Anand Mahindra offers to resign from NACIL board

Writes to civil aviation minister saying that M&M’s expanding aerospace business could result in a conflict of interest

New Delhi: Mahindra & Mahindra vice-chairman Anand Mahindra today offered to resign from the board of National Aviation Company of India (NACIL), which operates state-owned Air India, citing conflict of interest. In a letter to civil aviation minister Vayalar Ravi, Mr Mahindra sought permission to step down from the NACIL board.

"The recently concluded Aero-India 2011 at Bangalore has thrown up business opportunities for my company Mahindra & Mahindra Ltd, which was a potential conflict of interest and thereby throws up questions of good board practice. Hence my request," Mr Mahindra said in the letter.

Mr Mahindra was among the independent directors appointed to the the NACIL board in March 2010, along with air chief marshal Fali H Major (Retd), FICCI secretary general Amit Mitra and Ambuja Realty group chairman Harsh Neotia, reports PTI.

Mahindra said his firm had fruitful discussions with international aerospace corporations, encouraging the group to aspire to become a leading components player. "We are developing the capability to supply components to major suppliers from where Air India sources its aircraft. In view of this and the favourable business prospects, which recently emerged for M&M's aeronautical business in Bangalore, I feel that my continuing as a director of NACIL would not be in accordance with the highest standards of corporate governance," Mr Mahindra wrote.

M&M made its foray into the aerospace business in 2009, acquiring a 75.1% stake each in two Australian aerospace firms-Aerostaff Australia and Gippsland Aeronautics-for Rs175 crore, and it planned to make aircraft and allied components to service the global market.


BP ties up with RIL for 23 oil blocks; to pay $7.2 bn for 30% stake

Europe’s second biggest oil firm to also set up 50:50 joint venture to source and market gas

New Delhi: BP Plc, Europe's second biggest oil company, has agreed to tie-up with Reliance Industries (RIL), buying a 30% stake for a payment of $7.2 billion in 23 oil and gas blocks, including the giant KG-D6 gas fields, and a 50:50 joint venture to source and market gas, RIL said in a statement today. BP could pay a further $1.8 billion on exploration success that result in development of commercial discoveries.

BP CEO Bob Dudley and RIL chairman and managing director Mukesh Ambani signed the relationship framework and transactional agreements in London and they are scheduled to make a joint announcement later today, reports PTI.  

"The partnership across the full value chain comprises BP taking a 30% stake in 23 oil and gas production sharing contracts that Reliance operates in India. This includes producing KG-D6 block and the formation of a 50:50 joint venture between the two companies for sourcing and marketing of gas in India," it said. The joint venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.

Reliance said the partnership will combine BP's world class deepwater exploration and development capabilities with Reliance's project management and operations expertise.

"This partnership meets BP's strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets," said Carl-Henric Svanberg, Chairman of BP.

The 23 oil and gas blocks together cover approximately 270,000 sq km. Reliance will continue to be the operator of the blocks.


Nifty, Sensex locked in a range: Monday Closing Report

A day or two of rally will be followed by a day or two of decline or vice versa

The market started the week in the green, but was choppy through the morning session due to uncertainty over the Union Budget and the widening political turmoil in West Asia and northern Africa and the key indices dipped into negative territory. The market popped up a couple of times and then was down again on strong selling pressure.

The market touched the day's low in post-noon trade, but bounced back sharply and the key indices climbed to the day's highs and closed near those levels. But the broader indices were left behind in the recovery.

The market started in the positive today, but as we had expected weakness surfaced immediately thereafter. Till around 1.30pm the indices were down. The Nifty fell to a four-day low of 5,413. The Sensex hit a low 18,083. However, the market revived strongly and the Nifty went on to hit a high of 5,526, while the Sensex hit an intra-day high of 18,457. The Sensex closed 227 points up at 18,438 and the Nifty closed 60 points up at 5,519.

