TIMES BUSINESS

THE TIMES OF INDIA, NEW DELHI | SATURDAY, MAY 5, 2012

MUKESH AMBANI-LED RIL REVISES ARBITRATION PLEA AFTER GETTING `7K CR RECOVERY NOTICE | 24

SAMSUNG UNVEILS GALAXY S III WITH EYE SENSOR, BETTER VOICE COMMANDS TO TAKE ON APPLE

New Delhi: Angry mobile operators have slammed the telecom regulators recommendations on auction of spectrum and have said they would be forced to shut shop if these are accepted but independent estimates show that the impact on tariff would be marginal small enough for the operators to bear the costs. A Citigroup research note, released last week, estimates that the cost burden on consumers is likely to be 4 paise per minute, less than 10% of the current calling rates of 50-60 paise a minute. It says that operators are unlikely to give up spectrum and will try and keep their current allocation and the two options available to them is to pass the additional costs through with a small tariff hike or absorb it. The countrys top telecom operators such as Bharti Airtel, Vodafone and Idea on Thursday said mobile tariffs

Tariffs to rise marginally on Trai plan Cipla may cut Cost Burden On Mobile Subscribers Likely To Be 4P/Min, Says Citi Study prices of other cancer drugs too
TIMES NEWS NETWORK

CROSS-CONNECTION
GSM PLAYERS SAY
Mobile tariffs could nearly double in metros and large circles if the regulators plan on spectrum auction and allocation are accepted Trai has gone beyond the mandate given by SC Operators to bear high costs on equipment if they shift to 1800 MHz; service quality to suffer

TRAI SAYS

Recommendations to have marginal impact on tariffs, possibly around 4 paise per min Spectrum liberalisation assures better rural and inbuilding coverage, faster rollout of mobile broadband and more choice for consumers Refarmed spectrum enables introduction of new technologies, yielding economic and social benets Recommendations based on feedback, consultations with all stakeholders 900 Mhz spectrum would be up for auction when it is refarmed
ment. Although the government has sought clarifications, the regulator is sticking to its position with sources saying the recommendations were finalized after a thorough check of the numbers based on the experiences so

could nearly double in the metros and large circles if Trais recommendations on spectrum auction and allocation are accepted in their current form. The Citigroup estimates on tariff impact are quite similar to the Trais own assess-

far with regard to 2G and 3G auctions. Sources say all the stake-holders, including key players, were consulted before the recommendations were unveiled. The effort has been made to ensure that fair value of spectrum is realised and at the same time care was taken to ensure that these proposals do not hurt the industry said a source. , The COAI has also said that operators would have to shell out high costs if Trais proposal for refarming of spectrum is approved. The regulator has recommended that operators with spectrum in the 900 MHz band get airwaves in the 1800 MHz segment if they lose out in the auction for the existing 900 MHz spectrum when the tenure of their 20-year licences ends. Telecom companies say this will require them to spend on their infrastructure. But sources say the spending on new infrastructure would not be huge and few adjustments would be needed to en-

sure that the shift does not impact services. In any case, the auction will take place 18 months before the end of the licence. If they win in the auction, they can keep the 900 MHz spectrum. If not, they will get 1800 MHz spectrum in lieu of the 900 MHz and the difference in price between the two will more than

Facebook IPO price set at $28-35, values itself at $96bn

acebook is betting its growth prospects will persuade investors to pay 99 times its earnings for its initial public offering, a higher multiple than 99% of companies in the S&P Mark 500 Index. Zuckerberg The worlds most popular social-networking site will seek a market value of as much as $96 billion, offering shares at $28 to $35 each, a regulatory filing showed. The Menlo Park, California-based company will begin meeting investors next week and is scheduled to price the offering on May 17, data compiled by Bloomberg show. Facebook and its holders plan to sell about 337.4 million shares. At the high end of the range, the IPO would raise

Industry Will Be Forced To Review Pricing Strategy

Rupali Mukherjee
TNN

SSTL files curative plea in Supreme Court, P 24 Trai norms violate SC order: Uninor, P 24
offset any infrastructure costs, an official source said. The source also pointed out that the price realized for spectrum had risen from Rs 266 crore per MHz in 2001 to Rs 16,751 crore for 5 MHz by the time of the 3G auction in 2010. Considering that the exponential growth of the telecom sector in the last few years, the current reserve price is not totally out of tune with this trend, the source said.

