Indian Real Properties

Billionaires like Adani, Tata essential for country's success

2011-07-29T08:42:00.000+05:30

MUNDRA: On a recent wind-whipped morning, a steel-hulled behemoth arrived at a desolate stretch of India's western coast groaning with enough coal to power a city of 1 million people for more than two weeks.

The ship, the Vanshi, was carrying coal from Indonesia, a two-week trip across the Indian Ocean. India has its own abundant reserves of coal, which raises a question: Why did India need to go so far to get something it already had?

For Gautam Adani, the power mogul, the answer was simple: The easiest and most profitable way to meet India's rising demand for electricity is to avoid the hassles, divisive political confrontations and practical inefficiencies of India. In the spirit of the workaround ethos typical of India's private sector, Adani is working around the subcontinent itself.

He owns the Indonesian coal mine, the Korean-made cargo ship (named for his niece Vanshi), the Indian power plant and, most important, the private Mundra port. He owns coal mines and a major port in Australia, and has built his own private railroad spur in India. His business plan is to do as much as possible without relying on the creaky infrastructure of the Indian state.

"He is able to do so well partly because he is very entrepreneurial and has found the right opportunity," said Eswar Prasad, an economic adviser to India's finance minister. "But it's a symptom of a dysfunctional state. He is able to deliver something more effectively than the state."

Today, India is increasingly turning to the private sector to deliver the electricity needed to maintain rapid economic growth into the future. India's economy is growing at more than 8 percent annually, but is badly constrained by an inadequate power supply after years in which the government dominated the power sector and failed to keep up with growing demand.

The rise of Adani attests to a broader shift, as the private sector is playing a greater role in areas once controlled by the state such as telecommunications, ports, airports, banks and infrastructure. At a global level, this contrasts sharply with China, where huge state-owned enterprises dominate strategic industries and lead the country's global expansion. Adani recently had to outbid the Chinese for his Australian port.

Within India, though, the success of private tycoons has created a paradox: India's moguls are essential to the country's success and admired for their ability to get results. Yet their staggering wealth is made possible in part by their coziness with powerful politicians who help arrange environmental clearances, land use rights and other thorny issues. That raises accusations of crony capitalism.

India in the 21st century is now often compared to the United States during the Gilded Age of the late 19th century, when robber barons dominated the U.S. economy. The country has 55 billionaires whose aggregate wealth of $250 billion is equivalent to almost a sixthof the nation's annual economic output.

"No question, there is an oligarchy developing that has an enormous amount of influence," said Arvind Subramanian, an economic adviser to the government of India. "That is a matter of great concern. But in India, these are also the guys who are performing. In some cases, they may be gaming the system, but they are also performing despite how bad the system is."

Alarm bells ring over gaping holes in airport security at IGI airport (Indira Gandhi International)

2011-07-29T08:28:00.000+05:30

NEW DELHI: In light of the several security threats aimed atIGI Airport,Delhi Police has revealed that it carried out a security audit of the airport cityside and submitted a report to both bureau of civil aviation security and airport managementDelhi International Airport (P) Ltd (DIAL). But several months after the audit, most of the problems highlighted in the report have not been addressed.

Officials have raised concerns about the role ofDIAL in issuing airport entry passes. "DIAL is a private agency and while it is developing and running the airport, its role in security-related issues is highly questionable. Earlier, only BCAS or Delhi Police issued temporary passes and in case of an untoward incident responsibilities need to be fixed," said an official.

On the issue of the multi-level car park, police have pointed out that all vehicles entering the building are not being manually checked and electronic equipment needs to be in place to ensure checking of all vehicles. "Advance scanning systems, along with monitors, should be installed at the car parking. Till such time that the equipment is in place, manual checking should be made stringent," said officials.

Police have also highlighted the cargo terminal as an important grey area from the point of view of security. The letter said that arrival and departure of cargo must be scanned using mobile X-ray inspection system.

To secure the tunnel road that runs under the main runway, police suggested that two small porta-cabins be set up at either end of the tunnel forCISF personnel. "The 400-m long tunnel already has CCTVs but because of the location of the main runway, it is important that the area is not just monitored but also secured. For this, it would be advisable for CISF guards to be stationed there," said an official. Police have also asked for a helpdesk at the waiting halls inside terminals, claiming that several thefts are reported in the media but very few are reported to it.

