Indian Auto Industry News: Indian Auto Industry Update July 29, 2009

INDIAN AUTOMOBILE INDUSTRY
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Business Standard (Web Edition)

See this story in: Hindustan Times (Delhi Print Edition)

New Delhi: The Tata Motors scrip surged 10.47 per cent to Rs 414.2 on posting a 57 per cent growth in net profits. The net profit stood at Rs 513.8 crore for the quarter ended June 30 against Rs 326.1 crore in the corresponding quarter last year.

The spurt in net profit is attributed to an altered accounting policy and cost-cutting measures adopted earlier. The rise in net profit was on the back of a fall of 11.8 per cent in sales to Rs 6,876.6 crore. The stock made an intra-day high of Rs 424.4 and a low of Rs 380.1 with trading volumes of 42.4 lakh shares.

http://www.business-standard.com/india/news/tata-motors-surgesgood-q1-results/365219/

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TATA ROPES IN SPECIALISTS TO TRIM COSTS AT JLR

S Kalyana Ramanathan

Business Standard (Web & Print Edition)

See similar story in: The Hindu Business Line (Web Edition), Deccan Herald (Web Edition), The Indian Express (Delhi Print Edition), Hindustan Times (Delhi Print Edition)

London: Tata Motors has roped in international consultants Roland Berger Strategy Consultants (based in Munich) and KPMG to help its British car brands Jaguar-Land Rover (JLR) trim costs and help manage cash flow.

Tata Motors Vice-Chairman Ravi Kant said in a press conference in Mumbai yesterday the two consultants had been on this work for two months now. However, he refused to give more details on the exact brief these consultants had been brought in with.

Both Roland Berger and JLR refused to discuss this development and redirected media queries to Tata Motors.

JLR, which had been a profitable venture in the first half of 2008 (while it was still owned by Ford Motor Company), is now a loss-making venture. Since mid-2008, with a severe erosion in demand for luxury cars impacting the business of JLR, the British company posted a loss of Rs 2,400 crore for the 10 months ended March 2009, after it was acquired by Tata Motors.

The fall in demand for luxury and premium cars globally had commenced around the same time Tata Motors came to own JLR. Earlier last month, while announcing Tata Motors financial results, Kant had said that JLR would turnaround in two years.

Even before hiring the consultants, JLR had taken some initiatives to cut costs on its own. It has already slashed some 2,200 jobs in the past year. The company will be running the programme at its Halewood plant to find up to 300 additional volunteers, which closes year end, but is not yet functional. This is expected to be implemented after the summer shutdown. The total headcount by year end is expected to be around 14,000, according to a JLR spokesperson.

Cash flow for managing its routine operations too has become an issue in JLR with loans worth 340 million in the pipeline from European Investment Bank awaiting the UK governments guarantee. Prolonged negotiations between Tata Motors and the UK government over the last four months have not fructified yet.

In February this year, Tata Strategic, a Tata group consulting company, had tied up with Roland Berger to expand their consulting practices in West Asia, South-East Asia and Africa. Roland Berger Strategy Consultants is one of the leading strategy consultants in the world and the biggest with European origin with 36 offices in 25 countries.

The consultancy is an independent partnership, exclusively owned by its 180 Partners. In 2008, the 2,000 employees of Roland Berger Strategy Consultants generated revenues of $1 billion.

http://www.business-standard.com/india/news/tata-ropes-in-specialists-to-trim-costs-at-jlr/365243/

http://www.thehindubusinessline.com/blnus/02281721.htm

http://www.deccanherald.com/content/16413/tata-motors-hires-kpmg-vet.html
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INTERVIEWS/FEATURES Go To Top

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CARS, SUVs, MUVs Go To Top

MARUTI DRIVES OUT 100,000 KB-SERIES CARS IN 10 MONTHS
PTI
See this story in: Business Standard (Web & Print Edition), The Economic Times (Web Edition), Mint (Web Edition), Deccan Herald (Web Edition), The Statesman (Web Edition), The Hindu Business Line (Web Edition), The Financial Express (Delhi Print Edition)

New Delhi: Within 10 months of starting production of its KB-series engines, the countrys largest car maker, Maruti Suzuki, has rolled out over 100,000 of these units that power the two small cars, A-Star and Ritz.

Riding on the success of this new fuel-efficient technology, Maruti Suzuki India (MSI) has planned to incorporate KB-series engines in other existing as well as new models.

