ADAG has alleged in the Supreme Court that their corporate rivals were behind the petitions filed by farmers against the land acquisition for the company's proposed 8,000MW Dadri power project in Uttar Pradesh
Anil Dhirubhai Ambani Group (ADAG) on Monday alleged in the Supreme Court that their corporate rivals were behind the petitions filed by farmers against the land acquisition for the company's proposed 8,000MW Dadri power project in Uttar Pradesh, reports PTI.
"The petitions were motivated. This was a case of corporate rivalry. The rivalry seen in the gas dispute here (before the apex court)," senior advocate Mukul Rohatgi, appearing for Anil Ambani-led Reliance Power Ltd (RPL), said before a Bench headed by Chief Justice KG Balakrishnan.
RPL's submission came during the hearing of its petition challenging the decision of the Allahabad High Court quashing the Uttar Pradesh government's notification to acquire land for the project.
The Bench, also comprising Justices RV Raveendran and Deepak Verma, posted the matter for hearing on 29th January after advocate ML Sharma, appearing for some farmers, said a caveat has already been filed in the matter and no order should be passed without hearing the opposite side.
"We are also not planning for any stay now," the Bench said, while accepting the plea of the farmers that they should be given an opportunity to be heard.
Mr Rohatgi said he had no objection and accepted the suggestion that a copy of RPL's petition be given to the farmers who have filed the caveat.
However, he alleged that at the behest of ADAG's corporate rivals, petitions were filed in the High Court by the farmers against the allocation of land for the project for which the gas was to be supplied from the KG Basin.
RPL assailed the High Court decision saying that it was entertained four years after the allocation of land was made and in many cases farmers have already withdrawn the compensation amount.
Mr Rohatgi said that around 5,827 farmers had consented for the acquisition of their land by the Uttar Pradesh government. “Under such circumstances, how can the High Court pass such an order?” he asked.
"Once you have given consent, you are stopped from filing objections for land acquisition," he said, adding that out of (over) 5,000 persons, only 432 farmers filed the petition in the High Court, so the benefit of the High Court order will go to them only.
The Allahabad High Court had said that the state government had side-stepped a provision inviting objections from land-owners while coming out with the notification for using emergency powers to acquire land for the company.
In its appeal, RPL had contended that the High Court should not have entertained the petitions of the farmers on grounds of delay in filing them.
It said that the company had complied with the provisions of the Land Acquisition Law and the project was in the public interest.
About 2,500 acres of land were acquired by the state government from the farmers for the project.
The High Court judgement had come on several petitions filed by farmers challenging acquisition of the land in 2004, when the Samajwadi Party was in power in the state.
Indian markets shrugged off weak global trends, closing the day on a positive note
During the day, Indian markets opened in positive territory on fresh buying, but shed momentum later due to weak global cues. The Sensex was up 87 points from Friday’s (15 January 2010) close, ending the day at 17,641, while the Nifty closed at 5,275, up 23 points.
At 10 hrs IST, the Sensex was trading up 75 points from the previous day’s close at 17,628 while the Nifty was trading at 5,268, up 15 points.
At 14 hrs IST, the Sensex was trading at 17,671, up 116 points, whereas the Nifty was trading up 30 points at 5,282.
Jaiprakash Associates plunged 1% after its net profit declined 38.9% to Rs103.02 crore in the December 2009 quarter against the December 2008 quarter. The company said that the latest quarter’s profit was after a one-time expense of Rs212 crore towards employee compensation.
Hindustan Composites jumped 8% after the board approved selling the company’s property at Ghatkopar, a Mumbai suburb, for Rs571 crore to Raghuleela Lessors and Developers.
ORG Informatics shot up 8%, after the company secured an order worth Rs14.05 crore.
CMI FPE was locked at the 5% upper limit at Rs950.05, after the company bagged a contract for a wide-width cold rolling complex from Asian Colour Coated Ispat for an undisclosed sum.
Engineers India zoomed 9%, extending gains and making a new high after the government (on Thursday, 14 January 2010), approved sale of 10% stake in the state-run company.
During the day, Asia’s key benchmark indices in Hong Kong, Indonesia, Japan, and Taiwan fell by between 0.23%-1.16% while indices in China, South Korea and Singapore rose by between 0.17%-0.59%.
On Friday, 15 January 2010, the Dow Jones Industrial Average plunged 101 points whereas the S&P 500 and the Nasdaq Composite were down 12 points and 29 points respectively. US markets remain closed on Monday, 18 January 2010 for Martin Luther King Jr Day.
We expect Indian bourses to open higher tomorrow and remain firm.
As per reports, agriculture minister Sharad Pawar said today that wholesale sugar prices in India have dropped in the past two to three days, while retail rates are expected to fall in 10-15 days.
D Subbarao, governor, Reserve Bank of India, said that the timing and sequence of exit from an easy policy is still a challenge, said reports. He also said that the challenge was to support growth without compromising price stability.
Meanwhile, the finance ministry is reportedly likely to keep the corporate tax rate unchanged at 30% in the coming budget, as it faces stiff resistance from companies to the draft direct tax code proposal to cut the rate to 25% and remove all exemptions. The Central Board of Direct Taxes is not willing to cut rates, as any reduction in statutory rate will further reduce the effective rate and dent the government’s revenues. The government is already struggling with a 16-year high fiscal deficit, equivalent to 6.8% of the gross domestic product for the fiscal year 2009-10.