Several proposals to enhance security coverage through CCTVs have also been submitted. Pointing out that positioning of CCTVs on the cityside is not conducive to monitoring vehicular movement in and around the airport, it has asked for coverage on all approach roads to the terminals. This is the one proposal where DIAL has taken action and is in the process of finalizing a proposal. Police also said that contrary to international standards, DIAL stores CCTV footage for only a week. The cops said it should be retained for at least a month to help solve cases.

Tata Looking Forward to Construct the World’s Most Cheapest Home

2011-07-29T08:22:00.000+05:30

Tata is all set to try its hand in constructing the world’s cheapest house worth 500 Euros, named as ‘Euro 500 Home’. After launching the world’s cheapest car Nano, the company is looking forward to build a house in 20 square meters which will cost only 32,000 rupees.

The project being examined in West Bengal, is an idea pioneered by a group of 15 people from Tata Steel's Indian and European units. The project is claimed to be less expensive than Tata’s own project of ‘Nano Homes’, worth $7800, was specially being designed to provide shelter to the people who had shifted to the urban areas leaving behind their rural areas.

As per Sumitesh Das, Head of Tata Steel's Global Research Programme, "We have already prepared 2-3 different designs based on discussions with users and are gathering more feedback. Hopefully, in the next 6-8 months we should be able to roll it out in the market nationally”.

The company aimed to produce a plan of house which amounted less than 40,000 rupees per house, so that people from rural areas were capable to pay out the cost of the house. Along with the 20 square meter house, the company was also designing another 30 square meter housings, which will cost up to 700 Euros.

Rise and Fall in Indian Property prices

2011-07-29T08:19:00.000+05:30

According to the latest data released by the National Housing Bank (NHB), during the first quarter of 2011, in all over India, the prices for property have been dropped from 20.63% to 17.6%.

During the same period, five more cities have shown a marginal change inproperty prices. Among these, three have shown an increase in property rates; this has increased to 5% from 2.6%.

NHB’s residential housing price index data, which is also known as Residex for the first quarterof the calendar is always considered as a comparative study with the previous year’s quarter.According to this NHB Residex, upon analyzing year-on-year data, it has been found that in last one year, the property prices in all 15 cities that counts under NHB Residex have increased to a great extent.

According to the reports of NHB Residex, when property prices of July to September 2010 were compared to those prevailing during October to December 2010, then out of 15 cities 13 had increased property prices. In the remaining two cities, prices were either almost same else they were dropped marginally.

Property market has always been uncertain and therefore when NHB chairman was asked about the possible range of property price correction in the coming months, then he refused to provide a figure and said, “We can’t hazard any guess on property price correction as it may impact the market. There are blips in the property market”.

Real Estate Companies will soon Reconsider Capital Raising Plans

2010-12-01T12:11:00.000+05:30

With real estate and financial services stocks battered on Dalal Street, several companies have been forced to review their capital-raising plans. At least one public sector bank, which was working on sale of shares to institutional investors, has put its plans on hold till sentiment improves.

But the worst hit would be real estate players, several of whom had lined up initial public offers (IPOs). The list included Emaar MGF, which had deferred its issue earlier, Embassy Projects and Lavasa Corp that has also received a showcase notice from the environment ministry. Raheja Universal, BPTP, Ambience, Lodha Developers and Kumar Universal were also planning share sales.

“The current controversy has adversely affected investor sentiment for certain sectors and until things settle down, investors are likely to be cautious,” said Pratik Gupta, head of equities at Deutsche Bank. JP Morgan India investment banking head Rohit Chatterjee said in the short term, investors are likely to stay away from finance and realty stocks. Drugmaker Claris Lifesciences, which was in the market to raise Rs 300 crore, had to lower the price band to Rs 228-235 from the earlier Rs 278-293 in view of the choppy markets. Poor response also forced the company to extend the issue closing date, originally scheduled to end on Friday, to December 2.

Investor worry was in evidence on Friday with the BSE Sensex closing 184 points down at 19,136, led by a 4.68% decline in real estate stocks. This is the lowest closing level in 11 weeks. During the day, the Sensex dropped below the 19,000-mark as investors were worried about the future of the sector and tightening of lending to realty companies.

The fall was led by Unitech, which is also under the lens in the 2G telecom scam, declining by 4.8%, while DLF, the country’s largest real estate developer, recouped most of the losses and closed 1.7% down. Shares of Hindustan Construction, the promoter of Lavasa, crashed 19%.

