PE investor for Redington

A private equity arm of Standard Chartered today bought close to 10 per cent of Redington India from its promoter and another key investor for a sum of over Rs 365 crore. These shares were acquired from Redington Mauritius, classified as the company’s promoter with the stock exchanges and Taiwan-based Synnex Technology International Corp, a strategic investor in the IT and technology logistics provider. The transaction was done through the bulk deal window of the Bombay Stock Exchange today. Standard Chartered Private Equity, Mauritius bought 3,97,36,500 shares of Redington India for a price of Rs 91.89 per share. Another institutional investor, ECL Finance, acquired 79,50,000 shares at Rs 91.90. The sellers were Redington Mauritius, which offloaded 3,04,80,673 shares, and Synnex Mauritius that sold 1,58,95,000 shares. In all, close to 12 per cent of Redington’s equity changed hands. The purchase price marks a premium of nearly 4 per cent to the closing price of the Redington scrip at the bourses on Friday. Despite the transactions, the Redington stock fell 0.39 per cent to Rs 88.50 on the Bombay Stock Exchange. Shareholding data for the period ended March 31 showed that Redington Mauritius (an arm of Kewalram Chanrai Group from Singapore) held 28.89 per cent of the company’s equity. At the same time, Synnex held 27.80 per cent of its equity. Latest data from the Bombay Stock Exchange shows the promoter’s holding in Redington for the period ended May 27 has come down to 28.80 per cent. It is believed that as a consequence of today’s deal, the stakes held by both these big investors would have fallen below 26 per cent. This is the second action coming from a PE player over the past few days. Recently, Apollo Global Management, the private equity firm, announced that it is investing Rs 2,250 crore ($500 million) in the Welspun group. The investment will be made in steel pipe maker Welspun Corp Ltd (WCL) and two other companies in the group that included Welspun Maxteel Ltd and Welspun Infratech Ltd.

Tata bid to take off in aerospace

The $70-billion Tata group is quietly building its presence in the aerospace industry that has recently seen significant investment from the private sector. It is in the process of applying for licenses from several central government ministries, predominantly the defence ministry, to sell helicopters that it plans to assemble at its joint venture with Italian conglomerate Finmeccanica’s AgustaWestland. The Tata group and AgustaWestland decided in early 2009 to form a joint venture that would establish a plant to assemble the AW 119 helicopter — an eight-seater utility copter meant for both defence and civilian uses. The deliveries were supposed to start by 2011, but the deadline has since been pushed back by a year.  The joint venture was concurrently applying for licences as it went about putting up the assembly unit in Hyderabad. At the time the joint venture was formed, the production target was fixed at 30 units a year. The Centre for Asia Pacific Aviation (CAPA) has estimated that the Hyderabad-based greenfield facility of this joint venture is likely to entail an investment of $30 million. The joint venture company, Indian Rotorcraft, will assemble and deliver these helicopters. It will target domestic as well as global customers. Estimates indicate that India will be a key market for helicopters with an expected demand of 800 units in the next decade from both the public and private sector. Late last year, another Tata group company, Tata Advanced Systems Ltd, rolled out the first made-in-India Sirkorzy S-92 helicopter cabins from Andhra Pradesh. These helicopter cabins, which were previously manufactured in Japan, were exported to Sirkozy’s assembly plant in the US. A recent paper by the CAPA on aerospace manufacturing in India said the Tatas and the Mahindra group with strong financial credentials had entered into various alliances to manufacture parts and assemble machines under offset agreements. “However, there are strong prospects and good reasons for these groups to move from defence offset to licensed manufacturing and beyond to civil aviation manufacturing as the defence market becomes saturated,” it added. Mahindra & Mahindra (M&M) had acquired Aerostaff Australia and Gippsland Aeronautics in 2009 as a part of Rs 1.75-billion investment and capacity building forays into aerospace components and aircraft manufacturing. Recent reports said Mahindra Aerospace Pvt. Ltd, the aerospace unit of M&M, is scouting for a technology partner to make aircraft components at a proposed plant in Bangalore. The CAPA says that the interest shown in aviation by industrial houses suggests a real opportunity for India to develop a presence in international aerospace manufacturing where other developing economies such as Brazil have done well.

