Angul (Odisha): The Naveen Jindal-promoted Jindal Steel & Power Ltd (JSPL) will set up 1,500 MW of greenfield power generating capacity across five African nations.
“The company is going to set up 300 MW (2 x 150 MW plant) capacities each, across five African nations, including Senegal, Mozambique and Liberia,” a top JSPL executive told Business Line on condition of anonymity.
These projects are likely to start in the new financial year, starting April 1.
Investments
In addition, JSPL has decided to invest Rs 14,000 crore in the next financial year (2013-14).
The investments will be spread equally between its steel and power business, the executive added. The company is finalising its budget for next year. A chunk of investments for the power business in the next fiscal will go to the overseas greenfield plants, he said. The company will shortly decide how to raise funds for its capital expenditure plans. Recently, Bloomberg News had quoted JSPL group Chief Financial Officer Sushil Maroo saying that the company would mop up Rs 6,000 crore in 2013-14. This would include $400 million of overseas loans and $300 million of foreign currency bonds.
JSPL plans to achieve full capacity of 6 million tonnes in its upcoming steel plant in Angul, Odisha by 2015. Till now, the private steel and power company has commissioned 1.5 mt, said V.R. Sharma, Chief Executive for Steel Business, JSPL.
The company plans to export steel from Angul, which is nearly 210 km from Paradip port.
The Rs 30,000-crore project will source coal from the captive coal block Utkal-B1, about 7 km from the site.
“We are waiting for the mining lease for the block. As soon as we get this, we will start removing the over-burden,” Sharma told mediapersons visiting the project.
Till now, JSPL has spent Rs 16,000 crore for the steel and power project, to come up on 4,000 acres.
The company is maintaining a debt-equity ratio of 1.65:1. It has raised loans both from the domestic and overseas markets.
Land, connectivity
The company has got physical possession of 2,600 acres and payments have been made for 4,000 acres. The land acquisition is likely to be completed by July-August 2013, Sharma said.
JSPL has commissioned 405 MW capacity of the total 840 MW planned at the integrated steel and power plant in Angul.
Major infrastructure pending for the project include rail connectivity and the water pipeline.
The railway line is expected to be laid by May 2013 and the remaining 5 km pipeline for transporting water is to be completed in the next fortnight.
Success in my Habit
Friday, March 15, 2013
Govt clarifies provision for corporate investments in tax-free bonds
Mumbai: The government today clarified that tax-free bonds are eligible investments for companies in a bid to boost corporate participation in such instruments.
The government's move comes after ambiguity over interpretation of a provision in the Companies Act relating to inter-corporate deposits affected investments by corporate bodies in tax-free bond issuances. "It's hereby clarified that in cases where the effective yield on tax-free bonds is greater than the yield on prevailing bank rate, there is no violation of the Section 372A(3) of Companies Act, 1956," the ministry of corporate affairs said in a circular.
The Section 372A(3) of the Companies Act says: "No loan to any corporate body shall be made at a rate of interest lower than the prevailing bank rate, being the standard rate made public under section 49 of the Reserve Bank of India Act, 1934." Currently, the bank rate is at 8.75 per cent, while the coupon rate offered by such instruments are in the range between 6.85 per cent and 7.2 per cent. As a result, most companies were staying away from investing in such instruments for fear of breaching the Company Act provision.
The bank rate was untouched at six per cent since 2003. Last month, RBI as a "one-time technical adjustment" decided to align the bank rate with the so-called marginal standing facility (MSF), from where banks can borrow overnight, effective February 13. As a result, the bank rate shot up from six per cent to 9.5 per cent. Currently, both MSF and the bank rate are at 8.75 per cent.
The six tax-free bond issues currently in the market are finding it challenging to garner subscription. The corporate affairs ministry in a statement attributed the tepid response to restriction under Section 372A(3). Next year, the government has allowed fund-raising to the tune of Rs 50,000 crore through tax-free bond issuances. Lack of clarity would have impacted investments of up to Rs 5,000 crore, as up to 10 per cent of bond public issues are reserved for corporate subscribers.
In addition, some issuers had planned to raise funds through private placement for big-ticket corporate and institutional investors. "This clarification puts to rest the ambiguity on eligibility of investments by corporate bodies in tax-free bonds currently on offer," said the ministry in a statement.
