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if it had a free hand in policymaking

ommunications minister Kapil Sibal on Wednesday defended the government over the poor response to the first auction of 2G spectrum, saying it was bound by court directives and would have received more attractive bids if it had a free hand in policymaking. Sibal's remarks came after the auction ended by raising less than one-third of the Rs.30,000 crore it had been expected to garner. There were no takers for spectrum in Delhi and Mumbai, India's biggest telecom markets. Telecom analysts blamed the disappointing response on the high base price. The sale was necessitated by the 2 February Supreme Court decision to cancel the 122 permits allocated to nine companies that were given 2G spectrum and licences to operate in 22 telecom circles, or zones, on grounds that the process of allotment on a first-come-first-served basis was flawed. The court verdict followed a report by the Comptroller and Auditor General of India that the government had lost an estimated Rs.1.76 trillion because of the allotment, rather than auction, of the radio waves. Sibal said the government had done exactly what the court had directed it to do and fixed the minimum price for the spectrum according to the recommendations of the Telecom Regulatory Authority of India (Trai). Trai had suggested a price of

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Kapil Sibal defends govt, says govt would have received more attractive bids

2G auction ends with less than one-third of target met

Rs.18,000 crore for 5 megahertz (MHz) of spectrum across the country, a number pared toRs.14,000 crore by a panel of ministers after telecom companies complained it was too high. "If we had gone by Trai recommendations, we would have got no bidders," Sibal said, adding that the government needed a free hand in policymaking. The government should have gotRs.1 trillion instead of less than Rs.10,000 crore, the minister said. "We should allow market dynamics to play out," he said. The auction ended with the government receiving bids worth Rs.9,407 crore for 1800MHz spectrum in 18 out of the 22 telecom areas that were on offer, after 14 rounds of bidding. This is one-fourth of the government's original estimate of Rs.40,000 crore, which was reduced to Rs.30,000 crore, after the cancellation of the auction of spectrum for telecom companies operating on the code division multiple access technology platform. The auction, in which only five of India's

The auction ended with the government receiving bids worth Rs.9,407 crore for 1800MHz spectrum in 18 out of the 22 telecom areas that were on offer, after 14 rounds of bidding

10 operators participated, earned a little more than the Rs.9,000 crore that the government received as telecom fees under the allocation procedure followed in January 2008. "The results of the auction clearly indicate that the reserve price was completely off the mark," said Prashant Singhal, a senior telecom analyst associated with Ernst and Young Global, a consultancy. "The government's plan of raising Rs.40,000 crore has fallen flat... All in all, a big embarrassment for the Indian government, but one could see it coming, and a big disaster that could have been avoided by a more sensible reserve price." There were no bidders at the auction for spectrum in New Delhi, Mumbai, Karnataka and Rajasthan. Only Uttar Pradesh (West and East), Gujarat and Bihar saw bidders offering more than the base price

because demand exceeded the airwaves available. The government is likely to actually net around Rs.6,000 crore from the winning bidders after adjusting the money paid by the telecom firms that were affected by the Supreme Court verdict. The targeted proceeds of the auction were meant to be used to meet the government's ambitious fiscal deficit target of 5.3% of gross domestic product in the year to 31 March. The Cellular Operators Association of India (Coai), the country's primary global system for mobile communications technology-based operators' lobby, termed the auction a failure. The association said "an artificially high reserve price that bore no congruence to market realities was the key reason for the failure". "In spite of the industry consistently highlighting the many flaws in the assumptions and predicted outcomes, the government appeared bent on plunging ahead on these dubious grounds," Coai said in a statement. The government decided last month to allow the companies affected by the ruling to get refunds for the licence fee they had paid if there was no criminal liability found against them. This figure is likely to come down further to less than Rs.2,000 crore if all the firms opt for paying in instalments. SOURCE: Live Mint

DLF may sell Rs.5,000 cr non-core assets by March

LF Ltd, India's largest property developer by market value, expects to sell Rs.5,000 crore of non-core assets by March, having already sold Rs.3,129 crore's worth. The firm is in advanced talks to sell its Aman Resorts project, it said in an investor presentation. The firm's other major transaction, to sell its wind energy business, has the approval of shareholders, and will be closed by March along with some other sale of assets worthRs.500 crore, it said.

