Companies & Sectors
Auto growth in February likely to be negative, says Nomura

According to Nomura, negative factors like weak retail demand, high base of last year and loss of production due to the two-day nationwide strike would affect auto sales in February 2013

During February 2013, sales volumes in the auto industry are likely to decline due to some negative factors, mainly on weak retail demand, says Nomura Research in a note. “We expect the car industry volumes to decline by 20% year-on-year (y-o-y), medium and heavy commercial vehicles (MHCV) volumes to decline by 30%-32% and two-wheeler volumes to remain flattish y-o-y in February,” the brokerage said.


According to Nomura, while retail demand has been weak, the y-o-y growth in February could also be impacted. “Growth could be impacted by the high base of last year due to pre-buying ahead of an increase in the excise duty and loss of production and sales in many parts of the country due to the two-day nationwide strike. Thus we think there could be negative surprises against our estimates,” the report said.


Expect Maruti Suzuki to gain market share in the car industry

“For Maruti Suzuki India (MSIL), we expect around an 11% decline in car volumes compared to an expected 20% decline for industry volumes as the company benefits from a strong order book for its Swift and D’zire models. As per our estimates, MSIL could have around 50% market share in the domestic car market in February 2013 against about 44% in FY13 so far,” Nomura said.


Two-wheeler industry volumes expected to remain flat 

Nomura said, “In the 2-wheeler segment, we expect flat volumes y-o-y in February. Volume growth at Honda Motorcycles (about 10%) will likely be offset by a decline in Bajaj Auto's (NE: -7%) and Hero MotoCorp’s (NE: -2%) volumes, in our view.”


No signs of revival in MHCVs yet; negative for Ashok Leyland

“Industry volumes in the MHCV segment will likely remain weak; we expect a 30%-32% decline y-o-y in February. We expect Tata Motors and Ashok Leyland volumes to decline by 43% and 21%, respectively, while, Eicher will likely see lower decline of around 4%,” Nomura said.


Reiterate our preference for 4-wheelers; M&M and MSIL remain our top picks

Nomura said, “We reiterate our preference for companies where there is strong visibility of earnings growth and valuations are reasonable relative to historical averages. MSIL and Mahindra & Mahindra (M&M) remain our top picks in the sector. For M&M, we expect 16% volume growth in the utility vehicles (UV) segment led by the Quanto model. We believe that recovery in the tractor industry might take some more time and expect about 2% volume decline for M&M in this segment in February.”


JNPT seeks SEBI nod to raise up to Rs 2,000 crore via tax-free bonds

The proceeds are proposed to be utilised for the dredging works for deepening and widening of the Mumbai harbour channel and JN Port’s navigational channel and capital expenditure for other port projects

Jawaharlal Nehru Port Trust (JNPT), India’s largest container port, has approached the Securities and Exchange Board of India’s (SEBI) for approval to raise up to Rs2,000 crore through tax-free bonds.


In its draft prospectus with the market regulator, JNPT said it would raise “up to Rs500 crore with an option to retain over-subscription up to Rs1,500 crore such that the overall issue size does not exceed Rs2,000 crore”.


“The net issue proceeds raised through this issue are proposed to be utilised primarily for the purpose of dredging works for deepening and widening of the Mumbai harbour channel and JN Port’s navigational channel and capital expenditure for other projects in relation to the port operations,” JNPT said.


Kotak Mahindra Capital, ICICI Securities, SBI Capital Markets are the lead managers, while Bigshare Services is the registrar to the issue.


The shipping ministry controlled entity handles nearly 60% of the country's total container traffic.


In January, the finance ministry has given its nod to JNPT along with Dredging Corporation of India (DCI) and Ennore Port, to collectively raise Rs3,500 crore from tax-free bonds.


Earlier this month, Ennore Port had approached SEBS for approval to raise up to Rs1,000 crore by issuance of tax-free bonds to support its financing activities.


RTI reveals that in last year’s Assam’s violence Centre deployed army a good three days late!

