Today's Biz Bit

• TRAI has made its recommendations on Mobile Virtual Network Operators asking govt to allow MVNOs to launch services in India which will enable firms to offer mobile services without owning cellular networks. TRAI has recommended an entry fee of Rs 5 crore for metro/category A, Rs 3 crore for category B and Rs 1 crore for category C service areas. (ET)

• The Wireless Planning and Coordination (WPC) wing of DoT has cleared the proposal to allot 3G spectrum to state-owned telcos — BSNL and MTNL. This implies, BSNL and MTNL will be able to launch 3G services by the year-end, while private telcos are likely to come out with similar offerings only by mid-09. (ET)

• Govt and SEBI are drafting new guidelines governing domestic and foreign venture capital funds (VCFs) in India which may not allow VCFs to invest in listed companies and restrict them only to startups. The guidelines will also seek to remove differences in treatment of foreign and domestic VCFs and provide a level playing field for both. Another aspect being reviewed is minimum capital required by VCFs to set shop in India. Govt is also looking at norms followed by other countries. (ET)

• According to sources, govt is considering disallowing PE funds to invest in Indian retail companies which are franchisees of foreign brands. PEs will not be allowed to invest even in the permitted 51% single brand retail category because only the owner of the global brand is permitted to invest in the Indian company. The one exception to this may be food and beverage retail where 100% FDI is allowed. (ET)

• According to sources, the insurance amendment bill, slated to be vetted by an empowered group of ministers soon is likely to - increase FDI limit in insurance sector to 49%, allow foreign reinsurance companies to set up branch offices in India without entering into JV partnership with Indian firms, work out a favourable tax structure for such companies and relax norms related to mandatory listing of all insurance companies within 10 years of their operations. (ET)

• According to sources, the home ministry has suggested that clearance for FDI in sensitive infrastructure sectors such as airports and ports should be provided only after thorough verification under the proposed National Security Exception Act. It has asked finance ministry to identify such sensitive sectors which are on automatic route and it is likely that it may take such sectors off the automatic route once the proposed umbrella law for scrutinising FDI from the national security angle is put in place. (ET)

• SEBI is learnt to be set to carry out a review of rules relating to issuance of Participatory Notes (PNs) by foreign portfolio investors and changes if any, are likely to be flexible rather than restrictive. A review of the securities lending and borrowing system, and the status on the launch of currency futures is also listed for discussion by the Sebi board at its meeting slated on August 13. (ET)
  
• According to sources, SEBI is looking at introducing a slew of modifications in its prescribed regulations for art funds and is likely to consider art funds on a case-to-case basis without mandating a blanket approval for all funds. (BS)

• RBI and SEBI have issued operational guidelines for exchange traded currency futures paving the way for their commencement in the country. The circular lays down eligibility norms for existing and new exchanges and their clearing corporations/houses, eligibility criteria for their members, product design, risk management measures, surveillance mechanism and other related issues. Initially, FIIs and NRIs would not be permitted to participate in currency futures market and domestic banks would require prior permission from RBI to participate in trading, clearing and settlement or other related segments of the trade. At the outset, the minimum size of the currency futures would be $1,000 and the contract would be quoted in rupee terms. (BS)

• According to sources, the finance ministry wants to rethink the switch to a goods & services tax (GST) regime even as CBEC is gearing up for it. There are learnt to be differences of opinion within the indirect tax dept. on whether excise duty should be kept out of the purview of the new tax. (BS)

• Maharashtra govt’s industrial infrastructure arm MIDC has signed a MoU with four companies for developing SEZ, which will attract minimum investment of Rs 17,000 crore and create employment of more than 50,000. Eldeco Infrastructure Properties Ltd will develop the multi product SEZ at Amravti in the backward region of Vidarbha covering over 1,010 hectares for an expected cost of around Rs 600 crore, Parsvnath SEZ Pvt Ltd will develop a pharmaceutical SEZ at Nanded in Marathwada region covering over 150 hectares for a expected cost of around Rs 47 crore, Ajanta Projects India Ltd will develop textile SEZ at Butibori on the outskirts of Nagpur by investing Rs 73 crore and Soma Enterprise Ltd. will develop the integrated textile SEZ at Kagal near Kolhapur on 104 hectares at an expected cost of around Rs 143 crore. (BS)

• According to sources, Global pharma and beauty retailer, Boots Company has executed an equal JV agreement with Reliance Retail Ltd (RRL) for wholesale business and operate front-end stores through a franchisee agreement to enter India’s health and wellness market. The front-end stores are likely be launched under Boots brand. (ET)

• Country’s largest GSM operators, Bharti Airtel and Vodafone Essar have announced that they will begin selling the new generation iPhone model in select outlets from August 22^nd, 2008. The pricing for the phone has not been revealed but is expected to be between Rs 25,000 and Rs 30,000.

• According to sources, $30-billion Australian mining group Rio Tinto has decided to set up a greenfield 12,000-tonne activated alumina facility in Gujarat with an initial investment of close to $35 million. For the proposed project, Rio Tinto Alcan B&A, the Canadian arm of Rio Tinto group, would set up a wholly-owned subsidiary in India and may route its investments either directly or indirectly through its affiliates and group companies. The activated alumina manufactured at the new facility would cater to diverse set of applications including water treatment, oil & petrochemicals and other processing industries. (ET)

• US law firm Levi & Korsinsky has announced an investigation into the proposed acquisition of Nasdaq-listed PeopleSupport by Aegis BPO, an Essar Group company, for $250 million (around Rs 1,050 crore). Levi & Korsinsky is learnt to have received a complaint from a client who is a shareholder of PeopleSupport of a fraud and if after investigation any fraud is found, the issue will be taken up before the court. (BS)

• A task force on NBFCs set up by FICCI has stated that the regulations for NBFCs in India are not fit for growth of the sector and need to be on par with those for banks. The task force also said that NBFC sector is a weak link and requires development-oriented regulation. According to the task force, NBFCs are not allowed to issue hybrid instruments to raise capital or to go to debt recovery tribunal to recover bad loans, which limit the sector’s performance. (BS)