The Hindu Business Line : Weekly News Round-up

The Wholesale Price Index-based inflation shot up further to 11.42 per cent during the week ended June 14, up from the previous week's 11.05 per cent.

The increase was driven by an across-the-board increase in price levels of manufactured products, dairy items, edible oils, liquor, paints and iron and steel.

The Reserve Bank of India hiked both repo rates and Cash Reserve Ratio by 50 basis points each.

While the repo rate has been hiked with immediate effect to 8.50 per cent, the CRR will be hiked in two tranches, to 8.5 per cent on July 5, and 8.75 on July 19.

The double-dight anti-inflationary measures are expected to tighten liquidity in the system, as the CRR hike would suck out around Rs 19,000 crore.

Two public sector banks - State Bank of India and Union Bank of India - have announced an increase in their prime lending rates by 50 basis points each. Union Bank also raised deposit rates.

SBI's prime lending rate is now 12.75 per cent and that of Union Bank is 13.25 per cent.

Tata Steel nearly tripled its consolidated net profit for the last fiscal to touch Rs 12,321 crore, as compared with Rs 4,165 crore in the previous year, largely boosted by its acquisition of Anglo-Dutch steel maker Corus, last year.

Corus contributed close to $2 billion to it's consolidated profits.

The Essar Group lost out to the Russian steel maker Severstal in its bid to acquire US steel company, Esmark.

Severstal offered Esmark a price of 19.25 dollars per share, outbidding Essar's final offer of 19 dollars a share.

In a statement last Thursday, Essar said it was withdrawing its offer to purchase all of the outstanding shares of Esmark at 19 dollars per share.

Idea Cellular, a member of the Aditya Birla group, will be acquiring 40.8 per cent stake in Spice Communications, for about Rs 2,176 crore, at a price of Rs 77.30 per share.

In addition to this, Idea will also pay Rs 544 crore to the Spice group as non-compete fee, taking the total deal size to about Rs 2,700 crore.

Subsequently, Idea will make a preferential allotment of 464 million shares to Malayasian telecom company, TM International (TMI), which at present holds about 39 per cent stake in Spice, at a price of Rs 156.96 per share. This represents 14.99 per cent of Idea's equity capital post-allotment.

The Indian Railways is hiking freight charges for ores and minerals, petro-products, coke and coal, fertilisers, foodgrains and a host of other commodities by 5-7 per cent.

The rate hike, to be effective from July 1, will be on account of a 'special supplementary charge' that Railways has decided to levy for the first time under its dynamic pricing policy.

Hyderabad-based GMR Infrastructure Ltd has acquired 50 per cent stake in Intergen, a power company based at Burlington in the US, for $ 1.1 billion.

The company acquired the stake from AIG Highstar Capital II fund. The acquisition is subject to clearances under the US antitrust laws. The deal is expected to close in the third quarter of 2008.

Tata Power Company Ltd has posted a 25 per cent increase in net profit at Rs 869 crore up from Rs 696 crore posted in the previous year.

The net sales have also increased by 25 per cent for the fiscal at Rs 5,915 crore against Rs 4,715 crore.

The Department of Telecom has dropped plans to auction spectrum for CDMA players, even as the Government is close to finalising the policy for 3G services for GSM operators,

The DoT has also not specified any alternative method for allocating spectrum to CDMA operators, according to the draft policy.

Raymond Ltd has won the bid to acquire the world's first bale of wool of 11.6 micron, the finest ever to be offered at auctions in Australia.

By winning this bid, the textile company is all set to redefine the standard of luxury in worsted suiting by offering a limited edition of Super 240s suit length to global customer by the end of 2008.

Compiled & Podcast by M.J. Madhavan