The companys Gurgaon plant has produced over 100,000 KB-series engines, which are installed in the two small cars A-Star and Ritz since its commercial production began in October last year, a company spokesperson said. When asked about MSIs future strategy to roll out more KB-series engine cars, the official said, We have definite plans to gradually introduce this next generation light-weight fuel efficient engine series in other models over a period of next 3-5 years.

He, however, declined to name the model next in line after A-star and Ritz which will be powered by the KB-series engine. The company produces Bharat Stage-III, Bharat Stage-IV and Euro-V emission norms compliant KB-series engines. It produces two different petrol engines, 1 litre (A-Star) and 1.2 litre (Ritz), from the fully integrated engine manufacturing facility, located at MSIs Gurgaon plant.

According to the Automotive Research Association of India (ARAI), A-Star gives a mileage of 19.6 km per litre, while Ritz runs 17.7 km for every litre of petrol.

MSI has so far exported over 50,000 units of Euro-V compliant A-Star, sold as Suzuki Alto in Europe. It also supplies A-Star to another Japanese car maker Nissan under a contract manufacturing agreement with Suzuki. Nissan sells the car in Europe as Pixo.
http://www.business-standard.com/india/news/maruti-drives-out-100000-kb-series-cars-in-10-months/365244/
http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Auto-Components/Maruti-drives-out-one-lakh-KB-series-cars-in-10-months/articleshow/4830111.cms
http://www.livemint.com/2009/07/28161936/Maruti-drives-out-one-lakh-KB.html
http://www.deccanherald.com/content/16427/maruti-rolls-1-lakh-kb.html
http://www.thestatesman.net/page.news.php?clid=12&theme=&usrsess=1&id=262727
http://www.thehindubusinessline.com/blnus/02281720.htm

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HYUNDAI STRIKE OVER AFTER TN GOVT INTERVENES

The Economic Times (Web Edition)

See similar story in: Business Standard (Web & Print Edition), The Hindu Business Line (Web & Print Edition), The Hindu (Web & Print Edition), mint (Web & Print Edition), The Financial Express (Web & Print Edition)

Chennai: The vexatious labour dispute in Hyundai Motor India (HMIL) has been smoothly resolved with the CITU led Union and the management signing an agreement before the State Labour Minister, T M Anbrarasan in Chennai on Tuesday.

An official release said the accord was reached based on the advice given by Chief Minister, M Karunanidhi and deputy CM, M K Stalin. It has found an amicable solution to the dispute relating to the dismissed workmen.

Also, the workers, who were on strike, have accepted the terms of the wage revision clinched on July 23, 2009 and immediately returned to work. With this, the Government has paved the way for prevailing a congenial atmosphere in the factory, the release said.

It is learnt, the management has won in its stand of not recognising the union (formed in July 2007) which is the contentious issue between the parties. But, it has conceded to the union's demand for re-transferring nine workmen, who were shifted outside Chennai on disciplinary grounds.

Before the end of next year, they will be moved back, not to the plant, but to the associated units of HMIL like its work shops.

Also, of the total 81 dismissed workers, it has agreed to re-instate a maximum of 20. This will be done by the commissioner of Labour, who will look into the gravity of the charges and give his recommendations. All the cases are now before the Court.

The company has also agreed to revoke the punitive actions taken in the last two years against the workers of the union in the form of wage cuts, non-disbursal of bonus, gold coin, gifts etc., This will cover 700 to 800 workmen.

Hyundai officials appreciated the efforts made by the State Chief Minister, Deputy CM the Labour Minister and officials for finding an amicable solution to the dispute and to the mutual satisfaction of the parties.

Senior CITU leader, A Soundararajan, who was spearheading the agitation by the union termed the outcome a big achievement for the union. " The very fact the management was holding talks with us in the last three days itself is a sort of recognition of our strength and charter of demands".

He said the State Government had also acted tough with the management, as it went back on some of the assurances it had given to the Commissioner of Labour.

http://economictimes.indiatimes.com/News/News-By-Industry/Auto/Hyundai-Stir-ends-CITU-led-union-management-sign-pact-before-TN-Labour-Minister/articleshow/4830863.cms

http://www.business-standard.com/india/news/hyundai-strike-over-after-tn-govt-intervenes/365241/

http://www.thehindubusinessline.com/2009/07/29/stories/2009072950760300.htm

http://www.hindu.com/2009/07/29/stories/2009072956691600.htm

http://www.livemint.com/2009/07/28211800/Strike-at-Hyundai-Chennai-plan.html

http://www.financialexpress.com/news/hyundai-workers-end-strike/495218/
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COMMERCIAL VEHICLES Go To Top

WORST IS BEHIND US, SAYS LEYLAND MD

The Economic Times (Web Edition)

Chennai: For commercial vehicle major Ashok Leyland, 2008-09 was one of the worst years in its 60-years history. But, the worst is behind us and first green shoots of growth is visible, noted the Hinduja Group flagship company MD R Seshasayee.

