iGate open offer for Patni to begin 8th April

The open offer was delayed as the Securities and Exchange Board of India had sought certain clarifications from Kotak Mahindra Capital Co, the lead merchant banker for the offer

Mumbai: US-listed iGate's open offer for buying a little over 20% stake in Indian IT company Patni Computer Systems will begin on 8th April and close on 27th April, reports PTI.

Earlier in January, iGate, in a consortium with private equity firm Apax Partners, had announced a deal to buy the entire 45.6% stake of Patni brothers-Narendra Patni, Ashok Patni and Gajendra Patni-along with General Atlantic's 17.4% holding for $921 million (Rs4,188 crore).

In a filing to the Bombay Stock Exchange, Patni said the date for commencement of the open offer has been revised to 8th April from the earlier 4th March.

The date was put off as approval from market regulator Securities and Exchange Board of India (SEBI) was pending.

The SEBI clearance was delayed as the regulator had sought certain clarifications from Kotak Mahindra Capital Co, the lead merchant banker for the offer.

Besides, iGate had also announced an open offer for purchase of up to 20% stake from public shareholders, taking the total deal size to $1.22 billion (Rs5,400 crore).

The aggregate price for the shares to be purchased in the open offer, assuming full tender, is estimated at $301 million.

In any deal involving sale of over 15% stake in a listed company, it is mandatory for the acquirer required to make an open offer for purchase of an additional 20% stake from public shareholders of the target firm.

In the Patni deal, iGate has offered to purchase 20% stake from public at a price of Rs503.50 a share-the same price paid to the promoters of India's sixth largest company.

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Bhatt takes on RBI, says it never understood SBI teaser loans

Reiterating the RBI's stance that SBI's special home loans are similar to the sub-prime loans lent in the US in the run-up to the 2008 global financial meltdown, SBI chief OP Bhatt said this view is beyond logic

Mumbai: Outgoing State Bank of India (SBI) chairman Om Prakash Bhatt continued his defiance of the central bank on the teaser loan front saying "the Reserve Bank of India (RBI) never understood our special home loan product," reports PTI.

"Obviously, they (RBI) have not understood our product (the special home loan product)," Mr Bhatt, who is superannuating tomorrow from SBI after a five-year stint as chairman and a four-decade-old association, told reporters at the bank headquarters here today.

Reiterating the RBI's stance that SBI's special home loans are similar to the sub-prime loans lent in the US in the run-up to the 2008 global financial meltdown, Mr Bhatt said this view is beyond logic as his offering is sold to those who are "absolutely credit-worthy."

However, he was quick to add that this is not a defiant stance with regard to the regulator but this is the view-point of a bank that is the industry leader with a quarter of the entire banking business under its fold.

"Being the industry thought-leader and market leader, it is the duty of SBI to articulate our views to the regulator.

This has to be done in the interest of intellectual honesty and public discourse," he said.

However, Mr Bhatt was quick to add that "but if they still insist that this cannot be continued and is against its norms, then we will comply... That does not mean that we don't have a view-point on this? Also, I would like to place it on record that so far, all through the five years of my tenure as the chairman, SBI has been 100% compliant with all the RBI regulations."

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ASSOCHAM forecast of wine industry growth exaggerated, says wine expert

The industry body has estimated a growth of 35% by 2012 which has been contested as based on conflicting and unrealistic figures

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has forecast that the wine industry is likely to grow at around 35% by 2012, but industry experts think this expectation is exaggerated and is based on wrong figures for the past couple of years.

Subhash Arora, a wine expert who also runs the Indian Wine Academy, told Moneylife, "The ASSOCHAM report is nothing but a conflicting, confusing and confounding report." He said, "The figures are conflicting with unrealistic and unlikely growth rate projection with a very pessimistic estimate for 2008."

The ASSOCHAM report, titled "Emerging Industry trends in Indian Wine Market", states that the Indian wine market (in value terms) stood at Rs800 crore as of 2008 and is likely to touch the Rs2,700 crore mark by the end of 2012. It also says that wine consumption in India is likely to reach around 14.7 million litres (in volume terms) by the end of 2012, from around 4.6 million litres in 2008, thus registering a growth of 35%.

Mr Arora, writes on his website Delwine: "There seems to be a basic lacuna in the figures. Whatever the figures for 2008 that have been assumed, 2009 was a disaster and 2010 barely reached the level of 2009. The current year has shown buoyancy and 30-35% annual increase is most likely in 2011 and 2012. But if the figures of 2010 are assumed to be close to 2008, it would be far-fetched to expect an almost three and a half times growth during the next two years."

"The report on sales value also does not clarify whether the figures are first point sales by the producers and importers and whether they include customs duty, excise duty, VAT and other government taxes, or (whether) they are estimates based simply on the MRP of wine sold, or are ex-factory prices," Mr Arora explains.

According to the ASSOCHAM report, "around 65% of the total volume of wine consumed in India is produced locally in states like Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu and the Punjab, as these regions are booming with a number of wineries." But Mr Arora points out that "the study fails to name Goa, which produces over 200,000 cases (1.8 million litres) of low-end fortified wine, a majority of which is consumed within Goa."

DS Rawal, general secretary of ASSOCHAM, while releasing the report said, "Favourable government policies, suitable tax structures, rising disposable income and a growth in the tourism sector are certain reasons for the burgeoning Indian wine market. Besides, the rapidly changing lifestyle and drinking habits of people (many from the middle and higher middle classes no longer prefer hard drinks) especially the younger lot, are paving the way for growth of the wine industry.

Mr Arora, who only prefers wine over anything else, jokingly says, "It is the most profound statement that people from the middle and higher middle classes no longer prefer hard drinks. If that is the case, we would be consuming over 50 million cases, not litres, annually. Such a category of people is very minuscule, though it has added to the growth of the wine industry. But to say such a thing is a purely wishful statement and a distant dream."

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