Lean years of Osama ‘broke’ Laden - Cash crunch forced Qaida to jump off high horse and order kidnappings: Documents by CHRISTINA LAMB

Osama bin Laden was so short of money during his final years in hiding that he ordered his fighters to kidnap foreign diplomats for ransom, it was revealed yesterday. Documents found in the compound where he was killed in Abbottabad, Pakistan, portray a cash-strapped al Qaida severely hampered by the economic downturn, which had prompted a fall in donations. This was compounded by a freeze on its international assets and an increase in American drone attacks, one of which killed the organisation’s financial director. The terrorist group was run like a multinational business and Osama, like a chief executive, tried to find new sources of revenue and make cuts. Al Qaida went from offering allowances to its fighters, who at one point were paid $108 a month, to leaving militants to pay for their own bed and board. The organisation has a financial wing headed by skilled accountants who insisted on receipts for every purchase, including computer flash drives costing a few dollars. Messages uncovered in the huge cache of documents recovered in Abbottabad make frequent references to a shortage of funds. In one, the head of al Qaida’s security unit complained about having “a very low budget, a few thousand dollars”, an intelligence official told The Washington Post. In others Osama himself complains about lack of money. John Brennan, President Barack Obama’s chief counter-terrorism adviser, told The Sunday Times last week the biggest surprise was that “Bin Laden was far more operationally active and hands-on than we had realised”. But the terrorist leader was also clearly under tremendous pressure, both financially and operationally, from the drone attacks in Pakistan’s tribal areas. “We know from the material from the compound that OBL himself recognised they were being pummelled,” said Brennan. “He wanted to carry out more attacks but his commanders were saying, ‘your aspirations outweigh our capabilities’.” In spring last year, the al Qaida leader sent a message instructing a deputy to form a group that would kidnap diplomats for ransom. Al-Qaida had rarely engaged in kidnapping, preferring to focus on the so-called “spectaculars”, except where abductions could be used as an instrument of vengeance. “It is a simple and clear equation,” Osama once said. “As you kill, you will be killed. As you capture, you will be captured.” With donations drying up it appears he decided to emulate other terrorist groups, such as the Taliban, for whom kidnapping provides an important revenue stream. Terrorist plots can be surprisingly cheap. The September 11 attacks in New York and Washington cost an estimated $500,000, and tens of thousands of dollars in unused funds were sent back by the hijackers to al Qaida accounts. Last year Yemeni operatives boasted that their thwarted attempt to hide bombs in courier packages to blow up two planes cost just $4,500. Brennan said that if it had not been for a tip-off from the Saudi interior minister, Prince Nayef bin Abdul-Aziz, “we would definitely have had a couple of airliners coming down, possibly over the US”. Osama needed cash for training, weapons, operatives and their families, bribes and hideouts, including the compound where he lived with his three wives and children. For years the organisation relied primarily on donors who had known Osama since his days of helping the Afghan mujaheddin to fight the Russians in the 1980s or who regarded him as an inspiration. Such funds were hard to track, coming through the informal money-changing hawala system of brokers in the Gulf and central Asia.

Courtesy- THE SUNDAY TIMES, LONDON

Fitch lowers forecast

Global rating agency Fitch has further lowered its growth forecast for India in 2011 to 7.7 per cent from 8.3 per cent. “The growth has clearly hit a soft patch as GDP grew only 7.8 per cent in the first quarter of 2011, down from 8.4 per cent in the fourth quarter of 2009-10 and 8.9 per cent in the third quarter,” Fitch Ratings said in its report.

Sebi watching share pledge

The Securities and Exchange Board of India, suspecting possible circumvention of its disclosure norms for share pledging, is mulling changes in the rules to bring to the fore cases of promoters raising funds by keeping shares as “indirect collateral”. The market watchdog is also considering making it mandatory for promoters to disclose the amount of funds raised by share pledging and the utilisation of such proceeds, a senior official said. After the Satyam scam, which revealed the promoters having pledged almost all their shares, Sebi in January 2009 had made it mandatory for promoters of all listed companies to disclose their share pledging activities. However, these norms require only the disclosure of the number and percentage of shares pledged and not the amount of debt or funds raised by keeping shares as collateral. In the recent past, various cases have surfaced when investors have resorted to panic selling after coming to know about the huge amount of funds raised by promoters through share pledging as also by indirect pledging of shares to avoid Sebi’s disclosure norms. Sources said the regulator had received complaints of promoters resorting to informal and private financing arrangements with shares as collateral to avoid the disclosure norms. In many cases, these arrangements are entered into with entities outside the banking system and promoters do not pledge the shares of the listed companies themselves but use the shares of unlisted special purpose vehicles, which are created solely for the purpose of financing.

