FII holdings in public sector units on the rise

According to an analysis of 11 PSUs that came out with IPOs in the past two years, nine companies saw an increase in their foreign institutional investment shareholdings in the quarter ended December 2010 while two witnessed a decline in their FII holding

New Delhi: Overseas investors are increasingly reposing their faith and money in public sector undertakings (PSUs), with as many as nine public sector firms including Coal India, PowerGrid Corporation and NTPC, recording an increase in FII holdings in recent months, reports PTI.

According to an analysis of 11 public sector units that came out with initial share sales in the past two years, nine companies saw an increase in their foreign institutional investment (FII) shareholdings in the quarter ended December 2010, vis-à-vis the September quarter, while two companies-Oil India and Engineers India-witnessed a decline in FII shareholding.

In the case of another PSU that conducted a stake sale, MOIL, data on FIIs' shareholding during the quarter was not available on the Bombay Stock Exchange.

Central transmission utility PowerGrid saw an over seven-fold jump in FII shareholding to 12.05% in the quarter ended 31 December 2010, from 1.65% in the September quarter.

PowerGrid's experience was replicated by Coal India after it made its listing debut in November last year, with the company witnessing a two-third increase in FII shareholding in two months to 5.54% at the end of the December 2010. As of 30th October the company had a FII shareholding of 3.32%.

Analysts attributed the trend of increased FII holdings in PSUs to the strong balance sheet and long-term prospects of these entities.

"PSUs are generally known for their strong balance sheet, even enjoy virtual monopoly in some of the sector and they have got government blessing. These are some of the reasons which make FIIs comfortable in investing in such entities," SMC Global equity head Jagannadham Thunuguntla said.

He further said most of the PSUs come out a lower price band for their initial stake sales than private sector companies.

Similarly, NTPC saw its FII shareholding climb to 3.36% in the quarter ended December from 2.85% in the September quarter. FIIs' shareholding in Shipping Corporation rose to 2.32% in the quarter under review from 1.98% in the September quarter.

Interestingly, FII stake in Rural Electrification Corporation (REC) is far more than in other PSUs, although the increase is not much. The company saw its FII shareholding inch up to 21.22% in the December quarter from 20.4% in the previous quarter.

Despite the government's larger holding in these companies, their operations are based on sound business practices, so the chances of facing corporate governance issues are very less, which is also one of the primary reasons for the increasing FII holdings, CNI Research CMD Kishor Ostwal said.

Iron ore producer NMDC and hydro power firms NHPC and SJVN Ltd also witnessed an increase in FII shareholdings in the October-December quarter of 2010 vis-à-vis the quarter ended September.

On the other hand, EIL saw a marginal decline in FII shareholding to 6.83% in the December quarter from 6.98% in the previous quarter, while Oil India saw FII stake decline to 1.56% in the quarter under review from 1.73% in the September quarter.

Apart from companies that have already come out with their initial share sale, ONGC and IOC, which are slated to come out with two big-ticket follow-on public offers (FPOs) in 2011, have also witnessed an increase in FII shareholding.

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Domestic air traffic rises 21% in January

Jet and JetLite together flew 12.26 lakh passengers last month, followed by Kingfisher, which carried 9.61 lakh and IndiGo with 9.5 lakh. Air India (Domestic) flew 7.79 lakh flyers, SpiceJet 7.05 lakh and GoAir 3.15 lakh

New Delhi: Domestic air traffic rose by almost 21% in January over the same period last year, with Jet Airways and its subsidiary JetLite jointly flying about one-fourth of the passengers last month, reports PTI.

Over 49.36 lakh passengers were carried by all domestic airlines last month as against 40.88 lakh in January 2010, recording a growth of over 20.7%, official figures released on Monday showed.

Jet and JetLite together flew 12.26 lakh passengers last month, followed by Kingfisher, which carried 9.61 lakh and IndiGo with 9.5 lakh. Air India (Domestic) flew 7.79 lakh flyers, SpiceJet 7.05 lakh and GoAir 3.15 lakh.

The statistics for market share showed Naresh Goyal's Jet and its wholly-owned subsidiary, cornering 24.8% of the entire passenger traffic this January, followed by Kingfisher with 19.5% and no-frill airline IndiGo very closely behind it, with 19.2%.

National carrier Air India (Domestic) was in the fourth place with 15.8%, followed by another low-cost carrier SpiceJet with 14.3%.

The highest average seat factor, or passenger load per flight, was recorded at 88.6% by IndiGo in January, followed by Kingfisher with 86.5%, GoAir with 83.3% and SpiceJet with 82.6%, the figures showed.

Jet Airways and Air India (Domestic) recorded 73.9% and 69.3% respectively.

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PM announces JPC in 2G scam

Making the announcement in the Lok Sabha as soon as it met for the first working day of the session, prime minister Manmohan Singh said a formal motion for constitution of the Joint Parliamentary Committee would be moved soon

New Delhi: Giving in to opposition demands, Prime Minister Manmohan Singh today announced the government's decision to set up a Joint Parliamentary Committee (JPC) to go into the second generation (2G) spectrum scam, saying the country could "ill afford" disruption of the crucial budget session of Parliament, reports PTI.

Making the announcement in the Lok Sabha as soon as it met for the first working day of the session, Mr Singh said a formal motion for constitution of the Joint Parliamentary Committee would be moved soon.

"We could not succeed in spite of our sincere efforts" to persuade the opposition not to insist on a JPC probe, Mr Singh said.

