Indian rupee drops 83 paise against US dollar, breaches 63-mark

he Indian rupee dropped by 83 paise to 63.30 against the US dollar after a gap of nearly eight weeks on persistent dollar demand from importers and banks on the back of higher dollar overseas.

The domestic currency resumed lower at 63.00 per dollar as against the last weekend's level of of 62.47 per dollar at the Interbank Foreign Exchange (Forex) Market and dropped further to 63.32 per dollar before quoting at 63.30 per dollar at 10.40 am. It moved in a range of 62.94 per dollar and 63.32 per dollar during the morning deals.

Sustained dollar demand from importers and banks in view of firm dollar overseas mainly affected the rupee value against the dollar, a forex dealer said.

In New York, the American currency jumped last Friday after the US created twice as many jobs in October as Wall Street had expected, sparking yet another round of discussion about when the Federal Reserve could slow its bond buys.

Meanwhile, the BSE Sensex dropped further by 129 points, or 0.62 per cent, to 20,537.37 at 10.50 am.

Rupee will settle down, assures Chidambaram

Finance Minister P Chidambaram took to reassuring investors and traders after the rupee declined to a two-month low of 63 to a dollar, saying the currency will stabilise.

In early trade on Monday, the rupee fell to 63.33 a dollar, its weakest since September 18.

"Rupee will settle down," the finance minister told reporters in the national capital.

The Indian currency started weakening again last week after the dollar purchase by oil companies was partly shifted to the market.

The PSU oil companies are the biggest buyers of dollars, requiring $8-8.5 billion every month for the import of an average 7.5 million tonne of crude oil.

"Rupee weakness is due to OMC forex demand being moved to market... 30-40 per cent of OMC demand has moved to market," Economic Affairs Secretary Arvind Mayaram had said last week.

The rupee has recovered over 8 per cent since August 28, when it fell to a record low of 68.85 to the dollar.

The Reserve Bank of India had in August opened a special window to help the three state-owned oil marketing companies - Indian Oil, Hindustan Petroleum and Bharat Petroleum - to meet daily foreign exchange requirements and buy dollars directly from the central bank.

The gain in the rupee's value had also followed optimism that the US Federal Reserve would delay the tapering of its bond buying programme.

Bank licences: Sebi scans listed applicants, firms

As the Reserve Bank of India (RBI) gears up to issue new bank licences, capital markets regulator Sebi has also a job at hand that is of scrutinising all applicants coming under its jurisdiction directly or through group entities. Sebi's scrutiny follows detailed queries shot off by RBI to various regulators in India and abroad as part of its due-diligence of entities seeking to enter banking arena. According to a senior official, Sebi is looking into the capital market track-record of all the group entities of 26 banking aspirants, some of whom are either listed entities or have presence in Sebi-regulated businesses like mutual funds, brokerage and investment banks. The area of prime focus for the Securities and Exchange Board of India (Sebi) is action taken by or underway for violations to various market regulations, he added. The scrutiny is expected to be over this month itself. RBI is granting new bank licences for the first time in about a decade and preliminary screening process is underway for 26 entities that have submitted their applications. As part of this process, RBI has also asked the applicants to provide further details about their promoters, equity structure, financial inclusion programme, proposed banking model, among others, sources said. In addition to Sebi, RBI is also seeking details from other regulators such as insurance watchdog IRDA and pension regulator PFRDA, about the businesses of the applicant entities under their respective jurisdictions. With regard to some applicants, RBI has sought to know details about source of funds and compliance to the structural norms proposed for new banking players. Besides, RBI is seeking additional details from the concerned foreign regulators about those applicants whose group entities have operations, significant business dealings with foreign companies or overseas listings. Sources said this due diligence process involves information exchange with domestic and foreign regulatory authorities for all group entities of the applicants.

Telecom tariffs may go up every year: Vodafone MD

India's second largest telecom operator Vodafone expects phone call and other mobile services rates to go up every year, indicating that low tariff regime may not be sustainable any longer for the industry.

"We have lower tariffs for 18 years against inflation of 8-9 per cent per year. Now, can you do that forever? No you can't," Vodafone India Managing Director and Chief Executive Officer Marten Pieters said in an interview.

"So the point has come where lowest has been seen, we will have to increase our tariffs every year depending on cost levels," he said.

He said that like everyone else, the telecom industry too has to increase the prices.

Last month, the company increased 2G mobile Internet rates along with two other players,  Bharti Airtel and Idea Cellular, in the range of 25-30 per cent.

Peiters said that going forward 2G data rates and 3G data rates will be at same level indicating a further hike in 2G mobile Internet rates.

"We started 6-7 times high tariff rate when we opened up 3G network. It is now back to 1.5 to 1.6 times of 2G data rates. It over time will come together. But it can't come over time just by lowering 3G tariff, it needs to also see increase of 2G tariffs. Once it is equal, it doesn't matter to customer anymore," Pieters said.

The company's competitors such as Reliance Communications and Aircel have, meanwhile, reduced 3G mobile Internet rates to bring them on par with 2G mobile Internet rates.

Pieters said that industry will have to work to create efficiency in the network to handle increasing load.

"My assumption is that our price increase will always be lower than inflation but you can't of-course forever keep lowering your prices, its impossible," he added.

