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Oppenheimer Co To Buy 26% For $2Bn In JV

Govt spending can ease liquidity Stemcor in talks for
Centre Has Rs 90,000 Crore Cash Lying Idle With RBI; Q4 May Be Better
Surojit Gupta & Sidhartha | TNN

New Delhi: The prolonged

cash crunch in the banking
system could ease consider-
steel plant in K’taka the pressure is only going to in-
tensify after the December 15
deadline for tax payment.
Shubhada Rao, chief econ-
omist with Yes Bank, expects
said that the move is unlikely
to prompt most lenders to sell
their bond holdings.
Even the government had
cut its scheduled market bor- Boby Kurian &
ably if the government starts
loosening its purse-strings.
the liquidity tightness to re-
main for a substantial part in
rowing for this week to help
cash stay in the system. But
Reeba Zachariah | TNN
India Play
According to latest data, December but says it may be- market players said that this Mumbai: The Oppenheimer
Stemcor has been holding
the government has around gin to ease once government too has failed to prop up sen- family-controlled Stemcor, the
talks with diversified group
Rs 90,000 crore cash balances, spending picks up in the last timents, prompting bankers world’s largest steel trading
United Telecoms and an
which is lying idle with the quarter of the financial year. to seek lower CRR. company, is stepping up the
unidentified mining partner from
RBI. This is more than twice A senior finance ministry “RBI has been categorical India play. The London-based
the iron ore-rich Bellary
the level of Rs 43,525 crore re- official said government de- that the CRR is a tool for its and privately-held company is
ported in RBI’s latest data on partments are being pushed to monetary policy which re- discussing a joint venture with This move comes at a time
November 26. The government step up spending. “In any case mains anti-inflationary now. two local partners for a $2-bil- when Stemcor’s plans to buy a
receives resources by way of if they do not do it now, they RBI has raised six times this lion steel plant in Karnataka, 10% stake in Ispat Industries has
revenue, which, when not stand to lose out since depart- year to cool soaring inflation in a move that promises to be been on the slow track
spent, leaves it with a positive PUT IT TO WORK ments are allowed to spend which still remains above its its biggest bet on manufac-
cash balance just as individ- only 33% of their annual allo- comfort level of 5-6%,” said turing. Stemcor has been hold- Bigger global peers such as ArcelorMittal, Posco and Bhushan
uals have bank balances. further after advance tax is tively, banks park surplus cation in the fourth quarter. Indranil Pan, chief economist ing talks with the Bangalore- Steel have unveiled steel projects in Karnataka
While economists estimat- paid next week. funds with the RBI through So, spending will increase this at Kotak Mahindra Bank. based diversified business
ed the amount to be around Rs Even the amount borrowed what is called reverse repo. month,” the official said. RBI deputy governor Subir group United Telecoms and an
93,000 crore, government offi- by banks from the RBI, On Wednesday, banks ac- So far, the steps initiated Gokarn has said the central unidentified mining partner various potential JV partners United Telecoms has in-
cials said it was in the range through the repo window, is cessed nearly Rs 1.26 lakh crore, by the government and the bank views the CRR as mone- from the iron ore-rich Bellary on a number of different proj- terests spread across telecom-
of Rs 85,000 crore to Rs 90,000 continuously hovering near which shows the fund crunch RBI have served limited pur- tary instrument and is using in Karnataka to set up the ects in the Indian steel indus- munications, power and in-
crore. Although holding large record levels of over Rs 1 lakh in the system. And, with ad- pose. The RBI has permitted other tools in its armoury to plant, said sources privy to the try,” he added. frastructure, with one of its
cash balances are not a new crore a day. Repo allows banks vance tax payment by compa- banks to lower their holding gain short-term control over development. Industry estimates suggest group entities holding a large
phenomenon, some analysts to raise overnight funds from nies and high networth indi- of government bonds till Jan- the liquidity situation with- The discussions under way that a one million-tonne per stake in Karbonn Mobile, the
said this could be near record the central bank to meet their viduals expected to suck out an- uary-end to help them tide out compromising its mone- suggest that Stemcor may pick annum steel plant would re- handset maker. The promoters
highs. This surplus could rise cash requirements. Alterna- other Rs 40,000 crore, or more, over the crunch. But bankers tary stance. up a 26% stake, leaving the rest quire investments of $1 billion also owned JT Mobile, a mo-
with the two local partners – approximately. Hence, the pro- bile telephone service provider
UTL holding with around 40% posed JV could be looking at a in Karnataka and Andhra

