Capital goods push ECBs 18%

With risk appetite for Indian paper improving, Indian companies managed to mop up significant amounts of money through external commercial borrowings (ECBs) last fiscal (2009-10). Companies received approvals to raise $21.67 billion compared with $18.36 billion in 2008-09, an increase of 18%. In March 2010, companies raised $4.32 billion, up 300% over $1.11 billion mobilised in March 2009.

Most companies are raising these funds to import capital goods and modernise plants. Along with large companies, mid-sized and small companies are choosing the ECB route to raise money.

"More companies are looking to borrow through ECBs, but they will also keep a close watch on interest rates," said Prakash Subramanian, MD & regional head, capital markets, South Asia, Standard Chartered Bank.

Post the Lehman crises, when the ECB window had dried up, overseas funding was available at (London Interbank Offered Rate) LIBOR (base rate) +500 basis points (bps). However, with an improvement in liquidity scenario globally, a AAA Indian corporate can now borrow at close to LIBOR+200 bps.

Manmohan Singh, managing director (head-primary debt markets), India at Royal Bank of Scotland (RBS) observes that with an increase expected in local interest rates and recent tightening of spreads for Indian paper in international markets, overseas borrowing seems to be a competitive option.

"There is a lot of interest from the corporate and institutional space for overseas funds. In fact, ECBs and ECA loans continue to do well. There are pipelines of projects which need to be funded," says Hemant Mishr, managing director and head of global markets, South Asia, Standard Chartered Bank. He adds that the credit spreads have compressed and that there is higher appetite for funds.

RBI data for March 2010, shows that as many as 73 companies have opted for ECBs. Reliance Industries (RELIANCE.NS : 1018.9 -1.75), Reliance Infratel, Nacil, Aircel and PFCL account for more than half the borrowings.

HP evaded Rs 1,450-cr customs duty: DRI

By fe Bureau



The Indian arm of global IT giant Hewlett-Packard (HP) has been slapped a show-cause notice by the Bangalore unit of the Directorate of Revenue Intelligence (DRI) for alleged customs duty evasion of Rs 1,450 crore. If found true, this would be the single-largest case of evasion the DRI has ever unravelled. The California-based computer maker is already facing a bribery probe in Europe over a 2003 contract.

According to DRI, HP evaded duty by undervaluing products like computers, laptops, notebooks and desktops by Hewlett-Packard India Sales Pvt Ltd from its overseas offices in the past five years.
An HP Asia-Pacific & Japan spokesperson told FE: "HP India has been transparent and has cooperated fully with the DRI in its investigation. HP India refutes the DRI's position and will challenge its claims through the judicial process."

Even as the case is under investigation, HP voluntarily pre-deposited Rs 79.25 crore with the government, a DRI official told FE. Of this sum, Rs 35 crore was paid only last week. HP's Indian sales enjoy the Accredited Client Programme (ACP), under which it has an extended green channel facility for faster imports clearance without routine Customs checks. The company imports products from its parent's offices in the US and Singapore.

DRI says HP did not make proper and full disclosure about the pricing mechanism of imports to the Customs department. HP was allegedly raising two invoices one for the clients and one for its offices that gave it 44-83% discounts. While importing computers, it did not declare these details to the Customs and undervalued imports, a DRI official said. HP would need to reply to the showcause notice within a stipulated time, usually 90 days, after which the tax department can take action as per law.

Nokia, Microsoft launch new mobile software

HELSINKI (Reuters) - Nokia and Microsoft unveiled on Wednesday the first result of their new software collaboration aimed at breaking the dominance of Research in Motion's BlackBerry in wireless services for corporations.

Nokia and Microsoft, at one time fierce rivals in the mobile telecommunications business, announced the alliance in August 2009. They expect to offer Nokia phones running Microsoft's Office programmes later this year.

On Wednesday the companies unveiled Communicator Mobile software, which enables people to see their colleagues' availability, and click to communicate with them using instant messenger, e-mail, text or phone call.

The names and status of colleagues are embedded directly in the devices' contacts application. Owners of Nokia E52 and E72 models can download it as of today from Nokia's Ovi Store.
(Reporting by Tarmo Virki)

Bajaj car to be world's cheapest

By fe Bureau


Bajaj's ultra-low cost car being manufactured jointly with Renault and Nissan promises to give hot chase to the Tata Nano. On Monday, Rajiv Bajaj (BAJAJAUTO.NS : 2101.05 0), MD, Bajaj Auto confirmed the $2,500 (Rs 1.1 lakh) price tag for the car, announced first by Renault chairman & CEO Carlos Ghosn at the company's shareholders' meet late last week. The Renault announcement comes a few days after it pulled out of its loss-making Logan venture with Mahindra & Mahindra.

