The Hindu Business Line : Weekly News Round Up

The external commercial borrowings by Indian corporates has slowed down for the period April-May this year. This is evident from the figures released by the RBI recently.

According to the RBI data, while in March, about 55 companies borrowed nearly $4.47 billion through this route, during April, 25 corporates had raised about $1.16 billion through ECBs and Foreign Currency Convertible Bonds.

In May, as many as 30 companies had raised about $1.27 billion overseas.

India has recorded the lowest growth rate in steel production among the Asian countries for the first five months of 2008. Indian steel production grew 4.1 per cent during January-May against an Asian average of 7.9 per cent, according to data available with the International Iron & Steel Institute (IISI).

From 8.8 per cent in January this year, the growth steadily went down to 0.3 per cent in May.

India Cements Ltd reported a 33 per cent rise in net profit to Rs 638 crore for the year ended March 30, 2008, from Rs 479 crore in the previous fiscal year. The strong performance was achieved following continued buoyancy in demand, higher realisation, efficiency and increased output of blended cement.

Sales for the year 2007-08 also increased to Rs 3,554 crore from Rs 2,610 crore last year.

Idea Cellular, part of the Aditya Birla Group, along with Malaysian telecom firm TM International (TMI), last Monday made an open offer to acquire a further 20 per cent stake in Spice Communications Ltd.

The open offer is for acquiring up to 13.7 crore equity shares at a price of Rs 77.30 a share with face value of Rs 10 each. The date of opening of the offer is August 22, and the date of closing is September 11.

India's external debt position as on March 2008 was at $221.2 billion, up 30.4 per cent over end-March 2007, according to figures from the Reserve Bank of India last Monday. The external debt was $169.7 billion as on March 2007.

The rupee crossed the resistance level of 43 against the US dollar last week on fears of high oil price and pullout by FIIs from the domestic stock market.

The rupee opened the week at 42.90/92 and fell below the psychological mark of 43 to touch a low of 43.47 last Monday on the back of heavy dollar demand from banks and oil importers even as global oil prices continued to reign over $140 a barrel.

The domestic unit remained within the said range before closing at 43.15/16 on Friday.

After clocking a hefty growth of 31.5 per cent at $ 14.40 billion in April, the country's exports showed a distinct slowdown in momentum in May, logging a growth of 12.9 per cent at $13.78 billion. The export was $12.21 billion in May 2007.

In rupee terms, exports during the first two months of the current fiscal at Rs 1,15,690 crore were 20.6 per cent higher than Rs 95,958 crore in the corresponding months of the previous fiscal, reflecting the gathering depreciation of the rupee vis-a-vis the greenback.

Global construction and mining equipment major the Caterpillar Inc is understood to be in the final stages of striking a deal with CK Birla group to acquire its auto components arm, Avtec Ltd.

Sources from vendors of both the companies confirmed under condition of anonymity that Caterpillar was interested in the deal after it announced its intention to make India a hub for sourcing 3508 engines and 777 off-the road vehicle.

The Centre has decided to initiate decontrol of the sugar industry from the new crushing season, beginning October 1.

The Union Cabinet is expected to soon clear the Food Ministry's proposal recommending dismantling of the 10 per cent `levy' currently imposed on mills along with the `monthly release mechanism' regulating the balance 90 per cent free sale quota.

Mills are now obliged to deliver 10 per cent of the sugar they produce as `levy' for the public distribution system. Even for the remaining 90 per cent free sale quota that can be sold in the open market, the Centre decides to release the quantum of such sugar to be offloaded by each mill in a particular month.

Last week, almost all the petrol bunks displayed `No Stock' signs across the country due to diesel shortage. Long queues were seen at most petrol bunks following shortage of petrol and diesel as oil marketing companies slowed down their supplies.

Long queues of anxious customers wanting to fill in their tanks were a common feature at the petrol bunks. On Friday, the fuel availability at various petrol bunks became normal as oil companies stepped up supply of petrol and diesel to the outlets.

In tandem with the spike in crude oil prices, the price of spot LNG has also increased in the country.

Supplied primarily by Shell through its Hazira terminal in Gujarat, spot LNG prices have shot up to from $15 million British thermal unit (mmBtu) to $20 per in June.

Availability is also adding to the concern of consumers. Gujarat being most dependent on this form of energy, is also the worst affected by the crisis

Bowing to pressure from the poultry and starch industries, the Centre has banned export of maize from the country. The ban, to take "immediate effect", will be in place till October 15, according to a notification issued by the Directorate-General of Foreign Trade (DGFT) here on Thursday.

Domestic prices of maize are currently ruling at Rs 950-1,000 a quintal, a jump of around Rs 200 over last year at this time.

The country's chilli exports in 2006-07 fiscal reached an all-time high, according to the information available with Spices Board.

Exports rose to 209 thousand tonnes from 148.5 thousand tonnes in the previous fiscal.

Despite the prices fetched only Rs 52.51 a kg against Rs 54.39, earnings rose significantly to Rs 1,097.50 crore from Rs 807.75 crore as exports increased.

Truckers on Friday ended their nationwide strike after forcing the Government in overnight talks to concede to their demands. The striking transporters had raised issues relating to service tax on goods transport agency (GTA), toll charges, diesel and speed governors on highways.

ÿ ÿ Aided by sharp growth in TDS collections, the Centre's net direct tax collections grew 38.61 per cent in the first quarter of the current fiscal to Rs 57,373 crore compared with Rs 41,391 crore in the corresponding period last year.

ÿ While net corporate tax collections grew 32.65 per cent at Rs 34,566 crore, personal income taxÿincreased by 48.84 per cent to Rs 22,782 crore.

ÿ The continued volatility in international crude oil prices has led to the Indian basket soaring to $142.04 a barrelÿlast Thursday. Global crude oil prices on July 3 breached the $146 a barrel mark, before softening down.

The Indian crude basket price has averaged to $139.83 a barrel so far this month.

Inflation surged furtherÿ to 11.63 per cent during the week ended June 21, up from 11.42 perÿ cent recorded in the previous reported week. This was mainly on account ofÿincreases seen in manufacutured products, especially dairy items, edible oils, perfumes and cosmetics and the iron and steel products.

Compiled by M. J. Madhavan
Podcast by S. Vasudevan & M. J. Madhavan