Ashok Leyland (ALL) reported a net profit of Rs 190 crore for the year ended March 2009 compared with Rs 469 crore last year. Its headcount is 11,938 (13,304). The company declared 100% dividend and its sale revenue from vehicles, engines and spare parts during 2008-09 stood at Rs 6,666 crore (Rs 8,947 crore).

In his presentation made at the AGM here on Tuesday, Mr Seshasayee said market demand is picking up and the economy is on an uptick but the growth momentum needs to be sustained.

He said the global meltdown had impacted the Indian economy, which is in a deceleration state. The commercial vehicle industry, particularly medium and heavy duty segments, had fallen by 33%. The bus segment dipped by 10% while the trucks fell by 37%.

ALL sales dropped by 34.7% to touch 54,431 units in 2008-09 from a peak of 83,307 vehicles in the previous year. Being a cyclical industry, the fall was anticipated but lack of cash, capital and confidence has hit the company hard. The second half of the year had seen a precipitous fall as Ashok Leyland lost 1.8% market share. Regional imbalances too adversely affected its performance which reflected in its traditional stronghold south witnessing a steep drop.

Lack of significant presence in the east where the market held its own also impacted ALL. However, demand for semi-forward cab vehicles had surged, Mr Seshasayee said. Despite all this, the company had not lost in the bus market segment, where it maintained its leadership position with 46% market share.

Export markets posed severe challenges with the market collapsing following civil war in Sri Lanka. In the Middle East, especially Dubai, ALL faced extreme challenges as the number of vehicles sold declined from 300 to 30 in the second half of the fiscal.

Seeing significant growth in the engine business, Mr Seshasayee said ALL had managed to maintain its unbroken track record of profitability. Prudent in borrowings reflected in its stability.

To combat downturn, ALL has initiated a slew of steps including focusing on non-cyclical business, cash conservation, internal cost-cutting measures and improvement in competitiveness.

Noting that it is the fourth cycle of business that he has been associated with, Mr Seshasayee said the non-cyclical business contribution had shot up from 34% to 50%. This was also due to some large government contracts bagged by ALL. There has been a spurt of purchases from the defence sector and in the coming years, results would start showing.

To overcome vulnerability in some markets, ALL is consciously targeting new export markets.

A capex reduction from Rs 3,000 crore to Rs 2,000 crore over the next 3 years too is one way of conserving cash resource, he said, adding to move from an accelerated to a braking mode is painful. Since January, applying the brakes has been a hurtful process.

Seeing airport as a growing segment, he said ALL has the distinction of producing Indias first H-CNG engine. The company has also expanded its dealership network to 170, authorised service centre to 146 and workshops to 2,300.

http://economictimes.indiatimes.com/articleshow/4832192.cms

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ASHOK LEYLANDS NET PROFIT DIPS

The Hindu (Web & Print Edition)

Chennai: Ashok Leyland has reported a sharp drop in turnover and profits. The turnover has declined to Rs. 912.45 crore in the quarter ended June 30, 2009, from

Rs. 1,887.99 crore in the year-ago period. The profit after tax is lower at Rs. 7.77 crore against Rs. 50.57 crore.

http://www.hindu.com/2009/07/29/stories/2009072956911700.htm

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LEYLAND SPREAD SIGN OF CV TURNAROUND?

Sindhu Bhattacharya

Daily News & Analysis (Web Edition)

New Delhi: A turnaround in the commercial vehicle industry must surely be around the corner. Why else would Ashok Leyland Ltd announce capacity expansion by 50,000 units this year and talk of investing Rs 700 crore despite witnessing possibly one of the worst quarters ended June 30?

The second largest bus and truck maker in India after Tata Motors, Ashok Leyland is planning to launch four new products, begin production at the new Uttaranchal facility (which provides tax incentives) from the fourth quarter and foresees operating margins to get back to the 10-11% region.

