pse insights: manufacturing

PSEVol 1 • No 4 • July 2015

insights

CEO SPEAKCmde K Subramaniam Chairman & Managing Director Cochin Shipyard Ltd

SECTOR IN FOCUS Mr. T. Suvarna RajuChairman and Managing DirectorHindustan Aeronautics Ltd (HAL)

COVER STORYManufacturing –The Growth Engine For Future

MANUFACTURING

Contents

3 Message from the CII Director General

5 Chairman’s Message

6 CEO Speak – Cochin Shipyard to Become a Major Builder of Aircraft Carriers

Cmde K Subramaniam Chairman & Managing Director Cochin Shipyard Ltd

8 Sector in Focus: Manufacturing HAL on Massive Expansion Mode,

Aims at Significant Global Presence

10 Manufacturing – The growth engine for future

38 Investments

40 Results

41 CSR Initiatives

42 Overseas Operations

48 Appointments

13 Events

14 Policy & Impact

21 Tie-Ups, Procurement & Contracts

25 Project Updates

28 Operation Highlights

31 Export & Import

32 M&A

33 Marketing & Trade

35 Bottom Line Strategy

50 Stock-Talk

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2 | PSE insights | JULY 2015

Heralding a new era of Indo – Belarus friendship, H.E. Mr.

Pranab Mukherjee, Hon’ble President of India and H.E. Mr. Alexander Lukashenko, Hon’ble President of Belarus, jointly dedicated the Bharat Heavy Electricals Limited (BHEL) supplied 126 MW Grodno-II Combined Heat and Power (CHP) Plant to the Republic of Belarus and its citizens, on 4th of June 2015 at a grand ceremony in Minsk, Belarus. The programme was attended by H.E. Mr Andrei Kobyakov, Hon’ble Prime Minister of Belarus, Ministers and H.E. Mr. Manoj Bharti, India’s Ambassador to the Republic of Belarus, besides various other dignitaries and senior officials of Government of Republic of Belarus and key media persons from both countries.

A dedication stone, with the details of the plant and manufacturer inscribed in golden letters, was unveiled at the Grodno CHP-2 during the ceremony to commemorate the dedication of the Grodno CHP-2 to the Republic of Belarus and its citizens.

The Grodno-II Combined Heat and Power Plant is the largest power plant set up by BHEL in the CIS region and has emerged to be a testimony of Indo-Belarus collaboration. This plant has achieved better performance in all aspects – whether it be output, fuel consumption, emissions, etc. BHEL has supplied the state-of-the art Frame 9E design gas turbine along with matching generator, heat recovery steam generator and control systems for this plant.

BHEL’s performance in the Grodno CHP-2 has been appreciated by the customer RUE “Belenergo”, which consequently placed the largest order for capital spares (in CIS region) worth Rs. 22 crore on BHEL.

Hon’ble President of Belarus appreciated BHEL services during the project and welcomed the company’s efforts for future projects in his kind words, “... Indian and Belarusian specialists maintain productive cooperation in the renovation of Grodno CHP plant No. 2. If they work as productively in the future as they do now, you will have no concerns about the projects in Belarus, we will always support such projects. They mean high quality, reliability and excellent results. We welcome such projects in the center of Europe. We will always support them...”

Mr B.P.Rao, CMD, BHEL signed a Memorandum of Understanding (MoU) with RUE “Belenergo”, the central state owned public utility of Belarus, for setting up Combined Heat and Power plants in Belarus.

A Testimony to Indo-Belarus Friendship – BHEL Supplied Co-Gen Power Plant in Belarus

JULY 2015 | PSE insights | 3

Public Sector Enterprises (PSEs) are emerging as lead players in the seminal ‘Make in India’ initiative that is targeted at transforming the manufacturing sector of the country. Having contributed to building the base of the Indian

manufacturing sector in the past, the long experience and capabilities accumulated by PSEs will be greatly relevant to success of the initiative. This edition of PSE Insights elaborates on the role of PSEs in manufacturing, their potential and the opportunities for partnerships arising under Make in India.

The Make in India mission has emphasized a multi-pronged strategy to harness manufacturing capabilities, leveraging ease of doing business, industrial corridors and infrastructure, intellectual property and R&D, skill development and FDI. 25 sectors have been identified as growth engines, including manufacturing, services, and infrastructure to be converged for industrial development. In many of these sectors, PSEs enjoy a strong presence and can emerge as the core of a new growth trajectory.

Additionally, many companies from both the private and public sectors are now operating as global players. The ‘Make-in-India’ campaign has boosted the spirit of these enterprises to excel in their respective areas of operation and sharpen their competitive edge. With new avenues of opportunity opening up and global aspirations gaining pace, PSEs are moving in new directions.

India’s leading PSEs such as Hindustan Aeronautics Limited (HAL) and Cochin Shipyard Limited (CSL) are fast emerging as enterprises of global standard. HAL has already emerged into the high-profile top ‘Global 100’ defence manufacturers’ list, occupying 34th rank in annual sales. The company is contributing substantially to the ‘Make-in-India’ programme and leading the country’s defence exports. HAL aims to become a significant global player in the aerospace industry. CSL, the country’s first aircraft-carrier builder, now plans to construct more such vessels for the Indian Navy as well as overseas naval establishments. CSL is also undertaking dry docking and ship repair works and has ambitious plans to expand as a world class shipyard. PSEs like HAL and CSL make India proud.

In fact, a good number of India’s PSEs are performing at their peak levels and expanding to meet future business needs and challenges. A number of them bring out internationally competitive products and services. Companies such as BHEL, SAIL, HAL and CSL have set new benchmarks in production practices, manufacturing excellence and R&D spheres. For example, BHEL’s scale of operation is emerging as a key competitive advantage, with power plant equipment capacity of 20,000 MW per annum and capacity to manufacture 75 locomotive units among others. The engineering and technology company is spending around 2.5 per cent of its turnover on research and development.

CII is working closely with PSEs in a number of areas to expand and strengthen the partnership of public and private sectors. We are excited about the possibilities for enhanced synergies under Make in India, and look forward to a strong, competitive and global manufacturing sector taking shape in the country.

Chandrajit Banerjee

Director General

Confederation of Indian Industry

Message from CII Director General

On the occasion of International Yoga Day on June 21, 2015, special Yoga sessions & discourses were organized by CII offices across India.

The photograph below is of a special yoga session organized by CII Eastern Region at the Suresh Neotia Centre of Excellence for Leadership at Salt Lake in Kolkata. Trainers from ISHA Foundation explained through both live demonstrations and video clippings how a few minutes of yoga exercises a day can make a world of difference in the way people feel, work, and achieve. About 130 participants showed up and joined the yoga session.

The aim of the programme was to help people integrate body and mind, reduce stress, experience happiness and enhance productivity in all spheres of life, said Rear Admiral (Retired) A K Verma, Chairman, CII Eastern Region and Chairman & Managing Director, GRSE, in his introductory speech.

“Yoga embodies unity of mind and body; thought and action; restraint and fulfillment; harmony between man and nature; a holistic approach to health and well-being. It is not about mere exercise of body and muscles but to discover the sense of oneness with yourself, the world and nature,” he said.

CII joins the first International Yoga Day celebration

Dear Colleagues,

Indian economy’s return to higher growth path in 2014-15 is encouraging news for all and will further provide the much needed boost for revival of investment cycle. The contributions of the manufacturing, agriculture and core sectors will hold the key to higher GDP growth in the coming years. IIP data in the recent months suggest an improvement in industrial activity this year in comparison to 2014.

PSEs are ready to play their roles to expand the economy that will espouse the cause of inclusive growth. From energy, power equipment, steel and non-ferrous metals, engineering, heavy equipment, electronic products to defence, aircraft and shipbuilding, PSEs are at the helm of almost the entire gamut of manufacturing. In the last five years, large CPSEs performed extremely well in the face of protracted constraints, internal and external. Around two-third of the CPSEs signing MoUs with the government had secured ‘excellent’ to ‘very good’ ratings indicating their healthy performance. CPSEs continued to be a major source of revenue by way of payment of direct and indirect taxes to the government, apart from sharing nearly 10 per cent of the country’s export income. Thus, they play an integral role in the country’s economic development and enhance self-reliance in goods and services, apart from contributing to price stability.

From the Chairman’s Desk

The turnover and net profit of CPSEs have increased at 14.2 percent and 7.2 percent CAGR respectively during 2009-10 to 2013-14. Post liberalization and with increased globalization in the recent times, PSEs are facing stiff competition. Of late, net profit to turnover ratio is witnessing a declining trend indicating competition from imports and pressure on the bottom line. To enhance the scale of operations, CPSEs have been expanding in other geographies and exploring untapped areas. However, a higher local demand and domestic growth rate will mean a bigger participation of PSEs in all key sectors of economy. According to projections by several global consultants, the manufacturing sector is expected to grow six-fold by 2025 to USD 1 trillion creating a large number of jobs, pushing domestic income and expenditure leading to sustained higher growth.

PSEs have to gear up to leverage on the opportunities presented by the Government’s ‘Make in India’ initiative to their full potential. PSEs have to focus on development of technology to further extend their scope of manufacturing to highly challenging areas to emerge as major exporters of goods and services. The current issue provides a flavor of how our PSEs are meeting such demands and making modern engineering craft a strong trajectory for the Indian economy.

B Prasada rao, Chairman, CII Council on Public Sector Enterprises and CMD, BHEL


Cmde K subramaniamChairman & Managing DirectorCochin Shipyard Ltd

CEO SPEAK

Cochin shipyard Limited (CsL) was originally designed to build vessels for merchant marine upto 75,000 dWT Panamax Type. However, the Company is now banking substantially on orders from defence and Coast Guard. What changed the operational strategy?

It is true that Cochin Shipyard was designed to build steel intensive ships, viz bulk carriers and tankers upto aframax size. As you would be aware the global recession of 2008 has impacted the shipping industry including shipbuilding. There has been an oversupply of vessels in the market and freight rates have moved sharply downwards. The shipyard has responded with agility to the requirements of the market place to garner remunerative orders. In the past six years, the Shipyard has built and exported 34 high quality, high end, high technology Offshore Support Vessels to international clients. The recession in the shipbuilding market has forced us to look at the defence sector also. It would not be correct to say that CSL is banking only on orders from the defence sector. The fact of the matter is that CSL has built up a repertoire of skills required to build various classes of ships, both commercial and defence. The strategy is to look at remunerative value added products and respond with agility to garner these orders.

What is the Company’s experience to design and build aircraft carrier for Indian Navy? Is the shipyard gearing itself up to become a major builder of aircraft carriers for both Indian Navy and transnational naval forces outside India in future?

CSL has been entrusted with the onerous responsibility of building the first indigenous aircraft carrier for the Indian Navy. The design of the aircraft carrier has been developed by the Indian Navy and this is a completely indigenous design. The Shipyard has worked with a lot of commitment to rise to the challenges posed in building the

first aircraft carrier. The inherent talent and strength of CSL in designing commercial vessels, the advanced processes of shipbuilding technology of an experienced shipyard and most importantly the people’s skills along with eco system for quality shipbuilding are the reasons why CSL has been able to progress the construction of the aircraft carrier. There have been a huge number of challenges in building the first aircraft carrier, but all of them have been resolved in-house by the inherent innovation, ingenuity and commitment of the designers and workers of CSL. It is quite clear that CSL is positioning itself as a major builder of aircraft carrier. The skill sets nurtured and developed in building the first aircraft carrier have given the Shipyard a huge advantage in building carriers for both Indian Navy as well as for transnational naval forces which we could meet with due approval of Govt of India.

The shipyard has also been doing well in shiprepair though its turnover from such work dropped by almost 30% in 2013-14. How was the performance last year?

The Shipyard has assiduously nurtured the ship repair business for the last 40 years and has emerged as a reputed ship repair yard in the country. In my view, the success of CSL is due to the fact that it is an integrated yard for both shipbuilding and ship repair. The cyclicity of shipbuilding could be offset to an extent by the steady and regular ship repair business. The drop in ship repair turnover in 2013-14 was due to occupancy of the repair dock by the aircraft carrier which has now been undocked. We are confident of improving the ship repair performance this year. In our view, there is inadequate ship repair capacity in the country. As part of its growth strategy the yard is setting up of additional ship repair facilities in the leased land in Cochin Port Trust area. It is expected that this facility will be ready in the next three years time.

Cochin Shipyard to Become a Major Builder of Aircraft Carriers


although the Company is in operation for over four decades, its growth was negligible until five years ago. What were the reasons?

The growth of the Shipyard is an interesting study in itself. Way back in the early 1980s, shipbuilding was regulated with the price of ships being arrived at based on negotiations and the Government approved a fair price. It is pertinent to mention that in the initial years, the Shipyard as a PSE was subjected to the permit raj system till 1991, by which time the Shipyard was in the red. A debt restructuring plan in 1992-94 put the shipyard back on the rails and the yard has posted profits since then. However, it was the agility and business acumen of the top management which took some extremely bold decisions in 2003-04 that led this spectacular growth of the Shipyard. While CSL retained the processes and meticulous approach of a typical PSE, we also looked at shipbuilding with a business focus. CSL is perhaps the only Shipyard in the country to have successfully tied up with a private shipyard and jointly built ships which was a win-win partnership for both. Similarly, the yard’s decision to enter offshore supply vessel market in 2006, which required a lot of re-engineering process within the Shipyard, was another major factor which has contributed towards this tremendous growth in the last five years. Further the move towards the defence shipbuilding has also contributed to this growth.

What are the company’s future plans to expand its shipbuilding and repair yard capacities and outputs?

The Company has ambitious plans for expansion and as a shipyard which has been successfully delivering very high quality commercial ships and efficiently building defence vessels, it is probably in the best position to expand its market share. Cochin Shipyard, as mentioned earlier, is

pursuing an expansion plan to increase ship repair capacity by putting up ship repair facility in Cochin Port Trust area. CSL has also plans to build a larger dry dock within the premises to cater to the large ship segment such as LNG vessels, new generation aircraft carriers, repair of jack up rigs, etc. These plans would fructify in the next three to five years and would add capacity and capability to ensure momentum of growth.

does the Company see itself as a major international player in the industry competing with global giants in future?

Yes. The company is looking at emerging as an international player in the industry and towards this end, it is evaluating a proposal to setup a green field shipyard at a new location in Gujarat. The Shipyard is looking at increasing its product mix and investing in research and development. These are the long term plans which will finally enable CSL to be an internationally competitive global player.

Cochin shipyard has been doing a good work in the Csr field. What’s the feedback from the community it serves?

CSL is proud of its commitment to serve the society by undertaking CSR projects both in the immediate neighbourhood as well as within the state of Kerala. The Shipyard has done commendable work in the education and health sectors. The Shipyard has a special focus on programmes targeting disadvantaged sections of the society as also geographically backward areas. The feed-back on CSL initiatives in the field of CSR has been extremely positive and the yard has earned a very good reputation as a peoples friendly public sector undertaking in Kerala.


SECTOR IN FOCUS – MANUFACTURING

Hindustan aeronautics Limited (HaL) has pioneered the manufacturing of military and civil aircraft in India and stands as asia’s premier aeronautical complex today. What is the way forward and what are HaL’s current programs? HAL has been the mainstay of the Indian Defence for over seven decades and its expertise today encompasses design, production, repair, overhaul and upgrade of aircraft, helicopters, aero engines, avionics, aero systems, launch vehicles, satellite structures and Unmanned Aerial Vehicles (UAV). HAL has made sterling contributions in the field of aeronautics and aerospace and its indigenization programs date back to the early fifties. Over the years, HAL has been successful in producing various types of aircraft and helicopters and has grown into a company with 20 production Divisions and 10 R&D centres. HAL’s current programs are aimed at boosting the nation’s defence requirements through indigenization efforts and widening the export base.

Responding to India’s future requirements, HAL has conceptualized the indigenous development of a Basic Turbo-prop Trainer (HTT-40) and is working on development of Light Utility Helicopter (LUH). HAL’s latest indigenous product Light Combat Helicopter (LCH) has completed rigorous hot and cold weather flight trials recently and is expected to receive Initial Operational Clearance and enter Series Production by end 2015. I am

happy to inform you that thanks to HAL, India happens to be among the six countries in the world that designed a combat helicopter.

It is important to note that HAL today provides one stop solution for all the design needs of Aircraft & Helicopters in airframes, airframe systems, avionics mission & combat systems using advanced Design tools.

Also, HAL is determined to achieve its vision of becoming a significant global player in the aerospace industry. HAL’s thrust on co-development and co-production of aircraft, engines and equipment with leading global aerospace companies will not only meet India’s defence requirements but will also increase the level of exports of aerospace products. HAL currently exports its products and services to more than 20 countries.

Regarding Research & Development strategy, HAL has set up an R&D corpus earmarking 10% of its operational profit after tax for technology development efforts. The Company continues to focus on increasing its portfolio of products including aero engines. The latest being a 25 kN turbofan engine suitable for trainer aircraft and a 1200 kW turbo shaft engine primarily for use on helicopters. As part of R&D policy, a society has also been registered for formation of Corporate Meta-university for industry focused research relating to aeronautical sector in all disciplines and inter-disciplinary areas of technologies.

HAL on Massive Expansion Mode, Aims at Significant Global Presence

Mr. T. suvarna rajuChairman & Managing DirectorHindustan Aeronautics Limited (HAL)


What are the initiatives taken by HaL to realize government’s ‘Make in India’ drive? HAL has been one of the pioneers in meeting India’s defence needs and ‘Make in India’ concept has been its strength all along. HAL is committed to becoming self-reliant in aircraft production and maintenance in the strategic interest of the nation and has taken several initiatives aligning with government’s ‘Make in India’ drive.

Indigenization is crucial to manufacturing in India and HAL has been successful in indigenizing over 2000 components. In addition, a total of 111 technology projects have been identified in the areas of design, manufacture, avionics and material to support indigenous development and initiatives are being taken to develop advanced aerospace materials in the country.

HAL has so far designed and developed 15 types of Aircraft /Helicopters and has mastered the rotary wing technology. Advanced Light Helicopter (ALH) Dhruv has already proven its worth in India and other countries.

HAL’s current indigenous development/production programs include Light Combat Aircraft (LCA), Intermediate Jet Trainer (IJT), Hindustan Turboprop Trainer (HTT)-40, Advanced Light Helicopter (ALH-Weapon System Integration), Light Combat Helicopter (LCH), Light Utility Helicopter (LUH), Fixed and Rotary Wing UAV, Advanced 25kN Aero Engine and Mission Computer (MC) etc.

To further propel indigenization efforts and boost private-public partnership, HAL is keen on developing Micro Small and Medium Enterprises (MSMEs) to sustain global competitiveness. With a vendor base of about 2500, HAL is outsourcing its manufacturing activities to the Indian private industries and 25% of the total standard man hours are outsourced.

