NewsLetter 09 March 2010

LIC may seek bank licence
State-owned Life Insurance Corporation of India (LIC) is likely to seek a licence to float a bank when the Reserve Bank of India (RBI) allows more players. This year public sector insurer is expected to collect over Rs 176,000 crore as premium income. Similarly, it settles over 15 million claims annually which involves payouts to policyholders

IN STOCK LIC’s Shareholding at the end of Dec, 2009
Corporation Bank	26.32
SBI	10.53
ICICI Bank	10.35
Axis Bank*	10.34
HDFC Bank	7.02
* Part of promoter group Figures in % Source: BSE

The insurer was also one of the promoters of Axis Bank, now the country’s third-largest private bank, and has tried to take control of it in the past. Its proposals were, however, turned down by the RBI on grounds that the bank had received a licence as a “private sector bank” whereas LIC was a government-owned entity. The insurer will also need additional capital for its banking foray. Under the law governing it, LIC has a paid-up capital base of Rs 5 crore.

States seek Rs 1 lakh cr for GST switch

States are demanding that Central government double the compensation proposed by the Finance Commission to implement the already delayed Goods and Services Tax as the``Grand Bargain’’ is leading to stiffer demands. The Empowered Committee of State Finance Ministers is set to demand a compensation of Rs 1-lakh crore to adopt the GST.

Wheat, rice stocks swell; exports possible

India's wheat and rice stocks more than doubled as at March 1, government sources said on Monday, indicating the country's ability to free some stocks for exports and open market sale. Stocks of wheat were at 18.4 million tonnes, sharply higher than a target of 8.2 million tonnes, while that of rice were at 26.9 million tonnes compared with a targeted 11.8 million tonnes.

Govt looks to cut stake to let SBI hit D-Street

The government has taken the first step to let the country’s largest lender State Bank of India (SBI) mop up substantial funds from the stock market. On Monday, it moved a bill seeking Parliament’s go-ahead to reduce government shareholding in the bank to a minimum of 51% from the current threshold of 55%, a mobilisation of Rs 20,000 crore.

Bank of Rajasthan promoters banned

Sebi has banned 100 entities related to the Bank of Rajasthan (BoR), including several members from the Tayal family, the promoters of the bank, from all stock market-related activities. It was found that the entities which were banned were acting in connivance with the Tayals to corner BoR shares. This, in turn, helped the Tayals to disclose a shareholding pattern that conformed to the RBI rules relating to promoters' holding in banks.'

Terror stalking, IPL-3 under record insurance blanket

IPL3 promoters, the BCCI and the owners of different franchisesplaced a record insurance cover of more than Rs 1,000 crore with state-owned general insurer, the Oriental Insurance Company.
Insurance covers for another Rs 900 crore are still being sought by Sony Entertainment Television (SET)

Daimler to sell Tata Motors stake

German auto major Daimler, which holds a 5.34% stake in Indian automobile giant Tata Motors, is soon expected to sell its entire stake, consisting of nearly 2.56 crore shares. At the current market price, Daimler's stake is valued at about Rs 2,050 crore.

Exide to mop up Rs 540 cr via QIP

Storage battery maker Exide Industries plans to mobilise around Rs 539.5 crore by selling 5 crore equity shares to qualified institutional buyers (QIBs). According to a senior company official, the floor price for the exercise has been fixed at Rs 107.9 per share. Exide has asked Bank of America, Merrill Lynch, Enam Securities, Morgan Stanley and UBS to arrange the qualified institutional placement issue.

India Inc's Feb M&A deal tally jumps 5-fold at $1.3 bn

Corporate India's shopping spree continued unabated in the second month of this year, as deals worth over USD 1.3 billion were announced, a five-fold jump from the year-ago period. Led by the acquisition of Equipav SA Acucar e Alcool by Shree Renuka Sugars. We have also seen some unique deals such as Religare Enterprises overseas acquisition of a private equity and venture capital investment company, Northgate Capital

Best-Practice Working Capital Management: Techniques for Optimizing Inventories, Receivables, and Payables

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