TUESDAY, 1 DECEMBER 2015

22 pages in 1 section www.business-standard.com

MUMBAI (CITY)
~6.00
VOLUME XX NUMBER 77

THE MARKETS ON MONDAY CCh

hgg#
#

Sensex 26,145.67 17.47

Nifty 7,935.25 7.45 COMPANIES P2 REST OF THE NEWS P8

LUXURY CARS GET CHEAPER AS NESTL RESUMES PRODUCTION

Nifty futures* 7,980.10 44.85
Dollar ~66.67 ~66.76**
Euro ~70.47 ~70.74**
Brent crude ($/bbl)##
Gold (10 gm)###
43.81
~25,410.00
43.05**
~100.00
*(Dec.) Premium on Nifty Spot; **Previous close; # Over previous
CARMAKERS INCREASE LOCALISATION OF MAGGI IN ALL PLANTS
close; ## At 9 pm IST; ### Market rate including VAT and premium

Q2 growth at 7.4%, with Foreignborrowing

manufacturing boost normsrelaxed
RBI gives a leg-up to rupee bonds
COMPANIES P3 Govtcapitalexpenditurepushesinvestments,domesticdemandaconcern BS REPORTER
Mumbai, 30 November
Airtel to invest ~60,000 cr

ILLUSTRATION: AJAY MOHANTY

BS REPORTER The Reserve Bank of India (RBI) on Monday approved a set of more
in network New Delhi, 30 November IN SLOW LANE QuarterlyGDP growth: liberal external commercial borrowing norms (ECB), allowing Indian
The countrys largest telecom service provider, companies to raise rupee resources from overseas lenders, without

I
Bharti Airtel, plans to invest ~60,000 crore ndias gross domestic product (GDP) Half-yearly growth incurring currency risks.
over the next three years on transforming its for the three-month period ended The new norms will be effective
network. The investment includes Airtels cap- September 30 grew 7.4 per cent a tad 7.5 7.2 April 1 next year.
ital expenditure guidance of around ~16,000
crore in the current financial year. At the end
higher than the seven per cent in the
previous quarter with a boost from man-
Such rupee-denominated bonds are
being issued in large numbers. They
More liberal
norms
6.7 8.4
of the September quarter, Airtels net debt ufacturing and financial services. are a hit with Japanese retail investors.
7.0 7.4
stood at ~70,777 crore. The development comes The growth of the manufacturing sector Once Indian companies start rais- In focus
ahead of the impending launch of 4G services more than nine per cent pleased the ing rupee resources from abroad, more
RBI allows more liberal
by Reliance Jio, owned by Mukesh Ambani, in finance minister, Arun Jaitley. He said such bonds will be issued and would
norms for external
the next year, which is expected to increase despite adverse global conditions, factory Q1 Q2 Q1 Q2 help make the domestic currency more
competition in the telecom sector. Investors production had increased. international.
commercial borrowing
and analysts have turned cautious about The statistics and programme implemen- 2014-15 2015-16 For ECB in foreign currency, the On ground
incumbent telecom companies as Reliance Jio tationministryreleasedthefiguresonMonday. Note: All figures are in per cent
central bank raised the limit for Effective from 1 April
is expected to target their existing base. This There was a slight increase in investments (y-o-y) small-value bonds, with a minimum
makes it imperative for Airtel to defend its turf because of the governments capital expendi- average maturity of three years, to Hit abroad
by ensuring that its service is top quality. ture,butthedomesticdemandcontinuedtobe $50 million from the existing $20 mil- Rupee-denominated
a concern. The growth was, however, much lion. For ECB of more than $50 mil- bonds, which are
slower than the 8.4 per cent in the correspon- lion, the minimum maturity period already being issued in
COMPANIES P2 Required

