The proposed order will help remove the ambiguity of Section 6AA of the Insurance Act. The ambiguity came to light when Reliance Life announced its plans to go for a public offer in 2009, but could not obtain regulatory approval as it had not completed 10 years of existence
New Delhi: The government is likely to soon relax the norms for dilution of stake by Indian promoters of insurance companies, a move that will pave the way for Reliance Life to sell a 26% stake to Nippon of Japan, reports PTI.
"We will soon issue a circular which will enable insurance firms to dilute promoters' stake though permissible means before 10 years of operations," official sources said.
The proposed order will help remove the ambiguity of Section 6AA of the Insurance Act. The ambiguity came to light when Reliance Life announced its plans to go for a public offer in 2009, but could not obtain regulatory approval as it had not completed 10 years of existence.
Section 6AA of the Insurance Act, 1938, stipulates that a promoter holding over 26% in an insurance company, including re-insurance, will be required to divest its stake and bring it below this threshold limit in a phased manner "after a period of 10 years from the date of the commencement of the said business by such Indian insurance company or as prescribed by the central government".
This provision does not apply to the foreign promoters of insurance firms, as per the explanation of the section.
Sources said even the law ministry is of the view that there are no regulatory hurdles if promoters of life and general companies and re-insurance firms dilute their stake before the 10-year period stipulated in the clause.
With the enabling provision, insurance firms can dilute their stake anytime, sources said.
ADAG-promoted Reliance Life came into existence with the acquisition of AMP Sanmar in 2005. AMP Sanmar started operations in January 2002, which implies Reliance Life would complete 10 years of operations in January next year.
In March this year, Japanese insurance firm Nippon Life Insurance Company agreed to acquire a 26% stake in Reliance Life Insurance for $680 million (about Rs3,060 core), subject to regulatory approval.
The transaction pegs the total valuation of Reliance Life Insurance at approximately Rs11,500 crore ($2.6 billion).
As per the current rules, a foreign entity can hold up to a 26% stake in an Indian insurance firm.
Nippon is the sixth largest life insurer in the world and the No 1 private life insurer in Asia and Japan.
In her book, Tracy Carbasho describes the vision behind the victory of the company that has motivated people to stay fit with its driving motto “Just Do It”
Many athletes and sportspersons enjoy wearing Nike shoes. Many of them will hang up their shoes one day, but the global sportswear and equipment manufacturer that has been making these shoes for 47 years already is still running strong.
Tracy Carbasho has captured the spirit of this world renowned company in her story, "Nike - The Vision behind the Victory", through the lives of the people at Nike and their work that has carried it so far.
The company, which was founded in January 1964 as 'Blue Ribbon Sports', officially became 'Nike' in May 1978, taking its name from the Greek goddess of victory.
It is a well-researched story that documents powerfully the vision and the victory of a company with deep roots and a strong brand image that has motivated people to stay fit with its driving motto "Just Do It".
Tracy describes the passion that the Nike staff and management have for sports, as well as their deep knowledge of the needs of athletes, as the driving factors in their day-to-day work.
"Big name endorsers and clever advertising campaigns (have) certainly helped the company rise to power, by making Nike a household name," Tracy writes. "However, the technology behind the shoes, going all the way back to the first prototypes, is the true reason why the company has stood the test of time and it is the real secret of Nike's longevity as a brand."
Consumers-athletes want shoes that will make them better, faster and stronger than their competitors, whether they are in a running race or just doing a daily workout.
The shoe features include the modular instep, advanced shape-correcting memory foam, engineered fins and reinforcements to the external heel counter and outsole.
The book also contains something for budding engineers to learn about aerographics, lunarlite foam, Nike swift, flywire and precool technology that the company uses in the manufacture of footwear and apparel.
Describing the contribution of sportsmen to the brand, the author says, Nike has built its brand on celebrity endorsements. "If you review print and television advertisements, where golfer Tiger Woods has endorsed non-Nike products, you can clearly see the undeniable Swoosh logo on his shirt and hat. Other sponsors embrace the idea that he wears the Nike apparel in their commercials, e.g. TAG, Accenture and Buick," Tracy writes.
Importantly, Nike has been supportive of sportspersons who stumble; for instance, Tiger Woods when he had his problems which were widely reported in the media.
The author has also covered a number of ethical and human issues-like gender bias, or the efforts towards improved labour practices and avoiding child labour, and an environment-friendly approach in manufacturing processes with elaborate recycling of materials.
Lastly, according to Tracy, "Nike has diversity and inclusion component built into its organisation structure. The purpose is not to just include more women, but also to ensure that the company's makeup of more than 30,000 employees includes people of diverse backgrounds and skill sets."
Gina Warren, vice-president, Nike, sums it up when she says, "It's what makes us smarter. It's what helps our business grow and helps us connect with customers."
Kelley Murray Skoloda, partner at Ketchum the marketing consultancy, writes in the foreword: "This book is a must read not just for sports fans and history buffs, but also for business leaders, as well as advertising and marketing executives, who most certainly can learn lessons from Nike's success and who will benefit from Nike examples. It is well written in a manner that makes you want to keep turning the pages."
("Nike - The Vision behind the Victory", by Tracy Carbasho, is published by Jaico Publishing House and is priced at Rs195.)
There has been concern over production of pulses this year, as the area under cultivation across the country has been lower by more than 11%
The prices of pulses such as tur dal, urad dal, chana are expected to remain stable, despite the reduced area cultivated this year, as the crop from a good monsoon this year and stocks from the record production last year should balance prices.
"There is a 10% drop in the acreage for pulses and the production from other pulses-growing countries like Canada and Australia has fallen this year," says Bimal Kothari, vice-president, India Pulses and Grain Association (IPGA). "But this won't have any impact on the prices here as there was good production last year and the monsoon is still on, which might boost production."
Sageraj Bariya, managing partner of Equitorials research firm, says, "The prices have already risen, so there won't be any further increase. According to traders and wholesalers, last year's inventory is already piled up."
According to an estimate by the agriculture ministry, total sowing of pulses this year has fallen by 11%, from last year's 11.16 million hectares to 9.93 million hectares till 18th August.
According to the pulses and grain association, "India is having a good monsoon this year and the sowing process for the kharif crop has been good. This will give good subsoil moisture and assist in increasing the rabi crop acreage for chana and peas which is sowed in December and harvested in March. As a matter of fact, for the first time in the past five years, prices of pulses have contributed negatively to inflation and prices have remained within the reach of the common man."
The India Meteorological Department (IMD) says rainfall was 26% above normal in the week ending 19th August.
However, there has been adverse weather in Australia, where production of peas and chana has dropped by as much as half. In Canada, production of yellow peas has dropped from an average of 2.5-2 million tonnes.
Yellow peas constitute about 15% of the pulses imported by India. "There has been a fall in production of yellow peas in Canada this year, but this won't have any impact on the supply chain as we have enough storage. This is the case also with other pulses such as tur and urad dal," Mr Kothari said.
The Indian pulses industry contributes around 23% (15-17 million tonnes) of the total world pulses production, which is the highest by any single country. Consumption is pegged at 18-20 million tonnes and about 26 million hectares is under pulses cultivation. Despite this, India is the biggest importer of pulses, consuming about 15% of the world pulses trade.
Mr Kothari explained, "Our average yield per hectare is at around 600-700kg/hectare, which is lower than the world average of 1200kg/hectare, mainly due to the quality of seeds used in India. A lot of research and development is required. Farmers are also migrating to more remunerative crops like cotton, wheat, rice, oilseeds etc."