HAL is well poised to meet the future requirements of the country and emerge as a global player with capabilities in design, development, repair and upgrade of aircraft, helicopters, aero engines and aero systems. on the Hr front, what are the initiatives taken up by HaL to become a globally competitive organisation? HAL has chalked out plans and strategies to launch itself into the distinguished league of global companies in the aerospace arena. Human Resources has been identified as one of the thrust areas. HAL’s belief is that “people are key differentiators for sustained success”. The objectives are to ensure availability of right people to meet the organizational goals; continuous improvement in knowledge, skills and competence (managerial, behavioural and technical); development of core

competence in high-tech areas; promote a culture of achievement & excellence with emphasis on integrity, credibility and quality; maintain a motivated workforce through empowerment of individuals and teams; ensure organizational learning; and play a role directly to enhance productivity, profitability and improve the quality of work life.

HAL is focused on getting the best of its workforce through various measures:

• At the entry level, HAL has put in place Induction Training for Management Trainees (MT) / Design Trainees (DT) intended to bridge the gap between the academics and Industry. The 52-week structured training consists of one semester at IITs and other reputed Institutes to strengthen the technical skills and orientation towards Aeronautics. The training also focuses on Basic Management.

• For mid-career level employees, opportunity is provided to acquire latest and advanced technology in the field of Aeronautics and to implement the same on projects. HAL has a tie-up with Cranfield University UK to sponsor Executives for acquiring M. Sc in Aero Dynamics, Aerospace Vehicle Design, Material Science, Thermal Power, Manufacturing etc. During the past five years, more than 100 executives have been sponsored for this programme.

• In addition, HAL has been sponsoring Officers to reputed Institutions in India for higher studies in the field of Technology and Management, in a structured manner. In the Technical and Design Disciplines, Officers have been sponsored to various IITs and in the field of Management to IMI - New Delhi, XIME - Bangalore, MDI – Gurgaon etc. We recently introduced a scheme for Sponsorship for MS, M Sc (Engg.) and Ph. D Programme at Indian Institute of Science, Bangalore and IIT Kharagpur, Kanpur, Madras, Delhi and Mumbai.

• Succession Planning is identified as a thrust area to ensure continuous and timely supply of high performance individuals, who will occupy leadership roles as identified by HAL. The major initiatives launched by the Company in this direction include outlining a one year comprehensive Leadership Development Programme (Sanghshaptak) in consultation with IIM-Ahmedabad and revamping of Assessment & Development Centres for the Senior Executives with KPMG Advisory Service Pvt. Ltd. Also, customized Competency Development Programmes (CDPs) have been developed in collaboration with IIM Ahmedabad for Business Excellence; IIM Bangalore for Operational Excellence and IIM Calcutta for Leadership Excellence, to bridge the competency gaps identified by way of Assessment Centres.


COVER STORY

Manufacturing –The growth engine for future


Revival of economy through investment driven growth of industry and infrastructure sectors is the top most

priority before the government. Today’s evolving world-order rests on the pillars of globalization and technological advancement, offering a huge opportunity for the growth of industry. The emerging paradigm of manufacturing is based on productivity-adjusted labour, rationalisation in consumption of natural gas and electricity, not merely on the perceptions of high-cost or low-cost economies. In this context, improvement in efficiency and technological advancement are the two most important prime-movers to achieve competitiveness in manufacturing.

Manufacturing in India today

Today, Indian manufacturing sector is at a cross road. Despite being a major growth sector for the Indian economy, the share of manufacturing is stagnating at around the 15% of GDP for almost three decades now and it is indeed low when compared to around 33 percent in China, 28 per cent in South Korea, 25 per cent in Indonesia and around 20 per cent in Japan, Malaysia and Germany. With share of non-agricultural sectors growing faster than the performance of the agricultural sector, there seems to be an aberration in India’s structural transformation as India jumped directly from an agrarian to a service driven economy leapfrogging the intermediate manufacturing stage.

Country has experienced economic boom on the back of services led growth while low agriculture growth, low quality employment, rural-urban divide, continues to plague the well-being of masses. Today, manufacturing sector employs 30% of the non-agricultural workforce with approximately 15% share in GDP while the agriculture contributes only 18% of GDP with a working population support of around 60%. This re-enforces the fact that domestic manufacturing has to play a pivotal role in achieving consistent, more inclusive, and sustainable growth.

reaping demographic advantage

India is one of the best countries in the world poised to take the manufacturing revolution to the next stage. India has a strong advantage of being a nation with the youngest population. With increasing population, the working age people over the next decade is expected to be approximately 900 million which works out to around 65% of India’s population in the age bracket of 18-59 years by 2026. It is an imperative to focus on building a strong and skilled workforce, as such an opportunity rarely comes in the life of a nation and we as a nation should reap this opportunity of “demographic dividend” in its entirety or else we will lose the advantage if the situation does not change in the next ten years.

realising ‘Make In India’

Make in India’ initiative, aims to catapult Indian Industry into a new phase of growth trajectory by providing one of the best platforms to strengthen domestic manufacturing to earn global recognition for the Indian economy and also place India on the world map as a manufacturing hub. The success of this initiative will depend on how we spur up our level of operations with additional efforts in terms of better technology and enhanced skill meeting global quality standards while indigenizing technology intensive manufacturing and not just acting as a hub for assembly of manufactured components.

The Make in India’ campaign has the capability to lead to more localisation by leveraging the incipient strength of “Reverse Engineering” enshrined in various sectors of entire domestic manufacturing value chain. This needs to be cultivated and developed by providing an ecosystem conducive to low-cost and high-quality products.

With impetus on developing industrial corridors and smart cities, the government aims to ensure holistic development of the nation. The corridors would further assist in integrating, monitoring and developing a conducive environment for the industrial development and will promote advance practices in manufacturing. In a bid to reap advantage of the initiatives taken by the Government, the manufacturing sector needs to transform itself emphasizing on maintaining superior quality while keeping price at a competitive level. Appropriate quality standards are needed if the country has to emerge as a destination for global manufacturing. Prime Minister’s call for ‘zero defect and zero effect’ manufacturing to produce quality products without any adverse impact on the environment very well recognises shape of the things to come in future. The government plans to introduce quality standards for automobile, food processing, electrical machinery, garments and textiles products among others to drive exports of quality products. A policy ecosystem is required to render necessary flexibility to PSEs to address conflicting priorities enabling collaborative working with private sector. In the context of foreign collaboration, sharing business with collaborators on mutual benefit and to the holistic benefit for the country in terms of technology acquisition, skill development should be the hallmark.

Fostering innovation for Value added manufacturing

The shifting paradigm of global manufacturing led by lower energy cost and improved technology is putting traditional low cost counties under stress as manufacturing bases are returning to US, UK, Germany and Mexico bringing supply chain closer to demand centre. An enabling innovation


ecosystem needs to be created to unlock the potential of domestic manufacturers for higher value creation. Today, Value Added by the manufacturing sector in India is less than half that of China (30-35%). Even smaller countries (in terms of GDP and population) like South Korea and Brazil have larger manufacturing imprint than India. Today, Indian manufacturers face a daunting task in terms of transforming to a competing manufacturing centre and have to realize that not spending on innovation would be akin to unilateral disarmament in wartime. In the increasingly globalized manufacturing context, customer-oriented manufacturing is one of the promising approaches to improve product and service quality with competitiveness. This is an imperative, in particular, for the small and medium-sized enterprises (SMEs).

Climate change is going to be one of the foremost factors having a huge impact in terms of technology intervention on the manufacturing industry worldwide. With the stringent emissions controls and an earnest need to develop “Green Technology”, technology ‘depth’ is required which seeks to increase value addition and enhance competitiveness. As Indian manufacturers, we need to enhance our R&D spend from a paltry 0.8% of GDP vis-à-vis 1.5% spent by Chinese and 3.5% by South Korea so that we are not left behind in developing emerging technologies necessary for adding higher value in manufacturing.

The pace of commercialization of R&D is a weakness of Indian manufacturing calling for confidence and capacity building with right policies and robust competence in place. Other emerging areas like additive manufacturing; factory of future with intelligent decision support models, enveloping ambience of intelligence with sustainable and reconfigurable systems to equip our manufacturing units to cater to emerging kind of market demand are also necessary

for enduring existence. Skill developments for adapting the best practices with improvements and modifications, Six sigma, lean engineering, reconfigurable manufacturing etc need to be emphasised to enhance capacity and competitiveness. The approaches need to be designed to reduce time to market innovative products. Towards this improving capabilities for information collection and analyzing data, knowledge and patterns with advanced computing are crucial for manufacturing growth.

The necessary focus areas for value added manufacturing consists of (a) bridging skill gap by investing in skill development not only for the new entrants but also for the existing workforce in order to enhance productivity. (b) Creating an eco-system for innovation driven research, development and deployment to match the global peers (c) Supporting the SME sector in acquiring technology and improving efficiency as the sector often acts as supply chain partner of OEMs and large industries (d) Streamlining the accessibility to abundant raw material and natural resources of the country.

Conclusion

In fine, India has to stand up to the global challenges of climate change, resource scarcity and social inequities by leveraging technology and innovation in its manufacturing capabilities for developing products and providing services in an environmentally sustainable and socially responsible manner. The necessary pieces of manufacturing jigsaw need to be put together before global supply chain gets fully re-defined to reap the benefits of “Make in India” platform and overtakes domestic industry.

The author of the article is Mr Kaushik Acharya, General Manager, BHEL


(L - R) Mr. N K Verma, MD, OVL, Mr. Vimal Wakhlu, CMD , TCIL, Ms. Nita Karmakar, Director, CII, Mr. B Prasada Rao, Chairman, CII PSE Council and CMD, BHEL and Ms. Ratika Jain, Executive Director- Manufacturing, CII.

The CII PSE Council, which is a forum of Chairmen and Managing Directors of the Public Sector Enterprises chaired by Mr. B Prasada Rao, Chairman and Managing Director, BHEL, met on 21st July in Delhi for its first meeting for the year 2014-15.

The following points were discussed:

• Need for the Public Sector Enterprises to get due recognition for their CSR oriented activities and hence CPSEs to be encouraged to apply for the CII Sustainability Award.

• Swachh Bharat initiative taken by CPSEs including building toilets across the country.

• Discussion on the Public Procurement Bill and its implication for the CPSEs.

Cii CounCil on PuBliC SeCtor enterPriSeS

EVENTS

Cii PSe SuBCoMMittee on CSr & Sd

The CII CPSE Subcommittee on CSR and SD, chaired by Mr. Vimal Wakhlu, Chairman and Managing Director, TCIL met on 21st July in Delhi to discuss upon their various that would be taken in the year 2014-2015.The members discussed on their targets of building toilets across the country. Everyone would be completing their targets except for those which are in flooded areas.

The members also deliberated on the CII CSR Summit which will focus on sharing of experiences by both Public and Private Sector being planned in the month of September 2015.

• A presentation was made by Mr. M L Shanmukh, Chairman, CII Subgroup on Director (HR) on issues of the present Pay Revision and its solution for the next Pay Revision for the CPSEs

• A Presentation on Exemptions, Modification and Adaptations to

Companies Act 2013 was made by Mr. Rudra Pandey, Partner, Shardul Amarchand Mangaldas & Co. Members were presented the issues yet to be exempted by MOCA for CPSEs and their implication.

Mr. Vimal Wakhlu , Chairman, CII Subcommittee on CSR & Sustainable Development and CMD, TCIL.

(L-R) : Mr. Rabindra Singh, Director (Personnel), NMDC, Ms. Veena Swarup, Director (HR), EIL , Mr. Rajesh Goel, CMD, Hindustan Prefab and Ms. Anita Dhar Kaul, GGM, RITES.


Policy & Impact

PSe deFenCe FirMS Get aCCountinG eXeMPtion

The government has exempted its defence companies from segment account reporting so that these entities don’t have to reveal sensitive information in their books.

Segment reporting pertains to a company’s financial information with regard to the different products and services it produces and the geographical areas it operates in.

“For government companies engaged in producing defence equipment, the provisions of section 186 (loans and investments by companies) and accounting standard 17 (segment reporting) shall not be applicable,” said a senior official.

Besides, these companies have also been exempted from complying with section 186 of the Companies Act, 2013, which prohibits a company from making investments through more than two layers of subsidiaries and requires unanimous board approval for giving any loan, guarantee or security.

Many government defence companies have more than two layers of subsidiaries.

The decisions come at a time when the government wants to increase domestic defence production by both public sector and private companies. Currently, India is the second-largest importer of defence equipment.

The government has raised the foreign direct investment (FDI) cap on defence companies from 26 per cent to 49 per cent. FDI beyond 49 per cent is also allowed in state-of-the art

defence manufacturing, albeit with riders.

“Keeping in view the nature of business and the sensitive nature of the disclosure, it is considered prudent not to disclose the information required by accounting standard 17 regarding segment reporting. Such non-disclosure does not have any financial effect on the accounts of the company,” HAL said in its annual report.

Segment account reporting is only a disclosure standard and doesn’t affect the recognition or measurement of any component in financial statements.

Though no such exemptions have been given to private companies engaged in defence equipment manufacturing, it is unlikely to disrupt the level playing field, as such exemptions do not have a bearing on the manner in which the performance of such companies are depicted.

ShiPPinG MiniStrY looKinG For alternatiVeS to Port CorPoratiSation: GadKari

Shipping Minister Nitin Gadkari on June 5 said attempts were being made to find alternatives to corporatisation, which was opposed by port employees, for upgrading infrastructure and services, as announced in Budget 2015-16.“Finance Minister Arun Jaitley had told us (in the Budget) about the Companies Act, but we are looking at other alternatives beyond the Companies Act to modernise and develop the ports,” Gadkari told reporters at a Mumbai Port

Trust event. “Finance Minister Arun Jaitley had said major ports would be encouraged to come under the Companies Act for better functioning.

Gadkari said his Ministry was discussing and seeking guidance from the Finance Ministry on the alternatives. He did not elaborate. “Basic concept for ports is development and modernisation. We don’t want to privatise ports, nor do we want to give any equity to private people. We want to modernise, protect the interest of labour, protect the interest of ports and, at the same time, improve the services of the ports to improve business and do good profits.”

Speaking to reporters after inaugurating an oil spill response facility for the Mumbai harbour, Gadkari said the 12 major ports would be investing Rs 1,000 crore to set up clean power facilities and reduce reliance on grid power. “The government has sanctioned a 150-MW plan for green power for ports,” he said, adding generating funds would not be difficult. On the occasion of the World Environment Day, Gadkari also highlighted the need to use recycled water and reiterated his plans to have green smart cities at each port, at an estimated Rs 3,000-4,000 crore a city. “Port water will be recycled. Port waste will be turned into biogas. Vehicles will run on biofuel. Solar energy and wind power will be generated at ports. These cities will be pollution-free and aim at being green smart cities,” Gadkari said.

The 12 major ports together have an estimated 264,000 acres, and these are being mapped through satellites.

Gadkari also said the government had no plans to sell land to builders and private developers. These smart cities would be built according to

PSE NEWS UPDATE


international standards and would have wide roads, green energy, advanced townships and greenery. The major ports in the country - Kandla, Mumbai, Jawaharlal Nehru Port Trust, Marmugao, New Managlore, Cochin, Chennai, V O Chidambarnar,Visakhapatnam, Paradip and Kolkata (including Haldia) - handle approximately 61 per cent of cargo traffic.

india SCraPS dutY BeneFitS For deFenCe PSes to Woo PriVate CoMPanieS

The government has withdrawn a critical preference given to state-run companies and government entities that manufacture defence goods, a measure that will help attract private capital to the sector and boost job creation by creating a level playing field.

The government has issued a notification to withdraw the excise and customs duty exemptions enjoyed by the Ordnance Factory Board and public sector units in defence sector.

“This will provide a level playing field ... by taking away the strategic advantage with PSEs for quoting lower rates in open bids,” a Commerce and Industry Ministry statement said on Monday.

The move addresses a key demand of private sector and foreign original equipment manufacturers (OEMs) such as Boeing, Airbus, Lockheed Martin and BAE Systems, which are actively exploring the scope of future investments in India, the statement said.

It will also send a definitive message to foreign OEMs that India is open to business for defence manufacturing, the notification said.

Foreign firms tying up Indian private players have long complained that

the excise and customs exemption gives an unfair cost advantage to state-run enterprises.

It is partly due to this preference that foreign firms preferred to tie up with a public sector unit for a Defence Ministry contract even when it was more feasible to involve a private partner that could deliver faster and would be more efficient.

The withdrawal of exemption will open up possibilities for smaller Indian private players who can be sub suppliers and contractors for larger military contracts.

“This is a welcome move to put the Indian private sector and PSEs at par. However, the MoD (Ministry of Defence) also needs to consider the advantage that foreign companies enjoy as it does not have to pay any import levies for equipment it brings in,” said Ankur Gupta of EY India. The Indian aerospace and defence market is among the most attractive globally as the country is the highest importer of defence items in the world, the Ministry stated.

The government has systematically opened up the sector for private investment by raising the cap on foreign direct investment to 49% and rationalising certain conditions. Almost 60 per cent items required for industrial licence have now been dereserved.

GoVernMent MullS CoMMon Coal tradinG PlatForM For Coal india and PriVate CoMPanieS

The government is working on a common coal trading platform for Coal India and private companies which are likely to be offered lucrative blocks with prior clearances for commercial mining.

The electronic platform is likely to be an extension of the spot sale practice of Coal India called ‘e-auction’ where all the coal mined in the country, excluding from captive blocks, will be traded, a senior government official told ET.

State-run Coal India sold around 11% of its output through e-auction at a market-driven price in January-March. The government has decided to auction the company’s future coal supply to unregulated sectors such as steel, cement and captive power plants.

The proposed platform could trade Coal India’s auctioned supplies, the PSE’s uncontracted output, imported coal and the output of private companies from coal mines that will be auctioned for commercial use.

“A common electronic platform will ensure transparent trading, while letting the government record and monitor every single transaction,” another Coal Ministry official said.


The NDA government is working towards auctioning coal blocks for commercial use after enactment of Coal Mines Special Provisions Act that provides for opening the sector to Indian and foreign private firms, ending Coal India’s monopoly. Prior to this, Indian companies with end-use plants were permitted to mine coal for captive purposes.

Coal MiniStrY to reSerVe Coal For auCtion to unreGulated SeCtorS

The Coal Ministry will reserve coal for auction to unregulated sectors such as steel and cement from Coal India’s additional production every year so that there isn’t any desperate bidding by private firms in the upcoming auction of coal supply contracts. As per a draft model circulated for stakeholders’ comments by the Coal Ministry, separate bidding will be held for cement, iron and steel, aluminium and fertiliser plants.

As per the proposed mechanism, Coal India will invite bids from companies for supplying a fixed quantity of coal at a floor price. Once bids are received, the state-run miner will increase the floor price till the demand and supply reach the same level.

The proposed methodology is among three options proposed by SBI Capital Markets that was appointed as the consultant for advising on

auctions of Coal India’s contracts. The methodology is being used to derive a market-driven price for the coal contracts against the current system of awarding the agreements based on decisions of an interministerial screening committee.

oil MiniStrY to readY road MaP For SeCtor’S inFraStruCture

With India’s demand for petroleum products poised to grow at more than 3% annually and the country expected to see average annual GDP growth of 8-8.5% over the next several years, the Oil Ministry has decided to roll out a road map for development of the sector’s infrastructure. This will include decadal plans to meet demand till 2050.