Domestic firms line up for

Welspun RE projects
Hero Future Energies, ReNew Power and
Reliance Cleangen are evaluating the renew-
able energy portfolio of Welspun Enterprises.
Welspun Renewables, the wholly owned
green energy arm of Welspun Enterprises, is
selling equity stakes in its solar and wind
power projects. SoftBank, which was earlier
keen to pick up stakes in the projects, has
dropped out. Welspun Renewables was rais-
ing capital through equity sales, said a per-
son close to the development.
COMPANIES P2
Dr Lal PathLabs to go public
with ~638-crore IPO
It has the size, scale and a
sound financial track
record, complete with zero
debt and 14 per cent net
profit margin. But Dr Lal
PathLabs has another facet
to it history. Dr Lal PathLabs, which is
offering 11.6 million shares in an initial public
offering, is not only amongst the top pathol-
ding quarter of the previous financial year.
Economists had projected that GDP would
growby7.3-7.6percentthisquarter(seechart).
The gross value added (GVA), comprising
agriculture, industry and services, increased
to 7.4 per cent in the September quarter,
against 7.1 per cent in the June quarter.
According to the new methodology, the
GDP is calculated as the GVA plus indirect
taxes, excluding subsidies. However, over 35
percentgrowthinindirecttaxcollectionwas
not factored in, as additional measures such
as the hike in excise duty on oil, service tax
rateandthewithdrawalofexcisedutysopsto
theautoindustrywerenottakenintoaccount
while calculating economic growth.
FortheJuly-Septemberperiod,themanu-
facturingsectorgrew9.3percent,arecordsince
thenewseriesofGDPwasintroducedin2011-
12, compared to 7.2 per cent in the previous
quarter.Grossfixedcapitalformation,aproxy
for investment, showed an uptick by expand-
ing6.8percentinthesecondquarteragainst4.8
Sebi green light for exchange IPOs
AIM & DISTANCE
Some of the projections for
Indias GDP growth this financial
year and howmuch more is
required in the second half of
2015-16 to meetthese numbers:
Note: All figures are in per cent (y-o-y)
per cent in the previous three months.
However,muchofthishascomeonthebackof
increasedgovernmentcapitalexpenditure.
YES Bank chief economist Shubhada
Rao said, Gross fixed capital formation... is
expected to have been driven by govern-
ment capex. Jaitley, however, said there is
also private sector investment which has
nowstartedpickingup.AndIdohopeinthe
months to come, it picks up faster.
Turn to Page 20 >
Organisation Projection 2nd-halfgrowth
should be five years, it said. The all-
in cost for such ECB has been
large numbers, are a
huge hit with Japanese
IMF 7.3 7.4 reduced 50 basis points from what
World Bank 7.5 7.8 was allowed earlier.
retail investors
RBI 7.4 7.6 For long-term ECB though, the all-in Effect on currency
Finance ministry 7.5-8** 7.8-8.9 cost is 50 basis points higher. For rupee- As more such bonds are
denominated ECB, the rate will be com- issued, rupee will become
** The finance ministrys original projections were mensurate with the prevailing market more international
8.1-8.5. After the first quarter growth of 7, officials said
the revised figures would be 7.5-8. Official revisions are conditions.
yet to be released Apart from usual lenders like
banks, such rupee resources can now be borrowed from sovereign
wealth funds, pension funds and insurance companies, according to
ECONOMY, P4 the final guidelines. The liberal approach, with fewer restrictions on
Centres fiscal deficit till Oct at 74% of BE, down end uses and higher all-in cost ceiling will help for long-term foreign
from 90% a year ago currency borrowings as the extended term makes repayments more
Appetite for gold buoys GDP growth sustainable and minimises roll-over risks for the borrower, RBI said
Core sector growth rate slows to 3.2% in Oct in a statement.
Such an ECB policy means attracting foreign funds will continue to be
OPINION, P13
Edit: Trapped in a range
a major tool to calibrate the policy towards capital account management
in response to the evolving macro-economic situation, the central bank
said, adding the guidelines will be reviewed after one year, based on the
THE SMART INVESTOR, P17 experience and evolving macro-economic situation.
Sensex posts biggest monthly drop since Aug For ECB with a minimum three- to five-year average maturity, the all-
in cost ceiling is 300 basis points over the six-month London Interbank
Offer Rate (Libor), or applicable bench mark for the respective currency.
The ECB with an average maturity of over five years will carry a ceiling
of 450 bps over the six-month Libor.
The penal interest for default or breach of covenants is capped at two
per cent over and above the contracted rate of interest.

