs and photographs can be made available from any police station to any other police station in real-time, after the project is completed across the country," a company official said.
Recently, NIIT Tech also commissioned a Rs 228-crore 'Intranet Prahari' project for the Border Security Force.
Bangalore, Ahmedabad and Kolkata IIMs make it to Asia-Pacific top 10 again
Bangalore: The Indian Institutes of Management (IIMs) - Bangalore, Ahmedabad and Calcutta - continue to be the quality B-schools in the country.
The trio has figured in the top 10 in the Asia-Pacific region. The QS Global 200 Business Schools Report 2012 has put these B-schools among other Indian schools in the global rankings.
IIM-Ahmedabad is ranked second, IIM-Bangalore's rank is fifth and IIM-Calcutta is ranked eighth.
IIM-A and IIM-C have shown the biggest improvement in employer opinion this year in the region by improving four places.
Indian School of Business has been ranked seventh, S P Jain Institute of Management and Research is at 16 and Indian Institute of Foreign Trade at 21.
INSEAD, Singapore is number one in the region for the third consecutive year. Melbourne Business School (University of Melbourne, Australia), NUS Business School, ( National University of Singapore) and University of New South Wales were some of the other institutes that featured among the top 10 in the region.
The QS global report, which originated in the early 1990s, provides a detailed overview of the most popular business schools around the world based on information given by global recruiters.
It lists out 200 business schools from which employers prefer to recruit MBAs. The ratings are made regionwise (Africa and the Middle East; Asia-Pacific; Europe; Latin America; North America) and MBA specialization ratings.
According to the report, even though business schools in the United States and Europe remain the most popular destinations for MBA, schools in other partsm, like in the Asia-Pacific, are gaining popularity.
"Business schools in the Asia-Pacific region are looking at the standard of top American and European institutions as indicators of how they compare and where they could improve. Furthermore, the economic growth in some Asian countries, particularly in China and India, has heightened the demand for more accredited business schools in the region in order to train the next generation of successful business leaders," says the report.
"IIM-B has shown gradual improvements in the ratings, climbing from sixth (2009) to fifth (2010) and this year missed the top cluster by just 2.7 points," the report says.
However, there is a worry about international student enrolment.
"Many of Asia's business schools lack in international student enrolment, causing concern among employers who are looking for graduates to work in a multinational environment," the report says.
The percentage of international students in IIM-A, IIM-B, IIM-C and ISB is 1, 10, 3 and 5 respectively.
The trio has figured in the top 10 in the Asia-Pacific region. The QS Global 200 Business Schools Report 2012 has put these B-schools among other Indian schools in the global rankings.
IIM-Ahmedabad is ranked second, IIM-Bangalore's rank is fifth and IIM-Calcutta is ranked eighth.
IIM-A and IIM-C have shown the biggest improvement in employer opinion this year in the region by improving four places.
Indian School of Business has been ranked seventh, S P Jain Institute of Management and Research is at 16 and Indian Institute of Foreign Trade at 21.
INSEAD, Singapore is number one in the region for the third consecutive year. Melbourne Business School (University of Melbourne, Australia), NUS Business School, ( National University of Singapore) and University of New South Wales were some of the other institutes that featured among the top 10 in the region.
The QS global report, which originated in the early 1990s, provides a detailed overview of the most popular business schools around the world based on information given by global recruiters.
It lists out 200 business schools from which employers prefer to recruit MBAs. The ratings are made regionwise (Africa and the Middle East; Asia-Pacific; Europe; Latin America; North America) and MBA specialization ratings.
According to the report, even though business schools in the United States and Europe remain the most popular destinations for MBA, schools in other partsm, like in the Asia-Pacific, are gaining popularity.
"Business schools in the Asia-Pacific region are looking at the standard of top American and European institutions as indicators of how they compare and where they could improve. Furthermore, the economic growth in some Asian countries, particularly in China and India, has heightened the demand for more accredited business schools in the region in order to train the next generation of successful business leaders," says the report.
"IIM-B has shown gradual improvements in the ratings, climbing from sixth (2009) to fifth (2010) and this year missed the top cluster by just 2.7 points," the report says.
However, there is a worry about international student enrolment.
"Many of Asia's business schools lack in international student enrolment, causing concern among employers who are looking for graduates to work in a multinational environment," the report says.
The percentage of international students in IIM-A, IIM-B, IIM-C and ISB is 1, 10, 3 and 5 respectively.
