Companies & Sectors
ICRA places 14 suppliers of Maruti under watch over Manesar mayhem

The ratings agency said several auto ancillaries that have a high revenue dependence on Maruti's Manesar plant, may experience lower cash accruals and in some cases possible stress on their liquidity position during the lockout

Mumbai: As a fall out of the lockout at Maruti Suzuki's Manesar plant following violence and arson, rating agency ICRA on Tuesday placed 14 auto component manufactures on 'rating watch with developing implications', reports PTI 
Several ICRA-rated auto ancillaries, that have a high revenue dependence on Maruti's Manesar plant, may experience lower cash accruals and in some cases possible stress on their liquidity position during the lockout, prompting the agency to place their ratings under "watch with developing implications".
"Given the present uncertainties, it is difficult as of now to quantify the extent of supply disruption and its eventual impact on individual companies' financial risk profile," ICRA said in a release.
The firms under the rating watch list are ALP Nishikawa, Global Autotech, Jay Bharat Maruti, Juken Uniproducts, Kalyani Thermal Systems, Krishna Maruti, Lumax Industries, Machino Polymers, Neel Metal Industries, SKH Metals, Sona Somic Lemforder Components, Subros, Technico Industries and Uniproducts.
ICRA said it is monitoring the situation and would conclude its rating action as and when greater clarity emerges.
Production of four popular models - Swift, Swift DZire, A-Star and SX4 - has been halted since 18th July as India's top carmaker declared a lockout at the plant in Haryana following large-scale violence which led to the death of a top HR executive of the company.
According to ICRA, these four models together account for around 30-35% of Maruti's volumes. For suppliers, the overall average realisation of components related to these four models is higher than those of components that go in models produced at Maruti's Gurgaon facility.
Accordingly, it is estimated that those vendors that supply to all models of Maruti derive around 35-40% of their revenues from supplies to models produced at the Manesar plant, the rating agency noted.
Being the largest passenger vehicle original equipment manufacturer (OEM) in India with domestic market share of 38.4% in 2011-12, any demand or supply shock on Maruti's output, tends to have a relatively greater adverse impact across its supply chain, ICRA maintained.
Even during 2011-12, when production had remained intermittently disrupted at both Manesar and Gurgaon units in the wake of a prolong strike, some auto component makers, particularly those deriving a large majority of their revenues and profits from sales to Maruti, had experienced lower profits and cash accruals during that period, it said.
Given the prevailing situation, a quick resolution and subsequent process of normal production resumption may get protracted, the agency added.


IDBI Q1 net profit up 28% to Rs427 crore

IDBI Bank's first quarter net interest income rose 10% to Rs1,271 crore while fee based income grew 23% to Rs417 crore

State-run lender IDBI Bank Ltd reported a 28% higher net profit during the first quarter on robust fee based income.
For the quarter to end-June, IDBI Bank said its net profit rose to Rs427 crore from Rs325 crore while net interest income increased 10% to Rs1,271 crore from Rs1,152 crore, same quarter a year ago.
Its fee based income during the first quarter rose 23% to Rs417 crore from Rs338 crore. IDBI Bank said as of June 2012, its total business, including deposits and advances stood at Rs3.6 lakh crore compared with Rs3.3 lakh crore a year ago period.
During the first quarter, the Bank's deposits grew 9% to Rs1.9 lakh crore from Rs1.8 lakh crore last year.


Reshuffle in Cabinet in offing; Chidambaram likely to be FM

A minor reshuffle of portfolios in the Union Cabinet is likely to bring back Chidambaram as finance minister while Sushil Kumar Shinde may be the next home minister  

New Delhi: A minor reshuffle of portfolios in the Union Cabinet appeared to be in the offing with indications today that Home Minister P Chidambaram was being made the Finance Minister, reports PTI.
Power Minister Sushilkumar Shinde was tipped to be the Home Minister, according to sources.
Minister for Corporate Affairs M Veerappa Moily is likely to be given the additional charge of the Power Ministry, the sources said.
The reshuffle of portfolios has been necessitated by the exit of Pranab Mukherjee, who held the portfolio of Finance Ministry before getting elected as the President.
When asked about the speculation, Chidambaram sought to downplay it.
"I don't think so. I am very happy to meet you once in a month. I am content with the job I am doing and we will meet next month," he told reporters when asked during his monthly press conference as Home Minister whether this would be his last one in this portfolio.
Chidambaram was the Finance Minister before being given the charge of the Home Minister in the wake of November 2008 Mumbai attack.

Chidambaram has taken a major share of the pie of the Empowered Group of Ministers and Group of Ministers after the exit of Pranab Mukherjee.


Chidambaram now heads seven out of the 15 Group of Ministers (GoM) and two Empowered Group of Ministers (EGoMs), followed by Defence Minister AK Antony who chairs three EGoMs and four GoMs.


Agriculture Minister Sharad Pawar, who a fortnight ago had threatened to pull out of government contending lack of say in governance to coalition partners, has been made chairman of one EGoM and three GoMs.


Prime Minister Manmohan Singh has also pruned the number EGoMs from the earlier 12 to six at present. Earlier, all the EGoMs were chaired by Mukherjee.


The list of GoMs has also been brought down to 15 from the earlier 27.


The six EGoMs wound up by the government include those on the Food Security Act, National Highways Development Project, issues related to SEZs, and under-recoveries of oil marketing companies.


Antony chairs the EGoMs on gas pricing, mass rapid transit systems, and ultra mega power projects, Chidambaram heads EGoMs on telecom spectrum allocation, and reforms in the Central public sector enterprises.


Pawar has been made the chairman of the EGoM on drought.



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