Hackers attack Apple's website, claim they stole passwords - The Economic Times

Hackers attack Apple's website, claim they stole passwords - The Economic Times

Warren Buffet and the 5 BHK home

Quick-quiz. Match the place of residence given below to the following men.

World's Richest Man — Carlos Slim

World's Second Richest man — Bill Gates

World's third richest man — Warren Buffet

World's fourth richest man — Bernard Arnault

Where do they stay?

1.      World's Largest House

2.      World's 2^nd largest house

3.      World's 3^rd largest house

4.      World's 4^th largest house

Answer: None of the answers given above matches the place of residence of the men given above. Isn't that so odd? The richest men not living in the biggest houses. Then, what is the use of having so much money?

The shocker: The 3^rd Richest man in the world stays in a five bedroom house brought in 1958 and that today is valued at around USD 700,000 (although this works out to Rs 3.5 crore if we take the current exchange rates, it is only around a crore in PPP terms). Today almost 10% of Indians would be having a house in excess of Rs 1 Crore.

So does that mean that Warren Buffet is a miser? With over $50 Billion in wealth, he still stays in a 53-year-old house that too with "just" five bedrooms. He surely must be bluffing about his wealth, because, we know for sure he is not bluffing about the house! Or is he? Well not at all. His known public wealth is 50 billion dollars and growing.

So why does the world's third richest man stay in such a small house?

No, Warren Buffet is not stingy or miserly by any means; not anyone who donates 30 Billion to charity can be one. Rather, he has mastered the art of creating wealth.

Wealth is not created just by investing, but, also by avoiding unnecessary expenses. It's not called stingy, rather, it's called Frugality. This frugality has helped him grow his wealth year on year.

His logic is simple: An extra ten rooms in the house is not going to create any major difference to him. However, the same money if invested rightly (of which he is a master) can be made to grow to probably ten times the same amount.

Yes, it is not easy for all of us to be like him. Others might say that he can "afford" to be frugal because he already has so much wealth and does not need to worry about anything else. True, but he has stayed the same way even when he was poor!

If Warren Buffett can do it on such a large scale, we can at least do it on a smaller scale. The secret lies in falling in love: In love with growing wealth. If you can fall in love with the happiness that one gets by seeing his wealth grow, you will automatically start repelling the evil twin: spending.

Initially it may be very difficult and you may not even be able to follow. But, once you get accustomed to it. You realize that the pain of sacrificing current consumption is much smaller as compared to the thrill of creating long term wealth. The 20,000 Rupees saved by going for a simple phone (rather than a gold studded one) can in the coming years grow into Rs 200000/- and give you the power to be a giver.

The fundamental is to make sure we give priority to the needs and minimize the wants. Happy frugality.

Courtsy-http://in.finance.yahoo.com/news/Warren-Buffet-5-BHK-home-bankbazaar-637166520.html

Vodafone pays more,Essar exits.