Proceeds from possible sale of Aman Resorts, wind energy business, other assets, to be used to repay debt
In the September quarter, DLF closed a significant deal with Mumbai-based Lodha Developers Ltd, selling a prime defunct textile mill land for Rs.2,727 cr. The land was bought by DLF's subsidiary Jwala Real Estate Pvt. Ltd in a 2005 auction by National Textile Corp. Ltd. The sale of the hospitality business at Aman Resorts and the wind energy business will together bring inRs.2,600-2,700 cr. The proceeds from the sale of the noncore assets will be used primarily to repay debt. DLF's net debt stood at Rs.23,220 cr on 30 September. The realtor said it will achieve the target of reducing its debt to Rs.18,500 cr by 31 March. DLF's divestment plan is of great importance to the company to reduce debt, said Param Desai, senior research analyst at Nirmal Bang Securities Ltd, a

brokerage. "However, this also has to be complemented by launching more projects," Desai said. Summing up how much the company has achieved by changing its strategy since the global downturn of 2008-09, DLF said in the investor presentation that it has managed to revise its business model, consolidate businesses and operations, and outsource certain key operations to domain experts. SOURCE: Live Mint

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Banks paying less salaries this year

Higher education sector needs more FDI: Deloitte

India, which has the third largest higher education system in the world in terms of enrolments, after China and the US, needs more FDI to meet its target of doubling the gross enrolment ratio by 2020, a global consultancy firm has said in its report.

he private sector's role in the higher education sector has been growing at a rapid pace over the last decade and needs to further expand at an accelerated rate in order to achieve the GER target," Deloitte Touche Tohmatsu India said in a recent report titled ' Indian Higher Education Sector: Opportunities aplenty, Growth unlimited'. The government has set an aggressive target of achieving 30 per cent GER in higher education by 2020 from the current level of 15 per cent. According to projections, the sector is expected to register a CAGR of 12 per cent from 2008 to reach a size of $ 31.47 billion. According to Deloitte, as per the recent estimates by National University of Educational Planning and Administration ( NUPEA), in order to achieve this target, an additional investment of USD 190 billion which includes capital expenditure and operating expenditure, has to be made in the next eight years. " Therefore, given the limited support, which government can provide to this sector in terms of in-

The amount of foreign direct investment attracted by this sector since 2000 stood dismally low at just $400 million

vestment, the private sector needs to play a much larger role," the report noted. Stating that the role of private sector in higher education has significantly increased in the last decade, the report said, " However, due to various impediments, the amount of foreign direct investment attracted by this sector since 2000 stood dismally low at just USD 400 million." Therefore, it is important for foreign investment and experience to flow in this sector in order to transform the domestic higher education institutions into the world's top league, Deloitte report said. The number of students enrolled in the universities and colleges ( formal system) has been reported to be 16 million in academic year 2010- 11, the report said adding," This does not include enrolment in higher education offered through Open and Distant Learning. The university and higher education system comprises 610 universities besides 33,023 colleges as well. SOURCE: PTI

anks are sharing a smaller percentage of their revenue with their employees this year as compared to the same quarter last year. For HDFC Bank, the share of salary in the sales went from 12.25% in the September quarter last year to 11.3% in the same quarter this year. For ICICI Bank, the figure went from 10.33% last year to 9.63% this year. Axis Bank dropped too, from 9.45% last year to 8.64% this year. "With the banking sector having the closest correlation with the economy, the effects are much more visible when it comes to slowing down," said HR expert and president, Dhananjay Bansod, Leighton. He said that the current year was similar to last year in terms of business performance - both weren't good. He also said that bonuses were at almost the same level this year when compared to last year. In the case of Bank of Baroda, the share of salary in revenue dropped from 8.92% in the September quarter last year to 8.61% in the same quarter this year. For Kotak Mahindra Bank, the share of salary in revenue fell from 14.69% to 12.62% while in the case of Punjab National Bank, the same fell from 13.86% to 13.69%. SOURCE: Economic Times

Summer interns at IIMs hired in record time, stipends see 20% hike
S
ummer interns were hired in record time and stipends saw a nearly 20% increase at the country's premier Indian Institutes of Management this year, bringing some relief into an uncertain jobs scenario. Old recruiters as well as new ones jostled for space while stipends and international postings saw an increase. Hirers ranged from Barclays and Rothschild to the rural development ministry. Global brand consultant Wolff Olins and the World Bank hired for the first time ever from IIMs this year. "We had companies hiring in larger numbers than expected and as a result, had to turn away 30-40 companies, which has never happened before," says Nitin KV, placement coordinator for IIM Lucknow. Nearly 453 students at the institute saw a 20% in stipends on an average and a similar increase in international postings, with Unilever and P&G being the usual hirers for postings abroad. This time round, Aditya Birla Group too picked up students for international exposure. At IIM Kozhikode, placements were completed in record time. This year, the institute placed 366 students within 25 days compared with 308 students in 43 days last year. Stipends went up to Rs 30,000 per month from Rs 27,000 per month, with the highest being offered by an investment bank for a London position at Rs 1.5 lakh. IIM Calcutta (IIM-C) saw private equity firms like Macquarie Infrastructure Fund recruiting exclusively from campus. "The numbers that we see this year are on a par with last year. This is a good indicator, given the current market scenario," says Krishanu Rakshit, chairperson placement, IIM-C. Despite the hiccupping economy, the management institute placed 466 students in four days compared with last year's five days for a smaller batch. Over 470 offers came in from 200-plus companies this year compared with 443 offers from 160 firms in 2011, says a placement coordinator at the institute. The World Bank visited the IIM-C campus for the first time ever, and offered three students a position in its financial instruments and treasury departments. It's a first for any IIM too. SOURCE: Economic Times

