March factory output index unchanged at 57.9

Inflationary pressures intensified during March, as both input and output prices rose at faster rates than in the previous month

The seasonally adjusted HSBC Purchasing Managers' Index (PMI)-a headline index to measure the overall health of the manufacturing sector-posted 57.9 in March, unchanged since February. The latest reading indicates a marked strengthening of business conditions in the Indian manufacturing sector, which remained above the long-run trend.

Indian manufacturers reported a substantial increase in new business received during the month under review. Moreover, the rate of new order growth accelerated to a thirty-one month high. Panellists commented that the high quality of products and ongoing improvements in general economic conditions had helped to boost new work intakes. However, the rise in new export business was marginally slower than in the previous survey period. Nonetheless, the expansion remained strong in the context of historical data.

The sharp growth of overall new orders supported a further increase in output. However, the rate of output growth was broadly in line with that indicated in February. Subsequently, backlogs of work rose again and at the fastest rate in four months. Anecdotal evidence suggested that shortages of materials and manpower also contributed to the accumulation of outstanding business.

March data signalled a marginal rise in stocks of finished goods at factories in India. Where an increase in post-production inventories was indicated, this was attributed to strong output growth.

Employment in the Indian manufacturing sector fell for a third consecutive month in March, as manufacturers continued to struggle to fill vacant positions. Purchasing activity rose substantially during March, reflective of the sustained expansions of new orders and output. Moreover, the increase in input buying was the fastest since February 2008. Subsequently, stocks of purchases also rose. Suppliers' delivery times shortened fractionally during March, but the majority of panellists indicated that lead times were unchanged since February.

Inflationary pressures intensified during March, as both input and output prices rose at faster rates than in the previous month. Input cost inflation was the strongest in the series history, driven by higher raw material prices. This led to a further marked rise in charges, which was the second-fastest in the history of the series.

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R Sridharan named acting chairman of SBI

Formal decision yet to be taken on new chairman to succeed OP Bhatt; Mr Sridharam, who is managing director, will take charge today

Mumbai: R Sridharan will take over as acting chairman of the State Bank of India (SBI) from OP Bhatt, who superannuated yesterday.

Mr Sridharan, has been the managing director and group executive (associates and subsidiaries) at the bank, and will take charge today, PTI reported, quoting unnamed sources. He began his career with SBI in 1972, the same as Mr Bhatt, and has served with the country's largest bank through these years. Mr Sridharan, is a graduate from the University of Madras. He was appointed MD in December 2008.

The government is said to be considering appointing SBI's deputy managing director Pratip Chaudhuri to succeed Mr Bhatt, but with a formal decision yet to be taken, it has appointed an acting chairman.

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MCX files DRHP with Sebi for IPO

Under sectoral regulator FMC norms, the anchor investor, Financial Technologies is required to reduce its stake to 26% from the present 31.18%, which it has declared to achieve through the IPO. MCX also announced that it will be appointing a former High Court Judge as an Exchange Ombudsman and declared that it favours bringing exchanges under the purview of the Right to Information Act

Leading commodity exchange Multi Commodity Exchange (MCX) has announced its intention to go public through an initial public offering (IPO) which will see its existing shareholders diluting
12.60% of equity.

The offer for sale from the existing shareholders, including promoter Financial Technologies (FT) led by Jignesh Shah, is through a 100% book-building process.

MCX filed its draft red herring prospectus (DRHP) with capital markets regulator SEBI (the Securities and Exchange Board of India) on Thursday (31st March).

Under sectoral regulator FMC (Forward Markets Commission) norms, the anchor investor-FT-is required to reduce its stake to 26% from the present 31.18%, which it has declared to achieve through the IPO.

On 14th May, Moneylife had reported on how FMC had given a nod to the MCX IPO. (http://www.moneylife.in/article/8/5395.html).

Lamon Rutten, managing director and CEO of the Exchange, said that he hopes to complete the process by the deadline (30th September), failing which FT will have to find "other ways" of diluting the equity to meet the deadline. He, however, did not reveal the quantum of money to be raised through the IPO.

Interestingly, the National Stock Exchange (NSE), one of the stakeholders in MCX, will not be diluting its stake.

"SEBI generally takes 45 days to clear DRHPs and then we have a year's window to list which we will choose as per market conditions," Mr Rutten said.
NSE is not among the institutions diluting stake through the IPO either, he said, adding the issue will see SBI, Corporation Bank, GLG Financials Fund, Bank of Baroda, Alexandra Mauritius and ICICI Lombard General Insurance bringing down their stakes to 1.04%, 3%, 0.38%, 0.82%, 0.19% and 0.07%, respectively.

When asked if the financial institutions holding stakes are looking at the IPO as a good platform to exit and make money on their long-held investments, Mr Rutten parried the question, reports PTI.

He said the IPO is for bringing in the highest levels of transparency by ensuring shareholder and public scrutiny and corporate governance practises.

Edelweiss Capital, Citigroup Global Markets and Morgan Stanley will be acting as book running lead managers to the IPO which has caps of 50% for qualified institutional buyers and minimum limits of 15% for non-institutional bidders and 35% for retail buyers.

MCX also announced that it will be appointing a former High Court Judge as an Exchange Ombudsman and declared that it favours bringing exchanges under the purview of the Right to Information Act.

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