PSL subsidiary receives Saudi Arabian order worth $80 Million

PSL Ltd subsidiary based in Sharjah has won a contract worth $80 million from Saline Water Conversion Corporation

The Saline Water Conversion Corporation (SWCC) of the Kingdom of Saudi Arabia has awarded a contract for supply of bare line pipe to PSL FZE, Hamriyah (the Sharjah-based subsidiary of PSL Ltd, India) for approximately worth $80 million.  

The project comprises construction of a water transmission system from Ras Azour in the eastern province to Hafr Al-Baten in the central system, constituting API 5L Grade X-65, 44-inch diameter pipes for a total length exceeding 350km.

Ashok Punj, managing director, PSL, confirmed that with this order from SWCC, the installed capacity of the pipe mill at PSL FZE, Hamriyah, shall be fully utilised from April 2011 to May 2012. Resources at PSL FZE, Hamriyah, are further being added to establish another pipemill of capacity 75,000MT/year (aggregating to total capacity of 150,000MT/year), and the installation of second mill is in advanced stages of completion.

Another offer of approximate value $200 million for a water transmission pipeline project, for supply of over 600km of pipe as submitted by PSL Ltd, India, and PSL FZE, Hamriyah, as consortium partners, is also under active evaluation, added Ashok Punj.

Each pipe for this particular application shall be 18m in length, and such piping applications have a very large market potential within the rapidly developing water sector within the Middle East. PSL FZE commenced operations from its Sharjah-based facility in mid-2007, with a capacity of 75,000MT/year.  

On Tuesday, PSL ended 4.66% up at Rs72.95 on the Bombay Stock Exchange, while the benchmark Sensex gained 0.84% to 17,988.30.

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Maruti mulls options to counter yen impact

Maruti Suzuki India will consider taking different measures after April to protect its margins due to fluctuation of Japanese yen, post the devastating earthquake and tsunami

The country's largest car maker Maruti Suzuki India (MSI) said it will consider taking different measures after April to protect its margins due to fluctuation of Japanese yen, post the devastating earthquake and tsunami.

"For this month, we are completely protected. In fact, we are covered till April. Beyond that if yen continues to appreciate, then we will have to take a call to counter it," MSI chief financial officer Ajay Seth said. He said the company's margins are affected whenever the yen appreciates, while it is beneficial if it depreciates.

After the natural disaster that struck the island nation on 11th March, the Japanese currency is quoted at about 81 yen against a US dollar compared to that of about 83 yen earlier, Mr Seth added. He said there is strong volatility going on at present, with yen appreciating as much as to 76 yen against a dollar recently.

While Mr Seth did not elaborate on how MSI would counter the yen fluctuation, market analysts pointed out that currency hedging is a strong possibility.
"Usually, Maruti hedges yen against the euro instead of rupee to mitigate the impact," an analyst with a leading brokerage firm, who asked not to be identified, said.

On the component sourcing from Japan, Mr Seth said: "Of our total raw material procurement, about 25% are imported."
Out of those imported parts, about 80% are purchased in yen, he added.

During the October-December period last year, MSI spent Rs6,959.03 crore in consumption of raw materials and components. It also paid Rs460 crore as royalty in the quarter to its parent company Suzuki, which is about 5.5% of MSI's total sales.

When asked about the impact of Japan's natural disaster on MSI's production, Mr Seth said it will be unaffected for some time till next month as the company has enough inventory of components.

"Besides the stock at the plants, we will be getting some supplies, which will reach to us from Japan that started sailing just before the earthquake," he added.

Last week, the company had said it was assessing the possible impact of the natural calamity on its components import from Japan. Earlier, MSI had cancelled the celebrations for rolling out its 10 millionth car in view of the catastrophe.

On Tuesday, MSI ended 3.58% up at Rs1,171.85 on the Bombay Stock Exchange, while the benchmark Sensex gained 0.84% to 17,988.30.

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Govt tables Banking Laws (Amendment) Bill 2011 in Lok Sabha

The Bill proposes to raise the ceiling on voting rights of shareholders of nationalised banks from 1% to 10% and proposes to remove the voting right restriction of 10% for private sector banks in the total voting rights of all the shareholders of the banking company

New Delhi: The government today tabled a Bill in the Lok Sabha to raise the voting rights of shareholders of nationalised banks to 10% from the existing 1%, a move that will make investment in state-owned banks more attractive, reports PTI.

The Banking Laws (Amendment) Bill 2011 proposes to raise the ceiling on voting rights of shareholders of nationalised banks from 1% to 10%, the statement of Object and Reason of the Bill said.

In addition, the Bill proposes to remove the voting right restriction of 10% for private sector banks in the total voting rights of all the shareholders of the banking company. In the case of private sector banks, the voting rights would be commensurate with investors' shareholding.

There are 20 nationalised banks in the country and 22 private sector banks in the country.

The Bill was tabled in the Lower House by finance minister Pranab Mukherjee, seeking to amend the Banking Regulation Act, 1949, the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, and to make consequential amendments in certain other enactments.

These amendments would enhance the regulatory powers of the Reserve Bank of India (RBI) and increase the access of the nationalised banks to the capital market to raise funds required for expansion of the banking business, it said.

Besides, it enables nationalised banks to increase or decrease their authorised capital with approval from the central government and RBI without being limited by the ceiling of a maximum of Rs3,000 crore, it said.

It also proposes to give powers to the nationalised banks to issue two additional instruments-bonus shares and rights issues-for accessing the capital market to raise capital required for expansion of banking business.

At the same time, it proposes to confer powers upon the RBI to impose such conditions as it deems necessary while granting such approval for acquisition of 5% or more share capital of a banking company if it considers necessary.

The amendment also proposes to confer power on the central bank to call for information and returns from associate enterprises of banking companies and also to inspect the same.

The Bill noted that taking advantage of the liberalised environment, banking companies are engaging in multifarious activities through the medium of associate enterprises.

It has, therefore, become necessary for the Reserve Bank of India as the regulator of the banking companies to be aware of the financial impact of the business of such enterprises on the financial position of the banking companies, it added.

The amendment moved by the government also exempts mergers and acquisitions in the banking sector from the scrutiny of the Competition Commission of India.

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