In the afternoon, financial services secretary R Gopalan tried to play down the fears saying there was no directive to cut down lending. During the week, the Sensex declined by 2.3% with the loan probe by CBI affecting sentiment since Wednesday. Among the financial services companies under the CBI scanner, LIC Housing Finance closed 12% lower at Rs 931.15, while Central Bank dropped 10% to close at Rs 188.40. Investment bankers said the overall India story remained intact but appetite for real estate and banking stocks had taken a hit. This was apparent in the widening of spreads on credit default swaps for Indian stocks seeing the biggest jump since June. An increase in the spreads indicates that global investors are worried about the prospects of Indian stocks.

“Overseas institutional investors are very worried. There main fear is about the possibility of more murkiness in the real estate sector,” a senior executive at a leading foreign bank said. Bankers said the inability of developers to tap the stock market could affect them severely as banks are expected to tighten flow of loans to the sector. Even before the scandal broke out, RBI had tightened norms for lending to the sector fearing that a bubble was building up. “There may be some cash flow problems for some of the companies in the short term given that IPOs are tough and banks are tightening lending norms,” said a banker.

CREDAI (Confederation of Real Estate Developers' Associations of India) fears Drastic Reduction in Credit because of Housing Scam

2010-12-01T12:07:00.000+05:30

The Confederation of Real Estate Developers’ Association of India has said that “painting” the ‘loan-for-bribe’ as a scam, would lead to drastic reduction in credit for real estate companies. Bankers would become extremely wary and hesitant to lend to realtors and given the shortage of housing, it would be detrimental to both customers and homebuyers, said Mr Lalit Kumar Jain, Vice-President, CREDAI.

Mr Jain said the association is writing to the Reserve Bank of India asking it to direct banks to accept or reject developer applications within a certain timeframe — a month or so — and whether their loan applications are acceptable or not. On the scam, he said stray incidents should not be generalized. Advances made to real estate sector were secure as banks insisted on the personal guarantee of the developer, besides collateral security which was invariably 1.5 to three times the loan amount.

Mr Jain said it should also be understood that availing of liaison services of merchant or investment bankers by developers was routine, while adding that association condemned “all acts of facilitation” for loans. On reports doing the rounds that Kumar Urban Development (earlier Kumar Builders) was among the names on the CBI list, Mr Jain, who is also the Chairman and Managing Director of Kumar Urban, said his company was in no way involved in the issue.

HCC, in a statement said, “Money Matters Financial Services is associated with our companies on a fee based arrangement where they act as an agent for selling our properties. “In our companies we work with several firms for raising funds and all our transactions are completely transparent and through cheque payments. Money Matters was one of the advisors during the sale of HCC Real Estate-developed 247 Park at Mumbai. HCC Real Estate paid a fee of less than one per cent to Money Matters for coordinating the deal.

“Similarly, in the case of Lavasa, Money Matters is associated with the company on commission or brokerage basis, to the tune of 1-2 percent of the value of the transaction.” Oberoi Realty, reacting to reports of involvement in the loan scam, said it was a zero debt company. The company (including its SPVs) has no debt from any bank or financial institution for the last two years. It had not taken any loan from LIC, LIC Housing Finance, Bank of India, Central Bank of India and Punjab National Bank. Moreover, Oberoi Realty had never dealt with Money Matters for any transaction whatsoever, the company spokesperson said.

The Sigrun Group, a listed entity, also denied all reports associating it with the scam. The Sigrun Holdings, its subsidiary companies and group companies have not availed of any credit facilities from LIC or LIC Housing Finance or any other public sector bank. Further, it has no business relationship with Money Matters Financial Services, the group said.

Badarpur Flyover Changes the face of Faridabad Property Prices by 40%

2010-12-01T11:45:00.000+05:30

Over the past six months badarpur flyover changes the face of Faridabad, Faridabad has been witnessing a quiet revolution. Real estate prices, which had plummeted post 2008 and then platitude at Rs 20,000-25,000 per square yard last year, have suddenly shot up by 30-40%. Reason — the coming up of the Badarpur flyover.

Pradeep Mishra, a real estate analyst, said, ”The realty market reflects the sentiments of the investors. Over the past six-eight months, there’s been a very positive sentiment about Faridabad because of the expected opening of the flyover.” With the Metro also scheduled to come up anytime soon, realty experts say that Faridabad is looking at a booming realty scenario. Added Mishra, ”These prices will be going up by another 10-15% over the next few months.”

