Power Exchange ties up with Korean counterpart

Mumbai: Power Exchange India Ltd (PXIL) has signed a memorandum of understanding with Korea Power Exchange (KPX) to work together in overseas markets. PXIL is a joint venture of the National Stock Exchange (NSE) and National Commodity & Derivatives Exchange (NCDEX).

“We are hopeful that this association will help our objective of transforming the Indian electricity market. This MoU will bring in a global perspective which will help us to create a benchmark in the areas of operations and product offerings, said Ms Rupa Devi Singh, Managing Director and Chief Executive Officer, PXIL.

The priority areas identified for cooperation are; sharing of information regarding power markets, cooperation on improvements of competitive electricity markets, training employees to enhance their understanding of the electricity markets and sharing of expertise including new business initiatives such as REC trading.

Mr Ho-Ki Nam, Chairman and Chief Executive Officer, KPX, said, “As a neutral entity, KPX has played an important role in developing the electricity market in South Korea. With this MoU in place, it will broaden the area of mutual cooperation between KPX and PXIL. I truly hope that this collaboration and PXIL's high performance will help us in understanding the operations of Indian electricity market.”

IT spend in BFSI sector to touch $3.5 b: Study

Bangalore: A study by advisory firm Zinnov has found that India’s domestic IT spend is valued at $30.4 billion, out of which BFSI (Banking, Financial Services and Insurance) sector contributes to 11.1 per cent.

The company in a release said that IT spend in BFSI vertical is expected to reach $3.5 billion by FY 2014, growing at a CAGR of 13 per cent.

Commenting on the study, Mr Praveen Bhadada, Director-Market Expansion, Zinnov, said: “The number of BFSI-specific IT deals in India has increased 600 per cent cumulatively in the last four years and nearly one-third of those deals are focused on modern technologies. The BFSI segment in India is demonstrating a definite inclination towards leveraging information technology to add real business value as it moves up the IT value chain.”

Russian firm invests in two Indian e-commerce sites

Kolkata: Russian company ru-Net seems to have become the first foreign company to invest in an Indian online retail company. The Moscow-based internet and technology investment company invested $17 million (Rs 95.2 crore) in Freecultr and BeStylish, two e-commerce websites backed by the Smile group. This was also the first time a Russian company invested in India’s internet space.

E-commerce companies operating in India are governed by the same FDI (foreign direct investment) rules as other brick-and-mortar retail chains. At present, multi-brand retail chains are not allowed any FDI, while single-brand outlets can get foreign investment up to 100 per cent.

But online players are known to be running on foreign funds, mostly of international venture capital and equity funds. E-commerce or online chains structure the investment in such a way that front-end billing to customers is not done by companies that have foreign funds. As foreign investment is allowed for back-end operations, as opposed to front-end retailing, e-commerce companies typically work around these rules.

ru-Net invested $9 million (Rs 50.4 crore) in Freecultr and $8 million (Rs 44.8 crore) in BeStylish. While Freecultr is an apparel designing and retailing company, which was recently in the news for its merchandising tie-up with Bollywood actor Shahrukh Khan’s Kolkata Knight Riders, BeStylish is a shoe e-retailing company. BeStylish sells about 1,000 pairs of shoes daily and Freecultr 190-200 pieces of clothing.

“Yes, it is correct ru-Net has invested in Smile and Freecultr,” said Sujal Shah, chief executive of Freecultr.

But the Smile group refused to divulge the valuations at which the money was raised. Repeated calls made to Harish Bahl, chief executive of Smile group, went unanswered. Sources close to the deal told Business Standard that ru-Net valued Freecultr at $25 million (Rs 140 crore) and BeStylish at $35 million (Rs 196 crore), respectively.

A Smile group official said, “The reason Smile went to ru-Net for money has mostly to do with the fact that it was unable to raise money from existing private equity (PE) players in India.”

PE sources said the properties were overvalued at these prices. “To justify a $25-million valuation, any given company has to have about 1,000 transactions a day, where Freecultr is just doing 200 transactions daily. This is another example of an inflated deal,” said a PE player.

But the Smile group official said for ru-Net, the transaction had been driven by the need to gain an entry into India. “Besides this, it sees the deal as a long-term partnership with Smile, which has a pretty diversed portfolio,” he said.

The e-commerce segment in India was supposed to touch Rs 47,000 crore last year, growing at 25-30 per cent a year. Most investments in e-commerce till date have come from the UK and Mauritius-based funds like Sequoia Capital and Tiger Global.

Germany’s Samwer brothers have also taken aggressive bets on the Indian e-commerce market with their apparel retail site Jabong. According to industry estimates, Jabong is spending about Rs 75 crore a month on online advertising.

