Power Grid FPO price fixed at Rs 90 per share, govt to get Rs 1,600 cr

 
The government on Tuesday fixed the issue price for the sale of Power Grid Corporation shares at Rs 90 apiece, the upper end of the band, which would fetch about Rs 7,000 crore.

The follow-on public offer (FPO) of the state-run transmission utility last week saw bids for 530 crore shares, or 6.74 times the 78.7 crore shares on offer.

Retail investors and eligible employees will get a discount of Rs 4.50 a share on the issue price, Power Grid said in a filing to the BSE. The price band for the FPO was Rs 85-90 apiece.

The Cabinet approved the FPO last month. The offer comprised 13 per cent fresh equity by the company and 4 per cent stake sale by the central government.

The government will get about Rs 1,600 crore from selling 18.51 crore shares, while Power Grid will raise close to Rs 5,400 crore from its offer of 60.18 crore new shares.

After the issue, the government's holding in the company will come down to 57.89 per cent from the present level of 69.42 per cent.

The retail portion of the FPO, which closed on December 6, was subscribed 2.17 times. Qualified institutional buyers bid for 9.09 times the shares reserved for them and non-institutional buyers bid for 9.7 times the shares they were offered.

Power Grid shares closed at Rs 98.90 on the BSE, up 2.86 per cent.

This was Power Grid's second FPO. The company and the government each sold a 10 per cent stake in November 2010 at Rs 90 a share.

The company hit the capital market with an initial public offering in October 2007.

So far in the current financial year, the government has raised over Rs 1,300 crore through the sale of minority stakes in PSUs. It has set a target of Rs 40,000 crore from disinvestment this financial year.

Heineken buys United Breweries shares for Rs 275 crore

 
Dutch beer maker Heineken International BV, on Tuesday picked up more than 35 lakh shares of Vijay Mallya-led United Breweries for an estimated Rs 275 crore.

According to the information available with the bourses, Heineken International acquired a total of 35,58,030 shares, amounting to 1.35 per cent stake, of United Breweries through open market route.

The shares were purchased, from Citicorp Finance (India) Ltd on an average price of Rs 772.9, valuing the transaction at Rs 275 crore.

As of September quarter, Heineken International held 4.27 lakh shares, equivalent to 0.16 per cent holding, in United Breweries, while Heineken UK Ltd, held 84.89 lakh scrips, amounting to 3.21 per cent stake, in the Vijay Mallya-led company.

Heineken and UB Group inked an agreement in 2008 and started selling the imported beer in India a year ago.

Earlier in May, United Breweries had allotted over 84.89 lakh shares, representing 3.21 per cent, to Heineken UK Ltd, a shareholder of Scottish and Newcastle India Pvt Ltd (SNIPL).

The acquisition was pursuant to amalgamation of Scottish & Newcastle India with United Breweries, whereby SNIPL would cease to exist.

United Breweries shares settled at Rs 776.25 apiece on the BSE, up 0.67 per cent from the previous close.

CCI imposes Rs 1,773 crore fine on Coal India

 
The Competition Commission of India (CCI) has imposed a fine of  Rs 1,773 crore ($290 million) on state-run miner Coal India for abusing its dominant position and imposing unfair conditions in fuel supply agreements with customers.

CCI on Tuesday issued a "cease and desist order" to the state miner and directed it to modify clauses in its fuel supply contracts related to sampling and testing transportation charges and compensation on supply of stones.

Officials at Coal India-the world's largest coal miner by output-were not immediately available for comment.

The company, which accounts for 80 per cent of the country's coal output changed its pricing system last year allowing it to charge higher prices from some customers.

However, it still sells domestic coal at discounts of between 45 and 70 per cent to international prices.

The CCI had launched a probe earlier this year after complaints from state utilities Maharashtra State Power Generation Co. and Gujarat State Electricity Corp against the miner and its units.

Chidambaram seeks Vodafone's views on tax issue in writing: Official

 
Finance Minister P Chidambaram has asked UK-based Vodafone Group, which is facing a tax liability of over Rs 11,200 crore in India, to give its view on the long-pending matter in writing, a senior official said on Tuesday.

"Finance Minister P Chidambaram has asked Vodafone to give its view on the tax matter in writing," said the Finance Ministry official.

Vodafone Group Plc's Chief Executive Vittorio Colao had met Chidambaram last week.

The British telecom major is facing a tax liability of over Rs 11,200 crore, along with interest, on its 2007 acquisition of Honk Kong-based Hutchison Whampoa's stake in Indian telecom major Hutchison Essar.

The government had proposed a non-binding conciliation to the telecom major to sort out the tax dispute.

Although the company had been expressing its keenness to reach an amicable settlement with regard to the tax issue, there were differences over the rules under which the dispute should be taken up.

While the British telecom major has indicated its preference to conciliation under the United Nations Commission on International Trade Law, India has proposed settlement under the Indian Arbitration and Conciliation Act.

The Supreme Court last year had ruled in Vodafone's favour, saying the British company was not liable to pay any tax over its 2007 acquisition of mobile phone assets in India.

The government, however, changed the rules to enable it to make retroactive tax claims on already-concluded deals, drawing criticism from global business groups.

Following amendment to the I-T Act of 1961 last year, the Income Tax Department had issued a letter in January to Vodafone International Holdings BV stating that the company was required to pay the tax.

Vodafone replied, saying that they DID not owe anything to the Indian Government. Vodafone earlier wanted to take India to international arbitration but later offered conciliation on the issue.

Indian rupee rises 28 paise to 2-month high at 61.13 against US dollar

 
The Indian rupee surged to its highest level in nearly four months in intra-day trade and fell back to close with a 28 paise gain at 61.13 against the dollar today, boosted by stocks that climbed to a record after BJP won three out of four state assembly elections.
Support for the Indian rupee also came as foreign investors continued to buy local stocks and exporters sold dollars.
At the interbank foreign exchange market, the rupee commenced sharply higher at 60.90 a dollar from the previous close of 61.41 and immediately touched 60.84, a four-month high, on the back of a strong rally in local stocks.
The gains were trimmed and the local currency dropped to the day's low of 61.21 on dollar demand from importers before closing at 61.13, a two-month high. Previously, the rupee had touched an intra-day high of 60.45 on August 12, and it had closed at 61.07 on October 11.
"The recent gains in the currency are mainly attributed to the assembly elections. BJP, which is widely seen by investors as being more business friendly, swept recent state elections. Dollar weakness also continued to contribute to the gains in the rupee," said Abhishek Goenka, CEO of India Forex Advisors.
The benchmark 30-share S&P BSE Sensex rose for the third straight session, adding 329.89 points, or 1.57 per cent, to a record closing of 21,326.42. Overseas investors bought shares worth Rs 863.77 crore on Friday, according to provisional data with the stock exchanges.
The dollar index, consisting of six major global rivals, was down by 0.03 per cent.
"The Sensex and the Nifty rose to a record high today as main opposition party BJP won in three out of four key state elections," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India). "Investors welcomed the party open heartedly as it is widely seen as more stable and business friendly under the leadership of Narendra Modi."
Forward dollar premiums improved further on sustained payments from banks and corporates.
The benchmark six-month forward dollar premium payable in May edged up to 249-251 paise from 248-250 paise previously and far-forward contracts maturing in November inched up to 486-488