IDBI Bank was the lead arranger of the Rs13,125 crore debt with Power Finance Corporation acting as joint lead arranger. A consortium of over 15 banks and financial institutions are participating in the financing arrangements
Anil Ambani Group firm Reliance Power (R-Power) today said it has tied up finances for its Rs 17,500 crore ultra mega power project (UMPP) at Krishnapatnam in Andhra Pradesh, reports PTI.
The 4,000 MW coal fired project is being financed in 75:25 debt-equity ratio, R-Power said in a press statement.
"R-Power announces the financial closure of its 4,000 MW Krishnapatnam Ultra Mega Power Project being developed by Coastal Andhra Pradesh Ltd, its wholly-owned subsidiary," it said.
The company has executed financing agreements for the imported coal fired project, the largest in South India.
The project "will supply power at a competitive levelised tariff of Rs2.33 per kilo-Watt-hour (or unit) to the four states — Andhra Pradesh (1,600 MW), Maharashtra (800 MW), Tamil Nadu (800 MW) and Karnataka (800 MW)."
IDBI Bank was the lead arranger of the Rs13,125 crore debt with Power Finance Corporation (PFC) acting as joint lead arranger.
"A consortium of over 15 banks and financial institutions are participating in the financing arrangements," the statement said.
The consortium includes REC, LIC, Uco Bank, Union Bank of India, Andhra Bank, Corporation Bank, Punjab National Bank, Indian Overseas Bank, Andhra Bank, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, Vijaya Bank, Punjab & Sind Bank, Yes Bank and Indian Bank.
"With the financial closure for the Krishnapatnam UMPP, we have completed the financing arrangements for two UMPPs awarded to us by the government and have secured funding for a capacity of 10,000 MW," R-Power CEO J P Chalasani said.
The company had earlier achieved financial closure of Sasan ultra-mega power project.
"The Krishnapatnam financing is an important milestone as we undertake the implementation of our power project portfolio of over 37,000 MW," he said without giving details.
A number of recent advertisements are portraying Africans in a negative light. While Indians scream blue murder whenever they feel they are at the receiving end of racism, why are our ads so insensitive?
The Advertising Standards Council of India (ASCI) plans to pull up the recent LMN ad that was being aired, on the grounds that the advertisement was portraying Africans in a negative manner. Why are Indian ads confirming to some ugly stereotypes?
"This type of racial stereotyping is against our code," said ASCI's secretary general, Alan Collaco. Under Chapter 3 of ASCI's code, the ad for the LMN drink from Parle Agro has broken the rule which states that no advertisements can deride any race, caste, colour, creed or nationality. ASCI has already sent a letter to the agency behind the ad.
The LMN ad goes something like this - two dark-skinned individuals who reside in the desert are dying of thirst and are unable to get a single drop of water. Both eventually end up chasing water hoses, mistake taps for digging tools in their desperation - they even try to suckle a cheetah and finally try to kill each other for water. It can be argued that the ad is trying to stand out from the rest, but it clearly portrays that Africans cannot figure out the difference between a tap and a digging instrument.
Coke's ad for its lemon drink Sprite also takes a similar approach. The commercial portrays a fat dumb guy and a slim smart guy, both stuck in the jungles of Africa and who are trapped by one of the continent's tribes. The fat dumb guy tries to please the chief by breaking into what he thinks is an African dance. He only manages to agitate the chief who decides to make a meal out of him. But the slim smart guy offers the chief a bottle of Sprite and wins him over! All the stereotyped clichés in this ad (fat guys are dumb; slim guys are smart and African tribes are cannibals), apparently wasn't caught by ASCI's radar.
Mr Collaco maintains that there are no other such ads airing on television. But look around and you will find more.
Ads for fairness creams are big culprits. In a country where 'fair' is equal to 'lovely' and people obsess over every incremental shade from dark to fair (see any matrimonial classified column for further proof), it is clearly big business to encourage and perpetuate stereotypes. Advertisers want gullible young girls to believe that a fairer skin - which can be achieved through the contents of a tube - will get them glamorous jobs, the perfect husband or the winner's crown at a beauty pageant. After making it big with women, most manufacturers have now expanded their market by launching fairness creams for men. According to a few 'surveys' carried out by these whitening cream peddlers, even men would prefer a whiter complexion!
An important component of advertising is suggestion and not information. Advertising makes use of associations, appeal to emotion and the drives dormant in the subconscious. It also reaches out to desires in the target audience-like happiness, health, fitness, appearance, self-esteem, reputation, belonging, social status, identity, adventure and reward.
Ergo, when ads confirm to some clichéd stereotypes, they are actually strengthening them in the minds of viewers and readers.
Industry people tell us that advertising thrives on stereotyping because it is easy. The association of lungis with south Indians and dumbness with the obese are easily recognisable stereotypes and hence find quick acceptance with customers, goes the argument.
"Yes, ads often stereotype groups and communities. And that is because so does popular culture. Ads only feed on popular perceptions, they parasite on existing prejudices, for a quick connect with audiences. Remember that the job of commercial ads is not to enforce social change; their intention is to sell products and make money. And riding existing perceptions leads to that quicker," said Anil Thakraney, advertising expert and columnist.