Ashok Leyland's chief financial officer K Sridharan said in a conference call with analysts on Tuesday that demand pull had begun for CVs in the northern and eastern Indian markets last quarter, but then Ashok Leyland is not as strong in these markets as in the southern and western regions.

"But now, demand pull is beginning to be seen in the southern and western markets as well...We expect the CV market to register single-digit growth this fiscal and Ashok Leyland's market share should get back to the 27% level."

Sridharan said that the company needs to raise about Rs 400 crore and could consider using an equity instrument or else take on more debt since the debt:equity ratio even now is below 1:1 despite the company having Rs 1,900 crore of debt on its books.

His optimism for improved performance and overall growth this fiscal stems from several reasons. First, an expected perk-up in the Sri Lankan market should improve export prospects there to 2,000 units this fiscal, and several other virgin export markets such as Vietnam and Thailand are being considered, too. The company hopes to export at least 8,500 vehicles this fiscal against only 7,000 in 2008-09.

Then, Ashok Leyland's decision to align production with sales while simultaneously correcting the dealer-level inventories has led to an improved overall inventory position. It was faced with 3,000 units of inventory at the dealer level which was corrected in the June quarter, but is still saddled with over 6,000 vehicles across its own stockyards.

Thirdly, ALL has bagged almost half of the 10,000 unit bus order which was given under the Jawaharlal Nehru Urban Renewal Mission (JNNURM) programme and this should also help the company improve its profitability going forward.

Though he admitted that the realisations from selling buses under JNNURM are lower than private truck sales, Sridharan said that this order would certainly improve the company'sprofitability.

On the Rs 700 crore capex planned for this fiscal, he said most of it would be used in the Uttarakhand plant, where 2,000-3,000 vehicles would be produced in the fourth quarter.

http://www.dnaindia.com/money/report_leyland-spread-sign-of-cv-turnaround_1278006
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CONSTRUCTION & AGRI MACHINERY Go To Top

ESCORTS NET JUMPS

The Financial Express

Tractor manufacturers Escorts Ltd reported 144% jump in net profit for third quarter ended June 30, 2009 at Rs 22 crore as against Rs 9 crore in the corresponding quarter of the last financial year.

http://www.financialexpress.com/news/tata-tea-net-up-14-rec-profit-surges-to-rs-472-crore/495171/2
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2/3 WHEELERS Go To Top

TVS PLANS HIGH-CAPACITY GEARLESS SCOOTER LAUNCH

Shally Seth

mint

Mumbai: Indias third largest two-wheeler maker, TVS Motor Co. Ltd, is set to launch a high-capacity gearless scooter in the next three months as it looks to take on its rivals in newer segments.

TVS Motor has restricted itself to smaller gearless scooters with engine capacity of less than 100cc displacement, targeted primarily at women and lower income groups. Scooters account for 15% of the 7.4 million a year two-wheeler market in the country, dominated by gearless models.

The Chennai-based company will launch the new scooter around the Hindu festival of Diwali in October, said H.S. Goindi, president of marketing at TVS Motor. This is the first time TVS will be offering a big scooter, he said.

Goindi refused to comment on the positioning, branding or expected sales volume from the new model, only saying, It will help us strengthen our scooter portfolio further.

TVS sells the Scooty Pep+, Streak and Teenz brands in the sub-100cc scooter segment, in addition to its motorcycles, including Flame and Apache.

In the three months to 30 June, the company sold 315,785 two-wheelers in India, an 8.1% rise compared with the year ago period.

Scooters contributed 65,169 units, up 8.7% over the year ago period.

An analyst said it makes sense for TVS to move to a higher capacity bracket in the scooter segment as the market for sub-100cc models in India is contracting.

(But) one has to see if they (TVS) are able to break into Hondas dominance and the new product can give a run to the competition, the way its motorcycle Apache did, said Chetan Vohra, an analyst at Bric Securities Ltd.

TVSs larger rival Honda Motorcycle and Scooter India Pvt. Ltd, the India arm of Japans Honda Motor Co., sells at least half of the scooters sold in India, with all its models in the 100cc-plus segment.

Honda Motorcycle commanded 57.11% of Indias scooter market in 2008-09, while TVS Motor has a 20.94% share, according to the Society of Indian Automobile Manufacturers (Siam).

Credit Analysis and Research Ltd, or CARE, says in a June report on the Indian two-wheeler industry that the countrys scooter segment grew at a compounded annual growth rate (CAGR) of 5.3% between 2003-04 and 2008-09. This was driven by scooters with engine capacity of 75-125cc, which posted a CAGR of 20%.

