The market ended lower, taking cues from European markets. The Sensex settled at 16,617, down 163 points (1%) while the Nifty ended at 4,987, down 47 points (1%). The indices were range-bound in the positive zone in the morning session.
However, a sell-off was triggered in the afternoon session after the European benchmarks pared their gains, dragging the domestic indices into the red.
Asian markets ended higher. Key benchmark indices in China, South Korea, Singapore, Japan, Indonesia and Hong Kong were up 0.09% to 0.83%. Taiwan's and Singapore's main indices fell 0.08% and 0.19%, respectively.
US stocks were down on Monday (7th June), taking the S&P 500 to its lowest close in seven months. The Dow was down 115 points (1.1%) to 9,816. The S&P 500 was down 14 points (1.3%) to 1,050. The Nasdaq tumbled 45.2 points (2%) to 2,174.
The Bank of Japan has kept interest rates near zero and had outlined last month a new loan programme aimed at encouraging commercial banks to lend more to industries with growth potential.
Japanese bank lending marked its biggest annual fall in nearly five years in May, as companies were reluctant to increase capital spending. Bank lending fell 2% in May from a year earlier, dropping for the sixth straight month and marking the biggest annual decline since July 2005.
Back home, the government on Monday evening deferred the hike in fuel prices. The fuel subsidy is seen at $697 million this year, below last year's $3.4 billion.
The Reserve Bank of India (RBI) said that inflation is likely to ease with the monsoon; however, the central bank will tighten the monetary policy in its quarterly review next month. It has played down any concern regarding food prices.
Foreign institutional investors were net sellers, offloading stocks worth Rs242 crore. Domestic intuitional investors bought stocks worth Rs41 crore.
The monsoon has advanced to some parts of the central Arabian Sea, most parts of coastal Karnataka and some parts of south interior Karnataka. It is expected to advance further in the next couple of days.
The board of KIC Metaliks (up 1.7%) has accorded an approval for pursuing power and mining businesses and enhancing the borrowing limits of the company from Rs200 crore to Rs500 crore.
Alstom and Schneider Electric today proceeded with the closing of the transaction with Areva for the acquisition of Areva T&D (up 1.5%), its transmission and distribution business, after obtaining the approvals of the French authorities. A consortium agreement was signed by the two partners in November 2009 for the purpose of this joint acquisition. The price paid for Areva T&D's shares amounted to €2.29 billion.
Neha International (up 4%) has acquired 10,000 acres of land in Ethiopia through its wholly-owned subsidiary. This is part of its diversification into agriculture. The company expects to cultivate this land in the current kharif season.
Kyushu Railway Company (JR Kyushu), a major railroad company in Japan and Patni Computer Systems (down 1.6%) have signed a joint venture pact between JR Kyushu System Solutions Inc, the IT systems arm of the Japanese company.
The new company christened JR Kyushu Patni Systems Inc, is aimed at providing high quality and cost effective IT and product engineering services to the Japanese enterprise market.
The Pawar family holds significant stake in Four Seasons Wines, a subsidiary of Vijay Mallya's United Spirits
Sharad Pawar, Union agriculture minister, leader of the Nationalist Congress Party (NCP) and former chief of the Board of Control for Cricket in India (BCCI) is neck-deep in controversy over the Indian Premier League (IPL).
According to media reports, Mr Pawar and his family hold more than 51,000 shares or about 0.05% stake in United Spirits, the wine and liquor unit of Vijay Mallya's UB group. The Pawar family owns Lap Finance and Consultancy Pvt Ltd, which in turn had stake in grape grower and winemaker Baramati Grape Industries Ltd. Just before the start of auction for the IPL teams, Baramati Grape Industries was merged into United Spirits in a ratio of 31:20. This means shareholders of Baramati Grape got 31 shares of United Spirits for every 20 shares they owned in Baramati Grapes.
Under normal circumstances, shareholders of the larger company which will remain active after the merger, get a better share-swap ratio-and shareholders of the smaller company get lesser shares post the merger. For example, in the Bank of Rajasthan (BoR) and ICICI Bank merger deal, ICICI Bank offered 25 shares for every 118 shares of BoR.
