State-run producer Oil & Natural Gas Corp, reported a 32 per cent fall in quarterly profit, just missing expectations, as lower average crude oil prices and a higher subsidy burden weighed on profits. The company reported a net profit of Rs 5897 crore for its fiscal second quarter ended September, down from Rs 8642 crore a year earlier. Analysts, on an average, had expected a net profit of Rs 6090 crore,according to a Reuters poll of brokerages. Net sales fell 13 per cent to Rs 19,788 crore Shares of ONGC, India's third-biggest company with a market value of $41.9 billion, closed 0.6 per cent lower on Thursday, ahead of the results. The stock has risen 3.5 per cent so far in 2012, nearly matching a 4.3 per cent rise in the BSE oil and gas index.(Reuters)
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India is among the top five countries in terms of usage of new and renewable energy and the sector is attracting FDI worth over $10 billion every year. "India stands among the top five countries of the world in terms of renewable energy installed capacity and at present renewable power," New and Renewable Energy Minister Farooq Abdullah said here.Addressing the first ASEAN-India renewable energy meeting, he said, "Investment in renewable energy in India has now exceeded $10 billion per year."Abdullah said the meeting provided a unique opportunity to catalyse the India-ASEAN Renewable Energy family and underlined the importance of new energy sources in India's energy security for achieving its goal of providing reliable energy supply and access through a diverse and sustainable energy mix.Globally, renewable energy has started making a positive impact on energy supply and the Global Renewable Energy Status Report 2012 reveals that renewable energy has grown to meet 16.7 per cent of the global energy consumption.(PTI)
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Since 1993, when the coal sector was opened up for captive mining, as many as 289 blocks — with about 43 billion tonnes of geological reserves — have been allotted to various companies, including 179 to those in the private sector. An overwhelming majority of the allotments was made during the UPA regime; quite a few blocks were given away by the earlier dispensations as well. Here is a lowdown on the various ministers and the blocks awarded by them.(Compiled by Yashodhara Dasgupta)(Graphic: Sajeev Kumarapuram)Click Here To Download Infographic(This story was published in Businessworld Issue Dated 24-09-2012)
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Hinduja group firm Gulf Oil Corporation Ltd said on 7 November it is fully acquiring US-based Houghton International Inc for $1.045 billion (about over Rs 5,685 crore) through a UK-based subsidiary."An agreement was signed for the acquisition by its wholly-owned subsidiary in the UK on November 6, 2012, with the sellers, a US-based private equity fund," the company said in a filing to the BSE.The $1.045 billion acquisition will be subject to customary closing conditions, it said.Gulf Oil Corporation Ltd (GOCL) will operate Houghton as a separate company and the rest of Gulf's operations will be able to leverage Houghton's extensive base of industrial customers to offer them a complete en-to-end range of lubricants, it said."...in addition there are various synergies that can be achieved in manufacturing, strategic sourcing and distribution," GOCL said.Houghton is a global market leader metal working fluids and has a global footprint with sales in more than 75 countries, which are supported by 12 manufacturing facilities in 10 countries, it added."The acquisition fits extremely well with Gulf's Lubricant portfolio. Houghton has a very strong industrial portfolio, which perfectly complements Gulf's very strong presence in the automotive lubricant sector," GOCl said.Scrips of GOCL were trading at Rs 89 per share in the morning trade on the BSE, up 1.60 per cent from the previous close.(PTI)
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According to "The Rising Sun" report by KPMG, India, the rapid fall in solar prices and increase in cost of conventional power may increase the usage of Rooftop solar power at a broad scale by 2017. "Solar power technology may help India leapfrog in the energy sector as we are in a position when our energy requirement growing at a rapid speed." said Santosh Kamath, partner, KPMG in India. For example, a high-end residential consumer can install a 1 KW solar PV system - to reduce marginal power consumption - with a monthly EMI payment of around Rs 2000 for five (5) years and avoid an average discounted monthly payment of around Rs 1200 over the lifetime (25 years) to the grid. Similarly, a ten (10) year EMI would result in an outgo of only 1200 per month equal to the average discounted power cost savings over the 25 year lifetime of the asset. "Given the issues of fuel shortages and import dependence of our energy sector, solar power should be given a significant thrust by the Government. The National Solar Mission (NSM) has made a good beginning,", said Arvind Mahajan, partner, HOD, Energy and Natural Resources. He further adds that the government, utilities and Regulators should encourage solar power by providing net metering infrastructure, energy banking facility and also developing an ecosystem for rooftop market installation. The National Solar Mission (NSM) has triggered the development of solar ecosystem capacity in India in the last two years. India's solar capacity has grown from less than 20 MW to more than 1,000 MW in the last two years. KPMG is a global network of firms providing professional services. We have 145,000 outstanding professionals working together to deliver value in 152 countries worldwide. KPMG, India was established in September 1993 and provides services to over 2,700 international and national clients in India.
