Emami introduces balms in low-unit packs

The pain-relief segment is now taking the low-unit pack route, after the success of this strategy in shampoo and hair-oil marketing

Velvet Shampoo was the trend-setter in the sachet market many years back when it introduced shampoo sachets at Re1 to penetrate the rural market. This gave an edge to the company and better market penetration due to the low price point.
 
Other fast-moving consumer goods (FMCG) players like Hindustan Unilever Limited, Godrej Consumer Products and Dabur India Ltd have also tried this route for their different products, at different price points. Now the pain-relief segment is also trying to penetrate the rural segment with this time-tested strategy.

Emami Group is launching low-unit packs (LUPs) of Zandu Balm at Rs2. The pack will weigh 1.2 grams and it will be used to penetrate the rural market. “We feel that any consumer suffering from headache, cold or backache will be able to get relief from the LUPs instead of looking for a Rs-20 packet. This will not only add to the convenience of the consumers, but will also generate rapid sales of the product,” said Mohan Goenka, director, Emami Group.

The LUP market forms 35% of the total Indian FMCG market. “The market size for LUPs is different for different categories. For example, in shampoos, close to 80% of sales come from sachets. The LUP market for balms is around Rs100 crore; it is currently contributing about 20%-25% of the total sales of balms. Looking at this trend, we are confident that the LUP market for balms is certainly bound to grow and hence the decision to launch LUPs for Zandu Balm,” said Harsh V Agarwal, director, Emami Group.

The company is trying to push the product deeper into rural areas through its mobile trading scheme (selling products door-to-door through vans or bicycles) and the ‘small village shop scheme’ (where products are sold from shops based in rural houses).   

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Peak-hour deficit touches 13.3%, says Central Electricity Authority

According to the CEA website, peak-hour deficit has increased from 11.9% in 2008-09 to 13.3% in 2009-10. Experts believe that pent-up demand may be higher than the projected 11%, further worsening the situation

The power ministry plans 100% electricity supply all over India by 2012. However, statistics from the Central Electricity Authority (CEA) show an increase in the demand-supply gap during peak hours from 11.9% in 2008-09 to 13.3% in 2009-10.

The total energy deficit has come down from 11.1% in 2008-09 to 10.1% in 2009-10. However, power experts believe it is the peak-hour deficit that is the main concern and which needs to be monitored.

“I would be concerned about the peak deficits. We will have to plan capacities to match the peak deficits. There is a lot of electrification that needs to be done, there is a lot of pent-up demand,” said Kuljit Singh, energy expert and partner, (transaction advisories services), Ernst & Young, India.

Mr Singh also pointed out that the peak-hour deficit might be much higher than the projection by the government body. “The real peak demand may be much higher than the projected peak demand. There may be a lot of peak demand that is not coming on-stream because there is no capacity. The 11% projected deficit is also not in synch with the experiences of larger cities that are going through load-shedding for hours together,” stated Mr Singh.

If the official figures released by CEA are anything to go by, the western region and the north-eastern region have recorded a significant improvement in the demand-supply scenario. The power deficit in the north-eastern region has improved from 14% in 2008-09 to 11.1% in 2009-10. Similarly, in the western region, the power deficit has improved from 16% to 13.7% in the same period.

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SEBI’s move banning ULIPs may trigger a legal battle and postpone IPO insurance plans

While passing an order banning ULIPs late on Friday night, SEBI said the entities have not obtained any registration from the regulator though the ULIPs were in the nature of collective investment schemes like mutual funds

The move of the Securities and Exchange Board of India (SEBI) to unexpectedly ban 14 major private insurance companies, including SBI Life, ICICI Prudential and Tata AIG, from selling Unit-linked Insurance Plans (ULIPs), will open up legal battles, level the playing field between mutual funds and insurance companies somewhat, slow down the scorching growth of insurance companies and stymie the plans of several insurance companies to go public.

“We are examining all legal options. The matter is certain to end up in the court,” said the head of a large insurance company, reacting to the SEBI move. Curiously, while banning 14 insurance companies, SEBI has left out Life Insurance Corporation of India (LIC), by far India’s largest insurer. LIC is owned by the government and has been used by the government to push through large disinvestments of public sector companies for which public and institutional appetite was lacking.

While passing an order banning ULIPs late on Friday night, SEBI said the entities have not obtained any registration from the regulator though the ULIPs were in the nature of collective investment schemes like mutual funds.

