| PF, pension funds may be allowed to invest in corporate bonds |
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New Delhi, 9 November With banking sector facing asset-liability mismatch in their funding to infrastructure sector, the government may soon relax the norms for pension and provident funds to invest in the corporate bond market to provide long term finance for the core sector. Economic Affairs Secretary Arvind Mayaram said most countries had developed corporate debt market for funding the infrastructure sector and in India also could replicate it by relaxing the investment norms for pension and provident funds which would provide long-term funds. "This is one area we are very actively looking at and we would be coming out with some new guidelines in the near future," Mayaram said at an infrastructure summit today. Later, talking to the reporters, he added, "We are examining what needs to be done to deepen the corporate bond market. Steps are on the anvil. We are looking at them and we will be announcing those which are feasible very quickly." He said Exchange Traded Funds (ETFs) could play a very important role in funding infrastructure, but they are yet to take off in a big way. The Secretary added the government was open to discussions if some changes were required in the structure of ETFs. The corporate debt market in India is not developed fully and the government is looking at ways to attract the companies come up with longterm bond offerings. This would take some pressure off the banks which find their short-term resources limited for meeting the long-term needs of infrastructure sector. |
| Shed more light, proxy advisory firms tell Wipro |
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New Delhi, 9 November Proxy advisory firms have turned the heat on Wipro, which announced a demerger scheme last week. Stakeholders Empowerment Services (SES), promoted by J N Gupta, earlier with the Securities and Exchange Board of India, has asked Wipro shareholders to seek listing of the consumer goods business the company proposes to demerge. Said its note: "Shareholders should urge the board and the management to reconsider the demerger scheme and list the demerged entity, enabling investors to realise its fair price in the market. SES believes the stated objectives of demerger could still be met if the demerged entity were to be a listed company, unless the objective itself is to create an unlisted company." The note added, keeping in view the high standards of governance, transparency and fairness for all stakeholders for which Wipro is known, it urged the shareholders to ask for valuation details and division of tangible and intangible assets between the two and why the Wipro brand will be shared equally when neither the assets nor turnover or profits are equal. When contacted a Wipro spokesperson reiterated the management stand earlier that they are equally committed to both the businesses. "Whatever options were offered to the shareholders were by adhering to highest standards of governance," he added. SES also urged investors to ask the company what was the value assigned to the Wipro brand. "Additionally, SES would welcome it if the independent directors give their recommendation over the demerger proposal to shareholders (as is required in the case of takeovers)," the note added. Institutional Investors Advisory Services (IiAS) said Wipro needed to throw more light on the proposed demerged entity and plans for its future. "Given that Wipro Enterprises will be unlisted, the management has not provided any basis to investors on whether they should bank the cash or hold on to unlisted equity," went its critique. It said the management, including Chairman Azim Premji, should throw more light on Wipro Enterprises. In a report titled 'Unstitching Wipro', it raised several questions such as, "Is management thinking about divesting the lighting business and investing the proceeds in hydraulics and pneumatics? Or hiving-off toilet soaps to invest in lighting? Does the management have a focused strategy in place or will the 'pursuit of independent growth plans' suffice? Are they thinking of further splitting Wipro Enterprises and then list the various underlying businesses separately anytime soon?Azim Premji may not share the details but he has to share his vision with investors. In the absence of this, offering Wipro Enterprises shares is a hollow choice." The Wipro spokesperson said the company has already filed a demerger scheme along with a valuation report with the exchanges which gave all the necessary information to the shareholders. According to IIAS, listing of Wipro Enterprises might not be the solution. It said: "While investors can weigh the deferred cash against Wipro's shares, asking them to do so without any information on what are the management's plans for Wipro Enterprises is unreasonable. Investors have the right to know more and Wipro has an obligation to provide answers. Only then can investors hope to take the right decision." Ask shareholders to seek more clarity on demerger, say management should spell out vision; company says deal adheres to highest standards, all details shared OPTIONS FOR INVESTORS Wipros non-IT businesses to be demerged in to Wipro Enterprises (WEL) WEL would be unlisted Three options for Wipro shareholders: 1 Receive one equity share in WEL for every five equity shares of Wipro; 2 Receive one 7% Redeemable Preference Share in WEL for every five equity shares of Wipro redeemable after one year 3 Exchange the equity shares of Wipro Enterprises Limited and receive as consideration equity shares of Wipro Limited held by the promoter. The exchange ratio will be one equity share in Wipro Limited for every 1.65 equity shares in Wipro Enterprises Wipro: Non-IT products revenue Figures in ~crore 2011 2012 Toilet soaps 840.4 1099.6 618.6 867.2 207.5 509.2 642.2 874.5 2,308.7 3,350.5 Hydraulic and pneumatics Lighting products Others TOTAL |
Company Secretary, Chennai
email csarengarajan@gmail.com
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