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India is rapidly urbanising, with increasing urbanisation rates. From a 30 per cent urban India in 2011, which is about 340 million people living in Indian cities, it is expected that we would have 600 million people in urban India (40 per cent urbanisation) contributing to over 70 per cent of Indian GDP in the next 20 years. It has now been quite clearly established that cities are engines of economic growth and not a matter of debate whether urbanisation is to be supported or not. Urbanisation is a natural process of economic agglomeration which will happen with economic growth, and it is then a question of quality of cities, which is of concern. The focus of inclusive growth cannot any more be on rural India as urban poor are probably worse off than rural poor in India. Across Indian cities, the quality of life is declining and basic urban services like water, waste management, city roads, and urban transport are far below basic levels. Various policy papers, high powered or empowered committees churn out reports on urban infrastructure investment requirements, financing gaps with some possible solutions but some basic questions remain unanswered as how all these would be done and financed. As per some latest published estimates, around $1.2-trillion investment in urban infrastructure and services is required over the next 20 years for catching up on infrastructure investment backlog and for new urban infrastructure investments to support the urbanisation process. While there are concerns on policy, governance, and planning issues in Indian cities, there is also the need to figure out how urban infrastructure and services investments would be financed. If we carry on with the present approach to developing urban infrastructure constrained by the state of municipal finances, and sometimes supported central programs, it would not be possible to meet even a major fraction of the required investment. This means that the quality of life in Indian cities would decline further instead of improving. Some cities across the world have demonstrated that such decline can be reversed over a period of 10 years but these need careful policy and institutional actions which need to be implemented at the urban local body levels. On the subject of financing urban infrastructure and municipal services, the usual approach which we see from some economic and policy “think thanks” and urban departments of the government is a prescription that talks about public private partnerships, commercial borrowing and municipal bonds. While these approaches are desirable for bridging the urban infrastructure financing gaps, it needs to be recognized that these are only ‘instruments’ which would be successful only if the underlying key issues are resolved. Public private partnerships could improve the quality of operation and maintenance in urban servicers in addition to enabling private investment in urban infrastructure. Assuming that these instruments and approaches would work; some have gone further to suggest and experiment with incremental innovations such as pooled financing (which is getting a number of smaller municipalities to come together for borrowing), urban infrastructure funds, credit rating of municipalities and guarantees. A few of these initiatives have also been supported by multilateral and bi-lateral institutions, case studies have been developed and a few pilot successes demonstrated (if at all) again and again over the last decade. While all of these efforts may be laudable, some of the core underlying issues remain unaddressed. Let me explain this with some examples. A municipality can borrow from banks or by way of issuing bonds only if they are capable of repaying them and the lender or the bond investor is convinced of the same. It is now been over 15 years since the initial set of municipal bonds were issues by some reasonably larger municipalities and since them the total mobilization by way of municipal bonds has only been around Rs 1,200 crore, when the five-year plan requirements are of the order of Rs 1.2 lakh crore. The reason is simple; most municipalities are not creditworthy enough to access commercial finance. There is need to strengthen municipal finances in India. Credit rating of municipalities can possibly provide an indication of the how creditworthy the municipality is, which only serves a limited purpose of giving a number to the what we already know about the bad state of municipal finances (with a few exceptions). PPPs in urban infrastructure have seen limited success for the same reason-weak and uncertain municipal