Fw: Cygnus Daily Business Update 30 Mar,10
G.V.Sandeep
Indian Economy
Urine-processing technologies yield rich cash flow potential
The stink is out of urine, literally and metaphorically, with a growing number of researchers spotting commercial and ecological value in a liquid most people consider waste. The Indian Institute of Technology (IIT) Delhi, for instance, is working to harvest this human waste and convert it into fertiliser. The Delhi government is willing to consider a revenue-share commercial venture selling the phosphates and nitrates in urine. On the outskirts of Delhi, a little-known non-government organisation, Fountain for Development Research and Action, is laying the ground for the first urine bank. It has diverted urine from two schools, where it has installed odour-free urinals, into a tank and transferred the run-off to a village nearby for use as fertiliser. Urine is collected through a tank placed underground, harvested and used as liquid fertiliser two to three metres below the ground on a five-acre field on campus. The public urinal at IIT uses a simple technology, called Zerodor, developed by Chariar, that fits into the waste coupler in the pan and diverts the urine through a drain where it is collected and harvested. The idea is not to allow it to mix with water at any stage. The Centre for Banana Research in Trichy is already using it for banana plantations and the University of agriculture Sciences, Bangalore, too is looking at its varied uses.
RBI revives FCCB buyback scheme for three months
The Reserve Bank of India (RBI) has revived the scheme for companies to buy back foreign currency convertibles bonds (FCCBs). It will keep the window open to consider applications till June 30. Indian companies were allowed to buy back FCCBs, both under automatic and approval routes, until December 31, 2009. The scheme was discontinued with effect from January 1. Both the company concerned and the economy will benefit from the buyback at a time when FCCBs are trading at a discount. The central bank had allowed the buyback and prepayment of FCCBs soon after the global financial crisis intensified in 2008.
Industry News
Banking
Banks turn net borrowers at RBI's liquidity window
Showing signs of tight liquidity at the end of the financial year, banks turned net borrowers at the Reserve Bank of India’s (RBI’s) liquidity adjustment facility (LAF). For the first time in the current financial year (2009-10), the amount borrowed from the RBI repo window exceeded the amount banks parked at the reverse repo window. While one bank borrowed Rs 900 crore for a day, four banks placed a demand for Rs 445 crore. The strain on resources was due to temporary mismatch in the system and did not reflect shortage of funds. The average amount parked with RBI on a daily basis has been declining significantly since the beginning of the month. The market expects pressure on resources in the remaining two days of the financial year. According to data released by RBI, scheduled commercial banks, including regional rural banks, recorded 16.04 per cent credit growth at the end of March 12 on a year-on-year basis. This is above RBI’s projection of 16 per cent credit growth in this financial year. Pointing to immediate concerns, a dealer with an associate banking unit of State Bank of India said some banks were keeping ready cash to manage till April 5, which would be the first full working day of the new financial year (2010-11). Banks have begun unwinding large investments in mutual fund (MF) schemes, especially liquid funds, to avoid higher capital charge at the end of the financial year. Their outstanding investment in MFs stood at Rs 108,516 crore as on February 26.
Education
IIM-B raises fee by Rs 1.5 lakh
To cope with rising expenditure on salaries and infrastructure, the premier Indian Institutes of Management (IIMs) are planning to increase fees by Rs 1-2 lakh for their two-year post graduate programmes (PGPs). IIM-Bangalore's Board of Governors, chaired by Mukesh Ambani, decided to increase the fees from Rs 11.5 lakh to Rs 13 lakh for the incoming batch of 2010. A couple of days earlier, IIM Ahmedabad (IIM-A) would hike the fees for its two-year PGP course. IIM-Kozhikode (IIM-K), too, decided to hike its PGP fee by Rs 1 lakh to Rs 10 lakh from the next academic year. The board has decided to increase the fee by Rs 1 lakh for PGP students from 2011 academic year. Currently, their fee is Rs 9 lakh for two years. Likewise, IIM Calcutta is exploring an increase in fee once again this year. IIM-Shillong, too, is expected to raise its fees to over Rs 3.5 lakh from the current Rs 1.9 lakh. However, the board will meet on April 3 to decide the exact quantum. IIM Lucknow, though, will not raise its fees immediately. IIM-A, on its part, is yet to figure out the exact amount of increase, but sources close to the development said the increase will take into account the inflationary trend, and may be around Rs 1 lakh for the two-year course. This will take IIM-A’s total fee to Rs 13.5 lakh. An IIM-A spokesperson did not wish to comment on the quantum of the fee hike. The sharpest fee increase by IIM-A was in 2008, with PGP students of its 2008-10 batch shelling out Rs 11.5 lakh for the two-year course. The institute effected another hike in 2009, taking the total fee for the course to Rs 12.5 lakh. Last year, IIM Calcutta too nearly doubled its fee for the two-year post-graduate programme (PGP) to Rs 9 lakh from Rs 5 lakh. Till 2008, the two-year PGP students at IIM-C paid Rs 5 lakh (Rs 3 lakh for first year and Rs 2 lakh for second year).
