FY13 revenue growth could be closer to 18%: Rolta India

K K Singh, CMD, Rolta India told CNBC-TV18 that the company has been showing quarter on quarter increase and its margins were in excess of 40 percent EBITDA. The credit for the high margin goes to the change in there business model — a shift from service centric company to a service solution centric company.

Company's order size too increased in the past few quarters and currently it stands at Rs 25000 crore. He expects FY13 revenue growth to be closer to 18 percent.

Also read: Rolta India Q3 net rises 3.8% to Rs 73.1 cr

Below is the verbatim transcript of his interview to CNBC-TV18

Q: What's the story on margins? While your volume performance is as you guided even better, the margins for the second consecutive quarter have been slipping a little. What is the reason and when do you see them stabilising?

A: Margins are actually very good. We have been showing quarter on quarter increase and our margins are in excess of 40 percent EBITDA. So, we are very happy about the margins. It is higher because we have really changed our model from service centric company to a service solution centric company with lot of our own Intellectual property (IP).

This has given us more stability, annuity and we are able to play at a higher value end. Certainly, in each quarter there are sometimes more software of our own, sometimes which is less sometime which goes. Volumes and profit and loss to that extend has not done much.

Q: Nevertheless, there is this minor tweaking. Is that something that you stay around the ballpark 40 percent margin picture?

A: It is between 40-42 percent. It is much dependent upon if suppose the solution consists of more our own software and IP. Thus we have a higher margin and like on that. However, in this quarter also we did very good projects.

For example, US Trade Development Authority gave us a project to do for city of Nanjing. Olympic are being organised there and we are doing very sensitive sensors. We are in real time taking the information and providing for that. Similarly, for GE, IT and for engineering, Reliance  and for many other such largecap companies we did very good projects.

Q: What's the outlook on the revenue side? Last time you spoke about a 16 percent revenue growth for FY13. Is there a case to better it since you have been doing quarter after quarter growth of about seven-eight percent, any early signs for FY14?

A: This year we should be able to close about 16-18 percent revenue growth. It can go up to 18 percent. As far as the next phase is concerned, we are quite happy about that. So, we believe that we should be able to maintain double digit growth even in next year.

Q: Will it be as good as 18 percent?

A: I will be able to say more accurately as we go forward into the year. We are going to do next years' planning in next one month. However, we are certainly seeing double digit growth. We have very good action in our pipelines. The pipeline is growing. We are getting specialised large orders now.

For example, we got USD 30 million order from Memphis. We are right now negotiating very large order of about USD 25 million in engineering IT space. So, our sizes of orders have become much larger than what it used to be.

Q: What is the order book currently at?

A: About Rs 2,450-2,500 crore. That is the kind of order book, which we have now. The pipeline is also about Rs 7,500 crore. This is the qualified pipeline which we talk of.

Q: If you can give a little more clarity at least qualitatively in terms of the volume picture. The National Association of Software and Services Companies (NASSCOM) projections have been more optimistic than it was for the previous year.

A: We have been showing that FY14 has been better than FY13. We are quite positive that it should be like that because we have traction in everything what we are doing.

Q: Would you say that for the industry also?

A: I cannot say much on Industry. In our own case we have really gone through a transformation. That is giving us that traction now. We are seeing the benefit of that coming to us.

Q: You have recently acquired AdvizeX Technologies. How significant is this acquisition? What kind of revenues as well as EPS will it accrue for the company in FY14?

A: This is a good company in the space of cloud, software defined infrastructure in mobility and in big data. So, this is a very cutting edge technology. This provides solutions and it has almost 2,500 customers. It has been there around for about 30 years.

We paid about USD 34-35 million for this. This should be able to give us access to all these customers. We are expecting that we should be able to take all our other services to these customers. That is one reason why you are seeing some growth in our revenues and our profitability because this is certainly profitability accretive since beginning.

Q: Some numbers for how much can it contribute?

A: It has contributed to our EBITDA some percentage, which it has improved. I certainly believe that to our revenues also it has given a growth of about, this year we will be growing at about 17-18 percent. About 7-8 percent is because of this acquisition.

Q: What are you sensing in terms of visa issues? After all we know that things are getting stricter especially in the US. Will that start hitting you anytime in FY14 and the industry?

A: It can hit the industry very well because the rules are becoming very strict. In all probability, the US will insist for 50 percent force to be domestic US employees and then they will give visas accordingly.

Fortunately, in our case, we have a good population of almost about 1,000 consultants who are permanently posted there. We do rest of the business more from offshore here. Over 80 percent of our business is offshore. Our need to send on visas are much limited and whatever visas are required, we will be able to get for next 1-1.5 years.

There should be no issue as we go forward. However, certainly this is going to create hardship for many companies who have already got larger population there.

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Tata invests in technology, RD at Tel Aviv University

Tata Industries will invest USD 5 million in a new Tel Aviv University (TAU) technology fund, saying it saw the university as its Israeli research and development centre.

Tata, part of Indian conglomerate Tata Group, will be the lead investor in a planned USD 20 million fund at TAU's technology transfer company Ramot aimed at commercialising their research.

"For Tata, we, see innovation and R&D as an area of focus and a source of competitive advantage going forward," Rameshwar Jamwal, executive director at Tata Industries, told reporters on Monday.

Jamwal said it was Tata's first major investment in Israel and that it would likely invest further.

"This is our attempt to scout Israeli technology more deeply," he said. "This allows us over a period of time to show our commitment to Israel but we are interested in doing more."

Tata will work with TAU's scientists to help steer them towards applying commercial uses for their research.

"It's someone to test your ideas and say what's a mistake," said Shlomo Nimrodi, Ramot's chief executive. "Tata knows the market better."

He noted that TAU invests USD 150 million a year in R&D. Among Ramot's big successes is flash memory, which was licensed by an Israeli company before it was sold to Sandisk , which still pays millions of dollars of royalties to the university.

Nimrodi said the new fund will invest in healthcare, pharmaceuticals, cleantech, food security, the environment, engineering and software.

He noted that in some cases, Tata will get the right of first opportunity in a particular research project.

Many large global companies have R&D facilities in Israel, including Intel, Microsoft, IBM, Google, HP and Yahoo.

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Ruchi Soya enters into JV with Japan's Kagome, Mitsui

FMCG company Ruchi Soya Industries today signed an agreement with Japan's Kagome and Mitsui to set up a joint venture (JV), RuchiKagome, to manufacture tomato products in India. "Currently the total annual demand for processed tomato in the country is two lakh tonnes. We are planning to launch a range of tomato products along with Kagome," Ruchi Soya Managing Directer and Founder Dinesh Shahra said.

The company is looking to gain about 20 percent market share in this segment in the next five years. Ruchi Soya will have 40 per cent stake in the JV and the rest will be held by a special purpose company created by Kagome and Mitsui. Kagome and Mitsui own 66.7 per cent and 33.3 percent stakes respectively in the SPC. RuchiKagome will set up a manufacturing unit in Maharashtra with initial investment of Rs 44 crore and the commercial production will begin from June 2014, Shahra said.

Also read: HUL Q4 net up better-than-expected 15% on lower input costs

The company is planning to procure tomato directly from the farmers in the western region, he said. In the first phase, RuchiKagome will target business-to- business model in markets in and around Mumbai, NCR and Bangalore and is expecting Rs 340 crore revenue, then it would move to the business-to-consumer, he said. "We will also look into exporting our products to countries where our JV is present. However, our initial focus will be on the domestic market," he said. India is the second largest tomato producer in the world with 17 million tonnes production annually after China. Kagome is a leading tomato product company in Japan and supplies food and beverage products in 50 countries.

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Airlines can charge preferred seats, check-in bags: Govt

In a move that would raise the cost of air travel, the government today said it has allowed airlines to charge passengers for preferred seats on a flight, check-in baggages and meals, among other things.

"Civil Aviation Minister Ajit Singh has decided to permit scheduled airlines to unbundle certain services and to charge fees for these services separately," an official release said.

The services for which the airlines would be free to charge passengers include preferential seating, meals, snacks, drinks (barring drinking water), check-in baggages, use of airline lounges, carriage of sports equipment and musical
instruments and valuable baggages which have higher carrier liability.

The practice was launched in 2008 by some US carriers which were facing financial crunch. Their decision to charge for even the first checked baggage had then received flak from air travellers, but the practice still continues with the airlines generating revenue worth millions of dollars.

Also read: Jet-Etihad deal to make industry efficient: Ajit Singh

The release said the Minister's decision was based on recommendations of an independent consultant, which said, "Unbundling of services ... has become a necessary aspect of exercising more control over operational costs and running a successful airline".

"The objective of the decision is to facilitate airlines to offer low base fare for price sensitive travellers, while at the same time offer choice to service seekers at a price," it said.

The decision would "allow the passengers to benefit from lower base fares and to customise the product to better suit their requirements and budget while allowing airlines to develop more sustainable operations in an environment of
wafer-thin margins," the release said.

The airlines which decide to levy charges on these services would have to file details of services to be unbundled and the fees to be charged for them to the aviation regulator Directorate General of Civil Aviation (DGCA).

"DGCA may not fix fee for unbundled services but shall have the right to intervene and stop charging if regulatory principles are violated by the airlines," the release said.

It said the airlines would have to maintain transparency and inform the travelling public and agents what fee was being charged for which of the 'unbundled services'. The charges for would be a fixed amount and announced well in advance by the airlines "which shall not vary with the base fare for a particular flight".

The customers should be given the opportunity by the airlines to pick and choose which amenities they want to receive and pay for, the release said.

Observing that the airlines would be free to levy fees for these services, travel industry sources said there would now on be no difference between a no-frill and a full service carrier, once these charges on meals and preferred seats are implemented.

Without naming any airline, they said some of them were already selling the seats on the front three rows of each flight, along with those on the 12th or the 13th row located near the emergency exit, which gave larger leg-space.