Kandla Port awards Rs 1,060-cr dry bulk terminal project to Adani Port and SEZ
Ahmedabad: The Kandla Port Trust (KPT) on Tuesday awarded the Rs 1,060-crore dry bulk terminal development project, off Tekra near Tuna, to its perceived competitor-cum-neighbour, Adani Port and SEZ Ltd (APSEZL), which runs the Mundra Port in Gujarat.
The KPT board, in its meeting, took up the issue of the award of the public-private partnership (PPP) in the project, for which APSEZL had emerged as the successful bidder and short-listed for consideration of the award.
In its January 9 meeting, the Board could not decide on the award as some members suggested that APSEZL be asked to make a presentation assuring that the company, which operates the largest private port in India, would fulfil its promises and complete the project, as stipulated.
In Tuesday's meeting, the board, which had asked APSEZL to make a presentation, raised several queries with the bidder.
The Adani company assured that it was “very serious” about implementing the project and has the required expertise, Mr M.A. Bhaskar Achar, Vice-Chairman, toldBusiness Line.
The project will bring in 14 million tonnes (mt) of cargo annually to Kandla Port.
The Adanis would develop the satellite port in two years, which is part of the 30-year concession.
The KPT board, in its meeting, took up the issue of the award of the public-private partnership (PPP) in the project, for which APSEZL had emerged as the successful bidder and short-listed for consideration of the award.
In its January 9 meeting, the Board could not decide on the award as some members suggested that APSEZL be asked to make a presentation assuring that the company, which operates the largest private port in India, would fulfil its promises and complete the project, as stipulated.
In Tuesday's meeting, the board, which had asked APSEZL to make a presentation, raised several queries with the bidder.
The Adani company assured that it was “very serious” about implementing the project and has the required expertise, Mr M.A. Bhaskar Achar, Vice-Chairman, toldBusiness Line.
The project will bring in 14 million tonnes (mt) of cargo annually to Kandla Port.
The Adanis would develop the satellite port in two years, which is part of the 30-year concession.
Crowning glory: Indira Gandhi International Airport second best in the world
New Delhi: Delhi's IGI airport has been ranked the second-best airport in the world for 2011by theAirportsCouncil International. The airport scored this distinction in the category of airports with 25-40 million passengers per annum. Last year , it had been ranked fourth in the same category. The airport scored 4.72 of a possible 5 in the airport service quality index , coming 6in the overall airport ranking for 2011.
This is a massive jump for the airport which, before privatization in 2007, had scored 3.02 on the ASQ and did not manage a rank in the top 100. Delhi International Airport (P) Ltd (DIAL) commended the efforts of agencies such as customs , immigration , CISF , airlines , concessionaires , housekeeping and other support staff for contributing to the image make-over for the airport.
DIAL's CEO I Prabhakara Rao said : "IGIA has come a long way in the last five years since we took over. We have ensured that quality has become a way of life not just with DIAL employees , but with all stakeholders of the IGI airport family. We are confident that all 30 ,000 plus members of the IGI airport family will continue to strive for excellence and we hope to improve our position even further in the coming years."
IGI airport handled a record number of 35 million passengers in 2011. The airport has an annual passenger capacity of over 60 million of which terminal 3 can alone handle 34 million passengers. The airport also handled over 6 lakh tonnes of cargo and over 3 lakh aircraft movements in 2011.
Airports Council International is the only global trade representative of airports with 580 members operating from 1,650 airports in 179 countries and territories.
This is a massive jump for the airport which, before privatization in 2007, had scored 3.02 on the ASQ and did not manage a rank in the top 100. Delhi International Airport (P) Ltd (DIAL) commended the efforts of agencies such as customs , immigration , CISF , airlines , concessionaires , housekeeping and other support staff for contributing to the image make-over for the airport.
DIAL's CEO I Prabhakara Rao said : "IGIA has come a long way in the last five years since we took over. We have ensured that quality has become a way of life not just with DIAL employees , but with all stakeholders of the IGI airport family. We are confident that all 30 ,000 plus members of the IGI airport family will continue to strive for excellence and we hope to improve our position even further in the coming years."
IGI airport handled a record number of 35 million passengers in 2011. The airport has an annual passenger capacity of over 60 million of which terminal 3 can alone handle 34 million passengers. The airport also handled over 6 lakh tonnes of cargo and over 3 lakh aircraft movements in 2011.
Airports Council International is the only global trade representative of airports with 580 members operating from 1,650 airports in 179 countries and territories.
