Chennai sees a surge in luxury hotels

With economic slowdown impacting occupancy rates, some top-end luxury hotels in Chennai are now considering converting into residential properties. But the demand-supply mismatch has not deterred the Taj Group from opening its 5th property in the city, reports CNBC-TV18's Poornima Murali.

Also Read: Examine delay in auction of Taj Mansingh hotel: CVC to NDMC
 
Chennai is seeing a surge in luxury hotels. After the launch of three international brands last year, the Taj Group is the latest to open doors of its 5th property in the city - The Gateway Hotel with over 200 rooms at an investment of about Rs 150 crore.
 
With this latest entrant, the city now has over 28 branded hotels - including Grand Chola, Park Sheraton, Radisson and Park Hyatt. Add to this, more high-end projects including SRM's Novotel, Holiday Inn Express in Mahindra City, Le Meridian Chennai, Lemon Tree and Park Regent, which are under construction.

The total number of rooms in the city has increased from 4,788 in 2012 to 5826 in 2013 - a 23 percent rise in the inventory. However, the influx of new hotels, combined with a fall in occupancy rates due to the slowdown is leading to a demand-supply mismatch in the city.
 
N Hariharan, Office Director, Cushman & Wakefield, says: "If you look at 2008-2012, we have seen close to about 3,400 keys enter the market, out of which Luxury segment contributing predominantly. Close to about 1,250 keys have entered the upper-scale luxury market."

There is a clear over supply in the market. And with the average occupancy rate on weekdays falling to 55-60% and 20-25% on weekends, some big names are either being forced to offer discounts to attract customers or take more drastic measures like changing their entire strategy.
 
So, given these circumstances, why are we still seeing big ticket hotel launches in Chennai? Philippe H Charraudeau, Vice President & General Manager, ITC Grand Chola, says: "Growth in the number of branded hotels which has established itself in Chennai is because the economy of Tamil Nadu is looking good.  Far more investments are coming into Chennai from different sectors, be it automobile, IT, etc."

Also, hoteliers hope the rupee's depreciation will increase the number of foreign travellers and that could help occupancy rates in the near term.

08.11 | 1 komentar | Read More

Recalibrating future investments, says Baba Kalyani

Sep 05, 2013, 11.14 PM IST

Commenting on the slowdown in auto ancillary sector Baba Kalyani, CMD, Bharat Forge Limited said,"You have to calibrate investments based on what market conditions are."

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Recalibrating future investments, says Baba Kalyani

Commenting on the slowdown in auto ancillary sector Baba Kalyani, CMD, Bharat Forge Limited said,"You have to calibrate investments based on what market conditions are."

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Recalibrating future investments, says Baba Kalyani

Commenting on the slowdown in auto ancillary sector Baba Kalyani, CMD, Bharat Forge Limited said,"You have to calibrate investments based on what market conditions are."

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The slowdown in auto sector has also hit the auto ancillary companies. Auto ancillary manufacturers are treading with caution while making their investment decisions.

Commenting on the slowdown in the sector, major auto ancillary marker Baba Kalyani, CMD, Bharat Forge Limited said," You have to calibrate investments based on what market conditions are. Today, as I said earlier, in most of our business, if you're in the components sector, you make investments ahead of demand. We have already made the investments and we are recalibrating future investments. There is no sense in making investments today when you already have investments not being utilised. But our belief is that in the next 2-3 years this problem will be over.

Also read: Tata Motors to launch diesel Nano car by end of March

He further added," I don't even think it's a slowdown. I think it's a new reset of our economy and this is where we are going to start back from. If anyone thinks that we are going to get back to what we were 3 years ago in the next 6 months or 1 year, i don't think that's going to happen.

Raghupati Singhania MD, JK Tyre and Industries said, "We have been looking at de-risking the market. we have presence in Mexico and we are exporting out of there apart from catering to the domestic market. We are looking to opportunities in other emerging markets.

"I think this is a passing phase, maybe 18 months or so, and that much time I will take to set up new capacities. So by the time it's over, we should be there in the market place," he said.

