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NEW DELHI: With an aim to increase retail investors' participation in stock market, Sebi is considering
higher allocation of public offer shares for mutual funds.

Initial and follow-on public offers have traditionally been a preferred route of stock market investment for
mutual funds, but they do not get enough shares these days because of a surge in demand from foreign
institutional investors.

Currently, all the Qualified Institutional Buyers (QIBs), which includes a whole range of institutional
investors including mutual funds, are together allocated 50 per cent of shares being sold through IPOs and
FPOs. But, there is no direct reservation for mutual funds (MFs).

The maximum indirect allocation available to mutual funds as per the existing regulations is not even 10 per
cent, and intense competition in the QIB segment makes it tough for MFs to get desired amount of shares,
a senior official said.

Sebi is mulling over steps to increase the public offer allocation for mutual funds, as retail investors prefer
to invest through MFs because of risks being less in comparison to direct investment in stocks, he added.

As retail investors' portion in public offers is not as highly oversubscribed as the QIB portion, Sebi believes
that a higher quota for retail investors directly might not help them get more shares, the official said.

While retail investors are required to be allocated a minimum of 35 per cent of shares being sold, 50 per
cent of shares are reserved for all the QIBs together.

The Qualified Institutional Buyer (QIB) category includes a whole range of financial institutions such as
mutual funds, insurers, banks and foreign institutional investors (FIIs).

But, there is no direct reservation for MFs, as is the case for retail individual investors, employees and non-
institutional investors (HNIs and corporate bodies).

Out of the QIB quota, only 5 per cent shares need to be allocated to the mutual funds.

Besides, the companies have an option to sell up to 30 per cent of QIB quota shares to 'anchor investors',
to whom shares are sold a day before the opening of the public offer. Mutual funds are allocated one-third
of shares being sold to such investors.

The retail investors mostly invest in equity schemes of mutual funds, while debt schemes are preferred by
corporates.

The existing equity schemes of mutual funds are estimated to be getting an average of Rs 5,000 crore fund
inflow every month from investors.

In last fiscal, the funds houses are estimated to have sold equity schemes worth Rs 60,000 crore and the
trend so far suggests a similar amount for the current financial year ending in March 2011



è      
   


ANGALORE/ NEW DELHI: Big Bazaar outlets at Chikkadpally and Ameerpet in Hyderabad are fixed in
Rachael Daniel's routine. While lugging shopping bags past the cash counter three months ago, the 25-
year-old working at St Francis Women's College was presented with an offer: she could claim a mobile SIM
card with 70 talk time if she spent 3,000 at Big Bazaar.

And she could increase this talk time by shopping at any of Future Group chains, including Pantaloon and
Ezone. Daniel was elated. "Getting talk time for shopping is like saving pocket money," she says.

As competition in the retail sector intensifies, retailers and marketers are making their loyalty programmes -
that offer special discounts and easy rewards to regular customers - even more attractive by taking them to
the mobile phone platform and even adopting a gender-based approach. Loyalty or privilege club
programmes are structured marketing efforts to encourage customers to frequent a company's outlets and
spend more by offering them attractive rewards and discounts.

Retailers such as Future Group, Landmark Group, Reliance Retail, Indus League and Shoppers Stop are
now experimenting with mobile-based mechanisms to relieve consumers of the pain of carrying loyalty
cards every time they visit a shop.

Madura Fashion & Lifestyle's Van Heusen brand has gone a step ahead by tweaking its approach by
gender. "Loyalty cards are getting boring for the customer," says Bijou Kurien, president & chief executive-
lifestyle at Reliance Retail. "This is why we are evaluating methods of using the growth of mobile phone
usage to understand and connect with our consumers far more effectively," he adds.

Landmark Group-owned Lifestyle too now allows customers to accrue and redeem points through an SMS
short code service even if they are not carrying loyalty cards.

The Raheja Group-owned Shoppers Stop allows customers to redeem points directly into cash instead of
changing it into vouchers first. "With technology advancing by the day, more non-card based initiatives are
soon to come," says Shoppers Stop vice-president (marketing) Vinay Bhatia.

Loyalty programmes have already become a key to the revenue growth of several marketers, particularly
big retail chains.

Lifestyle, for example, draws 50% of its annual revenue from about 2 million members of its 'The Inner
Circle' programme, while Shoppers Stop derives 73% of its business from its more than 1.9-million 'First
Citizen' members.

Industry players estimate that there are about 20 million loyalty programme members in India. This is
nowhere near the US where there are more than 700 million loyalty club members across retail stores,
according to a 2009 study by loyalty marketing firm Colloquy. Most retailers in India base their loyalty
programmes on points. If a customer shops to a certain limit, then she gets reward points that can be
redeemed as products through a loyalty card.