In sharp contrast, scooters with engine capacity of less than 75cc declined 37.6% in this period, while that of models in the 125-250cc range fell 28.6%.

CARE attributed the decline in the sub-100cc segment to customer preference for higher capacity scooters and motorcylces.

http://www.livemint.com/2009/07/28213546/TVS-plans-highcapacity-gearle.html
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COMPONENTS Go To Top

PRICOL SUPPLIERS SEEK GOVT INTERVENTION

The Hindu Business Line

Coimbatore: Over 200 single source suppliers to the Coimbatore automotive component manufacturer Pricol find themselves in a tight spot following the companys decision to shift its assembly lines out of Coimbatore as the company perceives that the industrial climate has not been congenial for continuing operations here.

Most of these vendors, according to Mr Ramesh Veeraraghavan, President, Pricol Vendors Association, bank solely on Pricol for business, having supplied to the company for over two decades now.

Recalling their entry, Mr N. Nandagopal of the Association, Mr Sundaram, Treasurer, and Mr Veeraraghavan among others told reporters that they ventured into this trade soon after graduation, established small units and expanded operations in a phased manner, growing with Pricol.

Details shared with the press reveal that of the 1,100 suppliers to Pricol in the State, 206 are single source suppliers located in and around Periannaickenpalayam near here. The suppliers are estimated to have invested around Rs 250 crore and the combined annual turnover is said to have declined to Rs 100 crore from over Rs 250 crore two years ago.

Mr Veeraraghavan said, Recession coupled with labour unrest at Pricols facility here since March 2007 has had an adverse impact on our earnings Nearly 70 per cent of our capacity is at present lying idle. The Association, formed just a fortnight ago, has sought the Governments intervention to resolve this issue amicably by talking to Pricol management and workers.

http://www.thehindubusinessline.com/2009/07/29/stories/2009072951222300.htm

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SUNDARAM NET UP

The Financial Express

Sundram Fasteners Limited, part of the TVS group, has reported a higher net profit for the quarter ended June 30, 2009 at Rs 17.03 crore as compared to Rs 12.86 crore during the same quarter last fiscal. Total sales declined to Rs 283.60 crore as against Rs 364.72 crore during the same quarter last year, the company said on Tuesday.

http://www.financialexpress.com/news/tata-tea-net-up-14-rec-profit-surges-to-rs-472-crore/495171/2

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MOTHERSON SUMI SYS PATDIPS 65%

Business Standard

Consolidated profit after tax (PAT) for Motherson Sumi Systems Ltd for the quarter ending June 2009 dipped by 65 per cent to Rs.11.05 crore against the Rs.31.65 crore earned for a similar period last year. Consolidated sales grew by 133 per cent to Rs.1, 404.04 crore for the fist quarter ending June 2009.

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SLOWDOWN HASTENS CONTINENTAL AG'S ROLL-INS

Pranav Nambiar

Daily News & Analysis

Bangalore: Continental AG, the world's third largest auto component manufacturer, plans to bring more work into India. The $24 billion German major is also looking to expand its revenue base in the country which at present forms a minuscule portion of its overall sales.

"We have a twin-pronged strategy in India. To save on operational costs, while servicing our international markets and develop our expertise to cater to the burgeoning Indian markets," Rajendra Singh, associate vice-president & head, engineering, Continental India, said.

The Indian subsidiary has 700 employees in R&D and over 1,300 in manufacturing.It has technical and engineering centres for R&D based in Bangalore, and manufacturing facilities in Pune and Gurgaon.

The company plans to increase R&D employee base in India by 20% year-on-year for the next few years at a time when 16,000 people from its US and European locations were recently laid off.

This is part of its effort to rationalise its processes after the recession dented its business owing to over-reliance on the Western markets. It is currently present in 35 countries.
The parent company is strapped by 11 billion ($15.6 billion) in debt, and has just restored profit last quarter after two consecutive losses in earlier quarters by pursuing spending cuts. It reported a second-quarter operating profit of 39 million.

The company will invest over Rs 400 crore in its Indian operations by December 2010.
According to Singh, Continental expects India and China to increase Asia's revenue contribution to 33% in 2012 from the current 10%.

Industry insiders said that domestic sales for auto components sector in the last five years were around $14.4 billion, while export revenues stood at $3.6 billion. For its international markets, the Indian subsidiary is involved in business units like chassis components and passive safety. New verticals like multimedia and connectivity will be added shortly.

