Competition Commission slaps Rs 3cr penalty on Tesco

Competition Commission has slapped a penalty of Rs 3 crore on British retailer Tesco for delay in filing notice related to its purchase of 50 percent stake in Tata Group firm Trent Hypermarket. The fair trade watchdog, on May 22, had cleared the Tesco-Trent deal which is the first FDI transaction in multi- brand retail since the sector was opened up in 2012. Competition Commission of India (CCI), in an order dated May 27, has imposed a penalty of Rs 3 crore on Tesco Overseas Investments for delay in filing notice seeking approval for the deal.

A Tesco spokesperson could not be contacted for comments. Under the Competition Act, any person or enterprise, who or which proposes to enter into a combination, shall give notice to the Commission, disclosing the details of the proposed combination, "within thirty days of execution of any agreement or other document for acquisition".

Also Read: Tesco upbeat on Trent tie-up for growth in India

As per the Commission, Tesco should have filed the notice seeking approval within 30 days of its application to the Department of Industrial Policy and Promotion (DIPP) and the Foreign Investment Promotion Board (FIPB). However, the notice was given only on March 31, 2014, after a delay of around 73 days. Going by Competition Act, the acquirer as required to give the notice by January 16.

In case of such violations, the watchdog can impose penalties. "... the maximum penalty that may be imposed could be one percent of the total turnover or the assets, whichever is higher, of such a combination, which in the instant case is more than Rs 600 crore," according to the May 27 order, which is posted on CCI website.

However, the fine has been at a nominal amount of Rs 3 crore after taking into consideration the fact that Tesco, despite delay of around 73 days in giving notice, had voluntarily filed the notice within 30 days of executing the Joint Venture Agreement and Share Purchase Agreement. The Commission said that Tesco in its application to DIPP/FIPB on December 17, 2013, had provided enough details of the proposed combination which demonstrate that the parties were aware about the type, nature and purpose of the proposed combination at the time of making the said application.

Hence the watchdog said the acquirer's claim that had the notice been filed with the Commission without executing the definitive agreement (s), it would have been incomplete as being without the relevant documents/details, is also misconceived. Clearing the stake purchase in Trent Hypermarket Ltd (THL) by Tesco Overseas Investments Ltd, CCI in its order on May 22 had said the transaction "is not likely to have appreciable adverse effect on competition in India".

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Srei grp co sells United Spirits 22 lakh shrs for Rs 597cr

According to information available with stock exchanges, India Global Competitive Fund sold 21,98,980 shares of the flagship firm of Vijay Mallya-led UB Group.

India Global Competitive Fund, part of Kolkata-based Srei group, today offloaded nearly 22 lakh shares of  United Spirits for a little over Rs 597 crore.

According to information available with stock exchanges, India Global Competitive Fund sold 21,98,980 shares of the flagship firm of Vijay Mallya-led UB Group .

The shares were offloaded at an average price of Rs 2,717.33, valuing the transaction at Rs 597.53 crore, through an open market transaction.

However, buyer (s) of the shares could not be ascertained immediately.

United Spirits is India's top spirits maker with brands such as Signature, Bagpiper, Antiquity and Royal Challenge.

Shares of United Spirits closed at Rs 2,783.40 apiece on the BSE, up 0.26 percent from the previous close.

United Spirits stock price

On June 13, 2014, United Spirits closed at Rs 2783.40, up Rs 7.30, or 0.26 percent. The 52-week high of the share was Rs 2940.55 and the 52-week low was Rs 1993.30.

The company's trailing 12-month (TTM) EPS was at Rs 22.94 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 121.33. The latest book value of the company is Rs 440.83 per share. At current value, the price-to-book value of the company is 6.31.

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'Europe driving growth; media,life sciences growing faster'

"Overall, growth is being driven by project-based demand in the US and outsourcing-led demand in Europe, which continues to remain unchanged. The demand in Europe is across technology and service lines," Gopinathan added.

India's largest software services exporter  Tata Consultancy Services today said Europe continues to "drive" growth for the USD 13.4 billion company helped by demand across verticals and service lines. Also smaller verticals like Media & Entertainment and Travel & transportation are growing better than the firm's overall average growth, the Mumbai-headquartered company said in a business update for the first quarter of 2014-15 fiscal.

