SATURDAY, 19 FEBRUARY 2011 24 PAGES IN 2 SECTIONS MUMBAI (CITY) `6.00 Volume XV Number 163 Published simultaneously from Ahmedabad, Bangalore, Bhubaneswar, Chandigarh, , Hyderabad, Kochi, Kolkata, Lucknow, Mumbai, New Delhi and Pune.

SENSEX 18211.52 Ô 295.30 www.business-standard.com NIFTY 5458.95 Ô 87.50 Business StandardWEEKEND NIFTY 5453.65 Ô 5.30 FUTURES* DOLLAR `45.21 `45.35# Page 16 WEEKEND I: Separate Section EURO `61.32 `61.48# YEN `54.18 `54.25# IPL SCORES OVER WORLD CUP HAS ANALJIT SINGH, THE (100 Yen) GOLD `20430 Ò `60 IN AD SPEND, AS PREVIOUS PERENNIAL START-UP MAN, (10 gm) # Prev day’s close RESULTS HAUNT SPONSORS FOUND HIS GROOVE? * (February) Discount on Nifty Spot

[IN BRIEF] SCAM-SPOOKED MARKETS AWAIT NEXT TWIST IN PROBE APRIL 1 MAY SEE Essar Energy set to acquire SOME MFI NORMS RBI may implement some CBI RAIDS OFFICES recommendations made by Shell refinery for $350 mn the Malegam Committee on regulating the microfinance S KALYANA RAMANATHAN sector from April 1. +9 OF KALAIGNAR TV London, 18 February Indo- pact BS REPORTERS sation erode amid fears that fur- ssar Energy today announced that and Malaysia signed a Delhi/Mumbai/Chennai, 18 February ther arrests could follow. “The M-CAP LOSSES it has entered into an exclusive agree- Comprehensive Economic scam and its repercussions have Since A Raja’s arrest, BSE E ment with Shell UK for the proposed Cooperation Agreement, to rissons went through instilled a sense of apprehension (Feb 2-18) ` crore purchase of an oil refinery and other as- boost bilateral trade to $15 Delhi, Mumbai and in the market and rumour mon- sociated assets at Stanlow, near Ellesmere billion by 2015. +5 Chennai as the gov- gers are having a field day,” said R-ADAG Port in Cheshire, for $350 million in cash. ernment got cracking Nirmal Jain, chairman & man- The deal brings Essar Energy and Shell Fiscal discipline on the 2G spectrum al- aging director of Mumbai-based to the penultimate stage of two-year ne- FM Pranab Mukherjee said locationF scam. IIFL (India Infoline). gotiations that also saw a brief hiatus last the government will return The Central Bureau of Inves- Shares of Reliance Anil Dhirub- year, only to be revived after Essar Ener- to fiscal discipline in the tigation (CBI) raided the Chennai hai Ambani Group companies fell gy completed its $1.3-billion IPO and subseq- coming Budget. +5 offices of Kalaignar TV, report- between 5-8 per cent on the Bom- uent listing on the London Stock Exchange. edly owned by family members of bay Stock Exchange (BSE) on Fri- The deal will be the third largest by Multi-brand retail Chief Minister and day. Reliance Communications lost an Indian group in the UK, following Tata’s Commerce Minister Anand United Progressive Alliance ally 6.80 per cent at `93.15, while Re- -12,464.54 acquisition of Corus ($8.1 billion in 2006) Sharma said talks to open M Karunanidhi, late Thursday night liance Infrastructure declined 5.60 and Jaguar Land Rover ($2.3 billion in 2008). up multi-brand retail to and early Friday morning. per cent. The CBI had questioned Successful conclusion of the deal, even Royal Dutch Shell’s Stanlow oil refinery in Ellesmere, UK. PHOTO: BLOOMBERG foreign investors were at an The chatter in Delhi suggest- R-ADAG Chairman Anil Ambani SUN TV NETWORK at the current capacity utilisation of around advanced stage. +5 ed irreversible damage had been on Wednesday in connection with 75 per cent, should give Essar an addition- done to the alliance between the the 2G scam. -3,316.18 al $7-8 billion in revenues at current crude Deal size could touch $1.3 billion Marico acquisition Congress and the Dravida Munnetra Major Essar group companies prices, said Essar Group CEO Prashant Ruia, Marico has acquired 85 per Kazhagam. But it was clear that nei- – Essar Shipping and Essar Oil – in a telephone interview from Mumbai. here was some confusion about the actual size of the proposed Essar En- cent stake in Vietnamese ther political party was ready to end lost more than 5 per cent each ESSAR GROUP He said the company would continue to ergy-Shell deal for the Stanlow refinery in the UK. While Essar said it firm International the partnership just yet, although on Friday to close at `83.05 and keep its strategies open for further acqui- Twas paying $350 million, the Shell website stated, “Shell today confirmed Consumer Products for an the chill in ties was palpable. `106.45, respectively. The CBI had sitions in the oil sector, provided there is it has received an offer from Essar Energy to buy its 272,000 barrel-per-day Stan- undisclosed sum. +3 Simultaneously, industrialist questioned Essar Group CEO -3,028.55 a clear fit in its scheme of operations. low refinery and associated local marketing businesses in the UK for a total and DB Realty promoter Shahid Prashant Ruia on Thursday. Essar According to the new deal, Shell has expected consideration of some $1.3 billion.” Simplified IPO forms Usman Balwa was sent to judicial is alleged to have held a stake in granted Essar Energy