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GSPC hikes CNG prices by Rs 3/kg; ind gas by Rs 1.90/unit

State-run GSPC Gas Company (GGC), the largest city gas distributor in Gujarat, today hiked prices of CNG by Rs 3 per kg, and of industrial gas by over Rs 1.90 per standard cubic metre (SCM).

Also Read: Gujarat Gas, GSPC sign MoU for long-term gas supply deal

"Price of industrial gas has been increased from Rs 35.50 to 37.40 per SCM (without taxes), while CNG prices have been increased from Rs 63.30 to Rs 66.30 per kg (with taxes)," a GSPC statement said.

GGC, the retail wing of Gujarat government-owned GSPC, operates in 21 major towns and cities, with a network of 120 CNG stations fueling around 65,000 vehicles everyday and has around 1,443 industrial customers.

According to industry sources, the hike in CNG prices comes in the wake of a sliding rupee against the dollar. Other (City Gas Distribution) CGD players in Gujarat like Adani, Gujarat Gas, Sabarmati, GAIL, Charotar, HPCL may follow the suit and raise CNG prices, industry sources said. "The gas sourcing pool of each company varies. The boards of respective CGDs in Gujarat will take a look on how to offset the losses on account of rupee slide as majority of them are dependent on gas imports from overseas," they said.

GGC has been demanding allocation of cheaper domestic gas from the Centre at par with the prices as it supplies to Delhi and Mumbai under the Administered Price Mechanism (APM). Citing non-allocation of cheaper natural gas from the Centre, GGC had hiked CNG prices by Rs 2 per kg, and of piped cooking gas by Rs 4 per standard cubic metre for first 30 SCM, in June this year.

Gujarat government levies 15 percent VAT on natural gas. GGC supplies gas to industry, largely in South Gujarat region, comprising Valsad, Vapi, Umbergaon, Hazira and Halol. It also supplies gas in Gandhinagar, Nadiad, Morbi, Thangadh, Sunredranagar and Rajkot, an official said.

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Insignificant exposure to NSEL, says Axis Bank

Sep 04, 2013, 11.07 PM IST

Axis Bank comments comes amid media reports that it and others two other banks have the highest exposure to NSEL.

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Insignificant exposure to NSEL, says Axis Bank

Axis Bank comments comes amid media reports that it and others two other banks have the highest exposure to NSEL.

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Insignificant exposure to NSEL, says Axis Bank

Axis Bank comments comes amid media reports that it and others two other banks have the highest exposure to NSEL.

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Axis Bank today said its exposure to National Spot Exchange Ltd is insignificant and it has sufficient collateral.

Also Read: NSEL fiasco: Banks' exposure at around Rs 3,000-4,000cr

The National Spot Exchange Ltd (NSEL), promoted by Jignesh Shah-led Financial Technologies (India) Ltd, is facing the problem of settling Rs 5,600 crore dues to 148 members/brokers, representing 13,000 investor clients, after it suspended trade on July 31 on the government direction.

"We wish to clarify that the total exposure, direct and indirect of Axis Bank to NSEL is insignificant. We have adequate collateral to back these exposure," Axis Bank said in a statement. Axis Bank comments comes amid media reports that it and others two other banks have the highest exposure to NSEL.

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Telecom space is flooded with big money

The real money seems to be in the telecom space. At USD 130 billion, Vodafone's exit from Verizon Telecom makes it the world's third-largest deal in the space. And Microsoft is spending over USD 7 billion to jump from a maker of phone software, to a maker of phones itself, report CNBC-TV18's Malvika Jain and Farah Bookwala.

Also Read: Microsoft to acquire Nokia's handset business for $7.2 bn

Vodafone's Votirio Colao has good reason to smile. The British telecom giant has signed on the dotted line and it will sell its entire 45 percent stake in its US wireless business joint venture, Verizon Wireless, to its US partner.

