Power stocks give mixed reaction to NHPC listing

nhpc listing

Mumbai, Sep 1 (PTI) Shares of power companies today gave mixed reaction to the listing of state-run hydro power generator NHPC on the bourses.

Power generation companies, including NTPC fell 0.54 per cent to a low of Rs 211.50, Tata Power dropped 0.26 per cent, while Reliance Power was up nearly one per cent in the afternoon trade on the Bombay Stock Exchange.

The 15-share BSE Power index rose marginally by 0.62 per cent and was quoted at 3,010.52 points in the afternoon trade.

NHPC today listed with 8.33 per cent premium on the BSE at Rs 39. During the intra-day trade the scrip surged over 10 per cent to a high of Rs 39.75 on the BSE.

Marketmen said some of the state-run power companies may be impacted by the listing of NHPC as some investors may think of shifting to the new entrant.

Corporation Bank Recruitment | www.corpbank.com

Here is update on Corporation Bank Jobs, Corporation Bank is planning to recruit around 1400 staffs in its various branches in 2009. Corporation Bank Chairman and Managing Director J M Garg informed the media house in this regard. However, there is no such vacancies available on the official website http://www.corpbank.com/. Details Will update soon.

State-owned Corporation Bank has said it is planning to recruit 1,400 during the current financial year. “We are planning to hire 1,400, including officers, during the current fiscal,” Corporation Bank Chairman and Managing Director J M Garg said.

Recruitment of Clerks-2009 – RESULTS at http://www.corpbank.com/ from career section. SELECTION OF CLERKS IN THE Corporation BANK

Corporation Bank to raise Rs 1 bn via bond issue

corporation bank

Corporation Bank proposes to raise funds to the tune of Rs 1 billion via issue of unsecured innovative non-convertible Tier - I Bonds Series -I(4) on private placement basis.The one day bond issue, opens on Wednesday, August 26.

These bonds which will be in the nature of promissory notes have a face value of Rs 1 million a bond and carry a coupon rate of 9.10% p.a and a step-up coupon rate of 0.50% p.a for further life if call option is not exercised.

Shares of the bank gained Rs 11.7, or 3.18%, to close at Rs 379.50. The total volume of shares traded was 9,982 at the BSE (Friday).

Indiabulls downgrades Corporation Bank

corporation bank

Indiabulls Securities

Corporation Bank’s (CorpBank’s) net profit increased 41.8% y-o-y to Rs2.6 billion during the recently concluded quarter. Although impressive, the growth was largely driven by a surge in the profit on the sale of investments.

The Bank’s operational efficiency declined sequentially, despite the improvement in its margin.

We expected the Bank to expand its loan book, which it was unable to do due to the low credit-demand scenario. This reduces our estimates for loan growth in FY10, although we have increased it thereafter. In addition, we have increased the estimates for the core-fee income growth.

We have valued the Bank using Discounted Equity Cash Flow (DECF) model, using a cost of equity of 16.24% and an estimated terminal growth rate of 9.56%. These changes bolster our fair-value estimate to Rs404, which implies limited upside from the present level.

Currently, the stock trades at a P/B of ~1.1x, which is high, considering the level of its NPAs and restructured asset portfolio. We downgrade our rating to HOLD.

The key drivers of change that increased our fair value estimate are our improved outlook on business-growth after incorporating Tier I and Tier II bonds, and a stable source of funding.

New direct tax code to make fund-raising easier for VCs

direct tax code

With the government allowing tax pass-through to financial intermediaries, including domestic venture capitalists (VCs), in the direct tax code unveiled on August 12, VCs are optimistic about fund raising.

A pass-through in taxation means that the business entity need not pay tax. Instead, all taxable income is passed through to its owners or members.

According to the provisions of the Income Tax Act, VC funds that invest in nine designated sectors — biotechnology, nanotechnology, IT hardware and software, research and development for new chemical entities, seed research, dairy, poultry, bio-fuels and large hotel-cum-convention centers — do not pay any tax on the gains realised on such investments. But the investors or limited partners (LPs) in these funds pay the tax.