Sebi nod to Nippon Life's 26% stake buy in Reliance Mutual Fund

Mumbai: Market regulators in India and Singapore have cleared the sale of Reliance Capital's 26% stake in Reliance Mutual Fund to Nippon Life Insurance, Japan's biggest life insurer, for Rs 1,450 crore. Sebi and Monetary Authority of Singapore have both cleared the deal, Reliance MF said in a statement. Statutory approvals from RBI, Competition Commission of India ( CCI) and PFRDA, the pension regulator, are already in place, the statement said.

With all the statutory approvals in place, the final agreement between Anail Ambani-controlled Reliance Capital, the promoters of Reliance MF, and the Singapore-arm of Nippon Life is expected to be signed over the next few weeks. Once closed, this will be the biggest FDI in the Indian mutual fund industry. The buyout, by the largest insurance firm in Asia, values the fund house at Rs 5,600 crore.

Reliance MF is the largest fund house in India, managing around Rs 1.40 lakh crore in assets in MFs, government-sponsored public funds, managed accounts and hedge funds. Nippon Life Insurance, already a strategic partner in Reliance Life Insurance, manages over $600 billion in assets globally.

Australian envoy calls for stronger fiscal ties

ochi: The Australian High Commissioner to India, Mr Peter Varghese, has stressed on the need to extend Indo-Australian relations in key areas of infrastructure development and economic relations.

Speaking at an interactive session organised here by the Kerala Chamber of Commerce and Industry in association with the Australian Consulate General, Chennai, Mr Varghese said that India would become a more significant player in the region and Australia looks to India as one among the few fastest growing countries in the world.

He pointed out that bilateral trade between India and Australia will cross $40 billion within the next five years. “India is already our third largest export market and it will not be long before India becomes second largest,” he added.

“We are beginning to see the convergence of these two countries. India's strategic focus is altering the age old concept of ‘Asia-Pacific'. India and Australia can do much more to build multilateral relations particularly with G-20,” he added.

India is likely to be the largest source of skilled migrants and is in the top three for the last couple of years. India ranks second in temporary skilled migrants programme currently running in Australia and is also the second largest source of international students for Australia, Mr Varghese said.

Australia will also launch a major cultural promotion programme in India from October to January 2013, he added.

Mr K.N. Marzook, chairman, Kerala Chamber of Commerce and Industry, said on the occasion that India and Australia share historical ties. The contemporary period has seen these historical contacts reinforced on the bilateral level. The two countries enjoy rapidly growing trade and economic relations, he said.

Mr David Holly, Australian Consul General, South India, talked about the growing trade and fiscal relations with India.

RBI asks banks to allot unique customer IDs

Mumbai: The Reserve Bank of India has asked banks to initiate steps to allot Unique Customer Identification Code (UCIC) to all their customers.

To begin with the UCIC should be allotted to customers entering into a new relation with a bank. Further, this code should be allotted to existing customers by banks by end-May 2013.

The UCIC will help banks to identify customers, track the facilities availed, monitor financial transactions in a holistic manner and enable banks to have a better approach to risk profile it’s customers, the central bank said.

The RBI said that increasing complexity and volume of financial transactions require that customers do not have multiple identities within a bank, across the banking system and across the financial system. To overcome this, it is important to pool information pertaining to different account holders in a centralised database.

Eastern Railway records higher freight and passenger revenue in April-May '12

Eastern Railway has recorded substantial growth earnings with higher freight and passenger its earnings during April and May, 2012.

Eastern Railway set a record by carrying 10.606 million tonnes of freight traffic in first two months of the current financial year, April and May 2012, surpassing the proportionate target set up by Railway Board of 10.32 million tonne for these two months.

During the corresponding period last year, April and May 2011, Eastern Railway had carried 9.288 million tonnes of freight traffic. Thus, there was an increase of 14.19% over the previous year. Out of total loading so far, coal alone amounted to 7.322 million tonnes as against 6.163 million tonnes during the previous year.

General goods amounted to 3.284 million tonnes this year. Improvement in loading has been possible due to better offering of coal by the public and private coal producers, which has increased by 22.92% during May 2012 and 18.81% during 2012-13 (upto May 2012) over the corresponding period of previous year.

Total earning of Eastern Railway from freight traffic also increased to Rs. 794.02 crores during April and May 2012 as against 588.35 million tonnes during the corresponding period of last year.

Thus, there was an increase of 34.96% over last year's earning. In terms of passenger traffic too, Eastern Railway carried as many as 19.56 crores of passengers in April-May 2012 as against 18.82 crores of passengers carried during April and May 2011, recording an improvement of 3.86% over last year.

Eastern Railway earned a total of Rs 268.95 crores during April and May 2012 as against Rs 249.93 crores during April and May 2011, showing an increase of 7.61% over last year.

