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April 28, 2017

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It’s a mad, mad, mad world…



Right from the start of the Baillon Col­lection auction, the values were going berserk: the very first car on sale, for instance, a most ordinary and rather tired Singer Roadster, estimated at between €200 and €800 (?56,000) went for €10,790 (?7.6 lakh). The prices went spiralling, clearly there was a frenzy of buying that was not making any sense at all. Caught up in that frenzy was an Indian collector, Madan Mohan from Delhi, a transporter and a restaurant owner in Gur- gaon – who is new to the world of classic cars – went ahead and bought nine of the 59 cars, at €343,296, a price that is almost ridiculously high, especially for cars that need a huge amount of work to be restored, and are not all that special either.

As many as 59 ancient cars were sold for €25.15 million (?l 77.4 crore) at the recent­ly-concluded Retromobile classic car show in Paris! And the 2015 edition of Retromo­bile will be remembered through the sale of the Baillon Collection by Artcurial, despite
the fact that the 40th edition of a show had many other absolutely wondrous and rare automobiles on either special display or on sale. Of course, the Baillon sale was signifi­cantly boosted by the price that the Ferrari 250 GT California, a car that used to belong to the famous French actor Alain Delon, sold for a record €16.3 million (?115 crore).

Two other cars crossed the million euro mark: a Maserati A6G, which went for €2.01 million (?14.2 crore) and a Talbot-Lago T26 Grand Sport (€1.7 million or ?12 crore). The prices for the rarer and fancier machines were not all that surpris­ing, but a rather battered Delahaye Type 43, went for €65,600 instead of a sensi­ble estimate of €6,-8,000 – with most cars selling for five to 10 times their estimate.

Several of the cars came apart when they were transported from the Baillon barn to Paris – how many of those nine will make it to India in a complete state remains to be seen.

♦ GAUTAM SEN gauta m. se [email protected] ia. ir

Catching up

At Paradip, the company had also plannee a coal terminal (capacity: 18 mtpa). As a parIn December 2012, Essar Ports had com­missioned a 16 million tonnes per annum (mtpa) capacity unit to handle iron ore and pellets at Paradip, which was to be con­nected to the stockyard by a 9 km long cov­ered conveyor system. The company had a
10-year licence agreement with the Paradip Port Trust, for export of iron ore and pellets Today, the Hazira terminal (dry bulk anc break bulk cargo) has a capacity of 30 mtpa while Vadinar (liquid terminal) has a capac ity of 58 mtpa. Add to this the Paradip capac ity of 16 mtpa, the total comes to 104 mtpa.

  • of an agreement with the Paradip Port Trust, the company was given the right to build and operate for 30 years. The project got delayed because many petitions were filed by port users occupying the land, which were all dis­missed by the Supreme Court subsequently. Paradip Port Trust has now started clearing the land to be handed over to the company. Essar Ports will commence construction once the land is handed over.Essar Ports had planned a terminal with 20 mtpa capacity at Salaya, west of Jamnagar, to handle dry bulk cargo. The project was held up because it had not received approval from the ministry of environment. In its third quarter results, the company said it has obtained the ‘final forest clearance’ and that the ‘bund’ construction is now in full swing. The company expects the project to go on stream by October this year.The Hazira expansion, which was also held up for want of clearance from the envi­ronment ministry, has received clearance too. The company intends to add another 20 mtpa taking it to 50 mtpa.In 2013, Essar Ports had won the bid for the development of three iron ore berths at Visakhapatnam Port for 30 years. These three berths are expected to have a combined capacity of 23 mtpa. Labour unions filed petition against the ministry for shipping and Visakhapatnam Port Trust and, the Andhra Pradesh High Court, while allowing the tendering process to continue, said the process will depend on further orders by the court.

    Later, it dismissed the court cases by labour unions against the two-phase modernisa­tion and construction of iron ore berths in Visakhapatnam by Essar Ports. Subsequently, Essar Ports signed a ‘concession agreement’ with Visakhapatnam Port Trust in Decem­ber 2013. As per the third quarter results, Essar Ports had reached financial closure on this project. In the fourth quarter of 2014-15, the company will take it over as an operating berth. Essar Ports intends to take its present capacity to 194 mtpa over the next few years.