“It will create a level-playing field for investors. For instance, people who are investing from Malaysia will get the benefit of tax pass-through. At present, we have a trust structure where investors cannot exit from a fund in the middle. The direct tax code has opened various sources of funding and now we can even raise funds from high net-worth individuals,” said Axis Private Equity CEO Alok Gupta.

Foreign VC funds registered with the Securities and Exchange Board of India (Sebi) are exempted from paying any tax in India as most of them are also registered in Mauritius.

Funds have to pay tax while exiting their investments other than the prescribed sectors. VCs and private equity players said the tax treatment often discouraged a lot of domestic funds from investing in other sectors even if the underlying opportunity was good.

“It is unfortunate that most of the funds have registered in Mauritius. It is a welcome step, but a bit-too late since the industry has been demanding this for long. Since most PEs have raised funds, it will be beneficial for the new ones,” said Arun Natarajan, managing director, Venture Intelligence.

“This will bring us in parity with foreign funds. There will be no difference as we will not pay any tax. We will have to see whether the funds raised in 2005 and will exit in 2011 will get the benefit of the new tax regime,” said Rajesh Singhal, managing partner, Religare Milestone Private Equity.

At present, there are 132 Sebi-registered domestic VC funds and 129 foreign venture funds.

Govt should help airlines: SBI

sbi

Industries in troubled times in India can usually look to the government for support in some manner.

That is, of course, if the industry is important to the politicians.

The airline industry, however, hasn't been lucky so far but have now found a new supporter for their cause—OP Bhatt, chairman of the State Bank of India (SBI).

Well, there's some motivation for the private airline operators. SBI, the country's largest bank, is supporting their demand for a direct bail out—a sort of a rescue package that would help them breathe and not bleed further.

India's bleeding private airline operators may have found a saviour, as they fight falling passenger traffic and mounting losses.

In an exclusive interaction with NDTV, SBI chief OP Bhatt said that the government should come forward and help the industry.

“The government has tried a helping hand for every industry including exports. If they do it for aviation, they would be able to get out of the woods,” Bhatt said.

The industry has suffered losses to the tune of Rs 10,000 crore with state owned Air India's losses alone running into nearly Rs 7000 crore.

Now, with the markets improving, Bhatt says the airline operators could look at tapping the equity market to raise funds.

“Airlines require equity and all of them are aware of it. The timing is right and so they are exploring the option,” he said.

The aviation industry might be looking at possible options in order to bail themselves out from this mess.

However, with most of the aircraft on lease and no improvement in traffic, finding collaterals for loans will be quite difficult.

NHPC's IPO subscribed over 23 times

nhpc ipo

MUMBAI: Public sector utility major NHPC’s $1.25-billion initial public offer (IPO), which closed on Wednesday, was subscribed more than 23 times, fuelling hopes that this overwhelming response may enthuse the government to fast-track divestment in other firms.

Merchant banking sources said the qualified institutional buyers (QIBs) portion of the issue was subscribed 29 times, the high net worth individuals (HNI) portion was subscribed 56 times and the retail book was subscribed about 3 times till 6:00 pm on Wednesday. NHPC is the first IPO by a government-owned company in 18 months and given the response, industry experts expect the deal to be priced at the top end of its indicated range of Rs 30-36 per share. NHPC’s price range represents a valuation of roughly 1.8 times its book value.

“It’s a hydro-power company and deficient monsoon is not good news. Despite that perception, the response has been more than good,” said an official at one of the merchant bankers to the issue. Foreign institutional investors, who bid for the issue, included T Rowe Price, Fidelity, US fund Wellington Financial, Batterymarch, Morgan Stanley and HSBC Offshore, and domestic insurance major LIC, mutual funds Reliance, Prudential ICICI and Bajaj Alliance, to name a few.

NHPC’s public issue follows that of private-sector utility Adani Power IPO, which raised about $630 million and was more than 20 times subscribed.