CRITICAL CARE CANCER CARE

Pharma co Oncology retail mkt share* (%)
Cipla
Natco Pharma
Sun
Eli Lilly
Zydus Cadila
RPG Life Sciences
IPCA Labs
Dr Reddys
Pfizer Panacea Bio

Sensex falls 320 pts on fear RBI takes measures of Mauritius tax treaty rejig to arrest rupee slide
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Mumbai: Lack of clarity on the applicability of a new tax rule for foreign investors, weak economic data from US and Europe, and depreciation of the rupee against the dollar together pulled the sensex below 17,000 as it lost 320 points to close at 16,831, a three-month closing low. The days fall was also the biggest fall for the sensex in more than two months. The main trigger for the days loss, which wiped off investor wealth worth nearly Rs 1.1 lakh crore, came in the afternoon session after S S Palanimanickam, minister of state for finance, said

Samvardhana IPO scrapped

Mumbai: The current bad market conditions took its first toll on Friday with the IPO of Samvardhana Motherson Finance, which was aiming to raise Rs 1,665 crore to be the largest offering in about 18 months, being scrapped because of muted response. As per data available on the NSE, at the close of bidding on Friday, only 23% of the offer was subscribed. TNN

that the government was reviewing its bilateral tax treaty with Mauritius, one of the

most popular places among FIIs to route their investments into the Indian market. The statement spooked investors as they now fear that a large number of Mauritius-domiciled FIIs may be forced to limit their investments into India because of higher tax provisions in all the alternative countries from where they can route their money into into the Indian market. The comments from the minister came even as the market was awaiting some positive news on the governments proposed change in tax rules by introducing General Anti-Avoidance Rule (GAAR).

Mumbai: The Reserve Bank of India (RBI) has risen to defend the rupee through market intervention and measures to attract dollars after the domestic unit fell by as much as 47 paise against the greenback in intra-day trade. The measures include hiking interest rates on dollar-denominated foreign currency non-resident (banks) deposit schemes and allowing exporters to freely raise foreign currency loans. Until now, interest rates on FCNR (B) deposits had been capped at 125 basis points above the corresponding Libor/Swap rates. This ceiling has been raised to 200 basis points for

deposits between one and three years and 300 basis points for deposits between three and five years. The above measures will come into effect from May 5, 2012, RBI said in a statement. Ashish Vaidya, head of fixed income currency and commodities at UBS, said, The rupee will continue to re-

ATTRACTING NRIS
main under pressure because macroeconomic fundamentals are poor and RBI cannot solely address these issues. On Friday the rupee staged a , recovery after a large company sold around $200 million late in the evening after the rupee fell to an intra-day low of 53.95. It settled at 53.48 6 paise lower.

Mumbai: Domestic pharma major Cipla may extend its affordable and humanitarian pricing strategy on other anti-cancer drugs in its portfolio, even as domestic generic companies are still trying to grapple with the huge cuts and evaluate their pricing options. Cipla, the second largest pharma company in India by value, fired the first salvo by reducing prices of its three key anticancer drugs between 59 to 76%, used in treating brain, lung and kidney cancer, on Thursday . Industry experts said Ciplas move will trigger a reevaluation of portfolio and prices in the oncology segment for all companies competing in this space. Besides, it will also help more generic companies to penetrate the market. While Cipla will examine the impact of its move on doctors and the market, before it slashes prices of more cancer drugs, most players in the Rs 1,500-crore oncology market such as Glenmark, Natco Pharma and Hetero Drugs said that they would take a decision over the next few days. It may not trigger a price war but definitely there will be some changes. The oncology market in India has had price wars taking place irrespective of official slashing of MRPs, since approximately 70% of business is driven through institutions which have tenders as a pre-requisite, experts say Also, com. panies offer substantial discounts on the marked prices to doctors and institutions,

9.4 9.0 8.9 6.2 5.5 5.5 5.3 5.2 4.4 4.1

*Institutional sales not included | Source: IMS

an executive with a leading company said. Cipla, which has 23 oncology drugs in its portfolio, has been able to offer the price advantage because of backward integration and reverse engineering, its chairman Y K Hamied told TOI, adding that it is hoping to launch biosimilars like Roches Avastin and Herceptin used in cancer treatment at cutthroat prices in the next two years. However, a section of the industry feels that price is not the only determinant in the oncology market, and quality becomes more important especially in critical care products. Hence the decision of a doctor to choose a premiumpriced brand over an economical one will depend on the patient type, stage of disease and affordability says Zohra , Dawoodani, senior project director, Ipsos Research. Margins will not be impacted as oncology drugs are less than 5% of total sales of companies, says Ranjit Kapadia senior VP Centrum Broking.

TO RAISE $11.8BN
$11.8 billion, making it the largest initial share sale on record for an internet company . The high end of the proposed valuation would make Facebook more costly than every member of the S&P 500 relative to earnings except for Amazon.com, Leucadia National and Equity Residential, data show While 27. year-old CEO Mark Zuckerberg has amassed more than 900 million users since starting Facebook in 2004, his challenge is to stem slowing sales growth amid increasing competition from Google and Twitter. The pricing indicates Zuckerberg's total holding is worth about $18.68 billion, making him richer than Microsoft Corp's Steve Ballmer and Wipros Azim Premji. The IPO would further enhance Zuckerbergs financial position. According to Forbes 2012 list, Facebooks co-founder scored 35th rank with a wealth of $17.5 billion. AGENCIES Richer than Ballmer, P 24