But now they are experimenting with new products and offers to attract the aspirational Indian consumer.

Future Group has partnered with Tata Teleservices for T24, a special mobile connection supportedby Tata
DoCoMo. T24 already has 3 lakh subscribers across Andhra Pradesh, West Bengal and Uttar Pradesh and
it will be extended to 10 more telecom circles this month.

Or, take the case of Van Heusen. The American apparel brand has launched a loyalty programme called
the Diva club for women, based on discounts unlike the points system used for men. "Women are more
emotional. They do not really want to be bothered by calculating points and tend to be happier with
 discounts," says Van Heusen's strategy and planning head Shivaraj Subramanium.

The attempt to personalise relationships with customers is also becoming a focus area. Shoppers Stop, for
instance, allows its club members to choose a day within the year when they could shop on discount unlike
other customers who buy at full price.

Other non-monetary initiatives such as valet parking, free home delivery, dedicated lounges and billing
counters with specialised staff assistance too are making a difference


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è  tata motors ltd.|passengers|passenger cars|light trucks|distribution platform
MUMBAI\NEW DELHI: Tata Motors plans to combine distribution platforms for passenger cars and light
trucks capable of carrying passengers , as it seeks to boost margins for dealers and bring retailing for
products such as the Winger Platinum, Venture and the Xenon under one umbrella, three people familiar
with the development said.
 India's largest automobile major is looking to sell Nano, which posted an upsurge in sales in December
after successive decline in growth, through truck and passenger car services centres. The company's multi-
purpose vehicle, Venture, which is part of the Ace family of commercial vehicle platform, will be sold along
with Indica and Indigo by month-end, said automobile industry executives.

"We have started selling Platinum in passenger vehicle dealerships. This will help in expanding distribution
apart from combining financial strength," said a Mumbai-based passenger vehicle dealer of Tata Motors.
An email sent to the company did not elicit any response. Tata Motors' officials declined to comment.

The move reflects a change in marketing plan in tandem with the changing times. Faced with rising
overhead costs, dealers have been demanding better profitability from sales and vehicle service
operations. New model line-up will help the dealers to extend the customer base.

"The margins have taken a hit as sales of models like Indica and its variants have not grown and Nano is
yet to bring in volumes. Fiat Auto (Tata Motors JV partner) is also facing tough times as sales of its cars are
not so encouraging. So, the extension of vehicles like Venture will add to our sales and service operations,"
said a New Delhi-based Tata Motors dealer.

Passenger cars and commercial vehicle dealerships normally function independently.

In the early 90s, passenger cars Estate and Sierra did not bring much volume and were retailed as part of
the truck division. With the launch of Indica in 1998, the company moved the Sumo, Safari, Estate and
Sierra to the passenger car division.

While between April and December last year, Tata Motors vehicle sales grew by 28% at 5.24 lakh units, the
passenger vehicle sales posted 30% growth at 2.48 lakh units


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è  price|chennai
TIRUCHIRAPALLI: With rubber prices going up, tyre manufacturer JK Tyre & Industries has decided
to hike price of its products by two to four per cent, a senior company executive said.

The price revision in the range of two to four per cent is inevitable and it would be made effective from the
last week of this month across the country, JK Tyre & Industries Marketing Director AS Mehta said in a
telephonic interview.

"The raw materials prices have gone up to an all time high, touching Rs 210 or even Rs 220 per kg of
natural rubber. When the price of natural rubber was enhanced Rs 180 per kg in the previous quarter we
did not increase the price of tyres since market conditions were not conducive," he said.

"The current increase in rubber price is unbearable and we have decided to jack up the selling price of all
types of tyres."

To a question, he said that "third quarter results will be more or less similar to the tough Q2 or perhaps a
shade better because only fourth quarter is more promising for tyre industries since the purchase of
replacements are normally deferred only to the fag end of the fiscal."

The company, which clocked the next sales of Rs 3,678 crore in the year 2009-10, should be better off in
the current fiscal and as well in the next few years, he said.

The JK Group is also poised for expansion and the upcoming facility at Chennai will be commissioned by
the end of 2011.

In the first phase at the green site in Chennai with an investment of Rs 750 Crore, the production capacity
of truck radials will be to the tune of four lakh per annum and that of car radials 25 lakh, he said.

Chennai facility is to generate job opportunities to about 1,200 people.

Similarly, for Vikrant Tyres the capacity of the manufacturing facility at Mysore has been stepped up from
eight lakh to 10 lakh tyre production in a year.