However, in the Baramati-United Spirits merger deal, shareholders of Baramati Grape got a better share-swap deal. Later in September 2007, Mr Mallya was able to win an IPL franchisee, Royal Challengers Bangalore. Another co-incidence is that Royal Challengers Sports Pvt Ltd (RCSPL), the company which owns the IPL Bangalore team, just happens to be a subsidiary of United Spirits, in which the Pawar family holds shares worth around Rs6 crore.
Earlier, in June 2006, UB Group, which is a spirit maker, entered winemaking and bought over French winery Bouvet-Ladubay. The relations between Mr Pawar and the Mallya family go back a long way. Baramati Agro Industries, which was facing rough weather with its Bosca and Cinzana wines, had received advice from Vitthal Mallya, father of the UB Group chairman. The Mallya senior suggested to Mr Pawar to switch to growing Bangalore purple (a variety of grapes used as raw material for brandy and medicines) from table grapes.
Mr Pawar always had an inclination towards winemaking as evident from the Baramati Grape Industries deal with an Italian winemaker that resulted in the production of Bosca and Cinzana wines. Mr Pawar's love for wines and Vijay Mallya's business acumen as a spirit-maker came handy when the two decided to join hands to produce quality wines from Baramati.
The UB Group, in 2007, formed a 51:49 joint venture-Four Seasons Wines Ltd-with famers from Baramati led by the Pawar family. Under the agreement, the UB Group agreed to buy all the grapes produced by these farmers at a fixed price besides buying about 300 acres of land within that area.
In an interview, published at the Indian Wine Academy's site (http://www.indianwineacademy.com/) in August 2007, Abhay Kewadkar, chief winemaker and business head for wines at UB Group had said: "We are not concerned with who they bring in for the equity part, though our understanding is that many small growers will be the shareholders. The nine-member Board has five from our side-Mr Vijay Mallya, Mr Vijay Rekhi, Mr Sami Lalla, Murli-the CFO and me. Pratap Pawar, Ranjit Pawar (nephew of agriculture minister Sharad Pawar and son of the elder brother Appa Saheb, the man behind Baramati Grape), Sadanand Sule (who is the US educated son-in-law of Sharad Pawar) will be included in the Board from our partners' side."
Another media report clearly shows the Pawar family and a few farmers as partners in Four Seasons.
However, when contacted now, Mr Kewadkar said, "Some local farmers may hold shares in Four Seasons." He said that since he was in a meeting, he could not provide more details on the same.
United Spirits operates through two wine subsidiaries, United Vintners and Four Seasons Wines. United Vintners deals in imported wines, while Four Seasons produces Indian wines. United Spirits also directly owns Royal Challengers Sports and indirectly owns the Bangalore IPL team. Is there any direct connection between Royal Challengers Sports and its other sister concerns Four Seasons Wines and United Vintners? Well, we don't know as yet.
The tax-free enclave in Kolkata, which was to be developed in a small area of 10.48 hectares, was de-notified along with the other three Seas in February 2009, on account of demand shrinkage for commercial space
The government today gave the nod for the country's largest real estate developer, DLF, to revive its plan for a special economic zone (SEZ) in Kolkata, reports PTI.
"The Board of Approval (BoA) has allowed re-notification of Elf’s SEZ in Kolkata," commerce ministry additional secretary D K Mittal told reporters in New Delhi after a meeting of the BoA, the nodal body for SEZ-related matters.
The Kolkata SEZ was one of DLF’s four SEZ projects notified in June, 2008.
However, the tax-free enclave in Kolkata, which was to be developed in a small area of 10.48 hectares, was de-notified along with the other three Seas in February, 2009, on account of demand shrinkage for commercial space.
With the improved sentiment in the real estate sector, DLF had approached the commerce ministry for reviving this IT/Its tax-free zone. In its application for restarting the project, the company said demand for IT/ITES leasing space is showing signs of improvement.
However, DLF’s three other projects in
In all, about 12 developers had pulled out their SEZ projects due to a slowdown in the commercial space segment last year.