C O R N E R

O F F I C E

We plan to target youth more aggressively

TNN

Bhattacharya, face of UTIMF after Sinha, resigns

TIMES NEWS NETWORK

f Pune, once the centre of the Maratha Empire, ever required a new age brand ambassador it could not make a better choice than the Rahul Bajaj family. And if there is one thing Sanjiv Bajaj, the younger son of the effusive group patriarch, shares with his father, it is the passion of retaining Pune as the nerve centre of his companys operations. Whatever the odds. And the odds do appear stacked, at least on paper. Ask a financial sector boss about Sanjivs decision to retain Pune as the headquarters of his financial services empire and he would definitely consider it a handicap. What about the opportunities of post-work schmoozing at a pub, networking dinners and the general environment of deal-making that Mumbai offers as the mecca of the Indian financial world. The 42-year-old hears you out patiently but strongly supports his decision to be based in Pune. Sanjiv says there is no downside for a finance professional working at Pune given the proximity to Mumbai, both by road and air. On the contrary, Pune offers a better quality of life. Besides, with the pain of commuting not there, you have a balanced lifestyle and there is a sense of calm at Pune. Though it takes time to get the talent to move to Pune, those who relocate, stick longer as they value the better quality of life. It is perhaps this balanced lifestyle that has enabled Sanjiv to be steadfast on his business plan, although the world has changed since the 2007 demerger scheme that resulted

ing one of the few companies that continue to expand steadily into loans for conAchievements | Responsible sumer durables, for initiating Bajaj Autos vendor financing, international foray five years loan against propago today exports erty, construction contribute 35% to its equipment and inrevenue; stitched together frastructure. The Bajaj Finservs innovative company doubled its loan book last year and win-win deal for the largely on the back of group with Allianz the sharp growth in vendor financing, whereby it provides advances to vendors of large auto companies. The in the creation of Bajaj Auto other companies in the stable and Bajaj Finserv two sep- include the insurance arms, arate entities, driven by the Bajaj Allianz Life and Bajaj two sons of Rahul Bajaj, Ra- Allianz General and Bajaj Fijiv and Sanjiv, respectively At nancial Solutions, its distri. the time of the split, both com- bution arm. panies were close in terms of Sanjiv has also learnt market capitalization with what it takes to differentiate Finserv even exceeding the Bajaj Finance from the giants marketcap of Bajaj Auto. But that have the advantages of in the last five years, the fi- scale, including cheap funds nancial crisis has changed the and distribution network. landscape for all financial We have managed to bring service firms. Its no different down the sanction time for for Bajaj Finserv. Though it consumer durables from continues to be a Rs 10,000- three days to three minutes; crore company the insurance when it comes to loan against , business has lost value be- mortgages, the turnaround cause of the changes in the time has been brought down regulatory and business land- from 10 days to 48 hours, scape. Insurance, incidental- says Sanjiv. ly, contributes the largest to Going forward, he plans to the parent. target youngsters in the age Sanjiv, dressed casually in group of 45 years more aga pair of Chinos and a blue gressively. Besides, he is putshirt, is not your typical fi- ting in place targets of effinance man. He appears more ciency, a sharper focus on straightforward. In fact, he competitiveness, focus on opens up a lot more when smaller cities and building up asked about the difference be- a sustainable business. Intween his and his fathers novation would be key he as, management styles. He de- serts. He also plans to get into scribes himself as more pa- mutual funds soon but is not tient as against the aggressive willing to give a date as yet. working style of his father. The game changer would, To Sanjivs credit, after the however, be his imminent enfinancial crisis, Bajaj Finserv try into banking as and when Lending, the lending arm of the RBI opens it up for corthe parent Bajaj Finserv, has porates. And he is looking forattained the distinction of be- ward to that.

SANJIV BAJAJ

MD | Bajaj Finserv

Mumbai: Jaideep Bhattacharya, group president & chief marketing officer of UTI Mutual Fund, has resigned from the fund house. Bhattacharya, who has spent about 24 years in the financial services sector, was the face of UTIMF since its last chairman U K Sinha moved out to head market regulator Sebi in February 2011. He was with the fund house for nearly six years during which he led its rebranding, expanded distribution reach, and also launched Indias biggest investor awareness campaign. A release from the fund house said that Bhattacharya has decided to move on to pursue other interests. The board of directors has accepted his resignation. The board recognizes his contribution to UTI AMC for putting in place a good marketing organization and helping to enhance the UTIs brand equity , the release added. Other than heading the marketing in UTIMF, Bhattacharya was also on Sebis advisory committee on mutual funds and on the board of Association of Mutual Funds in India (AMFI), the fund industry trade body . Bhattacharyas resignation comes when the fund house has remained headless for nearly 15 months, two of its board members have resigned, besides an unrest among its employees and court cases. The day-to-day affairs of the fund house is run by an interim CEO, an arrangement that was agreed upon after market regulator Sebi barred the fund house from launching any new schemes. When the interim CEO was appointed, Sebi lifted the ban.

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MARKET WATCH
INDICES
SENSEX: 16,831 320 NIFTY: 5,087 102

BULLION
GOLD/10 GM: 29,210 SILVER/1 KG: 56,050

TOP GAINERS
ESSAR OIL: 53 2 CIPLA : 325 8

EXCHANGE
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