NHPC seeks Navratna status

State-owned NHPC, which has embarked on ambitious expansion plans, has approached the government seeking 'Navratna' status that would provide the power producer more leeway in investment decisions. The move comes at a time when NHPC, the country's largest hydel power generator, has firmed up plans to foray into thermal, solar and wind energy segments."We have submitted the proposal seeking Navratna status to the government," a senior official told. The proposal was submitted to the Power Ministry, which has forwarded the same to the Department of Public Enterprises (DPE), the official said.DPE, the nodal agency for public sector undertakings, comes under the Ministry of Heavy Industries and Public Enterprises. According to the official, Navratna status would provide the company with more autonomy and flexibility in deciding on investments. Currently, NHPC is a 'Mini Ratna Category-I' enterprise. Established in 1975, the company has an authorised share capital of Rs 15,000 crore. The company raked in a net profit of Rs 2,348.22 crore in the last financial year. 'Navratna' status provides for greater autonomy and more powers to the company's board, especially on investment decisions.Among others, the board of a 'Navratna' company can decide on investments worth up to Rs 1,000 crore in a single project without going for government approval.As per the guidelines for such entities, the ceiling on investment to establish financial joint ventures and wholly owned subsidiaries in the country or overseas shall be 15 per cent of the company's net worth in one project limited to Rs1,000 crore. At present, there are about 14 Navratna companies. NHPC has an installed power generation capacity of 5,702 MW, including 1,520 MW implemented through joint ventures. Seven projects, having total capacity of 4,095 MW are under construction.Moving forward with its diversification agenda, NHPC would be developing a 1,320 MW thermal power project alongwith Chattisgarh government in that state. Besides, plans are on the anvil for developing grid connected 50 MW wind and 100 MW solar power projects. "NHPC has been allowed to plan, promote and organise an integrated and efficient development of power through conventional and non-conventional sources in India and abroad," Director (Finance) A B L Srivastava had said earlier.

FPIs to get registration within 10 days

Making it easier for overseas entities to invest in Indian markets, Sebi has proposed grant of registration to them within 10 days of application under the new Foreign Portfolio Investor (FPI) regime.The FPIs would be allowed to invest across a host of the capital market segments, including in shares, debentures,warrants, mutual funds, collective investment schemes, derivatives, treasury bills and government securities. Besides, they can also invest in the commercial papers, security receipts of asset reconstruction companies, perpetual debt instruments, non-convertible debentures, infrastructure debt funds and Indian Depository Receipts.However, one FPI can hold a maximum of 10 per cent equity shares in a company, subject to the applicable sectoral caps.Under the proposed FPI Regulations, which were approved by Sebi's board yesterday and would be notified soon, various investor classes like FIIs (Foreign Institutional Investors) and QFIs (Qualified Foreign Investors) would be clubbed into one single category to be known as FPIs.To make it easier for FPIs to invest in Indian markets,the new norms also provide for a permanent registration tothem, while Sebi has also exempted the lowest-risk foreign investors (such as government entities, sovereign funds and multilateral agencies) from any registration fees.The new norms come at a time when concerns are being raised about flight of overseas funds away from Indian markets, which was known as among the most attractive investment destinations across the world till a few years ago.The regulations governing foreign investors have been streamlined to make Indian market a more attractive investment destination and include easier entry norms and cost-effective operational framework for the foreign entities.As per the draft FPI Regulations, 2013, the FPIs would need to apply for registration through Designated Depository Participants (DDPs), which would need to dispose of the application within ten days of its receipt.In case of additional information being sought for the registration, the application would be required to be disposed of within 10 days of such details being furnished. The applicants can approach Sebi for any grievance with regard to their application, while they would be required to be given a "reasonable opportunity" to remove any deficiencyfound in their application before it being rejected. An applicant can apply to Sebi for a reconsideration within 30 days of its application being rejected. The draft norms also stipulate that FPIs would need to transact in securities only through registered stock brokers, except for transactions in securities governed by RBI regulations (such as government bonds), open offers, buyback or delisting offers and divestment of shares. To ring-fence the new regulations from possible misuse,the FPIs would need to be from countries that are member of global bodies like Financial Action Task Force (FATF), IOSCO(International Organisation of Securities Commissions).Besides, the entities from any country against which bodies like FATF have issued warning for AML/CFT (Anti MoneyLaundering and Combating the Financing of Terrorism) deficiencies would not be allowed to register as FPIs.As per the draft regulations, FPIs would need to inform Sebi about any penalty, pending litigations or proceedings orinvestigations for which action may have been taken or can be taken by an overseas regulator against it.The FPIs would also need to obtain separate and distinct Permanent Account Number (PAN) from the Income Tax Department.In case the same set of ultimate beneficial owners invest through multiple entities, all such entities would be treated as part of same group and their investments would be clubbed together for the purpose of 10 per cent cap.They would also need to maintain propers books of accounts and records, while entities having opaque structuresto hide identity of beneficial owners would not be allowed to register as FPIs.The Sebi can also order inspections on suo motu basis or upon receipt of any complaint, to ensure that propers accounts and records, including telephone records and electronic records and documents, are being maintained, or to ensure compliance with the applicable norms. The Sebi would also be entitled to recover from the concerned entity the expenses incurred for the purposes of inspections and investigations.