RBI to permit non-banking entities to set up ATMs
Mumbai: In a bid to accelerate the growth and penetration of ATMs in the country, the Reserve Bank of India on Tuesday said it plans to permit non-banking entities to set up, own and operate ATMs.
ATMs rolled out by non-banks will be like White Label ATMs (WLA) and will provide ATM services to customers of all banks, the RBI said in its Draft Guidelines for WLAs.
Non-bank entities proposing to set up WLAs have to apply to the RBI seeking authorisation under the Payment and Settlement Systems Act 2007. Such entities should have a minimum net worth of Rs. 100 crore at the time of making the application and on a continuing basis after issue of the requisite authorisation.
Being non-bank owned ATMs, the guidelines on five free transactions in a month for using other bank ATMs will not be applicable for transactions made on the WLAs. The charges for the transactions have to be displayed on the screen before the customer initiates the transaction.
'Sponsor Bank'
The WLA operator will have to declare one “Sponsor Bank”, which will serve as the Settlement Bank for the settlement of all the service transactions at the WLAs. The Sponsor Bank should be a member of one of the ATM networks authorised by the RBI and also be a member of the RTGS.
While the primary responsibility to redress grievance of customers relating to failed ATM transactions will vest with the Card Issuing Bank, the Sponsor Bank will provide necessary support in this regard.
The RBI's directives on the time-lines for resolution of complaints of failed ATM transactions will also apply to transactions at the WLAs.
The WLA operator can choose the location of the WLA. However, it will adhere to annual targets and the ratio of WLA between Tier I &II and Tier III-VI centres that may be stipulated by the RBI.
ATMs rolled out by non-banks will be like White Label ATMs (WLA) and will provide ATM services to customers of all banks, the RBI said in its Draft Guidelines for WLAs.
Non-bank entities proposing to set up WLAs have to apply to the RBI seeking authorisation under the Payment and Settlement Systems Act 2007. Such entities should have a minimum net worth of Rs. 100 crore at the time of making the application and on a continuing basis after issue of the requisite authorisation.
Being non-bank owned ATMs, the guidelines on five free transactions in a month for using other bank ATMs will not be applicable for transactions made on the WLAs. The charges for the transactions have to be displayed on the screen before the customer initiates the transaction.
'Sponsor Bank'
The WLA operator will have to declare one “Sponsor Bank”, which will serve as the Settlement Bank for the settlement of all the service transactions at the WLAs. The Sponsor Bank should be a member of one of the ATM networks authorised by the RBI and also be a member of the RTGS.
While the primary responsibility to redress grievance of customers relating to failed ATM transactions will vest with the Card Issuing Bank, the Sponsor Bank will provide necessary support in this regard.
The RBI's directives on the time-lines for resolution of complaints of failed ATM transactions will also apply to transactions at the WLAs.
The WLA operator can choose the location of the WLA. However, it will adhere to annual targets and the ratio of WLA between Tier I &II and Tier III-VI centres that may be stipulated by the RBI.
PM for speedy clearance of road projects
New Delhi: The government has decided to fast-track the clearance of roads and highways projects in the remaining months of the current financial year.
After a directive from Prime Minister Manmohan Singh, the ministry of road transport and highways has decided to award 15 major projects, totalling 1,547 kilometres of roads, this financial year. Another 11 road projects (1,731 km) would be considered by the public-private partnership approval committee next week. “This will ensure the target for the current financial year of 7,999 km is met on time,” said a release from the Prime Minister’s Office.
In a meeting attended by the member-secretary in the Planning Commission, the secretary in the department of economic affairs, the secretary in the ministry of road transport & highways, and principal secretary to the prime minister, Pulok Chatterjee, it was decided cabinet approvals for the exercise would be sought next week.
The cabinet committee on infrastructure would also consider the ministry’s proposal on the eastern peripheral expressway to clear the project in its meeting next week.
After a directive from Prime Minister Manmohan Singh, the ministry of road transport and highways has decided to award 15 major projects, totalling 1,547 kilometres of roads, this financial year. Another 11 road projects (1,731 km) would be considered by the public-private partnership approval committee next week. “This will ensure the target for the current financial year of 7,999 km is met on time,” said a release from the Prime Minister’s Office.
In a meeting attended by the member-secretary in the Planning Commission, the secretary in the department of economic affairs, the secretary in the ministry of road transport & highways, and principal secretary to the prime minister, Pulok Chatterjee, it was decided cabinet approvals for the exercise would be sought next week.
The cabinet committee on infrastructure would also consider the ministry’s proposal on the eastern peripheral expressway to clear the project in its meeting next week.
