Current Economic Statistics and Review For the
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Theme
of the week:
RBI’s Approach to Liquidity Management *
In the recent past, RBI’s skills of liquidity management have been put to test, as it has to grapple with a huge capital inflow and unanticipated fluctuations in government surpluses with the RBI, in view of its avowed objectives of maintaining price stability and growth prospects amidst a rapidly growing economy leading to higher levels of inflation. RBI has put to use almost all the instruments available such has effecting a series of hikes in repo and reverse repo rates and has repeatedly cautioned banks against overextending credit to some sectors of the economy. In addition, RBI has also increased the cash reserve ratio (CRR) a number of times. Even the limits under market stabilisation schemes (MSS) have been expanded to accommodate further absorptions. Even so, the subscriptions under LAF have continued to remain robust. Against this background, RBI in March 2007, implemented a modified liquidity arrangement wherein LAF was sought to be restored to its original role of managing day-to-day liquidity adjustments by restricting the funds absorbed under LAF reverse repo, while MSS was to be used for absorbing funds for longer durations. However, this mechanism resulted in huge unabsorbed liquidity remaining in the system with the consequences of call rates ruling at abysmally low levels (below 1 per cent) even when the benchmark reverse repo rate was kept at 6 per cent. As the yield curve thus remained distorted, in the latest quarterly review of credit policy announced on July 31, 2007, the RBI governor has removed the daily cap of Rs 3,000 crore on absorptions under LAF.
RBI has been facing a serious dilemma on another front. Huge forex
inflows called for RBI interventions through sterilisations, which have
resulted in the generation of vast rupee liquidity in the system. Combined
with the supply shortages the increased demand situation has been getting
reflected in high levels of inflation and with a society increasingly
becoming sensitive to inflation. The authorities have been forced to adopt
various inflation control measures. A radical measure almost for the first
time adopted by them is one of allowing the rupee to firm up; it has
served as a double-edged weapon. On the one hand, it has helped to blunt
the liquidity growth and on the other it has arrested import cost; both
which are seemingly helping to contain inflation. No doubt, rupee
appreciation has begun to hurt The various trends in the financial markets are also getting manifested in another unhealthy trend. That is, interest rates have been firming up across the board and the unmitigated expansion in bank credit in respect of housing and retail sector have begun to show signs if recovery problems for banks; the chances are that very soon we will see very high levels of NPAs among the sectors which were otherwise considered as safe by the banking industry. These NPAs will come not from agricultural or industrial sector, but from the vast segments of the services sector. Reserve Banks’ Liquidity Management OperationsThe net foreign exchange inflows have increased from US $ 9.54 billion in 2005-06 touched to $ 46 billion in 2006-07; there has been a further addition of $ 23 billion in less than four months after March 2007. Total foreign exchange reserves have thus stood at $ 215 billion as on July 20, 2007. As shown in Table 1, the RBI has undertaken net purchases to the extent of Rs 61,739 crore in 2006-07 full fiscal year, while in the first two months of 2007-08, it has undertaken net purchases worth Rs 46,976 crore; yet the rupee exchange rate continues to hover around Rs 40.50 per US dollar as against Rs 44.50 three month ago. Further, the build up and volatility in Government’s cash balances with the Reserve Bank in recent years have significantly affected the liquidity conditions. With effect from April 8, 2004, as per the Working Group on Instruments of Sterilisation, the central government was not to invest in its own securities, which was part of the 1997 arrangement between the government and the RBI. This facility was again reinstated after the introduction of MSS as it was partially restored with a ceiling of Rs.10,000 crore in June 2004, which was further raised to Rs.20,000 crore in October 2004. While the government’s surplus cash balances may have enabled RBI to sterilise the monetary impact of excess liquidity, it has also resulted in sudden transition in liquidity conditions. The build up of large and unanticipated cash surpluses of the Government with the RBI and its depletion over a short period poses fresh challenges for liquidity management.
Efforts
at Liquidity Management With the inflation regaining its strength in the latter half of 2004 amidst a robustly growing economy, galloping non-food credit expansion and in sync with global monetary tightening trends, the RBI also began with monetary tightening process by increasing the reverse repo rate and repo rate (as shown in Table 2). Despite, the increases in these benchmark rates, the inflation and non-food credit off-take increases continued to surge and RBI began using the CRR as an extensive measure for absorbing liquidity. In the latest quarterly review of monetary policy announced on July 31, 2007, the CRR has again been hike by 50 basis points with effect from August 6.