In the end, all it took for 'operation river', as the negotiations were called, to fructify was for the two CEOs - Vodafone's Vitorio Colao, and Verizon's Lowell McAdam - to spend some time next to each other on exercise cycles in a gym, and continue their conversation over breakfast.

By opting for a buyout instead of a merger, Verizon will get full access to the profits from America's largest mobile operator and with it fresh firepower to invest in its mobile network and fend off challengers in a tough market.

For Vodafone, the accord will allow it to return 71 percent of the net proceeds to shareholders. It will also allow for ramping up investment in its networks to set itself apart from rivals.

Vittorio Colao, CEO, Vodafone, says: "The size of the deal itself allows us to return 71% to shareholders. But, even the remaining 21% is large enough to strengthen the company and to allow us to accelerate our strategy, so the percentage might look small, the percentage retained, but the amount of money is robust enough for allowing Vodafone to have a great future."

There is also the fact that Vodafone will not be paying any tax on this transaction in the UK. Vittorio Colao, CEO, Vodafone, says: "We apply the rules , laws - tax laws which are standard in any of these jurisdictions. We will pay tax in the US because there are tax liabilities generated there. We are not going to have a taxable income in the Netherlands because there is a tax exemption. But if the transaction happened in the UK, there would be no tax liability here as well because there are exactly the same provisions. Important thing is 54 billion pounds will go back to shareholders, those who want to sell will have to pay their own taxes, but it will be a great benefit to all."

The deal will also provide a fillip to Vodafone's capex plans for European countries like Germany, under its 6 billion pound investment plan called Project Spring.

But it's not just the mobile services business that's playing with the big bucks. Software giant Microsoft wants a bigger foot-hold in the mobile telecom space.

So after 2 years of providing Helsinki-based Nokia with its Windows phone software, Microsoft has agreed to buy Nokia's main handset business for over USD 7 billion. This is in keeping with Microsoft's retiring CEO Steve Ballmer's dream to remake Microsoft into a gadget and services company like Apple before he departs.

For Nokia, this is a way out from a losing battle against rivals like Samsung and Apple. The deal will see Nokia's Canadian boss Stephen Elop, who incidentally ran Microsoft's business software division before jumping to Nokia in 2010, returning to Microsoft as the head of its mobile devices business. And while this has the Finnish people dubbing him a Trojan horse, Nokia's chairman Risto Siilasmaa says the decision came after nearly 50 board meetings to explore alternatives to a sale, before deciding that this was in shareholder interest.

Both these deals mark a turning point for the global telecom space. But India, which is a strong market for Vodafone, Microsoft and Nokia, may not see much change on the ground. Vodafone is still in wait-and-watch mode as far as further investments into the country are concerned. And experts say neither Microsoft nor Nokia's ground operations in India will see much of an overhaul.

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Gujarat Gas, GSPC sign MoU for long-term gas supply deal

Gujarat Gas Company Ltd (GGCL) and Gujarat State Petroleum Corporation Ltd (GSPC) today entered into a Memorandum of Understanding (MoU) for a long-term gas supply deal, a top company official said.

The MoU was signed by GSPC Managing Director Tapan Ray and GGCL's Managing Director Sugata Sircar at Gandhinagar in Gujarat. As per the MoU, GSPC has agreed to supply 0.85 million standard cubic metres per day (mmscm) of gas per day to GGCL from January 1, 2014 to June 30, 2025, a statement issued here said.

Also read: Govt not honouring contracts on KG-D6 gas block: Reliance

"The signing of this MoU is an important step towards securing long-term gas supplies for industrial, domestic, commercial and CNG customers of Gujarat Gas," Sugata Sircar said. "Out of around 2.8 mmscm of gas per day used by GGCL's customers currently, nearly 50 per cent is RLNG (re-gasified liquefied natural gas) which is largely sourced through medium term contracts or from spot markets. Under the MoU with GSPC, we will be able to source assured supply of 0.85 mmscm of RLNG per day for 11.5 years," Sircar added.

