News Roundup: PSU Banks To Cut PLR; Dell Lays Off 8900 Globally

By Nimesh Sharma

  • 05 Nov 2008


Policy/ Public Equity

PSU Banks To Shortly Cut Prime Lending Rates: A number of PSU banks including SBI, Indian Bank and Bank of India are set to cut their prime lending rates (PLR) by about 0.75 %-age points after a meeting with the Finance Minister, P. Chidambaram in New Delhi. Reduction in the PLR is significant as interest rates on all loans given by a bank, fixed or floating, are linked to benchmark rates. Few banks including PNB and IDBI Bank have already cut their lending rates by 0.50% last week. Syndicate Bank & State Bank of Bikaner and Jaipur have cut their PLR from 14 % to 13.25 % from November 5. Indian Overseas Bank also plans to cut it by 75 bps.


Fertiliser Industry To Get Rs 52,000 Cr Subsidy: FM has approved an additional fertiliser subsidy of Rs 52,000 cr for October-December after North Block cleared the proposal. This takes the total subsidy announced so far to Rs 84,000 cr. The actual additional subsidy announced for fertiliser manufacturers is Rs 30,000 cr, of which Rs 14,000 cr will be given as bonds. Rs 22,000 cr will be returned to the banks led by the State Bank of India, as they have been giving funds to fertiliser makers for the past two months.

LIC Increases Stake In 62 Companies: Life Insurance Corporation of India has increased its stake in 62 companies in the quarter ended September while it owns stakes in over 400 companies. Those 62 companies include HDFC Bank (from 3.18% to 4.70%), IDFC (from 4.56% to 5.88%), Dabur India (from 3.08% to 4.24%), Tata Steel (from 10.28% to 10.94%) and Jaiprakash Associates (from 2.53% to 3.14%). Financial stocks gained a lot because of this buying spree by LIC. Overall LIC increased its stake in 11 banks – SBI, ICICI Bank, HDFC Bank, PNB, Vijaya Bank, Central Bank of India, Allahabad Bank, Syndicate Bank, IDBI Bank, Bank of India and OBC. In infrastructure, it bought shares of ABB, Lanco Infratech, Siemens, L&T, Reliance Infrastructure, Tata Power and Bhel. It also increased its stake in TCS, Infosys, Wipro and Satyam and bought shares of R-Com, MTNL, Idea Cellular and Tata Communications.



PwC Buys Out ECS: PricewaterhouseCoopers (PwC) India has bought out ECS,formerly Eicher Consultancy Services (ECS), a management consulting company in India for an undisclosed amount, which is rumored to be at Rs 80-85 cr, almost four times current revenue of ECS in India. The deal is being kept under wraps “for some technical reasons”. Former CEO of ECS, Ravi Bhamidipati who had earlier joined PwC is believed to have been a key player in pushing through the deal.

Kingfisher Airlines Ties Up With Disney Publishing: Kingfisher Airlines has forged a tie-up with Disney Publishing to bring them on-board its Kids Programme, Little Wings. They have introduced a complete set of activities to keep the kids on-board occupied and entertained with a specially designed in-flight activity magazine, in-flight entertainment and special Disney give-aways. Disney Kids, comprehensive Children’s magazine will be offered to their young guests, aged between 0-14 years.

Microsoft, LG Tie Up For Mobile Collaboration: Microsoft and LG Electronics have entered into a preliminary agreement for a strategic collaboration in mobile technology, during Microsoft CEO Steve Ballmer's trip to South Korea. The agreement focuses on strategic collaboration in R&D, marketing, applications, and services in the field of converged mobile devices.


GMR To Acquire Indonesian Coal Mine For $100 Mn: GMR Infrastructure is acquiring PT Barasentosa Lestari coal mine in Indonesia for about $100 mn. GMR is securing debt financing for the acquisition which is set to give it access to coal assets located on Kalimantan Island. In a complex deal structure, GMR will pick up stake in an indirect holding company as Indonesia’s regulations prohibit direct FDI in coal mines. Barasentosa, with 115 mt reserve, produces moderate-to-high quality coal and was previously owned by Banpu Public Company and Salim Group.

Omaxe Sells 51% In NAHIL To Its CMD: Omaxe, the realty firm has sold its 51% stake in National Affordable Housing and Infrastructure (NAHIL), the budget home subsidiary of Omaxe, to its Chairman and Managing Director Rohtas Goel after some independent members had raised objections over expenditure of the subsidiary, which is not yielding any revenues as of now. Omaxe promoter Rohtas Goel and family hold the balance 49% stake in NAHIL.



Essar Announces Rajiv Sawhney As CEO Of Its Telco: Essar group has appointed Rajiv Sawhney as Chief Executive Officer for its telecom business group. Sawhney would be responsible for the entire management of the telecom, telecom retail and telecom infrastructure said a press release. Sawhney has earlier worked with Hutchison Telecommunications as well as with Jenson & Nicholson and Blow Plast India.

Mark Meehan Replaces Tim Thomas To Be Bharati AXA's COO: Bharati AXA Life Insurance Company announced in a press release that Mark Meehan will replace Tim Thomas as its Chief Operating Officer. Prior to this appointment, Meehan was working as the CEO and Director of Tynan Mackenzie, a professional investment services group under AXA Australia. He will join the core management team, managing IT and operations and will be responsible for service delivery, underwriting, project management and branch infrastructure.

Lay Offs


Tata's Jaguar Land Rover To Lay Off 400 More People: Tata Motors-owned Jaguar Land Rover has planned to lay off 400 more employees in order to cut costs during the global economic downturn. The company's 16,000-strong workforce that is currently facing short-time working and prolonged plant shutdowns has been informed about the move. These 400 lay offs are in sequence to the 198 job cuts  JLR recently announced as part of its "annual efficiency drive".

Motorola India Confirms Layoffs: Mobile phone maker Motorola India has confirmed the job cuts as part of its global plan to shed 3,000 jobs, or about 5% of its workforce to reap an expected annual savings of $800 mn, though it has not specified the number of employees in India that will be given pink slip. Motorola India employs about 4,000 people and has offices in New Delhi, Mumbai and Bangalore.

Dell To Cut 8,900 Jobs, Offers Unpaid Vacation: Computer manufacturer Dell has asked its employees to take up to five days of unpaid leaves as it struggles to cut costs in the face of weak global demand. Dell is about to end its program to axe 8,900 jobs and is offering voluntary severance packages in addition to instituting a global hiring freeze. CEO Michael Dell announced the moves to all employees through an email.


NDS Group To Pump In $150 Mn More In India: Technology solutions company NDS Group Plc. will invest $150 mn (Rs 729 cr) in India to fund its expansion in wake of the growing digitization of pay TV in the country. It has already invested at least $120 mn in India operations. NDS had revenues of more than $65 mn annually from India from clients that include direct-to-home (DTH) service providers Tata Sky, Airtel and Dish TV and cable and satellite television operators Hathway Datacom and Digital Entertainment Network among others.

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