Health Care
Sanofi moves to block Wockhardt patent challenge
Sanofi-Aventis, the world’s third largest drug maker, has approached a US court against Wockhardt for challenging the patents of Allegra (fexofenadine hydrochloride), one of the largest selling anti-allergic drugs in the world. These patents are related to the 30 mg, 60 mg and 180 mg formulations of Allegra and 60 mg of Allegra D-12 hour-extended release capsules. In November 2007, Wockhardt withdrew its Paragraph IV Anda filed with the US drug regulator for the marketing rights of Allegra and converted these into Paragraph III applications. While Para III applications are to notify not-to-challenge patents and wait till the product gets off-patent for launch, Para IV specifies that the generic company is challenging the patents of the innovator to launch its product before patent expiry. Albany Molecular Research Inc (Amri) and Sanofi-Aventis had sought a preliminary injunction last week in the same court against Dr Reddy's Laboratories from distributing a generic of Allegra D-24, following Dr Reddy's getting final approval for marketing. In September 2009, Amri had filed a patent infringement lawsuit in the US District Court for New Jersey against Dr Reddy’s for infringement of one of its patents related to the manufacturing process for the active ingredient in Allegra, Allegra-D12, and Allegra-D 24. Such litigation is common in the US between innovator companies and generic players who make cheap versions of the drug through different processes. According to the US rules for selling generic drugs, an innovator has to sue a patent challenger within 45 days of receiving the notification of a patent challenge, to prevent the drug regulator from approving the drug for the next 30 months, before the patent expiry or till a court gives its judgment.
ITES
Indian domestic BPO market to grow 25% in 2010
The Indian business process outsourcing (BPO) market has rebounded faster than its global counterparts. The domestic BPO market is expected to grow at 25 per cent in 2010 to touch $1.2 billion (around Rs 5,400 crore) by 2011. The domestic India BPO services market grew by 7.3 per cent year-on-year in 2009, primarily due to the global economic uncertainty, which led to some price and volume pressures. According to research and advisory firm Gartner, the BPO market in India is estimated to grow 19 per cent through 2013 and grow to $1.8 billion (around Rs 8,100 crore) by 2013.
Life insurance
LIC plans Rs 75,000-cr market booster for next year
Life Insurance Corporation of India (LIC), the country’s largest institutional investor, is planning to pump in at least Rs 75,000 crore in equities during the next financial year. This will be 25 per cent higher than the Rs 60,000 crore it invested in the stock markets this year. During the current financial year, LIC had originally targeted to invest around Rs 50,000 crore in equities but with the markets recovering and investors returning to buy unit-linked insurance plans (Ulips), the target was breached. As a result, the public sector player ended up investing a higher than budgeted amount in equities. What also helped matters this year was LIC scaling its projections on total premium income, which includes funds generated from the sale of new policies as well as from renewals. Against a target of around Rs 1,75,000 crore, the life insurer is likely to close the year with premium income of close to Rs 2,00,000 crore. Against LIC’s investment in the equities segment, foreign institutional investors are expected to pump in around Rs 90,000 crore ($20 billion) during 2010-11. So far in the current financial year, against LIC’s Rs 60,000 crore, FIIs have invested Rs 1,09,000 crore. This year, apart from allocating Rs 60,000 crore to equity papers, around Rs 35,000 crore is in corporate debt instruments, while another Rs 65,000-Rs 70,000 crore has been invested in government securities. The remaining 35,000 crore have been invested in other instruments and in infrastructure sector. While the details of investment the infrastructure sector were unavailable, the company is expected to fall short of the 15 per cent exposure norm for want of quality papers.
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