• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

For A Better Future

Photo Credit :

Retail veteran Kishore Biyani seems to have found a way to reduce his Future Group's debt burden. The group will sell its 53.7 per cent stake in consumer finance arm Future Capital Holdings to US-based private equity firm Warburg Pincus for an estimated Rs 692 crore. Future Capital, formed in 2007, had a loan book of Rs 4,670 crore as of March 2012. Future Group's Pantaloon Retail India, India's largest listed retailer, and its fully-owned arm, Future Value Retail, will sell their stake in Future Capital to Warburg's Cloverdell Investment. The deal is expected to help Pantaloon ease debt, which  stood at Rs 5,500 crore as of March 2012, according to ICICI Securities. The company says the move is part of its strategy of doing away with its non-core businesses. In April, it sold more than 50 per cent stake in Pantaloon to Aditya Birla Nuvo.

Services Cheer
Despite the bad news on the economy front, there is a silver lining. The widely tracked HSBC Purchasing Managers' Index for services rose to a three-month high of 54.7 points in May, against 52.8 points in April. A reading of more than 50 points shows expansion. That said, the services PMI in May was lower than the reading of 58 points in January.

A New Bond
Drug maker Dr Reddy's Laboratories has tied up with German biotechnology firm Merck Seroni, an arm of healthcare giant Merck, to expand its biosimilars business. The companies will co-develop a portfolio targeting biosimilar compounds that treat tumours. 

Prime Time Spat
Indian Broadcasting Foundation says it will challenge telecom watchdog Trai's order to limit commercials  to 12 minutes per hour. The industry body will move the Telecom Disputes Settlement and Appellate Tribunal, questioning the role of Trai, which it says is an adviser primarily, but has been issuing regulations.

Dealing A Blow
Automobile dealers from across the US filed a lawsuit against India's utility vehicles major Mahindra & Mahindra, charging it with launch delays and fraud. The dealers allege M&M duped hundreds of dealers and walked away with more than $60 million in cash and trade secrets.

Payback Time
Nasdaq OMX, which owns and operates Nasdaq stock exchange, will offer cash and rebates worth $40 million to compensate clients affected by problems with Facebook's initial public offering. About $14 million will be paid to affected member firms and the rest will be credited to members to cut trading costs. Observers say the amount falls short of the actual losses.

Contagion Of Worry
China cut interest rates for the first time since 2008, boosting efforts to fight a slowdown as Europe's debt crisis threatens global growth. The benchmark one-year lending rate will drop to 6.31 per cent from 6.56 per cent effective 8 June, the People's Bank of China said. Meanwhile, Reserve Bank of India deputy governor K.C. Chakrabarty said interest rates in India are not too high to affect growth.

FEW TAKERS: Maruti has cut production of petrol cars

Petrol Pangs
Blame it on soaring petrol prices. India's largest car maker Maruti Suzuki has cut production of some petrol models, including the best-selling Alto, as much as 15 per cent. The company says sales of such cars have declined, and as the market sentiment is down, it does not want excess stock. Petrol prices were deregulated in June 2010, and on 23 May, oil marketing firms hiked petrol prices by 10 per cent or Rs 6.28 per litre.

Cheaper Food
Global food prices plunged in May because of good  supplies, growing global economic uncertainties and a strong dollar, says the Food and Agricultural Organisation. The UN body's Food Price Index, which tracks changes in global prices of a group of food commodities, fell by 4 per cent last month. This was the lowest level since September 2011.

Sour Apple
It seems Apple is a tad unhappy with the Samsung S3. In a court filing, Apple says the S3 infringes on two of its software feature patents and wants a ban on the US sales of the phone.

(This story was published in Businessworld Issue Dated 18-06-2012)