For the domestic markets it offers instrument clusters, sensors, power steering, for the likes of Tata Motors and TVS Motors. Singh said that though the nature of work done in India is not all high end the new work being doled out is of greater complexity.

For instance, last week the company kicked off a new fuel components team in India.
This team was initially planned to have been an extension of the team working on fuel components in Germany.

http://www.dnaindia.com/money/report_slowdown-hastens-continental-ag-s-roll-ins_1278009
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ALLIED INDUSTRY Go To Top

MRF PAYS RS. 3 PER SHARE INTERIM

The Hindu

Chennai: MRF has achieved a net profit of Rs. 125.70 crore in the quarter ended June 30, 2009, against Rs. 31.86 crore in the corresponding period ended June 30, 2008. Net sales and other income have risen to Rs. 1,438.21 crore from Rs. 1,274.37 crore. According to a company release, the directors have approved the payment of an interim dividend of Rs. 3 per share.

http://www.hindu.com/2009/07/29/stories/2009072961291900.htm
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FINANCE & INSURANCE Go To Top

SHRIRAM TRANSPORT NCD OVERSUBSCRIBED ON DAY ONE

The Hindu Business Line

Chennai: Shriram Transport Finance Companys Rs 1,000-crore non-convertible debenture issue has been subscribed 4.5 times.

The issue opened on Tuesday. By evening, the company had received subscriptions worth Rs 4,500 crore, according to sources.

The issue was for raising Rs 500 crore, with a (green shoe) option of retaining an additional Rs 500 crore.

It is learnt that only the portion earmarked for retail investors, of Rs 200 crore, was not fully subscribed. However, the issue is open until August 14.

Options

The company has the option of making good any shortfall in retail subscription from the oversubscriptions for the qualified instructional placements and high net worth individual portions. Shares of the company on Tuesday closed trading at Rs 299 on the BSE after losing 1.08 per cent from the previous close.

http://www.thehindubusinessline.com/2009/07/29/stories/2009072951491500.htm

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L&T FINANCE TO RAISE RS 1,000 CR VIA NCDS

Business Standard

Ahmedabad: L&T Finance Ltd, a wholly-owned subsidiary of Larsen and Toubro, has decided to issue non-convertible debentures (NCDs) to raise funds to the tune of Rs 1,000 crore. The financial services and asset management company filed draft prospectus for the issue.

The company proposes to raise Rs. 500 crore through NCDs. We also have an option to retain oversubscription of another Rs 500 crore. The issue will probably be launched in mid-August, said YM Deosthalee, chief financial officer and a member of the L&T board.

We are targeting retail and other institutional investors such as high networth individuals (HNIs), he said.

The companys focus is on construction equipment, finance, equipment leasing and tractor finance. Last year, it forayed into micro-finance. At present, it offers micro-finance services in Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra and plans to expand these to Gujarat and Rajasthan. L&T Finance has an asset base of Rs. 5,400 crore, while other group company, L&T Infrastructure Projects Finance, has an asset base of Rs 3,000 crore.

The asset base of the two companies is likely to touch Rs 12,000 crore by the end of this financial year, he added.

According to Deosthalee, the company aims to start general insurance business on its own. Currently, it offers general insurance products in collaboration with Sundaram Finance.

The new initiative is still on the drawing board and we hope to firm up things in the next seven-eight months. There will be no joint venture for this business, he said.

http://www.business-standard.com/india/news/lt-finance-to-raise-rs-1000-cr-via-ncds/365223/

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MAGMA FINANCE ENTERS GENERAL INSURANCE

Nandini Goswami

Daily News & Analysis

Kolkata: Magma Fincorp Ltd has entered into a 74:26 joint venture with Germany's HDI Gerling to foray into general insurance. The joint venture is expected to begin operations from the next fiscal.

Sanjay Chamria, vice-chairman, and managing director, Magma Fincorp, told DNA Money, "We will be filing the R1 licence immediately to the Insurance Regulatory & Development Authority. To begin with, the JV's equity capital would be Rs 110 crore and Magma and its promoters Celica Developers would hold 37% each. The company would be headquartered in Kolkata."

HDI-Gerling International is part of the Talanx Group, the third-biggest insurance group in Germany.The joint venture agreement was signed here by Chamria and Christian Hinsch, chief executive officer, HDI-Gerling, and member of board of management of Talanx.