LAFLAF has now emerged as the principal operating instrument of monetary policy. It has helped in stabilising the regular liquidity cycles and, subsequently, the volatility of call money rates by allowing banks to fine-tune their liquidity needs as per the averaging requirements of CRR over the reporting period. This smoothened the liquidity positions at the beginning and end of the month. Besides, it helped to modulate sudden liquidity shocks engendered by temporary mismatches induced by outflows/inflows on account of government auctions/redemptions and advance tax payments. More importantly, the LAF has emerged as an effective instrument for maintaining orderly conditions in the financial markets in the face of volatile capital flows. Thus, the LAF has imparted a much-needed flexibility to the Reserve Bank in modulating the liquidity in the system and steering the desired trajectory of interest rates in response to evolving market conditions.
Though LAF has served as the primary means for day-to-day liquidity management through the absorption or injection of liquidity, these operations involve costs, which impact on the balance sheet of the RBI. Most importantly, LAF has lost its character as a day-to-day liquidity adjustment tool operating at the margin. Market
Stabilisation Scheme (MSS) Given the finite stock of government securities in its portfolio and legal restrictions on issuing its own paper, the RBI felt that instruments other than LAF were needed to fufill the objective of absorbing liquidity of a more enduring nature. This resulted in the introduction of the market stabilisation scheme in April 2004 as a special arrangement, following the recommendations of the Working Group on Instruments of Sterilisation, 2003. Under this arrangement, the government issued treasury bills and/or dated securities in addition to the normal borrowing requirements. These are held in a separate identifiable cash account by the government (reflected as equivalent cash balances held by government with the RBI) and are appropriated only for the purpose of redemption and / or buyback of these securities under the MSS. Also, there has been no fiscal impact except to the extent of interest payment on the outstanding amount under MSS. This system has provided RBI the necessary flexibility to not only absorb liquidity but also to ease it through its unwinding and has succeeded in restoring LAF to its intended function of daily liquidity management. The amounts absorbed under MSS have increased from around Rs 37,000 crore in the beginning 2006 to Rs 85,027 crore as on July 20, 2007 (Table 4).
New Modified Arrangements On March 2, the RBI modified the liquidity arrangements wherein it was decided that the MSS would use a mix of Treasury bills and dated securities in a more flexible manner keeping in view the capital flows in the recent period, the assessment of volatility and durability of capital flows, and the paramount importance attached to liquidity management in containing inflation. Thus, every Friday the possibility and the quantum of MSS issuances for the succeeding week would be announced. Therefore, LAF has been used as a facility for equilibrating very short-term mismatches; from March 5, 2007, daily reverse repo absorptions have been limited to a maximum of Rs.3,000 crore each day comprising Rs.2,000 crore in the First LAF (forenoon) and Rs. 1,000 crore in the Second LAF (afternoon). As a result of these liquidity management measures, there has been a significant increase in volatility in the short-term market partly because of the restrictions imposed on the LAF, which resulted in huge liquidity sloshing around (Table 3). For instance, between July 2 and July 27, reverse repo bids worth Rs 19,54,710 crore have been tendered of which only Rs 56,941 crore have been accepted.
As the volatility in short-term markets began affecting the overall interest rate structure and the distortions in the asset-liabilities positions of banks, the market participants expressed concern about such low levels of call rates (below 1 per cent) co-existing with repo rates of 7.75 per cent and 6 per cent for reverse repo. Moreover, banks have been mobilising deposits by offering over 9 per cent and deploying them in call market at less than 1 per cent (Graph A). Therefore, the RBI in its latest credit policy has withdrawn the restrictions on the LAF and also discontinued the system of second LAF. * This note has been made by Piyusha D. Hukeri.
