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BANGALORE | WEDNESDAY, 11 JUNE 2014 COMPANIES 3

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RAGHUVIR BADRINATH
Bangalore, 10 June
The stock price of UB
Holdings (UBHL), the princi-
pal holding company of the
VijayMallya-ledUBGroup, hit
a fresh 52-week high at ~49.80
ashareonTuesday, adayafter
it breached the upper circuit
at ~47.30 on Monday as vol-
umes spurted 7.38 times on
the BSE. On Tuesday the vol-
umes spurted 3.68 times and
closed with gains of 2.12 per
cent at ~48.15 a share.
One trigger for this move-
ment is UBHLs bid to release
some of the pledged shares of
its groupcompanies United
Spirits and Mangalore
Chemicals & Fertilizers (MCF)
even as global spirits major
Diageo opened its second
offer from June 6 to mop up
an additional 26 per cent in
United Spirits at ~3,030 a
share.
In the past few
trading sessions,
UBHL shares have
gained 25 per cent.
UBHL, which had
pledgedapart of its
holdings in United
Spirits as well as
MCF to raise
resources to fund
its now-grounded Kingfisher
Airlines, has over the past two
weeks been slowly releasing a
part of these. UBHL has
released shares worth about
~150 crore of United
Spirits and addi-
tional shares of
MCF worth ~55
crore.
According to
information avail-
able, UBHL is try-
ing to pay back
some of its debtors
from the proceeds of the sale
of a part of its shares of USL to
Diageo. As part of the ~5,500-
crore transaction, sealed dur-
ing July 2013, in which UBHL
sold a part of its holding in
United Spirits, there was an
inflow of about ~2,000 crore
into UBHL.
Bulk of this was paid to
lenders to facilitate the share
sale to Diageo.
UBHL is continuing this
process as it is managing to
slowlyuntanglevarious issues
with lenders, a senior man-
agement official of UB Group
told Business Standard. An
official spokesperson offered
no comment.
Despite these moves, Vijay
Mallya might have to shortly
work out ways on how he
intends to square up against a
possible over-arching move
by Kingfisher Airlines
lenders, who are mulling var-
ious options to get back the
~6,000-crore of dues, after
many of their moves have so
far failed.
UB Holdings stock on fire
Shares at 52-week high as company starts getting back pledged shares
BS REPORTER
Mumbai, 10 June
Adayafter someIndiancom-
panies spoke out against 100
per cent foreigndirect invest-
ment (FDI) in the defence
sector, the Confederation of
Indian Industry (CII) and
BSE-listed Pipavav Defence
have endorsed the Modi gov-
ernments reported move to
allow it.
CII said FDI was directly
linked with core national
priorities such as raising
manufacturing growth to 25
per cent of the gross domes-
tic product, significant job
creation and bringing high-
end technology into the
country. The associated
benefits are the spinoffs for
the civilian market.
Opening various sectors
have helped Indian indus-
try grow and become glob-
ally competitive, said Ajay
Shriram, president, CII.
OnMonday, L&Tsaid100
per cent FDI should not be
allowed in India unless
backedbytransferof technol-
ogy and giving access to
Indian companies in foreign
markets. Tata, Reliance and
Mahindrawerenon-commit-
tal on allowing 100 per cent
FDI inthe sector.
Wewelcome100per cent
FDI in defence as it will help
India to get crucial technolo-
gy to build our own capabili-
ties, said Nikhil Gandhi,
chairmanof PipavavDefence.
Pipavav has invested ~8,000
crore to set up a state-of-the-
art shipyardinGujarat tocon-
struct ships for Indian navy
and coast guard.
CII, Pipavav
back 100%
FDI in defence
BS REPORTER
New Delhi, 10 June
A
stablegovernmentatthe
Centre seems to have
lifted consumer senti-
ment, with sales of passenger
vehicles in the domestic mar-
ket increasing three per cent to
207,953 units in May, the first
increase in eight months.
However, while buyers seemto
be returning to showrooms, a
definite turnaround in vehicle
sales might besometimeaway.
The previous time passen-
ger car sales had risen was in
August 2013, increasing4.47per
cent to190,053 units.