Bureaucratic tapism in the form official correspondence between the home ministry and the defence ministry led to a delay in sending army troops to quell violence is clear from the RTI query. The information which was denied under “classified information” was later ‘de-classified’

Ethnic violence between Bodos and Bangaldeshi Muslims which broke out mainly in Kokrajahr and Chirang districts of Assam on 20 July 2012 and inflamed colossally over the next few days, would probably have been milder if only the army troops had promptly reached ground zero promptly instead of an unpardonable three days later. 
The delay in sending troops, a complaint which the chief minister of Assam also had made to the home ministry, was recently established, after RTI (Right to Information) activist Venkatesh Nayak pursued information on copies of internal communications between the home ministry and the defence ministry with reference to deployment of troops in the Assam violence. Thanks to his perusal, the information which was initially declined by the PIO giving the reason of they being under the ‘classified’ documents category, has now been ‘de-classified’ by the home ministry and information has been made accessible under RTI.
We have dedicated a separate section for news, analysis and updates on Right to Information. Please click here to visit the Right to Information section.
The RTI documents from the home ministry reveal that on 21st July, the Assam government had requested help of the Army to control the violence. Three days later, joint secretary of the home ministry, Shambhu Singh again wrote to joint secretary of the ministry of defence, Subhash Chandra, “in continuation of the request of the government of Assam vide letter 21st July for deployment of Army in Kokrajhar district in Assam, there is an urgent need to deploy some columns of Army in Chirand and Dhubri districts of Assam to contain the situation.” On the same day, that is 24th July, the home secretary RK Singh wrote to defence secretary SK Sharma that “...ministry of home affairs has already deployed 29 coys and 15 more are being sent from different parts of the country...” but since that would take time, the “nearby Army units need to be deployed at once.”
Finally, the order for deployment of armed forces went out to the DGMO by fax only on 24th July at 9:22pm.
Mr Nayak sought a copy of this communications between the home and defence ministries on 3 August 2012. His RTI application was rejected by the PIO, North Eastern Division of the home ministry under Section 8(1) (a) of the RTI Act. He filed a first appeal with the joint secretary designated as First Appellate Authority. Thirty-eight days later, the FAA ordered disclosure of the information by de-classifying the information. The letter to Mr Nayak dated 18 February 2013 states, “communication sent by this ministry to the defence ministry was graded as secret/ classified as a result the CPIO could not furnish the said information. Now, the information sought by you has been declassified.”
Hailing this decision, Mr Nayak states that, “The FAA has taken the correct step of declassifying the correspondence as the sensitivity it seeks to protect is no longer as acute as it was in August 2012. Such instances of good practice are rare in public authorities and must be commended. However the FAA has not sent me the detailed letter that the home ministry sent to the defence ministry recounting all the provisions in the law which empower the local administration to seek assistance of the locally-stationed armed forces for dealing with the communal violence. So a second appeal may have to be filed before the Central Information Commission.”
However, Mr Nayak rues, “Narratives of the 2012 communal violence in Assam available online clearly document all the early warning signals that could have been used to take preventive action. More than 70 lives were lost and several hundred thousand persons rendered homeless. Such incidents happen with sickening frequency despite the existence of procedures and systems for preventing violence. When will the authorities start taking timely action? Three days was too long a wait for the dead, the injured and the displaced.”
Deployment of the army can be made at the local level
  Sections 130, 131 and 132 of the Criminal Procedure Code, 1973, are crystal clear about the processes by which the local administration may request the assistance of the locally stationed armed forces for dispersing unlawful assemblies (in simple language—bloodthirsty mobs)
Even an executive magistrate has the power to requisition the assistance of armed forces without waiting for orders from their superiors. The local head of the armed forces has a duty to assist the local administration to keep the peace under such circumstances
Under Section 131 even if no executive magistrate is contactable, any commissioned or gazetted officer of the armed forces may take prompt action on his own to disperse the mobs, arrest any person to punish him for violent actions or to prevent him from committing further violence. Such officers are granted immunity from criminal proceedings without the permission of the central government. None of these provisions seem to have worked in the violence-affected areas of Assam.
States Mr Nayak “In 2002 when communal violence broke out in Gujarat a similar controversy arose about the deployment of armed forces to stem the violence. A similar three-day delay in the deployment of armed forces in the violence affected parts of Gujarat was noticed then as well. Human Rights Watch’s report places the blame on the state government (see: “We Have No orders to Save You- State Participation and Complicity in Communal Violence in Gujarat” accessible at:”



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