Highlights of Current Economic Scene AGRICULTURE In order to meet the international standards of quality and safety norms while exporting processed food products, the ministry of food processing industries (MOFPI) is planning to set up 100 food testing laboratories across the country and upgrade the existing 327 ones. While the cost of setting up the laboratories by government universities will be fully borne by the ministry, private laboratories would be subsidised 75 per cent of the cost. Of the 100 planned laboratories, 5 would be national level ones, 5 regional ones, 28 state laboratories and the remaining local laboratories. The central government is contemplating over the suggestion of the draft legislation meant to expedite the clearance process of perishable goods meant for exports. As per the suggestion, farm exporters would be allowed self-certification on perishable products meant for exports to hasten the clearance process. The measure would, however, be extended to exporters of graded and star status products who have food testing facilities and perform preliminary testing on export consignments. These exporters would be given a ‘green channel’ status and only the authorities would check a sample of their consignment. However, in case of any violation of the minimum export standard requirement the export licence would be entailed to cancellation. The The
Working Group to assist distressed farmers set up by the Reserve Bank of Reliance
Industries Ltd, plans to invest over $2.5 billion to set up The
disease Avian Influenza has cropped up again in in a small poultry unit in
village Chingmeirong in According to Spices Board, exports of spices, during April-June 2007-08, have registered an increase of 25 per cent to 111,420 tonnes and 36 per cent in terms of value to Rs 967.30 crore ($234.53 million) compared to the corresponding period of 2006-07. While exports of Pepper, cardamom (large), chilli, coriander, fennel, fenugreek and nutmeg and mace have improved, that of cardamom (small) ginger, cumin, celery, garlic, and vanilla have declined over the period of one year. Among the value added spices, curry powder and spice oils, and oleoresins have posted increase in their exports. In the case of mint products, even though there is a marginal decline of quantity exported, value realised has shown significant improvement. Agriculture production in southern India could suffer a major setback during kharif season 2007 as the supply of fertiliser in the region is set to drop drastically following a partial cutback of production by major companies like Spic, Mangalore Chemicals & Fertilisers, Madras Fertilisers and Fact, on account of an acute cash constraints faced by them as many of them have still to receive their subsidy arrears from the central government. According to industry sources, the southern region may face a shortage of 5 lakh tonnes of urea and 2.5-3 lakh tonnes of DAP if the present production situation continues. The ministry will have to go for imports, as increasing production seems to be difficult. According to initial estimates, the government will have to import 5-7 lakh tonne of urea, and 2.5-3 lakh tonne of DAP, in addition to 23 lakh tonne of urea and DAP imported annually, sources said. The Centre has resorted to yet another round of tariff cuts on imported edible oils. With effect from Monday, the basic customs duty (BCD) on crude palm oil and crude palmolein have been reduced from 50 to 45 per cent, while that for RBD (refined, bleached, de-odourised) palm oil and RBD palmolein being similarly lowered from 57.5 to 52.5 per cent. Unlike in the previous rounds, the Finance Ministry has also slashed the BCD on soyabean oil — both crude (de-gummed) as well as refined — from 45 to 40 per cent. The cuts for sunflower oil have been even sharper: from 50 to 40 per cent for crude and from 60 to 50 per cent for refined. Taking into account the 3 per cent education cess, the effective import duty on crude palm fractions would now work out to 46.35 per cent, 54.075 per cent for refined palm oils, 41.2 per cent for crude sunflower oil and 51.5 per cent for refined sun oil. Soyabean oils are exempt from the cess that is levied on the BCD. We were forced to undertake the latest tariff reduction because of the steep rise in international prices, which have more than neutralised the effect of earlier duty cuts,” said a spokesperson of the Central Board of Excise and Customs. This is the third round of revision in edible oil import duties in the current calendar year. On January 25, the BCD on palm oils was slashed from 70 to 60 per cent for crude and from 80 to 67.5 per cent for refined fractions. InflationThe annual point-to-point inflation rate based on wholesale price index (WPI) stood at 4.41 percent for the week ended July 14,2007 as compared to 4.27 per cent for the previous week or 4.62 per cent a year back.
During the week under review, the WPI rose to 212.9 from 212.6 in the previous weeks’ level (Base: 1993-94=100). The index of ‘primary articles’ group, (weight 22.02 per cent), rose by 0.7 percent to 222.5 from its previous week’s level of 221.0, mainly due to increase in prices of ‘food article like fruits and vegetables, ragi, wheat, jowar, condiments and spices and bajra. There is no change in the price index of ‘fuel, power, light and lubricants’ group (weight 14.23 per cent).
In spite of the increase in prices of rice bran oil, groundnut oil, cotton seed oil , oil cakes , textiles, printing paper and cement the price index of ‘manufactured products’ group remained stationery at 185.3 mainly because of fall in prices of sugar,gur and gingelly oil as well as vitamin tablets and calcium ammonium nitrate n-content.