exclusivity to the ac- Frantic calls between Mumbai and London helped clarify that the deal size If Sebi’s thrust on primary custody in the Delhi’s Tihar jail. Loop Telecom in violation of cross- UNITECH quisition until April 1, 2011. Essar Ener- is in fact only $350 million, which is the price Essar will be paying for the re- market reform continues, This, along with the anticipation holding norms. DB Realty fell 5.94 gy has the option until March 31, 2011 to finery assets. The balance, which Shell at this stage believes to be $900 million, one could see a common that several top industrialists would per cent to `129.10. Unitech, whose -2,891.01 enter into an asset purchase agreement. is for the inventory lying on site, including crude, work in progress and fin- form for Asba and non- be called for questioning by the Managing Director, Sanjay Chan- If by that date Essar Energy decides not ished products. “You don’t expect us to buy a working refinery drained of its Asba applicants. +9 CBI, saw the markets turn jittery. dra, was questioned by the CBI on to proceed with the acquisition, it will inventory, do you,” asked a senior Essar executive in Mumbai. Some of the companies asso- Tuesday, lost 6.94 per cent at `34.20. ANANT RAJ INDS pay Shell a break fee of $50 million. Sim- A Shell spokesperson here later confirmed that the $1.3 billion it is claiming Cairn on deadline ciated with the 2G spectrum scam Turn to Page 16 ilarly, Shell has agreed to pay Essar En- to be the deal size includes the inventory along with the refinery assets that Es- Cairn Energy, which propo- have seen their market capitali- Related report on Page 7 -724.47 ergy a break fee of $10 million if it choos- sar plans to buy. “Beyond this, I cannot say anything,” said the spokesperson. ses to sell 60% stake in Cairn es not to go ahead with the sale. India, will not seek an exten- In a statement issued here, Essar said sion of the April 15 deadline R-Infra writes to Intelligence Bureau DB REALTY that the acquisition of the Stanlow re- improvements to optimise the facility and Ruhr Oel refinery in Germany sold to Ros- to conclude the deal. +3 -578.96 finery, which is the second-largest in enhance production.” neft in 2010 for $3,376 a barrel and To- eliance Infrastructure has written to the Intelligence Bureau the UK, will give it direct access to the UK Essar Energy said it is acquiring the tal’s Vlissingen refinery in the Netherlands Hassan Ali Ralleging that a bear cartel has been hammering the stock market. Naresh Nayyar, Essar Energy's Stanlow refinery at a competitive price, sold to Lukoil in 2009 for $8,439 a barrel. Stud farm owner Hassan Ali prices of infrastructure companies, including those owned by TOTAL LOSS chief executive, said, “Stanlow fits very compared with other recent similar trans- With the completion of the acquisition, Khan appeared before I-T of- Anil Ambani. The letter named market operator Sharad Shah well with our strategy of providing op- actions. The price of $350 million for the Essar will also take on board 960 workers ficials for alleged tax evasion, (aka Sharad Bobada) as primarily responsible for these activi- -23,003.71 tions for the export of high-quality prod- 296,000-barrels-a-day plant translates to at Shell’s Stanlow refinery. In the first six the penalty on which could ties. The letter, signed by R-Infra Company Secretary Ramesh M-Cap losses of ucts from our Vadinar refinery in India. $1,182 a barrel of daily throughput, com- months of 2010, the facility reported earn- run to `40,000 crore. +7 Shenoy and addressed to IB Director Nehchal Sandhu alleged After completion, we look forward to work- pared with BP’s Coryton refinery sold in ings before interest, tax, depreciation and six groups % the bear cartel had led to a market capitalisation loss of more vis-a-vis BSE loss 43 ing closely with the refinery management 2007 to Petroplus for $8,140 a barrel, To- amortisation (Ebitda) of $62.7 million and a China reserve ratio than `3 lakh crore. +2 and employees to develop the business tal’s Milford Haven refinery sold to Mur- gross refining margin of $4.90 a barrel. China’s central bank raised Data compiled by BS Research Bureau and we will be investing in operational phy Oil in 2007 for $3,307 a barrel, PDVSA’s Turn to Page 16 reserve requirements for lenders 10 days after boost- ing interest rates. +6 New Sebi chief Upendra Kumar Sinha took Rail PPP on a Retail prices up 6% in charge as Sebi chairman in Mumbai on Friday. slow track new consumer index BS REPORTER ary, compared with the aver- QA& SUDHEER PAL SINGH New Delhi, 18 February INDIA RISING age price level last year. The New Delhi, 18 February CPI for January 2011 (in points) fuel & light group was dear- he government today re- er by 6 per cent; clothing, bed- 107 he government’s plan to leased data on a new 106 ding & footwear by 7 per cent; transform the country’s T consumer price index 104 and the miscellaneous cate- T crumbling transport in- for the entire country, which gory (including primarily serv- frastructure through private could provide headline infla- ices) by 4 per cent. participation has not made tion numbers over a period of In rural areas, food, bever- much headway. While just over time — as is the practice in sev- ages & tobacco prices were up a year remains in the current eral countries. 