Residents agree. Virendra Chanda, a resident of sector 8 who also owns a business in sector 15, said, ”The fact is that the image of Faridabad is changing with the opening of the flyover. Coming here and setting up a business is no longer implausible because of the Badarpur bottleneck.” With the increased connectivity, Chanda hopes that not only will it be easier to go to Delhi, residents of the capital will also be coming down to Faridabad. Nitin Deol, a small-time entrepreneur, said, ”When big malls and cinema complexes open here, footfalls from Delhi and Noida will also be contributing to the economy.”

The feel-good realty market certainly seems to suggest so. Experts say that rates have gone up not only in the main Faridabad sectors but also in peripheral areas. Mishra added, ”The 4.4-km flyover is a boon for Faridabad as it will benefit not only nearby areas, but also Sector 37, Ashoka Enclave, Greenfield Colony, Sectors 45, 46, 21A, B, C and D, 28, 19, 30 and Sector 31 as well. In fact, after the Metro becomes operational the maximum effect will be felt here.” The impact is already visible. Rates in sectors 21A, B, C and D, which were earlier between Rs 36-38,000 per square yard, are now between Rs 50-60,000. In sectors 30 and 31, the figure is now between Rs 45-50,000 per square yard.

In sectors 21 and 19 — where most apartment complexes are located — the rates have gone up from Rs 3,500 per square feet to Rs 4,500. Realty experts say across the Canal area specially, sector 77-89 are expected to come up in a big way.

Booming Real Estate In INDIA

2010-12-01T11:38:00.000+05:30

Indian Real Estate seems to be no limit just like an open SKY. With property boom spreading in all directions, real estate in India is touching new unexpected target.

Flying high on the wings of booming real estate, property in India has become a dream for every potential investor as well as funders looking forward to dig profits out in real estate, so big Real Estate giants are playing big shots. Definitely, the first step on the way to investment is to study the current trends.

With the unaudited consolidated financial results for the Q2 FY11 (Second Quarter – Financial Year 2010-11) released for the real estate players such as DLF, Jaypee Infratech, Unitech, Ansal API, Raheja Developers, it seems real estate major DLF Group with a 62 year track record seems to have taken clear lead among all other players in this segment.

This quarter, revenues and profits of DLF group soared high in the real estate market with consolidated revenues increased to Rs 2,520 crores in Q2 from Rs 2,161 crores in the previous quarter. While, the consolidated revenues for H1 for this fiscal year was up by 32% to 4681 crores compared to the H1 in the previous year. The Earnings Per Share this quarter was Rs 2.46 and Rs 4.88 for the first half of this fiscal year. The Earnings before Interest, Taxes, Depreciation & Amortization (EBITDA) was Rs 1,080 crores for Q2 and Rs 2,192 crores for H1. Rs 418 crore was grossed as Net Profit for last quarter and Rs 829 crores for the first half of this fiscal year.

Unitech recorded Year-Over-Year growth of 41.27% in the revenues for the first half of this fiscal year amounting to Rs 1518.9 crores and Net Profit being Rs 353.80 Crores up by 5.41% compared to previous fiscal. Earnings per Share (EPS) for the half year stood at Rs 1.52.

The revenues for the quarter ending on 30th September 2010 were Rs. 674.92 crores and net profit for the same period was Rs. 173.76 crores. And, the Earning per Share (EPS) was Rs 2 along with Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) being Rs 166.9 Crores.

Jaypee Infratech recorded growth of 2794.5 % in total revenue being Rs 711.48 crores and Net profit equal to Rs 411.67 crores with growth of 1971.8% in the second quarter of 2010-11. The Earnings Per Share this quarter was Rs 2.96 and Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) was Rs 516.33 crores.

Realty firm ANSAL Properties and Infrastructure Ltd reported decline of 23% in its Net Profit to Rs 22.76 crores while, the revenues rose by 71% to Rs 330.05 crores compared to that of Q2 FY10. The Earnings Per Share this quarter was Rs 1.78 and Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) was Rs 67.03 crores. The revenues also rose by 79% to 604.5 crore during the first half of this fiscal year and the net profit was Rs 61.55 crores up by 54%.

The above results surely do reflect stable macroeconomic environment and growing real estate sector. With the companies developing strategies and offerings of residential products and product mix the demand for this segment of products is increasing and shall yield good returns in the future.