Tuesday, February 14, 2012
Consumer spending to rise 4 times by 2020, says a joint study by CII and Boston Consulting Group
umbai: Consumer spending in the country is likely to grow nearly four times in a decade to $3.6 trillion by 2020, driven by rising incomes and aspirations, widespread media proliferation and better physical reach across the country, says a study.
A joint report by Boston Consulting Group and industrial body Confederation of Indian Industry ( CII) says the overall consumer spending in 2010 was $977 billion. The study, 'The Tiger Roars - How a billion plus people consume and shop' , will be released on Thursday.
"The Indian consumer has shifted from forced denial to affordable indulgence," says Thomas Varghese, chairman of CII's national committee on retail and chief executive officer of Aditya Birla Retail. This "sensible consumption" has the potential to drive the economic growth of the country for years to come, he says.
Organised retail has developed an enabling environment to satisfy this consumption growth and allowing foreign retailers to invest in the country will boost it further, Varghese says. PepsiCo India Region Chairman & CEO Manu Anand, who is also the chairman of CII's national committee on FMCG, says that while the dramatic growth of the market is well known, the changing patterns of and attitudes toward consumption are not widely understood.
"It is critical for FMCG companies to understand the nature of this consumption demand and what is driving it," he says. "The Indian consumer pyramid is shaping into a diamond, but more importantly income is only one variable that is driving this consumption," he says. For instance, within the same income segment, attitudes and behaviours are dramatically different as consumers are trading up and down at the same time.
A joint report by Boston Consulting Group and industrial body Confederation of Indian Industry ( CII) says the overall consumer spending in 2010 was $977 billion. The study, 'The Tiger Roars - How a billion plus people consume and shop' , will be released on Thursday.
"The Indian consumer has shifted from forced denial to affordable indulgence," says Thomas Varghese, chairman of CII's national committee on retail and chief executive officer of Aditya Birla Retail. This "sensible consumption" has the potential to drive the economic growth of the country for years to come, he says.
Organised retail has developed an enabling environment to satisfy this consumption growth and allowing foreign retailers to invest in the country will boost it further, Varghese says. PepsiCo India Region Chairman & CEO Manu Anand, who is also the chairman of CII's national committee on FMCG, says that while the dramatic growth of the market is well known, the changing patterns of and attitudes toward consumption are not widely understood.
"It is critical for FMCG companies to understand the nature of this consumption demand and what is driving it," he says. "The Indian consumer pyramid is shaping into a diamond, but more importantly income is only one variable that is driving this consumption," he says. For instance, within the same income segment, attitudes and behaviours are dramatically different as consumers are trading up and down at the same time.
Mercedes to invest 350cr in India
Stuttgart: German auto major Mercedes Benz plans to invest Rs 350 crore by 2014 in its plant in Chakan near Pune and roll out about five compact premium cars in India over the next two years to regain its numero uno position from BMW.
The Stuttgart-based company will also introduce 10 new models in India, quickly after their global launches by 2015. "India is an important growth market for us. We see high demand for our A and B Class segments in India. We plan to enlarge our dealer network and ramp up production capacities," said Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz Cars. He, however, refused to divulge the exact investments in India. The company has so far invested Rs 650 crore in India . The additional investment will take the figure to Rs 1,000 crore.
The company may introduce A Class, B Class, a new SUV, a small coupe and one more product, which could be assembled at its plant in Chakan . The company also plans to set up a new in-house paint shop and two more assembly lines here. With the entry of more compact models, Mercedes Benz may double its sales in India to up to 20,000 in the next couple of years, said officials. Mercedes Benz India sold 7,089 cars in 2011, a growth of 22.7%.
"It is important to start local production for A and B Class. We hope to double our volumes with these models ," said Matthias Luhrs, chairman of the Mercedes Benz India board and vice president, global sales, at the company's annual results conference.
Daimler AG posted its best ever annual results in 2011 with net profit of over 6.0 billion and group revenues worth 106.5 billion. As part of its Vision 2020, Daimler aims to be the largest premium car-maker in the world with India and China being at the core of its future strategy.
The Stuttgart-based company will also introduce 10 new models in India, quickly after their global launches by 2015. "India is an important growth market for us. We see high demand for our A and B Class segments in India. We plan to enlarge our dealer network and ramp up production capacities," said Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz Cars. He, however, refused to divulge the exact investments in India. The company has so far invested Rs 650 crore in India . The additional investment will take the figure to Rs 1,000 crore.