The Bajaj car will be cheaper than the Nano, which comes at Rs 1.23 lakh-1.72 lakh (ex-showroom Delhi ). After the launch of Tata Nano, the race for the No.2 position in the ultra-low cost car segment is under way in India , which as emerged as the Mecca of this segment. However, other automakers' plans to enter this segment are still on the drawing board.

At Renault meeting, Ghosn said: "In India , Renault and Nissan are developing an ultra-low-cost vehicle with the Bajaj group, benefiting from its expertise in light vehicles and knowledge of the Indian market." He reiterated the affordability of the vehicle for the Indian market by citing the targeted low price tag.
"We are combining our strengths with Nissan, notably in India , Russia , Brazil and Mexico ," Ghosn said. "The alliance product strategy has been finalised in India and Russia , and Renault and Nissan will pool their production capacities and platforms there to fully deliver on these developments," he added.
The car was initially scheduled to hit the market this year, but has been postponed to 2012. Bajaj Auto displayed the prototype of the small car at the 2008 Auto Expo. However, the three partners were stuck at various levels of branding and engineering the car till last year. According to industry observers, the project also got delayed as partners were stuck on pricing issues as well. While Renault wanted a low-cost car, Bajaj was keen on a car that would sport high mileage and low maintenance.

It was during his India visit that Ghosn finally announced the finalisation of the project. "As per the agreement, the design, engineering, sourcing and manufacturing will be handled by Bajaj Auto, while marketing and selling will be (done) by Renault-Nissan Alliance," he said. But he had declined to comment on the pricing of the car.
Officials from the alliance have said the car will be smaller than Maruti Suzuki's Alto, which is the biggest selling model in India .

In March, Collin Dodge, executive vice-president, Nissan Motor had said: "It is over two years that Bajaj is trying to produce the car. The physics of it is very difficult. We have not yet found a solution as there are a lot of engineering solutions required." Nissan is also in talks with Hinduja group company Ashok Leyland (ASHOKLEY.NS : 62.45 0) to develop a small car for the global market that could be priced around $4,500-5,000.

"We have a formal agreement with Ashok Leyland for making light commercial vehicles in India . In addition, we also use Ashok Leyland's engineering services for various purposes. At the moment, we are talking to them and many other partners in China , Indonesia ...for a price centric vehicle," Nissan Motor Co executive vice-president Collin Dodge had said at the Geneva Motor Show in March.

People who sleep for less than six hours 'die early'

People who sleep fewer than six hours a night are more likely to die early, researchers have found in a study they claim provides 'unequivocal evidence' of a link between sleep deprivation and premature death.

"We spend a third of our lives asleep, and yet two-thirds of us struggle to get enough"

They discovered that people who slept for less than six hours each night were 12 per cent more likely to die prematurely - before the age of 65 - than those who slept the recommended six to eight hours a night.

The team from the University of Warwick and Federico II University Medical School in Naples analysed 16 studies involving a total of 1.3 million people before reaching their conclusions.

They pointed ouy that previous studies had shown that sleep deprivation was associated with heart disease, high blood pressure, obesity, type 2 diabetes, and high cholesterol.

However, the researchers also found that sleeping too much was linked to an early death.
Those who slept for more than nine hours a night were 30 per cent more likely to die early, the research published in the journal Sleep found.

That directly contradicts research published in the same journal last week which suggested that people who slept for ten hours or longer a night were more likely to live to 100.

This was thought to be because people who lived into extreme old age were healthier and therefore slept better.

However, the authors of the latest research contradicted this and suggested that long sleep was a sign of underlying illnesses such as depression and low levels of physical activity. Some cancer is also associated with sleeping for longer.

Professor Francesco Cappuccio, leader of the Sleep, Health and Society Programme at the University of Warwick and Consultant Physician at the University Hospitals Coventry and Warwickshire NHS Trust, said: “Whilst short sleep may represent a cause of ill-health, long sleep is believed to represent more an indicator of ill-health.

“Modern society has seen a gradual reduction in the average amount of sleep people take, and this pattern is more common among full-time workers, suggesting that it may be due to societal pressures for longer working hours and more shift-work. On the other hand, the deterioration of our health status is often accompanied by an extension of our sleeping time.

“Consistently sleeping six to eight hours per night may be optimal for health. The duration of sleep should be regarded as an additional behavioural risk factor, or risk marker, influenced by the environment and possibly amenable to change through both education and counselling as well as through measures of public health aimed at favourable modifications of the physical and working environments."