Exports rise 27% in Nov Banking, teleco and the Bellary mining group
with 33%. Stemcor’s plans
comes at a time when its bigger
global peers such as Arcelor-
two million-tonne plant going
by its investment plans. How-
ever, details about the plant
and the investments were cur-
Pradesh circles, which was
merged with Bharti Airtel
about 10 years ago.
Stemcor, with over $5 bil-

stocks sink mkt

New Delhi: The country’s ex-
ports rose 26.8% to $18.9 bil-
Mittal, Posco and Bhushan
Steel have unveiled multi-bil-
lion dollar steel projects in Kar-
nataka, where JSW Steel al-
rently not available.
This move comes at a time
when Stemcor’s plans to buy a
10% stake in Pramod Mittal and
lion in revenue from trading
of steel and steel-making raw
materials, has been diversify-
ing into manufacturing with
lion in November, helped by Mumbai: Sellers pulled down ready has a sizeable presence. Vinod Mittal-owned Ispat In- India being the learning
robust shipments across most sensex by 238 point on fears “I can confirm we are ex- dustries has been on the slow ground. The British giant has
sectors, and trade deficit nar- that banks’ profitability will
Re’s biggest 1-day ploring an exciting opportu- track. In September, Stemcor preferred greenfield projects
rowed to $8.9 billion on account be eroded due to their decision fall in a month nity with United Telecoms but and Ispat also entered into an with low-profile partners and
of a lower rise in imports. to hike deposit rates, while tel- we have not finalized anything agreement to jointly set up a one would like to cap its exposure
With export momentum com scrips came under pres- The rupee snapped a six- as yet,” Matthew Stock, man- million-tonne coke oven plant in manufacturing projects
continuing, commerce secre- sure with the CBI intensify- session rally and posted its aging director, Stemcor India, at Ispat’s existing steel complex with inherent risks normally
tary Rahul Khullar said the ing investigation into the 2G biggest single-day fall in told TOI. “We are in ex- at Dolvi in Maharashtra. But associated with metals and
export target of $200 billion spectrum allocation scam. almost a month on Wednesday, ploratory discussions with the transaction is yet to take-off. minerals industry.
for the current financial year The BSE index saw a weak weighed by broad losses in the
could be breached. “Exports opening and ended in the neg- dollar versus major currencies
are doing pretty damn well...
It’s not a question of whether
we will cross the $200 billion
market, the question is by how
ative terrain, losing 1.91% or
238.16 points at 19,696.48.
Besides the banking sec-
tor concerns, the sentiment
and weak domestic shares.
The partially convertible
rupee closed at 45.09/10 per
dollar, off the day’s low of
Fare data not flier-friendly
Continued from P 1
much will we exceed it. It was also impacted by the fall 45.1675 but still 1% weaker “Could one ever imagine airlines will make
could be $210-215 billion,” he in telecom stocks, as the CBI than its 44.64/65 close on For instance, an airline’s Delhi-Lucknow their fare range public? This is raw data and
told reporters. searched homes of former Tuesday. This is the rupee’s basic fare goes up from zero to Rs 14,400 for now it will go to the logical next step of being
According to provisional communications minister A worst one-day fall since its Delhi-Lucknow in 18 levels. made available in a useful and purposeful man-
data compiled by the commerce Raja and other officials in the 1.1% decline on Nov. 12. REUTERS Even after taking the trouble of decipher- ner. Just give some time,” said a senior official.
department, exports went up TRADE DEFICIT DOWN 2G spectrum allocation scam. ing the fare charts, there is no way for pas- Ankur Bhatia, head of a company providing
by 26.7% to $140.3 billion dur- Sensex saw a weak open- seems that FIIs are pulling sengers to check if the fares being offered for airline reservation technology service, said,
ing April-November, led by month might be revised up- $120 billion, from $135 billion ing and ended in the negative their money from India to in- travel are after all the lower level fare buckets “Fares shot up last month due to factors like
strong performances from en- wards. Besides, he said that estimated earlier. Khullar, how- terrain, losing 1.91% or 238.16 vest in the US markets,” Reli- have been exhausted. The only solace is that pent-up demand as people postpone their trav-
gineering goods (50% increase in case of petroleum imports, ever, warned that an increase points at 19,696.48. gare Securities executive vice- if the figure being asked seems too high, one el to after Diwali from a week or so before the
to $31.6 billion), gems & jew- the decline was largely on ac- in global crude oil prices could A similar movement was president Rajesh Jain said. can do some algebra to find if that is more than festival. There was massive demand while the
ellery (16% to over $20 billion) count of global prices. upset the calculations. witnessed in Nifty which de- HDFC Bank and HDFC be- the highest the airline is supposed to charge supply is low with many planes grounded. Fares
and petroleum products (41%). Imports during the first The commerce secretary clined by 1.22% or 72.85 points came the major contributors as per its fare chart! have not been lowered but will be charged as per
Though some of the sector eight months of the financial also acknowledged the possi- to settle the day at 5,903.70. to the overall sensex fall with Stumped by this fare ranges — well within demand and supply. We see the next peak in trav-
such as ready made garments year, are estimated to have in- bility of problems in Europe Analysts said that talks of the former plunging 3.07% the deadline set by it — the aviation ministry el around Christmas.” Airlines keep a certain
(3% drop to $700 million), creased 24% to $222 billion, re- affecting India’s exports. “It an imminent rate hike in Chi- and the latter declining 2.42%. said it was studying the charts. “There seem to number of seats in each price bucket and fares
gems and jewellery (24% de- sulting in a trade deficit of will affect and it has started na, liquidity crunch in the lo- State Bank of India and be some serious jumps in fares of certain sec- move to the next level as soon as that number is
cline), leather (13% fall) and $81.7 billion. The trend of ex- affecting us but we can hope cal banking system, and con- ICICI Bank also saw a sub- tors. The information is not consumer-friend- sold out. But the number of seats in each bas-
crude oil (8% decrease) had ports rising faster than im- to stay a little insulated due to cerns over banks’ margins dued trade, shedding 2.01% ly and we will ask for changes within 24-48 hours. ket is also dynamic, with more seats in low range
seen a fall in exports during ports for the past couple of our diversification strategy,” have hit the market. and 0.39% respectively. Our idea is not to interfere in setting highs/lows during off-season and reverse in travel period.
November, Khullar sought to months has also prompted the he said. Khullar, however, said “Dearth of positive news in The index has shed 7.91% or the ranges, but we just want transparency “An airline seat is a perishable commodity. The
play down any concerns, say- government to lower the trade the impact of the rupee ap- the market and strengthening or over 1,100 points in the four for consumers,” said a senior Directorate Gen- moment a plane’s gate is closed, an unsold seat
ing that the numbers for the deficit projection to around preciation was limited. dollar are leading the fall. It trading sessions. PTI eral of Civil Aviation (DGCA) official. is a dead loss,” said an official. TNN

