...DISINVESTMENT OF BHEL LTD INTRODUCTION:- Bharat heavy electrical limited is an integrated power plant equipment manufacturer and one of the largest engineering and manufacturing companies in india in relation to turnover. It was established in 1964. The company has been earning profits continuously since 1971-72 and paying dividends since 1976-77. Its related to design, engineering, manufacture,construction,testing,commissioning and servicing a variety of products and services for the main sectors of the economy mainly Power, Transmission,Industry, Transportation(Railway), renewable energy, Oil and Gas and Defence. It has 15 manufacturing divisions and more than 150 project sites across india. It contributes 59% in india’s total installed generating capacity. It has its branches in over 75 countries globally. DISINVESTMENT OF BHEL LTD:- * The government holds 67.72% holdings in BHEL Ltd. * The annual turnover target of the Ministry Of Disinvestment for the current financial year from disinvestment is around 40000 crores. * So the government has decided to sell 5% of its stake holdings to the public, which is expected to generate a revenue of about 4500 crores. * But the disinvestment has been currently put on hold due to the present market conditions. * The government wants to provide financial support and want to improve the efficiency of the enterprise. The company had some debts which is showed in the balance sheet. So in order to minimize those...
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...Disinvestment of India’s Public Sector Units L M Bhole, Department of Humanities & Social Sciences The role of the State vs. Market has been one of the major issues in development economics and policy. In a mixed economy such as India, historically the public sector had been assigned an important role. However, in the year 1991 the national economic policy underwent a radical transformation. The new policy of liberalization, privatization and globalization de-emphasized the role of the public sector in the nation’s economy. The faculty at IIT-Bombay has been studying various aspects of the New Economic Policy such as financial sector reforms, fiscal implications of reforms, and of globalization. To date several arguments have been proffered by the apologists of market-oriented economic structures: ▪ the government must not enter into those areas where the private sector can perform better ▪ market-driven economies are more efficient than the state-planned economies ▪ the role of the state should be as a regulator and not as the producer ▪ government resources locked in commercial activities should be released for their deployment in social activities. It is also contended that the functioning of many public sector units (PSUs) has been characterized by low productivity, unsatisfactory quality of goods, excessive manpower utilization, inadequate human resource development and low rate of return on capital. For instance, between 1980 and 2002, the average...
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...Reasons for disinvestments: Financial Reasons 1. Cash related – a. Need for cash - for better reinvestment opportunities b. Voluntary liquidation to avoiding any substantial investments need to run the business on a profitable and sustainable business 2. Performance related – c. Unsatisfactory profit level on assets being divested d. Selling off assets and fringe activities to focus efforts on core competencies e. Rationalization of resources to achieve cost reductions and avoid duplication or uneconomic scale of operations f. Project nearing end of profitable life g. Corporate sales and profit growth objectives not met h. PV of cash flows for disinvestment than PV of cash flows from retention or expansion of business 3. Financial Environment i. Increasing interest rates pushing up financing costs eg Air India j. Increasing rate of inflation which cannot be compensated for by price increases Non Financial Reasons 1. Market Related a. Declining industry with permanent reduction in customer demand to an inadequate level b. Market share continuously declining, inability to penetrate new markets c. Business location badly situated in relation to markets and distribution means d. Risk and uncertainties related to business growing e. Competition increase to severe level 2. Management Related a. Inadequate management knowledge b. Lack of any specific competence ...
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...Response to a South Africa Investment Leon Grier Personal & Organizational Ethics Dr. Tina Engle March 19, 2012 Response to a South Africa Investment In my judgment one of the benefits to continue with the expansion project of the Caltex plant is it would continue to keep Caltex black employees employed. Caltex has improved the life of its current minority employees even though the country itself hasn’t tried to improve the welfare of the rest of the black community. Another benefit is that that expansion project promised an annual return of 20 percent on the original investment, which is good for the shareholders. Finally, the benefit that I see is that Caltex is helping the economy of the South Africa by continuing its oil operations in its country. On the other hand by continuing operations in South Africa, and they are helping the government financially support the mistreatment of the black community. If Standard and Texaco did not build the plant, someone else would, likely a company with less global standards or stake in moral and ethical dilemmas. While most reasonable people, even in 1977, found apartheid to be cruel, unjust, and certainly morally wrong, one can think that it would be easier to change a situation from the inside out rather than the outside in. Even Caltex ended operations there in South Africa, the employees that had a little of success would be forced to return to where they began. Apartheid laws were designed to preserve the racial purity...