Going forward, more than a dozen PSU companies are said to be considering IPOs or follow-on offerings, as the government looks to trim the fiscal deficit. Another state heavyweight, Oil India, is said to be readying a $500-600-million IPO in September.

Indian companies have so far raised about $726 million through six share offering year to date against $4.3 billion for the calendar year 2008. Enam Securities, Kotak Mahindra Capital Co and SBI Capital Markets were lead book managers in the NHPC deal.

UBS Names Senior Hires To Rebuild FICC

hdfc bank

UBS (UBS) has made over 20 senior hires to its embattled fixed-income, currencies and commodities division, led by the former European co-head of FICC at Merrill Lynch, in one of the most emphatic signs yet of the Swiss investment bank's commitment to rebuilding its trading and sales team and recapturing profits.

In an internal memo to staff, Carsten Kengeter and Jeff Mayer, global co-heads of FICC, said the series of hires have been made globally across four core FICC areas - macro, credit, emerging markets and distribution - with the most senior being that of Dimitri Psyllidis, who has been appointed global head of macro group in London.

Psyllidis, one of Europe's top fixed-income salesmen, co-ran Merrill Lynch's European FICC business and was a member of its European executive management committee before he left the US bank last year.

At UBS, Psyllidis reports to Kengeter and Mayer and is responsible for all foreign exchange and interest rate trading globally. He also joins the FICC executive committee.

The memo added that Bobby Gerjarusak had joined UBS in Hong Kong from Goldman Sachs to head FICC structuring in Asia Pacific.

Gerjarusak would have worked with Kengeter at Goldman Sachs (GS) in Asia, where he was a partner and co-head of the bank's Asian securities division before joining UBS last year.

In credit, and following the joining of Rajeev Misra - former global head of credit trading at Deutsche Bank (DB) - last month as head of credit within FICC, UBS said it has hired Anatoly Nakum as head of investment grade trading from Barclays Capital; Dan Brereton as head high-yield trading from BNP Paribas (BNP.FR); Nahil Bayrasli from Barclays Capital as a flow credit default swap trader; Jeff Cahoon from Deutsche Bank to trade telecom credit; and Todd Corsair, previously from Bear Stearns, as a credit analyst.

All five join UBS in Stamford, Conn., and report to Sean Dowd, head of flow credit sales and trading in the U.S.

In emerging markets, UBS said Misra and Ritesh Dutta have become co-heads of the business, which it intends to grow further, and that it has hired Jim Lanzilotti from hedge fund SAC Capital Advisors as head of Latin American foreign exchange and interest rates, to be partnered by Drew Dragoumis as head Latin American credit and sovereign trading.

In addition, Allan Grauer is joining UBS as a senior Latin American sovereigns trader from StormHarbour, the bond broker founded this year by former Citigroup alumni, and Ashish Vaidya joins form Indian bank HDFC Bank as head of FICC trading in Mumbai.

Also in Asia, UBS said it had hired Andreas Fugman from JP Morgan in emerging market structured interest rates; Anthony Chuah from Standard Chartered in emerging market interest rates trading; Daniel Brader from Dresdner Bank in emerging market FX option trading; and Siddarth Mathur has joined from JP Morgan as emerging market interest rates strategist.

In Zurich, Kai Herbert joins from Nomura as an FX trader.

Within FICC distribution, UBS said it has hired Andrew Crowston and Pablo Terpolilli from Goldman Sachs in London to work across leveraged finance sales, and that Steve Murphy has joined from Deutsche Bank to run UBS' U.K. rates real money clients.

Furthermore, Oliver Chappell joins from Morgan Stanley (MS) as co-head of FICC, Germany, based in Frankfurt, and Mark Fox, who had previously moved over to UBS wealth management, returns to run emerging market distribution for the EMEA region in London.

In Asia, Jerry Ifill joins from Merrill Lynch in Hong Kong covering hedge funds for the macro group; Karen Lo joins from Deutsche Asset Management in Hong Kong and covers institutional clients; and Rei Kawasaki joins from Morgan Stanley covering institutional clients in Japan. UBS has also made a hire on this side in its Stamford office.