This would be for the first time, Petroleum Minister Dharmendra Pradhan said, that his Ministry has proposed a “long-term strategy similar to developed nations” to create infrastructure related to transportation, marketing and production of petroleum products to be able to adequately meet demand till 2050.

The ‘Vision Document 2050’, would strategise the demand for petroleum products and infrastructure in the country for the next three decades. One of the focus areas would be to cut costs.

India, the fourth-largest energy consumer in the world after the US, China and Russia and accounting for 4.4% of global energy consumption, would see highest oil demand between 2013 and 2040, said International Energy Agency’s World Energy Outlook 2014. The country is expected to see its demand for petroleum products grow at a compounded annual growth rate of 3.5%.

Moreover, with a positive outlook from the government’s end to ramp up investment in infrastructure, including roads and railways, sales of both passenger and utility vehicles are expected to grow at 6-8% in the current fiscal.

neW PoliCY liKelY to oPen Petrol PuMPS

With increased private participation in retail sector appearing imminent, the Ministry of petroleum is contemplating to offer petrol pumps on “self investment models” without any outlay assistance from oil marketing companies.

Under this new scheme, investments, maintenance and running costs will be done by dealer while the Oil marketing companies (OMCs) – IOCL, HPCL and BPCL – will mentor successful bidders on facility and equipments required, engineering and list of vendors to fetch fuel, said Ministry sources. Besides, the OMCs will decide fuel and other product prices offered at outlets to ensure that customers are not taken for a ride.

Till now OMCs are operating more than 50000 retail outlets all over the country under different categories – company-owned and company operated (COCO), company-owned and dealer operated (CODO) and dealer-owned and dealer operated (DODO).

PSE NEWS UPDATE


The Ministry is mulling to add another category in giving out retail outlets to individuals and “legal entity” by relaxing rules in the existing dealer selection policy. This scheme will have a provision for multiple dealerships – which is an indication of opening up of the retail sector for private companies.

natural GaS outPut to riSe 50% BY 2018-19

India’s natural gas output is likely to rise by 50 per cent to 146.87 Million Standard Cubic Meters per Day (mmscmd) by 2018-19 on account of higher production from ONGC fields, Oil Ministry has said.

In its annual report, the Ministry has said domestic gas production will rise from 98.15 mmscmd in 2014-15 to 99.87 mmscmd in the current fiscal.

In 2016-17, the output will climb to 112.95 mmscmd and finally to 146.87 mmscmd in 2018-19. Bulk of the incremental output will come from state-owned Oil and Natural Gas Corp (ONGC) which will see production rise to 65.75 mmsmd in 2014-15 to 96.38 mmscmd.

ONGC production will include 4.66 mmscmd from New Exploration Licensing Policy (NELP) block KG-DWN-98/2 or KG-D5 in 2017-18 and 12.05 mmsmcd in 2018-19.

State-owned Oil India Ltd will see gas production rise from 7.78 mmscmd last fiscal to 10.96 mmscmd in four years.

The Ministry said output from fields operated by private firms like Reliance Industries is projected to rise from 24.62 mmscmd in 2014-15 to 39.53 mmscmd in 2018-19.

Demand, on the other hand, is projected to increase by nearly 30 per cent to 523 mmscmd in 2018-19 from 405 mmscmd in 2014-15. Gas demand is expected to climb 10

per cent in the current fiscal to 446 mmscmd.

India is world’s fourth largest energy consumer with oil and gas constituting about 37.24 per cent of primary energy consumption. “The world average primary energy consumption growth rate (CAGR) for 2000-2013 has been 2.41 per cent, as compared to Asia Pacific’s rate of 5.39 per cent and India’s rate of 5.52 per cent,” the report said.

Green SiGnal liKelY For 42 Stalled ProjeCtS Worth rs 1.15 laKh Crore

The Narendra Modi government is gearing on the pedal to revive the investment climate, facilitating clearances for 42 stalled projects worth Rs 1.15 lakh crore since it presented the Budget for 2015-16.

In the previous nine months about 50 pending investment plans worth Rs 1.45 lakh crore were granted green signals through the Project Monitoring Group (PMG) in the cabinet secretariat. Highway projects account for half of the 42 projects whose pending clearances have been resolved by the PMG in the three months since the Budget.

Ten power generation and transmission projects with investments over Rs 72,000 crore have also got the green signal.

Three oil and gas projects have also got the nod, including Shell’s Rs 5,000 crore re-gasification plant in Kakinada. Railway projects worth Rs 5,500 crore, including the Patna Ganga Rail-Road Bridge and a new 180 km rail line to evacuate coal from Chhattisgarh’s hinterland, are also now set for implementation with all outstanding nods secured.

Aditya Birla group firm Hindalco has also secured permissions for a Rs 13,200 crore aluminium smelter plant

in Odisha’s Sambalpur district.

The PMG, set up by the UPA in January 2013 to help stuck investments, had cleared 155 projects worth Rs 5.5 lakh crore in its first 16 months. Since the NDA came to power in May last year, 91 projects worth Rs 2.6 lakh crore have been put back on track.

no Central helP to deBt-ridden State-run PoWer diSCoMS: PiYuSh GoYal

The government has ruled out the possibility of a central package for debt-ridden staterun power distribution companies, and has insisted that it’s time that they get their act together. The combined debt of all distribution companies was around Rs 2 lakh crore as on March last year, and despite most discoms raising tariff, they haven’t really managed to cut losses significantly. They are, in fact, depending on loans for even taking care of operational expenses.

In the past, the central government had introduced ‘restructuring packages’ for discoms – the most recent being 2013. What discoms need to do is, set efficiency right, eliminate corruption in the system, reduce losses, cut transmission and distribution losses. I need to handhold them and put on my investment banking hat to help them sort things out,” Minister of Power, Coal and Renewable Energy Piyush Goyal said.

The Minister added that the ‘onesize-fits-all’ principle doesn’t work here. “We have started dialogue with state governments last year. The central government, state governments and outside experts are working together for a 24x7 electricity plan by 2019 for each state,” he said.

No state had signed new power purchase agreements since 2013,


and many continue to opt for load shedding rather than buy power, forcing the industry and commercial outfits to depend on expensive power from diesel generator sets. India has a total installed capacity of 90,000 MW of diesel generator sets, providing power at upwards of Rs 20 a unit.

“We will eliminate consumption of electricity through diesel generator sets. This requires a lot of distribution capacity augmentation and improving transmission network. We are also looking at changing the existing transmission lines in parts to double capacity,” Goyal said. The Ministry plans to bid out contracts worth Rs 1 lakh crore over the next 6-8 months to scale up transmission infrastructure.

The recent coal mine auction and bids for gas have given the sector some relief and visibility to increase generation. In the year ended March, India added 22,566 MW of new generation capacity, its highest ever in a year. But these projects were those which had been stranded or stuck and thus delayed.

Centre PadS uP to raiSe rS 1-laKh Cr For PortS & inFraStruCture

Union Ministry of Shipping has chalked out a plan to raise Rs 1-lakh crore to develop ports, build ships and improve inland waterways. The amount would be raised in the dollar equivalent at an interest of three per cent.

Gadkari said his Ministry is planning to set up Ports Infrastructure Development Finance Corporation to fund ports and shipping infrastructure in dollars. Inland waterways, ports and shipping are on the top of the agenda. The Centre is keen to modernise large ports.

The Ministry has already taken decisions to develop six ports,

including Rs 12,000 crore deep-water Sagar port in West Bengal, Colachel in Tamil Nadu, Rs 6,000 crore Vadhavan port in Maharashtra, and Rs 1,200 crore Haldia dock 2. These ports would be developed with 20 meter draft. The handling capacity will be more and the ports do not have to annually spend money on dredging. A port with 20 meter draft will also help increase revenues. At present, JNPT has to spend Rs 400 crore annually on dredging.

GoVt ProPoSeS triBunal For PuBliC ContraCtS

To streamline the institutional mechanism for resolution of disputes arising from public contracts, including public-private-partnership projects, the government on June 18 released a draft Bill to set up a tribunal for public contracts.

The Bill provides for the tribunal to deal with disputes in the public contracts exceeding Rs 5 crore. It would deal with disputes relating to execution of contract, specific performance of the terms of the contract, termination, cancellation, repudiation and claims for damages for breach of contract.

The tribunal has to conduct day-to-day hearings and give final order within 180 days from the date of the application. Similarly, an arbitral tribunal would be required to announce its arbitral award within 120 days of referring the dispute to it. The tribunal’s order will be binding on all parties and can be challenged only in the Supreme Court.

The Bill is part of the government’s initiative to unclog stalled projects that were holding back investments worth several trillion rupees and discouraging investors. The government has envisaged $1 trillion investment in infrastructure in five years through FY17.

Acknowledging that disputes in public contracts are costly and takes a long process to resolve, Finance Minister Arun Jaitley had proposed the Bill in the Budget. According to the draft Bill, the government would constitute the tribunal for public contracts with principal seat in New Delhi and benches in Chennai, Kolkata and Mumbai.

PSE NEWS UPDATE


GoVernMent PlanS to raiSe nFl’S nanGal unit CaPaCitY BY 1.3 Mt

The Fertiliser Ministry plans to increase the capacity of National Fertilizer Limited’s (NFL) plant at Nangal in Punjab by 13 lakh tonnes (LT).

At present, NFL’s Nangal unit has an installed capacity of 4.785 lakh tonnes (LT)

“Government wants to produce more fertilisers in the country and reduce import dependence. The Ministry of Chemicals and Fertilisers is working on the Prime Minister’s ‘Make in India’ mantra and in this regard several old and sick units are being revived,” Minister of Chemicals and Fertilisers Ananth Kumar said.

Besides reviving old units, new units are also being set up, he added.

NFL has a total annual installed capacity of 35.68 lakh tonnes and is the second largest producer of urea in the country.

GoVernMent eaSeS dePoSit-taKinG, ManaGerial PaY norMS For FirMS

Ushering in an easier set of regulations, the government has relaxed deposit-taking norms for private companies and exempted the Public Sector entities from managerial remuneration restrictions.

The changes, which also include relaxations for related party transactions entered into by the private companies under the Companies Act, 2013, are part of the government’s efforts to further improve the ease of doing business in the country.

The Corporate Affairs Ministry said it has notified the changes that broadly include easier compliance requirements for private, government and charitable companies.

Private firms can now provide a shorter period for offering securities to existing shareholders, approve employee stock option plans through a simple majority and follow “an easier procedure” with regard to holding general meetings.

“Private companies have also been allowed to accept deposits from members without the requirement of offer circular and creation of deposit repayment reserve etc. Flexibility has also been provided in the types of share capital that can be issued by private companies,” the Ministry said in a press release.

The mandatory consent of shareholders for certain transactions relating to sale of undertaking, investments and borrowings etc. has been done away with.

Among others, private companies not having any investment by corporates have been allowed to extend loans to directors subject to certain conditions. An interested private company director has been allowed to can now participate in board meeting after declaring his interest.

For government companies, the Ministry has done away with limits on managerial remuneration as well as restrictions on the maximum number of directorships. Rules for disqualification of directors in certain cases have also been eased.

“The provisions relating to loans to directors, loans and investments by companies and related party transactions have been modified to provide flexibility to Government companies in complying with such provisions,” the release said.


The Ministry has already made a raft of changes to the Companies Act, 2013 - whose most provisions came into effect from April 1, 2014 – amid concerns raised from various stakeholders. Besides, a committee has also been set up to further review the new law and suggest further changes.

PSes, Central dePtS to Get rS1 Cr Per MW to Set uP Solar unitS

To boost the country’s energy security, the government has decided to give a push to solar power generation by roping in Public Sector units and Central departments and Ministries. The government has asked them to set up 1 MW solar power plant each on their rooftops or land for which they would be given viability gap funding of Rs 1 crore per MW.

The projects have to be implemented by 2017 and the PSEs and Ministries would be free to use the power so generated for either self-use or sell it to third party or discoms. The incentives are being given under the scheme to set up 1,000 MW of grid-connected solar PV power project to give fillip to generation of solar power, which will help in promoting ecological and sustainable growth while meeting India’s energy needs.

The viability gap funding (VGF) will be given in two tranches – 50 per cent on successful commissioning of the full capacity of the project and the rest after one year of successful operation of the project.

For encouraging domestic manufacturers, the government will give VGF of Rs 1 crore/MW if the cells and modules are procured from domestic source while it will give Rs 50 lakh/MW if only the modules are procured from the domestic source.

The PSEs such as NTPC, NHPC, CIL, IREDA, and Railways would be allowed to participate in Central or state government tenders from time to time up to 2016-17 for selling solar power to state utilities, discoms or any other organisation. They will also be allowed to sign power purchase agreements and power sale agreements with state utilities and discoms at tariff determined by the Central or state regulators.

The VGF will be provided through Solar Energy Corporation of India (SECI), which will be given a fee of one per cent of the VGF disbursed for handling the funds and managing the scheme. However, if the project fails to generate any power continuously for any year within the 25 years or the major assets are sold or the project is dismantled during this tenure, SECI will have a right to refund of VGF on pro-rata basis.

The project falls under the Jawaharlal Nehru National Solar Mission to meet the energy demand and tackle challenges of climate change. The mission has set a target of deploying grid-connected solar power capacity of 20,000 MW by 2022 to be achieved in three phases – first phase up to 2012-13, second phase by 2017 and the third phase by 2022.

For encouraging domestic manufacturers, the government will give VGF of rs 1 crore/MW if the cells and modules are procured from domestic source while it will give rs 50 lakh/MW if only the modules are procured from the domestic source.

PSE NEWS UPDATE


Tie-Ups, Procurement & Contracts

air india SealS CodeShare allianCe With air neW Zealand, aVianCa

Providing a seamless connectivity to its passengers bound for New Zealand and Colombia, national carrier Air India has sewed up a codeshare alliance with Air New Zealand and Avianca.

The two partnerships were sealed during the 71st Annual General Meeting of the International Air Transport Association in Miami, in June this year.

Both Air New Zealand and Avianca are part of the global airlines group Star Alliance, of which Air India is also a member.

Code-sharing allows an airline to book its passengers on its partner carriers and provide seamless transport to multiple destinations where it has no presence.

Under the codeshare agreement with Air New Zealand, Air India will place its code on Air New Zealand’s services from Melbourne, Sydney, Hong Kong and Singapore to destinations in New Zealand, Air India said.

The state-run carrier would also codeshare on Air New Zealand’s domestic network.

In turn, Air New Zealand will place its code exclusively on Air India’s services to Delhi from Sydney, Melbourne, Hong Kong, Bangkok and Singapore.

In addition, Air New Zealand will gain access to six points of call in India – Mumbai, Kolkata, Hyderabad, Chennai, Bangalore and Cochin apart from Delhi, the airline said.

As part of its codeshare partnership with the Colombian national airline,

which is a free flow pact, Avianca would codeshare as a marketing carrier on Air India operated flights on the Delhi-New York and Delhi-London sectors and Air India would code share as a marketing carrier on Avianca operated flights on the New York-Bogota/Medellin/Cartagena and London-Bogota sectors, the airline said. The code share agreement with Avianca is subject to flinalisation of an Air Services Agreement between India and Colombia and other regulatory approvals.

The agreement will enable both airlines to get additional feed from each other’s network as it would enable Air India to reach out to the South American market.

The agreement means better connecting times, seamless travel, more travel options and more competitive fares for passengers traveling between both carriers’ home markets, for which Air India and Avianca are the premier carriers, Air India said.

hal-turBoMeCa SiGn jV in PariS For rS 200-Crore Mro FaCilitY For heliCoPter enGineS

Hindustan Aeronautics Ltd (HAL) has signed an agreement with French engine manufacturer, Turbomeca, to support the redoubtable Shakti helicopter engine, which would power a fleet of 1,000 Indian military choppers during the coming decade.

HAL’s joint venture (JV) with Turbomeca, long in the making, would support the Bengaluru-headquartered aerospace company’s ambitious vision of becoming a helicopter production giant. India’s military has already committed to buying three different types of HAL

helicopters, all powered by the Shakti engine that Turbomeca custom-designed for HAL. Optimised to fly at extreme altitudes of up to 6,000 metres (almost 20,000 feet), the Shakti engine supports Indian army troops deployed on the Himalayan watershed.

An HAL release announced that the new JV would provide maintenance, repair and overhaul (MRO) support for the Shakti engine, as well as for the Turbomeca TM333 engine that was initially fitted on the Dhruv ALH while the Shakti was being developed.

BeMl reCeiVeS rS 645 Cr order FroM delhi Metro

Defence PSE BEML has received an order worth Rs 645 crore from Delhi Metro Rail Corporation for supplying 74 broad gauge coaches.

DMRC signed a contract agreement with BEML for design, manufacture, supply testing and commissioning of the coaches. BEML has forayed into manufacture and supply of metro cars in 2002 and is the reliable Make in India partner in Metro Rolling Stock.

BEML has supplied so far more than 600 metro cars or coaches to DMRC and 150 units to Namma Metro of Bengaluru for its Phase I.

The defence PSE claims that it has emerged as the preferred metro coach manufacturer in the country to encash upon the emerging opportunities in the Metro segment.

hal, Bel join handS to Meet deFenCe needS

Defence PSEs HAL and BEL have signed an agreement to share their expertise in design, development, engineering and manufacturing


to develop and produce advanced airborne communication equipment to meet the requirement of the defence services.

Hindustan Aeronautics Limited and Bharat Electronics Limited have agreed to share the business from the Indian defence services.

HAL has the expertise in design, development, engineering, manufacture of airborne communications equipment and BEL in communications and secrecy products and solutions.

ntPC-jKSPdCl to deVeloP Coal BloCK in joint Venture

State-run NTPC said, it has entered into an agreement with Jammu and Kashmir State Power Development Corporation Ltd (JKSPDCL) to form a joint venture company for mining at Kudanali-Luburi coal block in Odisha.

NTPC and JKSPDCL will share equity in the ratio of 67:33 in the joint venture company for undertaking exploration, development and operation of jointly allocated Kudanali-Luburi coal block by Coal Ministry to them.

Earlier, a Power Ministry statement had said that a joint venture

agreement between NTPC-JKSPDCL was assigned for development of coal mine for power generation.

According to the statement, the agreement was signed during a review meeting over power sector of Jammu and Kashmir, which was presided over by Power Minister Piyush Goyal, on Monday. During the meeting, Goyal had promised all help from the central government for expeditious development of conventional and non-conventional energy sources of the state.

uS-BaSed eMerSon to ProVide autoMation SolutionS For ntPC’S oriSSa unitS

US-based engineering company Emerson will be providing automation technology and expertise for two new 80 MW supercritical generating units of NTPC at the Darlipali Super Thermal Power Station in the Sundergarh District, Odisha, India.

The first unit at the power plant would be commissioned by December 2017 while the second unit would be done three months after that. Emerson project teams will engineer, install and commission

Ovation systems to monitor and control each unit’s supercritical boiler and critical balance-of-plant processes and equipment.

“Supercritical technologies boost the efficiency of coal-based electricity generation while reducing carbon and other emissions, but the high temperatures and pressures involved make them more challenging to control.