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...Disinvestment and Privatisation in India Assessment and Options1 R Nagaraj2,3 Ownership reform in public sector enterprises (PSEs) initiated since 1991 has as yet been quantitatively modest. It is perhaps too early to judge the effects of these initiatives on their financial performance. While the slow pace of the reform can be perceived as an opportunity, there is perhaps merit in carefully reviewing the policy in light of economic theory, and comparative experience. As the bulk of the public investments are in industries with economies of scale and scope (with externalities that in principle invite considerable regulation), this study suggests an alternative institutional arrangement for improving PSEs’ financial performance: mutual stock holding among complementary enterprises tied around a public sector bank to minimise problems of soft budget constraint, dysfunctional legislative and bureaucratic interference, and to encourage close interaction between banks and firms to promote long term economic development. Introduction: Employing about 19 million persons, public sector currently contributes about a quarter of India’s measured domestic output. Administrative departments (including defense) account for about 2/5th of it, the rest comes from a few departmental enterprises (like railways and postal services), and a large number of varied non-departmental enterprises producing a range of goods and services. These include, close to 250 public sector enterprises (PSEs) owned...
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...Reading Material - AFM Project A Project is a set of inter related activities leading to a complete tangible or intangible product or service. e.g construction of a building / dam / ship, launching of a new product, conducting national elections, state level professional admission process, setting up a new plant A project in business refers to an organized program of activity carried out to meet a definite goal. In business it may be to launch a new product, set up a new plant, increase existing capacities etc. Projects may be ; New projects, Modernisation projects, Expansion projects, Diversification projects, Other miscellaneous projects. Project Appraisal: Project Appraisal is the process by which a financial institution makes an independent and objective assessment of the various aspects of the investment proposition for arriving at a financing decision. There are four broad aspects of appraisal: 1. Technical feasibility – Analysing the technical aspects of the projects like technical process. Design, size, technology used, availability of resources like labour, raw materials, packing materials etc.,availability of utilities like electricity, water, fuel etc, installed fixed assets and their capacities etc. 2. Financial feasibility – Analysing the financial aspects of the projects w.r.t cost of project, sources of finance, evaluation of revenues and returns on investments and their adequacy. 3. Economic feasibility – Analysing whether the resources commited...
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...The Kelkar Committee Report’s Report Dr Vijay Kelkar along with his associates Indira Rajaraman and Sanjiv Misra came out with what they called it as the Roadmap for Fiscal Consolidation in September 2012. First of all many viewers watching business channels and overhearing about this latest buzz would not even know the proper definition of Fiscal Consolidation. Going by just the name, it seems as if it has something to do with collating various components associated with something called fiscal. Simply speaking Fiscal actually refers to government’s financial matters. It includes both revenues (especially from taxes) and expenditures. Whereas Fiscal Consolidation refers to a government policy intended to reduce deficits and accumulation of debts. The Kelkar committee seems to have been working hard from quite some time to actually relate government’s financial measures with realistic market scenarios. When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings) then it is referred to as Fiscal Deficit. The committee expects India’s fiscal deficit in FY 2012‐13 to be around 6% of the Gross Domestic Product (market value of final goods and services produced within in country in a given period) which comes out to be around INR 108 Billion. The current account deficit (it occurs when a country's total imports of goods, services and tr...