The government's move comes after ambiguity over interpretation of a provision in the Companies Act relating to inter-corporate deposits affected investments by corporate bodies in tax-free bond issuances. "It's hereby clarified that in cases where the effective yield on tax-free bonds is greater than the yield on prevailing bank rate, there is no violation of the Section 372A(3) of Companies Act, 1956," the ministry of corporate affairs said in a circular.
The Section 372A(3) of the Companies Act says: "No loan to any corporate body shall be made at a rate of interest lower than the prevailing bank rate, being the standard rate made public under section 49 of the Reserve Bank of India Act, 1934." Currently, the bank rate is at 8.75 per cent, while the coupon rate offered by such instruments are in the range between 6.85 per cent and 7.2 per cent. As a result, most companies were staying away from investing in such instruments for fear of breaching the Company Act provision.
The bank rate was untouched at six per cent since 2003. Last month, RBI as a "one-time technical adjustment" decided to align the bank rate with the so-called marginal standing facility (MSF), from where banks can borrow overnight, effective February 13. As a result, the bank rate shot up from six per cent to 9.5 per cent. Currently, both MSF and the bank rate are at 8.75 per cent.
The six tax-free bond issues currently in the market are finding it challenging to garner subscription. The corporate affairs ministry in a statement attributed the tepid response to restriction under Section 372A(3). Next year, the government has allowed fund-raising to the tune of Rs 50,000 crore through tax-free bond issuances. Lack of clarity would have impacted investments of up to Rs 5,000 crore, as up to 10 per cent of bond public issues are reserved for corporate subscribers.
In addition, some issuers had planned to raise funds through private placement for big-ticket corporate and institutional investors. "This clarification puts to rest the ambiguity on eligibility of investments by corporate bodies in tax-free bonds currently on offer," said the ministry in a statement.
Wave Infra to invest Rs 500 cr in affordable housing
New Delhi: Wave Infratech, the realty arm of Ponty Chadha’s Wave Group, will invest Rs 500 crore to set up its first affordable housing venture in the Delhi national capital region area, which will offer homes in a price range of Rs 14-18 lakh.
The construction for the project, ‘Dream Homes’, will start this month at the company’s integrated township — Wave City in Ghaziabad, Uttar Pradesh — and will be completed in three-four years, R K Panpalia, managing director, Wave Group, told Business Standard. In the first phase, the company will set up 1,500 flats in this segment.
With the recent Budget announcements, the sales in the affordable segment are expected to increase, he said. In the Budget, the limit for deduction of home interest was increased to Rs 2.5 lakh from Rs 1.5 lakh for the first time home buyers for a loan amount of up to Rs 25 lakh.
Wave City, which is spread over 4,500 acres, will have hospitals, schools and other commercial set-up, including hotels in the second phase of the project, besides villas, independent floors and plots. The company will offer 1BHK and 2BHK homes with an area of 575-800 square feet. In total, it will provide 3,500 flats — 800 (1BHK) and 2,700 (2BHK) homes.
The investment will be done through internal accruals and debt and the company has no plans to raise money through private equity or go in for an initial public offerring at the moment, Panpalia added.
The construction for the project, ‘Dream Homes’, will start this month at the company’s integrated township — Wave City in Ghaziabad, Uttar Pradesh — and will be completed in three-four years, R K Panpalia, managing director, Wave Group, told Business Standard. In the first phase, the company will set up 1,500 flats in this segment.
With the recent Budget announcements, the sales in the affordable segment are expected to increase, he said. In the Budget, the limit for deduction of home interest was increased to Rs 2.5 lakh from Rs 1.5 lakh for the first time home buyers for a loan amount of up to Rs 25 lakh.
Wave City, which is spread over 4,500 acres, will have hospitals, schools and other commercial set-up, including hotels in the second phase of the project, besides villas, independent floors and plots. The company will offer 1BHK and 2BHK homes with an area of 575-800 square feet. In total, it will provide 3,500 flats — 800 (1BHK) and 2,700 (2BHK) homes.
The investment will be done through internal accruals and debt and the company has no plans to raise money through private equity or go in for an initial public offerring at the moment, Panpalia added.