Chris DeMarco, previously at Merrill Lynch and Bear Stearns, joins as a senior client relationship director for hedge funds.

In the memo, Kengeter and Mayer said: "Our strategic goal is to become a leading FICC franchise as measured by profitability, client ranking and market share. These changes and appointments, along with others that will follow, represent a key step along the road to achieving this goal."

India Likely To Send Tax Notice To Vodafone Unit -Official

income tax india

NEW DELHI (Dow Jones)--India is likely to send a notice to a Vodafone Group PLC (VOD.LN) unit asking it to explain why it shouldn't pay up to $1.8 billion-$1.9 billion in taxes, an official at the country's tax department said Tuesday.

The notice, which will likely be sent within a month, will also ask Netherlands-registered Vodafone International Holdings BV to explain why it didn't comply with the country's tax norms while buying a stake in Hutchison Essar, Prakash Chandra, the director general for international taxes, said.

"We are drafting the showcause notice. We hope to complete that process very soon," Chandra told Dow Jones Newswires.

The move comes nearly seven months after the country's Supreme Country declined to hear an appeal by Vodafone International, which was contesting the right of India's authorities to impose tax on a deal completed overseas.

In February 2007, Vodafone paid $11 billion for a 67% stake in Hutchison Essar from CPG Ltd., which is owned by Hutchison Telecommunications International Ltd. (HTX) and registered in the Cayman Islands in a multi-layered transaction.

Vodafone says the deal isn't liable to be taxed in India as it took place on foreign soil.

But India's income tax department argues that Vodafone is liable to pay taxes because the transaction involved the transfer of an Indian asset.

It also says that Vodafone should have withheld tax on behalf of the government.

"The notice will say the transaction attracts capital gains tax in India. You (Vodafone) have not deducted the taxes while making the payment, so why you should not be asked to pay the taxes," Chandra said.

India’s Debt Auction Fails Amid Bank Strike; Bonds Reverse Drop

India bank strike

India’s plan to raise 120 billion rupees ($2.5 billion) at a debt auction failed today amid a workers strike at the nation’s banks, the biggest buyers of sovereign securities. Bonds rallied, reversing a decline.

The federal government, seeking to finance a 16-year high budget deficit, failed to raise funds for the first time since March as a two-day employee protest at lenders reduced trading volumes in the bond and currency markets. The central bank, which manages government debt sales, didn’t provide details or a reason for its decision to reject all the bids.

The yield on the benchmark 6.9 percent note due July 2019 dropped five basis points, or 0.05 percentage point, to 7.03 percent, after reaching the day’s high of 7.13 percent before the outcome of the sale, according to the central bank’s trading system. The price of the security jumped 0.35, or 35 paise per 100-rupee face amount, to 99.05.

“The central bank probably chose to refrain from giving any signal by simply rejecting all bids,” said Pradeep Madhav, chief operation officer at Securities Trading Corp. of India Ltd., a Mumbai-based primary dealer. “The reasons could have been many, including that they didn’t get full subscription or investors bid yields that were very high. Yet, the reasons revolve around the strike.”

The government offered to sell 40 billion rupees of the 6.49 percent bonds due 2015, 60 billion rupees of the 6.9 percent notes maturing in 2019 and 20 billion rupees of the 7.4 percent securities due 2035.

Lower Volume

Traders in a Bloomberg News survey before the auction forecast the government would sell the 2015 bonds at 7.04 percent, the 2019 bonds at 7.15 percent, and the 2035 securities at 8.1 percent.

The finance ministry today said in New Delhi it will sell 120 billion rupees of debt on Aug. 14.

More than 900,000 employees of state-run, private sector and foreign banks struck work demanding higher wages and benefits. Traded volumes averaged 41.7 billion rupees in the past two days, lower than the 75.5 billion rupees in the first three days of this week, according to Clearing Corp. of India Ltd., the company that guarantees bond settlements.