In a bid to remain profitable, leading telecom operators have increased rates of special tariff vouchers and reduced free minutes usage.

Bharti Airtel too has said recently that the current tariffs in the country "are at absolutely unsustainable levels".

Pieters said however that despite the tariff hikes India still has the lowest tariffs in the world.

"India has still the lowest tariffs in the world. I think there is only one country which is coming closer, which is China. The only difference being that in China, there are only three operators, they are very profitable and they invested last year USD 55 billion in telecom infrastructure. We did USD 5 billion, so what's better for the country," he added.

Finance Ministry keen on selling 10 pc govt stake in Indian Oil in Nov

The Finance Ministry wants to sell 10 per cent of the government's stake in Indian Oil Corp (IOC) by end of the month in a bid to achieve its Rs 40,000 crore disinvestment target.

So far, the government has raised about Rs 1,325 crore from stake sales in six companies.

"We want to push the IOC stake sale first, within November itself. This will pave the way for disinvestment of other oil sector PSUs like Engineers India," a senior Finance Ministry official said on Sunday.

IOC shares closed at Rs 213.20 on the Bombay Stock Exchange on Friday. They have fallen 43 per cent from the 52-week peak of Rs 375 on January 18.

At the current price, the sale of 19.16 crore IOC shares, equivalent to 10 per cent of the government's holding in the company, would fetch more than Rs 4,000 crore, which is 10 per cent of this financial year's disinvestment target.

Last month, the Department of Disinvestment put off overseas roadshows for the IOC stake sale following opposition from the company and the Petroleum Ministry, which cited poor market conditions. The roadshows were planned in London, US, Singapore, Hong Kong and Dubai.

Citibank, HSBC and UBS Securities are among the five merchant bankers selected to manage the oil retailer's share sale.

IOC Chairman RS Butola had written to the Oil Ministry in September, saying, "Current share price of IOC, already undervalued, may not fetch the fair value in the prevailing uncertain environment and investors in all probability are likely to factor in huge discount in their assessment of share price."

A share sale under present conditions could fetch a low price and would further dent IOC's efforts to raise loans for crude oil imports.

The government held a 78.92 per cent stake in the country's largest oil refiner as of September 30.

IOC posted an 82.5 per cent drop in net profit to Rs 1,683.92 crore for the July-September quarter after losses from foreign exchange and sales of diesel, cooking gas and kerosene below cost.

The government plans to sell 10 per cent in Engineers India. At the current market price of Rs 175.10, the sale of 3.36 crore EIL shares would fetch about Rs 600 crore.

Tata, SIA incorporate airline venture

The new company is a joint venture between Tatas and Singapore Airlines , with Tata Sons Ltd holding he majority 51 per cent stake and the Singaporean aviation major having the remaining 49 per cent equity.

As per information available with the Corporate Affairs Ministry, the new company was incorporated on November 5 with a total paid up capital of Rs 5 lakh and has been registered in New Delhi.

The incorporation documents have been signed by three directors -- Prasad Menon, Kersi Rustom Bhagat and Mukund Govind Rajan.

The incorporation follows approval from the Foreign Investment Promotion Board (FIPB) late last month for the proposed investment of USD 49 million by SIA in the joint venture, where Tatas are making initial investment of USD 51 million as per their shareholding structure.

Earlier, the JV received Corporate Affairs Ministry's approval to use the name 'Tata SIA Airlines Limited'.

The process of incorporating a new company for this joint venture started with registration of the name, followed by submission of various other documents, including the Article of Association, and details of the company's board of directors, share capital, business areas etc.

Tata SIA Airlines is among the first major companies to be incorporated under the new Companies Act, 2013.

The two partners are making an initial investment of USD 100 million to launch the airline, which may take off next year after getting all the clearances required.

This is the third attempt by Tatas and SIA to enter the Indian civil aviation sector.

Tatas have a long history of association with civil aviation in India.

JRD Tata had started Tata Airlines in 1932, which was later in 1946 renamed as Air India and was subsequently nationalised in 1953.

In February this year, Tatas also announced a partnership with Malaysia's AirAsia for a low-cost carrier in India, wherein Arun Bhatia's Telestra Tradeplace is third partner.

Tatas and Singapore Airlines have assured the government that control of their proposed venture would always remain in Indian hands, while seeking approval to offer full-service passenger services on both domestic and international routes.

The initial board of the new carrier will have three members, which would be later expanded to six members with six nominees of Tata group.

The JV would also provide air transport carriers for both passengers and freights as well as supporting services to air transport, like operation or airport flying facilities, radio beacons, flying control centres and radar stations.

GlaxoSmithKline Pharmaceuticals Q3 net declines 33.73 per cent

GlaxoSmithKline Pharmaceuticals (GSK) has reported a 33.73 per cent decline in standalone net profit at Rs 100.95 crore for the third quarter ended September 30.

The company had posted a standalone net profit of Rs 152.34 crore in the same period previous financial year.

The company follows January to December financial year.

The drug firm's total income declined by 7.02 per cent to Rs 666.02 crore in the July-September quarter, compared to Rs 716.37 crore during the same period last year.

GlaxoSmithKline Pharmaceuticals shares were trading at Rs 2,448 per scrip at the Bombay Stock Exchange in the afternoon trade, down 1.33 per cent from their previous close.