8 per cent, against 7 per cent p2 Plan period, the projected pri- The data showed that retail in urban areas; fuel & light up vate investment of `211,600 prices rose by 6 per cent in Jan- 7 per cent against 5 per cent; APARUP SENGUPTA crore in railways, roads and air- THE PLANNING uary, against the average price Rural Urban All-India miscellaneous up 5 per cent Commission recently CEO & Global MD, Aegis ports has already been lowered level in entire 2010, and that Base year 2010=100 points against 3 per cent; and cloth- by 60 per cent to `86,700 crore. slashed the expected prices rose slightly more in ru- ing, bedding & footwear up ‘We are evaluating firms in Not surprisingly, Indian Rail- private investment of ral parts than in urban areas. 7 per cent in both areas. The Latin America and Africa’ ways, which has resisted pri- `50,354 crore in railways However, as the ministry of Taking 2010 price levels as housing index remained at 100 vatisation for years, has fared for the current Plan period statistics & programme im- the base (100 points), the all- points for urban areas, while the worst. The Planning Com- plementation pointed out: India consumer price index this category is is not includ- mission recently slashed the by 83% to `8,316 crore “Since these indices are being stood at 106 points in January. ed in the index for rural areas. SENSEX THIS WEEK expected private investment of introduced for the first time, For rural and urban areas, it Within the food category, 18,800 `50,354 crore — or, 20 per cent Industry’s response to these annual inflation rates have not stood at 107 and 104 points, fruit prices rose the most, at of the overall investment of schemes has, however, been been compiled.” Also, not all respectively. 12 per cent all-India, while 18,400 `261,800 crore — in railways somewhat muted. A host of rea- states have sent the adequate Retail prices in the food, pulses declined the most, by 3 for the current Plan period sons, including ill-designed number of price schedules, the beverages & tobacco group per cent. 18,211.52 by as much as 83 per cent to model agreements and the rail- ministry added. rose by 8 per cent in Janu- Turn to Page 16 18,000 `8,316 crore. ways’ insistence on majority 17,728.61 That comes as disappoint- stake in projects, have ensured 17,600 ing news, given that the pub- delays in awarding PPP proj- INDEX IS BORN Feb 11 Feb 18 closing closing lic-private participation (PPP) ects, according to experts. model has proved a major suc- The showcase Madhepura Compilation Categorisation Net change 482.91 cess in telecom and highway locomotive project in Bihar, con- Price schedules are collated for Items are then broadly divided % change 2.72 development. In a recent dis- ceived in February 2007 at an 225 rural retail items and 250 into five groups: Food, cussion with the media, Prime investment of `1,290 crore, is urban items. Items differ from beverages & tobacco; fuel & Minister Manmohan Singh said an example. Bids to select a joint state to state, based on light; clothing, bedding & the country would see a fresh venture partner were invited in consumption pattern. Data on footwear; miscellaneous wave of infrastructure invest- May 2008. The rail ministry 20 services are also included. (primarily services); and housing ment via the PPP route. shortlisted Alstom, Bombardier (not in the rural index). The ministry of railways has and Siemens through compet- Indexing issued several policies aimed itive bidding and issued draft To compile the all-India index, at building infrastructure with requests for proposal in Sep- separate weights assigned by private participation in the past tember. However, none of them each state to rural and urban two years. Crucial projects on applied for the financial bid. areas are factored in. offer via PPP include new en- The ministry then decided gine manufacturing units in to set up the unit as a railways Marhoura and Madhepura in production factory, which was Calculation Weightage Bihar, high-capacity freight bo- approved by the Cabinet. In De- The price movement of each item, Taking 2010 as the base year (100 gey manufacturing factories in cember 2009, the ministry de- relative to its weight, is taken into points), various items are assigned Dalmianagar in Bihar and Ma- cided to revert to the JV mode account to compile the index. They weights based on an NSSO survey of jerhar in West Bengal and the and a fresh request for quotes are then compiled category-wise to consumption expenditure in 2004-05. Son Nagar-Dankuni Section of was issued in March 2010. arrive at rural and urban indices. Weights differ from state to state. the dedicated freight corridor. Turn to Page 16