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About 67% of FCCB Why paper gold is due this fiscal may smart way of investing default: Report
Even though gold price has touched new peaks, an investor can enter the market through SIP (systematic investment plan)
with the festive season. Certain brokers are offering SIP facility in gold ETFs. However, an investor should avoid investing lump sum in gold today as you cannot time the market." Booking Profits "It may be worthwhile to

Plans stake sale of Hindustan Copper, NMDC and Oil India

bout 67 % of USD 1.51 billion- worth foreign currency convertible bonds that are due for redemption in this fiscal are likely to default or restructure by majority of issuers, a report has said. According to India Ratings, a Fitch group company, up to March 2013, FCCB redemption amount of USD 1.51 billion belonging to 23 companies is due, out of which around 67 % of the outstanding dues belonging to 17 companies are unlikely to be redeemed on time. " Of the USD 1.5 billion worth of FCCBs due for redemption for the rest of F13, around 67 % are expected to either default or restructure," the report said. During March 1 to October 15, 19 companies successfully redeemed FCCB, of which only five companies had used any internal accruals. Of the 26 companies which defaulted on FCCBs on due date, three companies redeemed FCCBs post due date. These three companies are Suzlon Energy, KSL & Industries, and Hotel LeelaVenture Ltd. Meanwhile, investors in four companies converted FCCB into equity at a conversion price much lower than the original conversion price. Of these four companies, three companies namely Surana Industries Ltd, Kamat Hotels India Ltd and Grabal Alok Impex Ltd ( now merged with Alok Industries Ltd), converted FCCB into equity prior to due date.

SOURCE: PTI

old has been shining on the back of domestic and global economic turmoil. The price of the yellow metalhas scaled to Rs 31,298 per 10 gm from Rs 19,000 a year ago. In fact, the precious metal has more than tripled in the last six years. "Gold prices in India are a function of demand-supply, global economic outlook and foreign exchange rates," says Sutapa Banerjee, chief executive (private wealth) at Ambit Capital. "Most gains in gold last year were on the back of the rupee fall against the dollar while in the last three months, they have been due to price rise after the liquidity infusion by the Fed and the ECB." Now, the question is: does it still make sense to buy gold now? Simply put, the price cannot just go on rising forever. It has to end somewhere. "Even though gold price has touched new peaks, an investor can enter the market through SIP (systematic investment plan) route today as it takes care of the average cost," says Amar Ranu, senior manager (wealth management) at Motilal Oswal Wealth Management. "This is because gold price is going to rise further given the uncertainties coupled

his home loan EMIs, he can book profits on the surplus gold holdings. "Since housing loan is a good loan, the proceeds can be used to part pre-pay the loan and reduce the EMI burden," says Roongta. If you are new to the game,

The price of the yellow metalhas scaled to Rs 31,298 per 10 gm from Rs 19,000 a year ago
book partial profits, however, one should not exit gold completely and maintain a 5-10 % exposure in portfolios," says Banerjee. Harshvardhan Roongta, certified financial planner at Roongta Securities, says if an investor has more than 10% exposure, or if he is finding it difficult to meet

please pay attention on how you want to build your gold portfolio. To begin with, not many experts favour buying physical gold. "For retail investors, gold ETF's are the preferred vehicles for investment," says Rishi Nathany, chief executive at Dalmia Securities. "While they do charge an annual fee, they are more tax efficient than physical gold, easily tradable, available in small denominations, and can be kept in the demat account." SOURCE: PTI

PM to seek early conclusion of FTA on services

rime Minister Manmohan Singh will demand an early conclusion of the free trade agreement in services and investment being negotiated between India and the 10-member Asean grouping at the India-Asean summit in Phnom Penh early next week. In a bid to put pressure on Asean, which has been going slow on the proposed bilateral

services and investment agreement, Delhi is likely to link signing of the agreement to the initiation of formal negotiations on the ambitious Regional Comprehensive Economic Partnership (RCEP). The initiative seeks to create a free trade bloc in the Asia-Pacific region covering the Asean and its six partner countries including India, China and Australia. "India

wants the pending services and investment agreement with Asean to be tied up before it goes in for more trade pacts in the region," a commerce department official said. The Asean includes Cambodia, Brunei, Myanmar, Malaysia, Philippines, Thailand, Singapore, Vietnam, Laos and Indonesia. India and Asean implemented a free trade

agreement in goods in January 2010 and were supposed to conclude a similar pact in services and investment by the end of 2010. The Asean has been dragging its feet on the issue for over three years as a services and investment agreement is likely to benefit India disproportionately as it has a strong services sector. Indian professionals in a number of sectors

including teaching, nursing, accountancy, architecture and health are expected to benefit from a services agreement. "Asean has to remember that it had initially set off to sign a comprehensive agreement with India that would have included goods, services and investment. SOURCE: The Economic Time

