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Protection Vs power

The country needs power urgently and in a large scale but if the indigenous equipment makers cannot meet the requirements, the government will have to relax the rules for greater imports
In the last few years, China has made great strides into the Indian electrical equipment market at the cost of indigenous makers, due to price, delivery and varying performance of such imported goods.
The Arun Maira Committee, after a detailed study on the effect of such imports on the Indian manufacturing scene, had recommended that importers of these power equipments need to pay a 14% duty. Now, BP Rao, chairman and managing director of BHEL has categorically stated that this quantum of duty is not adequate enough to protect the local industry to survive and develop.  He has further contended that the actual net effect of protection in real terms is less than 5% and therefore not sufficient.
He has not spelt out what exactly he needs, but, perhaps increasing the duty to 20% from the current 14% may give a brief relief!
Leading Indian companies, who have plans to generate their own power, like Adani, Jindal and Reliance have sourced their requirements for their plants from Chinese suppliers like Dong Fang, Harbin and Shanghai Electric, due to price and delivery considerations. So far, the Chinese supplies have also not caused any major concerns in terms of performance.
So, with the continued order position from India and other importers, China has been able to improve its quality, increase production capacity and equipments have performed reasonably satisfactorily.
Indian manufacturers need to have full government support to perform by increasing their production capacity apart from qualitative improvement in performance. They need to match if not surpass Chinese equipment in every way so that Indian power generators and users give a ‘preferential’ treatment for makers like BHEL.
In a separate development, BHEL-associated projects in Tamil Nadu have made good progress.  The North Chennai Thermal Power Project is likely to go on stream in October with the second unit slated to start in December this year. Also, the Vallur 1000MW plant is ready to commence power generation soon and its second unit a little later, though they have not specified the date.
Even the Tamil Nadu Electricity Board-Neyveli Lignite Corporation Tuticorin 1200 MW plant is progressing smoothly, and BHEL is the main equipment supplier.
However, BHEL’s project with the Tamil Nadu government, for setting up two units of 800MW plants at Udangudi has not got off the ground, though it was signed in 2007, apparently due to some issues and the later having decided to go on its own despite entreaties from BHEL. In fact, the Tamil Nadu government had accused BHEL for “lack of cooperation”, details of which were not made public, presumably because of the fair amount success achieved elsewhere by BHEL.
It is imperative that the government seriously reconsiders the element of protection for the domestic industry, and raises the import duty element from 14% to possibly 20% as the first step.

Second would be to pull up all the power equipment manufacturers for not only increasing their capacity but to introduce latest technology to compete with China effectively. The country needs power urgently and in a large scale but if the indigenous makers cannot meet the requirements, the government will have to relax the rules for greater imports.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at [email protected].)


DLF sells 17 acres of Mumbai land to Lodha for about Rs2,700 crore


Lodha Developers would pay Rs1,200 crore to DLF and take over liabilities of around Rs1500 crore incurred by DLF unit Jwala at the NTC Mill property in Worli since 2005
New Delhi: In a big-ticket land deal, realty company DLF has sold 17 acres of prime land in Mumbai to Lodha Developers for about Rs2,700 crore, nearly four times higher than the price at which the company had bought this parcel seven years ago in 2005, reports PTI.
DLF had bought the land from National Textile Corporation for Rs703 crore. The company decided to sell this piece of land as part of the strategy to exit from non-core business.
"Lodha Developers has entered into a binding agreement to acquire DLF's wholly-owned subsidiary Jwala Real Estate, which is the owner of the strategic 17-acre Mumbai textile mill property at Worli," Lodha said in a statement.
"The acquisition is for a consideration of Rs1,200 crore for both equity and debentures of the company. In addition, Lodha is also expected to take over about Rs1,500 crores of liabilities that Jwala has incurred for the development since it purchased the property from NTC in 2005," it added.
The valuation of DLF's land is lower when compared with Indiabulls' deal in 2010 for 8.39 acre of NTC land for Rs1,580 crore.
"The acquisition is 3-4 times cheaper than deals recently done by other real estate players. At a cost of Rs5,000 per sq ft, this land acquisition gives Lodha significant competitive advantage to build a mixed-use development over 5 million sq ft at the prime location of Worli," Lodha said.
With this current deal, DLF has raised nearly Rs8,000 crore from sale of non-core-assets (hotel plots and IT SEZs/ Parks) in the last couple of years. The divestment proceeds are largely utilised to reduce net debt, which stood at Rs22,680 crore as on 30th June.
DLF, the country's largest realty firm, has also put on block two other major non-core assets -- luxury hotel business Amanresorts and wind energy -- and expects about Rs3,000 crore from these two deals.



David N

5 years ago

Lets hope the deal will not go the way of BPTP or RMZ Corp which bought big ticket items and are now facing legal action from PE investors! If Lodha were also to bring in equity from PE players it could face music since market is not so rosy to build and sell quickly.