Vishnu Mathur, director-
general, Society of Indian
Automobile Manufacturers
(Siam), said, The sentiment
seems to have improved in the
market. Enquiries are now
beingconvertedintosales. The
formation of a stable govern-
ment at the Centre, coupled
withafall inthecost of carsdue
to a cut in excise duty, has
brought back positive senti-
ment. However, he clarified it
wastooearlytoassumethiswas
a turnaroundinthe market.
Much depends on whether
the excise duty cut announced
ininterimBudget 2014-15finds
favour with those in the new
regime. We hope the govern-
ment will retain the current
excise rate beyond June 30.
Also, we are looking forwardto
the rollout of the GST (Goods
and Services Tax and environ-
mental clearances for industri-
al projects to kick-start the
economy, Mathur said.
In the interim Budget, then
finance minister P Chidam-
baram had cut excise duty on
small cars, scooters, motorcy-
cles and commercial vehicles
from 12 per cent to eight per
cent; on sports utility vehicles
from 30 per cent to 24 per
cent; on mid-sized cars from
24 per cent to 20 per cent and
on large cars from 27 per cent
to 24 per cent.
Mathur saidpredictionsof a
below-normal monsoon this
year might put a spanner on
auto sales. The government
has already spoken of contin-
gency plans and if these are
effective, we hope there wont
be muchimpact. Otherwise, in
case of a poor monsoon, the
demand for two-wheelers and
small cars in rural markets
couldbe affected.
InMay, vehiclemanufactur-
ers sold 148,577 passenger cars
in the domestic market, an
increase of 3.08 per cent com-
pared with 144,132 units in the
year-ago period. Owing to new
models, carmakers such as
Maruti Suzuki (Celerio),
Hyundai (XCent, Grand and
Santa Fe), Honda Cars (City),
Ford (EcoSport) posted good
growthinvolumes.
While Maruti Suzukis sales
rose 16.37 per cent to 90,560
units, sales of rival Hyundai
Motor increased 12.78 per cent
to 36,205 units. By contrast,
domestic automobile majors
Tata Motors and Mahindra &
Mahindra (M&M), withno new
vehiclesintheirportfolios, con-
tinuedtoseesluggishdemand.
While sales of Tata Motors fell
29.54 per cent to 12,103 units,
those of M&Mdecreased 21.36
per cent to19,470units.
Mathur said the slight trac-
tioninpassenger vehicles was-
nt seeninthecommercial vehi-
clecategory, whichrecordedits
19thconsecutivemonthlysales
decline in May total sales of
commercial vehicles fell 15.28
per cent to 46,986 units from
55,458unitsintheyear-agoperi-
od. Siam said in May, sales in
the two-wheeler segment rose
16.3 per cent to 1,402,830 units
from1,206,173 units in the cor-
responding month last year.
Whilemotorcyclesalesrose11.71
per cent to 984,469 units, sales
of scooters increased 34.48 per
cent to357,564units.
Overall, sales of vehicles
across categories registered
growth of 13.22 per cent at
1,698,138units, against 1,499,893
units inthe year-agoperiod.
Car sales rise 3% after eight
months, on stable central govt
However, growth will stay only if excise duty cut of interim Budget continues, experts say
Consumer sentiments in the automobile sector
have improved, with customers returning to
showrooms. But experts say a definite turn-
around in sales may be some time away
BACK ON TRACK
AUTO SALE WATCH
AUTO SALES
Category May 13 May 14 % Change
Passenger vehicles 202,358 207,953 2.76
Passenger cars 144,132 148,577 3.08
Utility vehicles 42,335 44,267 4.56
Vans 15,891 15,901 -4.92
CVs 55,458 46,986 -15.28
MHCVs 18,519 16,572 -10.51
LCVs 36,939 30,414 -17.66
Three-wheelers 35,904 40,369 12.44
Two-wheelers 1,206,173 1,402,830 16.3
Scooters 265,892 357,564 34.48
Motorcycles 881,288 984,469 11.71
Mopeds 58,993 60,797 3.06
TOTAL 1,499,893 1,698,138 13.22
Domestic sales only Source: Societyof IndianAutomobileManufacturers (Siam)
SOHINI DAS
Ahmedabad, 10 June
Car makers have started hir-
ing from Gujarat's industrial
training institutes (ITIs) for
their factories across the
country.