"I hereby direct the entities... not to issue any offer document, advertisement, brochure soliciting money from investors or raise money from investors by way of new or additional subscription for any product (including ULIPs) having an investment component in the nature of mutual funds, till they obtain the requisite certificate of registration from SEBI," said Prashant Saran, wholetime SEBI member in an order.

The insurance companies against whom SEBI passed an order are Aegon Religare Life, Aviva Life, Bajaj Allianz, Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India and Reliance Life, apart from SBI Life, ICICI Prudetial and Tata AIG. The SEBI order will put a brake on the scorching growth of ULIPs, which combine investment with insurance. A few months back, SEBI had sent letters to several life companies asking them why they were selling investment products without its approval. Companies had responded that insurance laws permit them to offer investment product with a life insurance policy. In its final order SEBI said, “I find that the entities by their own admission have stated that there are two components of ULIPs— an insurance component where the risk on the life insurance portion vests with the insurer and the investment component where the risk lies with the investor. This establishes conclusively that UlLIPs are a combination product and the investment component need to be registered with and regulated by SEBI”.

ULIPs have been a hot-selling product. The total first-year premium underwritten by the life insurance industry has grown 15% between February 2009 to January 2010. Almost 80%-90% of this comes from ULIPs. Only a small part of this actually ensures insurance cover, inviting charges of mis-selling.

SEBI’s move will halt the plans of life insurance promoters who have sunk in over Rs26,000 crore in capital and would like to extract some of this through public issues. Insurance companies will have to land up in the doorstep of SEBI to have their prospectuses cleared. Even before that they have to win a legal battle of ULIP that now seems inevitable.

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COMMENTS

babaji

7 years ago

wrong sebi gives bad mesage to all ulip costumer why lic left out i dont know and sebi doent give any clear clarification.it is very difficult for regaining trust of ulip costumer

dhansukh s shah

7 years ago

right...sebi took the right, but very late. irda is helping insurance companies in looting general public with agents missellings the products and irda taking no steps at all. even big banks also take active part in lootiongs.excellent steps by sebi

S Natarajan

7 years ago

It is very clear that SEBI's action is due to pressure applied by MF. It is hight time that Finance Ministry should clarify whether SEBI can intervene and issue orders without even consulting the Ministry of Finance. Why all these days SEBI was silent ? By its action SEBI is shattering the economy of India and also creating fear in the minds of public for making any sort of investments.

S Natarajan

7 years ago

SEBI has no authority to intervene when Insurance Companies are under the well control of IRDA which comes under the Control of Central Govt. When they have permission and certificates, how may times insurance companies have to get clearance from other Govt.bodies? It's the right time for IRDA to file Defamation against SEBI for dissuading the public for loosing interest in Insurance Companies. The Finance Ministry Should immediately issue a notification stating that SEBI has no local standi in the matter of Insurance companies and instruct them to apology and withdrawal of their notification forthwith.

Pradeep Bhageria

7 years ago

Its really surprising that Regulator like SEBI appointed by Government , having pre-determined objective and areas of work, is moving out of its role area and meddling with pther regulator; IRDA.
Whats the pressure on SEBI and who is lobbying with them to do so?

Why is government silent on such a serious unnecessary action taken by SEBI, when the area of operations have been decided by the government itself while forming both the regulators?

Whats the intention of SEBI in doing so?

IPO's are a part of the companys growth and its bound to come as and when the company promoters find it best suitable to them to do so. But what about the fear SEBI has created in the minds of the investors of ULIP?

The TV media has created a whole lot of scene on the issue between the reguators. The message gone down is that the these private insurers are cheaters and LIC is far above the law. While its an accepted fact that all these companies have gone ahead with the new ULIPS only after go ahead given by its regulator IRDA.

SEBI should have created an impression that all these companies are cheaters.

SEBI should have taken the governments help while implemetning such approval and registration from these copmpanies..Charges and Commission is an issue but not the only issue.. It has been discriminatory in passing order..

Rajat Jolly

7 years ago

Politician Nirupam asks FM to intervene in ULIP ban.....Indian Politicians do not act, but only react... http://www.indianmutualfundsonline.com

Rajat Jolly

7 years ago

Finally a day of enlightenment…………………………………..
This truly is a brilliant day for the Indian Mutual Fund Industry. When this news poured in, I literally jumped with joy, am glad this happened.