Tata Comm plans cable link to Bangladesh
New Delhi: Tata Communications is planning a terrestrial optical fibre cable link between India and Bangladesh in collaboration with BD Link Communications Ltd.
The proposed cable will connect Bangaon in West Bengal to Benapol in Bangladesh.
BD Link Communications, which is a Bangladeshi international telephony service provider, will lay the cable in that country. Tata Communications will be using a spare fibre pair that has already been laid and operational for connectivity with other Bangladeshi operators. Tata Communications will splice up the existing cable at Petrapol in West Bengal.
Bilateral traffic
“The proposed optical fibre link shall be used to for bilateral traffic (international long distance voice and data, Internet, as well as for transit traffic between various countries and Bangladesh via India,” stated an internal Government note seen by Business Line.
Tata Communications has shared the plan with the Government for approval since the Government holds a minority share in the company.
The Government has given an in-principle agreement to the cable link because the company had earlier done a similar link with Novacom, Summit Communications and Mango Teleservices, according to the note.
“However, the final clearance shall be given only after the link is ready and successful demonstration of the interception and monitoring capabilities to the satisfaction of the security agencies,” the note stated.
The proposed cable will connect Bangaon in West Bengal to Benapol in Bangladesh.
BD Link Communications, which is a Bangladeshi international telephony service provider, will lay the cable in that country. Tata Communications will be using a spare fibre pair that has already been laid and operational for connectivity with other Bangladeshi operators. Tata Communications will splice up the existing cable at Petrapol in West Bengal.
Bilateral traffic
“The proposed optical fibre link shall be used to for bilateral traffic (international long distance voice and data, Internet, as well as for transit traffic between various countries and Bangladesh via India,” stated an internal Government note seen by Business Line.
Tata Communications has shared the plan with the Government for approval since the Government holds a minority share in the company.
The Government has given an in-principle agreement to the cable link because the company had earlier done a similar link with Novacom, Summit Communications and Mango Teleservices, according to the note.
“However, the final clearance shall be given only after the link is ready and successful demonstration of the interception and monitoring capabilities to the satisfaction of the security agencies,” the note stated.
H and R Johnson invests Rs 400 crore for expansion of tiles manufacturing facility
Chennai: H & R Johnson, a division of Prism Cement is investing Rs 400 crore for the expansion of its industrial tiles manufacturing facility at Dewas, Madhya Pradesh.
With this, the company's capacity will go up to 54 million square meters per annum.
The company is investing in the expansion to cater to demand from small and medium firms across the country, said Ravi Aravamuthan, General manage, H&R Johnson India.
"The small and medium enterprises segment has the potential to provide greater acceleration to the industrial business. H&R Johnson sees the potential to engage with the small and midsize enterprises in India to deliver best industrial flooring solutions at competitive economics. Apart from our wide range of industrial solutions portfolio catering to over 20 industry types, we have basket of products to combine aesthetics and industrial functionality to suit unique requirement of various SME units," he said.
The Industrial flooring category accounts for about 7% of the overall Indian ceramic tile industry. Johnson Endura enjoys market leadership in this segment with over 50% market share, according to the company.
With this, the company's capacity will go up to 54 million square meters per annum.
The company is investing in the expansion to cater to demand from small and medium firms across the country, said Ravi Aravamuthan, General manage, H&R Johnson India.
"The small and medium enterprises segment has the potential to provide greater acceleration to the industrial business. H&R Johnson sees the potential to engage with the small and midsize enterprises in India to deliver best industrial flooring solutions at competitive economics. Apart from our wide range of industrial solutions portfolio catering to over 20 industry types, we have basket of products to combine aesthetics and industrial functionality to suit unique requirement of various SME units," he said.
The Industrial flooring category accounts for about 7% of the overall Indian ceramic tile industry. Johnson Endura enjoys market leadership in this segment with over 50% market share, according to the company.
US firm Harsco open to acquisitions in railway infrastructure
Hyderabad: Harsco Corporation, a global industrial services company with revenues of $3 billion, is looking at forging alliances and acquisitions in India.
The company, which is into metals and minerals, infrastructure, rail and industrial businesses, is operating in India for two decades but reports small percentage of its global revenues.
The newly-appointed President and Chief Executive Officer of the Pennsylvania-headquartered company, Patrick K. Decker, is in India to take stock of the company affairs and business opportunities here.