On the fees proposed to be levied on the use of airport lounges, the sources said this practice was prevalent in several countries where, apart from the travellers on first and business classes and frequent flyers who are entitled to enter the lounge, a non-entitled passenger could also avail of the lounge services by paying a certain amount.

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Ruchi Soya in JV with Kagome, Mitsui for tomato products

Moneycontrol Bureau

Soya products and refined cooking oil maker Ruchi Soya Industries is expanding into the tomato market with a joint venture with Japan's Kagome Co and Mitsui & Co.

According to the company around 17 million tons of tomatos are produced in India each year, second only to China. However, only 1 percent of that is further processed.

The JV company Ruchi Kagome aims to focus on this untapped market and make products like tomato ketchups, pasta sauces and purees.

Ruchi Soya will have 40 per cent stake in the venture and the rest will be held by a special purpose company created by Kagome and Mitsui, in which Kagome (processed tomato business leader in Japan) will hold 66.7 per cent and 33.3 per cent stake will be held by Mitsui, a trading investment and services firm.

The company will set up a factory in Maharashtra at an initial investment of Rs 44 crore and initial production will begin from mid-2014, Dinesh Shahra, Ruchi Soya's MD and founder told reporters in a press conference.

It will directly procure from farmers and the aim is to gain 20 percent market share in the processed tomato segment in 5 years, he added.

In the first phase, the JV will tap the business-to-business channel and then target consumers.

It will initially focus on market areas around Mumbai, the National Capital Region and Bangalore.

Ruchi Soya shares gained near 7 percent post the announcement and finally closed up 0.6 percent at Rs 69.50.

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Amazon shares hit on growth concerns

Amazon.com Inc's stock sank on Friday on concern about slowing growth at the world's largest Internet retailer.

Late Thursday, the company reported slower revenue growth and offered a disappointing outlook for this quarter, exacerbating uncertainty about the health of its business beyond the United States.

Amazon faces a sluggish European economy and inconsistent efforts to break into emerging markets such as China, where competition from the likes of Alibaba is intense.

"Amazon's now growing at about 2x eCommerce, compared to 3x a year ago," Doug Anmuth, an analyst at JP Morgan, wrote in a note to investors following the company's results.

Traditional retailers are losing less market share to Amazon than they used to as they increase selection online, price-match more aggressively, and work to combat showrooming, Anmuth argued.

Amazon shares were down 7.3 percent at USD 254.63 late on Friday morning on the Nasdaq.

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Bajaj Auto awaits final rules on quadricycles

Even as Bajaj Auto waits for a government-appointed committee to come up with the final rules on quadricycles, the two-wheeler major continues to face opposition over the RE60 in India from competitors who have raised safety concerns amongst other dissenting voices. 

However, CNBC-TV18 learnt exclusively that the company is seeing interest picking up from export markets .

The deputy Prime Minister of Singapore will be visiting Bajaj Auto on May 4 to discuss export potential for the RE60. Singapore is not the only country. Similar interest has been expressed by countries both from the Latin Americal as well as the African region. This export interest is coming in for Bajaj at a time when its domestic competitors are becoming increasingly vocal.

Earlier on Friday, Maruti pointed to the safety concerns in the RE60, which is Bajaj Auto's four-wheeler and comes under a new classification of vehicles called the quadricycle.

Tata Motors ' Karl Slym, in two different tweets, said, "The number of wheels do not automatically make us better. It is adherence to tried and tested safety and emission norms. Why? The government and industry have been accelerating efforts in traffic safety and environment now we consider the quadricycle."

What all these companies are pointing to is that the safety and other norms for quadricycles and cars are different at the moment. Something which Bajaj Auto refutes by saying that a quadricycle is not really a car and that it should be sufficient if the Indian norms follow globally established norms.

The governments report clarifying what the guidelines and specifications are for the quadricycle category is awaited.

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Make best use of your kids' time with online ready reckoner

The e-commerce space is in a frenzy of activity in the last few years- the rush of money, consolidation and a lot media buzz. The latest hot spot in this market is the children's category which has remained a relatively untapped segment in India.

Three entrepreneurs- Vishal Gupta, Prashant Sinha and Asif Mohamed who decided to jump in with their venture, mycity4kids.com, spoke to CNBC-TV18's Young Turks about their e-commerce experience.

Launched in 2010, this online portal for children-related services gives parents access to information about schools, activity classes and even reviews of services by fellow parents. With more than a million parents visiting the website currently and over 40,000 service providers being listed across six major cities, mycity4kids.com has already clocked in revenues of Rs 3 crore.

Below is an edited transcript of the show on CNBC-TV18

Deepa Singh, a 36-year-old mother of two who shifted to India after living for four years in the US, searched high and low for preschools in her neighbourhood till she logged on to mycity4kids.com. "mycity4kids.com is like a one-stop shop for a parent. I plan to enroll my older child at a few events or summer camps and plan to admit my younger child at a mother-toddler programme or a preschool."

Targeting parents like Deepa, Vishal Gupta, Prashant Sinha and Asif Mohamed set up the website as a ready reckoner for facilities and programmes for children between 1 to 14. With an initial investment of Rs 50 lakh including personal savings, the trio was clear. Of focusing on the children's market from the start.

Vishal Gupta, co-founder, mycity4kids.com says, "The biggest USP of our site is that it has been formed using the perspective of a parent. Every service-provider on our site has been profiled by us and contains all the required information."

"This information has been presented in the manner that parents would go about looking for such information. So for classes to aid a child's concentration, the search results on our site would offer everything from classes on chess, the Rubik's Cube to learning the abacus."

Not just parents, but investors saw potential in the concept and mycity4kids.cin has raised USD 1 million in angel funding from YourNest Angel Fund an early-stage venture capital firm in 2012. The team is now toying with the idea of raising another round of funding this year. Currently free for users, mycity4kids.com charges service providers and advertisers and has managed to clock up revenues of Rs 3 crore.

"For the consumer, the site is completely free as of now. Attempts are on to provide as much of personalisation as we can. So, based on how you surf through the site and depending on information you are looking for, we try to personalise your experience and give you information that is more relevant," adds Asif Mohamed, co-founder, mycity4kids.com: 

Providing information to parents across six cities - Delhi, Mumbai, Hyderabad, Chennai, Bangalore and Pune - the trio's the plan is to now cater to 10 more cities by March 2014. To generate additional revenues, mycity4kids.con provides a range of solutions to SMEs operating in the children's market ranging from response management, payment and local promotion solutions for a price of Rs 2,500 to Rs 1 lakh a year.

Prashant Sinha, co-founder, mycity4kids.com says that he foresees the model going to more cities and across different tiers. "So, there are different problems that are being solved. The first problem is to help similar businesses get online.  We are also trying to aid businesses promote themselves in and around the locality and collect payments."

With the target in sight, the trio is ready for game, set and match. As their customer base grows, the site could move to a pay-for-use model, adding funds to the company's kitty and the next phase of growth could see them making a play for the product market as well.

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Shades of grey: Many myths of media freedom

R Jagannathan
Firstpost.com

The sudden collapse of the Saradha Group in Bengal is yet another reminder of the fact that a huge chunk of Indian media is run by tainted money. The group set up several news channels and print publications in Hindi and Bengali, among other languages, and the failure of the core chit fund business means journos have been turfed out of jobs.

The Sahara Group, which has been running illegal money-raising schemes and asked by Sebi to wind up two of them, is still playing ducks and drakes with the legal system. It runs several print and TV channels. One cannot but wonder about the future of its newsroom if push comes to shove.

We can multiply such examples in every state, and we can also draw similar conclusions from the fact that many news organisations are run by political parties not known for their probity. Among them, the YSR Congress' Sakshi channels. Their boss in still in jail. Once again, Sakshi is not the exception. Every state has political parties, with dubious sources of funding, running media.

The question is this: if large parts of media, possibly even the overwhelming part by volume, are run with funny money, how can Indian journalism ever be credible? The abuse that many senior journalists get on social media including Firstpost is often the result of readers/viewers being unable to believe that any story is the result of honest journalism.

Can this change in the current climate of suspicion that all news media are dominated by vested interests?

The answer lies, first, in acknowledging this truth. We are in bed with powerful interests. It also lies in admitting to two shades of grey in terms of credibility and bias.

First, one has to question the presumption that there can ever be completely neutral and unbiased journalism in a situation where media has to be funded by someone. The best we can hope for is that the limited bias inherent in a media house owned by some moneyed interest or the other will be countered by opposite biases in some other media houses.

Second, we also have to doubt the assumption that somehow media can be both credible and commercially viable at the same time. Good journalism costs money; a serious investigation into wrongdoing can swallow lakhs of rupees and months of painstaking effort to bring to fruition. This can be paid for only by readers or advertisers. But how many readers are willing to pay Rs 15 daily for a Times of India? How many advertisers will be willing to pay you good money if, at some point, they are going to be targeted for their own wrongs?

This leads me to my first conclusion: Collectively media can be independent, by neutralising each other's biases, but individually we will have limitations on perfect credibility.

This is why people may watch Sakshi even though they know it is an YSR Congress channel. Ditto for Sun TV, which may have a DMK bias, and Jaya TV (AIADMK). As a society, by letting each one play out their biases, we end up getting a better approximation of the truth.

Biases emanate from multiple sources.

The first bias is the personal one. If I like Narendra Modi and you don't, our journalism will reflect our respective biases. We may couch our writing with arguments this way or that, but underlying it all will be our personal biases. Personal bias (predilection would be my preferred word) cannot be eliminated, and often we would not be human if we don't believe in anything or anyone. We have to live with it.

The second source of bias is related to how journalism is funded. In India, there are many categories of funding sources. Here are some of them.

