RIL to become debt-free this year: Chairman

Addressing the company's shareholders at its 37th AGM, chairman Mukesh Ambani said that RIL's revenue has grown by 28% on year-on-year basis over the past 33 years since its IPO, while profit and market capitalisation have grown by 33% on an average every year during this period

Mumbai: Announcing a bullish stance on the company's financial position, Reliance Industries' (RIL) chief Mukesh Ambani today announced that the company would become debt-free on a net basis in the current financial year, reports PTI.

RIL had outstanding debt of Rs67,397 crore ($15.1 billion) as of 31 March 2011, as against Rs62,495 crore ($13.9 billion) a year ago.

At the same time, RIL had cash and cash-equivalents of Rs42,393 crore ($9.5 billion) as on 31st March this year, which was nearly double the level seen a year ago.

These were mainly in fixed deposits, certificate of deposits with banks, mutual funds and government securities/ bonds.

Addressing the company's shareholders at its 37th AGM here, Mr Ambani said that RIL's enterprise value stood at about $75 billion.

He said that RIL's revenue has grown by 28% on year-on-year basis over the past 33 years since its IPO, while profit and market capitalisation have grown by 33% on an average every year during this period.

Chairman Mukesh Ambani also added that Reliance Retail will soon launch cash-and-carry format stores for wholesale business, while its consumer-focused business will become market leader across all formats in the next two years.

Asserting that Reliance Retail has already become largest food retailer in the country, Mr Ambani said that all the specialty formats of the company would attain top positions in their respective segments in next two years.

Mr Ambani also said that Reliance Retail has already got the largest portfolio in terms of number of formats and 25 lakh customers were shopping at the company's various stores every week.

He said that further growth was expected in the retail business on the back of future investments and Reliance Retail was currently at an inflection point.

The company's stock was trading at Rs945.40 apiece in afternoon trade, down 0.68% from its previous close on the Bombay Stock Exchange.

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PFRDA to retain 50% cap on equity investments in new pension policy

PFRDA chairman Yogesh Agarwal said that if SEBI liked to see more investments in equities, then PFRDA would also like to see the investments, but after ensuring proper risk management

Mumbai: Pension regulator, Pension Fund Regulatory and Development Authority (PFRDA), on Thursday said that it would like to maintain the 50% limit on investment in equities for the new pension fund, regardless of the recommendation of the Bajpai committee, reports PTI.

“We think that at the current stage of pension market in the country, investing more than 50% in equities is not going to be fair to investors in terms of the risk that has to be taken, and therefore, we tend to retain the cap at 50%,” PFRDA chairman, Yogesh Agarwal, told reporters on the sidelines of the 26th Skoch Summit here.

The Bajpai Committee, headed by former Securities and Exchange Board of India (SEBI) chairman, GN Bajpai, has been entrusted with the task of analysing the fee structure and suggesting changes to the National Pension System (NPS).

Initially, the government launched the NPS for central government employees for those joining service from 1 January 2004, but it was extended to all citizens from 1 May 2009.

Currently, seven pension fund managers are managing assets of about Rs9,000 crore. Of this, about Rs100 crore is contributed by pension schemes for persons other than government employees.

These fund managers include LIC Pension Fund, SBI Pension Funds, UTI Retirement Solutions, IDFC Pension Fund Management, ICICI Prudential Pension Funds Management, Kotak Mahindra Pension Fund and Reliance Capital Pension Fund.

Even though the NPS is considered an immensely beneficial financial product for unorganised sector employees, especially those who don’t manage a steady source of income after retirement, it has received a lukewarm response till now.

To popularise the scheme, PFRDA, in September last year, introduced the Swavalamban scheme. Under this scheme, the government contributed Rs1,000 per year to each NPS account opened in the year 2010-11 and for the next three-years—2011-12, 2012-13 and 2013-14.

To be eligible, a person has to make a minimum contribution of Rs1,000 and maximum of Rs12,000 per annum.

Mr Agarwal said the Bajpai committee report is “finally being signed” and by the third week of this month, it will be available on the PFRDA website.

On the capital market regulator SEBI chairman’s views on allowing pension funds to be invested in equities, Mr Agarwal said that if SEBI liked to see more investments in equities, then PFRDA would also like to see the investments, but after ensuring proper risk management.

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Cement industry likely to underperform over the next six months

According to a latest survey, the industry is suffering from sluggish offtake, the southern region has turned in a lacklustre performance and dealers believe that the onset of the monsoon could further dampen prospects for the sector 

The volume growth of the top three domestic cement players-ACC, Ambuja Cements and UltraTech for May 2011-was mixed on a year-on-year (y-o-y) basis, says the latest Sharekhan report on the industry. ACC managed a decent performance with a strong 13.7% growth in its dispatches. Ambuja Cements and UltraTech suffered a volume decline of 6.6% and 3.2% respectively. Overall cement offtake was sluggish, thanks to delayed execution of infrastructure projects coupled with a slowdown in housing sales. On a sequential basis, all major players registered decline in their dispatches, says the report.

Dealers have confirmed that cement offtake has remained sluggish. The southern region (particularly Andhra Pradesh) has turned in a lacklustre performance. Demand was hit badly in West Bengal due to the recently-concluded elections. The western market of the country continues to be better-off.  

Cement prices during May decreased in most parts by Rs8-Rs10 per 50kg bag. The price correction was due to over-supply from new capacity additions. Dealers also believe that with the onset of the monsoon, prices could decline further in June. The Sharekhan report says that the sector could underperform in the coming six months.

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