The Ruias and Vodafone Plc have finally buried the hatchet. The Ruias-owned Essar group today agreed to sell their entire 33 per cent stake in Vodafone Essar — India’s third-largest telecom player with a subscriber base of 137 million at the end of April — for a net consideration of $4.58 billion. The total cash outflow for Vodafone Plc will be $5.46 billion — which seems to suggest that the Ruias were able to arm twist the world’s largest mobile communications company by revenue into forking out more than the originally agreed sum of $5 billion. On Friday, the Ruias transferred their entire 22 per cent held through their overseas subsidiaries to Vodafone for $3.32 billion. This stake was transferred in two tranches: the first on June 1 and the second on Friday. Vodafone decided to hold back $0.88 billion as withholding tax on the transaction as it didn’t want to run foul of the government once again. The London-based telecom giant is battling a $2.5-billion withholding tax claim over its $11.08-billion deal in February 2007 to acquire a 67 per cent controlling stake from Hong Kong-based Hutchison Whampoa. The Supreme Court is scheduled to hear this case on July 19. “It was viewed as prudent to deduct and pay withholding tax on a without-prejudice basis and have the two Mauritius-based subsidiaries — Essar Communciations Ltd and Essar Com Ltd — claim a refund of such withholding tax after following due process,” the Essar group said in a statement later. On March 31, the Ruias had pressed the put option on the 22 per cent stake they held through the Mauritius subsidiaries. Vodafone had riposted by exercising a call option on the 11 per cent the Ruias held through Chennai-based ETHL Communications (ECHL). Under the terms of the agreement they had signed in March 2007 with the Ruias, Vodafone had to make the first payment within 60 days of the date on which the Ruias exercised their put option. As a result, the two sides were under some pressure to seal the deal today itself. Vodafone had applied to the Authority for Advanced Rulings (AAR) wanting to know whether it should withhold tax on the $5 billion payout to the Ruias under the terms of the original deal. With no sign of any ruling from the AAR, the two sides agreed that Vodafone should deduct the withholding tax of $0.88 billion (Rs 3,500 crore) and leave it to the Ruias to seek a refund from the government. No future claims Under the terms of the agreement reached today, ECHL will sell its 11 per cent holding in Vodafone Essar for $1.26 billion. The Ruias will receive the payment for this stake sale by February 15 next year. The transfer of these shares will be completed after obtaining all the necessary approvals. Vodafone said the two sides had agreed to terminate all outstanding claims between them. They also renounced all future claims on each other. The two Ruia firms — Essar Communciations (Mauritius) Ltd (ECML) and ECHL — will give up their board seats in Vodafone Essar. The stake buyout will see Vodafone’s shareholding cross the 74 per cent ceiling on foreign direct investment in telecom. Vodafone intends to sell a 1.35 per cent to an Indian investor in order to comply with India’s investment rules. In the past, it has sought the help of Analjit Singh of the Max group and Asim Ghosh, former chief executive officer of Hutchison Essar, to hold the excess stake on its behalf. Agreements signed with Singh and Ghosh had incorporated call options that would allow Vodafone to buy back the stake at a later date. The stake sale marks the end of a four-year partnership between Vodafone and the Essar group in India. As per Essar group chairman Shashi Ruia, “We were one of the early entrants in the telecom space in 1995 and have enjoyed an extremely successful relationship with Vodafon.” Stake valuation Vodafone and the Ruias squabbled last year when the Ruias wanted to seek an independent valuation of their 33 per cent stake in Vodafone Essar. The Ruias decided on a reverse merger between Essar Telecommunications Holdings Pvt Ltd – the parent of ETHL Communications Ltd – with another group company, India Securities. Since India Securities was a listed entity, the idea was to secure a proxy valuation of the Essar stake in Vodafone Essar. Vodafone challenged the reverse merger in court but lost. The Ruias believed that the valuation of Vodafone Essar had gone up substantially after the telecom company won 3G spectrum licences in nine circles after bidding Rs 11,617.86 crore. The Ruias were able to force Vodafone to fork out $5.46 billion to seal the deal. It will be interesting to see whether they can persuade the government to refund the $0.88 billion that Vodafone has retained as withholding tax.

Bank raise base rate

ICICI Bank, the country’s largest private lender, and two other banks raised their base rates, or the minimum lending rate, by up to 75 basis points. 

The revision will make corporate and consumer loans, including home and auto, expensive for new borrowers. The other two private lenders to increase the base rate are Kotak Mahindra Bank and Dhanlaxmi Bank.

A Heartfelt farewell to the 25 Paise Coin

The new rules of Government says-All the coins of denomination of 25 paise and below, issued from time to time, will go out of circulation with effect from June 30, 2011 onwards.

The 25 paise coin, which has been fading out of the pocket change in the recent years because of low acceptability, will finally become history from tomorrow as per new RBI rule from today onwards.

The coin, along with those with lower denominations, will be demonetised or cease to be legal tender. Also, in accounting, i.e. the entries in books of accounts, pricing of products / services / taxes shall also be rounded off to 50 paise or whole rupee from that date.