#1: Big business with surplus cash. This is the main legitimate source of media funding. The Aditya Birla Group has a stake in TV Today, the Reliance group has funded the promoters of Network18 (publishers of Firstpost), and Kotak Mahindra has a stake in Business Standard, and so on. The inherent blind spot for these media houses is that they wouldn't be seen as being objective about the activities of their financial backers. The problem here is not the source of funding alone but perception.

#2: Politically funded newspapers. This is where the bulk of Indian journalism gets tainted, because political funding is always the result of backdoor funding unless something is specifically designated as a party mouthpiece. Media writer Vanita Kohli-Khandekar says that "more than a third of news channels are owned by politicians or politico-affiliated builders. An estimated 60 percent of cable distribution systems are owned by local politicians." These news organisations will have clear political biases, not to speak of business biases where the business interests of their political patrons are concerned. Most Indian politicians are also aligned to business interests.

#3: Plain and simple crooked money. Given the size of India's black economy, there are not enough legitimate businesses which can use these hidden cash. Investing in media is one way to launder black money. Media investments are not only small (for crooks, that is), but also have the ability to yield big dividends in terms of political clout and respectability to owners. As Shekhar Gupta writes in The Indian Express today: "If you have a couple of news channels and newspapers, a few well known (and well connected) journalists as your employees, give them a fat pay cheque, a Merc, and they solve your problem of access and power. They also get you respect, as you get to speak to, and rub shoulders with top politicians, even intellectuals, at awards and events organised by your media group. It is the cheapest ticket to clout, protection and a competitive edge."

#4: Mainstream media houses helped by covert compromises, even blackmail. There are many legitimate media houses, both in English and in regional media, that do regular journalism unaligned to politics. But to make themselves viable, they use covert strong-arm tactics to earn revenues. The Zee-Jindal case is alleged to be one such example, but it is a well-known fact that many in the regional media play this game to stay afloat. Their message to advertisers: "If you don't advertise, we may write nasty things about you."

#5: Formal alliances of media and business interests. In order to protect their commercial interests, some media groups such as The Times of India have sections where news is paid for, and advertisers are given private treaties that more or less guarantee them some good publicity in return for advertising revenues. This model has now been taken up by many other media houses and is no longer unique to The Times. In any case, almost all publications create specific sections just for the advertiser and call them marketing supplements, or advertiser-sponsored supplements.

#6: A ready source of rentals. Some media houses what obtained cheap land in the past from government are able to stay afloat by using rental incomes from property. The Indian Express lives partly of incomes from its real estate in Mumbai, and so does the Statesman. The Free Press Journal exists as a newspaper only to legitimise the real estate interests of its owners.

The short-point is this: media is compromised in many ways, and credibility can only be a shade of grey.

The larger question that journalists need to ask themselves is this: can real journalism ever be fully viable without compromises?

My own (partial) answer is that digital journalism, by bringing down content costs dramatically (due to very low distribution costs) is one solution. Not surprisingly, powerful vested interests, including governments, want to control freedom on the net. They are not lovers of freedom.

But the long-term answer surely must lie in non-commercial funding structures that reduce dependence on big business, tainted money or dubious compromises.

The writer is editor-in-chief, digital and publishing, Network18 Group

Moneycontrol.com is part of the Network 18 Group, which owns TV18, Firstpost etc.

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'Think Learn' a venture focused on educating India

The India story is linked closely to its demographic profile. We are not just the world's largest democracy but also the youngest. This advantage could turn to be liability if the government and the private sector turned focus on scaling employability and providing basic education.

A 33 year old Byju Raveendran decided to focus on the not sought after competitive examination market to help students prepare and crack the entrance exams from engineering to medicine to the IAS and even the SAT and GMAT. He gave up his American dream for a chance to change the way students think and learn.

Founded in 2008 Think & Learn is grown from addressing the needs of 250 students to over 20,000 students today. With the launch of the K12 tablet Byju hopes to capture even bigger market through distance learning.

Every weekend in Bangalore over 2000 students assemble in a classroom to get ready to bell the cat. The man cracking the whip is Byju Raveendran. A CAT topper and National Mathematics Olympiad winner, Byju decided to ditch the IIMs to start Think & Learn, the parent company of Byju's classes.

For Byju having grown up in a family of teacher's education seemed to be a natural fit. What started as a CAT training institute with just 250 students in 2008 today prepares students for UPSC, engineering entrances, GMAT and the GRE.

Realising that there is an upper limit to the number of students he can reach out to if he continues with a brick and mortar model, Byju started identifying best teachers across India. Today it reaches out to students in different parts of the country through VSAT centers. However, what is different about Byju's class?

Raveendran differentiates his classes with others. He believes that all the other coaching institutes basically identify the patterns and make them practice 100s of question so that they get familiar with all the previous questions. However, he does not concentrate on that. He basically teaches students the principles so that they can solve any question. He teaches them how to expect questions, how to predict questions rather than solve questions made by someone else. "We mainly train them is that they will be in a position to expect questions and more than questions its not just about doing well in the exam they will clearly understand the concepts so that they will be able to frame those questions," he said.

With 60 centers pan India Byju's class isn't cheap with students shelling out anywhere between Rs 6000-50,000 a year. Having already grossed revenues of Rs 14 crore Think & Learn received its first round of funding, a whooping USD 10 million in December 2012 from the Manipal Group.

What made the Chairman of Manipal Global Education Services and the Former Infosys CFO Mohandas Pai bet on Byju was that he had a great business for India and his idea was truly transformational.

Pai heard of him first, when in Manipal we found a rush of young people going to a class. When he enquired as to why they are doing that he found that there was a person by the name of Byju Raveendran who is taking classes for them to enable them to pass their classes in IAM. Students were very happy with him and the success rate was extraordinarily high. "Then we contacted him and requested for a meeting, he came and he spoke to us and he explained. We found that he was a wonderful entrepreneur who has hit upon a successful idea and who has made sure that the idea actually worked. He has tested it out, he has led from the front, done many things himself, he has opened to change, he has changed the way of doing things based upon responses" said Pai.

With financial backing, Byju is all set for the next growth phase and is betting on the power of tablets to take his classes to students anytime, anywhere. These K12 tablets launched in February this year are preloaded with adaptive text, animation videos and practice tests. Currently the content is only available for engineering and medical entrance exams in Bangalore. The team of Think & Learn is now working on adding courses and taking the tablet pan India by next year.

Raveendran informed that for the next three years he will be getting into the school education segment. There he will be coming out with products in maths and science through tablet, which will be in a completely adaptive platform. Revenue numbers which we are expecting over the next three years is close to Rs 100 crore. In the last three years we have been doubling our revenue without any investment. With investment as well as with lot more brilliant minds coming together, joining he hopes to come out with products across test preparation segments as well as into school segments in maths and science through tablets.

With an eye on scoring revenues of a Rs 100 crore over the next three years Byju is all set to kick-start Think & Learn foraying to the school segment to prepare students from class eight onwards by supplementing their school studies. The bigger goal however for this state level player is to teach students how to learn.

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Iron Men of D-street: Cos that beat Jan-March earnings estimates

Maruti

Maruti Suzuki's fourth quarter standalone net profit rose better-than-expected 80 percent year-on-year to Rs 1,148 crore. Revenue was up 14 percent to Rs 13,304 crore in Jan-March.

Analysts on an average were expecting it to report a net profit of Rs 700 crore, on revenues of Rs 12,750 crore, according to a CNBC-TV18 poll.

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To hike prices this month, eyeing 100 bps margin rise: VIP

VIP Industries , one of the biggest luggage makers had recently launched new product in its line up. Caprese handbag, launched last Diwali, is receiving good response due to aggressive pricing. The comapny's Canteen Store Department (CSD) too is seeing good recovery.

Speaking to CNBC-TV18 Radhika Piramal, MD, VIP Industries said the April-May-June quarter is generally the most important quarter for the company.  However it would be too early to say how this quarter will pan out, says Piramal. The current market share for VIP currently stands at 64 percent and it spends around 8-10 percent of sales in advertisement. The company plans to increase its spend for FY14.

She also added that soft luggage contributes around 75 percent to overall sales. The company expects EBITDA margins to expand by 100 bps in FY14. VIP has recently announced price hike in soft and hard luggage segment.  She hopes margins to go up by 100 bps in FY14 if rupee does not depreciate.

Also read: Samsonite goes beyond metros with project pappu

Below is the edited transcript of her interview to CNBC-TV18.

Q: Your company has launched new product in your line up. How the demand does looks like as the economy is undergoing slowdown. This being the holiday, travel season it is best for your company. How is demand compared to last quarter and a year ago?  

A: April-May-June quarter is the most important quarter for us when holiday starts. It is too early to predict how the whole quarter will pan out but the early results are promising. We are definitely expecting growth over the previous quarter at the same time last year.

CSD which is an important channel for us is showing good recovery. In the previous year 2012-13, CSD declined due to working capital management issues on their side. Now, that channel has recovered.

So while we are not expecting double digit growth, we are certainly expecting discretionary spending to increase compared to how it has been in the last six months.

The company also successfully launched Caprese handbag last Diwali and we have tremendous response to that product line. Consumers have appreciated the product collection and affordable pricing, so we are looking towards for a good quarter ahead.

Q: Sales in the Q3 were down 5 percent from year ago levels. While you cannot give me very clear numbers on your Q4, would they be lower or would that downturn have been covered or are you seeing an upturn only in the current quarter?

A: I can only say that the CSD which had declined in previous year is now showing elements of recovery and stability.

Q: What kind of competition are you facing from Samsonite? What is the market share of VIP and how has it changed?

A: Currently, our market share stands at about 55-60 percent and about 35-40 percent for American Tourister and Samsonite combined. They are the second largest branded player in the luggage market and between the two companies we have the most of the branded luggage market. So, I am very pleased with our competitive position in the last year although the growth results for VIP in terms of sales have not been good, our competitive position has strengthened in the last one year. Our market share has increased, even our competitors have not grown.

