DGCA asks airlines not to charge exorbitant fares

Meanwhile, the Delhi High Court earlier today asked striking Air India pilots to take a decision on resuming work, saying "this strike will not see another day"

New Delhi: Civil aviation regulator Directorate General of Civil Aviation (DGCA) today asked private airlines not to charge exorbitant spot ticket prices and ensure that these were not more than the maximum fares published on their website, reports PTI.

The directive came at a meeting DGCA chief EK Bharat Bhushan held with senior officials of private airlines, following complaints that exorbitant spot-fares being charged by the carriers in the wake of cancellation of Air India flights due to the ongoing pilots' strike.

The spot fares or the last moment air ticket prices are those which are charged two hours before the scheduled departure of a flight.

Air ticket prices on private carriers currently range between Rs9,000-Rs18,000 on most sectors. Cost of a Mumbai- Delhi ticket, which is a high-density sector, ranges between Rs9,000-Rs15,000. Similarly, Mumbai-Bangalore is priced at Rs13,000-Rs15,000.

"I have told them that there should not be a jump in airfares, basically the spot fares should not be exorbitant.

These should not be more than the maximum fare published on their website," Mr Bhushan told PTI soon after the meeting.

Maintaining that there were around 14-15 fare buckets, he said the spot fares should not be more than that charged at the highest fare bucket.

With the private carriers currently operating with around 70%-75% of seat load factor, the DGCA asked them to come up with the routes, where Air India has cancelled its flights, they wanted to operate. The national carrier has a market share of about 15%.

"In the wake of ongoing pilots' strike, I have decided to allow them to fly on temporary basis on the routes on which Air India has cancelled its flights," Mr Bhushan said, adding, "I have asked them to come by 5pm tomorrow with the route plan."

Mr Bhushan said the sectors, left out by Air India, can be taken care of by the private carriers to fly passengers.

Meanwhile, the Delhi High Court earlier today asked striking Air India pilots to take a decision on resuming work, saying "this strike will not see another day."

"You call off the strike, we will press the management to consider your demand," said a division bench of justices BD Ahmed and Beena Birbal, while hearing a plea for initiation of contempt proceedings against the pilots who have struck work since Tuesday last.

"This strike will not see another day," the bench observed, while asking the pilots to resume work by afternoon.


Whatever may happen to the IPO investor, legal firms make money anyway

Legal e-mag reports how much law firms made from IPO, QIP rush last year. Amarchand & Mangaldas, Luthra, Crawford Bayley top the list

2010-2011 saw quite a few memorable IPOs (initial public offers) and QIPs (qualified institutional placements) last year. Whatever followed afterwards-with the market, the issuers, banks, the buyer companies or individuals-it was a win-win situation for legal firms that were consultants.

In its second annual report on capital markets published recently, "Bar & Bench", a legal webjournal, has listed the top ten legal firms that benefited as counsellors during the last fiscal. Amarchand & Mangaldas & Suresh A Shroff & Co (AMSS) emerged at the top of the list. Second is Luthra & Luthra which undertook some 20 transactions, then Crawford Bayley & Co with 18, AZB & Partners with 16 deals and Khaitan & Co with 15.

"Top-tier domestic law firms charge anywhere between Rs30 lakh (about US$65,000) to Rs80 lakh (US$175,000) for an IPO. For the EIL (Engineers India Ltd) IPO, insider sources revealed that Luthra and DLA Piper jointly quoted about Rs1.35 crore (US$300,000), Amarchand and O'Melveny quoted Rs1.65 crore (US$366,000) and S&R along with Dorsey had put in a bid of about Rs1.75 crore (US$388,000)," the report says. Yes, you can raise your eyeballs now.

Bar & Bench's yearly review has everything on upcoming IPOs, commentaries on select sectors and market expectations, and a round-up of the IPOs and QIPs that happened last year. It may appear surprising, that a legal magazine would do the job of a market analyst. After all, legal discussions and cases are supposed to be their field of interest; and incidentally, lawyers are also supposed to be occupied with courts instead of watching the movement on the Sensex. But if you are a financial consultant, you will see why it is imperative.

Financial and legal counselling is big money today. With every IPO and QIP that hits the market, banks, companies and wealthy individuals will make a go at a law firm for advice. Whatever follows-whether the buyer goes bankrupt or emerges with flying colours, whether the market crashes or its sunshine-the counseller stacks up his safe in exchange for his pearls of wisdom.

And what a stack it is! Amarchand acted as counsellers in 43 IPO/QIP transactions, of which 19 were worth more than $100 million. Their transactions included the Coal India IPO, Standard Chartered PLC IDR and PO of Essar Energy PLC. If we take Amarchand's fees at Rs1.65 crore for all 43 transactions, it will come to Rs70.95 crore. Similarly, Luthra would have earned Rs27 crore. However, the report announces that the firms cut their fees 'drastically' for government IPOs this year.

Apart from the Coal India IPO, none created a buzz, and most of them have seen the public react hesitantly. As Moneylife reported earlier, the BSE IPO index has moved only 6%, since its launch on 24th August 2009 to 29th April 2011. However, whatever the outcome, the legal firms have surely profited. And this is money earned during a time when there was a lull.

The markets are picking up again. While no major IPOs are being talked about now, they could surface after some time. The Power Finance Corporation's Rs6,000-crore FPO is scheduled to hit the market soon. Meanwhile, there will be a lot of other places from where the legal firms will get their moolah. After all, advice is for all times, high or low.




6 years ago

In the process of bringing an IPO, many intermediaries make money - brokers, bankers, printers, registrars, auditors, rating agencies and legal advisors, for rendering their services. That is fine. But in some IPOs, the BRLMs collude with the promoters and hike the issue price and also play some role in rigging the price after listing. Those BRLMs are to be black listed.


6 years ago

Are there are corporatised law firms which are listed?

FIIs pump $1.61 billion into Indian equities in April

According to analysts, FIIs have been pumping funds into India because of its strong growth potential. They feel that in the coming days too, foreign fund houses are likely to infuse money in the Indian bourses

Mumbai: Betting big on the Indian market, foreign fund houses invested $1.61 billion (about Rs7,213 crore) in Indian equities in the month of April, reports PTI.

Foreign institutional investors (FIIs) were gross buyers of shares worth Rs54,174.40 crore, while they sold equities amounting to Rs46,961.10 crore, translating into a net investment of Rs7,213.30 crore, or $1.61 billion, as per data available with capital markets regulator Securities and Exchange Board of India (SEBI).

According to analysts, FIIs have been pumping funds into India because of its strong growth potential. They feel that in the coming days too, foreign fund houses are likely to infuse money in the Indian bourses.

"The FII (segment) has been witnessing inflows in the last two months in India because they (investors) don't have many choices left. Besides, they are taking advantage of the country's growth potential," CNI Research CMD Kishore P Ostwal said.

In contrast, foreign fund houses were negative on the debt market and pulled out Rs17.20 crore. This takes the overall net investment by FIIs into stocks and bonds to a total of Rs7,196.10 crore.

In January 2011, overseas investors had pulled out Rs4,813.2 crore from the stock market. The outflows continued in February too, with Rs4,585.5 crore being taken out from equities. However, the scenario changed in March when they were net investors in equities worth Rs6,749.60 crore.

This has taken the gross purchases of equities in the country by FIIs so far this year to over Rs2.22 lakh crore. After taking into account the outgo of Rs2.17 lakh crore, overseas investors have made a net investment of Rs4,712.60 crore.


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