Coins of denomination of 25 paise and below will cease to be legal tender from June 30, 2011. These will not be accepted for exchange at bank branches from July 1, 2011 onwards," the RBI has said recently.

In December 2010, the Government had decided to withdraw the coins of denomination of 25 paise and below from circulation from June 30.

Even before price inflation killed the 25 paise coin, RBI had been receiving complaints regarding non-acceptance of the coin by shops, business establishments, utility services and even public sector organisations and government departments.

The central bank, then, had to issue notice that the coin was in circulation and continue to be legal tender. Coins of 1, 2, 3 and 5 paise denominations have already demonetised.

After independence, during the period of transition (1947-1950), India retained the monetary system and the currency and coinage of the earlier period.

While Pakistan introduced a new series of coins in 1948 and notes in 1949, India brought out its distinctive coins on August 15, 1950.

The Frozen Series 1947-1950 represented the currency arrangements during the transition period up to the establishment of the Indian Republic. The Monetary System remained unchanged at One Rupee consisting of 192 pies.

The Anna Series was introduced on August 15, 1950 and represented the first coinage of Republic India. The King's Portrait was replaced by the Lion Capital of the Ashoka Pillar, according to an RBI document.

In September 1955, the Indian Coinage Act was amended for the country to adopt a metric system for coinage. The rupee remained unchanged in value and nomenclature. It, however, was now divided into 100 'Paisa' instead of 16 Annas or 64 Pice. The 2.5 grams nickel 25 paise coin was born.

The latest 25 paise coin, weighing 2.83 grams, was ferritic stainless steel. In fact, the only ones who are now benefitting from 25 paise coins are the scrap dealers. They can now melt the 25 paise coins and even if they sell it as raw steel, they get more money. In short, the cost of manufacturing a 25 paise coin is much higher than its actual face value.

As per the RBI, over a period of time, cost benefit considerations led to the gradual discontinuance of 1, 2 and 3 paise coins in the 1970s.

Stainless steel coinage of 10, 25 and 50 paise, was introduced in 1988 and of one rupee in 1992.

Wedding Insurance now in India too

Rahul and Anita have fixed their marriage on 23rd March. All the arrangements were made and both were looking forward to their D-day. But unfortunately on the day of their marriage, the van in which the caterers were traveling broke down. As a result, the guests who came to the wedding did not get pre-lunch snacks. They were disappointed as the dream marriage they were expecting did not turn out to be a dream one after all.

So what should they have done? Could they have prevented this calamity? Well, perhaps no but at least they could have prepared adequately for it in terms of costs involved. By opting for a wedding insurance!

Introduction to wedding insurance

Just like we have life insurance to protect our life, car insurance to safeguard our car and health insurance to secure our health, we have wedding insurance to ensure our wedding goes off smoothly.

Is it required?

Over a period of time, marriages have evolved from a simple ritual uniting two souls to a complex affair where lakhs and crores of rupees are spent on lavish ceremonies. Besides costs of all the services involved in providing marriage facilities, have gone up. So if anything goes wrong, the parties involved can suffer heavy losses. This is where having an adequate wedding insurance will help. It will give you peace of mind as you are sure you won't lose any money.

Coverage of wedding insurance

Different insurance companies have different types of wedding categories. Some of the most common ones include: personal accident, postponement/cancellation, damage to property, burglary, money and public danger. However, some insurance companies do offer certain specific categories of cover like food poisoning.

Selecting the right type of insurance cover

with so many types of covers being available, you have to choose the right cover carefully. For that, consult an insurance agent or request your wedding planner (if you have one), to help you out in selecting the right cover. Also, get the details of every section covered in writing. Read it carefully and ask questions if you find some important points are not covered. Moreover, get in writing from the insurance company, the method of claiming money and the necessary documents required to be submitted to make a claim. E.g. if anybody falls ill at the marriage party, you will have to submit a doctor's certificate stating the nature of the person's illness. If you intend to provide cover to your relatives, you will have to mention their names when submitting the forms for buying the policy.