Decker said there was huge scope for business in railway infrastructure in China and India.
The old and worn-out rail infrastructure needs to be rebuilt. “We are in early stages of pursuing that business,” he said.
Addressing a press conference here, he, however, refused to put a number to the opportunities being pursedor the target for Indian operations. “We are open to acquisitions. But I am against acquiring any company for the sake of acquisitions,” he said.
The company runs a Global Innovation Park here with 220 staffers. Of the 19,000 employees globally, around 700 work for its India operations. It recently bagged a 15-year $100 million contract with Jindal Stainless. Harsco’s services are scheduled to begin in the second half of this year and will include the company’s specialised process technologies for recovering metal from stainless steel production by-products.
The firm acquired over 20 companies globally. With a cash back-up of $100 million, it also had credit lines and opportunities to raise debt for buy-outs, if any, he said.
Environmental issues
Refusing to comment on the country’s overall (mining and environment) policies, he said these trends would continue, making Harsco’s services more valuable.
On the growth projections globally, he said the company was cautiously optimistic.
The company, which is into metals and minerals, infrastructure, rail and industrial businesses, is operating in India for two decades but reports small percentage of its global revenues.
The newly-appointed President and Chief Executive Officer of the Pennsylvania-headquartered company, Patrick K. Decker, is in India to take stock of the company affairs and business opportunities here.
Decker said there was huge scope for business in railway infrastructure in China and India.
The old and worn-out rail infrastructure needs to be rebuilt. “We are in early stages of pursuing that business,” he said.
Addressing a press conference here, he, however, refused to put a number to the opportunities being pursedor the target for Indian operations. “We are open to acquisitions. But I am against acquiring any company for the sake of acquisitions,” he said.
The company runs a Global Innovation Park here with 220 staffers. Of the 19,000 employees globally, around 700 work for its India operations. It recently bagged a 15-year $100 million contract with Jindal Stainless. Harsco’s services are scheduled to begin in the second half of this year and will include the company’s specialised process technologies for recovering metal from stainless steel production by-products.
The firm acquired over 20 companies globally. With a cash back-up of $100 million, it also had credit lines and opportunities to raise debt for buy-outs, if any, he said.
Environmental issues
Refusing to comment on the country’s overall (mining and environment) policies, he said these trends would continue, making Harsco’s services more valuable.
On the growth projections globally, he said the company was cautiously optimistic.
Green Channel Facilities to Firms with a Turnover of Rs.1000 Crore
New Delhi: Government has taken a decision to grant green channel status for DGS&D Rate Contracts to PSUs and firms (Indian as well as foreign) having an average turnover of Rs.1000 crore or more during the last three years and making profit in any three years of the last five years.
So far, twenty firms have been given green channel status. The area-wise details of these firms are Delhi -04; Mumbai-04; Gurgaon-05; Bangaluru-03; Ahmedabad-01; Vadodara-01; and Noida-02.
More reputed firms in international and national markets would be available on DGS&D Rate Contracts which will facilitate user departments.
This information was given by the Minister of State in the Ministry of Commerce & Industry, Dr. D Purandeswari in a written reply in the Rajya Sabha today.
So far, twenty firms have been given green channel status. The area-wise details of these firms are Delhi -04; Mumbai-04; Gurgaon-05; Bangaluru-03; Ahmedabad-01; Vadodara-01; and Noida-02.
More reputed firms in international and national markets would be available on DGS&D Rate Contracts which will facilitate user departments.
This information was given by the Minister of State in the Ministry of Commerce & Industry, Dr. D Purandeswari in a written reply in the Rajya Sabha today.
Titagarh Wagons' subsidiary wins Rs 275-cr order from French Railways
Kolkata: Titagarh Wagons AFR S.A. (TWAFR), the French subsidiary of Titagarh Wagons Ltd (TWL), has bagged an order from French Railways for 400 hopper cereal wagons worth Euro 39 million (around Rs 275 crore).
Umesh Chowdhary, Vice-Chairman & Managing Director, TWL, said “after the restart of operations in July 2010 under TWL’s aegis, TWAFR has got orders worth Euro 150 million (Rs 1,050 crore)”.