Though, TCS does not give revenue guidance, it added that there is no change in the revenue outlook for Q1 2014-15. "There is no change in revenue outlook (for Q1 FY 2015) compared to our last quarter's earning. Europe continues to grow faster and India is likely to be flattish or in that range," TCS CFO Rajesh Gopinathan said in a concall.

Outlining the global demand scenario, he said that demand in the US continues to be "fairly decent and strong". "Overall, growth is being driven by project-based demand in the US and outsourcing-led demand in Europe, which continues to remain unchanged. The demand in Europe is across technology and service lines," Gopinathan added.

Also Read: TCS hires more from Tier-I & II cities; logs into Facebook

In January-March of last fiscal, Europe accounted for close to 29.9 percent (which includes 17.8 percent from the UK and 12.1 percent from Continental Europe) of the firms revenues of USD 3.5 billion. This is against 29.1 percent in the third quarter of 2013-14 fiscal, which included 17.5 percent from the UK and 11.6 percent from Continental Europe. It had clocked revenue of USD 3.44 billion during the period.

North America accounted for 52.7 percent and 52.2 percent of the revenue in the third and fourth quarter of the last fiscal, respectively. Revenue contribution from India declined marginally to 6.2 percent in January-March quarter from 6.3 per cent in Q3 of 2013-14 fiscal. On segment-wise growth, Gopinathan said: "In terms of segments, most of the larger verticals are likely to come in at or near the company average and smaller verticals like media, life sciences will continue to do better than company average."

The company CFO exuded confidence in the growth in digital services in the US. "There is pick-up in digital services in the US and there is across various forms of the service. But the underlying trend in the US continues to be increase in demand for digital technologies," he added. On appreciation in the Indian currency, he said: "At today's rate the impact will be about a negative 300 basis points difference between constant currency (CC) revenue and rupee revenue. In USD terms, it will be a positive 50 basis points impact."

Gopinathan said annual salary increments will impact the first quarter margins, which is "in line and proportionate to previous years". TCS said it is also amending its Depreciation Policy to reflect current regulations and the Q1 FY 2015 results will reflect a one time impact in IRFS of an additional 2 per cent charge of fixed assets.
There will also be a one time impact of a write back of 4-5 percent of fixed assets in Indian GAAP terms, it added.

TCS CEO and Managing Director N Chandrasekaran during the fourth quarter results said: "We have maintained our momentum, improved our quality of growth, deepened our relationship with customers and expanded our presence in newer markets like Europe during the past 12 months. "Our strategic investments including those in Digital Technologies are providing a compelling value proposition as well as helping us anticipate and shape new market trends successfully."

TCS stock price

On June 13, 2014, Tata Consultancy Services closed at Rs 2214.70, down Rs 17.4, or 0.78 percent. The 52-week high of the share was Rs 2384.20 and the 52-week low was Rs 1382.10.

The company's trailing 12-month (TTM) EPS was at Rs 93.48 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 23.69. The latest book value of the company is Rs 224.90 per share. At current value, the price-to-book value of the company is 9.85.

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LIC to buy more stake in Central Bank of India for Rs 540cr

LIC currently holds 7,34,20,914 shares, or 5.44 percent stake, in Central Bank of India. The price for preferential allotment may be determined as per SEBI Regulations, it said, adding, an Extra-Ordinary General Meeting of shareholders will be held on July 15, 2014 to pass this resolution.

State-owned  Central Bank of India proposes to raise an estimated Rs 540 crore by selling stake on preferential basis to Life Insurance Corporation (LIC). The board approved raising of additional capital by issuance and allotment of, up to 7,10,75,753 equity shares of the face value of Rs 10 each to Life Insurance Corporation of India on preferential basis, Central Bank of India said in a BSE filing.

Shares of the bank today closed at Rs 76.45 apiece. At this rate, the stake proposed to be bought by LIC would be worth Rs 543 crore. LIC currently holds 7,34,20,914 shares, or 5.44 percent stake, in Central Bank of India. The price for preferential allotment may be determined as per SEBI Regulations, it said, adding, an Extra-Ordinary General Meeting of shareholders will be held on July 15, 2014 to pass this resolution.