Mysore plant has already commenced full-fledged production of OTRs (Off The Road tyres) after
successful trial runs and in fact India's biggest OTR variety was rolled out in the first week of January. The
mega tyre weighed more than 3.5 tonnes and the height was little excess to 12 feet


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è  reliance industries ltd.|oil and gas industry|fitch ratings
Fitch Ratings said, in a just published report, that the outlook for India's oil and gas industry is stable for
2011. This is based on the agency's expectation that ties between the government and its majority-owned
oil companies will not weaken. India's state-owned oil companies dominate the sector, and Fitch links their
ratings with that of the sovereign because of the sector's strategic importance and the evidence of tangible
financial support. Consequently, these companies' stable outlooks reflect that of the sovereign.

"Unless crude oil prices rise significantly, the market-linked petrol pricing regime that was implemented in
2010 will continue to operate in 2011. However, the agency does not expect diesel price reform in 2011 as
the fuel has a higher impact on reported inflation, which is one of the government's key economic
concerns," says Abhinav Goel, Senior Director in Fitch's corporates team.

The government marginally increased the prices of cooking fuels -- liquefied petroleum gas (LPG, domestic
use) and kerosene (public distribution system) in 2010. However, these continue to be subsidised, and
Fitch believes that these will remain at levels set by policy requirements, rather than at market prices even
in 2011. Consequently, under-recoveries, which result when tariffs are insufficient to cover costs -- will
remain high for these fuels.

"The revision in the Outlook for the downstream public sector to Stable from Negative in June 2010 was
based on Fitch's expectation that the government will continue to maintain the oil sector reforms introduced
in 2010, and support these companies given their role as the government's extended arm for policy
implementation," Mr. Goel added.

Fitch notes that India's surplus in refining capacity will continue with the commissioning of new facilities in
2011 and beyond. However, public sector refiners are partially protected by price controls. Private sector
company, Reliance Industries Ltd (Reliance, 'BBB'/Stable), has significant export revenues, benefiting from
more complex refineries than most international competitors

 
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è  vibrant gujarat 2011|tata motors ltd.|tata motors|tata housing|tata
group|gandhinagar|ahmedabad
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Vol:1285372 shares traded
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MUMBAI: Tata Housing today signed an agreement with the Gujarat government to investment Rs 1,000
crore for developing a township in Ahmedabad on a public-private partnership (PPP) model.

The agreement was signed on the second day of the Vibrant Gujarat Summit at Gandhinagar , Tata
Housing Managing Director and Chief Executive Brotin Banerjee said.

"The proposed project, which would be a township and may involve one or multiple projects, needs many
clearances from the state administration and we hope to get them in the next two months. The project, to
be developed on PPP model, would in the affordable housing segment," he said.

On the project completion and the type of the housing, he said, it will take at least three-four years for
completion and it would be in the affordable (Rs 10-20 lakh, 2-3 BHK units) range.

On the increasing focus of the Tata Group in Gujarat, he said the state offers one of the best investment
climates in the country today. Moreover, the state administration is very proactive when it comes to private
sector investment.

"In fact, we have been looking at entering Gujarat for some time now, but one way or other, it never
materialised. The Vibrant Gujarat summit just enabled it."

The USD 73-billion Tata Group, the country's largest industrial house that straddles from salt to software,
has already pumped in Rs 30,000 crore in Gujarat. The recent high profile investment was by Tata Motors
at Sanand near Ahmedabad to roll out the world's cheapest car, the Nano.

At the summit yesterday, Tata Motors had signed a pact with the state for rural transportation


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è  provident fund savings|pf pay out|pf department|finance ministry

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NEW DELHI: The finance ministry has rejected the 9.5% interest pay out proposed on provident fund
savings for 2010-11 saying the 'surplus funds' found by the PF department from its past accounts were
'unverifiable.'

Labour Minister Mallikarjun Kharge had recommended raising the employees' provident fund (EPF) rate to
9.5% in September 2010 after the PF department's accounts revealed a surplus from the past.

In a tersely worded communiqué to Labour Secretary Prabhat Chaturvedi, Finance Secretary Ashok
Chawla has termed the calculations used to arrive at the PF rate as 'incorrect.'

Chawla's letter, written with the express approval of Finance Minister Pranab Mukherjee, also asked the
labour ministry to get the Employees' Provident Fund Organisation (EPFO) to first update and settle all
pending accounts of its 5 crore members.

The EPF rate has been at 8.5% since 2005-06 and the rate would have stayed the same in 2010-11 as per
its earnings. But a review exercise of EPFO's Interest Suspense Account, where EPF's annual income is
parked till it is distributed to members, revealed a surplus of about 2,000 crore.