Chamria said, "We have been distributing general insurance products of other companies for years and a standalone insurance business would be a natural extension." "Almost 77% of Magma's branches and 63% of its customers are in the rural and semi-urban markets, which are generally underserved for insurance products.

Currently we finance commercial vehicles, passenger vehicles construction equipments etc. Now we will be insuring these as well," he added. Magma has a customer base of over 2 lakh and has assets of Rs 8,600 crore under management.

http://www.dnaindia.com/money/report_magma-finance-enters-general-insurance_1277987

http://www.telegraphindia.com/1090729/jsp/business/story_11292340.jsp

http://www.financialexpress.com/news/magma-fin-to-foray-into-nonlife-insurance-biz/495152/
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OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top

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INTERNATIONAL NEWS Go To Top

DELPHI TO RIDE OUT OF BANKRUPTCY

Bloomberg

See this story in: The Economic Times

Southfield, Michigan: Delphi said that it has agreed to a deal to sell its assets to creditors, clearing the way for an exit from Chapter 11 bankruptcy protection. The deal has the backing of the auto parts makers former parent, General Motors, Delphi and GM said in separate company statements.

Lenders including Elliott Management and Silver Point Capital have been in talks since June with Delphi and GM on completing the so-called credit bid, which uses the debt creditors are owed from bankruptcy loans.

GM supports this bid, which is still subject to Delphi bankruptcy court approval, and we are pleased that Delphi is now positioned to move forward in its restructuring, the Detroit-based automaker said in the statement.

If approved by the bankruptcy court, the creditors bid would supersede an offer by private equity firm Platinum Equity. Lenders opposed their bid because it called for the lowest among three tiers of lenders being paid cents on the dollar.

The lenders bid is based on a transaction structure that is similar to Platinums offer, which proposed buying some Delphi assets and transferring the steering business to Detroit-based GM.

Delphi valued the transaction with Beverly Hills, California-based Platinum at $3.6 billion, which included $2 billion in financing from GM. Delphi said it would attempt a so-called 363 asset sale if the bankruptcy court rejects the deal with creditors.

A hearing to approve the bid is scheduled for July 29 in US Bankruptcy Court in New York.

http://economictimes.indiatimes.com/News/International-Business/Delphi-to-ride-out-of-bankruptcy/articleshow/4832257.cms

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MAGNA UPS ITS OPEL BID

Reuters

See this story in: Deccan Herald

Berlin: Magna has increased the amount of upfront capital it will inject in its offer for General Motors European unit Opel, a German government source said on Tuesday.

Magna is now offering Euro 350 million of its own capital immediately, the source, who is familiar with talks to find an investor for Opel said, adding: Furthermore, there should be a Euro 150 million convertible bond. Magna originally wanted to invest just Euro 100 million ($142.8 million) of capital in Opel in two tranches of Euro 50 million, sources said, along with another 400 million in convertible debt. Magnas improved offer comes after the government criticised the amount of their own capital all three bidders for Opel planned to inject into the carmaker. GM said last Thursday it had agreed to continue detailed talks with Magna and RHJ.

http://www.deccanherald.com/content/16410/magna-ups-its-opel-bid.html
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ECONOMY & FINANCE Go To Top

RUPEE FALLS BY 8 PAISE IN EARLY TRADE

PTI

See this story in: Hindustan Times

Mumbai: The Indian rupee on Tuesday skidded by 8 paise against the dollar in early trade due to the month-end dollar demand from importers.

At the Interbank Foreign Exchange (forex) market, the domestic currency was quoted at 48.24 a dollar, a fall of 8 paise over the previous close. Yesterday, the rupee gained 6 paise to close at 48.16/17.

Dealers said the rupee fell due to the month-end demand from importers and refiners.

The dollar's mixed trend against other Asian currencies and expectations that the stock market may open in negative zone also put pressure on the Indian rupee, they added.

http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=
BusinessSectionPage&id=bb49fbc0-5a9e-4b79-b497-97c8340c416f&Headline=Rupee+falls+by+8+paise+in+early+trade

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MARKETS LUKEWARM TO RBI MONETARY POLICY

PTI

See this story in: The Hindu Business Line

Mumbai: The BSE benchmark Sensex was volatile on Tuesday for the second day in a row and closes over 43 points lower as banking stocks tumbled on the RBI decision to keep interest rates unchanged, even though two-thirds of the Sensex stocks gained.