Emerson has earlier worked with NTPC to automate units at the Sipat, Simhadri, and Tanda power stations and is currently carrying out projects at several other sites.

Coal india needS More ClaritY to deterMine e-auCtion VoluMe

Even though Coal India(CIL) has been allowed to revert to the old system of removing the cap on e-auction volumes with effect from April 2015, in the absence of a specific guideline from the Ministry, the state-owned miner is in a fix over determining the volume to be sold via e-auction route.

The e-auction volume is key to CIL, as its profitability to a large extent is dependent on the realisation from e-auction sales. While a small part of overall volumes, e-action sales contribute 35-40 per cent of total Ebitda (earnings before interest, taxes, depreciation and amortisation). Hence, higher e-auction volumes would mean higher profitability in the coming quarters.

The standard practice as interpreted by Coal India is 8-10 per cent of the total sales. But out of total sales of 471.58 million tonnes (MT) in 2013-14, a total of 58 MT of coal or 12.29 per cent was sold by CIL through e-auctions which prompted the Ministry to put a cap on the volume, which has now have been removed.

PSE NEWS UPDATE


MCl FloatS SeCond tender For 10 Mt Coal WaSherY

Mahanadi Coalfields Ltd, a subsidiary of Coal India, has floated an online tender seeking participation of interested parties to set up a 10 million tonne (mt) per annum coal washery at Talcher.

This is the second online tender by the coal company for establishment of coal washery. MCL, which plans to set up five coal washeries in the state, had floated the previous tender for another washery on May 29 this year.

The washeries are to be set up under build operate and maintain (BOM) concept, where a bidder has the liberty to choose the technology keeping in mind the project cost and return on investments. As per the tender rules, the operator will have to establish and operate the plant at least for 10 years.

Coal MiniStrY inViteS BidS For third round oF auCtion

The government on June 8 kick-started the process for auction of 10 coal blocks in the third tranche, inviting bids from companies engaged in sectors like steel, cement and captive power generation.

“The government of India has directed the Nominated Authority to undertake the auction of 10 identified schedule II & III coal mines to eligible companies. Accordingly, bids were invited from eligible companies for shortlisting of qualified bidders,” the Coal Ministry said in a notice inviting tender.

“Qualified bidders will be allowed to participate in the auction for the coal mines,” the Ministry said.

Government said that it will auction 10 coal mines with reserves of 858.19 million tonnes for steel, cement as well as captive power plants and the process will be completed by August end.

The government has so far auctioned 29 coal blocks in two tranches to

private companies and garnered over Rs 2 lakh crore, surpassing CAG’s loss estimates of Rs 1.86 lakh crore in allotment of mines earlier without auction.

Of the total estimated geological reserves, these mines have extractable coal of about 356.245 million tonnes and are located in Maharashtra, Jharkhand, Chhattisgarh and Odisha.

Coal Secretary Anil Swarup had said that the government will execute agreements with successful bidders by August 31.

Under schedule II category (producing) mines, two will be auctioned, while in the schedule III (ready to produce) eight mines will be put on offer.

The two mines in schedule II category are MarkiMangli-I mine in Maharashtra and Parbatpur-Central mine in Jharkhand. Both are explored blocks having extractable reserves of 62.12 million tonnes.

The eight mines in the schedule III category are Dongri Tal-II mine (Madhya Pradesh), KosarDongergaon (Maharashtra), Margi Mangli-IV (Maharashtra), Majra (Maharashtra), Chitarpur (Jharkhand), Bhaskarpara (Chhattisgarh), Sondiha (Chhattisgarh) and Jamkhani (Odisha).

inCreaSe ProduCtion, raMP uP eXPloration: dharMendra Pradhan to onGC

Petroleum Minister Dharmendra Pradhan, who did a detailed review of India’s flagship explorer ONGC on June 6, saw several “improvement areas” and asked the state-run firm to work towards increasing hydrocarbon output and expanding exploration activity.

ONGC has set an ambitious target of drilling about 1.74 Million Tonne (MT) incremental crude oil and 2.98 Billion Cubic Metres (BCM) of additional

natural gas in FY16. It produced 22.26 mt crude in FY15, marginally higher from the previous year’s 22.25 mt. Gas output was 22.02 bcm, less than 23.28 bcm in the previous year.

“The chunk of production is coming from Western offshore. It is a tough job to take out hydrocarbon from offshore assets, which ONGC has been doing for decades. In future, incremental oil and gas would come from the same region,” Pradhan explained.

Currently, 34.5% of ONGC’s crude production comes from improved and enhanced oil recovery schemes. This means extra efforts are being put in to extract hydrocarbon from ageing fields, which naturally see a decline in output. Another 13.1% hydrocarbon is drilled from new fields.

ONGC had taken up 15 projects, worth Rs 38,602 crore, for monetisation of 39 new and marginal offshore fields. Of this, nine have been completed, which produced 2.74 mt crude (13.8% of ONGC’s production) and 3.35 bcm natural gas (15% of its gas output) in FY15.

ONGC is working on six major field development and three redevelopment projects with an investment of Rs 41,678 crore. Of this, Rs 24,188 crore is towards development projects including Daman, Vasistha & S-1, Bassein, Vasai, Gamij and Nagyalanka. Another Rs 17,490 crore is for three re-development projects – the third phase of Mumbai High North and South and Heera-South.

Dinesh K Sarraf, CMD, ONGC, said efforts were being made to achieve the target for the current fiscal. Meanwhile, if some opportunities come up that could immediately add to incremental production, they would be explored. “The government is supportive, which gives the push and encouragement for ONGC to do more,” Sarraf said.


rinl in talKS With odiSha GoVt, nMdC

Rashtriya Ispat Nigam Ltd is in the process of becoming a partner with the Odisha Government and NMDC Ltd in two projects – one for mining iron ore and the other for a greenfield steel plant.

RINL has been designated as the ‘lead player’ in these two Odisha projects.

Following up a proposal mooted by the Centre, the public sector steel major was currently negotiating with Odisha Government and NMDC, said RINL CMD P Madhusudan.

RINL CMD mentioned that the proposed SPV for mining will have Odisha Mining Corporation Ltd (OMC) as RINL’s partner along with NMDC.

In the SPV for the proposed steel plant, the Industrial Development Corporation of Odisha Ltd (IDCOL) will represent the State Government’s interest.

RINL hoped to sign the MoU soon. “The MoU will spell out the capacity of the proposed steel making project. As the State agency, OMC will facilitate allocation of mines to the SPV,” Madhusudan said.

IDCOL, as a partner, would take care of the land and the related linkages for the steel project, he indicated.

BalMer laWrie and CGda launCheS air traVel Portal For arMed ForCeS

An Air Travel Module, developed and implemented by Balmer Lawrie and Co. Ltd. in the Defence Travel System (DTS), was launched as an additional facility for Armed Forces personnel by Mr. Arvind Kaushal, IDAS - Controller General of Defence Accounts (CGDA) and Mr. Viren Sinha, C&MD (Balmer Lawrie & Co. Ltd.) on 28th May 2015 in New Delhi. The Defence Travel System which was developed in 2009 provided the facility of booking railways tickets only. Senior officers

representing both the organisations were present during the launch. Bhel GetS larGeSt-eVer order Worth rS 18,000 Crore FroM tSGenCo

Bharat Heavy Electricals Limited (BHEL) secured the largest order in its history for setting up a 4,000 megawatt (5x800 MW) super-critical thermal power project from Telangana State Power Generation Corporation (TSGENCO). The order is valued at Rs 17,950 crore.

The company in a statement said this is also one of the highest value orders ever placed in the capital goods sector in India.

In December 2014, TSGENCO placed an order for setting up Telangana’s first super-critical thermal power plant of 800 MW to BHEL, followed by an order for the 4x270 MW Bhadradari thermal power station at Manuguru in Khammam district in March 2015.

BHEL’s scope of work in the project would include design, engineering, manufacture, supply, construction, erection, testing and commissioning of 5x800 MW thermal sets on engineering, procurement and construction (EPC) basis.

“The key equipment for the contract will be manufactured at BHEL’s Trichy, Haridwar, Hyderabad, Bhopal, Ranipet, Bangalore and Jhansi plants, while the company’s power sector construction division will be responsible for civil works and commissioning of the equipment,” said the company’s statement.

To overcome the uncertainty of coal supply, BHEL said it shall be supplying its in-house developed fuel flexible boiler, which is capable of firing the entire range, from 100 per cent Indian to 100 per cent imported mix of coal. This will provide security against variation in design coal and the coal actually available during operation,

thereby offering operational flexibility to ensure uninterrupted generation of electricity.

Apart, amid a rigorous bidding process, top public sector company Bhel has bagged a Rs369 crores contract for revival of NTPC’s power plant in Barh in Patna, officials said on Monday. The contract has been given for supply and installation of the Power Cycle Piping (PCP) package for the Barh Thermal Power Project - Stage-I (3x660 MW) of NTPC in Bihar.

iWai, Canara BanK deVeloPinG Model to attraCt inVeStMent in inland Water VeSSelS

The Inland Waterways Authority of India (IWAI) is working with Canara Bank to develop models to incentivise entrepreneurs to invest in inland water vessels. “The proposal is at an advanced stage of consideration by the government,” said Amitabh Verma, Chairman, IWAI.

Canara Bank, in a study, has pointed out that there are positive cash flow options in case the government subsidises vessel costs by 10-15 per cent for inland waterways, said Ajit Kumar Das, Deputy General Manager, Canara Bank.

Meanwhile, marking one year of the NDA government, the Shipping Ministry said it is working on a proposal to develop 300 lighthouses and 1,100 islands as tourist destinations. “The Prime Minister asked us to develop 300 lighthouses and 1,100 islands as tourist destinations. We have made that a part of the Cabinet note,” said Nitin Gadkari, Minister of Shipping, Road Transport and Highways.

He also said that Cochin Shipyard Ltd was working on the first model of a hovercraft that can operate on land and water for a cost of Rs. 5 crore, instead of Rs. 50-60 crore.

PSE NEWS UPDATE


Project Updates

Sail PrePareS FeaSiBilitY rePort For telanGana ProjeCt

Steel Authority of India Limited (SAIL) has prepared a feasibility report and carried out site inspection and market analysis for a proposal to set up a 3-million tonne capacity integrated steel plant in Telangana.

GSI and MECL, two government organisation under the Ministry of Mines, can assist the state in assessing its mineral resources for revenue generation, according to an official statement.

Preferential treatment to Vizag Steel (RINL) products needed for infrastructure and industrial development in the state and, allotment of land to Vizag Steel in Warangal for better reach and distribution in Telangana were discussed.

BPCl to Go ahead With Bina reFinerY eXPanSion SanS oMan oil CoMPanY in MadhYa PradeSh

With Oman Oil Company reluctant to put more money, Bharat Petroleum Corp Ltd has decided to fund the Rs

18,000-20,000 crore expansion of the Bina refinery in Madhya Pradesh on its own.

Bharat Petroleum Corp (BPCL), India’s second-biggest state refiner, plans to raise Bina refinery capacity to 15 million tons in two phases - to 7.8 million tons a year from current 6 million tons at a cost of Rs 3,500 crore by 2018 and then to 15 million tons at an additional investment of Rs 18,000-20,000 crore in 5-6 years.

Oman Oil Company (OCC), which holds 26 per cent stake in the Bharat Oman Refineries (BORL) - the firm that built the refinery, is willing to participate in the first phase expansion but not in the second phase, a top official said.

The BORL was formed as an equal joint venture company way back in 1993. However, following inordinate delays in the implementation of the project, OOC froze its investment in the company at Rs 75 crore for a two per cent equity stake.

BPCL, which holds 49 per cent stake in the project, provided the unbridged portion of the Rs 4,000-crore equity in form of loan. The state-run firm got its loan back

once OOC made payments for its 26 per cent share.

The remaining 25 per cent is with financial institutions. BPCL also operates a 12 million tons a year refinery at Mumbai and 9.5 million tons Kochi unit. It also has majority stakes in the 3 million tons Numaligarh refinery in Assam.

The official said BPCL is expanding and upgrading its Kochi refinery in Kerala to process high sulphur crudes by 2016. Kochi refinery capacity is being raised to 15.5 million tons from current 9.5 million tons.

ntPC PlanninG 3,000 MW CaPaCitY addition at talCher

State-owned NTPC said on June 11 Talcher in Odisha will become a power hub with the PSE planning around 3,000 MW of capacity addition there.

“Talcher Thermal Power station we are planning to add 1,320 MW. In super thermal power station we are planning to add another 1,600 MW. So what will essentially happen is that in that area itself there will be almost 3,000 MW of capacity addition, so it will become a power hub in Odisha,” NTPC Chairman and Managing Director Arup Roy Choudhury said.

ntPl tutiCorin to CoMMiSSion FirSt 1000-MW PoWer unit

The first 500-MW unit of coal-based NTPL thermal power plant of NLC Tamil Nadu Power (NTPL) in Tuticorin has qualified for commercial operations.

NTPL, a joint venture company of NLC (89 per cent) and Tangedco (11 per cent), is establishing a 1,000-MW (2 units of 500 MW) coal-based thermal power plant at Tuticorin, Neyveli Lignite Corporation.

The pre-commissioning activities in Unit II of this plant are nearing


completion and this unit will also be ready by July.

MrPl CoMMiSSionS PolYProPYlene unit

Mangalore Refinery and Petrochemicals Ltd (MRPL), an ONGC company, has commenced commercial production of Polypropylene from its Polypropylene (PP) Plant as part of its phase-III refinery expansion and upgradation project on June 18. The plant has capacity to produce 440,000 tonnes per annum of polypropylene, it said.

The feedstock for the Polypropylene plant, polymer grade propylene, is being produced from upstream Petrochemical Fluidised Catalytic Cracking Unit (PFCCU). The technology-provider for the Polypropylene Plant is Novolen of Germany and the plant has been engineered and constructed by Engineers India Ltd, a Navaratna CPSE.

hYdel PoWer PuSheS ntPC into GloBal BiG leaGue

State-run NTPC has switched on an 800 MW hydel plant to join a select group of global peers who span the entire fuel chain – coal, gas, hydro power and renewables – for generating greener electricity.

Last month, the country’s largest fossil fuel-based generation utility quietly switched on the last of the four 200 MW units of its first hydel project in Bilaspur district of Himachal Pradesh, roughly 145 km before the tourist destination of Manali.

The development marks fulfillment of a vision, the seeds of which were sown by then Chairman C P Jain during early parts of the 2000-2002 period. The hydel foray is part of NTPC’s diversification plan to widen fuel base.

Bhel StartS ntPC’S 800-MW KoldaM hYdro PoWer Plant

State-owned BHEL said it has commissioned NTPC’s 800-MW Koldam hydro power project in Mandi district of Himachal Pradesh. The Koldam project is capable of generating approximately 3,054 GWH annually.

All the four units have been commissioned within a short span of just 75 days, starting with the commissioning of the first unit on March 30, 2015.

Other than Koldam, the other three hydro projects of NTPC being executed by BHEL are Tapovan Vishnugad HEP (4x130 MW), Lata Tapovan HEP (3x57 MW) and Rammam Stage-III HEP (3x40 MW).

onGC introduCeS hF teChnoloGY in triPura

Oil & Natural Gas Corp (ONGC) in Tripura has undertaken hydro-fracturing in Khubal to assess the actual reserves of the field and in Baramura to enhance production from tight sands.

According to ONGC, the job involved intricate coordination to get domain experts, machine and chemicals from various regions of the country apart from understanding the reservoir characteristics and geology of the region. Hydro-fracturing units, high-capacity storage tanks, Proppant (special sand particles) and chemicals for the work were mobilised from six different assets of ONGC: Ahmedabad, Karaikal, Rajamundry, Bokaro and Assam.

ONGC said it made discovery of commercial gas in the Khubal area in February 2009. It completed drilling of seven exploratory-cum-appraisal wells out of which 2 are gases-bearing, the state-run explorer said.

three oF nhPC’S Four Stalled ProjeCtS reViVed

NHPC, the state-run hydroelectric power producer, which has often got stuck with environmentally sensitive projects, may be on the cusp of turning a new leaf on the back of progress made on three out of its four stalled projects and higher power generation in FY15.

Out of the four under-construction projects, Teesta Low Dam-IV, Parbati-II and Kishanganga, with an aggregate capacity of 1,290 MW, have seen definitive progress towards commissioning. While the geological issues of tunnelling has been solved for Parbati-II and work is likely to start this month, work on Teesta Low Dam-IV also resumed in November and is likely to be commissioned in the next fiscal year. Although Subansiri Lower, with a capacity of 2,000 MW, still faces headwinds from activists, Kishanganga project in J&K is slated for commissioning in FY 17.

indian oil CorPoration BeGinS WorK on 4 MW Solar PoWer ProjeCt in naGaPattinaM

Indian Oil Corporation Limited (IOCL)has commenced construction work on its proposed 4 MW solar power project at Muttam village in the district.

Commencing the construction work with a ‘bhoomi pooja’, Nagapattinam District Collector S Palanisamy said IOC was setting up the plant at a cost of Rs 31 crore on 20 acres of land.

IOC has entrusted the construction work to Tata Power Solar Systems Limited, he said.

The Collector said IOC was setting up the project with the objective of generating green energy so as to reduce carbon footprint.

PSE NEWS UPDATE


In addition to meeting the power consumption needs of IOC installation here, the power produced from the solar plant will help Muttam and nearby villages of the district, he said.

CaPaCitY oF indianoil’S PaniPat reFinerY to Be raiSed to 20.2 MMtPa

India’s largest refiner IndianOil will expand refining capacity of its state-of-the-art Panipat Refinery to 20.2 mmtpa. This was disclosed at the first maiden visit of the State Minister for Petroleum & Natural Gas ( I/C) Dharmendra Pradhan to the refinery on June 7.

Krishan Lal Panwar, (MLA), M P Dhanda (MLA), Sandeep Poundrik, Joint Secretary (Refineries), Ministry of Petroleum & Natural Gas, B Ashok, Chairman, Sanjiv Singh, Director (Refineries), Debasis Sen, Director (Planning & Business Development), IndianOil, T K Basak, ED(I/c) - Panipat Refinery & Petrochemical Complex were also present on the occasion. While appreciating performance of the refinery, particularly its capacity utilisation and energy management, Pradhan emphasised the need for effective integration of refinery operations with Petrochemicals and their positive contribution to develop downstream industries in the region.

Panipat Refinery commissioned in 1998 with refining capacity of 6.0 mmtpa had its first expansion of 6.0 mmtpa in 2006. The capacity of 3.0 Mmtpa was added in 2010. The proposed expansion of refining capacity from 15.0 mmtpa to 20.2 mmtpa is being planned at a cost of Rs 15

arCelorMittal-Sail Plant ProjeCt rePort BY auGuSt

A Detailed Project Report (DPR) on the proposed Rs 5,000-crore steel plant to be set up under a Joint Venture (JV) between ArcelorMittal

and state-run SAIL will be completed by August.

Last month, the world’s largest steel-maker and domestic steel giant inked a pact to jointly set up a steel plant in India to cater to the fast growing automotive sector.