I know so far this news must have reached your ears too, oh its spreading like wild fire..

m k sujitkumar

7 years ago

at last somebody has put their handup to protect indians from the private+foreign players who dont care for the policy holders by charging huge amounts by way of diffrent charges.

ROOPSINGH SOLANKI

7 years ago

THE SHAMELESS ACTION OF IRDA TO SELL ULIPS IGNORING SEBI ORDERS SHOWS THAT IRDA PLAYS IN HANDS ASSOCIATE INSURANCE COS-INSURANCE IS A BUSINESS OF SHAMELESS AGENT-WHO CAN MAKE DAY LIGHT BLUFFS-AND HAVE NO FEAR OF GOD-FOR THEM MONEY IS SOLE CRITERIA-BY HOOK OR CROOK-AFTER ALL INSURANCE IS SOLD ON EMOTIONAL BLACK-MAILING OF DEATH DREAMS-SO NO SURPRISE-IRDA REFUSED TO SHOW ANY RESPECT TO SEBI ORDER-LETS HOPE THIS CONFLICT TURNS INTO A FULL BATTLE SO THAT OUTCOME RESULT IS A REAL LEVEL PLAYING FIELD FOR ALL AND THE HONEST WINS AND THE INVESTOR COMMUNITY IS THE REAL GAINER FROM THIS BATTLE-LETS HOPE FOR A ''MAHABHARATA''A WAR OF PRINCIPLES

jayaprakash r

7 years ago

all the ulip plans are cheating plan can any one of insurance companies can say they give at least 10% return to the customer in last three year but their advertisement they say 30% to 40% after all deduction the customer get only the prinicipal only sebi take good action only.i welcome this action.

Devendra

7 years ago

I think SEBI chairman MR. Bhave helping FII to run Indians rupees out of the country. middleclass indian can take part indian equity markets only through ULIPs and MFs, and mr. Bhave is determined to kill both the industries. First he killed mf industry by abolishing commissions and now he is after Ulips. When Indian markets are in dip and FIIs running out of the country only Ulips and Mfs were there to save investers interests, now mr. bhave is giving free hand to FIIs to loot indians. And one another question, why he left LIC? LICs most of the agents are not have enough lnowledge about their products and they sell on the name of govt. company. Highest misssellers are from LIC. Why is he discriminating?

R NAGARAJAN

7 years ago

THIS IS LATE DESISITION BUT OK AND ALSO GIVEN COMISSION FOR MFADVISORS

R NAGARAJAN

7 years ago

THIS IS LATE DESISITION BUT OK AND ALSO GIVEN COMISSION FOR MFADVISORS

Mandip Chawla

7 years ago

Hi all,
Don't be so rude to LIC, LIC is a goi company its true but you have to agree that lic is following 2 regulators already IRDA & It's own LIC ACT 1956.
Did you know that if any insurance company give total insurance of 100Rs to any person then that company has to pay a solvency margin of security of 150Rs to IRDA (its not include product returns only persons death cover includes)
You will be surprised that till now not a single life insurance company except LIC has given single solvency margin to IRDA.
Did you know that lic has paid a total solvency margin of 153% (its about more than 32000 crores) to IRDA in 2006-2007.
I am not against in any private of state own insurance company but don't be so rude about our own LIC.
LIC invest its 91% of funds in welfare of our country.
LIC has invested more than 150000 crore in govt infrastructure to grow our nation.
There is no proprietor of LIC. LIC all profit belong to its policy holder. (5% to govt & 95% to policy holders)
About this event, LIC has received notice from SEBI & LIC has answered to that notice may SEBI will be satisfied with that answer & not ban it.
LIC has already said to sebi that it is ready to take any license to invest in Market but isuue must be clear by sebi & IRDA.
I tell you that i am not a insurance agent or any official of lic but i love my country and i can't here any obligation to any govt company which is hepling us to grow our country.
A true indian
Mandip Chawla

Ramesh R Bhanusali

7 years ago

For protection of investor's money is the slogan of SEBI and takes unilaterlal decision overnight.First Mutual Fund and now Insurence.Does SEBI think that the Indian public is not matured and literate enough to take decision of their investment . Then why create a platform on BSE & NSE to buy products through Brokers which is nothing but shifting the dependence of investors from distributors etc to brokers.This seems only to monopolise the whole business to a limited few who will then ditctate in future.

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