    In October 2014, Essar Ports decided to de- list. By October, the company set the de-listing price at T90.50 and got the shareholders’ nod for de-listing through postal ballot.                       ♦

    [email protected]



ECONOMY More resources to states


The 14th Finance Commission has recommended an increase in the share of states in the Centre’s tax revenue from the current 32 per cent to 42 per cent. The recommendation will give more power to states in determining how they spend this money. Besides sharing of tax revenues,


the commission has also laid down the principles for giving out grant-in-aid to states and other local bodies for a five-year period beginning 1 April 2015.

Coal block auction

The first round of coal block e-auction saw some of the key names in the industry bagging 18 mines with a combined extractable reserve of 90 million tonnes, along with attached end-use infrastructure. According to the auction amount and royalty payable, six mineral- rich states are likely to earn a little more than ?1 lakh
crore over the next 30 years. Some of the earlier owners of coal mines – Hindalco, Balco, Jindal Steel & Power (JSPL), GMR and CESC – bagged most of the blocks. Of them, JSPL won back one of the blocks it had lost after a Supreme Court order cancelled allotments.

Finance SEZs

The finance ministry has cited the exodus of rupee and Nifty trading outside Indian shores as the key wjtowmendation reason behind pursuing finance special economic zones (SEZs). A report put out by the ministry said that more than X2 lakh crore of yearly revenues are being generated outside India on account of trading in rupee derivatives – revenue which can potentially be brought onshore.

Food grain output likely to fall

The agriculture ministry has estimated total food grain output for 2014-15 at 257.07 million tonnes, as against 265.57 mt in 2013-14. All crops, barring sugarcane, are
expected to post production declines, as rainfall has been deficit in both the South- West and North-East.

‘Hike import duty on rubber’

The Association of Planters of Kerala has sought to enhance* the import duty on natural rubber to 30 per cent next fiscal onwards, besides an immediate ban on imports temporarily as an urgent intervention. The planters body said

that rubber production during the current fiscal till December was 529,000 tonnes, which is 16 per cent lower than the corresponding period last year. However, import during the current fiscal was 359,857 tonnes, which is 38 per cent more than the previous year.

Pulses production to decline

India’s pulses output is set to decline 7 per cent to 18 million tonnes during crop year 2014-15, according to the Second Advanced Estimate by the ministry
for agriculture. Pulses’ output during the previous crop year (July-June) was estimated at 20 million tonnes.

Wheat procurement

The Centre has fixed wheat procurement target for the 2014-15 mbi marketing season at 30.06 million tonnes, against the actual procurement of 28.02 mt. The target was fixed at a meeting with state food secretaries, held to discuss procurement arrangements, an official statement said.

WPI goes negative

The wholesale price index (WPI) dipped to -0.39 per cent in January, consequent to a fall in inflation recorded for the eighth consecutive month. Inflation was at 0.1 per cent in December. The WPI plunged into the negative zone, as the slide in fuel prices more than offset the increase in food prices, which continued to be high.

Priorities on gas allocation

The government is set to revise its priorities in allocation of natural gas, by putting city gas distribution at the top, followed by atomic energy, urea plants, power and domestic LPG.

It will also make this allocation policy uniform, implying that the order of priorities will be the same irrespective of what source the gas is coming from. Currently, top priority in gas allocation is accorded to fertilisers, followed by the power, although 100 per cent of the city gas sector’s needs is to be met by domestic gas, as per a Gujarat High Court order issued last year.


JLR expands its global footprints

Tata Motors, is contemplating to set up a plant in North America for


the production of its Jaguar and Land Rover (JLR) brands. Earlier JLR opened its first overseas manufacturing facility in China, with a view to double global sales by the end of this decade. Earlier in December JLR has progressed on its ?1,800 crore Brazilian project to set up a second plant in Rio de Janeiro.

This plant aims to produce 24,000 vehicles a year once it ramps up to full production in 2016.

Powering ahead

Neyveli Lignite Corporation’s (NLC) Unit I of NLC Tamil Nadu Power has been test synchronised with the grid on 18 February, 2015. NLC Tamil Nadu Power is the subsidiary company of NLC.