Embedding ethics in Indian Real Estate Market though buyer cooperatives

2010-10-10T10:26:00.002+05:30

Worst enemy to the growth of Real Estate Business in India is the conventional and unethical business model that our so called “Street Dalal’s” are nurturing. This model is not only spreading bad breadth in Real Estate environment, but also promoting more corruption in the entire industry. Every other street corner is filled with uneducated, unethical and notorious middle man with no sense professionalism. What can and should Government do to remove this hurdle and help real estate business to grow strong in India? When will the current scenario change? One solution seems to be in embedding ethics in Real Estate Business though strong buyer cooperatives (or associations, companies, committees, NGOs, etc.) which have strong and transparent Govt. backup.

In real estate the government sponsored cooperative housing concept did proliferate during the socialist years but it has since died down. In the US, buyers get together on the Internet and negotiate with manufacturers of televisions, music systems and other goods to buy nearly 40% cheaper. This concept can be applied to Indian real estate. In fact, given the state of affairs, it should be exercised by the buyer now.

The laws framed under the Indian Contract Act don't seem to apply to buying Indian real estate. The law says there has to be an offer and as a result an acceptance of the offer. Indian builders have this brochure where they print three columns.

Once home booking amount is paid to the builder then the builder will not offer you any receipt, which specifically states that the basic selling price is in so many rupees. It will be a verbal agreement between the builder and the buyer of the apartment.

The obvious idiot's question is that what is the consumer going to do if the builder accepts the cheque and later declares that the base selling price is not what was agreed upon but something quite higher. At today's arrangement, the buyer does not have anything in hand to support the reason why he / she took the decision to buy.

Further, into the agreement , the builder usually asks for the balance money of a fourth of the total cost of the apartment. That means the total cost of the apartment, divided by four and minus the booking amount. Again at this stage, no bit of paper with the builder's signature or company seal mentions that the money accepted is one fourth of the total cost of the apartment. If the builder asks for more money under the pretext of parking space charges or club membership charges then the buyer has no recourse left.

Considering the buyer only buys the apartment and is given additional benefits around it to make the deal sweeter, he is made to tolerate all kinds of nonsense when the apartment is sold to him. The first thing that he has to swallow is the concept of super area, where the total cost of the project is divided by the total covered area and the cost of the super area calculated.

For one thing, buyers in India prefer to be fleeced by the builders who do not offer them any consumer relief but weigh the entire deal towards themselves. They harbour an unconscious feeling that given a choice between uncertainties of having an apartment built by an association of poor, EMI (equal monthly installments) paying middle class people and buying an overpriced apartment from a greedy builder, they would rather be robbed.

First, combined buyer companies have to operate as profit making companies and not associations, which are easy prey to corruption and inefficiency owing to the very nature of no compensation being paid to the active players.

The members have to pay a substantial amount as membership fee, which would not be returned in totality in case of cancellation to ensure seriousness of the members regarding the project. Then the active leaders should start scouting for land and government schemes. This can also be complemented by looking for investors in the project who will get a return once the gestation period is over.

The project can house facilities such as health clubs, parks, restaurants, parking lots and cinema theatres , which will earn money and add to the revenue of the project. Each member can be treated as a shareholder and they can earn dividend as and when it is declared.

Some social networking companies and socially responsible models have already begun work in this area and are accepting memberships to fructify into long term projects on real estate. Once this movement picks up, nobody will be able to challenge the buyer's clout. He will come into his own on his own right and his own strength.

Let’s raise our concern towards unorganized Real Estate Business models in India and vow to bring Professional approach to satisfy customers at large.

Web Link:

http://economictimes.indiatimes.com/quickiearticleshow/6314327.cms

Shoppers Stop to open more outlets

2010-06-24T20:11:00.000+05:30

Shoppers Stop intends to raise Rs300-crore through a qualified institutional placement (QIP) and increase its stake in HyperCity Retail India Pvt, a super market chain.

It is also planning to invest Rs 100-120 crore to open 12 more Shoppers Stop outlets and four Hypercity stores in this fiscal.

The Hypercity stores would be coming up at Bhopal, Ahmedabad, Ludhiana and Mumbai, Nagesh said. The company plans to increase number of Hypercity stores from 7 to 25 in the next three years and expects them to break-even in FY 2013.

The BSE-listed retail chain of the K Raheja Group, holds a 19 per cent stake in Hypercity. It now intends to up its stake by 32 per cent by the end of this month.

