Posts Tagged ‘private sector’

Centre To Go Ahead With PSUs Disinvestment :)

Prime Minister Manmohan Singh reiterated that Centre will go ahead with the disinvestment in public sector undertakings (PSUs).

Prime Minister Manmohan Singh reiterated that Centre will go ahead with the disinvestment in public sector undertakings (PSUs).

While efforts will be made to recover loss-making units, the Centre will go ahead with the disinvestment in public sector undertakings (PSUs) stated Prime Minister Manmohan Singh.

However, this is said :

–Β  to unlock the true value of a company,

– improves its corporate governance standards and

– also help it in raising resources for funding future expansion plans.

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Additionally, several PSEs are entering the capital markets striving to become active global players.

At the same time several PSEs got their shares listed on the markets in the last 2 years and many more want to do so, showing they are not shying away from market scrutiny and are ready to face new challenges.

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Further, stressing the need for strengthening the public sector, MMS said that the government was committed to restructure and recover sick and loss-making PSUs.

Moreover, amount of Rs. 15,250 crore is provided by the government in the last 5 years as cash and non-cash support to 36 such enterprises.

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On the other hand, stating that the Centre was committed to giving PSUs flexibility and autonomy to operate effectively in a competitive environment, MMS stated that they have delegated more powers to the boards of Navratna and Miniratna companies.

This was done in order to facilitate improvement in their performance, implemented revised salaries for executives of public sector enterprises and introduced innovative measures like performance related pay.

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India’s FDI Inflows Surge in July :)

FDI-Inflow-India-july

The government has revealed that despite a global financial crisis, the flow of foreign direct investment (FDI) to India during the month of July 2009 has been registered at $3.52 billion, impressive 56.5% higher than the $2.25 billion registered last year.

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However, the inflows in July have been against $2.58 billion during the month of June 2009 and $2.10 billion received during the month of May 2009.

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Moreover, it is said that this raise is an optimistic one if the present fiscal situation of India and world is taken into consideration.

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In addition, it is said that a non-profit company will be encouraging FDI into India and this will act in association with the central and state governments as well as the Federation of Indian Chambers of Commerce and Industry.

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On the other hand, the distinctive feature is the partnership between a private sector organization, the Government of India and state governments is unlike anywhere else in the world.

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However, in order to attract more foreign investments, Indian government on Thursday announced formation of a not-for-profit company β€˜Invest India’.

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Private Sector Life Insurers Sailing in Choppy Waters :(

Private insurers sailing in choppy waters

Even after 8 years in operations, most of the companies seem to be sailing in choppy waters while the latest profit/loss numbers reveals that almost all of the 22 companies are still making losses.

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Net losses of the private sector life insurers have risen to a whopping Rs 4850 crore during the last fiscal from 2001-2002, showing a uncanny rise of over 2000%.

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However, Reliance Life has suffered the highest loss of Rs 1085 crore and its pool of the policy holders fund is a meager Rs 50 crore.

Moreover, ICICI Prudential Life is sitting on a net loss of Rs 780 crore while the cushion for policy holders is Rs 200 crore.

As for Birla Sunlife, the loss amounts to Rs 700 crore with a 130 crore surplus for the policy holders fund while HDFC Standard Life has netted losses of Rs 500 crore with a policy holders fund of 160 crore.

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Additionally, IRDA is looking at the numbers very closely now and is also doing a check on the risk profile of individual companies and trying to build in a system of early warning given the fact that life insurance is a long gestation business.

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Meanwhile, it is the speedy expansion in business that has cost the companies dear and the coming days will see a change in strategy.

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At the same it is said that such multi million losses may hit valuations of private life insurers especially if the companies are keen to list on the stock exchanges.

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Indian Govt. disinvestment plans to kick off soon !

Indian Govt. disinvestment plans to kick off soon !

Indian Power Firm NHPC Ltd will kick off a $1.25 billion IPO next week in the first share sale by a state company.

Since the congress party’s unexpectedly strong re-election in May spurred investors hopes for pro market reforms. πŸ™‚

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Despite opposition from labour groups and leftist parties, the government is forecast by some watchers to offload roughly $5 billion a year in state shares.


This could hearten a bond market worried about fiscal responsibility, but do little to address a yawning deficit and $90 billion borrowing plan.

Investors are expected to lap up shares in government firms, given :

a) attractive pricing,

b) a record of outperformance relative to IPOs by private firms,

c) and a roaring stock market run since March. πŸ™‚

NHPC opens its IPO on August 7 in what would be the first for a state firm in India since Feb. 2008.

Oil India is expected to follow with a $500 to $600 million issue in September.

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Also in the works could be a multi-billion-dollar IPO by telecoms firm Bharat Sanchar Nigam Ltd.

Secondary offerings by power equipment maker Bharat Heavy Electricals, Rural Electrification Corp, trading firm MMTC Ltd and mining firm NMDC Ltd. are also in queue.


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The pipeline of equity from state firms promises to top the record $6 billion raised from government asset sales between 1999 and 2004 when the pro-business Bharatya Janata Party (BJP) was in power.

During that period, shares were sold in firms such as Oil and Natural Gas Corp and Maruti Suzuki.

Since then, the government raised just $1.4 billion as allies of the ruling coalition and labour unions thwarted plans for stake sales.

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Indian state companies that listed between 2004 and 2009 have shown share price gains on average of 140 percent compared with just 3.5 percent for their private sector peers, according to a study by SMC Capitals, a deal tracking firm.