"Sometimes it's about the advertiser trying hard to play to the gallery. One would say, sometimes a bit too hard," said Macklin Lacerda, creative group head, Draftfcb+Ulka.
However, veteran ad man Prahlad Kakkar told Moneylife that certain stereotypes are needed for depiction. "How can you show a Goan without a guitar in his hand? It's needed because it brings about an association to the viewer."
He also said - quite correctly, one would admit in some instances - that people need to lighten up. "Come on, people need to stop taking things so seriously; we've been cracking Sardarji jokes for hundreds of years. So, do you mean to say that Sardarjis are stupid? Give people a break, learn to smile and laugh at yourself or else it would be the end of entertainment in advertisements."
We agree too. However, some stereotypes are just fun-but ads like the ones that sell fairness creams and foster racism are definitely not.
MFs are now attempting to push ‘simplified products’ like hybrid funds, having learnt a hard lesson after the NFO boom of 2006-07. Except that they are again following each other lemming-like in launching similar hybrid products
Faced with dwindling assets caused by changing regulation and investor apathy, mutual fund companies have now hit upon a new strategy - launch all-in-one or hybrid products. These products combine multiple asset classes in one, supposedly making the job of asset allocation easy. Axis Triple Advantage Fund, now on offer, gives investors the chance to participate in three asset classes - equity-related, fixed income and gold.
In April 2010 Religare Mutual Fund pioneered the move in this direction by launching a scheme that seeks to generate income through a portfolio of fixed income securities, gold and equity-related instruments. The scheme would invest 65%-90% in debt instruments, 0%-25% in equity and 10%-35% in gold ETFs (exchange-traded funds). The scheme is benchmarked against CRISIL MIP Blended Fund Index (65%) and price of gold (35%). Taurus Mutual Fund has just launched an open-ended income scheme called 'Taurus MIP Advantage' fund. The scheme is identical to Religare's. It aims to generate regular income through a portfolio of fixed-income securities, Gold ETFs and equity. The scheme is benchmarked against CRISIL MIP Blended Fund Index (75%) and price of gold (25%). Clearly, no sooner has one fund company launched a new kind of product than lemming-like, others are rushing in, offering identical products.
But what is the reason that fund companies are looking at hybrid funds for their salvation? It appears that the stricter regulations enforced by the Securities and Exchange Board of India since August last year has led to a drop in new sales of equity funds and some deep introspection among the fund community. Since the massive bull run of 2003-2007, the only way fund companies wanted to grow was bringing new funds to the market. The standard strategy was to tempt investors with new fund offers (NFOs), many of which had fancy names and complicated strategies. Fund companies gave fat incentives to distributors in order to encourage investors to sell their existing funds and buy the new ones - especially since they were available for Rs10 - which was of course, highly misleading.
Unfortunately, this led to terrible performance of the vast majority of funds launched during this period. And when SEBI took away the fat upfront incentives for distributors, fund sales nosedived. Now, the MF industry is aiming to build rapport with investors by offering 'simplified' solutions to them in the form of hybrid funds.
The logic behind it is to offer investors the 'opportunity' to participate and gain exposure to different asset classes under one roof. Hybrid funds invest in a mix of equity and equity-related instruments and fixed-income securities. Some even invest part of the corpus in gold ETFs (exchange traded funds), a recent favourite among investors. This stands in sharp contrast to the relentless spewing of innovative and complicated fund offerings in the recent past.
Rajiv Anand, managing director and CEO of Axis Asset Management Co Ltd recently wrote in newspaper Mint that "MFs spend a lot on getting new investors, but pay little attention to existing ones. But MFs are not a one-time fill-it-forget-it product... We need to find ways to meaningfully engage with these investors." In a burst of plain speaking Mr Anand wrote, "In all the cloud and dust created by a surfeit of NFOs and products, the ultimate use of the product has been completely compromised somehow." According to him the biggest challenge for the fund houses and distributors is to prepare themselves for the arduous journey of getting investments in their existing funds pretty much on a 24x7x365 basis." You thought that Axis Mutual Fund would stop launching NFOs and push its existing products? Despite all this talk, Axis has gone down the same road as its peers and done exactly what the rest are doing. It has announced a me-too NFO! It seems that fund companies will continue to move in herds and be driven by the fad of the day.
Interestingly, coinciding with the Axis Bank NFO opening for subscription, Mint gave Mr Anand an opportunity in to beat his own drum: "The one obvious way is to educate, and, perhaps, the other is to ensure that products… should blend equity and debt components. In other words, they should be hybrid funds." How nicely self-serving.
That leaves us with one last question. Do the 'simplified' hybrid offerings make sense for investors? Hybrid funds, in essence, are souped-up versions of existing products in the market - like balanced funds and monthly income plans (MIPs). While these offer investors capital protection with a chance to participate in equity markets, hybrid funds go a step further - they simply add gold to the soup. Instead of simplifying matters, hybrid funds would only complicate them further. They will not match the returns of equity, they will be marginally better than debt, they will still be more volatile than fixed income. Finally, gold, now historically high, may drag down their returns drastically. Invariably, such funds will lead to very average returns for the investor. The question is do investors care anyway, as long the fund industry tries to do everything except one thing they need to do - directly reach out to investors and engage them?