The Board had already approved the buy-out and we will pick-up an additional 32 per cent stake to have a majority stake of 51 per cent in Hypercity by June 30. This buy-out would cost the company Rs125-crore.

Vishal Retail to sign MoU with TPG

2010-06-24T20:09:00.000+05:30

Debt-ridden Vishal Retail’s board has approved the terms of memorandum of understanding (MoU) with US-based private equity firm TPG in accordance with a debt restructuring programme approved by its lenders.

The company did not divulge the terms of the MoU or when or where the understanding was reached between it and the private equity player.

The terms of the MoU would be subject to negotiation and execution of definitive agreements or documents.

TPG has been linked with the troubled retailer for a possible stake purchase in the past as well.

The Delhi-based retailer has been undergoing a debt-restructuring exercise since November last year to make it eligible for fresh infusion of equity.

Revenue, commerce secys home in on SEZ for tax

2010-06-24T20:07:00.000+05:30

The secretaries of commerce and revenue departments discussed the long pending issues of withdrawal of tax concessions to special economic zones (SEZs) in the direct tax codes (DTC). Union commerce secretary Rahul Kullar, told the press that he and his peers had a meeting on Wednesday, but he refused to divulge any details of the outcome. "It is too early to make inferences", he said.

The proposed DTC has sought to end the tax exemptions to SEZs. The draft of the DTC proposal was put up for public debate and scrutiny. The draft clearly states that the profit-linked deductions distort and create an incentive to inflate profits as well as transfer profits from a taxable entity to a non-taxable one. The SEZs also have the incentive to evade and avoid tax, the draft explained.

The government has allowed units already operating in SEZs to avail of tax benefits for the unexpired period. Tax benefits for SEZs are usually given for 15 years. But many SEZs are still under construction even though they have got the approval from the government a long time ago.

Sanghvi Group to generate Rs1,500-crore

2010-06-24T20:01:00.002+05:30

Mumbai based developer, Sanghvi Group plans to generate returns to the tune of 1,500-crore by unveiling a mix of qualitative residential and commercial properties across the city over the next one year. The plan focusses on several key areas that include Worli, Lower Parel, Byculla, Mazgaon, Dahisar, Ghatkopar, Kalwa, Dombivili and Kalyan.

Shailesh Sanghvi, Director, Sanghvi Group of Companies said, “With the real estate market showing strong signs of growth, we are optimistic that the year 2010-11 harbors many lucrative opportunities. Within this year we plan to launch 10 new projects across the city that will comprise of both commercial and residential properties.”

As part of the group's immediate plans, over 26 lakh sq ft of land has been earmarked for the development of the ten new projects in the metropolis. The company has a land bank of 100 acres to dedicate to the various residential and commercial projects.

The Group has completed development totaling 40, 00, 000 sq. ft. of affordable real estate.

Metro reaches Gurgaon

2010-06-21T19:39:00.002+05:30

A Delhi Metro train finally chugged into Gurgaon, the millennium city today, thereby bringing the satellite city a little closer to the national capital.

The 14.47 km link connecting Qutub Minar with HUDA City Centre in Gurgaon was inaugurated for the public in the morning as revenue services commenced simultaneously at both stations.

With this, Gurgaon has become the second satellite city to get Metro connectivity after Noida, where it reached last November.

People of the Millennium City have been waiting for an effective transport system to travel to and from Delhi and the launch of Metro services is likely to ease some pressure on road traffic.

Maytas Infra’s debt restructuring gets approval

2010-06-21T19:38:00.002+05:30

The debt restructuring proposal for Maytas Infra Limited has been given the nod by the Corporate Debt Restructuring (CDR) Cell. The CDR package has been approved unanimously by the banks.

The Provisional Letter of Approval has been approved by the Board of Directors of Maytas Infra Limited in its board meeting held on June 19, 2010.

The approval permits Maytas Infra Limited to bring the overall debt in the company to a sustainable level and at a reasonable pricing. The package will support the debt striken company in its ongoing strategic and operational initiatives to strengthen the business model and cash flows of the company

The overall debt on the balance sheet of Maytas Infra would come down from over Rs1,800-crore to around Rs800-crore -- this will be through a mix of one time settlements with a few banks, conversion of debt into preference shares and restructuring the composition and structure of the debt.

Maytas Infra Limited will be working closely with the banks to finalise the Master Restructuring Agreement.