Indian rail to charge difference of fare from pre-book tickets

Railways increases passenger fare and freight tariff by about 2 per cent to offset the financial burden arising out of increased input cost. Railways is expected to mop up about Rs 1250 crores from the hike in the last six months of the current fiscal, sources in the ministry said. The suburban and non-surban fares would, however, remain untouched. The decision on the fresh round of hike has been taken under the system of fuel adjustment component (FAC) about which an announcement was made in the 2011-12 rail budget. Railways has taken into account the additional burden of 7.3 per cent increase in diesel price and about 15 per cent in electricity hike. While the fare of AC and sleeper class will be increased by about 2 per cent, the freight rate will go up by 1.7 per cent, as per the decision. Railways has imposed 15 per cent levy as the busy season charge on all commodities from October 1 and the FAC-linked revision is likely to take effect from October 10. Another round of rail fare hike from October 7th: According to the budget proposal, the fuel component is segregated from tariff as FAC and the railways is expected to revise the passenger and freight tariff after every six months taking into account the input cost and the prevailing market condition. According to the calculation, railways will have to bear a burden of Rs 1,250 crore due to increased energy and input cost in the next six months. The cross-subsidy for passenger service is currently touching Rs 26,000 crore in a year. Railways Minister Mallikarjun Kharge had said yesterday that "fuel adjustment component (FAC) was announced in the budget and as per the budget proposal it should have been implemented from October 1. The file containing the FAC proposal has come to me and I am examining it and a decision will be taken shortly." The then Railway Minister Pawan Kumar Bansal had announced the implementation of FAC-linked revision in only freight tariff from April 1. As regards passenger fare, since it was revised in January this year, so it was not touched then.

India 11th most favoured for MNC headquarters'

India hosts about 158 large global companies having a revenue of USD 1 billion or more, making the country the 11 most favoured destination for setting up of a multinational corporation headquarters, says a report. According to an analysis by McKinsey Global Institute, as many as 158 global large companies have their headquarters in India with a combined revenue of USD 898 billion. The US topped the chart with 2,123 large firms having their headquarters in the country with a combined revenue of USD 15,221 billion, followed by Japan (1,028 firms, USD 7,347 billion), China (577, USD 5,449 billion), Germany (462,USD 3,788 billion) and United Kingdom (358, USD 2,818 billion),constituting the top five. The top 10 most favoured destinations for setting up an headquarters of a global MNC include: France which hosts 236 firms's headoffice, Australia (203), Canada (194), Italy (179) and Russia (165). India was ranked 11th in the list followed by South Africa, Switzerland, Taiwan and Brazil.At present, there are some 8,000 distinct large companies worldwide with revenue of USD 1 billion or more, and three out of four are based in developed regions, Mckinsey said. This situation is likely to undergo a sea-change as by the year 2025, an additional 7,000 companies would grow to this size (revenue of over USD 1 billion) and seven out of ten of these new entrants are likely to be based in emerging regions, the Mckinsey report added. Currently, the US, Canada, and Western Europe account for 11 per cent of the world's population but are home to over 50 per cent of large company headquarters. In comparison, South Asia is home to 23 per cent of the world's population but only 2 per cent of the world's large companies' headquarters. As per the report, by 2025, nearly half of the Fortune global 500 companies are likely to be based in developing countries including India. "As Japanese and South Korean companies became formidable global competitors in the past half century, new players from emerging markets such as Chinese telecom networking giant Huawei, Brazilian aircraft manufacturer Embraer and India's industrial conglomerate Aditya Birla Group are asserting their presence," it said adding "many more are soon to follow". According to the report, companies from emerging regions are growing faster than their counterparts from the developed world not only on their home turf but also in overseas markets. It cited the example of the aggressive expansion of India's Tata Motors into Europe in the past decade.