Maruti Suzuki IndiaLtdlast
year administered tests to
1,100 candidates at the
Kubernagar ITI in northeast
Ahmedabad. "Maruti Suzuki
had recruited 40-45 candi-
dates here for their Gurgaon
plant. It has indicated it will
test candidates again this
month. Accordingly, we have
prepared a list of around
1,000," said A J Pandey, place-
ment coordinator for the
Kubernagar ITI.
A senior Maruti Suzuki
executiveconfirmedthedevel-
opment and said the compa-
ny was committed to its long-
termrelationshipwithGujarat.
Maruti has adopted five ITIs in
Gujarat whereit workswiththe
faculty to train students.
The company had signed
an agreement with the Gujarat
government for adopting ITIs
at Viramgam, Becharji, Detroj,
Kadi and Mandal last year, a
senior state government offi-
cial said. All of them are locat-
ed near Maruti Suzukis pro-
posed manufacturing facility
in Gujarat.
The first batch of trainees
signed up at these institutes in
March 2013, and 400 local
youths are expected to receive
training here. This will ensure
availability of skilled man-
power for Maruti Suzukis
plant at Mandal.
Honda Cars and VE
Commercial Vehicles, a joint
venture between Volvo and
Eicher Motors, have also visit-
ed ITIs in Gujarat. Pandey said
Honda Cars recently hired 85
ITI students for its factory in
Tapukara, Rajasthan, andindi-
cated earlier this month that
it planned to recruit around
1,000 more by the end of 2014-
15 for a second shift.
VE Commercial Vehicles
recruited a handful of candi-
dates for its Pithampur plant in
Madhya Pradesh.
Asenior official inthecom-
missionerate of employment
and training of the Gujarat
labour department confirmed
that car makers hadvisitedthe
state last year scouting for tal-
ent. The department does not
have data on the number of
recruitments by the automo-
bile industry from ITIs, but
the official said the trend was
clear.
"According to feedback we
get from individual ITIs, diesel
and motor mechanic courses
have gained popularity, apart
from other automotive cours-
es. Around 80-85 per cent of
the students taking these
courses areplacedonaverage,"
he said. "Companies that set
up facilities in the state start-
ing with Tata Motors and Ford
India began recruiting from
ITIs. The trend caught on as
Gujarat was positioned as an
automobile hub," he added.
The fact that companies
like General Motors, Tata
Motors, Maruti Suzuki and
Fordhadcollaboratedwiththe
states ITIs to bridge the skills
gap had helped, said another
official in the states labour
department.
Car manufacturers
flock to Gujarat ITIs
BS REPORTER
Ahmedabad, 10 June
A lower annual bonus for 2013-
14declaredbytheAnand-based
KairaDistrict Co-operativeMilk
Producers UnionLtd, popular-
ly knownas Amul Dairy, led to
ashowdownbetweenmilkpro-
ducers and the dairy manage-
ment onTuesday.
Annual bonusisdeclaredby
cooperative diaries after calcu-
lating the profits for the finan-
cial year. The Kaira Union is a
member of the Gujarat
Cooperative Milk Marketing
Federation.
As many as 2,000
milk producers and
members of the
dairy had organised
a sit-in protest out-
side the dairy prem-
ises, demanding
higher annual
bonus. Some of the
protesters and dairy officials
entered into altercation lead-
ing to a scuffle. Some protest-
ers entered the premises and
ransacked the chairman's
office and caused
damage to the prop-
erty.
Police was called
in to control the
crowd, as the agita-
tion turned violent.
Police used lath-
ichargetocontrol the
crowd and detained
half adozenpersons. Thecom-
motion resulted in about a
dozen sustaining minor
injuries.
Superintendent of Police,
Anand, R V Asari, said: Some
people have beendetainedand
a case has been registered
against them.