ogy lab chains in India but it is also the old- BS REPORTER expectedonceitissuesacircular.
est private lab chain with its origins dating Mumbai, 30 November Most of the measures
back to 1949. S K Lal laid the foundations of announced by Sebi were already PHOTO: PTI

the lab chain with the setting up of Central The Securities and Exchange
Clinical Laboratory and Blood Bank Board of India (Sebi) on Monday
Transfusion Centre in New Delhi four years cleared the decks for initial pub-
after partition, writes ANEESH PHADNIS. lic offerings (IPOs) by stock
exchanges and depository firms
byprovidingclarityonthelisting
WORLD P6 framework.
IMF approves China's yuan It said the combined share-
holding of trading members,
for currency basket associates and brokers in a list-
The International Monetary Fund (IMF) on ed exchange cannot exceed 49
Monday approved the Chinese yuan as one of
the worlds main central bank reserve currencies,
per cent. Every shareholder
will have to declare their fit &
a major acknowledgement of the countrys rising proper status at the time of
financial and economic heft. This will help pave the IPO. The depositories will
way for broader use of the yuan in trade and monitor the investment caps
finance, securing Chinas standing as a global for single entities.
economic power. But it also introduces new The industry players, how-
uncertainty into Chinas economy and financial ever, said they would wait for
system, as the country was forced to relax cur-
rency controls to meet IMF requirements. The
more clarity.
We welcome the Sebi move.
changes could inject volatility into the Chinese We will be able to comment once
economy, since large flows of money surge into the detailed regulations are pub-
the country and recede based on its prospects. lished. BSE will try to expedite
the listing process, based on the
regulations. Listingofexchanges
COMPANIES P2 is expected to bring additional
Quikr buys Commonfloor transparency to their working,
said a BSE spokesperson.
for $200 million
ACTION-PACKED ANNOUNCEMENTS
Some of the decisions taken at theSebi board meeting:
| Removes irritants to enable
listing of stock exchanges
| Exemptionofopenofferincase
ofpassiveincreaseinvotingrights
| Exit option for investors if a | Easy delisting norms for small
company alters objective of
funds raised
| Accepts recos by K V Kamath
panel on clearing corp
2012 but could not because of
the lack of enabling provisions.
The NSE, which recently told
allowed the transfer of five per
| Proposes issuance and listing
green bonds
fund. The regulator has asked
| Allows public issue of convertible
securities by listed firms
option to shareholders if the
firms
| Business responsibility
reporting extended to top 500
companies
plans, said it was examining
Sebis decision, which was
revealed after its board meeting
there in the Stock Exchange and
Clearing Corporations (SECC)
regulations, said Sandeep
Parekh, the founder of Mumbai-
based Finsec Law Advisors.
TheSebiboardalsoapproved
mostoftherecommendationsof
the K V Kamath-led panel on
clearing corporations. It said
exchanges need not transfer 25
per cent of their profits to a core
settlement guarantee fund of
clearing corporations. It has
cent of the profit from a deposi-
tory to an investor protection
PM Narendra Modi (right) and Pakistan PM Nawaz Sharif in Paris on Monday
companies to provide an exit
ECONOMY P21
objects of fund raising are
changed a move that is likely Modis soft touch at Paris climate meet
tobenefitminorityshareholders. Prime Minister Narendra Modi took a two-pronged approach to climate change
For instance, a company rais- diplomacy on Monday. Writing an editorial for the Financial Times he
es ~100 crore through an IPO to demanded that the rich world vacate the carbon space for developing countries
build a factory. Later, it decides
to scrap the factory and instead
to grow in future. At the same time he sought to play India as a leader in the
acquires a rival company. It will global arena, stitching a Global Solar Alliance, with other countries such as the
now have to provide the option
of a refund to investors.
US and France coming on board.
CLIMATE CHANGE A GLOBAL CHALLENGE, MUST ACT WITH URGENCY: PM
>

