Archive for September 11th, 2009
Reserve Bank of India: Economy not reverting to trend yet
The Indian economy is unlikely to revert to its trend growth rate soon as recession in advanced economies would eat into global growth and world trade, Reserve Bank of India (RBI) deputy governor Usha Thorat said on Friday, September 11, 2009. Thorat, speaking in Hyderabad, said draft guidelines for repurchase agreements (repos) in corporate bonds would be posted shortly on the central bank’s website. As well, the central bank was looking at allowing banks to issue long-term bonds with incentives for investors so banks could better manage their asset and liabilities, she said. The RBI expects the economy to grow about 6 per cent in the financial year ending March 2010.
Oil India IPO subscribed 31 times; QIBs bid the most
Oil India’s initial share sale to raise Rs. 2,782 crore (Rs. 27.82 billion) received demand for as much as Rs. 86,000 crore (Rs.860 billion), as its shares are seen offering profits since its valuation is lower than rivals ONGC and Cairn India. The 2.65-crore share sale that ended on Thursday (September 10) was subscribed 31 times, with institutional investors making maximum bids, while retail investors, who were burnt in the past IPOs, such as NHPC and Adani Power, were less enthusiastic.
Analysts say Oil India’s strong fundamentals, bright long-term growth prospects and better record for discoveries over larger state-run rival Oil and Natural Gas Corp will draw investors to the company. “The valuations for Oil India are much cheaper than peers, and its exploration pipeline also looks better than ONGC,” Sonam Udasi, vice president at BRICS Securities, said. “Even if the overall market is weak, we could see a strong listing. We think the shares could see a premium of 20 to 25 per cent on the listing day.”
Abolition of entry load hits mutual fund sales
Abolition of entry loads on equity mutual fund schemes has sharply hit sales of equity schemes in the very first month of the new rule coming into effect. Industry sources admit this is the fallout of the recent SEBI regulations scrapping entry loads completely and introducing a variable load structure for all mutual fund investments with effect from August 1, 2009.
Equity assets have recorded a net outflow to the tune of Rs. 142 crore (Rs. 1.42 billion) in August, despite a 5% increase in the overall industry’s assets under management (AUM) to Rs. 7,56,638 crore (Rs. 7566.38 billion). “Around 80-90% drop in the equity assets can be attributed to the scrapping of entry loads as independent financial advisors (IFAs) did not sell equity products in August, 2009,” said a senior official at a fund house. “Even banks have slowed down the sale of equity mutual products drastically, as their sales persons have also seen a sharp decline in their commission structure,” he added.
Thus, the share of equity assets in the total industry AUM has slipped further to just about 24%, including ELSS, from over 25% of assets until last month. ULIPs, on the other hand, are now expected to see aggressive push, both by distributors and producers of these products.
Oil India $570 million IPO oversubscribed 31 times
State-owned explorer Oil India’s $570 million IPO was subscribed nearly 31 times on Thursday (September 10), quelling fears investor appetite for new offerings had waned in the wake of a tepid market debut for two recent big listings. Robust demand for Oil India’s IPO also boosted hopes the government will look to sell more stakes in state firms as it looks to raise funds and cut a widening budget deficit. The 26.4 million share offering, priced at a discount to peers, was subscribed 30.81 times by 6:00 p.m. (1230 GMT) on the final day, according to the National Stock Exchange’s website.
Review of “deemed” varsities deemed to be a failure
Indian HRD minister Kapil Sibal may be happy with his achievements in the first 100 days of the government but the review of deemed universities by two separate committees of MHRD and UGC is turning out to be a whitewash, reports The Times of India.
While the MHRD’s review committee is still on the job, the UGC review panel has already given satisfactory reports to more than 30 deemed universities. If this is not enough, UGC has even been holding its full commission meeting to approve the review committee’s reports. On Thursday (September 10) too, UGC met where satisfactory reports to 30 deemed universities came up for approval. Ironically, MHRD’s representative who sat in the UGC meeting on Thursday is the convenor of the MHRD’s review committee. Barring one case, the commission accepted all reports of review committee on deemed universities. Names of more and more deemed universities that have been given clean chit were added even after agenda of the meeting was circulated. After the commission accepts the review committee report, it is sent to the Ministry.