Q: What about advertisement spends or marketing spends in a situation where the consumer is spending less so obviously you have to work harder to get to his wallet. What were ad spends in FY13 as a percentage of sales, what they might be in FY14? Have you already started upping it?

A: Yes, we have already started advertising for the current quarter. Our ad spends typically range between 5-7 percent of sales and in the last year we increased our ad spends by about 20 percent over the previous year.

Essentially, we have a long-term view of the Indian consumer and we do not want to hold back on advertising spends because of a few difficult quarters. The strength of our brand is the underlying strength of our company and so we continue to invest in advertising and brand building.

In addition to that, we are heavily promoting our new ladies handbag brand Caprese so that also takes a good amount of advertising spend. In the year ahead we are looking to spend about 7 percent of our sales on advertising and that is a significant increase over what we did the previous year and the year before that as well.

Q: So what will this do to your margins because in Q3 you saw a very sharp decline in your EBITDA margins, it came down by over 500 bps and was in single digit. For FY14 roughly will it be better than FY13 and any kind of price increases just on the annual?

A: We are expecting our margins to stabilize at 12-13 percent levels or increase by 100 bps because we will take another round of price increases this month. Last week we announced price increases in hard and soft luggage category. We hope for 100 bps increase if the rupee does not depreciate.

If the rupee further depreciate to 60 then that would offset any gain from the price increase because the majority of our sales is in soft luggage and we import our soft luggage from China, hence a bulk of our buying is in dollars so rupee depreciation matters for VIP

Q: With respect to your new launch in the ladies handbag segment, what kind of profitability will it enjoy? Is it going to be loss making in the first year and thereby it will start improving?

A: It will make losses for the first two-three years but positively most of the losses are due to discretionary ad spends. So, any new brand in the first few years will be loss making as we build up consumer franchise. The good part about it being loss making due to ad spends as oppose to any fixed capital investment, is that there is a degree of management discretion involved in that so we can control the pace at which we grow the brand.

If we see recovery on consumer demand then we can go a bit faster, put some more money into advertising, but if we feel that consumer discretionary spend remains low then we can moderate that and grow as per the market.

Q: How do you expect FY14 will pan out in terms of sales and margins? Would it be 10 percent sales growth or would you do better than that?

A: We expect our gross margins to stabilize at the last year's levels and some improvement in net margins. In terms of the sales growth rate I am cautiously optimistic. We are looking at 10 percent or higher sales growth and we stand a good chance to achieve it in the year ahead.

21.03 | 0 komentar | Read More

Expecting a beneficial Kharif season, says Rallis India

Rallis India , an agro products manufacturer, hopes that the Kharif season in the current year will be beneficial for the company based on the positive monsoon forecasts.

"We are looking towards a positive kharif both in terms of the way southeast monsoon will pan out as well as the interest in some of the key crops," V Shankar, MD & CEO, Rallis India told CNBC-TV18 today.

In the first official forecast on rains today, Jaipal Reddy, Science and Technology Minister said that monsoon rainfall in 2013 is expected to be within normal range. 

The company today reported 13.7 percent annual increase in consolidated net profit at Rs 11.26 crore for the quarter ended March. The manufacturer of seeds, pesticides and fertilizers recorded a whooping 32 percent hike in consolidated income from operations at Rs 284.9 crore.

The company margins remain under pressure through out last financial year due to increase in power cost and erratic monsoon. Margins contracted by around 200 bps during 2012-13.

Below is the verbatim transcript of the interview.

Q: Let us run us through the numbers first starting with the margin picture. I have the net sales picture which looked quite good. On the bottom-line also you have delivered decent growth, but what about the margin picture?

A: On the revenue front we have indeed done well and we have crossed Rs 1,500 crore milestone on revenues for the year. For the quarter as well our growth has been over 35 percent and even in terms of the Profit After Tax (PAT) we have registered handsome growth. As far as the margin is concerned we have faced both environmental and business level challenges in the industry all through the year. Margins have compressed by about 200 bps; having said that, during the year we have been able to recover. Power costs have increased; pressures on the foreign exchanges had gone up. On top of that, very erratic monsoon both southwest and northeast also had impact on the business. In Q4 as you are seeing from the numbers our margin has bounced back and we are on the road to closing the gap.

Q: How do you see the numbers going from hereon in the Q1 and Q2? Do you see things picking up and improvement in margins as well as in volumes?

A: As of now I can look at a few pointers which look positive, one is in terms of the general inventory levels and the pipeline. They are a bit easier than what it was last year and second of course is the forecast which we see of the monsoon. Most of it is quite positive. So we are looking towards a positive kharif both in terms of the way southeast monsoon will pan out as well as the interest in some of the key crops.

Q: Do you expect anything positive coming in terms of policy in terms of being able to raise prices?

A: In terms of policy we have seen that the government has been quite sensitive to some of the costs, which have gone up and they have been addressing their Minimum Support Price (MSP) increases, so that kind of intervention has certainly helped the farmer income on many crops. For example, if you look at the farmer income on wheat this season, that has been generally okay. The crop health has been good and the MSPs and the cost profile also. But this has not been true in case of paddy across states like Andhra Pradesh, their incomes have been less. So the MSP intervention happening at the right time is certainly a booster in terms of the policy. The other one of course is in terms of the credit availability and steps like the interest subvention in terms of the farmers' access to credit and the cost of it, so the policy moves there will also certainly come in handy. The key interventions which a farmer really looks for is availability of finance as well as whether he gets the right price when the output is ready. So on these two fronts any positive moves made by the government is certainly going to help going forward.

21.03 | 0 komentar | Read More

Localisation was key contributor to Q4 net: Maruti Suzuki

Internal measures taken on cost, the weakening yen and commodity prices helped achieve good Q4 results, says, Ajay Seth, CFO, Maruti Suzuki . Maruti Suzuki's Q4 net soared 80 percent year-on-year to Rs 1,148 crore. Talking to CNBC-TV18, Seth says the company has increased selling prices in January, which also helped achieve these numbers.

He added that as the yen has fair amount of bearing on the company's margins, it has already hedged 30 percent of its hedge books of yen, and intends to increase this to about 50-60 percent in the coming months.

Here is the edited transcript of the interview on CNBC-TV18.

Q: Your numbers have been good at a time when the overall market is bad. Can you explain the reasons.

A: We had mentioned it earlier in the half-yearly conference that we are working towards our internal programmes on how to manage costs well. Localisation for us was a very key component. We have been saying that this will bring us significant results aided by the weakening yen and also commodity prices softening.

So, internal measures that we took on cost, the weakening yen and commodity prices helped us to achieve these results. We also had some minor correction on our selling price. We have increased selling prices in January. That has also helped us to achieve these numbers.

Q: These numbers are coming at a time when the overall market got totally hammered. Can you give us a sense of the kind of discounting that happened in FY13 compared to FY12?

A: Overall discounts this year were slightly high than last year. However, the discounts in the fourth quarter this year were lower than discounts in the fourth quarter of last year. So, we had this benefit of seeing a slightly declining discount trend in the fourth quarter. Hopefully, moving forward, we may see the trend of discounts getting corrected a bit.

Q: Also, in FY14, the diesel share of your overall production is going to go up to 40 percent. In terms of overall realisations, do you see healthier numbers and this stellar run that you have reported this time around to continue in FY14 as well?

A: There will be some increase in overall realisations as the percentage of growth compared to the volume growth but most of it has already been factored in this year because this year if you see, the realisations have been growing much faster than the volume growth. Next year also, you will see that trend but it will not be to the extent that you saw this year. Most of the base has already been corrected.

Q: The Bank of Japan announced its massive stimulus package, following which there was a significant depreciation in yen and of course you benefited tremendously. Going forward, could you give us a sense of your hedging strategy?

A: We have been continuously watching the yen. For us, this is the most important currency because it has fair amount of bearing on our margins. We have already hedged about 30 percent of our hedge books of yen. We intend to increase this hedge book to maybe about 50-60 percent in the coming months.

21.03 | 0 komentar | Read More

Antique maintains buy on SpiceJet; target Rs 60

Moneycontrol Bureau

Brokerage house Antique Stock Broking has maintained its "buy" rating on SpiceJet with a price target of Rs 60 for the stock. The broking firm believes the Jet Airways -Etihad deal has the potential to re-rate aviation industry in India and SpiceJet could see substantial upside from current levels.

"The strong premium by foreign player signals the interest in latent growth Indian aviation market and we believe Spicejet is the next best candidate among the listed players to attract investments considering country's growing aviation market with strong promoter support and its lean balance sheet. The company has gained market share from 12 percent in the financial year 2010 to 19.2 percent in third quarter of financial year 2013. It is expected to continue to outperform domestic market with higher load factor and growing fleet," said the Antique note to clients.

"The company has very high sensitivity with fuel cost as it currently accounts for 45-50 percent of its sales. Considering relatively fixed nature of other cost, the full year profit for FY14 has delta of Rs 40 crore for rupee 1 per litre change in domestic fuel cost. We believe with increasing market share, focus on operational efficiency and relatively strong balance sheet should re-rate the valuations of the company," said the note.

21.03 | 0 komentar | Read More

BMW India bets big on Indian with enhanced 7,1-Series

Apr 25, 2013, 06.25 PM IST

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BMW India bets big on Indian with enhanced 7,1-Series

BMW has announced the launch of its new, enhanced 7-Series. While diesel variants of the 7-Series will be manufactured at its Chennai plant, petrol variants will continue to be imported as completely built-up units (CBUs).

Like this story, share it with millions of investors on M3

BMW India bets big on Indian with enhanced 7,1-Series

BMW has announced the launch of its new, enhanced 7-Series. While diesel variants of the 7-Series will be manufactured at its Chennai plant, petrol variants will continue to be imported as completely built-up units (CBUs).