ONGC offer
now in Feb
LCC, Big Boys birds of same fare
Saurabh Sinha | TNN spend on sandwiches and cold than the higher ones. “Our
New Delhi: The government drinks on this flight. On the cost of operation are lower
has advanved the public of- New Delhi: Till about three other hand, a full service car- structurally than the biggies
fering of ONGC to February years ago, the two big boys of rier (FSC) offered an all-in- like Air India, Jet or King-
2011, while pushing back the Indian aviation – Jet’s Naresh clusive range of Rs 4,181 to Rs fisher. If the government is
share sale of Indian Oil Corp Goyal and Kingfisher’s Vijay 24,871 on the Delhi-Mumbai able to ask airports to offer
(IOC) following the rise in glob- Mallya – used to say that sector. A small LCC, in fact, lower fares to us and sales tax
al oil prices. there’s nothing like low cost had among the highest highs on jet fuel is rationalised, we
The Cabinet, on December carrier (LCC) in India as every in its fare ranges for many can show the difference be-
1, approved sale of govern- airline has to operate under routes. tween us and FSCs,” said a
ment’s 5% stake in ONGC, the the same cost structure of air- A top government official senior official of an LCC.
nation’s highest profit earn- port and fuel charges. The said: “The maximum opposi- In fact, one of the objec-
ing firm, to raise up to Rs only differentiating factor, ac- tion to our move of making tives of the aviation ministry
13,000 crore, sources privy to cording to them, was low fares fare ranges public came from drive to make fare ranges pub-
the decision said. offered by LCCs. LCCs. Full service carriers lic was to ensure that LCCs
The follow-on offer is But now with airlines for have been filing their range come under pressure to either
planned for mid-February or the first time ever making with the global distribution live up to their name or be-
early March, a month earlier public their entire fare range, NOT FAIR system providers, while it re- come FSCs themselves. If the
than previously planned. IOC’s one thing is clear that even mained out of public domain. government is able to find
public offering was to have this distinction is fast blur- separating Delhi and Mum- Very often we found LCC fares some consumer-friendly way
come up in the 3rd or 4th week ring. For there is not much dif- bai. To this will be added a fuel to be higher than the ones on of publicising the fare ranges
of January, but would now fol- ference in the fare ranges of surcharge of Rs 2,200-2,600 FSCs offered.” and it becomes popular among
low ONGC. these two. (which also goes to the airline) On their part, LCCs said travellers, LCCs could come
The Cabinet has not yet ap- For example, an LCC offers and airport charges and tax every airline has fare range under intense pressure from
proved sale of its 10% share- basic fare range of Rs 490 to of about Rs 550. and they sell more of their fliers to remain low fare air-
holding in IOC. PTI Rs 22,800 to fly the 1,150 km People will also need to seats in lower priced buckets lines.