Asserting that his government was committed to root out corruption, the prime minister said "all effective steps" were taken to convince the opposition in this regard.

"We can ill afford a situation where Parliament is not allowed to function during the crucial budget session. It is in these special circumstances that our government agrees to the setting up of a JPC," he said.

Mr Singh requested speaker Meira Kumar to proceed with the process of formation of the JPC and said a formal motion would be moved soon.

Welcoming the government's move, leader of the opposition Sushma Swaraj thanked the prime minister and leader of the house Pranab Mukherjee for the decision.

"We should not see this as a victory or defeat. This is a victory of democracy. We should all work together putting aside any talk of victory or defeat," she said.

Recalling that the Winter session of Parliament had been lost on account of controversy over 2G spectrum allocation, Mr Singh said, "In paralysing Parliament, I believe, we all do disservice to those who have elected us."

The opposition has been adamant on a JPC probe in the 2G scam, which according to the Comptroller and Auditor General (CAG), has resulted in a presumptive loss to the tune of Rs1.76 lakh crore. A Raja, who was forced to resign as telecom minister three months back, is now in jail.

Dubbing it as the biggest scam in independent India, the opposition had made it clear that it would not allow the budget session to function properly if the JPC was not announced today.

Insisting that the government was committed to root out corruption, the prime minister listed the steps taken by the government on the 2G issue which included Central Bureau of Investigation (CBI) probe supervised by the Supreme Court and the independent inquiry conducted by former judge Shivraj Patil.

He also pointed out that the Public Accounts Committee (PAC) of Parliament was also seized of the matter and the government was fully cooperating with it.

"We are a functioning democracy and must strive to resolve our differences in a spirit of accommodation and collaboration, not confrontation," he said, hoping that it would "renew our confidence in India's forward march."

The government has already made it clear that a formal motion for creation of the JPC would be moved on Thursday by telecom minister Kapil Sibal.

This would be the first JPC to be set up since the Congress-led United Progressive Alliance (UPA) came to power in May 2004.

AIADMK leader M Thambidurai demanded representation for all political leaders on the JPC to ensure that there was no feeling of neglect among the members.

Gurudas Dasgupta (CPI) said he would not like to thank the prime minister for agreeing to the opposition demand for a JPC.

He said it was better late than never that "good wisdom has dawned upon the government" which led to the announcement of a JPC to probe the 2G spectrum scam.

"This is not a question of thanking or complimenting the government or the prime minister. The government and the prime minister had only done their duty by responding to the opposition demand and ensuring that Parliamentary norms are adhered to," he said.

SP leader Mulayam Singh Yadav said the delay in announcing formation of the JPC had affected the credibility of the government.

"The people of the country have come to know that the government had something to hide," he said.

NDA convenor Sharad Yadav wanted that the JPC should also go into alleged irregularities in the conduct of Commonwealth Games, the S-band issue relating to ISRO and the Adarsh housing scam.

He said the judiciary and media were actively involved in probing the issue and the announcement by the prime minister would also allow Parliament to be part of the exercise.

Basudeb Acharia (CPI-M), Arjun Charan Sethi (BJD), K Chandrasekhar Rao (TRS) and Raghuvansh Prasad (RJD) also welcomed the announcement of formation of the JPC.

In the Rajya Sabha, the prime minister made a similar statement on the JPC formation.

Soon after he completed, leader of the opposition Arun Jaitely said he was "disappointed" over the contents of the statement.

"The issue could be resolved in a more gracious manner," he said adding the content of the PM's statement showed the government had done everything and the JPC was formed only because Parliament was paralysed.

Mr Jaitely said the formation of the JPC could have been done in a graceful way rather than in a "tasteless" manner by projecting that the opposition had coerced the government to do so.

BJP members including SS Ahluwalia and Ravi Shankar Prasad as also AIAMDK member M Maitreyan took objection to the content of the PM's statement.

Deputy chairman K Rahman Khan disallowed members saying it was agreed that no discussion would take place on the statement.

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COMMENTS

Shadi Katyal

6 years ago

It is funny that we all complaint about each party but have never given thought to how we reached wsuch a low point. One can point finggers at MM Singh and his coterie but we forget that it is US the citizen of India who have let this go far. We pay ourselves to facilitate for our conveneince and have no legs to stand up and shout that we will not pay briabe.
Why dont we ask to change the selection rule in our voting sytem and take the power away from the parties.
Only those who live amingst us can be electd and not anyone who is given a ticket.
We need accountability of these MLA and MP and only if they are residents amongst us.
We need changes and passing the buck will not end this corruption

K Narayanan

6 years ago

MMSingh has stooped to such a low level and has no shame left in him presiding over the loot of the nation watching silently and helplessly.He is worse than the thick skinned politicians.
He has done more disservice to the nation.No politician in power-which ever party is in power-is interested in the people's welfare.There have a single goal.LOOT the nation.May be MMSingh might have thought -I cannot stop the loot,but at least let me enjoy some comforts of the PMs office during my last days of life.May God give him berth in heaven after his life in earth.

Shadi Katyal

6 years ago

One wonders why it was not acceptable
to UPA and thus lost all this time. What made it now so important top agree.There seems to be left hand not knwoing what right hand is doing and is this the reason that Scam after Scam is being ignore.
What makes Dr. Singh that by agreeing BJP will play fair for Budget.There is too much animosity between the parties.
Is future of India a Secular nation or run by conservative BJP?

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