The latest final index of WPI for the week ended May 19, 2007 has been revised upwards; as a result both, the absolute index and the implied inflation rate stood at 212.4 and 5.30 per cent as against their provisional levels of 211.9 and 5.06 per cent, respectively. Banking Nabard
is planning to increase its short-term lending to regional rural banks and
co-operative banks in 2007-08 to Rs 20,000 crore from Rs 14,500 crore in
the previous fiscal despite financial constraints as the RBI has stopped
assistance for short-term credit from December 2006. RBI used to lend
money to Nabard under the short-term credit limit at a uniform rate of 6
per cent per annum before discontinuing the same. Accordingly, in the
current fiscal year Nabard has to raise the required money from the market
at high rates at about 9 per cent per annum. The apex bank is in talks
with the government and RBI to restart funding. IDFC
has recorded a 38 per cent rise in net profits to Rs 181 crore for the
first quarter of 2007-08 against Rs 131 crore in the corresponding period
of 2006-07. PNB
has registered a 15.7 per cent growth in net profit to Rs 425 crore
in the first quarter of the current financial year as compared to
Rs 368 crore in the corresponding period of 2006-07. The
RBI has imposed a penalty of Rs 10 lakh on Catholic Syrian Bank under the
provisions of Section 47A(1)(b) of the Banking Regulation Act, 1949. The
penalty has been imposed for violating regulations including the
non-adherence to KYC norms and AML standards while opening and operating
certain accounts and failure of the bank’s internal control systems in
detecting the irregularities. SBI’s
net profit has increased by 27.8 per cent to Rs 1426 crore for the first
quarter of the current financial year, against the previous year’s
comparable period figure of Rs 799 crore. It’s
a century for the state-owned Bank of Baroda (BoB), celebrating its 100th
anniversary this year. For the first quarter, the bank has registered a
staggering 102.6 per cent growth in net profit to Rs 331 crore, against Rs
163 crore in the corresponding quarter previous year. The growth in net
profit was mainly on account of robust interest on advances, profit in
sales of investments and other incomes. A
technical committee set up by RBI has recommended model legislation aimed
at facilitating rural credit and regulating moneylenders. Prime among the
panel’s recommendations is that advances made by institutional creditors
– including banks and financial institutions – to accredited loan
providers ( A task force of the RBI headed by NABARD chairman KG Karmakar has recommended restoring tax concessions to Regional Rural Banks (RRBs) for making them viable rural financing institutions and increasing their operational efficiency. The provisions under Section 80(P) of Income Tax Act may be continued for another five years or till the restructuring process is completed. The finance ministry in 2006 had withdrawn the tax exemptions, which treated RRBs as deemed cooperative societies. Tax concessions for RRBs are considered necessary as their cost of operations is high, profits margins are low and they cater to weaker sections of the society. It also suggested that the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act), which currently covers commercial banks, should also be extended to RRBs. The Act helps commercial banks securitise their bad debt. It further recommended that RRBs should shed their image as narrow banks while trying to provide all financial needs through progressive use of technology. As well, the panel suggested that 60 per cent of the advances be earmarked for priority sector with a sub-limit of 40 per cent for agriculture and agro process. It also recommended that efforts should be made to increase the coverage area of the RRBs. The task force has suggested that RRBs should do away with the four-tier structure and revert to a three-tier system comprising a head office, controlling offices and branches. Financial MarketsCapital
Markets Primary
Market There
were four issues that tapped the market during the week under review. Secondary
Market The
market edged lower, last week, due to a sharp fall in a single trading
session on Friday, 27 July 2007, that was caused by setback in Asian and
US stocks. Earlier, the market remained firm for a better part of the week
as renewed buying was witnessed due to good Q1 June 2007 results. FII
inflows remained robust. The 30-share BSE Sensex lost 330.98 points or
2.13 per cent to 15,234.57 in the week ended 27 July 2007. The S&P CNX
Nifty lost 120.85 points or 2.6 per cent to 4,445.20 in the week. Profit
taking was witnessed in small-cap and mid-cap shares after their recent
solid surge. BSE Small-Cap index shed 261.67 points or 3.2 per cent to
7,926.45 in the week. BSE Mid-Cap index lost 237.75 points or 3.48 per
cent to 6,598.32 in the week. A
good rollover was witnessed to the August 2007 series from the July 2007
series when the July 2007 contracts expired on Thursday, 26 July 2007.