The Government of India (GoI) currently holds 88.63 percent stake in Central Bank of India. The bank recorded a 4 percent decline in net profit to Rs 162.44 crore in the fourth quarter ended March 31 . It had posted a profit of Rs 169.15 crore in the January-March quarter of 2012-13.  Total income increased to Rs 6,961.67 crore from Rs 6,403.57 crore. For 2013-14, the bank made a loss of Rs 1,262.84 crore, compared with a profit of Rs 1,014.96 crore in the previous financial year, due to higher provisioning.

Central Bank stock price

On June 03, 2014, Central Bank of India closed at Rs 82.65, down Rs 0.75, or 0.9 percent. The 52-week high of the share was Rs 85.60 and the 52-week low was Rs 43.05.

The latest book value of the company is Rs 104.94 per share. At current value, the price-to-book value of the company was 0.79.

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Sikka to chart own course sans founder interference: Murthy

Sagar Salvi
moneycontrol.com

Infosys 's 33rd Annual General Meeting (AGM) will be remembered for the historic change of guard at the India's second largest IT company, which has got its first external CEO. Also, this was NR Narayana Murthy's last AGM as the executive chairman.

Murthy, who first retired in 2011, was called back in June last year to head the firm and put it back on a high-growth trajectory when peers  TCS and  HCL Tech were outperforming Infosys.

Speaking at the AGM, Murthy thanked the shareholders for their support and welcomed ex-SAP executive Vishal Sikka into the top job. Sikka will take over as the CEO and MD of the company from August 1, 2014.

"Sikka is well-known for being a tech visionary and a great leader," Murthy told the shareholders at the AGM. He said the new CEO will chart his own goals without founder interference.

Sikka, however, was not present at the all-important AGM.

Also Read: Murthy failed to do a Steve Jobs: Now will Sikka deliver

Murthy's return has been marred by a host of executive exits, including board members Ashok Vemuri, V Balakrishnan and BG Srinivas. The selection process of the new CEO also got a lot of press.

Murthy was also criticized for breaking corporate governance rules Infosys was famous for by getting his son Rohan Murthy to assist him. Murthy had said in the past that the children of Infosys's founders should stay out of the company.

Murthy defended his decision saying he needed someone "smart and fresh" when the company called upon him to get its business back on track. Murthy said he came back to assist the board in finding a suitable CEO and stablise growth in the company.

He said the Sikka was zeroed in on after a long and tedious selection process, which second-to-none in transparency and rigour. But managers weren't the only staff leaving. Infosys's attrition rate has climbed from one of the lowest in the industry to one of the highest.

Around 19 percent of its employees left the company in the 12 months ended March 31.

Analysts say that many of the departures were part of Murthy's efforts to shake things up. In February, Murthy said most of those that have quit "were deriving high salaries and not adding value."

Investors have not been so sure. Infosys shares have plunged from last year's highs and underperformed other technology stocks. Former Infosys official Mohandas Pai attributed the exits to lack of empowered senior managers.

"Lack of empowerment of senior managers is the reason the company failed in the last three years. The people who left, they are doing extraordinarily well, wherever they are," Pai, who held the finance and HR responsibilities at Infosys said.

Despite the employee exodus, Infosys's bottom line improved under Murthy's leadership. In the nine months ended in March, profit rose 16 percent from a year earlier, while revenue measured in dollars grew 11 percent.

Also Read: Here's what experts make of Infosys' 33rd AGM

According to Murthy, employees are the biggest asset for the company. He identified a need to start a fast-track career programme and incentives for high performers. The not-so-well performing people are being moved to other tasks, he said.  

Sales, which a lot of analysts feel is the biggest challenge for the IT major, will be a focus point for the company along with delivery.

Murthy said the company has improved its assessment process in hiring trainees and freshers. It is invested in creating a process to enhance quality, he promised shareholders. He said Infosys gave salary increases twice in the last 12-months.

He said is it extremely important to cut wasteful and avoidable spends. Also, he said Infosys needs to reduce expenditure on non-revenue earning people abroad. "We have started initiatives to encourage technical competence," he said.

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IOB seeks Rs 3,500 crore capital support from govt

The board has also permitted the bank to issue equity shares of Rs 10 each to Qualified Institutional Buyers by way of Private Placement, up to an extent of not exceeding Rs 1,200 crore out of the shortfall in the Tier I Capital requirement of Rs 3,500 crore assessed by the bank.