Publicis on expansion drive to take on WPP

Samidha Sharma | TNN plans to get international tal- on the overall Asia-Pacific ad
ent to India to widen its talent market. The 9.2% organic
Mumbai: Publicis Groupe, the pool in the country. growth achieved in the third
world’s third-largest commu- Publicis will also step up ef- quarter is partly due to an up-
nications group, is reviewing forts on the digital front. The turn in the global ad market but
its India strategy with the aim idea is to strengthen our digi- more importantly, it is the out-
of tripling the size of its busi- tal presence and ramp up Dig- come of our investment strat-
ness here. itas along with introducing egy in two high-growth areas,
The group is looking to ex- new ventures from within the digital and emerging markets.
pand its operations, invest- group, Levy said. Last year, The BRIC countries to-
ments and business here in an Publicis acquired Microsoft’s gether registered a 15% jump
effort to narrow the huge gap digital ad firm, Razorfish, for in revenue for Publicis. Cur-
between Publicis and Martin around $530 million, which is rently, emerging markets con-

Sorrell’s WPP Group, which likely to enter India consider- tribute about 22% of the
currently dominates the Indi- ing the group’s seriousness in group’s revenues.
Price: . 295/ - an market. BATTLEGROUND INDIA: The French ad group wants to accelerate its expanding its digital offerings When asked about the
J Talking to TOI, Publicis growth here organically and through acquisitions here. In fact, the French ad- group’s interest in the much
Groupe CEO Maurice Levy vertising group expects digi- talked-about acquisition of
said the agency’s board will Coming close on the heels countries.” Elaborating on its tal and emerging markets to American advertising group,

BAI’JGALORE: Book Mark—824427a0a0, Grosswonis 25bB241 1, Oangarams 25581 BiT , In-Toucr 25B37744,
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meet on Thursday to firm up
its expansion plans. The euro
4.5-billion French group is am-
of French President Nicolas
Sarkozy’s India visit, Levy
said, “the president has helped
India plans, Levy said, “We
want to invest heavily in hir-
ing talent across the group
contribute 60% to its overall
revenue in the next few years.
Besides India, Publicis is
Interpublic Group (IPG), Levy
denied any such interest.
“There are some conflicts and
Reliance lime Out 22667125 , Reliance Time Out-41286025; HYDERABAD: Crosswords 9848072884, A A AA bitious about India and wants create a Franco-Indian body, companies here in India – be betting big on China where it some similarities as far as IPG
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Odyssey—24402264 , Book Point—2852301 9, Connoxions—26260429, Higginbothams Ltd—285 1 35191. organically and through ac- and French CEOs to acceler- Saatchi or the media and dig- enues. Levy, who was in China is no logic to making such a
quisitions. ate the growth of both the ital agencies. The group also last week, is extremely bullish big acquisition,” he said.