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BMW has announced the launch of its new and enhanced 7-Series. While diesel variants of the 7-Series will be manufactured at its Chennai plant, petrol variants will continue to be imported as completely built-up units (CBUs).

Speaking to CNBC-TV18 on the implications of the ongoing EU-FTA negotiations on the company's margins, Phillip von Sahr, president, BMW India says the company is working closely with SIAM to ensure any negative impact on the auto-maker's investments in India is minimal.

"What is already good for the brand is that we are now launching in September the BMW 1 Series because we believe that there is also a market for premium compact hatchback model in India. So we are convinced of the success of this model."

From DJ EU Officials Spain Aid Cap Of 100 Bn Euros 'should Be Enough'

The latest earning numbers FIRST on CNBC-TV18

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Jet-Etihad deal: Why it reeks of crony capitalism

R Jagannathan
Firstpost.com

The Jet -Etihad deal is further proof that India and Indians are losing the aviation war. And this coming defeat is the result of whimsical policy driven not by consumer vision but crony capitalism.

This is not to say that the deal is per se bad. In fact, by boosting competition on Gulf routes, it will benefit consumers. We can expect more fare wars. But the deal appears to be the result of cosy bargaining between promoters and policy-makers. It is being sold in the name of consumers , but it was conceived with business interests in mind, not consumers.

The consumer benefits may be short-term and illusory without a broader policy articulation on open skies. A case-by-case approach will mean dead airlines (Kingfisher), or perennially bleeding ones (Air India), and arbitrary air fare and route construction depending on whose policy clout works. The rest of the domestic airlines are sitting ducks for acquisition.

Let's begin with the basics of the Jet-Etihad deal and then go on to the macro picture.

The deal allows Etihad to pick up a 24 percent stake in Jet for USD 379 million (Rs 2,060 crore) but the pound of flesh Etihad has extracted in return is a policy change whereby it has obtained a huge increase in weekly seat capacity on the India-Abu Dhabi sector to 50,000 (which is a nearly four times the current 13,000). The deal will thus funnel Indian passengers to a hub in Abu Dhabi which means the only job of our airports is to send business over to the Sheikhdoms of West Asia.

The idea is to use Jet's domestic capacity and feeder routes from cities beyond Mumbai and Delhi to funnel traffic to Europe and the West through Abu Dhabi. Effectively, the most vibrant part of the Indian international traffic has now been handed over to Gulf airlines earlier Emirates out of Dubai, and now Etihad out of Abu Dhabi.

There is, of course, commercial sense in this your-beauty-and-brains partnership. India has the traffic, and Gulf carriers from the oil-rich sheikhdoms have cash. Indian promoters of airlines have been living on borrowed time and money. Their time is up. Hence Etihad.

The matter, of course, won't end here. Why would Emirates, which now handles a significant chunk of the west-bound traffic, want to let Etihad steal its market? It, too, will demand more weekly seats and possible tie up with some other domestic airline. After that, why should the same not happen to Indian traffic headed to south-east Asian hubs? Air Asia should be asking for that, and so will many other Asian airlines.

The reason why the Jet-Etihad deal smacks of crony capitalism is the linkage of the Jet equity deal to the Abu Dhabi bilateral rights deal and increase in seat capacity. The former is a commercial arrangement between Jet and Etihad; the latter is a policy issue that ought not to have been tied to bilateral issues.

Consider the signals on why this is more than just a commercial deal.

Etihad is paying a 32 percent premium for 24 percent of Jet compared to the airline's market price on Tuesday. Why pay such a huge premium in a business with wafer-thin margins, and that, too, for an investor stake of 24 percent? Remember, Jet has nearly Rs 13,000 crore of debt, a negative net worth, and losses of Rs 1,236 crore in 2011-12.

This premium is, in fact, higher than what Jet was demanding earlier in negotiations around Rs 1,780 crore. In an interview to the media in February, Sheikh Hamed bin Zaved al-Nahayan, Chief of Etihad Airways, said that this price was too high, and said he wanted to "revise it."

Who would have thought he wanted to revise it higher? Unless, something else has been delivered quietly.

The increase in bilateral traffic rights and allocation of more weekly seats to Abu Dhabi is the obvious answer. This is probably what Jet chief Naresh Goyal has swung in return for the higher valuation of Jet.

Not only that, Business Standard reports that Naresh Goyal may sell some of his shares (he owns 80 percent) before the Etihad deal to bring his holdings down to 75 percent, as per Sebi listing requirements for public floats. Since the Etihad deal has pushed up Jet shares by over 10 percent today, no prizes for guessing who will benefit from this.

As we noted earlier, the deal has consumer positives that are blighted by narrow considerations. This writer is not against higher seat allocations on any route, but they have to flow from the logic of a general opening up of the skies and a clear policy on promoting competition on all routes domestic and foreign.

The problem with the Indian aviation sector is simple: all policy-making has been driven by vested interests, and any opening up has been selective and intended to benefit only a few.

Consider some of the key developments over the last 15 years.

In the late 1990s, Jet and other domestic players pressured policy-makers to restrict foreign ownership of airlines to non-airlines. This was meant to specifically stymie the Tata-Singapore Airlines deal. But it simply stunted the growth of Indian aviation.

In the 2000s, the main obstacle to the growth of private players was the public sector Indian Airlines. Under Praful Patel, not only did we get an unviable merger of Air India and Indian Airlines, but also a crippling decision to increase an order for aircraft from 28 to 68 without any revenue plan. Net result: an airline with Rs 7,000 crore of revenues in 2004 took on Rs 50,000 crore of debt and killed its own viability. Even today, the airline is on life-support, with the government giving it a Rs 30,000 crore bailout.

Guess who benefited from Air India's hara-kiri?

Two years ago, when Kingfisher was on the ropes, the civil aviation ministry could have thrown up the industry for foreign investment right away. But it waited 18 months to do so till Kingfisher went into rigor mortis.

But now, with Jet itself sinking, bilateral traffic rights are renegotiated to benefit the airline and consummate the Etihad deal. Much as Ajit Singh, the Aviation Minister, may talk of consumer benefits, the driving logic isn't that. If it was, he could have said seats will be increased on all routes out of India and not just Abu Dhabi. And wasn't this the same Ajit Singh who seemed less than enthusiastic about the Air Asia decision to enter into Indian aviation with the Tatas in tow?

This will be the net result of this selective policy change:

One, the other domestic airlines will have to sell out to international investors sooner or later. Nothing wrong in that. But the policy should be deal-neutral. Bilateral rights in all sectors should be equally liberalised, and not just Abu Dhabi. Foreign airline investment should be 100 percent and not just 49 percent.

Two, Air India is now going to bleed further unless the government decides to privatise it. But who will buy an overstaffed airlines with bloated losses?

Three, India has lost whatever chance it had of becoming a global airline hub itself. We have clearly given up on making our own airports competitive.

Four, barring Air India, all domestic airlines will ultimately be owned by foreign airlines. This includes Jet, too. Etihad is not getting into Jet just to play a minority role. The airline business needs deep pockets, but domestic interests with deep pockets the Tatas, etc were deliberately kept out in the last 15 years. Now, the survivors have no option but to sell out.

The only plus we have in aviation is a huge market. According to the International Air Transport Association (IATA), Indians make 0.1 air trips a year, against 1.8 in the US. If we get to even a third of the US level we would have 700 million air travellers annually. Currently, the annual traffic is a tenth of that.

We can leverage this to either make cosy deals like Jet-Etihad, or we can open our skies to all comers and let consumers benefit fully.

India may have already lost the aviation game by making it too costly to operate an airline out of this country. Our airports are expensive, our fuel is too expensive and our policy is wayward.

But we can at least make a virtue of our large market and let consumers come first. Not domestic promoters or global players.

Crony deals are not the way to go.

The writer is editor-in-chief, digital and publishing, Network18 Group

21.03 | 0 komentar | Read More

Monnet Ispat Energy raises Rs 175 cr

Monnet Ispat & Energy today said it has raised Rs 175 crore by issuing shares on preferential basis.
    
The decision was taken in the meeting held last month, the company said in a filing to BSE.
    
"Consequent to requisite resolutions having been passed by the shareholders in the extra-ordinary General Meeting Committee of the Board, in its meeting held on March 30, 2013, has made allotment of 1,75,00,000 Cumulative Redeemable Preference Shares of Rs 100 each," the company said.
    
The shares of the company were trading at Rs 200 a piece on BSE, 48 percent high from the previous close.

Also read: Will raise $100m via FCCB; cheer restart of mining: Guj NRE

21.03 | 0 komentar | Read More

Tata Housing announces housing project for senior citizens

Tata Group's realty firm Tata Housing Development Company today announced its foray into housing for senior citizens with launch of first project in Bangalore with an investment of about Rs 70 crore.

The 4.5 acre project 'Riva Residences' will have 187 units where only a person with age of 55 and above can reside. The project is part of Tata Housing's 25 acres township.

"Tata Housing's mission is driven by the desire to delight our customers by providing quality life spaces through continuous innovation. In the same spirit, Riva is our effort to create a special offering for the seniors of our society," Tata Housing MD and CEO Brotin Banerjee said in a statement.

The project has been planned with modern utility-based design facilities, services and ambiance to specially cater to the requirement of its senior residents.

Also read: Housing prices up by avg 20% in Delhi-NCR during Jan-March

When contacted, a company's senior official said that there would be 187 dwelling units in the project dedicated for senior citizen.

The total investment on this project would be Rs 70 crore and expected revenue is about Rs 95 crore, he added.

Asked about the selling price, the official said it would be Rs 45 lakh all inclusive for one bedroom flat with 800 sq ft area and Rs 65 lakh for two-bed room flat having 1,200 sq ft area.

The company plans to develop more housing projects for the senior citizens across the country, he added.

