MINT CORNER

Tata Motors debt may rise as FCCBs mature Tata Motors Ltd. the countrys largest auto maker by revenue may have to raise money by selling fresh debtor increase existing credit lines from banks to repay investors when foreign currency convertible bonds (FCCBs) worth $623 million mature on 12 July, analysts said. FCCBs are bonds that can be converted to equity at maturity. But if the share price of the issuing firm has fallen, the investor has the right to seek redemption for the bond in cash. FCCBs carry almost no or less interest, so investors typically buy them in the hope of gaining due to increase in share prices. Tata Motors is among the many firms which sold FCCBs in 2006-08 when they took advantage of a surge in share prices at the time to raise money. Since then, the shares of the issuers have fallen 2090% making conversion unviable for the investors.

RBI to open bond market to smaller firms The Reserve Bank of India (RBI) will introduce a web based bond trading platform that can be accessed by any entity interested in trading sovereign paper, opening up the government bond market to small institutions.

Foreign firms scout Indian power projects Overseas utilities including Electricite de France SA (EDF), GDF Suez SA, Germanys E.ON AG, Tokyo Electric Power Co. (Tepco), Korea Electric Power Corp. (Kepco) and Malaysian state fund KhazanahNasionalBhd are actively scouting for stakes in Indian power projects, seeking to derive value from stressed assets, said people familiar with the development.

India goes from beneficiary to donor After having survived on international aid for decades, India has upgraded its profile to join the ranks of donors and is increasingly extending economic and development assistance to countries in South Asia, Africa, Central Asia, Latin America and the Caribbean. And though Indian government is careful to convey that all such projects are based on considerations of mutual benefit and are not exploitative in nature, people close to the development and analysts agree that the process dovetails with Indias long-term strategic and economics objectives.

Rupee to bounce back to 50 to a dollar: Crisil Rating agency Crisil Ltd sees a high probability of the rupee touching 50 a dollar by March 2013. This is close to a 11% rise from the current level of the domestic currency which closed at 55.43 to a dollar on Monday. The rupee slipped to its lifetime low 57.12 to a dollar on 22 June. Crisil, the inidan arm of Standard and Poors (S&P), assigned a two-out-of-three of the rupee hitting this level, and a one-third chance to it consolidating around the present level of 55-57 a dollar. Standard Chartered Plc expects the rupee to trade ata round 55.5 a dollar by December and 55 by March. Kotal Mahindra Bank Ltd expects the rupee to stay at 54-57 a dollar for the rest of the calendar year. ING Vyasa Bank Ltd expects the rupee to trade between 53.50 and 54.50.

Microsoft to write off $6.2 bn for a failed purchase Microsoft Corp owned up on Monday to the collapse of its biggest push into digital advertising, announcing that it would take a $6.2 billion (around Rs. 33976 crore) accounting charge in its online services division for a failed acquisition. The accounting charge called a write down of goodwill, was essentially a write off of the value of aQuantive Inc., a digital advertising company that Microsoft bought in 2007. It will take effect on fourth quarter, Microsoft said in a statement.

Tension over Iran, growth hopes give oil a boost Commodities surged on Tuesday on hopes central banks will take action to boost global economic growth, while oil got an extra boost from tension over Iran and grains extended a rally on a drought in United States. Brent crude jumped over $101 a barrel, copper touched six-week highs and corn climbed to a 10month peak.

Low fuel prices boost airline stocks, but headwinds persist Airline stocks have been soaring since the last month. Jet Airways (India) Ltds stock has vaulted 32% in a month, while shares of low-fare carrier SpiceJet Ltd have jumped 27%. Even cash-strapped Kingfisher Airlines Ltds stock has risen 10.24%

Scandal rips through Barclays corner offices; CEO, COO quit The scandal involving efforts to manipulate a key interest rate continued to tear through the top ranks of Barclays PLC as its chief executive and chief operating officer resigned a day after its chairman stepped down.

