Dr Reddy’s seeks denotification of SEZ at Medak

“We are locating both our SEZs close together (at Visakhapatnam). Having an API unit at one place and formulation unit at another place complicates the whole matter,” Dr Reddy's Laboratories (DRL) chief financial officer Umang Vohra informed the media

Hyderabad: Pharma major Dr Reddy’s Laboratories has requested the government to denotify its Special Economic Zone (SEZ) at Medak in Andhra Pradesh, reports PTI.

The formulations unit, which was to come up at Medak, will now be moved to Visakhapatnam where the company has another SEZ for manufacturing Active Pharmaceutical Ingredients (APIs).

“We have requested for denotification of entire SEZ (in Medak). We are locating both our SEZs close together (at Visakhapatnam). Having an API unit at one place and formulation unit at another place complicates the whole matter,” Dr Reddy's Laboratories (DRL) chief financial officer Umang Vohra told PTI.

DRL, he said, has given an undertaking to the commerce ministry for refunding the duty benefits availed of in the name of SEZ and the development commissioner of VSEZ has recommended the proposal.

It is expected to come up for consideration at the Board of Approvals meeting scheduled on 28th November.

Mr Vohra said DRL is setting up the formulations SEZ in Vizag for better synergies of management and material flows.

“Land was bought by us (in Medak) and will remain with us. We (have now) decided to put both the units at one place,” he said.

DRL had acquired around 103 hectares at Melasangam and Lingampally villages in Medak to set up a tablets and capsules manufacturing unit for exports. In Vizag, it had acquired around 260 acres for the bulk drugs SEZ, which will now house the formulation SEZ as well.

The company is expected invest around $200 million in both the SEZs, a company official had said earlier.

Mr Vohra said the SEZ land, after denotification, will be used for other expansion plans.

“Every two years or three years we require capacity addition. We can think of that in future. Later on when we wanted to do something with this land, we will go for two plants (API and Formulations) together,” he explained.

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Govt can raise Rs3.76 lakh crore by lowering stake to 51% in PSUs: ICICI Securities

Releasing the ICICI Securities’ white paper on disinvestment, finance minister Pranab Mukherjee had said that disinvestment was necessary to unlock the value of state-owned companies and garner resources for funding social sector programmes

New Delhi: The government can garner over Rs3.76 lakh crore by bringing down its holding in state-owned companies to 51%, reports PTI quoting ICICI Securities’ white paper on disinvestment.

“There is huge potential to disinvest most of the holdings while retaining the 51% government stake.

This can lead to unlocking the wealth to about Rs3,76,711 crore,” said the white paper, which was released by finance minister Pranab Mukherjee.

The total market capitalisation of public sector units is around Rs12.83 lakh crore, according to the paper.

A sectoral analysis shows that the value of government stake is the largest in power sector, followed by oil & gas and metals.

The value of government stake in power companies stood at Rs4.03 lakh crore, oil & gas companies (Rs2.98 lakh crore) and metals (Rs1.70 lakh crore). The valuation of government stake in engineering sector companies stood at Rs85,791 crore, the paper noted.

“Experience in other countries indicates that resource mobilisation equivalent to 5%-10% of gross domestic product (GDP) successfully augmented fiscal position and catalysed economic growth while maintaining a desirable and acceptable social thrust,” the paper said.

Releasing the paper, Mr Mukherjee had said that disinvestment was necessary to unlock the value of state-owned companies and garner resources for funding social sector programmes.

“Keeping more than 51% equity in government companies locked-up does not make economic sense when such valuable resources are required for redeployment in area where development is needed,” he had said.

With seven months of the ongoing financial year (2011-12) already over, the government has been able to raise just Rs1,145 crore through stake sale in Power Finance Corporation (PFC) and there are apprehensions that it may miss the mammoth Rs40,000 crore target for the fiscal.

Volatile stock markets have forced the government to delay the proposed stake sales in PSUs. Global equity markets have been on a downslide on fears over the spiralling debt crisis in the euro zone, as well as credit crunch in the US.

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Bank of India likely to re-launch mutual fund biz by December

BoI was in the MF business in 1990. Of the six schemes launched by the fund, four had been redeemed and two schemes transferred to Taurus Mutual Fund after giving exit option to investors in 2004

Mumbai: State-run lender Bank of India (BoI) has decided to advance its proposed re-entry into the mutual fund (MF) business by a few months to December, reports PTI.

“We are working on it (MF business)... by December, I suppose we should have something in place,” Bank of India chairman and managing director Alok Misra told PTI.

He refused to give more details on the business model saying the bank is working out the details. He also refused to say whether it will be a joint venture or not.

Earlier this year, the bank had said it would launch its MF business by early 2012 and was scouting for a partner.

It was also reportedly in talks with Bharti Axa Investment Managers and Pramerica AMC which were planning to sell their stakes.

BoI was in the MF business in 1990. Of the six schemes launched by the fund, four had been redeemed and two schemes transferred to Taurus Mutual Fund after giving exit option to investors in 2004.

Banks generally enter the MF space as they can leverage on their branches for distribution, which in turn would help cut cost of delivery, thus improving business efficiency.

Currently, there are eight MFs either fully or partly-owned by banks along with overseas partners. These include Baroda Pioneer Mutual Fund, Canara Robeco Mutual Fund, ICICI Prudential MF, Principal MF of PNB and SBI Mutual Fund, Axis MF, IDBI Mutual Fund and Union KBC MF of Union Bank.

There are 40 MF players in the country with average asset under management of over Rs7 trillion.

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