Tata Housing, a subsidiary of Tata Sons, currently has 55 million sq ft of area under various stages of planning and execution and an additional 19 million sq ft in the pipeline. It is offering products ranging from Rs 5 lakh to Rs 14 crore.

21.03 | 0 komentar | Read More

NIIT Technologies signs Rs 344 cr contract with AAI

NIIT Technologies today said it has signed a Rs 344 crore multi-year contract with the Airports Authority of India for implementation of airport operations control centers across 10 cities, in partnership with communication specialist SITA.

"It has signed a multi-year contract with the Airports Authority of India (AAI) for the implementation of airport operations control centers (AOCC), in partnership with SITA, the global air transport IT and communication specialist," the company said in a statement.

The airport management system and resource management system will be implemented and integrated by NIIT Technologies solution which has been supplied by SITA.

Also read: IT will continue to underperform in May series: Thukral
    
The systems and their interfaces will help improve airport management by consolidating multiple sets of information and providing accurate real-time data from just one source, it added.

"We are delighted to have been chosen as a partner by AAI for the complete integration of IT systems enabling efficient utilisation of airport infrastructure at the 10 airports in respective cities," NIIT Technologies President (Asia-Pacific and Middle East) Arvind Mehrotra said.

The project will be executed within the next 15 months at the airports in Chennai, Kolkata, Ahmedabad, Pune, Thiruchirapalli, Thiruvananthapuram, Calicut, Mangalore, Guwahati and Jaipur, it added.

21.03 | 0 komentar | Read More

60 Goa mines would be able to work once ban is lifted: CM

The Goa government today said that atleast 60 out of the 90 mines could be operational in the state once the Supreme Court lifts ban on mining activity. "Of the existing mines, 60 mines would be able to operate while the rest may have issues like proximity to the forest areas and others," Chief Minister Manohar Parrikar told the State Legislative Assembly today.

The Chief Minister was responding to a question tabled by Independent legislator Vijay Sardesai about the renewal of mining leases in the state. Parrikar told the House that the government has renewed one mining lease in the state collecting the stamp duty, while the process is on to renew leases of seven more mines.

"The state has collected Rs 304 crore in the form of stamp duty from the mining leases, which were till then working on deemed renewal clause as former governments never bothered to renew them," the chief minister said. Responding to a question by Sardesai, Parrikar clarified that although the leases have been renewed, the mining operations cannot start unless all the required permissions are in place.

He said that the SC has been hearing the petition on mining activity in the state. The chief minister said that once the activity is allowed and if mining lease is found to be indulged in illegal extraction, the lease will stand cancelled. The mining activity in 90-odd leases in Goa came to a halt since last year after the SC order, pending inquiry by Central Empowered committee on allegations of illegal mining.

21.03 | 0 komentar | Read More

Foreign airways' deals won't save aviation space: Expert

While hailing the Jet-Etihad deal announced on Wednesday, Saroj Datta, former executive director, Jet Airways , says foreign airways will not be able to revive Indian aviation sector.

"(Potential deals taking shape) is impossible to comment on. Jet's deal with Etihad doesn't have any immediate relationship to what other carriers could get. Valuations will also depend on what will happen in the future; how they see the airlines growing and so on and so forth. However, foreign deals will not automatically bring in a lot of money to get over the financial problems of the Indian Aviation industry," adds Datta in an interview to CNBC-TV18.

Another issue one needs to focus on, according to Datta and aviation expert, R Krishnan is enhanced bilateral rights. Datta believes inking the deal based on bilateral rights is not  a good idea as in the recent past the Indian aviation has complained about excess number of seats due to which traffic growth has slowed.

Jet Airways announced a deal with Abu Dhabi-based carrier Etihad Airways for Rs 2,060 crore (roughly USD 379 million) after months of negotiations. Jet has approved the allotment to Etihad of 27.3 million shares at Rs 754.74 each on a preferential basis.

Below is the edited transcript of Datta, Krishnan and Kanu Gohain, Ex-DGCA's interview to CNBC-TV18.

Q: What is your view on this deal, the fact that it has come in at very good valuations and going forward how it could impact the aviation sector?

Datta: It is a very good deal for Jet Airways because Jet will now be able to reduce their debt with the funds they get from Etihad and acquire new aircraft and so on. However, to ink the deal with additional bilateral right is something which should not be resorted to. The aviation industry has in the recent past complained about the excess number of seats in the Indian market and with the surplus capacity that has been operated, traffic growth has become slower.

Therefore, putting in additional seats will be even more difficult and we don't want to see a situation of shares dropping further to levels where airlines are not going to breakeven. It will have consequences not only for Jet and Etihad. It is important to know the plan that they implement and whether it is Abu Dhabi's half for Jet or India's half for Etihad. Also, it is important to know whether Etihad continues operating in the four-five points that they do. All these questions need answers and the pricing could become more difficult because if truly the capacity increases greatly, it is almost inevitable that the prices will drop and airlines will then be in difficulty. Not that they are not today but they will continue to have problems.

Q: What does the valuations tell you about the other impending deals that could get struck, do you see more players coming in on board into the Indian markets into other companies like SpiceJet etc and do you see any of that happening anytime soon within this calendar year itself?

Datta: That is an impossible question to answer because valuations that Jet has been able to get from Etihad for this 24 percent doesn't have any immediate relationship to what other carriers could get. Valuations will also depend on what is the future; what will happen in the future; how do they see the airlines growing and so on and so forth. However, foreign deals will not automatically bring in a lot of money to get over the financial problems of the Indian Aviation industry.

21.03 | 0 komentar | Read More

Etihad confirms takes 24% stake in Jet Airways for $379m

Abu Dhabi's Etihad Airways confirmed it had taken a 24 percent minority stake in Jet Airways for USD 379 million.

The Gulf carrier said in an emailed statement it would subscribe to 27.3 million new shares at Rs 754.74 per share.

Jet said in a brief statement to the stock exchange earlier on Wednesday that its board had approved the allotment to Etihad.

Etihad, which is on an aggressive expansion drive, will also make a $150 million equity investment in Jet's frequent flyer programme and spend $70 million to buy Jet's three pairs of Heathrow slots through the sale and leaseback agreement announced in February.

Jet's majority ownership will remain with Indian nationals and Jet's founder and non-executive chairman Naresh Goyal will hold 51 percent of the airline after the deal, which is subject to shareholder approval, the statement added.

As part of the deal Jet will establish a hub in Abu Dhabi and expand its reach through Etihad Airways' global network.

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Tata Comm partners Mercedes AMG Petronas

Tata Communications today said it has partnered with Mercedes AMG Petronas, to deliver trackside connectivity for the team at all Formula One race locations. With the new partnership, Tata Communications becomes the 'Official Managed Connectivity Supplier' to the team, the company said in a statement.

Tata Communications will work closely with the team to deliver high-speed, high quality and secure trackside connectivity, it said. This will enable the team to transfer vital real-time data from the Silver Arrow cars at any Grand Prix location to its headquarters in the UK, three times faster than at present, the statement said. "Formula One relies on data and the ability to transfer our data from the track back to our factories in Brackley and Brixworth quickly and securely.

The Tata Communications global network will play a key role in the team's performance and our ability to react over the race weekends," Mercedes AMG Petronas Team Principal Ross Brawn said. In February 2012, Tata Communications announced a multi-year technology service and marketing agreement with Formula One Management to deliver connectivity to all Formula One race locations. It also provides global hosting and content delivery services to the official Formula One website Formula1.com.

21.03 | 0 komentar | Read More

Maruti to discuss merging of 7 subsidiaries with itself

Country's largest car maker Maruti Suzuki India today said it will consider amalgamation of the company's seven wholly-owned subsidiaries with itself at the upcoming board meeting.

In a filing to the BSE, the company said the board, in its meeting scheduled to be held on April 26, 2013, shall consider the proposal of amalgamation.

The seven wholly-owned subsidiaries, which are engaged in different businesses are Maruti Insurance Business Agency, Maruti Insurance Agency Services, Maruti Insurance Distribution Services, Maruti Insurance Agency Logistics, Maruti Insurance Agency Solutions, Maruti Insurance Agency Network and Maruti Insurance Broker.

The development comes at a time when MSI has witnessed a change at the top management with Kenichi Ayukawa taking over as the Managing Director and Chief Executive Officer in place of Shinzo Nakanishi, who retired from the post on April 1, 2013 on attaining retirement age.

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Oil Min pushing for daily petrol price revision: Sources

The oil ministry is pushing state-run oil companies to revise petrol price daily in line with international rates and the rupee's value against the dollar, CNBC-TV18 reports quoting sources.

Currently, oil retailers like Bharat Petroleum , Hindustan Petroleum and Indian Oil Corp revised petrol price every fortnight bases on average regional bulk market price and also the value of the rupee against the dollar

However, sources say the ministry believes fortnightly price revision is not sufficient and it should be on a daily basis just like it is done in the US. To begin with the OMCs can so by revising price every week.

It is also believed that if price moves in tandem with global rates, customers will be benefited from lower rates and vice-versa. However,  customers will not mind a small increase unlike current scenario where Re one hike in petrol price also becomes an issue.

For instance, in May last year, oil marketing companies (OMCs) hiked petrol price by  Rs 7.54/litre which was not acceptable to consumers and later there was a partial rollback later due to protest from opposition parties.

Last time companies hiked price was on April 15 by around Rs 1.20/litre. Petrol now costs Rs 67.29 in Delhi, Rs 74.72 in Kolkata and Rs 74.14 in Chennai.

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MM market shr in UVs may dip; Kotak cuts growth forecast

Moneycontrol Bureau

Brokerage house Kotak Securities has trimmed its earnings estimates for Mahindra & Mahindra , while retaining its "add" rating on the stock, saying upcoming utility vehicle launches could eat into its market share.