finances. Urban infrastructure financing is the process by which cities can obtain the right mix of funding for continued investments in urban infrastructure and services so that residents can have access to better basic urban services. Meeting the challenge of financing our huge urban infrastructure needs possibly requires a different line of thinking and strengthening of municipal governance and finances lie at the heart of this approach. It also needs to be appreciated that we are unlikely to see completely commercialised cities (except possibly a few very large ones, which could possibly generate adequate revenues to fund both operating expenses and capital expenditure from own sources. Urban infrastructure needs to be financed by a mix of public expenditure, grants, commercial borrowings, development financing and with some infrastructure being amenable to PPPs – which could be private investment with commercial revenue models and limited viability gap funding. Some of the possible fiscal and financial approaches to improving the state of municipal finances in India could include some of the following Monetising urban land and capturing indirect value from urban infrastructure provisioning; Increasing property taxes which seem to be the mainstay of urban local body finances;Attempting cost reflective pricing for all urban services, may be with targeted subsidies for urban poor;Ensuring certainty in timing and amount of government grant devolutions; Equitable or proportionate sharing of all tax revenues between the state and urban local bodies.Creating urban regulatory institutions which provide an oversight on the quality of urban services and provide for appropriate economic regulation. Only with gradual improvement in municipal finances across the board can we expect to see increasing urban infrastructure investments and improvement in quality of urban services. This could then be followed by municipalities accessing commercial bank financing, bond markets; effectively use focused urban infrastructure funds set up with mixed capital and only then Indian cities could be the driver of sustainable growth in India. (The author is president and CEO, financial advisory division, Feedback Infrastructure Services. The views expressed here are personal).
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The All India Motor Transport Congress (AIMTC) said on 14 September it has increased freight charges across the country by 15 per cent following the hike in diesel prices."We have decided to pass on the burden of increase in diesel price hike to customers. The freight charges will be increased with immediate effect by 15 per cent across India," AIMTC spokesperson G P Singh told PTI.He further said the transport industry was not in a position to absorb the price hike."The increase in diesel price will hit the common man as the cost of basic items will shoot up," he said.Asking for a roll back of the diesel price hike, Singh said the government has not heeded the transporters' plea not to increase diesel price and AIMTC was keeping "all our options open" to press for its demand.The apex body of truckers across the country, AIMTC claims to have around 80 lakh trucks under its aegis.Yesterday, the government hiked diesel prices by a steep Rs 5.62 a litre. This was the biggest-ever hike in diesel prices excluding VAT or local sales tax following which the fuel is sold at Rs 46.95 per litre in the national capital as against Rs 41.32 a litre earlier.Diesel prices were last hiked by Rs 3.37 per litre in June 2011.(PTI)
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Power utility CESC Ltd said it would pay Rs 395 crore for a 49.5 per cent stake in Firstsource Solutions Ltd, a business process outsourcing company. Including a mandatory open offer for another 26 per cent of the shares, CESC expects to invest a total of Rs 650 crore to acquire Firstsource, which will help it expand outside the power sector. "Growth opportunities in the power sector are getting ... somewhat challenging and returns from the power sector are also not as lucrative as they were," Sanjiv Goenka, vice chairman the RP-Sanjiv Goenka Group which controls CESC, told a television channel. Firstsource will issue about 227 million shares, or 34.5 per cent of equity capital, on a preferential basis to a unit of CESC at Rs 12.10 per share. CESC has also separately agreed to buy a total 15 per cent stake from existing Firstsource shareholders — Temasek Holdings, US-based Metavante Investments and ICICI Bank — at Rs 12.20 a share, it said in a statement to the stock exchange. (Reuters)
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