FCi Silo ProjeCt FetCheS reSPonSe FroM 21 FirMS

The Food Corporation of India’s (FCI) attempt to create state-of-the-art foodgrain storage facilities, ‘silos’, through private sector participation has evoked interest among various companies.

Sources said 21 private players, including Adani Agri Logistics, LT overseas and OM Metals, have evinced interest in setting up silos on behalf of FCI at six locations spread across Punjab, Delhi, Bihar, Assam and Karnataka.

Silos with a capacity of 50,000 tonne each at four locations and 25,000 tonne grain capacity each at two locations would be created through private sector participation at Sahnewal and Kotkapura (Punjab), Narela (Delhi), Katihar (Bihar), White-field (Karnataka) and Changsari (Assam).

Sources also said that in all 92 tenders have been received from various private sector companies. At present the tenders are being evaluated by the FCI.

Bharat eleCtroniCS eMBarKS on rS 2,000 Crore ModerniSation driVe

Government-owned Bharat Electronics Limited (BEL) is embarking on an expansion-cum-modernisation drive to explore new areas in the defence and non-defence sectors.

In the next four to five years, the company plans to invest at least Rs 2,000 crore, to equip itself for new business opportunities.

“In the past five years, non-defence business has been 17 per cent of the overall business and we plan to increase this share in the coming years,” said S K Sharma, Chairman and Managing Director.

Some of the areas identified in defence are SAM systems, electronic ammunition fuses, satcom terminals, LTE, Gigabit passive optical network, routing and switching products, he said. In non-defence, infrastructure protection, air traffic management radar, intelligent traffic management systems, solar power plants and smart city elements are being focused on, he added.

BEL is planning to set up a Rs 500-crore weapon systems facility in Andhra, covering design, development and production. It is expected to be ready in two years, said Sharma. Land acquisition is on in Ananthpur district, he said.


Operation Highlights

india’S Crude oil outPut riSeS 0.8% in MaY

India’s crude oil production rose marginally by 0.8 per cent in May on the back of improved performance by state-owned Oil and Natural Gas Corp (ONGC).

Crude oil production at 3.18 million tons in May was 0.8 per cent more than 3.16 million tons in the same month a year ago, an official statement issued here said.

The increase was on account of 1.8 per cent rise in ONGC’s oil output at 1.9 million tons. Its western offshore fields produced 8.5 per cent more crude oil at 1.3 million tons and helped tied over a 9 per cent drop in onshore output at 0.48 million tons.

However in April-May, the first two months of the current fiscal, the nation’s crude oil production dipped 1 per cent to 6.05 million tons. While ONGC produced 1.7 per cent more crude oil at 3.71 million tons, fields operated by private firms saw a 6.3 per cent dip at 1.92 million tons.

Natural gas production declined 3.1 per cent in May to 2.85 billion cubic meters as ONGC saw dip in output. ONGC saw gas output dip by 1.8 per cent to 1.9 bcm while eastern offshore production dropped 8.9 per cent to 403.16 million cubic meters.

“Restricted gas withdrawal by GAIL in view of safety issues of GAIL’s pipeline” was the reasons for lower output from eastern offshore fields, the statement said.

In April-May, India’s gas production decreased 3.3 per cent to 6 bcm. ONGC’s output was down 1.7 per cent at 3.67 bcm.

Sail aiMS to ProduCe 50 MtPa oF Steel BY 2015, SaYS narendra SinGh toMar

Public sector company Steel Authority of India Limited (SAIL) has set a target to produce 50 Million Tonnes Per Annum (MTPA) of steel by 2025 at an estimated investment of Rs 1,50,000 crore, Union Minister for Steel and Mines Narendra Singh Tomar said.

SAIL’s steel plants are being expanded from a capacity of 13 MTPA to 23 MTPA, at an investment of Rs 61,000 crore. The long term plan is to take SAIL’s capacity upto 50 MTPA by 2025, at an estimated investment of Rs 1,50,000 crore, the Minister said.

Last year, the Ministry placed a special emphasis on timely completion of modernisation and expansion of public sector companies under the Ministry of Steel.

On April 1, 2015, the Prime Minister dedicated the modernised and expanded steel plant of SAIL in Rourkela to the nation.

The Ministry has also set up a Steel Research and Technology Mission of India at an initial allocation of Rs 100 crore which will be augmented by another Rs 100 crore contributed by private sector companies, in order to enhance research and development in the steel sector, he said.

In order to enhance steel production, and encourage the ‘Make In India’ initiative in the steel sector, a Special Purpose Vehicle (SPV) is dedicated to the steel industry. In the first phase, there are plans to establish steel plants through the SPV route in Chhattisgarh, Odisha, Jharkhand and Karnataka.

hal handS oVer ChandraYaan-2 CoMPonent

Public sector plane-maker Hindustan Aeronautics Limited (HAL) has delivered ‘Orbiter Craft Module Structure’ of Chandrayaan-2 to the ISRO Satellite Centre (ISAC).

Chandrayaan-2 is a two-module configuration spacecraft comprising of the ‘Orbiter Craft’ and the ‘Lander Craft’.

“The Orbiter Craft Module structure is a three-tonne category bus structure made out of a central composite cylinder, shear webs and deck panels,” CMD of Hindustan Aeronautics Limited T. Suvarna Raju said.

The Chandrayaan-2 mission is aimed at placing an orbiter around the moon and sending a lander and rover to the surface of the moon. It will be launched by a Geo-Stationary Satellite Launch Vehicle (GSLV-MKII).

HAL’s association with ISRO’s space programme dates back to the early 1970s, when HAL provided technical inputs and manufacturing support to ISRO for realisation of light alloy structural assemblies for satellites and launch vehicle.HAL has a division at Bengaluru totally dedicated to cater to ISRO’s growing requirement.

PSE NEWS UPDATE


air india to drY leaSe 14 airBuS a320 PlaneS FroM KuWait

National carrier Air India would dry lease 14 Airbus A320 planes from a Kuwaiti lessor as it seeks to replace its ageing narrow-body fleet with new fuel efficient planes.

The carrier plans to replace 19 A320 planes. It has already entered into a deal with a Chinese firm for five sharklets-equipped A320 (ceo-current engine option) aircraft.

For these five planes, it has tied up with independent Chinese lessor China Aircraft Leasing Company, which has already delivered one plane in early February. The rest four are to be inducted by October this year.

Under the 14-plane deal with new engine option (NEO), which was inked recently after months of evaluation, a Kuwaiti aircraft leasing firm would deliver A320s between April 2017 and March 31, 2018.

CiVil aViation MiniStrY to reVieW air india turnaround Plan

The Union Civil Aviation Ministry has asked SBI Capital Markets to review the turnaround plan of government-owned Air India (AI), with the changes in the operating environment and the airline’s inability to reduce loss.

For 2014-15, the airline is expected

to see a consolidated net loss of Rs 5,400 crore, the same as 2013-14, despite substantial savings in the fuel bill. However, those gains have been offset by lower than expected revenue and an increase in engineering and maintenance costs, and lease rents.

The airline’s accounts are yet to be audited and the profit and loss figures are provisional.

AI is also facing increasing competition from both no-frills and full-service airlines on the domestic and international routes. The turnaround plan approved in 2012 also did not contemplate the Jet-Etihad alliance and proposed relaxation of the government’s norms on international flying, two factors which will impact AI growth. Also, the plan needs a review with the fluctuations in currency rates and fuel prices, an AI executive said.

By the provisional numbers, while capacity deployed and passenger revenue grew nine per cent to Rs 15,450 crore, this was about Rs 500 crore lower than the expectation. The revenue was lower despite increasing passenger feed from Star Alliance partner airlines. Total revenue, including income from charters, cargo and Haj flights, is pegged at Rs 19,500 crore.

The airline spent Rs 8,400 crore on fuel as against an initial budget estimate of Rs 9,600 crore. The daily spending on this has reduced to about Rs 18 crore from Rs 27 crore earlier, due to lower jet fuel prices.

ForeiGn airlineS to taKe ai on Board For eXPandinG in indian MarKet

At least 14 foreign airlines are in advanced talks with national carrier Air India (AI) for stitching code-share agreements that would help them grab a pie of the lucrative Indian aviation market.

Negotiations with two others – TAP Portugal and LOT Polish – was complete and code-shares could be signed anytime soon, sources said.

Code-share is a ticket-selling agreement between two airlines, whereby one carrier can market and sell the flights of another airline, and provide seamless travel to multiple destinations where it doesn’t fly.

Gulf carriers have managed to corner the biggest pie of the Indian international market and around 40% of all global traffic from the country is West Asia bound.

AI is in advanced talks for a code-share with 10 Star Alliance member airlines including Air China, Air New Zealand, Shenzhen Airlines, United Airlines, Croatia Airlines, Eva Air, Avianca, Thai Airways, Copa and Aegean Airlines.

VietJet, S7 Airlines, Air Austral and Flybe are the nonStar Alliance members that AI is in talks for a code-share.

One of the fastest-growing aviation markets in the world, India will overtake the UK to become the third largest by 2031, according to a 20-year passenger growth forecast by the International Air Transport Association.

direCt Container SerViCe FroM BenGaluru to KriShnaPatnaM

Eyeing the growing export-import cargo traffic of Bengaluru, the Krishnapatnam Port Container


Terminal (KPCT) and Container Corporation of India (Concor) have announced the launch of direct container train service from June 19 to cater to customers in the region.

The weekly train service will ply between the Concor’s Whitefield Depot in Bengaluru and Krishnapatnam Port on the Eastern Coast directly and is expected to benefit the exporters of granite, gherkins, coffee, pharmaceuticals and engineering machinery.

The train will have a maximum carrying capacity of 90 TEUs containers and will operate every Friday evening from Bengaluru.

“This will enable the traders to complete their customs related documentation at Whitefield Depot during 5 days of the week and use the weekend to get the goods transported from Bengaluru and load them onto the ships. The train will return on Sundays from the Port carrying the goods imported by the traders and deliver the containers on Monday in Bengaluru,” said Sriram Ravichander, Executive Director, KPCT.

Coal india noW SiXth-larGeSt MininG CoMPanY in World: PwC

Country’s top dry-fuel miner Coal India ( CIL) has become the sixth-largest mining company in the world in terms of market capital, says a recent PwC report.

Earlier, the company was at the eighth spot among top 40 global mining firms, according to the report.

Another state-run company, NMDC, the country’s top iron ore miner which also figures in the list, has improved its position by coming to the 21st slot from 24th earlier.

The report “Mine 2015”, which analyses the financial performance of the top 40 mining companies by market capitalisation, says though there have been improvements in

most financial statement metrics across the top 40 companies, market values continued to decline.

“The top 40 miners lost USD 156 billion, or about 16 per cent of their combined market value, in 2014,” the report said, adding that the good news is that it is only half of last year’s slide.

The market capitalisation for the top 40 was USD 791 billion at the end of 2014, which is where it was 10 years ago, it said.

Cil MaY eXCeed ProduCtion tarGet BY 60 Million tonne thiS Year: Coal SeCretarY

“Coal India has set a target of increasing its production capacity by 60 million tonne this fiscal. But taking into consideration the steps taken by the company to increase production, it may surpass the target,” Coal Secretary Anil Swarup said at select media interaction.

In 2014-15, the company’s total coal production increased by 31.81 million to over 494 million tonne, recording nearly 7 per cent growth over 2013-14.

“The company has anticipated higher growth on the basis of the initiatives taken by it. CIL recently acquired 2,000 hectares and also received 41 mine clearances. Consequent to this, its subsidiary Western Coalfields will be opening one new mine every month for the next two years. Therefore, we hope production will increase,” he said.

BSnl PlanS to launCh 4G SerViCeS in SiX CirCleS

State-run telecom company Bharat Sanchar Nigam (BSNL) plans to launch high-speed fourth-generation (4G) services across six telecom circles, of the 20 circles where it operates. BSNL is in talks with various telecom companies, including Reliance Jio Infocomm (RJIL) and SSTL, for a strategic tie-up.

BSNL CMD Anupam Shrivastava said that they were open for a strategic tie-up for 4G operations and are in talks with various telecom companies in this regard.

Telcos are eagerly awaiting announcement of the guidelines on spectrum sharing and trading, which is expected to be in place in a month or two.

Official sources said for BSNL, RJIL would be the first choice, as RJIL has already signed a pact with BSNL to lease out 4,000 of its mobile towers. It is the only telco that has 4G spectrum in 2300 MHz band across all 22 telecom circles. But, unlike RJIL, that plans to launch 4G services in few selected circles in next one or two months, BSNL is expected to start its 4G operations in six of its circles only by March 2016.

Bharat eleCtroniCS looKS to diVerSiFY aS BillionaireS enter india’S deFenCe SeCtor

As Prime Minister Narendra Modi turns to local billionaires to modernize the nation’s military, a state-owned defence supplier is hedging its future by diversifying into civilian contracts.

Bharat Electronics Ltd, a maker of radar and avionics, is looking to double its non-defence revenue in three years in a strategy that may help boost sales by 15% as early as this year, a pace of growth not seen in a decade, chairman S.K. Sharma said in an interview.

Bharat Electronics will spend `500 crore in the year ending 31 March 2016, on securing orders for solar power plants, Modi’s smart city projects and air- traffic management systems, Sharma said. The investment will be the biggest for new initiatives in the past five years, he said.

PSE NEWS UPDATE


Export & Import

GoVernMent hiKeS dutieS on Steel to CheCK ChineSe iMPortS

In a decisive step, the government has hiked import duties on steel meeting a long standing demand from domestic players reeling under a flood of cheaper steel imports from China and South East Asia. The decision, which comes on top of recent imposition of anti-dumping duty on some grades of stainless steel, brought much-needed cheer to steel stocks. While industry appreciated the step and remained disappointed with the quantum of the hike, analysts tracking metal stocks remained indifferent to the move calling it “too little too late.”

Duty on flat products of steel like hot and cold rolled (HR/CR) sheets and coils typically used in automobiles, refrigerators and washing machines were revised upwards from 7.5% to 10%. On long products of steel like TMT bars, angles and channels, used in building and construction, duty has been raised from 5% to 7.5%. The two exceptions were duty has been maintained at existing levels are -CRGO (cold rolled grain oriented) steel or “electrical steels” that few domestic players manufacture and stainless steel flat products. Steel stocks jumped in reaction to the move, anticipating its impact of steel companies’ financials.

“The move will benefit India steel makers from the pressure of imports,” Union Steel & Mines Minister Narendra Singh Tomar tweeted on the micro-blogging site. “Combined with a recent anti dumping duty on stainless steel, it is also a sign of our commitment to Make in India,” the Minister commented on Twitter.

Indian Steel Alliance (ISA), an industry body of private and public steel producers like JSW Steel, Tata Steel, SAIL and JSPL lobbying for a duty hike, said it welcomed the move. “It is a welcome step since it relieves some of the pressure on steelmakers though we wanted a bigger hike in duty. However, it shows the government has recognized that imports pose a serious challenge to steel industry,” Sanak Mishra, secretary general of ISA, an industry grouping of top public and private steel producers.

MMtC to iMPort 5,000 tonne PulSeS to CheCK SPiKe in PriCeS

To augment domestic supplies, which would curb a spike in prices, the government has decided to import around 5,000 tonne of pulses through state-owned trading firm MMTC.

MMTC would shortly float tenders for the import of pulses. After getting a response, the government will consider importing higher quantity pulses during the next few months. One of the possibilities being discussed is to use a portion of the dedicated corpus of Rs 500 crore under the Price Stabilisation Fund (PSF).

The government had on Wednesday stated that it would import lentils on a “large scale’’ to boost domestic supply and also asked states to take action against hoarders.

Measures to increase the import of pulses and action against hoarders were taken in a cabinet meeting chaired by Prime Minister Narendra Modi.

MrPl BuYS FirSt CarGo oF eGYPt’S raS GhariB Crude

India’s Mangalore Refinery and Petrochemicals Limited (MRPL) has made its first purchase of Egypt’s Ras Gharib crude, two sources with knowledge of the tender award said.

The purchase is for loading in first half of July. Trader Vitol will supply the 600,000 barrel cargo at a discount of about $5.5 a barrel to Dubai on a delivered basis, the sources said.

MRPL operates a 300,000 barrel per day coastal refinery in Southern Karnataka state.

KioCl oFFerS Pellet Plant to oVerSeaS BuYerS under ‘MaKe in india’

Steel Ministry undertaking KIOCL Limited has floated a novel idea to make use of its idle facilities at Mangaluru. The company is offering its pellet plant and blast furnace units to overseas companies under the ‘Make in India’ programme by using it as a tolling plant, wherein KIOCL will convert imported ore or concentrate into pellets and supply back to the customers.

Under this programme, the company has entered into a dialogue with an Iranian firm for importing iron ore, converting into pellets at its plant in Mangaluru and then exporting it back to them.

Malay Chatterjee, Chairman and Managing Director, KIOCL said said the the company was inviting expression of interest from international firms, buyers and mine owners to bring iron ore fines to India and use KIOCL’s pellet plant for converting the ore into pellets and export the same. “KIOCL is bringing this tolling programme under the ‘Make in India’ initiative of the government of India,” he said.


trouble due to problems over land availability. A portion of this plant is ready, but cannot commence generation due to the absence of land and water. NTPC has taken over power assets in the past as well. It took over West Bengal Power Development Corporation’s project in Katwa a few years ago. It took over also a couple of hydroelectric projects in the state. Recently, the company entered into a memorandum of understanding with Jharkhand to acquire the Patratu thermal power station, where it intends to scrap the existing units and set up 4,000 MW of fresh capacity.

M & A

ntPC to BuY StreSSed PoWer Generation aSSetS

NTPC is on the prowl again. Armed with a reserve of about Rs 5,000 crore, this time the nation’s largest power company intends to take over stressed power generation assets from central and state sector units. It is at present in talks with three such entities in Rajasthan, Madhya Pradesh and West Bengal, a person with knowledge of the plan said.

To own such power plants, NTPC is proposing to create joint ventures with state governments where it will take a majority stake. It had previously looked at acquiring private power assets, but the plan hasn’t taken off as expected.

NTPC intends to buy stressed power generation assets, in talks with Rajasthan, Madhya Pradesh, West Bengal

“Following slow and dismal progress of NTPC’s plan to take over stressed assets from private sector entities, the company has now decided to take over assets or plants that are facing problems in the central and state sector. While we are in talks with three assets at the moment, NTPC is open to taking over more if they are offered to the company,” a senior NTPC official said.

In Rajasthan, NTPC is in discussions with Rajasthan Rajya Vidyut Utpadan

Nigam to take over its entire generation capacities through joint ventures. The Rajasthan utility runs plants with a total capacity of about 5,000 MW. It is also in the process of setting up 900-MW power capacities, but the projects are delayed by several years.

In Madhya Pradesh, NTPC is talking to MP Generating Company for taking over 1,300 MW of the Satpura thermal power plant through the same joint-venture model. According to reports, the plant, one of the oldest in the state, faces an uncertain future owing to poor utilisation of fly ash. Its sole fly ash pond is full to capacity and a union government committee has turned down a request to build a new ash pond.