Sunil Mitra, disinvestment secretary, said in a television interview that the government was likely to mop up more than Rs24,000 crore in fiscal 2010. He further added that the government plans to list 60 unlisted public sector units, and may even ask for dividend before divesting cash-rich companies.
Stock market regulator the Securities and Exchange Board of India (SEBI) reportedly wants the government to scrap tax benefits for corporate investing in mutual funds. If the proposal is accepted by the government, it could be a body blow to local asset management companies and other firms.
The third quarter of FY10 is likely to be one of the weakest quarters for the bottom-line of Indian mobile operators, despite new highs in net monthly subscriber additions
Worsening metrics in the Indian wireless (mobile) industry are likely to converge into significant pressure on earnings of incumbents, say analysts.
"For the third quarter of FY10, we expect the aggressive price cuts to lead to 9%-14% quarter-on-quarter (q-o-q) drop in wireless ARPU (average revenues per user) and a 2%-4% q-o-q decline in wireless revenues for our coverage stocks. Idea Cellular is the most vulnerable to competition and we expect losses in its new circles to widen to Rs1.10 billion in the quarter," said IDFC-SSKI Securities Ltd, in a research report.
Entry of new operators in the market has led to higher subscriber additions every month. Tata DoCoMo has been the market leader for incremental additions for the last four months. Despite being the 7th-8th largest operator in its eight circles, Uninor has added an impressive 1.2 million subscribers in the first month, garnering an estimated 12% share of the incremental market in these circles.
IDFC-SSKI said that in the near term, it expects the pace of subscriber additions to remain strong and pricing to be a key factor in the fight for market share.
The net telecommunications (telecom) subscriber additions in December 2009 stood at 12.52 million, excluding the numbers of Reliance Communications (RCom) and Tata Teleservices (Tata Tele), implying a 12.9% growth month-on-month (m-o-m) in the net additions. At the end of December 2009, India's total mobile subscriber base, excluding RCom and Tata Teleservices increased to 364.7 million, an m-o-m growth of 3.6%.
"Despite a 7.5%-12.6% q-o-q growth in wireless subscribers, we expect the third quarter of FY10 revenues of mobile operators to be stagnant sequentially," said Anand Rathi Financial Services Ltd, in a report.
The report said that unlike the second quarter, the brokerage expects the third quarter ARPU to drop more from average revenues per minute (ARPM) or tariff cuts, and less from minutes of usage (MOU) drop, due to seasonal recovery. As such, the third quarter margin contraction would be more than in the second quarter, leading to a 0.7%-6.6% q-o-q drop in estimated wireless earnings before interest, taxes, depreciation, and amortisation (EBITDA) of the leading operators like Bharti Airtel, RCom and Idea, the research report added.
On the back of aggressive price cuts and intense competition, wireless metrics of all the listed operators are likely to deteriorate significantly. "We estimate 7%-9% q-o-q drop in yields for Idea and Bharti, up from about 4% q-o-q in the second quarter of FY10. Notably, RCom had reported a 17.5% q-o-q drop in yields in the second quarter of FY10, mainly due to elimination of handset revenues in the wireless segment. We estimate about 5% decline in revenue per minute for RCom in the third quarter of FY10. ARPU for our coverage universe is likely to decline by 9%-14% q-o-q, leading to a 2%-4% decline in wireless revenues. A sharp decline in tariffs and new market launches, we believe, would lead to margin erosion of 70-420 basis points," said IDFC-SSKI.
Current valuations appear inexpensive compared to the cost of a nationwide rollout for mobile operators, but the worsening wireless metrics and persistent ambiguity around regulatory developments would remain key overhangs on stock prices.
The IDFC-SSKI report said that Idea remains the most sensitive to pressure on wireless business as the operator is still in an expansionary mode. "We have lowered our 12-month price target for Bharti, RCom and Idea by 4%-11% to Rs330, Rs188 and Rs54, respectively and believe these companies would continue to underperform the broader indices,” the brokerage added.
The telecom sector is witnessing one of its worst times over the recent past, primarily due to heightened competitive activity in the market place. There are 12 players in the market at present and a couple more are likely to roll out services shortly. Rapidly falling tariffs are impacting the profitability of all players in the market.
Echoing the same view, ING Investment Management (India) Pvt Ltd, in a report said, "We believe (the) telecom sector will continue to get negatively impacted by the hyper-competition in the market. (The) number of players in the market needs to come down for improved profitability of the industry. While consolidation in the long term is inevitable, in the next two years, we may not see any activity on that front. We are underweight on the sector.”
New launches by Uninor and Etisalat, introduction of mobile number portability (MNP), final policy on 2G licence fee and allocation, and auction of 3G spectrum would be the key events closely watched over the next few months. While MNP implementation and new launches could lead to some further market disruption and lead to an increase in competitive activity, successful 3G auctions and final policy on 2G spectrum allocations would increase visibility in these key regulatory issues.
Motilal Oswal Securities Ltd (MOSL) said in a research note that it foresees a low risk of significant revenue decline at the industry level, given high mix of low-end subscribers in the pre-paid segment who are likely to step up usage. However, realignment of revenue market share could continue to be driven by aggressive tariffs and promotions by new entrants, it added.
In the current challenging environment, MOSL said it believes that Bharti remains the best placed bet based on its strong balance sheet, least earning sensitivity to ARPM declines and strong brand, network, and distribution coverage, enabling it to maintain a premium versus other competitors.