IFC to invest Rs20,000-cr in Dewan Housing arm

2010-06-21T19:37:00.000+05:30

International Finance Corporation (IFC) has agreed to invest up to Rs20,000-crore by subscribing upto 2 million shares in Aadhar Housing Finance Pvt Ltd (AHFL), said Dewan Housing Finance Corporation Ltd in a statement released today.

AHFL is a housing finance company promoted by Dewan Housing Finance and its unit DHFL Vysya Housing Finance Ltd.

This will be 20 per cent of the paid-up capital of AHFL. The companies had entered into a transaction agreement on Friday.

Initially, AHFL proposes to provide retail housing loans in the low income segment in certain states.

NTC to auction Mumbai mill land

2010-06-21T19:36:00.000+05:30

State-run National Textile Corporation will auction 8.38 acres of prime land in Mumbai in an attempt to garner Rs750-crore from sale.

National Textile Corporation (NTC) had earlier called for sealed tenders for sale of Bharat Textile Mills, located in Lower Parel, one of the prime areas in the city.

The firm had earlier planned to sell 60 acres of Mumbai mill land in phases within the current fiscal to part-finance the company's Rs 9,102 crore expansion, diversification and modernisation programme.

NTC has nine mills situated in prime locations of the country's financial capital, including Prabhadevi, Worli and Lower Parel.

While the reserve price (starting price) of the Bharat Textile Mills has been fixed at Rs 750 crore, it is expected that NTC could fetch higher going by the company's previous experience.

NTC originally had 119 mills, out of which 77 were closed under the Industrial Disputes Act. Two have been handed over to the Pondicherry government and five are being revived through joint ventures with Pantaloons, Alok Industries and Bhaskar Industries.

Unitech promoters hike stake to 46.72%

2010-06-21T19:35:00.000+05:30

Promoters of realty firm, Unitech, have hiked their stake in the company by 0.42 percentage points to 46.72 per cent by converting warrants worth Rs76.44-crore.

The committee of directors of the company in its meeting held on June 18, 2010, has allotted 2,00,00,000 equity shares of Rs2 each at a premium of Rs48.75 per share to Harsil Projects Pvt Ltd, a promoter group company. The promoters have paid Rs 76.44 crore for the conversion of two crore warrants.

The promoters' shareholding in the company after such allotment on conversion of warrants has increased to 46.72 per cent from 46.30 per cent.

Early this month, the company had announced that its promoters had increased their stake to 46.30 per cent from 45 per cent by converting warrants worth Rs224.78-crore.

In March also, the promoters had raised their stake to 45 per cent from 43.84 per cent by converting five crore warrants for Rs 190 crore.

Last year in June, the company had issued 22.75 crore warrants convertible into equal number of equity shares at Rs50.75 per share.

Early June sees easing of food, fuel inflation

2010-06-18T22:37:00.002+05:30

India's food and fuel price inflation eased in early June, reducing pressure on the Reserve Bank of India to accelerate its process of tightening monetary policy.

The country’s food price index rose 16.12 per cent in the year to June 5, snapping a two-week rise, and lower than the previous week's annual reading of 16.74 per cent, according to recently released government data. The fuel price index climbed 13.18 per cent, compared with an annual rise of 14.23 per cent in the previous week.

There has been pressure on the Reserve Bank of India (RBI) to hike rates before its July policy review after the wholesale price index rose 10.16 per cent in May, the highest in the G20 group of leading economies.

Most analysts do not see the RBI raising rates before the July 27 review, in line with the bank's earlier stated preference for "baby steps" toward normalisation.

The RBI said the federal government would buyback Rs100-billion ($2.15 billion) of bonds via a multiple price auction on June 18. The move is expected to improve liquidity with banks after an estimated outflow of over Rs1.36-trillion between late May and June towards third-generation (3G) and broadband spectrum auction and advance tax payments, which have pushed up overnight cash rates.

High inflation has proved to be severe case of worry for Prime Minister Manmohan Singh's coalition government, which has held back on major reforms such as freeing up retail fuel prices ahead of eight state elections due later in 2010 and 2011.

Unitech promoters hike stake to 46.72%

2010-06-18T22:35:00.000+05:30

Unity Infraprojects bags orders worth Rs412-cr

2010-06-18T22:34:00.000+05:30

Unity Infraprojects Ltd, the engineering, procurement and construction major, has bagged four new orders aggregating Rs412- crore. Of these four, three are based in India at New Delhi, Bangalore and Shillong while one is a Ministry of External Affairs (MEA) assignment at Kathmandu, Nepal.