Choosing the right amount of insurance

The premium of wedding insurance is quite nominal. For a nominal premium of Rs 12,000, you can get an insurance cover of Rs 8 lakhs, which covers all the categories of covers. But you can exclude some covers, thus reducing your premium amount.

Where should I go?

Some companies that offer wedding insurance include Bajaj Allianz General Insurance, United India Insurance and ICICI Lombard General Insurance. Ask them for the quotes and choose the one with the lowest premium.

Marriage is the most memorable event in our life. So we need to ensure that it passes off as peacefully as possible. However despite our best efforts, some untoward incidents can mar our day. It is here that wedding insurance will help. While it won't eliminate the bad taste in our mouth, it will definitely go a long way towards protecting us from financial loss. There are various types of covers available under this insurance. Choose the covers wisely, ask for the quotes from various lenders and then select the most appropriate one for you.

Happy wedding!

Cash loss fear in salary move

The state’s rural and co-operative banks are worried about losing out on service charges and loan interest because of Mamata Banerjee’s decision to disburse schoolteachers’ salaries through nationalised banks.

At present, around two lakh primary and high school teachers have salary accounts in co-operative and rural banks. These banks earn about Rs 60 crore annually as service charge from the government for disbursing salaries and Rs 170 crore as annual interest from loans given to teachers.

“We are worried about the decision to provide teachers’ salaries through nationalised banks. We will lose out on the service charge and loan interest. Also, repayment of loans given to teachers may become uncertain. The decision will affect our financial condition,” said Amit Rajak, the general secretary of the Co-operative Bank Supervising Staff Association in Burdwan.

Rajak, who is also the officer in charge of Samudragarh co-operative bank in Kalna, said the bank had disbursed loans of Rs 28 crore. “We will be in trouble if we fail to recover the amount,” he said.

Srijan Pal, the general secretary of the West Bengal Regional Rural Bank Officers’ Association, expressed similar fears. “The rural banks have disbursed around Rs 1,170 crore salary-linked loans to schoolteachers. The recovery process may now become uncertain. We will also lose out on the Rs 40 crore we earn as service charge every year,” he said.

Officials of co-operative and rural banks said most loans were repaid through EMIs deducted at source from the salaries of teachers.

The banks have written to the chief minister, finance minister Amit Mitra and co-operation minister H.A. Safwi urging them to reconsider the decision. “It will become difficult for us to compete with the nationalised and private banks,” Rajak said.

Naren De, the co-operation minister in the Left government, said: “I don’t know what prompted the government to take such a decision when there was no complaint from teachers. The government should support such banks as they are financially weak compared with nationalised banks.”

School education minister Rabindranath Bhattacharya said he was “looking into the matter”.

Courtesy- http://www.telegraphindia.com/1110628/jsp/bengal/story_14169449.jsp

Mutual funds set to get $10bn

Foreign individual investors can now invest up to $10 billion in domestic mutual funds. “A new class of investors called qualified foreign investors (QFIs), other than foreign institutional investors (FIIs), can invest money into domestic mutual funds,” said Thomas Mathews, joint secretary (capital markets) in the finance ministry. Qualified foreign investors can be individuals and bodies, including pension funds, and cumulatively they can invest up to $10 billion (about Rs 45,000 crore). “We are open to the idea (of increasing the $10-billion limit) if such inflows are less volatile. We will review it (the cap) after six months,” said Mathews. Till now, only foreign institutional investors and non-resident Indians were allowed to invest directly in local equity schemes. Foreign individuals could not directly put in their money. In Budget 2011-12, finance minister Pranab Mukherjee had allowed mutual funds registered with the Securities and Exchange Board of India (Sebi) to accept subscriptions from foreign investors in equity schemes that meet regulatory requirements. “This will enable Indian mutual funds to have direct access to foreign investors and widen the class of foreign investors in the Indian equity market,” the finance minister had said. The fund houses, however, will have to comply with know-your-customer (KYC) norms before seeking investment from overseas investors. Industry experts said the move was aimed at broad-basing the flow of foreign investment in the domestic stock market, reducing the dependence on FII funds. “Sebi will be the market regulator for all such investments,” said Mathews. According to the new proposal, individual foreign investors will be able to buy mutual funds in India through depositories already functioning in their countries or by opening an account with Indian depositories.