According to one brokerage report, overall 83 per cent positions have got
rolled to August 2007 from July 2007. A good rollover of 73 per cent was
witnessed in index futures as well. Institutional investors rolled over
short positions in Nifty following the hedging of their positions in the
cash market FIIs
inflow in three trading sessions from Monday, 23 July 2007, to Wednesday,
25 July 2007, totaled Rs 2322.40 crore. Mutual funds sold shares worth a
net Rs 468.70 crore in four trading session from Monday, 23 July 2007 to
Thursday, 26 July 2007. Trading
for the week began on an upbeat note. Sensex surged 166.65 points or 1.07
per cent to 15,732.20, an all time closing high on Monday, 23 July 2007.
Shares from the auto, real estate, and capital goods sectors were at the
forefront of the rally. Shares rose in Weak
Asian and BSE,
on Monday, 23 July 2007, announced that it is shifting 45 scrips to
trade-to-trade segment with effect from Friday, 27 July 2007. The stocks
transferred to trade-to-trade segment include B.A.G. Films, BSL, Dharamsi
Morarji Chemical, Isibars, Pearl Engineering Polymers, V.I.P. Industries
and Meanwhile,
a development that could increase domestic liquidity is the approval given
by the Cabinet Committee on Economic Affairs on Thursday, 26 July 2007, to
public sector companies enjoying Navratna and Miniratna status to invest
up 30 per cent of their surplus funds in equity mutual funds. The total
surplus of central PSUs in 2005-06 was estimated at about Rs 2,39,500
crore, according to public enterprises survey. This means that about Rs
70,000 crore may flow to equity mutual funds. However, investments would
be allowed only in public sector mutual funds. Emerging
markets-dedicated funds saw their second best inflows ever in the week
ending 18 July 2007, after setting their all-time high just the previous
week. Inflows to emerging markets equity funds exceeded outflows by $3.3
billion in the week ended 18 July 2007. More than half of this net inflow
- a record high of $1.8 billion went to funds dedicated to Bowing
to pressure from Left-backed trade unions, the Employees Provident Fund (EPF)
board on Monday, 23 July 2007 agreed to continue paying 8.5 per cent
interest rate to its nearly four crore subscribers for fiscal 2006-07 as
well. The EPF has a corpus of Rs 94,000 crore including pension fund. Derivatives
During the week, the F&O segment turnover ranged between Rs 51,007 crore and Rs 79,995 crore with a generation of huge open interest. The discount to spot is marked across the entire index futures segment. Theoretically, the difference should bring in arbitrageurs who sell Nifty stocks on spot and go long on the index. This is cumbersome but there may be enough big players in the market to make it possible.
In itself, the differences make long futures positions tempting because the differentials are likely to get narrower regardless of market direction. However, massive discounts to spot also suggest that expectations remain bearish. There isn't enough differential in the August-September Nifty contracts to make calendar spreads worthwhile. The market was ready for a correction any time after the expiry of the July series if the F&O activity of foreign financial institutions (FIIs) was an indication. The FIIs were hedging net buying in cash with short positions in index and stocks futures. The FIIs’ trading data for July said they were net buyers of Rs 8,951 crore worth shares on the cash segment and net sellers of Rs 4,485 crore on the BSE and the NSE. Also, short positions in derivatives strengthened in the last four days of the July series expiry. They were net sellers in index futures (Rs 2,587 crore) and stocks futures (Rs 1,224 crore). These short positions seemingly hedge with net buying in index options (Rs 2,150 crore) and net buying in cash markets (Rs 8,952 crore, according the BSE and NSE data. The FIIs were sellers on the derivatives and the cash segment on Friday. They sold index and stocks futures worth Rs 5,343 crore and Rs 1,475 crore worth equity shares on the cash segment. During the last five days of the expiry, the market saw three bear attacks. The days when the markets were up, the advance-decline ratio was flat to negative. The rise in volumes, coupled with the negative breadth, also heralded troubles ahead. The open interest of over Rs 90,000 crore and the daily turnover of over Rs 50,000 crore in the F&O segment during the last week of the expiry fuelled the selloff.
Government
Securities Market Primary
Market RBI
conducted the sale (re-issue) of "7.55 per cent Government Stock
2010" for Rs.2000 crores under the Market Stabilisation Scheme (MSS)
on July 25, 2007. The cut-off yield of the security was set at 7.0361 per
cent. RBI
conducted the auction of State Development Loans (SDLs), 2017 for five
states for an aggregate amount of Rs.1,389.16 crores. The cut-off yield
was 8.00 per cent for the states
of Andhra Pradesh and RBI
has announced the sale (re-issue) of "7.99 per cent Government Stock
2017" and "7.95 per cent Government Stock 2032" for Rs.6000
crores and Rs.4000 crores on August 3, 2007. RBI
has announced the sale (re-issue) of "5.48 per cent Government Stock
2009" for Rs.5000 crores under the Market Stabilisation Scheme (MSS)
on August 1, 2007. Secondary
Market In
the secondary market for gilt-edged securities, the yields have eased
across maturities. The yields for 1-year tenure have eased from 6.68 per
cent in the previous week to 6.58 per cent in the week under review.
