India’s largest private sector steel maker Tata Steel is forming a special purpose vehicle (SPV) with state-owned MMTC for acquiring gold and diamond mining businesses abroad. MMTC would hold 26% stake in the proposed venture, leaving 76% to the Tata Steel.
The venture is likely to start operations by acquiring mining rights for diamond in Angola and Namibia before venturing in other African markets. The SPV would also explore business opportunities in iron ore and coal mining abroad through acquisitions or fresh mining rights. India is the world’s largest importer of diamond and gold with imports to the tune of $10 billion in each category. The joint venture between Tata Steel and MMTC would aim at acquiring mining rights for these minerals mainly in African markets with the aim of reducing country’s import dependence. While African markets would be the prime focus of the venture, it would also explore mineral rights in Australia, Brazil, Russia and Indonesia.
While MMTC is likely to bring its expertise in mineral trading and mining into the venture, Tatas would infuse cash to help the SPV to place aggressive bids for mining rights. The joint sector SPV is being conceived on the lines of a coal SPV formed in collaboration with five PSUs including SAIL and NTPC.
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Power equipment maker Areva T&D (India), which is investing Rs 700 crore to put up three greenfield manufacturing plants, is eyeing to double its sales turnover in the next two to three years. Indian subsidiary of the French major, had recorded a sales turnover of Rs 2,000 crore in the last year, up by 24.9 per cent over 2006. It has eight existing manufacturing facilities in India. Its greenfield projects are coming up at Hosur, Baroda and Padappai. The company has upwardly revised its investment plans in these plants to Rs 700 crore from Rs 500 crore earlier.
The transmission and distribution business in India will continue to grow since modernisation of grids & interconnections and new generation capacity are taking place in the country. Transmission contributes 60 per cent of Areva T&D’s total business.
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Yes Bank, one of the new-generation private banks, net profit increased by 109% in the fourth quarter ended March 2008. The bank has so far not faced any delinquency on its derivatives exposure and has therefore made no provisions for such transactions.
The bank’s advances grew 50 per cent to Rs 9,430 crore as on March 31, 2008, from Rs. 6,290 crore in the corresponding period last year. The deposit base rose 61.5 per cent to Rs.13,273 crore, from Rs. 8,220 crore earlier. Its Net interest income went up at Rs 389 crore versus Rs 202 crore. Its total income was up 75.9 per cent to Rs 494.3 crore, compared to Rs 281.09 crore. Its provisions and contingencies rose 80.1 per cent to Rs 22.8 crore, compared to Rs 12.7 crore during January-March 2007. Consequently its net profit went up 108.7 per cent to Rs 64.5 crore. Its Net interest margin is at 3.06 per cent, as against to 2.6 per cent in the fourth quarter of 2006-07. Its cost of funds stood at 8.4 per cent, while capital adequacy ratio was 13.64 per cent. Of the total advances, retail constitutes one per cent, while corporate lending was the major chunk of the loan book.
Of the total deposits current and saving account base, the low-cost source of funds, is about 8.5 per cent. The bank has invested in building the infrastructure to build the retail business and now will focus on growing its retail book. The bank has a target to have 117 branches by end FY09 and 150 by 2010.
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