State-owned Indian Overseas Bank (IOB) today said it has requested the government to provide a capital support of Rs 3,500 crore during the current fiscal. "The bank has requested Government of India, Ministry of Finance, Department of Financial Services to infuse capital fund to meet Tier I Capital under Basel III norms to an extent of Rs 3,500 crore for the current financial year, 2014-15," IOB said in a BSE filing.

Last fiscal, the government infused Rs 1,200 crore in the bank to enhance its capital base. Besides, it said, the board has also permitted the bank to issue equity shares of Rs 10 each to Qualified Institutional Buyers by way of Private Placement, up to an extent of not exceeding Rs 1,200 crore out of the shortfall in the Tier I Capital requirement of Rs 3,500 crore assessed by the bank.

Also Read: Had good recoveries & upgrades in Q4, says IOB

The bank has also requested Ministry of Finance for the dilution of their shareholding in the bank, it said. "The permission is accorded to the bank to raise capital by way of issue of equity shares of Rs 10 each at a price determined by SEBI Regulations, to government to the extent of their capital infusion," it said. The capital requirement for the bank for 2014-15 is Rs 3,500 crore.

The government infused Rs 14,000 crore in public sector banks during the current financial year ending March 31, 2014. Of this, the State Bank of India got Rs 2,000 crore while IDBI Bank received Rs 1,800 crore. In view of the Basel III or global prudential banking norms, all banks have been planning to shore up their Tier I capital.

According to the Reserve Bank, Indian lenders will require an additional capital of Rs 5 lakh crore to meet the new global banking norms - Basel III. The government, which owns 70 per cent of the banking system, alone will have to pump in Rs 90,000 crore equity to retain its shareholding in the public sector banks (PSBs) at the current level to meet the norms. Of the total Rs 5 lakh crore, equity capital will be of the order of Rs 1.75 lakh crore and Rs 3.25 lakh crore as non-equity. The RBI recently extended the deadline for Basel III implementation in a phased manner by banks by one year March 2019.

IOB stock price

On June 12, 2014, Indian Overseas Bank closed at Rs 84.90, down Rs 0.45, or 0.53 percent. The 52-week high of the share was Rs 89.90 and the 52-week low was Rs 37.15.

The company's trailing 12-month (TTM) EPS was at Rs 4.87 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 17.43. The latest book value of the company is Rs 130.90 per share. At current value, the price-to-book value of the company is 0.65.

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AirAsia launches first flight into loss-making India

AirAsia India will have to juggle some of the highest fuel costs in the region, an array of local and national taxes, and heavy price discounting by rivals desperate to win market share.

AirAsia Bhd's Indian joint venture launched its debut flight on Thursday, promising the budget airline would buck the trend of accelerating losses that is hurting rivals and break-even around October.

High costs, low fares and a highly competitive market have left all but one of India's big airlines losing cash.  Jet Airways Ltd and  SpiceJet Ltd last month reported record losses as a price war intensified.

But Chief Executive Mittu Chandilya believes his airline can break-even "in four months".

"India is a huge potential. My goal would be to scale up as soon as possible. We're looking at bringing in maybe an aircraft a month," Chandilya told reporters in Bangalore hours before its first Indian flight - to the coastal state of Goa - took off.

Chandilya declined to give specifics on its cost base - key to profitability in the cut-throat Indian market - but said AirAsia's cost structure was one of the lowest in the industry.

AirAsia India will have to juggle some of the highest fuel costs in the region, an array of local and national taxes, and heavy price discounting by rivals desperate to win market share.

Competition is set to increase further too, when Singapore Airlines Ltd's joint venture with the Tata Group starts flying in India later this year.

Chandilya said AirAsia India, a three-way venture between the Malaysia-based low-cost airline, India's Tata Group and investment firm Telestra Tradeplace, would hike its investment in its aircraft fleet to USD 20 million from a current USD 15 million.

Jet Airways stock price

On June 12, 2014, Jet Airways closed at Rs 264.20, down Rs 0.35, or 0.13 percent. The 52-week high of the share was Rs 489.00 and the 52-week low was Rs 210.25.

The latest book value of the company is Rs -350.63 per share. At current value, the price-to-book value of the company was -0.75.

