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Food inflation eases to 10.63% for week ended 5th November

Concerned over the inflationary spiral, the government had on Wednesday said it is taking steps to remove supply bottlenecks and expects prices to ease from December

New Delhi: Food inflation eased to 10.63% for the week ended 5th November from 1.81% in the previous week. The dip in the weekly food inflation came despite prices of agricultural items, barring onions and wheat, continuing to rise on an annual basis, reports PTI.

Food inflation, as measured by the Wholesale Price Index (WPI), stood at 11.41% in the corresponding week of the previous year.

As per data released by the government today, onions became cheaper by 22.89% year-on-year, while wheat price were down 3.63%.

However, all other items became more expensive on an annual basis during the week under review.

While vegetables became 27.26% costlier, pulses grew dearer by 14.44%, milk by 10.74% and eggs, meat and fish by 11.73%.

Fruits also became 5.99% more expensive on an annual basis, while cereal prices were up 3.53%.

Inflation in the overall primary articles category stood at 10.39% during the week ended 5th November, as against 11.43% in the previous week. Primary articles have over 20% weight in the wholesale price index.

Inflation in non-food articles, including fibres, oilseeds and minerals, was recorded at 5.33% during the week under review, as against 6.41% in the week ended 29th October.

Fuel and power inflation stood at 15.49% during the week ended 5th November compared to 14.50% in the previous week.

The continued rise in food prices is likely to exert further pressure on the government and the Reserve Bank of India (RBI) to tackle the situation expeditiously.

Concerned over the inflationary spiral, the government had yesterday said it is taking steps to remove supply bottlenecks and expects prices to ease from December.

“We are taking care to remove the supply constraints and I do hope from the month of December, inflation pressure would be moderate,” finance minister Pranab Mukherjee had said yesterday.

Headline inflation, which also factors in manufactured items, has been above the 9% mark since December 2010. It stood at 9.73% in September this year.

The RBI has hiked interest rates 13 times since March 2010 to tame demand and curb inflation.

In its second quarterly review of the monetary policy last month, the apex bank said it expects inflation to remain elevated till December on account of the demand-supply mismatch, before moderating to 7% by March 2012.

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iGate to delist Patni; stock up 8%

The floor price—the minimum level at which shares have to be purchased—for the delisting is Rs356.74 per ordinary share, determined as per the applicable delisting regulations, iGate said in a statement

New Delhi: US-based iGate, which acquired Patni Computer Systems earlier this year, plans to delist the domestic company from Indian bourses by mid-2012. Patni’s American Depository Receipts (ADRs) would also be delisted from the New York Stock Exchange, reports PTI.

iGate intends to commence, through its subsidiaries Pan-Asia iGate Solutions and iGate Global Solutions, a process that could lead to the delisting of its Indian subsidiary, Patni Computer Systems, the US firm said in a statement on Wednesday.

“iGate believes that given the low liquidity of Patni’s equity shares, the delisting offer would provide the public investors of Patni with the ability to exit fully from the shares of Patni,” iGate CEO Phaneesh Murthy said.

The delisting process, if successful, is expected to be completed by mid-2012.

iGate had acquired a majority stake in Patni in January this year for $1.2 billion in one of the largest deals in the Indian IT sector. Post the open offer, iGate now holds about 82% stake in Patni.

Following the process, equity shares of Patni would be delisted from the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The floor price—the minimum level at which shares have to be purchased—for the delisting is Rs356.74 per ordinary share, determined as per the applicable delisting regulations, the statement said.

The delisting is subject to the approval of the Patni shareholders and regulatory approvals.

The purchase of Patni’s ordinary shares would be done in accordance to the Securities and Exchange Board of India’s (SEBI) delisting regulations at a price determined through the prescribed reverse book building process.

The floor price for the same is Rs356.74 per ordinary share, determined as per the applicable delisting regulations.

iGate has the right of not purchasing the offered shares if the final price discovered through the above process is not acceptable to it.

While the price payable for the Patni shares will be determined through the reverse book binding process, iGate’s ability to afford the price will be determined by a number of factors including the limitations on debt incurrence under its existing financing agreements.

Based on such restrictions and other factors, iGate has proposed to arrange a debt facility of about $215 million, which is expected to serve as the source of funds to pay for the acquisition.

“If, however after the reverse book building process, we conclude that the ultimate discovered price to purchase the Patni shares outweighs the benefits, we will examine our alternatives,” Mr Murthy said.

Patni Computer Systems was trading 8.27% up at Rs420.80 in noon trade on the BSE and at Rs420.95, up 8.26%, on the NSE.

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