In West Bengal, it is in talks with Damodar Valley Corporation for acquiring the Raghunathpur thermal plant of 2,400 MW, which is in

PSE NEWS UPDATE


Marketing & Trade

indian oil CorP’S lotuS XanGPo Petrol PuMP World’S hiGheSt altitude outlet

Indian Oil Corp’s (IOC) petrol pump, Lotus Xangpo Memorial filling station, in Leh has become the world’s highest altitude retail outlet to be powered by solar power.

A solar power generation system has been installed at the petrol pump situated at 11,500 feet above the sea level to replace polluting diesel generator. Besides cutting greenhouse gas emission, the solar power generation system enables the retail outlet to save about Rs 30,000 per month. The investment in putting up the solar system is recoverable in about 18 months.

IOC already has two other solar powered retail outlets operating at Chuglamsar and Leh-Manali Road in Ladakh region.

These outlets face extreme weather conditions like minus 25 degrees Celcius during winters and thin oxygen density, yet the solar power generation systems function smoothly as the region gets bright sunlight due to dry weather conditions for most part of the year.

IOC is increasingly using solar power to light up its petrol pumps across the country. In the year ended March 31, 2015, 1,398 new outlets were solarised, taking the total tally to 2,663.The company plans to add another 1,500 petrol pumps and Kisan Seva Kendras in the current financial year and envisions touching 5,000 solar-powered outlets by 2017-18 and 10,000 by 2022.

IOC has 24,405 petrol pumps and 6,230 rural outlets called Kisan Seva Kendras.

By installing solar power, the dealers of the outlets are assured of power supply at a constant voltage. Even fuel dispensing units, fan, tube lights and other essential electrical fittings can be operated at optimal capacity, which in turn ensures that a dealer is able to provide consistent and quality service to their customers.

Bharat PetroleuM readieS to roll out Full-FledGed retail oPeration

With 12,500 fuel outlets, where anywhere between 24 million and 36 million customers top up their tanks daily, Bharat Petroleum Corporation (BPCL) is readying to roll out a full-fledged retail operation. A revamp of the non-fuel retail operations, which now fetch less than 1% of the firm’s revenues, is on the cards and Boston Consulting Group (BCG) has been tasked with finalising a blueprint for a fresh roll-out both the In&Out convenience stores and also Quick-Service Restaurant (QSR) outlets. The consulting firm will also come up with ideas for loyalty cards and

the lubricants business, two highly placed officials at BPCL said.

Even as it taps into a larger share of customers’ wallets, the public sector Oil Marketing Company (OMC) wants to differentiate itself from competitors so as to be able to retain its customers. The BPCL top team believes a separate Strategic Business Unit (SBU) may be called for to house the non-fuel retail operations. George Paul, executive director, retail, confirmed BPCL was looking to monetise the non-fuel business, making it a big enabler to grow the fuel operations. “Earlier, the non-fuel businesses were treated like any other initiative. But now it’s a strategic business proposition because this could help customer retention,” Paul said.

The initiative will not just be restricted to offering food or merchandise; financial and banking services, e-seva kendras and Aadhaar centres too are being contemplated. BPCL has joined hands with Amazon to set up pick- up points at some


of its outlets to test whether the model will work. “We are in a vantage position and can designate these as Amazon pick-up points. At the end of the day e-commerce companies need to have a brick and mortar logistics network and we’re well positioned for that,” Paul observed.

Paul pointed out that several large retailers were struggling since they needed to maintain stores on high streets at high rentals. “We already have 12,500 fuel outlets where we can potentially open up stores. We already have stores earning Rs 400 per sq feet in locations like Delhi,” he said.

Pramod Sharma, executive director in charge of business strategies, said the oil retailer was toying with the idea of teaming up with other retailers to open stores outside of BPCL’s retail outlets and possibly even managing the back end.

BalMer laWrie PlanS to eXPand diStriBution netWorK

Diversified Public Sector Enterprise Balmer Lawrie is planning to expand its distribution network and double its market share over the next five years, a senior official of the company said.

“We are putting a lot of pressure on expansion. We are focusing on the automotive retail business, which will drive growth and profitability. The expansion will be done by leveraging and rapidly expanding the distribution network in focused markets and effective brand building,” Balmer Lawrie Chairman and Managing Director Viren Sinha said.

He was speaking during the launch of the new TechTonic Packs for Diesel Engine Oils and 4T Oils for automotive sector.

Fuel retailerS ConSider diFFerential PriCinG aS CoMPetition MountS

Established companies in the Indian fuel retail market, including Indian Oil Corp. Ltd (IOC) and Hindustan Petroleum Corp. Ltd (HPCL), are considering a differential pricing option in the wake of increasing competition.

With new entrants such as Mangalore Refinery and Petrochemicals Ltd (MRPL) also considering the same, such a move will benefit consumers, analysts said.

The National Democratic Alliance government deregulated the pricing of diesel in October last year, leading to a surge of interest in this market.

While petrol and diesel prices are deregulated, the prices of domestic cooking gas and kerosene continue to be set by the government.

B. Ashok, Chairman of IOC, and Nishi Vasudeva, Chairperson and Managing Director of HPCL, confirmed their firm’s strategy while presenting their annual earnings last week. India’s fuel retail market, with 52,864 outlets, is dominated by state-run companies such as IOC, HPCL and BPCL.

Private-sector companies such as Essar Oil Ltd and Reliance Industries Ltd shut several retail outlets because they couldn’t match the prices offered at pumps run by their state-controlled rivals.

PSE NEWS UPDATE


Bottomline Strategy

CaSh-riCh PSes MaY haVe to ForK out rS 15,000 Cr For national inFra Fund

The government is set to ask cash-rich state-run enterprises to fork out Rs 10,000-15,000 crore in special dividends this year to implement the budget’s proposal of setting up a Rs 20,000-crore National Investment and Infrastructure Fund (NIIF), whose aim will be to catalyse infrastructure development in the country, sources said.

“One of the options is to provide budgetary support of at least Rs 5,000-10,000 crore and mobilise the rest by way of special dividends from PSEs this year,” a senior Finance Ministry official said.

Announcing the setting up of NIIF during the budget in February, Finance Minister Arun Jaitley had said he would find resources to ensure an annual flow of Rs 20,000 crore to it. This would enable the trust to raise long-term debt to invest in equity of infrastructure finance companies, such as the Indian Railway Finance Corporation and the National Housing Bank.

The fund would also invest directly in infrastructure projects, such as ultra mega power projects, smart cities, roads, ports, rail lines and airports, the official said.

Leveraging the Rs 20,000 crore, the fund could raise debt up to 10 times, or Rs 2 lakh crore, over a period of time to ensure long-term fund flows to the sector at a time when banks’ balance sheets are laden with NPAs.

The Finance Ministry has already floated a draft cabinet paper for consultation on the formation of NIIF, which has been approved by the Cabinet.

The Finance Ministry would keep fresh fund infusions into NIIF flexible and look for sources other than special dividends from PSEs in subsequent years. The government could provide up to Rs 10,000 crore budgetary support next year as well, the sources said.

Through NIIF, the government is keen on permanently resolving the nagging problem of infrastructure funding in the country, a prerequisite for the government’s ‘Make in India’ drive to succeed.

The government has announced several ambitious infrastructure projects, from building 100 smart cities to improving infrastructure in 500 existing cities for Rs 1 lakh crore over five years. Similarly, it plans to build five new UMPPs, besides other mega projects such as high-speed trains and industrial corridors.

air india to Get rs. 1,200 Crore FroM deFenCe MiniStrY

Air India is to receive Rs. 1,200 crore in October this year from the Ministry of Defence (MoD) for the transfer of two Boeing 777-300 Extended Range aircraft for VVIP operations. These funds will be used to retire outstanding loans for these aircraft. Incidentally, the outstanding loans are to the tune of about Rs. 1,200 crore.

A senior Air India official confirmed that the two aircraft will be transferred to the MoD on October 1, and that the funds should flow into Air India’s coffers almost immediately after the transfer takes place.

VVIP aircraft are primarily used by the President, Vice-President and Prime Minister on their trips out of Delhi, be it within India or while travelling abroad.

While the aircraft will be transferred to the VVIP squadron in October, it will take some more time before they can be used. This is because the aircraft will have to refitted to meet VVIP requirements, officials said.

Meanwhile, the national carrier, which is to take delivery of its 21Boeing 787 aircraft at the end of the month, is planning to place two such aircraft exclusively for domestic operations.

The deployment of the Boeing 787 exclusively for domestic operations will help the airline offer more capacity in the domestic market. At the moment, Air India primarily uses the Airbus A320 series of aircraft to operate domestic flights. While the Boeing 787 seats 256 passengers, the Airbus aircraft seats anything between 122 to 172 passengers on each flight.

The deployment of two Boeing 787 aircraft exclusively for domestic operations could see the airline increase the number of cities to which it operates the Boeing 787 aircraft as Mumbai will also be added to the aircraft’s flight schedule. At the moment, the Boeing 787 aircraft only flies from Delhi to Kolkata, Chennai and Bengaluru.


air india to raiSe uP to $350M Via eCB route

Air India is raising up to $350 million to meet its working capital requirement through the external commercial borrowing (ECB) route.

In 2012, cash-strapped Indian carriers were allowed to raise up to $1 billion through ECB route for working capital requirements. “A big private airline has availed of $300 million and another has taken $50 million this way. The balance that remains is $650 million. AI is going to raise $300-350 million for meeting its working capital requirement for spare parts,” said a senior official.

AI has awarded the mandate to Citibank and SBI. “The all-inclusive financial cost works out to be lower than 3% per annum. The documentation has been completed. We will start availing this funding from second half of June and complete the same over a year,” the official said.

With this working capital loan, AI hopes to improve its aircraft usage by cutting down the time they waste on waiting for spare parts. “Our Airbus A-320s fly for about 11 to 12 hours a day. The wide-body fleet does 14 to 17 hours a day and the Boeing 787 Dreamliner does an average of 13 hours a day. An improved supply of spares will increase aircraft utilization by an average of one to two hours daily,” the official said. AI currently has 55 A-320s and is taking four more on lease by the coming winter.

Optimum utilization of assets is very important for AI to generate more revenue, given its precarious financial condition. AI is currently facing a cash crunch and has asked the government to give it Rs 1,777 crore. The gap has been created due to three factors – shortfall of Rs 720 crore in equity infusion last fiscal, along with the rupee’s depreciation against the dollar

and spiking of oil price to $110 in that financial year.

nhai inViteS aPPliCationS FroM deVeloPerS For Fund inFuSion to BooSt StuCK ProjeCtS

To accelerate highways building and salvage stuck road projects, NHAI has asked developers to come forward with a financing plan and justification for the fund infusion that they are seeking from the authority.

The government last month allowed the National Highways Authority of India (NHAI) to provide funds to projects that are in advanced stages of completion but are stuck due to equity crunch.

“The concessionaire seeking such relief shall approach NHAI with an application which shall clearly state the financing plan required for completing the project construction and justifying one time fund infusion,” NHAI said in a communique.

NHAI will provide financial assistance from corpus earmarked to any languishing highway project in BOT (build, operate and transfer) mode that has achieved at least 50 per cent physical completion where infusion of moderate funding could lead to its completion.

“The assistance would be provided on a loan basis at bank rate + 2 per cent drawing a parallel with the provisions of a model concession agreement. A robust third party evaluation mechanism will be developed by NHAI to determine the eligibility of the concerned project and the extent of bridge fund required to complete the project, ” the government has said. Of the ongoing 240 PPP (public-private-partnership) projects, some are languishing due to delays on land acquisition, grant of statutory clearances, local issues and shortage of construction materials etc.

In addition to steps to revive such stalled projects, the government last month approved a special intervention for the projects that are in advanced stage of completion but are stuck due to either lack of additional equity or lender’s inability to disburse further.

Directing NHAI to develop a robust mechanism to determine eligibility of the project as also the extent of funds required to complete projects, in time-bound manner, the government had expressed hope that about 16 such projects languishing in various parts of the country where public is facing difficulty on account of incomplete works will benefit from the decision.

The government had set a target of constructing 6,300 kms of roads in 2013-14 and 2014-15 each, of which 4,260 kms and 4,410 kms, respectively, were achieved during the two fiscals.

Now the government has decided to take the road building pace to 30 kms a day from existing about 14 km a day.

neYVeli liGnite to BorroW rs 1,185 Crore For taMil nadu PoWer ProjeCt

The board of NLC Tamil Nadu Power Limited (NTPL), a joint venture company involving Neyveli Lignite Corporation, gave its nod to borrow Rs 1,184.92 crore from Power Finance Corporation.

The announced borrowing would help NLC meet capital expenditure for works on the ongoing 1000 MW (2x500 MW) Thoothukudi power project in Tamil Nadu.

The Unit I of the project involving 500 MW capacity had already been declared for commercial operation on June 6, 2015, and the commissioning of 500 MW Unit-II is expected soon.

NLC said the announced borrowing would result in reduced interest costs.

PSE NEWS UPDATE


Officials of Power Finance Corporation today met Neyveli Lignite Corporation and an agreement for Rs 1,184.92 crore lending to the project was signed by the Project Director, General Manager (Finance) for new projects and Chief Financial officer of NTPL.

PFC to raiSe $1 B in ForeiGn CurrenCY BondS

Power Finance Corporation said on June 15 that the company will raise $1 billion through foreign currency denominated bonds.

The proceeds of the bonds, if and when issued, will be utilised for on-lending to the company’s borrowers in the power sector in rupee and/or foreign currency in accordance with the rules and regulations framed by the RBI.

nhPC MaY raiSe rS 1,475 Crore throuGh lonG-terM BondS

NHPC is planning to raise Rs 1,475 crore from the bond markets through long-term bonds, sources said.

The company is likely to raise funds in July said to market participants indicating that under current market conditions, NHPC may be able to issue bonds at yield close to 8.50%.

Bonds are likely to have a tenure of up to 15 years with staggered payments stretching from the fourth year till the fifteenth year, sources indicated.

NHPC had reported a net profit of R644.51 crore for the quarter ended March against a net loss of R707.40 crore in the same period a year ago.

PoWer Grid CorPoration arM ViZaG tranSMiSSion iSSueS FiVe-Year BondS at 8.9%

State-owned Power Grid Corporation India Limited’s (PGCIL) subsidiary Vizag Transmission has raised Rs 290 crore at a coupon rate of 8.90% through its five-year bonds.

PGCIL’s two subsidiaries – Vizag Transmission and NM Transmission company – were each looking to raise up to Rs 500 crore through the bond market.

These bonds are rated AAA (SO) – structured obligation – and are guaranteed by their parent PGCIL, according to a dealer. This might have resulted in a premium of 15-20 bps over the prevailing market rate for a 5-year bond of a AAA-rated PSE which is about 8.50-8.55%, he said.

A further premium of 15-20 bps could be attributed to the fact the subsidiaries are first time issuers and the bonds are unlisted, the source added.

Sail raiSeS rs 420 Crore Via Short-terM BondS

Steel Authority of India (SAIL) has raised Rs 420 crore at a coupon rate of 8.35% through bonds having a maturity of three years, sources said. Earlier, SAIL had issued short-tenure bonds in April at a coupon rate of 7.95%. In early May, it had put off the bond issue due to demand for higher yield by investors, said sources, indicating the company was planning to raise funds at 8.25-8.30% even as it received bids in the range of 8.43-8.72%.

“After the June 2 monetary policy review, G-sec yields have hardened and so have corporate bond yields. Considering that, 8.35% could be a good yield. However, in the next few days, we could expect the yields on corporate bonds to be in the range of 8.30-8.50% range,” said Ajay Manglunia, Senior Vice President, fixed income at Edelweiss Securities.

Nuclear Power Corporation of India (NPCIL) and Rural Electrification Corporation (REC) are also likely to tap the bond markets in near term, sources indicated.

PoWer Grid CorP to taP Bond MarKet to raiSe rs. 12,000 Crore

State-run transmission utility Power Grid Corporation of India Ltd (PGCIL) would be tapping the bond market to raise Rs. 12,000 crore in the current fiscal, said Chairman R N Nayak on June 2. The proceeds from the bonds would be used for the Rs. 22,500- crore capital expenditure plan.

Nayak said that the company has earmarked a capital expenditure of up to Rs. 1 lakh crore for the next five years. The company would be maintaining a 70:30 debt to equity ratio for its capex plans.

reC, PFC, ireda, otherS to raiSe rs 5,000 Crore Via taX-Free BondS

State-owned firms, including Power Finance Corp. Ltd (PFC), Rural Electrification Corp. Ltd (REC) and Indian Renewable Energy Development Agency Ltd (IREDA) will raise Rs.5,000 crore by selling tax-free bonds to raise low-cost and long-term funds to help finance India’s plan to quadruple its renewable energy production.

While IREDA will raise Rs.2,000 crore, PFC and REC will raise Rs.1,000 crore each. The companies will, in turn, lend the money to solar energy developers at a low interest rate of 10.5%.

The current base rate is upward of 9.75%, although banks typically lend at base rate plus 1-2% for their best customers. Developers may use these funds for projects such as rooftop solar panel installations.

The government has raised an earlier target of installing 20,000 megawatts (MW) of solar energy capacity by 2022 fivefold to 100,000MW.


INVESTMENTS

hPCl inVeStinG in Clean Fuel ProjeCtS, SaYS oFFiCial

Hindustan Petroleum Corporation Limited (HPCL), a Navratna company, is making huge investments in clean fuel projects to meet the Bharat Stage-III & BS-IV fuel specifications to reduce vehicular pollution.

Flue gas desulphurisation units had been added in the recent past to reduce sulphur dioxide and particulate matter contents in the fluidized catalytic cracking unit (FCCU).Online Analysers had been provided on all refinery stacks for monitoring various pollutant concentrations in stack emissions. These apart, Continuous Ambient Air Quality Monitoring Stations had been provided in three locations in Visakh Refinery for monitoring the ground level concentrations of various pollutants.

BSnl to inVeSt rS 6,000 Crore to Set uP 40,000 Wi-Fi hotSPotS in 20 CirCleS

State-run Bharat Sanchar Nigam (BSNL) will set up at least 40,000 Wi-Fi hotspots across 20 circles, other than Delhi and Mumbai, for which it has earmarked Rs 6,000 crore, said Telecom Minister Ravi Shankar Prasad while launching a wi-fi facility at Taj Mahal on June 16.

The Telecom Minister said a global tender for this project will be placed in July seeking private participation. “This project is likely to be completed by March 2018,” he said.

BSNL CMD Anupam Srivastava said this will help the state run telecom operator to take on private telcos that are rolling out 4G internet services.

“Our 3G reach is around 60% across 20 circles. By offering 40,000 Wi-Fi hotspots, we will be able to reach out to almost 85% of our total network with high-speed internet services,” said Srivastava.

The CMD also said BSNL will initially involve private players in the scheme. “After a year we will evaluate and if we find the project feasible, we will back up major part of this plan through our own resources,” he said.