"We expect M&M to lose 500 bps market share over the next two years due to aggressive launches by competitors, notably the Ford Ecosport (May 2013), Nissan SUV (4QFY14) and Maruti 's SUV (4QFY14). M&M does not have a major launch in FY2014 and is likely to come out with an all-new Scorpio only in FY2015," said the Kotak note.

"We have cut our domestic UV/SUV segment volumes by 4-6 percent and our average selling prices by 3-4 percent to factor higher discounts and an inferior product mix in the UV segment. We have thus reduced our EBITDA estimates by 5-10 percent over FY2013-15," the note said.

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Hiring activity slowing among IT firms

Moneycontrol Bureau

FY2014 may be looking a brighter growth year than FY2013 for IT firms,  but hiring activity especially among freshers/trainees, doesn't seem to be in sync with it.

Several top companies like Infosys , Wipro and HCL Tech who gave offers to engineering students last year have deferred joining dates.

A trend among IT firms was to hire en-masse from engineering colleges and then send offer letters to the selected candidates depending on the work load. But now candidates who have already been selected have had to wait for six months to a year to get their joining dates.

India's top software services exporter Tata Consultancy Services recently said it is confident of beating NASSCOM's FY14 growth guidance of 12-14 percent and will hire 45,000 employees on a gross basis. But this is lower than the over 50,000 employees it had guided to hire in FY13 and 70,000 gross employees it added in FY12.

Also Read: US Immigration Bill can seriously impact Indian IT: Nasscom

According to Ambit Capital, which surveyed 30 tier-II engineering colleges, a primary scouting place for IT firms, there has been a slowdown in campus recruitments.

"Our survey results confirm that campus hiring has declined significantly during the 2012-13 placement season. Some of the colleges surveyed have seen a 50-70 percent decline in the number of offers as well as a decline in the number of companies visiting their campus," said analysts Ankur Rudra and Nitin Jain in a recent report. 

Automation is certainly one reason for the decline in hiring. More and more systems and processes are now being automated and that means lesser number of software developers and testers are needed.

But more importantly its the slowdown in client spending and the overall global demand uncertainties that have plagued the sector in the last couple of years, that has turned companies cautious in expanding their work force. Companies earlier used to maintain a huge bench strength (idle employees). But with the slowdown in spending and pressure on margins, organisations have become much leaner.

There are also company specific issues. India's second largest software services exporter Infosys, for instance has lagged the industry growth for several quarters now. It deferred salary hikes and increments last year to October. On-site employees, in fact got their increment only in Jan this year. It had also deferred hiring last year.

Infosys pushed its employee utilisation levels to around 69 percent in fourth quarter. But that is still at a low level. According to Morgan Stanley Research, the company has idle capacity of 43,000 employees.

In a post earnings conference call, Infosys CEO SD Shibulal told analysts the company will honour all the offers it has already made.

Some analysts also point out that since the sector has reached a scale, lot of hiring now also happens from within the IT industry, which could be one more reason for slowdown in hiring from colleges and other sectors.

In a recent conference call, India's third largest IT company Wipro told analysts it has absorbed all its freshers hired from campuses last fiscal and they have gone on campus to hire for this fiscal too. Its hiring, however, will be based on demand and one-third of its hiring is now from laterals.

Nachiket Kelkar
nachiket.kelkar@network18online.com

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Oil Min pushing for daily petrol price revision: Sources

Apr 23, 2013, 07.07 PM IST

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Oil Min pushing for daily petrol price revision: Sources

The oil ministry is pushing state-run oil companies to revise petrol price daily in line with international rates and the rupees value against the dollar, exclusive sources tell CNBC-TV18.

Like this story, share it with millions of investors on M3

Oil Min pushing for daily petrol price revision: Sources

The oil ministry is pushing state-run oil companies to revise petrol price daily in line with international rates and the rupees value against the dollar, exclusive sources tell CNBC-TV18.

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The oil ministry is pushing state-run oil companies to revise petrol price daily in line with international rates and the rupee's value against the dollar, exclusive sources tell CNBC-TV18.

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Money laundering: HDFC Bk sings RBI's tune on systemic risk

Moneycontrol Bureau

Private sector lender HDFC Bank does not see any systemic threat to banking industry due to alleged money laundering cases exposed by a sting operation.

"In respect of the sting operation, three investigations are going on," Paresh Sukthankar, executive director HDFC Bank told reporters here in Mumbai while announcing the fourth quarter (January - March) results on Tuesday.

"While we had our own internal audit, we have ordered for a forensic investigation by consultancy firm Deloitte. At the same time, the regulator too is doing its own scrutiny. As of now, there is no transaction of this type (money laundering), which any of these audits receives. There is no systemic risk," he said.

The bank has suspended around 21 officials allegedly involved in the sting operation. Their suspension will continue till the final investigation reports appear. However, the lender will take call on them after evaluating those reports.

Earlier in the day, RBI deputy governor K C Chakrabarty hinted at taking corrective measures to fix the problem. However, he ruled out any systemic risk due to it while refusing to divulge details of investigation.

"Any RBI investigation is an issue between supervisor and supervised entity. It is not for public discussion," he said.

"The system is good. There is transaction libel. Some aberration will always take place and there is a need to look into those issues. As and when necessary, banks will take corrective measures. And if necessary, we will issue corrective measures  from the rbi regulatory side."

A month back, Cobrapost.com, an investigative news website, ran a sting operation alleging that three private sector lenders including ICICI Bank , HDFC Bank and Axis Bank were involved in money laundering cases. Immediately after that, individual banks came out with press statements giving clarifications and ordering internal and external investigations.

Later, the Reserve Bank of India too discussed the issue with those banks. Currently, it is too investigating the issue.

Last week, Rajiv Takru, the secretary at the Department of Financial Services - the government of India, had met RBI in Mumbai. After the meeting, he said that the central bank report pointed out to some "aberrations", and assured action against the erring parties.

Meanwhile, the RBI deputy confirmed that the central bank had extended its investigation to 34 banks terming it a "thematic" investigation including all lenders.

saikat.das@network18online.com

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Cadila Healthcare to merge certain subsidiaries with itself

Drug maker Cadila Healthcare today said its board has approved the merger of various wholly-owned subsidiaries, including Zydus Animal Health Ltd with itself.

The board of directors of Zydus Animal Health Ltd (ZAHL), Live Healthcare Ltd (LHL) and Zydus Pharmaceuticals Ltd (ZPL) at their respective meetings held today approved amalgamation with Cadila Healthcare Ltd, the Ahmedabad-based firm said in a filing to BSE.

The board of Cadila Healthcare also approved the amalgamation with ZAHL, LHL and ZPL, it added.

In terms of the scheme, ZAHL, LHL and ZPL will be amalgamated with the company followed bt the dissolution without winding up of ZAHL, LHL and ZPL, the company said.

"Upon the scheme being effective, in consideration of the tranfer and vesting of the undertakings of ZAHL, LHL and ZPL (the transferor companies) in the company...all the equity shares issued by the transferor companies and held by the company and its nominees shall stand cancelled and extinguished," it added.

Headquartered in Ahmedabad, Zydus Cadila group has global operations in four continents spread across USA, Europe, Japan, Brazil, South Africa and 25 other emerging markets. The group's operations range from active pharmaceutical ingredients (API) to formulations, animal health products and cosmeceuticals.

Shares of Cadila Healthcare today closed at Rs 770.35 on the BSE, up 0.92 per cent from their previous close.

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Mahindra Reva plans exports to Europe next year

Mahindra Reva, a part of the Mahindra Group , plans to start exporting its electric car to Europe next year, a senior company official said on Monday. "We have plans to export Mahindra Reva in Europe from 2014," Mahindra Reva Electric Vehicles, chief of operations, R Chandramouli, told reporters after announcing the launch of the company's new model of 'e2o'.

"We are working on the regulatory framework of the European Union for starting export," he added. The company on Monday unveiled its all-electric, zero-emission car here, which would be made available at EMI of Rs 12,802 for customers of Chandigarh. Chandramouli declined to give any information on the number of bookings made so far.

The company is targeting big cities for marketing the vehicle, he said. "We are targeting metro cities only for promotion of our product," he said, adding that it would be available at Mahindra outlets. 

Asked whether any state government provides subsidy on the purchase of eco-friendly car, he said only Delhi  government is offering 15 percent subsidy on purchase of the vehicle. The car comes with lithium-ion batteries and can run 100 kilometre on five hours of charging.

It also has a regenerative braking feature which allows it to pump energy back into car's batteries and charges them every time when it is in slow mode or brakes are applied.

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APTEL quashes RInfra's appeal against MERC order

The Appellate Tribunal for Electricity (APTEL) has quashed Reliance Infrastructure's appeal against the adverse remarks made by the Maharashtra Electricity Regulatory Commission (MERC).

Reliance Infrastructure had filed an appeal with APTEL challenging certain adverse remarks made against the company by the state commission stating that those remarks were baseless.

APTEL in an April 17 order upheld diverse adverse remarks and findings against RInfra's conduct as a distribution licensee that were earlier made by MERC.

The state commission, in its order last year, had said that Reliance Infrastructure's lack of planning of its power procurement requirement and for not contracting for adequate capacity are some of the reasons for responsible for the tariff situation in Mumbai.

Also read: Coal India modifies provisions in model FSA to power plants

"We do not agree with the contention of the Appellant (RInfra) that the impugned observations have been made by the State Commission without any basis as there are enough materials," APTEL said in its order.

Commenting on the order, RInfra in a statement said: "Tata Power after agreeing in writing, suddenly withdrew power meant for RInfra's Mumbai consumers. RInfra power purchase cost lower than TPC during the entire business plan period as approved by MERC."

Tata Power in its statement added that, "The judgement passed by APTEL yet again vindicates Tata Power's contention that RInfra consumers were facing high tariff due to RInfra's failure to discharge its obligation as a discom to procure power at reasonable rates and provide competitive consumer services."