The first order is worth Rs299.24-crore which has been secured from Director General of Married Accommodation Project, Delhi for construction of homes for allied services for officers, airmen at Delhi (AF), Gurgaon (AF), Hindon (AF), is slated for completion in 27 months.

The second order is worth Rs.45.52-crore from North Eastern Indira Gandhi, Regional Institute of Health & Medical Sciences, Shillong, Meghalaya for construction of North Eastern Institute of Ayurveda & Homeopathy.

Third order valued at Rs39.34-crore from Karnataka Power Corporation Limited (KPCL) for construction of New Office Complex at Banglore. These orders are scheduled for completion within 18 months.

The fourth order valued at Rs28.22-crore has been awarded by Ministry of External Affairs, New Delhi for Interior works at Embassy of India complex, Kathmandu, Nepal.

India enticing luxury retailers

2010-06-18T10:42:00.002+05:30

Luxury and premium-end retailers are looking to make their mark in the Indian market. Owing to the slow economic recovery in Euro zone and the US, companies in the high-end bracket has are expanding in India and China.

From watches and luxury apparels to home linen and handbags, every category is seeing a spurt in activity. Companies such as Raymond Weil, Paul & Sharks and Zara have renewed their commitment to India.

However, lack of brand recognition and fewer high-street retailing avenues could pose a deterrent for global brands in breaking even.

Raymond Weil set up its 100 per cent subsidiary in India besides opening up a mono-brand boutique. The company will be investing about one million Swiss franc in India during the current year.

Apparel major Paul & Shark also opened its first boutique in India 18 months after it signed a joint venture with Reliance Brands.

Spanish fast fashion retailer Zara, a part of the Inditex Group, which has 51:49 per cent joint venture with Tata Group's retail arm Trent, is looking at sourcing apart from expansions. The company, which opened its maiden 1,500 sq metres store in Delhi will be adding two more stores in India – in Mumbai and New Delhi.

IRB Infrastructure forms JV with RIL

2010-06-18T10:41:00.002+05:30

IRB Infrastructure Developers Limited (IRB), toll road operating company has formed a JV with Reliance Infrastructure Ltd. and has submitted Request for Qualification(RFQ) for Rs5,134-crore NHAI project.

The project is a 50:50 consortium between IRB and Reliance Infrastructure Ltd. The project entails designing, engineering, financing, constructing, operating and maintaining the six-laning of the Kishangarh-Udaipur-Ahmedabad section of NH 79A, 79, 78 and NH-8. This project will be executed on the BOT (Toll) basis in the states of Gujarat and Rajasthan.

Reliance Infra seeks FIPB approval

2010-06-18T10:40:00.002+05:30

Reliance Infrastructure has approached the Foreign Investment Promotion Board (FIPB) seeking permission for raising overseas funds for investments in the road sector. The firm is presently implementing road projects worth Rs12,000-crore.

The proposal is for design, finance, construction and maintenance related work.

After winning the Rs2,960-crore Delhi-Agra project spanning 180 km from the National Highways Authority of India last month, the company emerged as the largest developer of six-laning highway projects in the country. The company plans to more than double its road portfolio to over Rs25,000-crore by 2012-13.

The eleven road projects comprise a total length of 970 km having an investment outlay of over Rs11,900-crore.

The company hopes to achieve financial closure in case of the Delhi-Agra project within the next six months. The project will be executed on design, build, finance, operate and transfer (Toll) basis with a concession period of 26 years, including the construction period.

SEZ unit transfer now allowed

2010-06-18T10:38:00.002+05:30

The government has permitted industrial units to move from one special economic zones (SEZ) to another after approval of the apex authority, the board of approval (BOA).

The approval to transfer units will be given on a caseto-case basis by the BOA. The board, chaired by commerce secretary, clears SEZ proposals and frames rules guiding these zones.

Permission to relocate could easily be granted to units that are yet to start their operations or units that have started sourcing inputs but not started production. BOA may take a cautious approach in cases where production and exports have started. Where production and sale of goods have started in a unit, one has to consider provisions for income tax exemptions for migration of goods.

The BoA, therefore, decided that permission would be given to units seeking transfer on a case to case basis.

Allowing SEZ units to shift base could help in business consolidation as companies with several units in different SEZs would have the option of bringing them under one roof. It would also help if for reasons of geographical proximity to a source of input or to a market, a unit owner wants to move to another SEZ.