Similarly, the yield on 5-year paper has eased from 7.42 per cent to 7.41
per cent. Bond
Market Nabard
has tapped the market to mobilise Rs 200 crore by offering 8.40-8.60 per
cent for three years. The bonds have been rated AAA by crisil and care.
Foreign
Exchange Market The
rupee depreciated from Rs 40.33 on July 20 to Rs 40.48 on July 27
Commodities
Futures derivatives Total
value of trading at the Commodity Exchanges during the fortnight was Rs.
1, 17,028.78 crore. The value of trade from 2nd April, 2007 to 14th July,
2007 for the financial year 2007-08 was Rs.10, 14,845.30 crore. InsuranceIn
a significant development, public sector general insurance companies, led
by New India Assurance, have lost their leadership in providing insurance
cover to the country’s largest private sector company, Reliance
Industries Ltd (RIL), which has assets of around Rs 50,000 crore. ICICI
Lombard, a subsidiary of ICICI Bank, has for the first time bagged the
leadership position in insuring the RIL assets, consisting of all its
petrochemical and textile plants, including the assets of IPCL, which is
being merged with RIL. Though the exact premium amount is not known, it is
believed that the company has managed a discount over last year’s
premium of Rs 150 crore. However, sources point out that during the
current renewal process, the close business relationship between ICICI
Bank and RIL played an important role in awarding the mega deal to ICICI
Lombard. ICICI
Prudential Life Insurance has injected Rs 300 crore fresh capital taking
the total base to Rs 2,372 crore to meet the solvency norms and incur high
up-front expenses. The two promoters, ICICI Bank and Prudential Plc, which
hold 74 and 26 per cent stake respectively in the company, contributed to
the capital infusion in proportion of their holdings. Meanwhile, in the
first quarter of the current fiscal, the company registered a 22 per cent
growth in premium income from new business at Rs 987 crore as against Rs
812 crore in the corresponding period of the previous fiscal. Corporate SectorA
consortium of 26 lenders, led by State Bank of India, the includes banks
and LIC, has committed Rs 7,793 crore to Guru Gobind Singh Refinery (GGSRL),
country’s largest foreign direct investment project under public-private
partnership. GGSRL is a JV between HPCL and Mittal Energy Investments Pte
Ltd Singapore. The money will be used to construct a 9 mmtpa In
order to replace the defective relay in the luxury sedan’s fuel pumps
Honda India has recalled 2310 Accords sold in 2005 and 2006. But not all
Accords sold in this period were being called back. Honda had received
about five complaints in Patni
Computer Systems has acquired US based life sciences services consultancy
Taratec Development Corp for $27.2 million. Taratec, which had annual
revenues of $20 million, provides business, Information technology and
regulatory compliance products and services for the life sciences
industry. The
country’s largest paper manufacturer, Ballarpur Industries has decided
to hive off its three manufacturing units at Bhigwan, Ballarpur (Maharashtra)
and Kamalpuram (Andhra Pradesh) into a wholly owned subsidiary Bilt
Graphic Paper Products in a process to offset debts of Rs1,450 crore
raised while acquiring Sabah Forest Industries, Malaysia (SFI). The
transfer of the three units would be done at Rs 1,950 crore and within 40
days of court approval. Bilt would then transfer the three units to
Ballarpur Paper Holdings BV in Arcelor
Mittal is planning to set up a 12 million tonne per year capacity plant
each in Jharkhand and Orissa. Although a detailed project report is not
yet finalised Mittal has already placed an order of $50 million to
purchase equipment for the two steel units and has asked for 600 mt of
iron ore for each of his proposed plants over a 30 year period. South
Korean giant Posco is planning to set up a 12 million tonne steel plant in
Orissa with an estimated investment of Rs 52,000 crore. Infosys
Technologies has bagged $ 250
million business process outsourcing (BPO) deal in the finance and
accounting space from Royal Philips Electronics of the
*These statistics and the accompanying review are a product arising from the work undertaken under the joint ICICI research centre.org-EPWRF Data Base Project. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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