CEO Robert diamond resigned on Tuesday amid intense political and investor pressure over the British banks involvement in rigging the benchmark, used to set interest rates on an estimated $ 800 trillion of borrowings and derivatives. Jerry delMissier, who was named chief operating officer last month, also stepped down.

Godrej Ind to sell 4.1% stake through IPP route Adi Godrej-controlled Godrej Industries Ltd (GIL) is planning to raise money from institutional investors and increase its public share holding to 25%. The company will seek shareholder approval for the same on 7th July, according to a recent stock exchange disclosure. The Securities and Exchange Board of India (SEBI) has given companies till June 2013 to cap their holding at 75%. As of 31 March, GIL promoters held a 79.10% stake.

ECB tightens lending rules The European Central Bank on Tuesday tightened its lending conditions in what seems a foretaste of the more active role it will soon have as regulator and supervisor for the euro zone banking system. In a statement on its website, the ECB said it would cap at current levels the amount of governmentguaranteed debt that banks can post as collateral in return for its loans. It said it would make exceptions in certain cases. But it said that any such exceptions would be dependent on the bank in question presenting an acceptable funding plan.

FDI Expectation India is the third most favoured destination for global companies after China and US, a United Nations report said on Thursday, while predicting that investment inflows could increase by more than 20% this year and next. FDI flows into India rose 30% to nearly $32 billion in 2011, while china drew $124 billion and Brazil attracted nearly $67 billion. The FDI inflows into India can go up by 20-25% this year and above 20% next year, if the present trend continues, said Nagesh Kumar, chief economist, United Nations Economic and Social Commission for Asia and the Pacific, while releasing UNCTAD World Investment Report 2012. Some 179 global companies- from the manufacturing, services and primary sectors- were surveyed between February and May, on their favoured investment destinations for 2012-14.

Coal India may raise production target further amid criticism Ami mounting criticism over its inability to raise output, Coal India Ltd. (CIL) has achieved its 1 stquarter production target of 102.46 million tonnes (mt), and is likely to raise its full year production

target from the 464 mt announced earlier. This is great news for Indias economy, Coal Minister Sri Prakash Jaiswal said. ET CORNER

M&A to have call and put option Fund raising set to get easier with government set to allow use of call and put option in M&A deals. Earlier SEBI had limited the use of derivatives instrument to standardized contracts which can be traded on exchange only. The move will allow call and put options that create post transaction right to buy or sell more shares. These options will be treated as normal contractual agreements.It will allow corporate greater flexibility to create innovative deals through use of options. US Healthcare Plan may Land Indian IT Cos Deals Worth $22-b Indian IT sector will benefit from the US Healthcare Plan which was upheld by US Supreme court. According to IT industry group Nasscom, of the $70 billion worth of software outsourcing that happens out of India, about $30 billion comes from insurance and financial services. New US Law will bring some 30 million Americans under mandatory Healthcare Insurance. This might unlock potential market of $20-22 billion to IT industry which will be one fourth of present IT industry in India. June PMI highest in four months Indias manufacturing sector grew at its fastest pace in four months during June, with stronger domestic demand contributing to higher levels of new orders, according to a private sector survey of purchasing managers. The HSBC India Manufacturing PMI rose to 55 in June from 54.8 in the previous month, signalling improvement in business confidence. India to launch 2nd phase of JNNURM with budget of $40 billion Urban Development Minister- Kamal Nath- announced that India will launch the $40 billion second phase of its urban renewal mission in about four months. About $15 billion are already spent on Phase I of urbanisation. Second phase will boost the urban infrastructure and help to improve deficit of Indian infrastructure sector. Spanish 10-year Yields Back to Pre-summit Levels Yields on Spain's 10-year debt rose back above the 7% danger level on Friday as the impact from a European Union summit last week faded and an interest rate cut in the euro zone did little to restore investor appetite for riskier assets. The European Central Bank's rate cut to 0.75% put pressure on two-year German bond yields, taking them to negative territory for the first time on record.