The Times of India has accessed documents that show satisfactory report to 13 deemed universities by UGC’s review committee. This includes Shanmugha Arts, Science, Technology and Research Academy (SASTRA) deemed to be university, Tamil Nadu; Atal Bihari Vajpayee Indian Institute of Information Technology and Management, Gwalior, Madhya Pradesh; Dr D Y Patil Vidyapeeth, Pimpri, Pune, Maharashtra; Graphics Era University, Dehradun, Uttarakhand; Vellore Institute of Technology, Vellore, TN; Karunya Institute of Technology and Sciences, Coimbatore; Jagadguru Sri Shivarathreeswar University, Mysore; and Periyar Maniammai Institute of Science and Technology, Vallam, Thanjavur, Tamil Nadu.
This has created a piquant situation that might put MHRD’s review committee in a bind. What if a deemed university not found worth ‘deemed’ status by the MHRD review committee has already been found satisfactory by the UGC committee? How will this contradiction be resolved? After all, deemed status is given by the MHRD only on the advice of UGC. Will the MHRD review committee disregard clean-chit given to deemed universities by the UGC?
MHRD’s review committee did not make visits to deemed universities. Instead, a detailed questionnaire was sent to them after which 81 deemed universities gave detailed presentation to the committee. The panel consists of P N Tandon, formerly of AIIMS; Goverdhan Mehta of Indian Institute of Science; M Anandakrishnan of IIT Madras and Mrinal Miri, eminent social scientist. Joint Secretary, Higher Education, MHRD, is the convenor of the committee.
Review of "deemed" varsities deemed to be a failure
Indian HRD minister Kapil Sibal may be happy with his achievements in the first 100 days of the government but the review of deemed universities by two separate committees of MHRD and UGC is turning out to be a whitewash, reports The Times of India.
Review of "deemed" varsities deemed to be a failure
Indian HRD minister Kapil Sibal may be happy with his achievements in the first 100 days of the government but the review of deemed universities by two separate committees of MHRD and UGC is turning out to be a whitewash, reports The Times of India.
Task Force on proposed higher education regulator
The process of replacing the University Grants Commission (UGC), All India Council for Technical Education (AICTE) and National Council for Teacher Education (NCTE) by the proposed National Commission for Higher Education and Research (NCHER) has commenced. The task of establishing a national testing scheme on the lines of GRE for university admission has also been initiated by the Government of India.
A task force, set up by the Ministry of Human Resource Development (MHRD) for the purpose, will also advise the government on the creation of 14 world class innovation universities. MHRD has already moved a concept note on the innovation universities and is seeking the views of stakeholders.
Parallel to the Bill being framed for the NCHER, the task force will oversee how the transition to the new regulatory body will take place. The task force consists of IIT-Madras Director M. Anandkrishnan, social scientist Mrinal Miri, Planning Commission member Sayeda Hamid, scientist Govardhan Mehta and a member of the Planning Commission to be inducted later. Hamid was named as a member of the task force in her individual capacity and not as member of Planning Commission.
The task force will advise the MHRD on how the interest of employees of the existing regulatory bodies can be protected and what the proposed NCHER should be like. The task force will also advise the government on the NCHER Bill. UGC employees have already begun protesting against the move to set up NCHER on the ground that they were not consulted by the Yashpal Committee that recommended winding up of UGC.
Another major issue before the task force will be to evolve the national testing scheme for college admission. To be based on the pattern of GRE, the test will be open to all the aspirants of university education. The test will be held more than once a year. Students would be permitted to send their best test score to the university of their choice. The national testing scheme was proposed by the Yashpal Committee on Renovation and Rejuvenation of Higher Education.
Task Force on proposed higher education regulator
The process of replacing the University Grants Commission (UGC), All India Council for Technical Education (AICTE) and National Council for Teacher Education (NCTE) by the proposed National Commission for Higher Education and Research (NCHER) has commenced. The task of establishing a national testing scheme on the lines of GRE for university admission has also been initiated by the Government of India.
Task Force on proposed higher education regulator
The process of replacing the University Grants Commission (UGC), All India Council for Technical Education (AICTE) and National Council for Teacher Education (NCTE) by the proposed National Commission for Higher Education and Research (NCHER) has commenced. The task of establishing a national testing scheme on the lines of GRE for university admission has also been initiated by the Government of India.
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