One of the protester Kirit
Patel said the dairy was being
mismanaged by the present
management, headed by
RamsinhParmar, theCongress
MLA from Thasra. He said the
management of Amul Dairy
was tryingtosuppress thevoic-
es of the milk producers.
Showdown over annual bonus at Amul Dairy
The fact that companies
like General Motors, Tata
Motors, Maruti Suzuki
and Ford has
collaborated with the
states ITIs to bridge the
skills gap has helped,
says a government
official
~49.80
Price per share of UB
Holdings Limited
on Tuesday
3.68Tuesdays volumes
growth of UBHL
2.12%Value the firm
gained over a day
~205 cr Total number of
shares released by UBHL,
comprising both United
Spirits and MCF
RETURN OF GOOD TIMES
UBHLs bid to
release some of
the pledged
shares of USL
and MCF is one
reason for the
sudden spurt in
market value
Some protesters
entered the
dairy premises
and ransacked
the chairman's
office and
caused damage
to the property
BS REPORTERS
Bangalore/Pune, 10 June
Infosys, the countrys second
biggestinformationtechnology
company, going through a
troubled leadership transition,
has sent legal notices to three
Indiannewspapers for the first
time in its history since seven
entrepreneurs, including N R
NarayanaMurthy, set it up.
Mondaysnoticesseekdam-
agesofRs2,000croreeachfrom
The Times of India and The
EconomicTimes, bothownedby
Bennett, Coleman&Co, andThe
FinancialExpress, ownedbythe
Indian Express group, alleging
some of their articles defamed
Infosys. Itaskedthenewspapers
to withdraw the articles and
offeranunconditional apology.
Legal notices to the media
arenotuncommoninIndia. But
the move by a media-friendly
company like Infosys has sur-
prised many, who believe this
could be part of a crisis man-
agement strategyover specula-
tion regarding its senior man-
agement.
I think it is an employee
communication problem they
are trying to address through
this. It is verydifferent fromth-
eir old strategy, which is the
mediaisafriend. I wasverysur-
prisedwhenIsawit,saidJessie
Paul, a marketing expert and
CEOofPaul WriterStrategicAd-
visory, a marketing advisory
firm. LuluRaghavan, managing
director, Landor Associates, a
global strategic brand co-
nsulting and design firm, says,
Infosys as a company has the
prerogative to respond to any-
thing that is negative for its
brand. We live ina very trans-
parent anddigital ageandit isa
difficult environment for cor-
poratebrandstooperatein. Mo-
re so for a firmlike Infosys that
is undergoingrestructuring.
Vaidehi Thakar, director of
The Indian Express Limited,
said, While we will send an
appropriate response to the
Infosysnotice, wedonotwishto
comment on this matter. Ravi
Dhariwal, CEO, publishing, at
Bennett Coleman&Co, didnot
replytoanemail fromBusiness
Standard. Infosys, too, did not
replytoanemailedquery.
Infosys is understood to
haveobjectedtoninearticlesin
Economic Times and six in The
Times of Indiaand has pointed
out inaccuracies. Most of the
articles dealt with a series of
exits at Infosys and its revival
strategy under Narayana
Murthy, who returned from
retirement last year. Infosys is
searching for a replacement to
CEOSDShibulal, whowantsto
stepdownbeforeJanuary2015.
Thecompanyisunderstood
to have interviewed internal as
well as external candidates and
isexpectedtoannounceaname
soon. The departure of a few
senior executives, notably B G
Srinivas, a former president in
contentionfortheCEOsjob, has
triggered speculation of more
exits at Infosys.
It is okay to speculate on a
company. But when you start
speculatingaboutanindividual
whetherhewill stayinacom-
pany or not two things hap-
pen. Even if a person has not
thought of leaving, people will
assume he is going to leave.
Second, thatpersonwill alsoget
targetedbyhead-hunters,said
Paul, who has worked as chief
marketing officer for infotech
company Wipro and global
brandmanager for Infosys.
I think, it (the notices to
media companies) is a ploy to
clamp on speculative stories,
andtotrytosendamessagethat
if you do not have the facts do
not publish, sheadded.
Media-darling Infosys
fights bad press

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