In Friday's report we had mentioned that the Nifty should close above 5,520 for the rally to continue. However, although the market has gained today, this rally is weak. This is borne out by the advance-decline ratio on the NSE which was a poor 761:1102. Expect the market to trade in a range. A day or two of rally will be followed by a day or two of decline or vice versa.

The market breadth on the key barometers was positive. Of the 30 stocks traded on the Sensex, 20 ended in the green and 10 edged lower. The Nifty settled with 36 advancing stocks and 14 in the losers list. Among the broader indices, the BSE Mid-cap index shed 0.04%, while the BSE Small-cap index fell by 0.09%.

All sectors, barring autos (down 1.18%) ended in the green. The gainers were led by the BSE IT index (up 2.76%), BSE TECk (up 2.11%), BSE Consumer Durables (up 1.97%), BSE Oil & Gas (up 1.81%) and BSE Metal (up 1.31%).

The top Sensex gainers were TCS (up 4.24%), Wipro (up 4.12%), Sterlite Industries (up 3.31%), ONGC (up 2.98%) and Jaiprakash Associates (up 2.93%). The major losers were Tata Motors (down 3.33%), Hero Honda (down 1.66%), Maruti Suzuki (down 1.31%), NTPC (down 1.04%) and Tata Power (down 1%).

Deeply concerned over the impact of rising prices on the aam aadmi, president Pratibha Patil today said the government would accord top priority to fighting inflation.

The top priority of the government in 2011-12 "will be to combat inflation and, in particular to protect the common man from the impact of rising food prices," she said, in her address to Parliament, marking the beginning of the budget session.

Most markets in Asia ended lower as increased tensions in the Middle East once again put pressure on crude prices. Media reports stated that Chinese authorities also acted to halt an online call for a 'Jasmine Revolution,' detaining activists and increasing policing on the streets. The Chinese central bank's move to hike banks' reserve requirement on Friday impacted investor sentiment today.

In economic news, Thailand's economy strengthened in the fourth quarter on exports and consumer spending. Gross domestic product rose 1.2% from a revised 0.3% decline in the third quarter, the National Economic and Social Development Board said in Bangkok today.

The Hang Seng declined 0.47%, the Jakarta Composite fell 0.11%, the Straits Times was down 0.53%, the Seoul Composite ended 0.39% lower and the Taiwan Weighted shed 0.05%. On the other hand, the Shanghai Composite surged 1.14%, the KLSE Composite gained 0.55% and the Nikkei 225 added 0.14% in trade today.

Back home, foreign institutional investors were net buyers of stocks worth Rs207.67 crore on Friday. On the other hand, domestic institutional investors were net sellers of equities worth Rs189.14 crore.

Tata Steel (down 0.08%) plans to commission the first phase of its proposed six-million-tonne per annum (mtpa) Kalinganagar facility by the end of FY13. The company had earlier said it will develop the facility in two phases of 3-mtpa capacity each.

A top official of the company stated that the required funds for the project have "more or less" been tied up. Tata Steel, which raised Rs3,477 crore recently through a follow-on public offer, said a part of the FPO proceeds would be invested in the project.

Punj Lloyd (down 1.68%) subsidiary, Punj Lloyd Infrastructure (PLIL), has received a letter of award from the National Highways Authority of India (NHAI) for upgradation of the NH-31 from Khagaria to Purnea in Bihar to a two-lane, undivided carriageway with paved shoulders, under the NHDP III (National Highways Development Programme- III) on BOT annuity basis.

The estimated cost of the project is Rs735 crore. PLIL will form a special purpose vehicle, which will sign a concession agreement with NHAI for 17 years and will be entitled to semi-annual annuity of Rs56 crore.

Reliance Industries (RIL) (up 2.04%) and BP today announced a partnership that involves the overseas company taking a 30% stake in 23 oil and gas production sharing contracts that RIL operates in India, including KG D6 block, and the formation of a 50:50 joint venture for sourcing and marketing of gas in India.

The joint venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.


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