Total earning of Eastern Railway increased to Rs 1101.81 crores during April and May 2012 even surpassing the proportionate target fixed up by Railway Board of Rs 1074.21 crores for these 2 months.

Last year, Eastern Railway earned Rs 873.51 crores during the previous corresponding months recording an increase of 26.14% over last year.

Ashok Leyland plans big drive in five country clusters

hennai: Ashok Leyland is targeting five country clusters — West Asia, Africa, CIS, Asean and Latin America — to either export to or start local operations.

Last year, the company hired Mr Per Gustav Nilsson from German truck-maker MAN as Executive Director, International Operations, to spearhead this strategy.

Mr Vinod K Dasari, Managing Director, Ashok Leyland, says the company has to look beyond its traditional markets of Sri Lanka and Bangladesh, which are now “as good as domestic markets.”

“We have to keep the momentum growing outside too, to fight the cyclicality in the domestic market,” says Mr Dasari

In an interview to Business Line, Mr Dasari said the idea is to either take Indian products to these market clusters or bring in multinational products. For instance, buses from British company Optare (which Leyland acquired) are being sold in South Africa. Leyland sells vehicles made at its Prague Avia truck plant in Singapore. Its plant in Ras-al-Khaimah achieved full capacity last year, rolling out four buses a day to West Africa and West Asia. Some of the buses to Africa also go directly from India.

Bus first, truck then
The company believes in entering markets by partnering with local players that have both market access and knowledge. Ashok Leyland provides a chassis or chassis kit, on which the local player builds the body. “We can slowly even bring in CKD kits.”

This strategy has worked well in markets such as Russia and Ukraine, says Mr Dasari. The company also has local partners in Chile now. “And we have partners coming up in Vietnam, Malaysia and Indonesia.”

And when Ashok Leyland steps into a country, it takes its bus there first. “The reason being the bus has a limited (travelling) radius. Once the brand starts to build and we know more about the market, then we bring in trucks,” says Mr Dasari.

Though Ashok Leyland is keen to have local partners, it is not averse to acquisitions. “Even a big ticket acquisition. But it must give us two things: market access and technology. We will not acquire companies just to make ourselves bigger.”

Exports grew 25 per cent last year to 12,852 vehicles — accounting for 13 per cent of the overall business.

“We want to consistently maintain a 10-20 per cent ratio, depending on what happens in the world markets,” says Mr Dasari.

The Indian nutraceutical market to grow to $2731 million in 2016: Frost & Sullivan

Kolkata: Functional foods and functional beverages are relatively nascent markets in India primarily due to a burgeoning middle class that relies on traditional practices such as Ayurveda.

New analysis from Frost & Sullivan, The Indian nutraceutical market, finds that the market earned revenues of $1480 million in 2011 and could grow to $2731 million in 2016 at a CAGR of 13.0 percent.

Dietary supplements were the largest category accounting for 64 percent of the nutraceuticals market, driven primarily by the pharmaceutical sector in the form of vitamin and mineral supplements.

Functional foods will be the quickest growing category until 2015 followed by dietary supplements. However, dietary supplements, specifically herbal and dietetic supplements, will form the greatest opportunity areas for nutraceutical manufacturers, driven by growing demand from an evolving consumer base.

The global nutraceutical market in 2011 was estimated to be $149.5 billion, with US, Europe and Japan being the largest regional markets, accounting for nearly 93 percent of the global nutraceutical demand. These markets are nearing maturity, with exceedingly high per capita spends on nutraceutical products. Japan has a per capita spend of $51/person/year, while US and Europe have $40 and $35 each. The global average is only $21/person/year. This compels nutraceutical manufacturers to look at developing countries such as India and China, which have considerably lower per capita spends on these products, as key growth regions.

Mozambique team visits Coir Board

Kochi: To explore the possibility of getting technical expertise on coconut and value additions, a high level delegation from Mozambique visited Coir Board and Coconut Development Board offices here.

The delegation headed by Mr José Condugua António Pacheco, Minister of Agriculture, Republic of Mozambique, discussed various matters connected with the development of coir industry, coconut cultivation and the processing sector.

A presentation depicting various facets of the coir Industry was made before the delegation by Mr M. Kumaraswamy Pillai, director (marketing), Coir Board. The Board chairman, Prof G. Balachandran, explained the activities undertaken by the Board for the development of coir industry in the country.

The Chairman also agreed to extend all support to Mozambique government for the development of coir industry in that country with the approval of the Centre under bilateral agreement.

The delegation was impressed on the way of coir industry in India producing wide range of products out of coir and the presentation highlighted the tremendous potential for setting up of coir based industry in places where coconut husk are available.