The hopper wagons order, signed last week, is the fourth such deal since its development in early 2011 and marks the acceptability of TWAFR’s design skill.
“From the beginning, we have concentrated on creating a niche for ourselves in the European market by offering superior design, high quality products and timely delivery. What was essential for AFR was to regain creditability in the market,” Chowdhary added.
TWAFR owns a number of patents for both wagons and bogies. The company has developed a range of multi-application wagons that include poly-articulated wagons. TWAFR has also designed road-to-rail wagons — on which trucks can be loaded. The TWAFR unit is located on an area of 42 acres at Douai in northern France with a yearly capacity of 2,000 wagons.
Umesh Chowdhary, Vice-Chairman & Managing Director, TWL, said “after the restart of operations in July 2010 under TWL’s aegis, TWAFR has got orders worth Euro 150 million (Rs 1,050 crore)”.
The hopper wagons order, signed last week, is the fourth such deal since its development in early 2011 and marks the acceptability of TWAFR’s design skill.
“From the beginning, we have concentrated on creating a niche for ourselves in the European market by offering superior design, high quality products and timely delivery. What was essential for AFR was to regain creditability in the market,” Chowdhary added.
TWAFR owns a number of patents for both wagons and bogies. The company has developed a range of multi-application wagons that include poly-articulated wagons. TWAFR has also designed road-to-rail wagons — on which trucks can be loaded. The TWAFR unit is located on an area of 42 acres at Douai in northern France with a yearly capacity of 2,000 wagons.
Tata Steel arm buys stake in Canadian mine for Rs 160 cr
Mumbai: Tata Steel has acquired through its subsidiary Tata Steel Minerals Canada (TSMC) half the interest in Labrador Iron Mines’ (LIM) Howse deposit for Canadian dollars 30 million (Rs 160 crore).
TSMC has the option to raise its stake to 70 per cent by paying Rs 130 crore. Howse has estimated iron ore reserves of 28 million tonnes (mt). TSMC will transfer its “Timmins 4” deposit, having resources of 1.7 mt, to LIM for C$3 million (Rs 16 crore), which is recoverable from sales.
Tata Steel already has a presence in Canada after it bought 27.7 per cent in New Millennium Iron Corporation. It also owns 80 per cent in NML’s DSO Project in the Labrador region. The DSO Project has 125 mt of resources spread over 25 deposits.
While the mine has produced 300,000 tonnes of ore, the construction of the processing plant is in full-swing. The TSMC facility, fully commissioned, will put out 6 mtpa of sinter fines, said a Tata Steel press release. H. M. Nerurkar, Managing Director, Tata Steel, said the arrangement is expected to enhance the raw material security and streamline the logistics of the DSO Project.
Infra Sharing
TSMC and LIM operate adjacent iron ore projects spread over the Provinces of Newfoundland, Labrador and Quebec. The Labrador Trough is a 160-km wide iron-ore bed in the Labrador-Quebec region in Canada.
The trough has delivered over two billion tonnes of ore in the last 50 years and attracted investments of $15 billion. It is estimated that the annual iron ore production of this region will increase from 35 mt to 65 mt by 2015.
TSMC and LIM have entered into multi-part co-operation agreements in areas of logistics and potential offtake arrangements.
It includes development of a rail line that will pass through LIM’s rail yard and connect TSMC’s processing plant with the main rail line.
TSMC has the option to raise its stake to 70 per cent by paying Rs 130 crore. Howse has estimated iron ore reserves of 28 million tonnes (mt). TSMC will transfer its “Timmins 4” deposit, having resources of 1.7 mt, to LIM for C$3 million (Rs 16 crore), which is recoverable from sales.
Tata Steel already has a presence in Canada after it bought 27.7 per cent in New Millennium Iron Corporation. It also owns 80 per cent in NML’s DSO Project in the Labrador region. The DSO Project has 125 mt of resources spread over 25 deposits.
While the mine has produced 300,000 tonnes of ore, the construction of the processing plant is in full-swing. The TSMC facility, fully commissioned, will put out 6 mtpa of sinter fines, said a Tata Steel press release. H. M. Nerurkar, Managing Director, Tata Steel, said the arrangement is expected to enhance the raw material security and streamline the logistics of the DSO Project.