In choppy trade, the Sensex closed 43.10 points lower at 15,331.94 after moving between 15,463.46 and 15,240.53 points during the day.

Among the 30 Sensex stocks, ten ended with losses while 20 gained. The 50-share National Stock Exchange index Nifty fell by 8.20 at 4,564.10. It shuttled between 4,599.90 and a low of 4,529.15 points.

In the quarterly review of the monetary policy, the Reserve Bank, while keeping the repo and reverse repo - short-term rates at which banks lend and borrow from the apex bank - retained economic growth projection at 6 per cent with an upward bias in curr ent fiscal.

The market ended lower after Reliance Industries, with the highest weight in the Sensex, Infosys, Hindustan Unilever, ICICI Bank, State Bank and Larsen and Toubro yielded notable ground. The six carry nearly 40 per cent weight in the Sensex.

ICICI Bank, the second-biggest bank, declined 6 per cent and the country's largest, government-run State Bank of India fell by 1.70 per cent. Reliance Industries and Infosys fell 1.46 per cent and 1.51 per cent, respectively.

http://www.thehindubusinessline.com/blnus/05281901.htm

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Last Financial closing

Sensex	15,331.94
US$ spot	Rs.48.15
US$	Y.94.7099
US$ 6 months	Rs.48.76
Yen	Rs.0.51
Euro spot	Rs.68.71
LIBOR 6 months	%
Call	%
GOI sec. 10 years	- - - -

Aluminium (per kg)	Rs.
Aluminium Ingot	Rs.
Copper (per kg)	Rs.
Gold (10gm)	Rs.15110
Lead (per kg)	Rs.
Mild Steel Ingots (Mumbai)	Rs.
Nickel (per kg)	Rs.
Nickel Cathode	Rs.
Silver (1kg)	Rs.22800
Sponge Iron (per tonne)	Rs.13800.00
Steel Flat (per tonne )	Rs.30070.00
Steel Long GVD (per tonne)	Rs.
Steel Long BVN (per tonne)	Rs.21600.00
Tin (per kg)	Rs.
Zinc (per kg)	Rs.
Zinc Ingot	Rs.- - - -

Crude Oil (WTI)	$- - - -
Crude Oil (Brent)	$70.40

Automobile

Scip on BSE	Face Value (Rs)	Last traded Value (Rs)
Apollo Tyres	1	39.20
Asahi Ind	1	58.35
Amara Raja B	2	116.70
Ashok Leyland	1	35
Bajaj Auto	10	1221.05
Bharat Forge	2	190.30
Denso	10	66.10
Eicher Ltd	10	- - - -
Eicher Motor	10	368.65
Escorts	10	69.45
Exide Ind	1	81.80
Force Motors	10	138.30
Gabriel India	1	14.70
Hero Honda	2	1673.85
Hind Motors	10	20.90
Hi-Tech Gear	10	68.40
Jay. Bh. Maruti	5	41.55
Jamna Auto	10	34.80
JK Tyres & Inds	10	91.90
Kinetic Motors	10	15.40
Kinetic Engg	10	50.80
KOEL	2	108.90
Kirloskar Br:	2	178.85
LML Ltd	10	9.45
L&T	2	1494.45
Lumax Ind	10	131.10
Lumax Tech	10	29.30
M&M	10	822.80
Maruti Suzuki	5	1388.90
Motherson SS	1	78.45
Minda Inds	10	164
MRF	10	4948.60
MICO	10	- - - -
Omax Auto	10	35.05
Perfect Circle	- - - - - -	- - - -
Rico Auto	1	27.35
Sona Koyo St	2	11.85
SKF Bearing	10	- - - -
SRF	10	144.30
Swaraj Mazda	10
Tata Motors	10	414.20
TVS Motor	1	54.60

Metals

Scrip on BSE	Face Value(Rs)	Last traded Value (Rs)
Bhushan Steel	10	730.75
Essar Steel	10	- - - -
Hindalco	1	93.45
Hind Zinc	10	697.35
Ispat Inds	10	23.20
Jindal Iron	10	- - - -
Jindal Stain	2	- - - -
JSW Steel	10	683.50
Jindal Steel	5	3014.65
National Aluminium	10	302.25
SAIL	10	178.25
TISCO	10	468.95
Visa Steel	1	29

Indian Auto Industry News

Wednesday, July 29, 2009

Indian Auto Industry Update July 29, 2009

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Wednesday, July 29, 2009

Indian Auto Industry Update July 29, 2009

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