Today's Biz Bit

• A group of domestic banks and foreign financial investors (including SBI, Canara Bank, Capital International, Citigroup, T Rowe Price, Credit Agricole, UBS and Kotak Mahindra) have picked up around 9% stake in GMR Infrastructure, the flagship co. of GMR Group, for around $1 billion, through a qualified institutional placement (QIP). GMR CFO said the funds would be used for the construction of GMR Istanbul's airport in Turkey as well as buy-outs in the international power and airports markets. Currently, GMR is bidding for Tuas Power in Singapore. (ET)
  

• With direct tax collections growing at over 40% during this FY, the govt. is evaluating a proposal to reduce corporate tax rates, revenue dept. officials have said. It is clear, however, that a decision on reducing the tax rate will hinge on the elimination of a host of exemptions that Indian cos now enjoy and an acceptance by the govt. that tax compliance has indeed improved. The govt. and FM in particular, have been of the view that although the statutory rate is 30%, the effective rate for firms works out to just over 19%, after taking into account the various exemptions that Indian cos currently enjoy. (ET)
  

• ‘Smart Homes’ may become a reality soon. BSNL is all set to install and test a cutting-edge application that will offer broadband speeds of 100 mbps and 500 mbps (250 time the current speed) to homes through fibre optics network in Kolkata. The 100 mbps project will allow users to make his/her entire house a local area network on which all gadgets like TV, refrigerator, washing machine, micro-wave, water filter or the lock at the main door and the gate will be connected. All these can be controlled remotely through a wireless gadget like the cell phone or any other hand held devices. (ET)
  

• The govt., in proposed new company law, is planning to curtail the freedom of companies to raise deposits directly from the public. The proposed legislation will make RBI the sole authority to regulate acceptance of deposits from the public other than shareholders. The new law, however, will allow cos to raise deposits if they are eligible under the RBI norms. This would mean that only NBFCs will be able to raise deposits from the public as the RBI's provisions are restricted to them. Considering that almost all major corporate houses have set up their own NBFCs, the govt's intention seems to be to allow public deposits under only one window. (ET)
  

• In a clear admonition to the warring competitors in mobile telephony, PM Dr. Singh said today that spectrum needs to be distributed in a “fair, transparent, equitable” manner and should not “create entry barriers to newcomers or barriers to the continued growth of the sector”. The comment is significant because it suggests official endorsement for the DoT to go ahead and issue letters of intent to successful applicants among the 29 companies that have applied for new mobile service licenses. (BS)
  

• Three Indian power companies — Reliance Energy, Tata Power and GMR Infrastructure — have submitted indicative bids to acquire Singapore-govt owned Tuas Power. While Tata Power and Reliance Energy have decided to bid on their own, Bangalore-based GMR Infrastructure has formed a consortium with Macquarie Bank and Kuwait Fund for the purpose. Tuas Power has a capacity of 2,670 Mw and accounts for 26.1% of Singapore's electricity generation. It was put on sale by its promoters, the govt-owned investment company Temasek. (BS)
  

• German auto maker Daimler Trucks has zeroed in on the Munjals of Hero Honda for a JV to make commercial vehicles in India. The announcement is expected before Christmas. A Daimler spokesperson confirmed that the co had identified a potential partner. Daimler’s move has been widely anticipated as it has already expressed its intention to move beyond luxury cars in India. It now sells the Mercedes Benz brand of cars and the Actros range of high-end trucks. (BS)
  

• Mahindra & Mahindra’s (M&M’s) utility vehicle, Scorpio, will enter the US market in a little over a year’s time. The co already has firm orders for 45,000 units of Scorpio for the first year, which is more than the 40,000 it sold in India in the last financial year. 285 US dealers have signed up to sell the M&M’s Scorpio and are investing $178 million in setting up sales and service outlets. (BS)
  

• A recent report by PwC states that India's telecoms market has grown rapidly in the last few years with revenues of over $22 billion and an average annual subscriber growth of about 45% and revenue growth of 25%. The report says that the tele-density of India at about 23% coupled with its population offers immense potential for growth in the coming years. (BL)