Telcos that lost permits may not get chance to bid

Telecom companies whose 2G permits were cancelled by the Supreme Court may not get another chance to bid for spectrum in the next round of auction, according to official sources. Inter-miniterial panel Telecom Commission has accepted the recommendation by a Department of Telecom (DoT) committee to remove the eligibility rule that allowed such companies to participate, the sources said. The DoT committee has suggest that the eligibility condition would require modification with respect to quashed licences as there would be no such licence holder in the next auction. It has suggested that any eligible entity can participate as new entrant or existing licence holder. This view is different from the one given by the Telecom Regulatory Authority of India (Trai) for the third round of spectrum auction. It recommended that "eligibility conditions prescribed in the recently held auctions (November 2012 and March 2013) should be retained for the upcoming auction". The DoT committee has said however that it is "of the view that the eligibility condition would require modification with respect to quashed licencee as there would be no quashed licencee in the next auction. This will have to be suitably incorporated in the NIA". According to sources, Telecom Commission has upheld the views of DoT panel, saying that "Recommendations of DoT's committee may be accepted". TC is expected to take final view on all recommendations of Trai on October 29 which will be then send to Empowered Group of Ministers on spectrum, headed by Finance Minister P Chidambaram, for final decision. In February last year, the Supreme Court had cancelled 122 telecom licences in the 2G spectrum allocation case. They covered 22 licences of Uninor, 21 of Loop Telecom, 21 of Sistema-Shyam, 15 of Etisalat DB, 6 of S Tel, 21 of Videocon, 3 of Tatas and 9 of Idea Cellular. They were able to get benefit of government decision to set-off the amount they paid for impacted permits against final price they had to pay for spectrum in auctions. Uninor, Sistema Shyam, Videocon and Idea Cellular were among those companies that were allowed to adjust the licence fee they paid for quashed licences. Loop Telecom, Etisalat DB, S Tel and Tata Teleservices have so far not participated in auctions. Foreign investor in Loop Telecom, Khaitan Holdings Mauritius Ltd, has filed international arbitration against Indian government seeking damages of about USD 1.5 billion in the matter. Meanwhile, TC has given in-principle approval to spectrum trading recommendation of Trai which would allow telecom firms to take spectrum from other companies.

ATMs may run dry on shortage of guards

There may be cash crunch at ATMs this festival season on account of shortage of armed staff in private security agencies that provide logistics services to banks. The number of armed security guards in cash handling agencies have come down to one-third of what it was 6 months ago hitting the logistics operations, as per an industry estimate. Besides, many of them are expected to go on leave during the festivals - Navratri, Dussehra, Diwali and so on - adding to the woes of cash logistics firms. A number of ATMs are now being loaded with cash every fifth day, instead of every two days earlier, say industry officials. "There could be cash crunh in ATMs, due to shortage of armed guards at various companies. The increase in loading time to once every 5 days, is an indicator to that." said an official at a logistics company. However, according to a public sector bank official, lenders are taking adequate measures to feed in extra cash in ATMs taking into account additional demand for money during the festival season. About Rs 15,000 crore cash is moved on behalf of banks everyday, according to Cash Logistics Association. The fall in armed security guards is because of various reasons including the fact that police in many states have raised objections on the issue, saying that private arm licence cannot be used for purpose other than defined by the law, said the association. This has lead to staff crunch with cash logistics firms, which don't get a formal licence to operate armed services for cash logistics. Currently, cash van security involves people who have private licence for carrying arms and are mostly from UP, Bihar and Rajasthan. According to cash logistics firm SIS Prosegur's Managing Director Rituraj Sinha, discussions between government and banks have happened on the issue many times but the issue remain unresolved. "We may have to stop the cash logistics services if the issue is not sorted soon. Looting incidences have stalled fear among cash logistics companies," he said. Cash van looting incidents have gone up to one incident per month in 2012-13, compared to just one in three months in 2011-12, he said. Cash Logistics Association's Secretary General N S G Rao is of the view that the Indian Arms Act 1959 should be relaxed to suit the requirements in bigger cities. There are over 1 lakh ATMs across the country. Of these, nearly one third are in rural and semi-urban areas