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...IKEA Task 1 Boru Zhao Examine approaches to strategy evaluation and selection P7 Analyse possible alternative strategies relating to substantive growth, limited growth, Market entry strategies, and disinvestment strategies IKEA has marketed its products well and has dealt with all the problems easily. But there have been some constraints that came in the way of IKEA and alternative strategies have to be developed for them. These strategies are as follows: Substantive growth: In any business strategy growth is the most important factor. To achieve substantive growth the firm needs to go through a lot of planning. Some of the key advantages of substantive growth are: • Exponential Growth: Once IKEA achieves substantive growth in their business then they can be confident that it will lead to more growth in the future. There is a tendency of the growth of wealth at an exponential rate and the company can use these funds for other project to generate gains in future. While an organization achieves substantial growth the main benefit is that it helps in investing them for future benefits and achieving potential wealth gains. This is always a welcome consideration. • Competition: Substantive growth of IKEA will help them to understand the strength of the competition and developing the business strategy accordingly. The faster a company achieves substantive growth the easier it is for them to beat the competition. The added wealth...
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...Homeownership at the time, and even today determines many factors for a family: what kind of school you went to, economic stability, opportunities, and more. The Federal Housing Administration (FHA) was a government agency created in 1934 authorized by the National Housing Act of 1934 to regulate interest rates and mortgages after the housing market was hit during the Great Depression. As the Federal Housing Administration created requirements for the mortgage, buyer, and property, this led to racial segregation and “urban disinvestment” within neighborhoods across the U.S. Since the Supreme Court ruled in 1917 that “racial zoning” was illegal private companies began to find loopholes to get past these laws, a common tactic used was redlining....
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...Ad-valorem duties: These are the duties determined as a certain percentage of the price of the product. Appropriation bill: This Bill is like a green signal enabling the withdrawal of money from the Consolidated Fund to pay off expenses. These are instruments that Parliament clears after the demand for grants has been voted by the Lok Sabha. Aggregate demand: It is the sum of all demand in an economy. This can be computed by adding the expenditure on consumer goods and services, investment, and not exports (total exports minus total imports). Aggregate supply: It is the total value of the goods and services produced in a country, plus the value of imported goods less the value of exports. Budget: Just what is this annual rigmarole called the Union Budget? Put simply, the annual Union Budget is an estimate of the Government of India's revenue and expenditure for the end of a particular fiscal year, which usually runs from April 1 to March 31. The Union Budget is the most comprehensive exhibit of the government's finances, in which revenues from all sources and outlays to all activities are consolidated. The budget also contains estimates of government's accounts for the next fiscal, called budgeted estimates. Ironically enough, you won't find the term "budget" anywhere in the Constitution! Under Article 112, a statement of estimated receipts and expenditure, called the "Annual Financial Statement", has to be laid before Parliament for each financial year. This Annual Financial...
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...arise. This was brought to the matter of the UN from India who considered it to be an in house dilemma and felt that South Africa should handle this concern themselves. From that time onwards, more diverse segregations occurred, mainly between the blacks and the whites of South Africa. Not to mention the various conflicts when the UN tried to intervene demanding that South Africa release South West Africa to become an independent state. Needless to say, South Africa refused, in which the UN banned South Africa from the UN summit. It was only after the 1994 elections when the Truth and Reconciliation Commission was established, that the UN first allowed The South African government back. Content How does this involve sanctions and disinvestment that brought about the end of Apartheid you might ask? It was the beginning. It brought South Africa into the limelight but not enough for it to make too much of a ripple in the economy of the country. During this time frame , there was growing discontent amongst the majority of blacks with regard to income, housing, living conditions and basic human rights violations. It wasn’t until the Sharpeville uprising and massacre that the full eyes of the world intensified upon South Africa in 1960. International outcries of distaste bore heavy on the country. Initially, America and Britain were against sanction to South Africa , as the country supplied great commodities such as gold and coal, as well as the fact that South Africa was in a strategic...