“Bids would have only been accepted at higher yields and wouldn’t have reflected the correct picture as the biggest players were absent,” said Kumar Nathani, who manages about $35 million of debt at Taurus Asset Management Co. in Mumbai. “The rejection has prevented the adverse impact it would have had. The strike made its impact felt considerably.”

Rising Yields

India’s benchmark 10-year yield has risen 1.77 percentage points this year after Finance Minister Pranab Mukherjee in his July 6 budget unveiled plans to borrow a record 4.51 trillion rupees in the year ending March 31, with estimates for the budget shortfall at 6.8 percent of gross domestic product.

India has scheduled 2.99 trillion rupees of debt sales in the first half, more than in the second because it wants to ensure the market borrowing doesn’t hurt companies when demand for loans rises in the October-March period, Junior Finance Minister Namo Narain Meena told lawmakers today.

Indian bonds have handed investors a loss of 4.2 percent this year, the worst performance among the 10 regional local- currency debt markets in Asia, according to an index compiled by HSBC Holdings Plc.

India 6th most active nation in global IPO space

nhpc ipo

NEW DELHI: A clutch of IPOs, including Asia's third biggest by state-run NHPC, has propelled India to the sixth position in the list of most active nations in the global space of initial public offerings this year.

Though there has been a drastic fall, both in terms of IPO volume and value so far this year compared to last year, experts say the lull in the primary market is finally over and the markets are showing some signs of recovery.

"The IPO activity in India has reached $707.1 million through five deals in 2009 so far this year, down 85 per cent from $4.9 billion via 36 deals in the comparable period last year," global deal tracking firm Dealogic said in a report.

The report further said the recent lull in the market is finally over and the current bullishness in the primary market, has jacked up India to the "sixth most active nation in terms of global IPO activity so far this year, accounting for around 3 per cent of global IPO volume."

Dealogic further said NHPC's IPO would be the largest in India since Reliance Power's $2.6 billion deal in January 2008, and the third largest IPO in Asia (ex Japan) region so far this year.

This year five companies, including NHPC have hit the primary market but it was the IPO by Mahindra Holidays that enthused the corporate world to raise funds from the capital market.

Sbi Recruitment | State Bank of India Recruitment | Sbi Bank

sbi bank recruitment

State Bank of India (SBI), Sbi Recruitment Mumbai has invited online applications from Indian citizens for appointment of 11000 Clerical staff posts in its branches across India.

Candidates are requested to apply online between 1st August to 15th August 2009 through Bank’s website. http://www.statebankofindia.com/

Last date of online registration is 15th September 2009. Date of written exam is on 8th and 15th November 2009.

Before applying, candidates are advised to ensure that they fulfill the eligibility criteria. They should note that examination fee and/or postage amount deposited once will neither be refunded nor be adjusted against any other projects.

Candidates are advised to fill their details online themselves correctly.

Indian bank strike enters second day, trading hit

bank strike

MUMBAI, Aug 7 (Reuters) - India's state-run banks remained shut on Friday as a nationwide strike by their employees demanding higher wages and pensions entered the second day, hurting volumes in the currency and bond markets.

State-run banks account for more than half of banking sector assets and have a dominant presence in the fixed income and foreign exchange markets.

Around 900,000 employees announced the two-day strike after talks with Indian Banks' Association, representing the managements of various banks, collapsed earlier this week.

"The strike is 100 percent on today as well," said Prakash Gangal, secretary of All India State Bank of India Staff Federation.

Gangal said the Labour Commission has convened a meeting with bank unions at 3 p.m. (0930 GMT) on Friday to resolve the issue.

Gangal's union is part of the United Forum of Bank Union, which represents employee unions of all banks.

India has 80 commercial banks, including 29 foreign banks and nearly 3,000 urban and rural co-operative banks. Volume recorded in the federal bond market was low at 250 million rupees ($5 million). Trading on Thursday was 29.15 billion rupees, compared to 43.50 billion rupees on Wednesday.