The company may introduce A Class, B Class, a new SUV, a small coupe and one more product, which could be assembled at its plant in Chakan . The company also plans to set up a new in-house paint shop and two more assembly lines here. With the entry of more compact models, Mercedes Benz may double its sales in India to up to 20,000 in the next couple of years, said officials. Mercedes Benz India sold 7,089 cars in 2011, a growth of 22.7%.
"It is important to start local production for A and B Class. We hope to double our volumes with these models ," said Matthias Luhrs, chairman of the Mercedes Benz India board and vice president, global sales, at the company's annual results conference.
Daimler AG posted its best ever annual results in 2011 with net profit of over 6.0 billion and group revenues worth 106.5 billion. As part of its Vision 2020, Daimler aims to be the largest premium car-maker in the world with India and China being at the core of its future strategy.
Govt wants its divestment sum assured, dials LIC
Mumbai: The government has allowed the Life Insurance Corporation (LIC) to increase stake in public sector entities beyond the 10 per cent cap. The move will help the insurance behemoth to meet the investment target for the financial year and support the government's efforts to fast-track disinvestment.
This has been a long-standing demand from the largest domestic institutional investor in the country. So far, LIC was allowed to pick up a maximum of 10 per cent stake in a company.
LIC has been seeking a relaxation to this norm, arguing that it is limiting its investment options as the insurance behemoth has already exhausted that limit in most blue-chip companies.
As part of this plan, first LIC will pick up five per cent stake in more than a dozen public sector banks, including Canara Bank, Allahabad Bank, Syndicate Bank and Andhra Bank through a preferential allotment of shares. Second, the insurance company will be allowed to acquire 5-10 per cent of the government's stake in public sector units that will be put on the block before the financial year ends.
Funds would not be a problem for LIC, as it has enough headroom in equity investment this year. Given the choppy equity market and lower sales of unit-linked products, the insurance company had only invested around Rs 25,000 crore in equities during April-December of this year’s target of Rs 40,000 crore.
During 2010-11, the total investment of LIC stood at Rs 1.96 lakh crore, of which Rs 43,000 crore was invested in equities.
According to sources, LIC has already set aside Rs 1,800-2,000 crore for investing in these banks and another Rs 10,000 crore to participate in the disinvestment process.
“The process has already started. Dena Bank and Bank of Maharashtra have allotted shares to LIC on a preferential basis. After the completion of the deal, in both these banks LIC's share will go up to 11 per cent,” said a source.
In 2010-11, the government raised Rs 22,763 crore by divesting stake in six companies — SJVN, Engineers India, Coal India, Power Grid, MOIL and Shipping Corporation of India. LIC had invested close to Rs 8,000 crore for buying shares in these companies.
“Whenever state-owned companies came up with issues, we had invested and picked up stakes as these are always a good strategic investment,” said an LIC official.
This has been a long-standing demand from the largest domestic institutional investor in the country. So far, LIC was allowed to pick up a maximum of 10 per cent stake in a company.
LIC has been seeking a relaxation to this norm, arguing that it is limiting its investment options as the insurance behemoth has already exhausted that limit in most blue-chip companies.
As part of this plan, first LIC will pick up five per cent stake in more than a dozen public sector banks, including Canara Bank, Allahabad Bank, Syndicate Bank and Andhra Bank through a preferential allotment of shares. Second, the insurance company will be allowed to acquire 5-10 per cent of the government's stake in public sector units that will be put on the block before the financial year ends.
Funds would not be a problem for LIC, as it has enough headroom in equity investment this year. Given the choppy equity market and lower sales of unit-linked products, the insurance company had only invested around Rs 25,000 crore in equities during April-December of this year’s target of Rs 40,000 crore.
During 2010-11, the total investment of LIC stood at Rs 1.96 lakh crore, of which Rs 43,000 crore was invested in equities.
According to sources, LIC has already set aside Rs 1,800-2,000 crore for investing in these banks and another Rs 10,000 crore to participate in the disinvestment process.
“The process has already started. Dena Bank and Bank of Maharashtra have allotted shares to LIC on a preferential basis. After the completion of the deal, in both these banks LIC's share will go up to 11 per cent,” said a source.
In 2010-11, the government raised Rs 22,763 crore by divesting stake in six companies — SJVN, Engineers India, Coal India, Power Grid, MOIL and Shipping Corporation of India. LIC had invested close to Rs 8,000 crore for buying shares in these companies.
“Whenever state-owned companies came up with issues, we had invested and picked up stakes as these are always a good strategic investment,” said an LIC official.
Subscribe to:
Posts (Atom)