MERC had referred to several occasions in the past where it had directed RInfra to take steps to procure power in a timely  manner to meet the demand of its consumers, it said.

APTEL observed that MERC followed the directions of the High Court by considering the issues, independent of the Government Memorandum.

It also said that the State Commission after analysing the materials as well as the opinion and suggestions offered by the Competition Commission, that "since the issues raised by RInfra in the said proceedings as against the Tata Power Company have already been considered and settled by the Supreme Court.

There was no justification for dealing with the said issues again as there was no necessity to reopen those issues again."

"In view of our findings, we do not find merit in this Appeal. Hence, the Appeal is dismissed. However, there is no order as to cost."

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SC pulls up Sahara for ignoring SEBI’s contempt plea

The Supreme Court today pulled up the Sahara Group for not replying to the market regulator Securities and Exchanges Board of India (SEBI)'s contempt plea and instead filing petitions before Allahabad High Court and Security Appellate Tribunal. The apex court ordered Sahara Group to reply to all the queries SEBI within a week.

On March 16, SEBI had filed a contempt plea against Sahara Group asking for detention of Chairman Subrata Roy after two companies of the group failed to comply with apex court's order to refund Rs 24,000 crore to its investors. SEBI had also asked for restrain on movement of Roy and two other group directors by detaining their passport.

The apex court strongly criticised Sahara's move with words like 'you are manipulating courts'  for filing several petitions with various courts.

The Supreme Court asked Sahara to reply to SEBI's demand for restrain on movement. The highest court also said that SEBI was free to pass direction in addition to its orders. On April 16, after its meeting with the market regulator, Roy had accused SEBI of going beyond SC's order and breaking rules and law.

The Supreme Court further said the SEBI need not search for 30 million small investors of Sahara Group and that it was Sahara's responsibility to provide information about them. In August 2012, SC had asked the group to repay sums raised by dubious mean from around 30 million small investors. In February, SEBI had ordered a freeze on the assets and bank accounts of the two Sahara group companies. Since then SEBI has been trying to find Sahara investors, but have been able to contact very few investors.

Today SC said that if the regulator is able to identify the investors then it must refund the amount to them and if not, then the entire amount should be forfeited by SEBI and deposited with the Government of India.  The court will have the next hearing on the matter on May 2.

(With inputs from PTI)

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Air India likely to fly Dreamliners by May 20

Air India likely to fly Dreamliners by May 20

Air India could start flying its 6 Boeing Dreamliners by the end of May. Aviation regulator sources told CNBC TV18 that Boeing engineers will start work on changing the battery frames on grounded Dreamliners from tomorrow.

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Mumbai foray to aid in margin expansion: Kolte-Patil

Kolte-Patil is perhaps Pune's most formidable real estate developer. It is also the first real estate company to announce a dividend policy 15-25 percent of its Profit After Tax (PAT). Now the company has its eye set on Mumbai and Bangalore.

Explaining the rationale behind entering these new cities Sujay Kalele, Group CEO, Kolte Patil said that the company is highly deleveraged, has hardly any debts and is a cash surplus company, giving them an advantage of trying new markets.

Also expansion in these new cities will help the company in margin expansion from 35 percent to atleast 40-45 percent.

Below is the verbatim transcript of Kalele's interview with Prime Property

Q: Your FY13 guidance for launches was 2.5 million square feet and the top-line guidance was Rs 600 crore. It became pretty clear after Q3 that you were going to meet that guidance, but going forward in the New Year what is the launch pipeline looking like?

A: We plan to maintain the run rate pretty much what we have been doing for the last two years or so. Hopefully this year Bangalore will also catch up. For the last financial year we were able to do only one project launch there because of approval delays, but hopefully this financial year we will have far more contribution from Bangalore coming in. We are very hopeful of our Mumbai foray fructifying now, because it was mid last financial year that we decided to setup our base here, so that should also fructify this year.

Q: Will the company enter new geographies?

A: Not for this financial year. We plan to consolidate our presence in these three markets which we feel offer very decent traction. We still have some headroom left for expansion in these markets. Internally we have set ourselves a benchmark of anywhere between 15-20 percent of the market share before we look at any new geography. We achieved that benchmark in this financial year in Pune. We are hoping to replicate it in the next 24 months in Bangalore. Obviously Bombay remains a very large market where we cannot have that. Other than these three markets at least for this financial year we do not have any plans of going into fourth market although we keep on evaluating opportunities and everything, but for this financial year these three are the focus areas.

Also read: MCHI realty fair a flop; Mumbai vol sales may dip 10-20%

Q: Can you explain to me why is it that you are entering the Mumbai market at a time sales are down, the city's property market is so subdued, why now?

A: If you look at the contrary viewpoint to what you just mentioned for a newcomer any market in such a position always offers the opportunities. We are highly deleveraged as a firm. There is hardly any debt on our balance sheet. We are net surplus cash company, so that offers us good opportunities to write cheques. When a market has undergone structural change like what we have seen in Bombay where Development Control Rules have changed, some of the policies were cancelled, new policies have taken. So that has resulted in some sort of churn in the market. These kind of opportunities for a new entrant are available.

Q: We have discussed the timing of the Mumbai foray, but can you explain me the rationale behind that?

A: One of the reasons of entering Bombay is margin expansion. We hope that there will be incrementally better margins than what we see in Pune. So if we are doing about 35 percent EBITDA as of now in all our Pune, Bangalore projects we feel it should give us at least 40-45 percent margins.

Q: Which are regions in Mumbai do you really want to be in?

A: We are not specific to any location. We are looking at evaluating deals in places like South Bombay, Walkeshwar, central Bombay like Lower Parel and other locations, Bandra, some of the other eastern and western suburbs of Malad, Mulund, Borivali and some of the other MMRDA regions like Panvel, we are very positive about. We are not very specific to any particular location. As long as we feel the deal that is getting offered to us throws good value and is promising and it fits in our internal criteria we are pretty location agnostic.

Q: Can you give me an idea at what kind of prices you will sell apartments in Mumbai?

A: If it is MMR region like Thane or Panvel we would typically look at anywhere from Rs 40 lakh to Rs 75 lakh. The closer you come to the main city, for example, if you are looking at Andheri or some of those markets or Chembur and all of that then we will typically look at maybe about Rs 1.5-4 crore each apartment. If we are looking at some of the closer suburbs of Bandra then we will be looking at about Rs 8-10 crore each. The moment you get onto the main island then you would be looking at anywhere from Rs 10-25 crore each apartment.

Q: During the downturn, the company had this idea to exit commercial real estate, the exposure was cut down from 50 percent to 10 percent. Are you now looking to re-enter commercial real estate?

A: Not at least for the next 12 months. We are very eagerly watching the space on commercial side. More than the demand really, what we are tracking is the supply because, as you rightly said, we have done some analysis internally and figured out that the amount of supply that had committed post down turn was sufficient for absorption over five-seven years. So we feel we are still into the fifth year of absorption. Our re-entry into the commercial is maybe at least 12-18 months away.

Q: Now, let's talk about your home market which is of course Pune. How exactly are you reading that market, what are your plans for the city?

A: Pune has been growing very steadily for almost two decades and more now that we are in existence and we are very bullish on market going forward also. We hope to launch about 2.5-3 million square feet new projects across the city of Pune. Obviously, new lands are also on the anvil as and when those deals fructify. Couple of years back, we took a completely different decision to cater to the luxury end of the market. We introduced brand 24K which has completely revolutionise the luxury segment in that city where today we have apartment ticket sizes ranging from Rs 2.5 crore to Rs 8 crore each apartment size. There is plan of extending that brand to Bangalore now and capitalise on luxury demand that is there. Both the cities have been doing very well and we are very happy that we have grown from 5 percent market share to about 16 percent market share in the city of Pune and hope that we build and maintain that lead that we have generated.

Q: Pune is also now been seen as a luxury market. Developers coming up with thematic homes, niche products, branded homes like what we are seeing in the case of Trump Towers. Do you have any such plans?

A: That's where our 24K brand is trying to address and trying to create living experience, global standards really. That's a market that we are looking at aggressively expanding. We are delivering our first 24K project in this particular quarter. We have received phenomenal response. That project is 90 percent sold out, almost ready now and the end product there is selling at a 70 percent premium to the neighbouring product. So that's a segment that we are slowly entering into and we will move fast on that.

Q: Put that in perspective for us. What kind of a price appreciation are you really talking about?

A: This project was launched at Rs 3,750 per square feet. Today, the project is selling for about Rs 7,000 per square feet in 2.5 years time.

Q: Let's talk about the third market you will be operating in which is of course Bangalore. What exactly are you planning?

A: We launched one project in October last year in Kannur Road. We received very good response. Actually we had to stop sales because we follow a construction linked sales model. So sales were running ahead of time. So we had to stop it. We are just restarting it. We have just received approvals for about a million a half square feet at Hennur Road which we hope to launch in coming months. There is another 24K project in the pipeline on Hosur Road which will be very good and will again set up benchmark as far as luxury living in Bangalore goes. Then there are smaller projects on Richmond Road, Koramangala that we hope to launch.

Q: The promoter holding is already less than 75 percent so there is no compulsion on the promoters or even the company to dilute any of its stakes. Are there any fund raising plans on the anvil?

A: As you rightly said, there are no plans of funding at the corporate level. At the SPV level, we keep on evaluating opportunities if and when we get the right partners. We prefer only an equity model, all our historical private equity deals also have been pure equity. So it is also a definition of the market as to what the players are ready to give us in the market. So to answer that, we are looking at SPV level fund raising but nothing in the near future that I can see.

Q: Are any of your existing equity investors pressing on you for an exit?

A: Nothing. All our business plans are well ahead. Some of our projects have already entered the finishing stage. In some of the projects, our private equity investors have already got the capital back with decent returns. The other returns are following. So there is no pressure to exit at all.

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