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...JEEV SEWA SANSTHAN GROUP OF INSTITUTION FOR WOMEN FACULTY OF MANAGEMENT PGDM-1 2012-2013 INDIAN FINANCIAL SYSTEM TOPIC- FINANCIAL MARKET SUBMITTED TO: SUBMITTED BY: Miss Ankita Rajdev Nisha Kumari Garima Jain Kohila Chouhan Laxmi Nandwani Sanchita Vishwakarma Neha Satwani ACKNOWLEDGEMENT Guidance, help and encouragement are the essential requirement for successful completion of assignment. We own our gratitude to all those who have helped us in the preparation of this assignment. We express our deepest gratitude to our assignment guide Ms. ANKITA RAJDEV, Asst. professor for her valuable guidance and help in completion of this assignment. We feel obliged to all the respondents, friend and other who have shared their valuable time and opinion, for making significant contribution directly or indirectly in the assignment. INDEX S.no. | Topic | Page no. | 1 | INTRODUCTION TO FINANCIAL MARKET | 4-5 | 2 | MONEY MARKET | 5-6 | 3 | CAPITAL MARKET | 6-8 | 4 | PRIMARY CAPITAL MARKET | 8 | 5 | SECONDARY CAPITAL MARKET | 8-9 | Financial Markets Introduction Financial markets are a mechanism enabling participants to deal in financial claims. The markets also provide a facility in which their demands and requirements interact to set a price...
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...the decision to allow 51 percent FDI in multi-brand retail, Commerce and Industry Minister Anand Sharma told reporters after the Cabinet meeting chaired by Prime Minister Manmohan Singh. "The response has been a mixed one but the UPA had tried to evolve a consensus," he said. The cabinet had in November last year approved 51 percent FDI in multi-brand retail but had to put it on hold due to opposition from political parties, including UPA ally Trinamool Congress. Sharma also reiterated that foreign retailers planning to enter the multi-brand segment would have to invest a minimum of USD 100 million with 50 percent of it in rural areas. Related Stories • 49% FDI in civil aviation allowed; industry welcomes • Cabinet allows disinvestment in 4 PSUs; to raise Rs 15,000 crore • Broadcast sector reform: FDI upto 74% to be allowed • FDI in retail to boost mall space demand: Realtors • Govt permits foreign investment in power trading exchanges • Major decisions to dispel policy paralysis notion: India Inc • FDI decisions to boost growth, generate employment: PM • UK-India business body hails FDI move • FDI sensitive, but to India's benefit: UK Inc • Corporate America, media hail India's 'big bang' reforms • Corporate America, media hail India's 'big bang' reforms • Govt's big-ticket reforms: FDI in multi-brand...
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...The Fiscal Deficit | | | | | | | | |What exactly is the Fiscal Deficit? | |The fiscal deficit is the difference between the government's total expenditure and its total receipts (excluding borrowing). | |The elements of the fiscal deficit are (a) the revenue deficit, which is the difference between the government’s current (or | |revenue) expenditure and total current receipts (that is, excluding borrowing) and (b) capital expenditure. The fiscal deficit | |can be financed by borrowing from the Reserve Bank of India (which is also called deficit financing or money creation) and | |market borrowing (from the money market, that is mainly from banks). | | | |Does a Fiscal Deficit Necessarily Lead to Inflation? | |No. Two arguments are generally...
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...MERCHANT BANKING Prof Faye N Salins Merchant Bankers act as a link between corporate bodies who intend on raising funds and investors who are interested in investing in securities. It helps corporates establish new companies, expand, diversify, merge, commission projects etc. Apart from that, merchant banking was the necessity of banks themselves which were in need of non-fund based income so as to improve their profitability margins by all means in the changed economic scenario. Merchant Banking is known by different names in different places. In the USA, it is known as “Investment Banking”. In the UK it is known as “accepting and clearing houses”. Definitions of Merchant Banking 1) A Merchant Bank is a bank or financial institution that handles all the tasks related to incorporation of a company as well as marketing corporate and other securities. 2) Merchant Banking is an institution engaged in the business of issue management either by making arrangement regarding selling, buying or subscribing to securities or acting as manager, consultant, advisors or rending corporate advisory services in relation to issue management. 3) As per SEBI, Merchant Bank mostly provide advisory services, issue management, portfolio management and underwriting services, which require less capital but generate more income (non-interest income). 4) As per the Ministry of Finance; any person who is engaged in the...
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