State Bank of India Cuts Home-Loan Interest Rates, Times Says

sbi bank of india

Aug. 8 (Bloomberg) -- State Bank of India has reduced interest rates on home loans by between 50 basis points and 75 basis points for new customers, the Economic Times reported without saying where it got the information.

The state-run lender will charge an interest rate of 8 percent over a five-year period on loans worth up to 500,000 rupees ($10,450), the report said. For larger mortgages, the bank will charge 8 percent in the first year and 8.5 percent over the next two years, it said.

Recruitment of Clerical Staff in State bank of India

sbi recruitment 2009

Mumbai: State Bank of India (SBI), Mumbai invites online applications from Indian citizens for appointment of 11000 Clerical Cadre posts.

Candidates are requested to apply online between 1st August to 15th August 2009 through Bank's website. Last date of online registration is 15th September 2009. Date of written exam is on 8th and 15th November 2009.

Before applying, candidates are advised to ensure that they fulfill the eligibility criteria. They should note that examination fee and/or postage amount deposited once will neither be refunded nor be adjusted against any other projects. Candidates are advised to fill their details online themselves correctly.

For more details visit SBI Website - http://www.statebankofindia.com/

India's SBI to raise 5 bln rupees via debt - exec

sbi bank

MUMBAI, Aug 7 (Reuters) - State Bank of India (SBI.BO), the country's biggest lender, will raise 5 billion rupees ($105 million) via perpetual bonds, Chief Financial Officer S.S. Ranjan said on Friday.

The bonds will be placed with SBI Pension Fund, the official told reporters on the sidelines of a banking conference. ($1=47.8 rupees) (Reporting by Neha D'silva)

Technical snag hits HDFC Bank yet again

hdfc netbanking

PUNE: Banking transactions at HDFC Bank, the country’s second largest private sector bank by operating income, seem to have been hit by a major technical snag. Its ATM and transactions at all branches across the country have been stopped since early Saturday morning. Though the exact reason is yet to be ascertained, bank officials at some of its branches here claimed that it is a ‘server down’ problem. They added that this problem is preventing them access the bank’s internal network. The bank’s netbanking services, however, were functioning normally.

HDFC Bank has 1412 branches in 528 cities and over 3,300 ATMs across the country. The guards at the bank’s ATMs were seen advising customers to use the ATMs of other banks, since the HDFC Bank’s ATMs were not functioning. Customers did not complain as the use of other bank’s ATMs no longer attracts a transaction fee from April 1.This is the second time the bank is experiencing this glitch. It was hit by a similar problem on September 2 last year. The bank had then clarified that a technical problem in one of its systems applications catering to retail customers had hit its services.

RBI Credit Policy leaves key rates unchanged

NEW DELHI: The RBI has kept the key rates unchanged and increased the inflation forecast to 5 per cent. The GDP is expected to grow at 6 percent and the money supply growth is seen at 18 per cent, according to the quarterly review of the economy, released on Tuesday. ( Watch )

The deposit growth is seen at 19 per cent and the review has said that there is scope for the banks to cut interest rates. The SLR also remains unchanged at 24 per cent.

“It is worth reiterating that the Reserve Bank will maintain an accommodative monetary stance until there are definite and robust signs of recovery,” it said in its review.

“The overall macroeconomic scenario continues to be uncertain although it is expected that the fiscal and monetary stimulus measures will boost domestic demand in 2009/10. On balance an uptrend in the growth momentum is unlikely before the middle of 2009/10,” the central bank said in its quarterly statement.

The repo rate, at which the central bank lends cash to banks, stays at 4.75 per cent, which is its lowest in 9 years, and the reverse repo rate, at which it absorbs surplus cash from the banking system, stays at 3.25 per cent, according to the Q1 Monetary Policy.

The RBI has cut its short-term lending rate by 425 basis points in six steps since October to support growth. The RBI also slashed the reverse-repo rate by 275 basis points since early December and brought down the cash reserve requirement by 400 basis points to 5 percent to keep credit flowing. This has resulted in injection of over Rs 5,61,700 crore into the economy.