The MoU is effective till December 31 this year or the signing of the relevant Gas Sales Contracts (GSC), whichever is earlier. The price of gas will be determined in the relevant GSCs and it is expected to be formula based, the release said. GGCL, a subsidiary of Gujarat Distribution Network Ltd (GDNL), currently distributes approximately 2.8 mmscmd of natural gas. GGCL continues to be India's premier gas distribution company with a proven expertise in distributing gas to the entire range of customers - industrial, commercial, domestic and CNG.

GGCL distributes gas to about 404,000 industrial, commercial and domestic customers through its pipeline network and CNG to over 200,000 vehicles through 56 retail outlets.

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ITC hikes prices of select cigarette brands

Sep 02, 2013, 10.53 PM IST

The price of 'Gold Flake Kings' pack consisting of 10 cigarettes will now cost Rs 75, up from Rs 68 earlier. A pack of 'Gold Flake Lights' consisting of 20 cigarettes will cost Rs 75 compared to Rs 68 earlier.

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ITC hikes prices of select cigarette brands

The price of 'Gold Flake Kings' pack consisting of 10 cigarettes will now cost Rs 75, up from Rs 68 earlier. A pack of 'Gold Flake Lights' consisting of 20 cigarettes will cost Rs 75 compared to Rs 68 earlier.

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ITC hikes prices of select cigarette brands

The price of 'Gold Flake Kings' pack consisting of 10 cigarettes will now cost Rs 75, up from Rs 68 earlier. A pack of 'Gold Flake Lights' consisting of 20 cigarettes will cost Rs 75 compared to Rs 68 earlier.

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Diversified business group ITC Ltd today said it has increased prices of select cigarette brands, Gold Flake and Classic by over 10 per cent, the second hike in as many months.
    
The price of 'Gold Flake Kings' pack consisting of 10 cigarettes will now cost Rs 75, up from Rs 68 earlier. A pack of 'Gold Flake Lights' consisting of 20 cigarettes will cost Rs 75 compared to Rs 68 earlier.
    
Likewise, the 'Classic' pack consisting of 20 cigarettes will now cost Rs 150 from Rs 136 earlier. When contacted, a company spokesperson confirmed the hike in prices. The packs with new prices are already in the market.

Also read: ITC shares surge after it raised Gold Flake prices: UBS

The company, which had hiked prices of its Gold Flake cigarette brand by over 7 per cent in July, had earlier said that steep hike in excise duty on cigarettes impacted sales. ITC, which is the market leader in cigarettes in India, sells various brands including India Kings, Classic Gold Flake and Navy Cut among others.
    
The company's cigarettes business grew by 7.05 per cent to Rs 3,537.39 crore during the first quarter ended June 30, 2013. It produces cigarettes at plants located in Bengaluru, Munger (Bihar), Saharanpur (UP), Kolkata and Pune.

 Besides FMCG, ITC has interests in hotels, paperboards and packaging, tobacco products and information technology. Shares of ITC Ltd today closed at Rs 319.40 apiece at the end of day's trade, up 3.75 per cent from the previous close on the BSE.

Tags: ITC Ltd, Gold Flake Kings, India Kings, Saharanpur (UP), , Munger (Bihar), , Bengaluru, Pune, Kolkata, FMCG, BSE

CHATS

03 Sep- 10:00hrs

Property Guide

Anuj Puri,

Chairman & Country Head
, Jones Lang LaSalle India

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Vodafone to return $84 bn to investors after Verizon deal

Vodafone said its shareholders would receive about USD 84 billion in cash and shares after the company completes the sale of its 45 percent stake in Verizon Wireless to Verizon Communications for USD130 billion.

Under the agreement announced on Monday, the third-largest deal in corporate history, Verizon will take full control of the largest mobile operator in the US by paying Vodafone USD 58.9 billion in cash, USD 60.2 billion in Verizon stock and an additional USD 11 billion from smaller transactions.

Also Read: Vodafone investors split on best use of Verizon windfall

All the stock will go to shareholders, plus USD 23.9 billion in cash, after the deal is finalised, likely to be in the first quarter of 2014.