Infra Sharing
TSMC and LIM operate adjacent iron ore projects spread over the Provinces of Newfoundland, Labrador and Quebec. The Labrador Trough is a 160-km wide iron-ore bed in the Labrador-Quebec region in Canada.
The trough has delivered over two billion tonnes of ore in the last 50 years and attracted investments of $15 billion. It is estimated that the annual iron ore production of this region will increase from 35 mt to 65 mt by 2015.
TSMC and LIM have entered into multi-part co-operation agreements in areas of logistics and potential offtake arrangements.
It includes development of a rail line that will pass through LIM’s rail yard and connect TSMC’s processing plant with the main rail line.
Societe Generale opens third branch at Sanand in Gujarat
Ahmedabad: Societe Generale, a French multinational bank, has opened it's third corporate banking branch at Sanand, near Ahmedabad in Gujarat. It already has branches in Mumbai and Delhi. 150-year old bank believes that Gujarat is one of the robust place in the India and hence it will give good opportunities for bank to expand its base in the Indian market.
"Gujarat is one of the dynamic and investor friendly states in India in terms of economic growth. It offers quality infrastructure compared to other states,"said Marc-Emmanuel Vives, Chief Executive and Group Chief Country Officer in Ahmedabad during press conference.
"State has very diversified industrial base and many industries are setting up their bases in Gujarat," he added. The state is home to various industries like chemicals, oil and gas, fertiliser, pharmaceuticals, automobiles, and engineering. Bank will provide all-types of financing, both short-term working capital lines and medium-long term equipment or project finance, in Indian as well as foreign currencies, from Sanand.
Other specialised advisory and financing activities like merger and acquisition, project finance, equipment and commodities financing will also be made available to clients in Gujarat. Bank will expand in Bangalore, Chennai, Hyderabad and Pune in next three years, added Vives. The Societe Generale branch, staffed with five people, working to market the Bank across Gujarat.
Societe Generale Group has established several other businesses within the country, which includes two joint ventures with State Bank of India, in the areas of mutual funds and custodial services, as well as 100% subsidiaries in car fleet management, brokerage and IT services. Sanand, however, was not the first choice by Societe Generale said Mr Vives.
"RBI allowes new branches to come-up in the under-banking area. Hence, we have selected Sanand. I think we are well placed as lot of companies are coming with the new projects here," he added.
Societe Generale's Indian business has been growing at 50% CAGR in past three years and expects to equal its Chinese business in next three-years. While commenting on the Indian economy, Vives said that, "We are positive about Indian economy, however, not over optimistic,". Bank sees 6% GDP growth for the fiscal 2013-14. "Reforms measures taken by government since September will take time to generate results,".
"Gujarat is one of the dynamic and investor friendly states in India in terms of economic growth. It offers quality infrastructure compared to other states,"said Marc-Emmanuel Vives, Chief Executive and Group Chief Country Officer in Ahmedabad during press conference.
"State has very diversified industrial base and many industries are setting up their bases in Gujarat," he added. The state is home to various industries like chemicals, oil and gas, fertiliser, pharmaceuticals, automobiles, and engineering. Bank will provide all-types of financing, both short-term working capital lines and medium-long term equipment or project finance, in Indian as well as foreign currencies, from Sanand.
Other specialised advisory and financing activities like merger and acquisition, project finance, equipment and commodities financing will also be made available to clients in Gujarat. Bank will expand in Bangalore, Chennai, Hyderabad and Pune in next three years, added Vives. The Societe Generale branch, staffed with five people, working to market the Bank across Gujarat.
Societe Generale Group has established several other businesses within the country, which includes two joint ventures with State Bank of India, in the areas of mutual funds and custodial services, as well as 100% subsidiaries in car fleet management, brokerage and IT services. Sanand, however, was not the first choice by Societe Generale said Mr Vives.
"RBI allowes new branches to come-up in the under-banking area. Hence, we have selected Sanand. I think we are well placed as lot of companies are coming with the new projects here," he added.
Societe Generale's Indian business has been growing at 50% CAGR in past three years and expects to equal its Chinese business in next three-years. While commenting on the Indian economy, Vives said that, "We are positive about Indian economy, however, not over optimistic,". Bank sees 6% GDP growth for the fiscal 2013-14. "Reforms measures taken by government since September will take time to generate results,".
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