In its quarterly review of the economy released on Monday, the central bank said there were indications of inflation firming up by the end of the year due to increases in commodity prices, easy monetary policy and expansionary fiscal policy.

Asia’s third-largest economy grew 6.7 percent in the last fiscal year ended March after expanding by 9 percent or more in the previous three years. Private sector economists expect growth between 5.8 and 7.2 percent this year. At its April review, the RBI forecast growth of 6 percent in 2009/10.

Wholesale prices are below last year’s levels, largely as a result of oil prices retreating from their all-time peaks reached in July 2008. But they have been rising since March as food and oil prices have started to creep up, while consumer price inflation hovers near 8 percent.

India’s fiscal deficit is on track to reach 6.8 percent this year, its highest level in 16 years, with the government set to borrow a record 4.51 trillion rupees ($94 billion) in 2009/10, roughly three times last year’s borrowing.

The RBI urged a return towards fiscal consolidation. “Large fiscal deficits if continued strictly beyond the recovery period, can crowd out private investment and trigger inflationary pressures,” it said.

Adani Power IPO over-subscribed 4 times on debut

ipo adani power

Adani Power initial public offering (IPO) witnessed huge investor interest and was subscribed 4.55 times on the second day of subscription. The issue received bids for 1,13,15,07,130 shares as against the issue size of 30,16,52,031 shares, as per the data available on the NSE website.

Till yesterday, qualified institutional investors had given strong response to the issue followed by non-institutional investors. Their portion subscribed 7.5 times and 2.1 times, respectively.

The price band has been fixed between Rs 90 and Rs 100 per equity share. The minimum bid lot has been fixed at 65 equity shares by the company in consultation with the global coordinator and book running lead manager. The issue will close on July 31, 2009.

The issue constitutes 13.84% of the post-issue paid-up equity share capital of the company. The issue includes a reservation of up to 8,000,000 equity shares for eligible employees. The issue less the employee reservation portion comprises a net issue of 293,652,031 equity shares. The net issue will constitute 13.47% of the post-issue paid-up equity share capital of the company.

The company intends to utilize the net proceeds of the issue to part finance the construction and development of Mundra Phase IV Power project for 1,980 MW and fund equity contribution in its subsidiary, Adani Power Maharashtra Limited, to part finance the construction and development cost of power project for 1,980 MW at Tiroda, Maharashtra.

The equity shares offered through the red herring prospectus dated July 14, 2009, of the company are proposed to be listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited.

The global coordinator and book running lead manager for the issue is DSP Merrill Lynch Limited. Book running lead managers for the issue are Enam Securities Private Limited, IDFC-SSKI Limited, JM Financial Consultants Private Limited, Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, ICICI Securities Limited and SBI Capital Markets Limited.

Govt may soften FBT blow for salaried class

NEW DELHI: The government may extend a helping hand to India’s two-crore strong salaried class in September 2009 when the burden of paying fringe benefit tax (FBT) will be moved from the employers’ shoulders to the employees’, as envisaged in Budget 2009.

According to a finance ministry official, the new rules being framed by the revenue department could allow increasing the non-taxable portion in the conveyance allowance, which at present stands at Rs 800 per month. He, however, refused to elaborate whether the new rules would bring about such tax exemption limit for other perquisites as well.

As things stand, the employees would feel the heat during the last seven months of the current fiscal as the enhanced tax liability of the first five months would reflect in the tax deducted at source of employees from September onward, thereby reducing their monthly take-home salary.

Consultancy firm PricewaterhouseCoopers’ (PwC) executive director Ashutosh Chaturvedi said the abolition of FBT would put the burden not only on employees but also on the administrative cost of the employers due to issues of multiple compliance.

“Given the current economic situation, where salaries of employees are already under stress, it is important that they are not put in an adverse situation again,” he said.

The FBT allowances include allotment of shares free of cost or at a concessional rate, free or concessional tickets to employees for their private journeys, reimbursement on conveyance, entertainment, hospitality, food and beverages, paid vouchers to name a few.