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Companies looking to tap IPO market on reform push: Experts
ttracted by improving investor sentiments in the stock market, companies are warming up to the idea of raising funds through initial public offers and a number of companies have firmed up their IPO plans to hit the market. At least five companies have already filed their draft offer documents for IPOs with the market regulator Sebi in the past couple of months, while a similar number of companies, including retail chain operator Spencer's,satellite TV broadcast services arm of Videocon and Tata Sky are also said to be looking to tap the IPO market. Experts say that the sentiments have improved after various reform measures announced by the government and the market regulator in the recent weeks, while an uptrend in the secondary market is also helping bringing companies to the market. The companies having filed their draft offer documents since September include Calyx Chemicals and Pharmaceuticals, Madhya Bharat Agro Products, SMC Global Securities, Bharti Infratel and G B Tools and Forgings. Besides, RP-Sanjiv Goenka Group CESC said it will list Spencer's by next year and the satellite TV broadcast services arm of Videocon Group's Videocon D2H and Tata Group's Tata Sky are also reportedly planning to hit the capital market in the near future. Most of the companies plan to utilise their proposed IPO proceeds for capacity expansion as well as working capital requirements. Sebi Chief U K Sinha recently said that

Bad loans of state-run banks rise to Rs 1.12 lakh cr in 2012

Non-performing assets of public sector banks
rose to Rs 1,11,664 crore in 2012 from Rs 52,807 crore in 2003, suggests RBI data

tate-run banks and foreign banks were hit by bad loans as their non-performing assets rose, says the Reserve Bank. Led by state-run banks and foreign lenders, "the asset quality of the banking system deteriorated significantly in FY12 after a period of sustained improvement," says RBI report on 'Trend and Progress of Banking in 2011-12' released over the weekend. Non-performing assets of public sector banks rose to Rs 1,11,664 crore in 2012 from Rs 52,807 crore in 2003, data from the Reserve Bank of India showed. The non-performing assets (NPAs) of country's bank SBI and its associates in 2012 (as of March 31) were at Rs 45,695 crore from Rs 16,958 crore in 2003, while that of nationalised banks' were at Rs 65,969 crore versus Rs 35,849 crore. Though the report sates that there is no systemic risk to the banking system as the fundamentals are robust, the Reserve Bank says the banking system is weaker because of rising bad loans as growth has fallen below potential and companies are reeling under obstacles to project clearances. "Inadequate credit appraisal during the boom period of 2003-07, coupled with the adverse economic situation in the domestic

as well as the external fronts, have resulted in the current increase in NPAs," says the report. The fall in asset quality was more visible among public sector banks, which saw their bad loans rise on both priority and non-priority loans. In FY12, gross NPAs of state-run banks rose to 3.3 per cent, higher than the 3.1 per cent at the system-level. Foreign banks also saw a rise in NPAs, but the report did not specify how much was their NPA level. But the RBI report said that state-run and foreign lenders' recovery performance was better than their private sector counterparts which relied more on write-offs than recovery. The report said among banks, new private sector lenders relied more on writing off NPAs as a measure to contain their NPA levels. Loans worth Rs 1,800 crore were written off by new private sector banks in FY12, according to the report. To strengthen the NPA management framework of the banks, RBI its in 2012-13 Monetary Policy has advised the banks to put in place a robust mechanism for early detection of signs of distress, and implement measures to preserve the economic value of assets. SOURCE: PTI

the regulator is noticing a renewed optimism about the economy and about the market. Admitting that IPO market has been very sluggish so far this year, Sinha said that a renewed interest was being noticed for past few weeks, giving an impression that people are optimistic and they are going to make investments. "The current market conditions has

turned favourable for companies planning to come out with their IPOs mainly on account of various initiatives taken by the government," Sudip Bandhopadhyay MD and CEO at Destimoney Securities said. "Besides, festive season is also approaching so I expect many companies that withdrew their IPO and companies that have not hit the capital market despite getting Sebi's approval on subdued market conditions would definitely plan to go ahead with their public issues," he said. In the last two months, broader market Sensex gained 1,125 points or more than six per cent as Foreign Institutional Investors (FIIs) invested a hefty sum of about Rs 30,000 crore on the back of a slew of reforms initiated by the government. SOURCE: The Economic Times

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