Godrej woos Darling

Godrej Consumer Products (GCPL) has inked an agreement with the Darling Group for upping its shareholding in Darling South Africa and Mozambique businesses to 90 per cent. This is in line with its intent of gradually scaling up its ownership of the Darling businesses.

BHEL to build submarines

BHEL, Mishra Dhatu Nigam (Midhani) and Hindustan Shipyards have inked an MoU for setting up a consortium for bidding and if successful, building submarines for the Indian Navy at an Indian shipyard. The initiative was inspired by Prime Minister Narendra Modi’s ‘Make In India’ initiative for catering to the defence sector.


DVR shares

The BSE has announced rules on the inclusion of shares with differential voting rights (dvrs) on the s&p bse Sensex, BSE 100, BSE 200 and

BSE 500 indices. Shares with differential voting rights are similar to common equity shares in all respects other than dividend received and voting rights.

Simpler advertising norms

Association of Mutual Funds in India (AMFI) has approached market regulator, Securities and Exchange Board of India (SEBI), to simplify the current advertisement norms.

The association feels the current norms are too complicated and it needs to be made clearer so that investors can take informed decisions.

Law tribunals

Maintaining that substantive questions of law need to be addressed, the Supreme Court has referred a petition challenging the validity of the National Company Law Tribunal (NCLT) and its appellate body to a five-judge constitution bench. Madras Bar Association (MBA), a body of practising lawyers, in the Madras high court, had challenged the NCLT and the National Company Law Appellate Tribunal (NCLAT) for violating the need for separation of powers between the executive and judiciary.

Regulating e-commerce sector

The rapidly expanding e-commerce sector, which has been attacked by brick and mortar businesses over issues such as predatory pricing, has found support within the government against a proposal that seeks to impose curbs on the likes of Flipkart and Snapdeal that have disrupted the market. The department of industrial policy and promotion (DIPP) has opposed a plan to regulate the e-commerce sector, arguing that it would curtail innovation and the spirit of entrepreneurship.

A new group for stocks

To check market manipulation through ‘penny stocks’, market watchdog SEBI will soon ask stock exchanges to create a new group for shares that are found to be prone to such activities. The new group may be called ‘T+’ and would include shares that remain susceptible to manipulative activities despite having been put in the ‘T’ group where trading is restricted to delivery-based trades within a small price band of up to five per cent and intra-day trades are not allowed.

Firms face SEBI’s heat

A large number of listed firms, including top blue- chips, are facing heat from the stock market authorities for sudden surge in their share prices and trading volumes as also for ‘speculative’ information leaks. In just about one and a half months since the beginning of this year, the stock exchanges have sought ‘clarifications’ from at least 19 Sensex blue chips, including giants like Mahindra & Mahindra, Hindustan Unilever, SBI,

Coal India, Wipro, Hero Motocorp, ICICI Bank, Cipla and L&T.

No consensus

SEBI is yet to reach an agreement with banks on the pricing formula for conversion of debt of troubled companies into equity. According to sources, banks want full freedom to decide on the price of converting their debt into equity without any application of pricing formula stipulated by the stock market regulator.

Banks as brokers

The Insurance Regulatory & Development Authority of India has asked insurers to pursue an open architecture model in bancassurance.

In a meeting between the insurance regulator and industry players, the chairman of the authority said that guidelines to facilitate this would be issued soon.

Nuclear pool gets IRDAI nod

Insurance sector regulator IRDAI has given in-principle approval for setting up of ? 1,500 crore nuclear liability pool for providing risk cover to nuclear reactors.

Gold import norms eased

The Reserve Bank of India has allowed banks to import gold in bullion form on a consignment basis and given them a freehand in extending gold loans. Importers who have been accredited as ‘Star Trading Houses’ and ‘Premier Trading Houses’ can import gold on ‘documents against payment’ basis without any end use restrictions.

Interconnection charges slashed

In a move that is likely to lead to reduction in call rates – both for mobile as well as fixed line users – the Telecom Regulatory Authority of India slashed various interconnection charges one operator has to pay to another for using their network. However, it is not yet known how much the tariff reduction will be.

Mobile number portability

The Telecom Regulatory Authority of India (TRAI) has said that, starting May, mobile users will be able to avail themselves of full mobile number portability (MNP) in any part of the country. This is different from the existing system, which allows users to retain phone numbers only within a circle.