While the EPFO board cleared the 9.5% PF rate on this basis, the finance ministry had commissioned a
special audit of the accounts in question by the Comptroller and Auditor General of India (CAG).

The CAG found that the surplus amount cited in the suspense account can not be verified till all accounts
are updated by the EPFO. The CAG usually audits EPFO's accounts at the end of a financial year. Chawla
has cited the CAG's findings while communicating the finance ministry's refusal to notify the PF rate.

EPF interest is manually credited to workers' accounts. On 31 March 2010, the suspense account had a
balance of 27,000 crore - which means EPFO's dated systems had not credited that much interest due to
its 5 crore members' accounts. More than 11 crore account statements were pending on April 1, 2009.

The PF department has admitted that the huge balance in the suspense account would 'ideally' vanish if all
past years' annual accounts were updated. PF officials also explained their surplus calculations to the
finance ministry in at least two separate meetings. But their defence did not cut much ice.

"The problem is that the PF department classifies worker accounts that haven't been credited interest due
to them as pending for the 'current year' and pending for the past," a senior government official told ET.
If some accounts have past interest credits pending, it is not possible to ascertain for how many years they
have not been updated. Till the amounts in the suspense account can be broken down to verify how many
members' account credits are pending for how long, a 'surplus' can't be claimed from the same funds.

The labour ministry is likely to request the finance ministry to reconsider its decision. It is expected to point
out that as per the rules, the EPF rate is announced at the beginning of a financial year and is always
based on estimated inflows and incomes.

The finance ministry has already notified a tax-free PF rate of 8.5% for 2010-11, effective from September
1. Historically, the tax-free PF rate notified by the income tax department has never been lower than the
EPF rate for the year


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è  spicejet ltd.|jobs|indigo|indian aviation sector|hiring

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BSE

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Vol:524241 shares traded

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MUMBAI | NEW DELHI: Indian carriers will hire at least 5,000 professionals across categories this year ²
pilots, cabin crew and airport ground staff ² buoyed by the recent boom in the aviation sector which saw
high attrition and retrenchment after the onset of the downturn in 2008.

³Airlines had pulled out at least 20% capacity from the market during the downturn. That capacity was
restored last year and we see airlines adding another 20% capacity this year and would behiring 4,500-
5,000 people this year,´ said Kapil Kaul, CEO of aviation consultancy firm Centre for Asia Pacific Aviation,
South Asia.

The Indian aviation sector will grow by 18-20% this year, said aviation industry experts. Among airlines,
national carrier Air India and low-cost airlines IndiGo and SpiceJet will add more than 1,000 this year. ³Our
flights will go up to 350 flights per day from 221 currently. We are in the process of hiring 200 pilots, 400-
500 cabin crew and as many airport ground staff this year at IndiGo,´ said Aditya Ghosh, president,
IndiGo.

Demand for pilots is rising due to the dearth of professionals. Airlines are chasing expats as the aviation
regulator has allowed foreign nationals to be employed as pilots till December 13, 2013.

³The fact today is that all airlines in India are asking for foreign pilots and no single agency can provide
those many numbers. Airlines in India have asked all agencies that these pilots need to be recruited on an
urgent basis,´ said a person directly involved with hiring of expats, requesting anonymity.

In all, airlines are looking for about 230 commanders on an immediate basis , according to recruitment
agencies. ³We are looking to hire 500-600 pilots to meet the demand,´ Jet¶s chairman Naresh Goyal had
stated recently. Jet, which looks to add 49 aircraft, will need 100 commanders alone to meet its
international expansion plans. Jet Airways , during the downturn, had fired 1,800 flight attendants only to
re-hire them after protests and political intervention. It also slashed salaries by up to 25% at higher levels.

GoAir, which plans to add 20 aircraft by 2014, will hire 250 people this year with 100 each for cabin crew
and ground staff and 50 pilots. The only airline that does not seem to be on an expanding spree is the
Vijay Mallya-promoted Kingfisher Airlines . The airline pulled capacity by 22% in the downturn, losing pilots
to competitive airlines.
 Aviation experts, however, believe that the current hiring spree will not translate into higher salaries due to
inflation and other costs. ³Salaries will only go up by 15-20% on an average,´ said an expert.

The staffing agencies are conservative in their demand projections. ³2010 was a recovery year, which saw
net addition of 1,500 people, but 2011 is a boom year and we¶ll see net addition of3,000 people or more,´
said Kamal Karanth, MD, Kelly Services India, a global staffing company. Out of these 3,000, two-thirds
will be cabin crew and the rest will be a mix of engineers and pilots. Over the next five years, the growth in
hiring will be between 100% and 200%