BSNL will provide free Wi-Fi services for 30 minutes per 24 hours (three times a month) which visitors can utilise in multiple sessions. After the free usage limit of 30 minutes is exhausted, a customer can pay for using the services. Subscription plans are available in the denomination of Rs 20, Rs 30, Rs 50, and Rs 70, valid for 30 minutes, 60 minutes, 120 minutes and one day, respectively.

BSNL has also planned to expand Wi-Fi coverage to other tourist and religious locations like Khajuraho and Jagannath Puri by March 2016.

onGC to inVeSt rS 41,678 Crore on neW FieldS

State-owned Oil and Natural Gas Corp (ONGC) will invest Rs 41,678 crore for bringing to production newer oil and gas fields and redeveloping ageing fields as it looks to boost output.

ONGC will invest Rs 24,188 crore in development of six projects both on the east and west coast. Another Rs 17,490 crore will be spent on redeveloping its prime Mumbai High fields as well as Heera-South Heera fields in western offshore, a top company official said. The biggest project is the western offshore Daman field development where Rs 6,086 crore is being invested to produce 27.67 billion cubic meters (bcm) of gas by 2034-35.


In the neighbouring South Bassein field, Rs 4,620 crore is being invested in additional development by April 2017 for an incremental gas production of 18.83 bcm by 2030-31.

Also, Rs 2,477 crore additional development of Vasai East will give 1.83 million tonnes and 1.97 bcm of gas by 2029-30. The project will be completed by December 2018, he said.

The official said ONGC is investing Rs 1,881 crore in developing the Gamij oilfield near Ahmedabad.

Of the east coast, ONGC is investing Rs 4,124 crore in developing the Vashista and S-1 gas fields in Krishna Godavari basin. The project will be completed by April 2017 and give an incremental gas production of 15.96 bcm, he said.

Another Rs 5,000 crore is being spent on Krishna Godavari basin field of Nagyalanka which will start production from September next year.

Meanwhile, Oil and Natural Gas Corporation (ONGC) will explore four of its coal bed methane blocks on its own. This will require an investment of Rs 5,000 crore.

D K Sarraf, Chairman and Managing Director, said, “We have decided to expedite development in our CBM blocks. CBM does not require technology or expert knowledge. We were in this business and our team is familiar with exploration plans”.

ONGC has so far spent Rs 510 crore on the four blocks.

ioC to inVeSt rS 1,500 Crore to uP StoraGe in northeaSt

Public Sector Enterprise Indian Oil Corporation plans to invest around Rs 1,500 crore in the Northeast to strengthen its various divisions, including storage and retail, over the

next three-four years. IndianOil-AOD, the company’s Northeast division, is scouting for land in states such as Assam, Tripura and Mizoram to increase storage capacities of petroleum products. “Northeast is very important for us and we are focussing more to provide optimum services to the people of the region.

“One of the most important issues is availability of products, keeping in mind the geographical disadvantages of the region,” Indian Oil Corporation Executive Director (IndianOil-AOD) Dipankar Ray said here. Common people of the region, especially in hill states, suffer a lot whenever there is any natural calamity or political or social disturbances, he added.

“To mitigate this problem, we have decided to increase our storage capacities of petroleum products and LPG in every state of the region in a big way. “For this, we will invest around Rs 1,500 crore over the next three-four years in the seven states,” Ray said. Out of this amount, about Rs 1,250 crore will be put in to ramp up the storages of petrol, diesel and kerosene, while Rs 150 crore and Rs 50 crore will go for enhancing LPG storage capacities and increasing the number of retail outlets, respectively, he added.

PoWer Grid CorPoration oF india liMited PlanS to inVeSt rS 22,500 Crore in FY16

State-run transmission utility Power Grid Corporation (PGCIL) is planning to invest Rs 22,500 crore this fiscal to fuel its expansion plans.

“We are very well on track on our capex plans. This fiscal, we have earmarked an expenditure of Rs 22,500 crore for FY16, which we will use for expansion,” company’s Chairman and Managing Director RN Nayak told reporters.

He further said the company has already deployed Rs 4,000 crore for various projects in the last two months.

“Out of the capex for FY16, we have already spent Rs 4,000 crore in the last two months for undertaking various projects. We plan to maintain 70:30 debt equity ratio,” Nayak said.

nalCo to inVeSt rS 5,540 Crore in 1 Million tonne aluMina reFinerY

The board of National Aluminium Company (Nalco) has approved a significant capacity expansion plan to set up a one million tonne alumina refinery at Damanjodi, Koraput, Odisha at a proposed investment of Rs 5,540 crore. Nalco already has a captive bauxite deposit at Pottangi in the state, which will be utilized in this project. This is the first major expansion in the state run aluminium company in step with the Modi government’s Make in India campaign.

With a view to boost the ancillary and downstream industries, Nalco is also committed to supply 50,000 tonne of aluminium metal to ‘Angul Aluminium Park’ which has been formed as a joint venture between Nalco and Industrial Development Corporation of Odisha. Apart from investing in its mainstay metals business, the company is also stepping up its fledgling presence in the renewable energy sector. It is in an advance stage of setting up of 100 MW wind power plant at a suitable location with an estimated investment of Rs 660 crore.


RESULTS

SCi FinallY SteadieS ShiP and reGiSterS ProFit aFter three YearS

The Shipping Corporation of India Ltd (SCI), India’s largest shipping company and a Government of India Public Sector Enterprises, has reported a quarterly profit of Rs. 101.49 crores for Q4 FY 2014-15 as against Rs 13.24 crores reported during the same quarter last year. This is the fifth consecutive quarter of reporting profits. After having reported losses for last three financial years, SCI has turned around and reported a net profit of Rs. 200.93 crores for the year ended 31st March 2015, as against a net loss of Rs. 274.66 crores in the previous year.

While the net income from operations has almost remained flat, the appreciable decrease in various expenses, impact of judicious cancellation of new ship building orders and sale of old vessels have also contributed to the positive results. The overall financial health of the company has improved with enhanced net-worth and reduced borrowings.

All the three business segments of SCI have reported profits before interest in the last quarter and also on annual basis. The losses due to unprecedented downturn in the dry bulk markets have been partially offset by the rally in the tanker market since early 2015. SCI prides in having a diversified fleet of 69 vessels of 5.89 mn dwt with an average age below 9 years. SCI has been able to maintain her tonnage over the year and is aspiring to cross the 6 million DWT mile stone in near future.

PGCil rePortS 20% riSe in Standalone net ProFit

Power Grid Corporation of India has reported a 20 per cent rise in its standalone net profit at Rs 1,412.48

crore for the quarter ended March 31 against Rs 1175.84 crore last fiscal.

nalCo net ZooMS 106% in 2014-15

National Aluminium Company (Nalco) posted 106 per cent jump in its net profit for the year ended March 31, 2015 at Rs 1322 crore as against Rs 642 crore achieved by the company in the year ago fiscal.

During 2014-15, the navratna company achieved its highest ever gross turnover of Rs 7771 crore, 10.63 per cent higher than Rs 7024 crore recorded in 2013-14. Nalco’s previous best turnover was Rs 7247 crore which it achieved in 2012-13.

Nalco also logged an export turnover of Rs 3307 crore in 2014-15.

The Nalco board has recommended final dividend at a rate of 10 per cent (Rs 0.50 per equity share of Rs five each) amounting to Rs 128.86 crore. Earlier, Nalco had declared an interim dividend of 25 per cent (or Rs 1.25 per share of Rs five each), amounting to Rs 322.16 crore for 2014-15, on the paid-up equity share capital of Rs 1288.62 crore.

State tradinG CorP. reCordS rs 31 Crore ProFit durinG 2014-15

State Trading Corporation of India has recorded a Profit Before Tax of Rs31 crore during the year 2014-15, officials have said, announcing the annual results of the central government’s premier global trading company engaged in exports, and imports operations.

“The company achieved an export turnover of Rs1,884 crores, which is the highest achieved during the last six years. The total turnover of the company during the year 2014-15 was of the order of Rs14,400 crore,” he said.

Announcing that the company has recorded a Profit Before Tax of Rs31 crore, officials said that they could achieve this performance as a result of many new initiatives undertaken during the financial year. The company in the meantime has also recorded a huge volume of global trade and commerce.

nhPC PoStS rS 644 Cr net ProFit in Q4

Swinging into black, hydel power producer NHPC has reported a net profit of Rs 644.51 crore for the March quarter mainly on account of higher power generation.

The state-owned company had registered a net loss of Rs 707.4 crore in the year-ago period, it said in a BSE filing. For the year ended March 2015, the company posted a standalone net profit of Rs 2,124.47 crore whereas the same stood at Rs 978.79 crore in the year-ago period. Consolidated net profit stood at Rs 2,491.36 crore for the year ended March 2015 as against Rs 1,218.75 crore posted in the year-ago period.

“The main reasons better performance of the company in the March quarter as well as in the fiscal under review is higher power generation compared and adopting latest accounting standards,” a senior official said.

He revealed that the NHPC generated 4,000 million units more in 2014-15 compared to total power generations in the previous fiscal. “During the last fiscal, we adopted Accounting Standard-16 (AS-16) in line with guidelines of Institute of Chartered Accountant of India. Thus we did not charge interest on borrowing to our Profit and Loss Account, which helped our improving our bottom line,” the official added


CSR INITIATIVES

hPCl eXtendS unStinted aid to ViSaKhaPatnaM

It was nearly seven months ago that the Hudhud cyclone wreaked havoc here, leaving behind a trail of untold devastation and damage. Currently, as the region struggles to rise once again from the ashes, a ray of hope shines bright. The Hindustan Petroleum Corporation Limited is joining hands with the state government to reconstruct the devastated region.

The next three years will see that the Navratna PSE invest the collective efforts of its people into Rs 3-crore joint rehabilitation project in collaboration with the state government. The Chief Minister’s Office is currently in the process of identifying the activities to be undertaken as part of the programme. The HPCL employees had already contributed Rs 1.90 crore to the CM’s Relief Fund Hudhud, earmarked another Rs 3 crore towards reconstruction for which the state government offered 18 locations.

The HPCL-VR (Visakh refinery) encompasses a wide range of activities from collaborating with educational institutions to health care programmes. The company is engaging the people of Visakhapatnam through long-term corporate level projects as well as on-time field-level activities.

During the past three years, HPCL has transformed the face of Andhra Pradesh, with five long-term projects – swavalamban (skill development programme to the unemployed youth), Nanhi Kali (educating girl Child and providing academic and social support to continue education), Unnati (computer education to school children – providing computer awareness and basic education to Class VI to IX

in rural areas), akshaypatra (mid-day meal programme - providing hygienic and nutritious food to students from rural areas) and dhanwantari (Gramin Swasthya Seva through Mobile Medical Vans to provide basic medical attention in villages).

Besides, HPCL has brought social change across Visakhapatnam through a series of field-level interventions, which include building of classrooms, computer labs and toilets in schools; supplying furniture and books to schools; providing workshop tools and equipment to the disabled; supporting medical care in hospitals and organising skill training programmes for the youth.

enVironMent aWareneSS CaMPaiGn at ntPC VindhYaChal

NTPC Vindhyachal is organising various competitions on Environment Awareness for employees, school children, teachers, housewives, and members of Ladies Club, Suhasini Sangh.

The Awareness Campaign for protecting the Environment culminates on World Environment Day throughout the country, Competitions will include Essay and Slogan writing in English and Hindi for children of various age groups and ladies in various categories and Painting and Drawing competition for junior and senior children.


OVERSEAS OPERATIONS

onGC VideSh SeeKS Greater FinanCial autonoMY

ONGC Videsh (OVL) said it was seeking financial powers to invest up to $1 billion without government approval. Currently, the overseas arm of ONGC,can independently decide on investment of up to Rs 300 crore. An investment decision higher than this needs to be ratified by the PM-headed Cabinet Committee on Economic Affairs (CCEA). “We are seeking at least Navratna PSE status for OVL, so that $1 billion investment powers could be granted to us,” Narendra K Verma, Managing Director of OVL, said.

The MD said Rs 300 crore financial power for OVL was set in 2000 when the rupee-dollar exchange rate was completely different’

OVL has 35 projects in 16 countries from Brazil to New Zealand and is looking at certain acquisitions in oil and gas rich regions. Verma hinted that OVL is contemplating selling stake in some exploration assets and buying equity in ‘five-six’ new projects.

india SeeKS taX ConCeSSionS For onGC’S aSSetS in ruSSia

India has again pressed Russia for tax concessions for some energy assets Oil and Natural Gas Corporation (ONGC) operates there. In a meeting with his Russian counterpart last month, Oil Minister Dharmendra Pradhan argued for lower taxes for Imperial Energy that ONGC has been struggling with since its purchase six years ago.

Pradhan led the Indian delegation that met with Russian Energy Minister on the sidelines of the Organisation of Petroleum Exporting Countries (OPEC) meeting in Vienna and proposed a tax cut for Imperial reserves, a request that has been rejected in the past.

“We told them (Russia) that if they allowed more concessions to such difficult fields, production is likely

to go up. They also know by now that it’s a difficult field,” said Dinesh K Sarraf, Chairman, ONGC, who was part of the delegation. He said the Russians may consider India’s request for tax concession.

A declining output, writedowns and unavailability of certain oilfield services due to western sanctions on Russia has troubled Imperial Energy that was purchased by ONGC for about $2 billion in 2009. Imperial is now hoping a tax reduction from Russia and a quick production from the shale reserves in Bazhenov region may help boost its profit. ONGC executives say Imperial makes barely $21 on a barrel of oil sold at $100 and desperately needs tax concessions to be able to support the difficult and expensive drilling needed to survive in the Russian field. The Russian government has offered lower tax incentives to energy fields operated by some other companies. India wants that extended to Imperial as well.

During the delegation meeting, India also showed interest in picking up interests in a few more oil and gas assets, while inviting the Russian delegates to evaluate opportunities in the Indian hydrocarbon sector, Sarraf said.

PetroBraS and onGC Find neW oil reSerVoir oFF BraZil’S SerGiPe

Brazil’s state-run Petroleo Brasileiro SA discovered a new deposit of light oil in deep waters off the coast of the northern state of Sergipe, the company said.

Well 3-SES-189, located in the Poco Verde area discovered in 2012 in the BM-SEAL-4 exploration block, was drilled down to 5,350 meters in waters 2,479 meters deep.

Drilling began on April 6 by Diamond Offshore Drilling Inc with its Ocean Courage semi-submersible rig.

“The reservoirs contain light oil of good market value and are 85 meters wide, with good porous and

permeable conditions,” a Petrobras statement said. It said another test is needed to confirm the conditions and establish the well’s potential. Petrobras is the operator and has a 75 per cent stake in the prospect, in partnership with India’s Oil and Natural Gas Corp , which holds 25 per cent.

Deepwater exploration in the Sergipe-Alagoas Basin by Petrobras, ONGC and India’s Videocon Industries Ltd and Bharat Petroleum Corp. has resulted in some of Brazil’s largest oil discoveries outside the giant finds in the Santos Basin.

india MaY ForM joint Venture With uae, KuWait For oVerSeaS oil & GaS aSSetS

India is in talks with the oil rich United Arab Emirates and Kuwait to explore the possibility of setting up separate joint ventures that will acquire oil and gas assets in other countries, chairman of state-run Oil and Natural Gas Corporation said.

A delegation led by Oil Minister Dharmendra Pradhan held separate discussions with the Energy Ministers of the two countries on the margins of a recent seminar of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna. ONGC chairman Dinesh K Sarraf said while the UAE and Kuwait have plenty of oil to deal with at home, unlike India, “they also have plenty of cash to deploy”.

This explains the interest of the two countries in forming joint ventures with India to acquire assets in other countries, said Sarraf, who was part of the Indian delegation that also included government officials and top executives of other state-run oil firms. If discussions were to lead to a deal, Indian state-run firms might form separate joint ventures with state firms in the two countries. India’s primary interest is in acquiring upstream assets while for Kuwait and the UAE the interests stretch to refineries, retailing and petrochemicals, Sarraf said.


CII INVESTMENTTRACKER

hiGhliGhtS

Macro-economic conditions have improved over the past one year

Economic reforms initiated in the last one year have perked up growth & investment

CII Business Confidence Index has moved up

A pick-up in capital goods coupled with investment intentions hint at early stirrings of investment revival

Foreign investment inflows have stabilized

Project implementation has gone up

Project revival has also improved

Incremental capital-output ratio (ICOR) is declining, indicating improved returns on investment

1. inVeStMent SnaPShot

Unit 2013-14 2014-15 same Previous Latest quarter quarter quarter last year

New project announcements Rs bn 5737 10204 1249 4156 2344

Foreign investment inflows US$ bn 26.4 75.1 10.2 13.6 22.9

- FDI inflows US$ bn 25.3 31.9 8.0 6.6 10.2

- FII inflows US$ bn 5.0 40.9 9.5 6.1 12.4

Projects completed Rs bn 3279 3561 1556 778 1098

Project implementation Rs bn 363 2445 988 305 stalled 5

Projects revived Rs bn 1355 2050 224 203 382

GFCF as % of GDP % 29.7 28.7 29.8 28.2 28.7

ICOR Ratio 4.3 3.9 4.4 4.3 3.8

Latest quarter- Q4 2014-15, previous quarter- Q3 2014-15, same quarter last year- Q4 2013-14 ICOR: Incremental Capital-Output RatioSource: CII compilation from various sources

2. inVeStMent SCenario reGiSterS iMProVeMent

2.1 Pick-up in capital goods, indicating early signs of investment revival

The capital goods, specifically machinery & equipment sector, has shown an improved performance since end 2014, indicating that investment activity is gradually gaining traction

Source: Office of the Economic Advisor

30

25

20

15

10

5

0

-5

-10

-15

-20

Capital Goods Machinery & Equipment

IIP growth (y-o-y)


2.2 Investment Intentions Hint at Investment revival

2006-07

17.120.1

22.4

16.1 16.1

9.7

5.3 5.7

10.2

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

New project announcements (Rs trillion)

New project announcements growth (%)

June

-10

200

150

100

50

0

-50

-100

8000

7000

6000

5000

4000

3000

2000

1000

0

New project announcements by sector (Rs billion)

ManufacturingElectricityConstruction & real estate

MiningServices (other than �nancial)

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

16000

14000

12000

10000

8000

6000

4000

2000

0

New project announcements by ownership (Rs billion)

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

GovernmentForeign Private Sector

Indian Private Sector

Improved business confidence has translated into new project announcements on ground

New Projects announcements have nearly doubled in 2014-15

Source: CII analysis & calculations based on CMIE data

Quarterly growth of new projects announcements reveal a consistent increase in 2014-15

Growth of new project announcements has turned positive in the last 3 quarters

Project announcements have picked up in 2014-15 in all sectors except manufacturing

Delayed revival of manufacturing is due to subdued economic activity in last 2-3 years, which has resulted in a huge surplus capacity in the sector.