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Govt may sell 10% stake in Rashtriya Ispat in Sept-Oct IPO

The RINL share sale had to be deferred thrice in the past two years due to differences over pricing among merchant bankers and an accident at its sole facility at Vizag in which 19 people were killed.

The initial public offering (IPO) of state-owned steel maker Rashtriya Ispat Nigam (RINL) may take place by October, with the government likely to sell a 10 percent stake in the company.

"The IPO is likely to hit by September-October this year. The Department of Disinvestment will kick-start the process of listing in next two weeks," a Steel Ministry official said.

RINL, which produces 2.9 million tonnes of steel annually, is on the verge of completing a Rs 12,300 crore expansion programme, which will increase its capacity to 6.3 million tonnes a year. There are plans to raise it further to 20 million tonnes a year by 2025-26.

The RINL share sale had to be deferred thrice in the past two years due to differences over pricing among merchant bankers and an accident at its sole facility at Vizag in which 19 people were killed.

The listing of RINL is also necessary to maintain its navratna status, which gives the company some operational and functional autonomy.

The navratna status was granted on November 16, 2010, on condition that it would get listed on the stock markets within two years, a deadline that has since been extended.

RINL had a net worth of Rs 12,477 crore and an equity of Rs 6,347 crore in 2012-13. It clocked an 8 percent growth in sales to Rs 13,527 crore in 2013-14.

Sources said the DoD would soon float a tender inviting expressions of interest from merchant bankers to manage the issue.

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Dr Reddy's launches skin disorder lotion in India

The lotion will benefit patients of the skin pigmentation disorder in India, Dr Reddy's said in a statement.

Drug firm  Dr Reddy's Laboratories today launched Melgain lotion used for treatment of vitiligo, a skin disorder in India under a partnership with Issar Pharmaceuticals Pvt Ltd.

The lotion will benefit patients of the skin pigmentation disorder in India, Dr Reddy's said in a statement.

"Melgain lotion is safe and efficacious in vitiligo cases involving various areas of the body, as established by a number of clinical studies. Its safety is well established for treating children as well," it added.

It leads to re-pigmentation in 80 percent to 90 percent of patients, as compared to 60 percent of patients who respond to other medical treatments such as corticosteroids and phototherapy, Dr Reddy's said.

"Vitiligo is a skin disease that leads to white patches on the body due to the loss of normal skin pigment called melanin. It is a very common disease that affects all races, and is estimated to affect about 5 crore people in India," it added.

Melgain lotion's unique mechanism of action enhances re-pigmentation when used in combination with other therapies, Dr Reddy's said.

Shares of Dr Reddy's Laboratories today closed at Rs 2,434 apiece on BSE, up 0.08 percent from previous close.

Dr Reddys Labs stock price

On June 12, 2014, Dr Reddys Laboratories closed at Rs 2434.00, up Rs 2.05, or 0.08 percent. The 52-week high of the share was Rs 2939.80 and the 52-week low was Rs 2025.00.

The company's trailing 12-month (TTM) EPS was at Rs 113.51 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 21.44. The latest book value of the company is Rs 570.62 per share. At current value, the price-to-book value of the company is 4.27.

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Bain Cap to halve equity stake in Hero Moto via block deal

Citigroup is likely to be the banker in this deal that will see Bain offload 8.57 shares, or 4.29 percent of its equity stake.

Private equity firm Bain Capital is planning to sell a part of its stake in auto major  Hero MotoCorp through a block deal. The deal offer is sized upto USD 300 million with an upsize of USD 93 million.

Citigroup is likely to be the banker in this deal that will see Bain offload 8.57 shares, or 4.29 percent of its equity stake.

Also read: Anil Dua quits Hero MotoCorp; to pursue career abroad

The price range for the block deal is in the range of Rs 2582- 2717 per share. The price quoted is a 0-5 percent discount to the stock's current market price.

Bain Capital is reported to owns 8.58 percent stake in Hero MotoCorp, worth Rs 4,600 crore currently.

Hero Motocorp stock price

On June 12, 2014, Hero Motocorp closed at Rs 2708.55, up Rs 3.15, or 0.12 percent. The 52-week high of the share was Rs 2775.05 and the 52-week low was Rs 1565.95.

The company's trailing 12-month (TTM) EPS was at Rs 105.62 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 25.64. The latest book value of the company is Rs 356.32 per share. At current value, the price-to-book value of the company is 7.60.

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