Vodafone also said it would plough 6 billion pounds into improving its mobile and broadband networks across its footprint over the next three financial years. It said the investment programme dubbed Project Spring would help it boost growth to underpin its increasing dividend payments to shareholders.

It will have a US tax liability of around USD 5 billion.

While Vodafone will lose its best asset, it will get a war chest it will use to reward shareholders and bolster its European operations, which are under pressure from recession and tough regulation.

"We are pleased that our long and successful partnership with Verizon will yield a significant return of value to our shareholders, rewarding them for their continuing support of Vodafone's investment strategy," Chief Executive Vittorio Colao said.

"We wish Lowell and the Verizon team continuing success over the years ahead."

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Hero resolves issues with striking workers at Haridwar

Aug 31, 2013, 07.31 PM IST

Labour trouble erupted at the company's Haridwar unit when a worker was sacked on disciplinary grounds. The workers there were demanding the creation of a new Union Body.

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Hero resolves issues with striking workers at Haridwar

Labour trouble erupted at the company's Haridwar unit when a worker was sacked on disciplinary grounds. The workers there were demanding the creation of a new Union Body.

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Hero resolves issues with striking workers at Haridwar

Labour trouble erupted at the company's Haridwar unit when a worker was sacked on disciplinary grounds. The workers there were demanding the creation of a new Union Body.

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Moneycontrol Bureau

Hero Motocorp has amicably resolved its issues with workers striking at its Haridwar plant, the company told CNBC-TV18. All protesting workers have returned and despatches from the Haridwar plant are going on, the company added.

The company said the impact of the strike on production was insignificant, though the workers claimed that production at the plant had come to a complete halt.

Also Read: Labour trouble halts production at Hero's Haridwar plant

Hero Motocorp on Friday served show-cause notice to a worker for misrepresenting facts. Issue arose when the company sacked one worker on disciplinary grounds. The workers were demanding his reinstatement. They were also demanding the creation of a Union Body.

Haridwar plant is the only unit of the company that does not have a workers union. Hero Motocorp has three plants, one each in Gurgaon, Dharuhera and Haridwar. The Haridwar plant is the company's largest manufacturing facility, with daily capacity of about 8,000 units.

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Net4 India MD held for not depositing service tax

The Service Tax department has arrested Net4 India Ltd Managing Director Jasjit Singh Sawhney for non-payment of the levy to the tune of Rs 9 crore. Sawhney was arrested by Service Tax department officers on August 30 for the company's pending liability of about Rs 9 crore for the financial year 2012-13, an official said.

"A major chunk of this liability has been collected by the company from its clients as service tax to be paid to the government exchequer, but was not deposited with the government," the official added.

Also Read: GST roll out difficult until 2015, says Harsh Mariwala

The official said Sawhney was granted conditional bail up to September 3 by the Chief Metropolitan Magistrate in Patiala House Court today on payment of Rs 25 lakh. He has to pay Rs 75 lakh within 15 days and Rs 1 crore a month subsequently, the official added. This is the third arrest this fiscal by the department for failure to deposit service tax collected from customers.

Earlier, one person was arrested in Kolkata for non-payment of the levy to the tune of Rs 79 lakh and one person was held in Mumbai for dues of Rs 1.96 crore. According to the Finance Act, any person who has collected service tax of more than Rs 50 lakh and fails to deposit the amount with the government even six months after the due date can be imprisoned for up to seven years.

The department has identified 10 lakh people who have not filed service tax returns or have stopped filing them and may be liable for punishment.

In the budget, the government had come up with the Voluntary Compliance Encouragement Scheme under which defaulters can pay at least 50 percent of the arrears for the five-year period ending 2012, with the remainder payable over six months without interest.

Finance Minister P Chidambaram had attributed the large number of defaulters to benign provisions of the Service Tax Act. Service tax has emerged as a major source of revenue and the government proposes to collect Rs 1.8 lakh crore in the current fiscal, up from Rs 1.3 lakh crore last fiscal.

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