Project announcements by the government and private sector have picked up in 2014-15





New project announcements by states in 2014-15(Rs billion)

Har

yana

1,16

8A

ndhr

aPra

desh

Guj

arat

Mad

hya

Prad

esh

Mah

aras

htra

Odi

sha

Tam

ilnad

u

Aru

nach

al P

rade

sh

Karn

atak

a

Tela

ngan

a

Raja

stha

n

Jhar

khan

d

Him

acha

l Pra

desh

Wes

tBen

gal

Utt

arPr

ades

1,61

3

705

613

593

563

549

548

521

509

395

384 33

133

117

1

163

2009 2010 2011 2012 2013 2014

3475

4336

3900

2828

2387

1843

868 826

Number of Proposals

2014-15Jan-May

2014-15Jan-May

2009 2010 2011 2012 2013 2014

1040

17361540

568 530405

124 150

Proposed Investment(Rs thousand crore)

2014-15Jan-May

2009 2010 2011 2012 2013 2014

9.5

12.5

21.0

7.1

10.5

4.52.3 2.2

Proposed Employment (lakh)

Haryana, followed by Gujarat, Andhra Pradesh, Madhya Pradesh and Maharashtra, has attracted the maximum amount of new investments in 2014-15


While the significant growth in new project announcements is laudable, subdued new investment proposals (IEMs/LOI) indicate that a gradual recovery is underway as investors are still adopting a wait-and-watch approach before undertaking new investments

Source: DIPP’s SIA statistics


Annual Projects completed(Rs billion)

1,094

1,9112,226

3,045

3,9243,401

4,213

3,2793,5613,681

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

Quarterly Projects completed(Rs billion)

2,135

851577

871

1,381

544 637 532

1,566

1,123

562778

1,098

Mar-12

Jun-12

Sep-12

Dec-12

Mar-13

Jun-13

Sep-13

Dec-13

Mar-14

Jun-14

Sep-14

Dec-14

Mar-15

3. ProjeCt iMPleMentation reGiSterS an iMProVeMent

Project implementation can be assessed by analyzing project completion and projects stalled.

3.1 Project completion

Project completion is improving. Number of projects completed has gone up


Correspondingly, projects wherein implementation was stalled during the year/ quarter, have been coming down

Implementtaion Stalled during the year(Rs billion)

2005-06

6 305 218

876

2,759 2,535

4,943

3,9553,635

2,445

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

Impemetation Stalled during the quarter(Rs billion)2006

1412

886

1140

825994 988 1071

827652

305415516

Mar-12

Jun-12

Sep-12

Dec-12

Mar-13

Jun-13

Sep-13

Dec-13

Mar-14

Jun-14

Sep-14

Dec-14

Mar-15



Lack of clearances (environmental and non-environmental) is the major cause for projects getting stalled, followed by problems related to land acquisition, funds availability and fuel feedstock &raw material supply.

Lack ofenvironment

clearance,17.4%

Lack offunds,10.9%

Lack ofpromoterinterest,

3.0%

Landacquisitionproblem,

12.4%

Naturalcalamity,

0.2%

Notavailable,

3.5%

Others, 14.5%

Unfavourable marketconditions, 6.0%

Lack ofclearances(non-env,),

22.5%

Fuel/feedstock/raw materialsupply pb,

9.6%

Reasons for Stalled Projects, (% share in value)


4. ProjeCtS reViVal haS iMProVed

Project revival has picked up in 2014-15

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

Projects revived during the year(Rs billion)

161 226

1,098

1,506 1,577

2,195

1,355

2,050

Projects revived during the quarter(Rs billion)

428

890

408 379

518

252

580

300224

513

952

203

382

Mar-12

Jun-12

Sep-12

Dec-12

Mar-13

Jun-13

Sep-13

Dec-13

Mar-14

Jun-14

Sep-14

Dec-14

Mar-15



saNjay GUPTa takes charge as Chairman and Managing director of Engineers India Ltd

Sanjay Gupta, an engineering graduate from University of Roorkee has 34 years of extensive experience in Engineers India Ltd (EIL) cutting across implementation of various mega projects. Gupta is a pioneer in implementation of projects on OBE (Open Book Estimate) mode.

Gupta joined EIL in 1981 as a management trainee and has served the company in various positions. Prior to taking over as Chairman and Managing Director (CMD), EIL, he served as Director (Commercial), EIL. As Director (Commercial) he was mainly responsible for Business Growth Initiatives and Strategy Building to enhance company business profile, geographical spread and inorganic growth. Major successes in the overseas market have come during his tenure including establishment of Abu Dhabi Engineering Hub. Implementation of major domestic and internal jobs was also entrusted to him given their strategic importance.

Gupta has travelled extensively and has been instrumental in enhancing

EIL’s international visibility and client connect across the globe.

M K sINGH takes charge as Chairman and Managing director of Bridge & roof Co. (I) Ltd.

M.K. Singh has been appointed as the Chairman and Managing Director of Bridge & Roof Co. (I) Ltd. (B&R) from June 5, 2015. He joined the Company in July 2011 as Director (Project Management) and had held additional charge of CMD of the Company previously.

Singh has the distinction of having diversified and varied experience of working in various disciplines of reputed Maharatna and Navratna PSEs like NTPC and POWERGRID in the areas of Engineering, Procurement and Project Management involving constructing projects in India and abroad. He has experience to handle manufacturing business of various products while working as MD/CMD of Richardson & Cruddas (1972) Ltd., Mumbai and Workshop of B&R at Howrah which manufactures various Engineering Products.

He is presently also holding additional charge of CMD of National Bicycle Corpn. Ltd., Mumbai and

has held position at Board Level in many other Companies such as Hindustan Cables Ltd., Bharat Bhari Udyog Nigam Ltd., BBJ Construction Co. Ltd. and has sound knowledge of various policies, procedures and guidelines including interfacing between various departments of Government, Statutory Bodies and other stakeholders.

MaNoj MIsHra takes charge as Chairman and Managing director of National Fertilizers Ltd

Manoj Mishra has taken over as Chairman & Managing Director (C&MD) of National Fertilizers Limited (NFL) with effect from June 3, 2015. He is a member of the Institute of Cost Accountants of India.

Mishra has professional experience of 30 years in various Public Sector Undertakings and Co-operative sector. Prior to his appointment as C&MD, NFL, he held the position of Director (Finance) in State Trading Corporation (STC). He was also holding additional charge of Director (Marketing) for bullion and other divisions in State Trading Corporation (STC).

Prior to his joining STC in 2010, Mishra held various positions in

APPOINTMENTS

Ameising Luikham has taken over the charge as Secretary of the Department of Public Enterprises (DPE), the Government of India. Prior to this, he was the Secretary, North East Council.

An IAS officer of the 1981 batch of Manipur cadre, Shri. Luikham has served the Manipur government in various capacities with distinction. In his 34-year-old career, he has handled key ministries in the state including finance, industry, agriculture and urban development and has earned the appreciation of the authorities for his insight and tactful handling of sensitive issues. He has also worked earlier at the Centre in the Department of Public Enterprises as a Director.

aMEIsING LUIKHaM joins as secretary, department of Public Enterprises

Shri aMeiSinG luiKhaM iS the neW SeCretarY, dePartMent oF PuBliC enterPriSeS


Krishak Bharati Co-operative Limited (KRIBHCO) for 23 years. Earlier, he had worked in HHEC of India Ltd.

rajENdra CHaUdHarI takes charge as director (Commercial) of NBCC

Rajendra Chaudhari has taken charge as Director (Commercial) of NBCC on June 10, 2015. Prior to assuming the office of Director (Commercial), Chaudhari was holding the position of Senior Executive Director (Commercial) in NBCC, primarily overseeing the operations of the Company’s Real Estate Segment. In addition, he was also heading some key wings of NBCC namely, Consultancy, Systems, Administration and CSR. Known for his penchant in digital dynamics, Chaudhari is a Civil Engineering Graduate from Maharaja Sayajirao University, Baroda (Gujarat) and also had stint in Western Coal Fields, another CPSE, before joining NBCC in 2005.

P K sHarMa takes charge as director (operations) of oil India Ltd.

Pramod Kumar Sharma has taken over as Director (Operations) of Oil India Limited (OIL), on June 1, 2015. Sharma is a Post Graduate in Geophysics from Banaras Hindu University (BHU), Varanasi (UP) and also possesses a Post Graduate Diploma in Management (PGDM) with dual specialization in HR & International Business, from All India Management Association (AIMA), New Delhi.

Sharma has to his credit an experience of more than three decades in the E&P industry in India

A Government of India Undertaking, Ministry of Shipping, with its Head Office at Visakhapatnam, with effect from June 1, 2015.

M.S. Rao joined in DCI in the year 2006 as Deputy General Manager (Operations) and got promotions up to the level of General Manager and now appointed as Director (Operations & Technical). In DCI, he worked in various capacities as Head of Operations Department, Head of Marketing Department, Project Engineering Department, Human Resources Department.

Rao is having vast experience of about 24 years in the field of Dredging (Operations, Marketing, Contracts, Project Engineering, etc.) and in other major Civil Engineering projects.

Rao has obtained B.Tech (Civil Engineering) from the Regional Engineering College, Warangal (Now NIT, Warangal), in the year 1990 and MBA degree from Andhra University, Visakhapatnam.

saNjIV sHarMa takes charge as director (Finance) of Mazagon dock Ltd.

Sanjiv Sharma has been appointed as Director (Finance) of Mazagon Dock Shipbuilders Limited from June 1, 2015. Sharma is a qualified Chartered Accountant having vast experience in the field of Finance. He held various Finance portfolios such as Project Finance, Resource Management, Costing and Budgeting, Internal Audit and implementation of ERP during his career spreading over last three decades. Prior to this, he was Director (Finance) of Goa Shipyard Ltd.

and abroad. He has worked at various senior positions in the Fields Head Quarters of the Company at Duliajan, Assam. His last assignment was as Group General Manager (OSD) with Director (Operations). Before being OSD, he was Group General Manager (Business Development) at Corporate Office, Noida. As GGM (BD) he led the Business Development team in Oil India Limited, while discharging the additional responsibilities as Chief Executive Officer (CEO) of Oil India International Limited (OIIL), a wholly owned subsidiary of the company.

V KaLyaNa raMa takes charge as director (Projects & services) of Container Corporation of India

V. Kalyana Rama has taken over as Director (Projects & Services) Container Corporation of India Limited (CONCOR). He was holding the post of Executive Director, South Central Region of CONCOR. He is a Mechanical Engineer and worked in BHEL, BHPV before joining Railways. He had held various challenging assignments in his career with Indian Railways. He has been professionally trained both in Railways and in multi modal transport logistics. He was instrumental in development of container depots in South Central and Southern Region of CONCOR. He has been involved in all the developmental planning and operational activities of EXIM and Domestic cargo at the various dry port terminals of CONCOR.

M s rao takes charge as director (operations & Technical) of dredging Corporation of India Ltd.

M.S. Rao has been appointed as Director (Operations & Technical) in Dredging Corporation of India Ltd.,


STOCK TALK

GoVernMent looKinG to PuSh StaKe SaleS in SMaller CoMPanieS to driVe SelloFF

The government is looking to push stake sales in smaller state-run companies as part of a revised strategy aimed at meeting its ambitious disinvestment target. Officials said public issues of blue-chip firms such as NTPC and Oil and Natural Gas Corporation may be slipped in between issues of smaller firms such as National Buildings Construction Corporation (NBCC) and SJVN.

The Disinvestment department, which has approvals for about 20 public issues worth Rs 50,000 crore, is working out a road map with an aim to bring one issue each month. Since the beginning of this fiscal, the government has been able to bring only one issue, that of Rural Electrification Corporation, raising Rs 1,600 crore through a 5% stake sale. The disinvestment agenda has received a setback on account of choppy market conditions.

Finance Minister Arun Jaitley, during his recent visit to the United States, had addressed a select gathering of portfolio managers from foreign institutional investors as well as officials from banks, insurance and pension funds. The government will further push those companies where it currently holds around 90% stake, and which needs to be brought down by 2017 in order to meet the mandated 25% public holding norm prescribed by the market regulator, Securities and Exchange Board of India. “It is necessary to maintain momentum throughout the year and whenever market conditions augur well, we will offload the bigger issues,” the official said.

This will help the government inch closer to the mammoth disinvestment target of Rs 69,500 crore, of which Rs 41,000 crore is to come from stake sales in state-owned companies, the official said. Last month, among a list of issues, the cabinet had approved 10% stake sale in the country’s biggest refiner and fuel retailer, Indian Oil Corporation, and 5% in power producer NTPC. Approvals are already in place for 5% stake sale in ONGC. At current valuations, the government may be able to raise about Rs 28,000 crorefrom stake sale in these three blue-chip firms.

The government also has cabinet clearances for 5% stake sale in Bharat Heavy Electricals and 10% stake sale in both National Mineral Development Corporation and National Aluminium Company Limited.

GoVt PlanS SinGle roadShoW, i-BanKer in StaKe Sale PuSh

The Finance Ministry is considering bundling requests for proposals and roadshows in an effort to speed up disinvestments during 2015-16.

The disinvestment department usually issues separate requests for proposal to engage merchant bankers for each company in which the government is planning a stake sale. Similarly, investor roadshows are conducted separately for each company.

With a disinvestment target of Rs 69,500 crore for 2015-16, and with Cabinet approvals already in for stake sales worth Rs 50,000 crore in 20 state-owned companies, the

government is weighing the option of bundling requests for proposals and roadshows.

If implemented, a request for proposals may be issued for four or five companies. Instead of working on one scrip, merchant bankers may find themselves handling a bunch of Public Sector Enterprises’ stake sales at the same time.

The disinvestment department is working on how to bundle the companies, by sector, market capitalisation, or any other parameter. “All the bundles may be similar in value, but beyond that the modalities are being worked upon,” the official said.

Of the Rs 69,000 crore disinvestment target, Rs 41,000 is expected from minority stake sales and Rs 28,500 crore from strategic sales in loss-making PSEs or other assets like warehouses, factories, hotels and office buildings.

The disinvestment department has secured approvals for Rs 50,000 crore worth of stake sales ranging from 5-15 per cent in 20 PSEs. These include Power Finance Corp, NMDC, NTPC, Nalco, BHEL, MMTC, National Fertilizers, Rashtriya Chemicals and Fertilizers, Indian Oil, Hindustan Copper, State Trading Corp, India Tourism Development Corp, Engineers India, MOIL, SJVN, and Mangalore Refinery and Petrochemicals.

Not all these companies’ stakes may be sold in 2015-16, but most will be. So far this year, only a five per cent stake in Rural Electrification Corp has been divested, garnering Rs 1,600 crore.


PSE INDEX

S&P BSe PSu indeX StoCKS (aS on 31 julY 2015)

SL.NO. SCRIP CODE COMPANYCLOSING

PRICE (Rs.)

CHANGE FROM THE PREVIOUS

TRADING DAY (%)

CPSEs-Central Public Sector Enterprises (Companies where the direct holding of the Central Government or of other CPSEs is 51% or more)

1 523319 BALMER LAWRIE & CO. LTD. 634.00 0.76%

2 500048 BEML LTD. 1514.25 0.39%

3 500049 BHARAT ELECTRONICS LTD. 3987.05 1.54%

4 500103 BHARAT HEAVY ELECTRICALS LTD. 278.70 2.84%

5 500547 BHARAT PETROLEUM CORP. LTD. 925.40 2.19%

6 500110 CHENNAI PETROLEUM CORP. LTD. 191.45 7.33%

7 533278 COAL INDIA LTD. 439.30 4.55%

8 531344 CONTAINER CORP. OF INDIA LTD. 1643.15 0.06%

9 532178 ENGINEERS INDIA LTD. 241.60 3.98%

10 532155 GAIL (INDIA) LTD. 355.45 1.97%

11 513599 HINDUSTAN COPPER LTD. 61.70 5.38%

12 500104 HINDUSTAN PETROLEUM CORP. LTD. 924.05 1.48%

13 500191 HMT LTD. 47.40 0.42%

14 530965 INDIAN OIL CORP. LTD. 431.25 3.14%

15 500108 MAHANAGAR TELEPHONE NIGAM LTD. 18.95 0.79%

16 500109 MANGALORE REFINERY & PETROCHEMICALS LTD. 72.85 0.69%

17 513377 MMTC LTD. 47.25 4.88%

18 533286 MOIL LTD. 232.45 0.19%

19 532234 NATIONAL ALUMINIUM CO. LTD. 35.50 0.14%

20 534309 NATIONAL BUILDINGS CONSTRUCTION CORP. LTD. 1028.40 1.73%

21 513683 NEYVELI LIGNITE CORP. LTD. 82.50 0.06%

22 533098 NHPC LTD. 18.95 1.34%

23 526371 NMDC LTD. 101.95 0.24%

24 532555 NTPC LTD. 134.90 0.70%

25 500312 OIL & NATURAL GAS CORP. LTD. 273.05 0.68%

26 533106 OIL INDIA LTD. 432.40 2.02%

27 532810 POWER FINANCE CORP. LTD. 245.85 1.03%

28 532898 POWER GRID CORP. OF INDIA LTD. 141.55 0.53%

29 524230 RASHTRIYA CHEMICALS & FERTILIZERS LTD. 54.40 0.55%

30 532955 RURAL ELECTRIFICATION CORP. LTD. 271.35 1.47%

31 523598 SHIPPING CORP. OF INDIA LTD. 64.70 1.25%

32 533206 SJVN LTD. 25.25 1.00%

33 500113 STEEL AUTHORITY OF INDIA LTD. 56.50 3.34%


the FaCtS

Bi Monthly Magazine of Central Public Sector Enterprises

Read by CII Members, Board level people of CPSEs, Top level Ministry officials.

the CoVeraGe

CEO Speak

Sector in Focus

Lead Article

PSE News Updates

Policy & Impact

Project Update

Tie ups , Procurement & Contracts

Export & Import

Investments

CSR Initiatives

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For Advertisement Booking, write to : [email protected]

** Amount exclusive of service tax

insightsPSEVol 1 • No 1 • Nov 2014

SECTOR OF THE ISSUE: POWERDr. Arup Roy Choudhury, Chairman and Managing Director, NTPC Ltd.

CEO SPEAKMr K.V. Varkey, Chairman and Managing Director, Hindustan Antibiotics Ltd.

INDIA’S PUBLIC SECTOR:Challenges and Opportunities

PSE UPDATESPolicy & ImpactCorporate StrategiesTie-Ups, Procurement & ContractsProject Updates

1

2

3

4

PSEVol 1 • No 3 • Mar 2015

insights

IN SEARCH OFBLACK DIAMOND

CEO SPEAKMr M Narayana Rao Chairman and Managing DirectorMIDHANI Ltd

SECTOR IN FOCUS Mr. Surender MohanChairman and Managing DirectorNLC Ltd

COVER STORYNLC to Expand its Capacities in Green Energy Projects

PSEVol 1 • No 2 • Jan 2015

insights

CEO SPEAKDr. R N PatraChairman and Managing DirectorIndian Rare Earths Ltd

SECTOR IN FOCUS Mr C S Verma Chairman, Steel Authority of India Limited (SAIL)

COVER STORYMSME Needs Big Push, But Not at State Enterprises’ Cost

GEARING UP TO REACH HIGHER GROWTH OBJECTIVES

For Comments/ suggestions, please write to Nita Karmakar, Director, CII at [email protected]

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