BSE had proposed to list in its shareholders about its listing on Monday. More clarity is Turn to Page 20 > > $2-TRILLION RATED DEBT COULD BE UNDER RISK
Tiger Global-funded online
classifieds platform Quikr has
finalised a stock-cum-cash
deal to acquire real estate
portal CommonFloor.com for
$200 million (~1,300 crore) as
it deepens its play in the real estate segment.
Panel proposes to unleash watchdog on private coaching
The deal will be announced next week, two KALPANA PATHAK & Technology Joint Entrance engineering entrance coaching recommendedthatanall-India
people familiar with the development said. A
Quikr spokesperson declined to comment, TO SET A WATCHMAN M SARASWATHY
Mumbai, 30 November
Examination (IIT-JEE). The
ministry and the premier
sector earns about ~24,000 crore
each year.
councilbeestablishedtoregulate
thecoachinginstitutes.Thiswould
saying terming it market speculation. Sector size: institutes expressed concern over Accordingtoana2013surveyby ensurethatbestpracticesare
Centres:
CommonFloor, which counts investors Like Gopal, the hapless the growing number of aspiring AssociatedChambersof maintainedandfeesareregulated.
such as Accel, Google Capital and Tiger Global, ~2.4 lakh | Kota in Rajasthan is the capital protagonist of Chetan Bhagats engineering students joining CommerceandIndustryofIndia Therecommendationsarein
was in talks to merge with Quikr, after it failed
to raise additional capital to fund its business.
crore of this sector, attracting
thousands of IIT aspirants
bestselling novel Revolution 2020,
thousands of students spend
private coaching classes in a
bid to crack the challenging
(Assocham),titledBusinessof
PrivateCoachingCentresinIndia,
thepublicdomainforconsultation
withstakeholders.
Cost to students: each year fortunes every year at coaching entrance exams. thesizeoftheprivatecoaching Coachinginstitutesare
~2-4 lakh | Other major centres are
classes, hoping to get through a
premier engineering college.
Misraisaformerdirectorof
IIT-Bombay.Thecommitteehas
sectorwas$23.7billion,or~1.41lakh
crore.Thesurveyalsopredicted
unhappywiththesuggestionofa
watchdog.
for a 2-year course Mumbai, Delhi and Chennai The~2.4lakhcroreunregulated suggestedthataregulatorybody thatby2015,itwouldgrowto$40 Pramod Maheshwari, chief
segmentcould,however,soonbe shouldbeformedtokeepaneyeon billion,or~2.39lakhcrore. managing director and chief
underthewatchfuleyesofa thecoachingsector. The survey had collected data executive officer, Career Point
regulator,iftheAshokMisra The proliferation of coaching from 5,000 students and parents Infosystems, Kota, said: The
committeerecommendationsare centres has become a problem, across 10 cities. It revealed that 87 education system, which the
enforced.(Thesegmentincludes said a committee member who per cent of primary and 95 per government regulates, is in a
allcoachingclassesfor did not want to be named. cent of high school students in the shambles. The government
engineering,medical,lawand Students are becoming too major cities took private tutoring. should focus on the performance
othercompetitiveexaminations.) dependent on the coaching This industry grew by 35 per cent of its institutes rather than
The committee was set up in centres. This has adversely in the previous six years, regulating others.
October this year by the Union affected school education. It is Assocham had said. Kota,about250kmsouthof
human resource development also a financial burden on the Initsreportsubmittedtothe Jaipur,istheundisputedcapitalof
ministry, to recommend changes parents of the students. humanresourceministryon thecoachingsector.
to the Indian Institute of The committee estimates the November5,thecommittee Turn to Page 20 >