Indecisiveness continues on the bourses: Monday Closing Report

The Nifty has to decisively break out of the range of 5,300 and 5,377 for further direction

The Asian indices had a weak opening and so did the indices at home. Both the Sensex and the Nifty opened in the negative at 17,552 and 5,316, respectively. On Friday we had mentioned that if the Nifty breaks the day’s low of 5,294, it may head for 5,200. Today the index could sustain itself above the Friday’s low and made a higher high. In the last hour of trade today, the benchmarks made a smart recovery to wipe off the losses incurred in the past two trading days. The Nifty has to decisively break out of the range of 5,300 and 5,377 for further direction. The National Stock Exchange (NSE) saw volume of 50.47 crore shares.
Japan’s economy grew at an annualized pace of 1.4% in the second quarter—lower than analysts’ expectations of 2.7% rise—as exports slowed and a domestic demand led recovery showed signs of faltering. That marked a steep slowdown from an upwardly revised advance of 5.5% in the first quarter. Japan said its economy grew 0.3% in April-June from the first quarter, half as much as expected, as Europe’s debt crisis weighed on export demand and consumer spending began to lose momentum.
With weak economic data coming from across the globe, economies anticipate that the further fall in equities may be controlled by a fresh round of easing by major central banks.
Until the last one hour of the trading session, both Sensex and Nifty saw range bound movement. The Sensex and Nifty hit their intraday low after a weak opening of the European indices. The Sensex hit a low of 17,522 while the Nifty hit a low of 5,309. Both the indices hit a higher high of 17,642 and 5,352. The Sensex closed at 17,633 (76 points up, 0.43%) while the Nifty closed at 5,348 (28 points up, 0.52%). 
The advance-decline ratio on the NSE was positive at 782:641.
Among the broader indices, the BSE Mid-cap index gained 0.49% and the BSE Small-cap index rose 0.46%.
With the exception of the BSE Auto index (down 0.12%), all other sectoral gauges were in the positive. The top gainers were BSE Realty (up 2.41%); BSE Consumer Durables (up 1.70%); BSE Capital Goods (up 1.08%); BSE Power (up 1.02%) and BSE PSU (up 0.75%). 
The top performers on the Sensex were HDFC (up 3.71%); Sterlite Industries (up 2.66%); Maruti Suzuki (up 1.95%); Bajaj Auto (up 1.68%) and BHEL (up 1.66%). The key losers on the index were Tata Motors (down 1.55%); Hindustan Unilever (down 1.43%); Hero MotoCorp (up 1.32%) and Tata Steel (down 1.19%).
The top two A Group gainers on the BSE were—United Spirits (up 11.87%) and United Breweries (up 9.54%).
The top two A Group losers on the BSE were—Muthoot Finance (down 3.23%) and Sun TV Network (down 2.91%).
The top two B Group gainers on the BSE were—Kingfisher Airlines (up 20%) and Ruchira Paper Products (up 19.96%.
The top two B Group losers on the BSE were—Kemrock Industries & Exports (down 19.99% and ABC India (down 12.46%).
The top gainers on the Nifty were HDFC (up 6.46%); DLF (up 3.14%); Reliance Infrastructure (up 3.05%); Sterlite Industries (up 2.66%) and Sesa Goa (up 2.25%). Hindalco Ind (down 1.50%); Tata Motors (down 1.49%); Hero MotoCorp (down 1.29%); HUL (down 1.25%) and Tata Steel (down 1.15%) were the main losers on the index.
Fitch Ratings has put out a warning saying that it might lower India’s sovereign rating. It said that the possibility of downgrading India's sovereign rating is more than 50% in the next 12 to 24 months.
Senior officials from the Group of 20 largest economies are likely to meet to try and coordinate a response to surging food prices due to a severe drought in the US, a leading London based newspaper reported.
 Most of the Asian indices closed in the red on signs of slower economic growth. However, investors kept hopes alive of new initiatives to boost growth. 
The Shanghai Composite tumbled 1.51%; the Hang Seng declined 0.27%; the Jakarta Composite dropped 0.94%; the Nikkei 225 fell 0.07%; the Seoul Composite tanked 0.72% and the Taiwan Weighted was down 0.06%. On the other hand, the KLSE Composite gained 0.06% and the Straits Times advanced 0.35%.
The European indices had a mixed performance at the time of writing while the US stock futures were trading marginally in the red.
Back home, foreign institutional investors were net buyers of shares amounting to Rs83.16 crore on Friday whereas domestic institutional investors were net sellers of equities totaling Rs536.69 crore. 
The board of Israel-based Taro Pharmaceutical has agreed to sell the remaining stakes of the company to Sun Pharmaceutical and its affiliates for an enhanced price of $39.50 per share. The merger agreement provides that all shareholders of Taro other than Sun Pharma and its affiliates will receive a cash payment of $39.50 per share upon the closure of the merger deal. The raised buy-out offer by Sun Pharma is over 61% from it's earlier offer of $24.50 a share. Sun Pharma rose 1.55% to close at Rs134 on the NSE.
Welspun Corporation, a large diameter pipe manufacturer, today said it has bagged orders worth Rs819 crore from overseas and domestic markets. With this, the current order book of the company stands at Rs10,000 crore, the company said in a statement. Welspun closed at Rs101.80 on the NSE, down 1.12% from its previous close.
Oil & Natural Gas Corporation (ONGC) has decided to set up a Rs5,000 crore urea manufacturing unit in North Tripura district in joint venture with a private company. Khobal has been selected as the site for the project considering its proximity to the Khobal gas field from where natural gas (hydrocarbon) would be supplied, a company official said. ONGC rose 0.38% to Rs280 on the NSE.


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