IDBI Fortis gets Rs 250 cr cap infusion

MUMBAI: Giving a boost to its business expansion plans, IDBI Fortis Life Insurance has announced a capital infusion of Rs 250 cr from its shareholders as per their share holding pattern.

IDBI Fortis launched its operations in March 2008 with an initial capital of Rs 200 cr leading with their innovative product, WealthsuranceTM, which has been its flagship product helping it race to over Rs. 2000 Cr of Sum Assured with over Rs 250 Cr of First Year Annual Premiums and over 62,000 policies issued in record time.

The company is targeting a network expansion drive to set up 100 branches across the country. In addition, IDBI Fortis also sells its products through the more than 1100 branches of its shareholder banks, IDBI and Federal Bank.

“The branch expansion drive is going on in full swing and we already have over 30 branches up and running in various states,” said Mr G.V. Nageswara Rao, MD and CEO, IDBI Fortis Life Insurance. “IDBI Fortis is committed to providing comprehensive investment and insurance solutions through innovative products, well-trained sales force and high standards of service.”

IDBI Fortis Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s premier development and commercial bank, Federal Bank, one of India’s leading private sector banks and Fortis Insurance International, a multinational insurance giant based out of Europe. IDBI Bank owns 48% equity while Federal Bank and Fortis own 26% equity each. Visit www.idbifortis.com to know more.

IDBI Fortis has managed to launch an array of innovative products from its stable.
Its flagship product, WealthsuranceTM Foundation Plan is a unique combination that is termed as an Insured Wealth Plan that aims to provide people a growing wealth plan protected by the benefits of insurance. With comprehensive investment choices, protected by powerful insurance options, all presented with a reasonable charge structure, Wealthsurance is a one-stop solution to a customer’s wealth building plans. The product is designed to ensure that the hard-earned money that is invested is not susceptible to unforeseen circumstances. WealthsuranceTM offers investment choices such as Guaranteed Return Fund, Capital Guaranteed Fund, Monthly Interest Account, Equity Funds, Debt Funds, Asset Allocator Funds etc. ensuring that the customer would find all his investment requirements satisfied with this one powerful product. The powerful insurance benefits of WealthsuranceTM ensure that a customer’s wealth plan is not affected by unforeseen events that may strike them.

With the recent popularity for guaranteed return products, the company launched a unique product, BondsuranceTM that offers tax-free assured returns with life cover.
With the innovative HomesuranceTM Protection Plan, customers can now cover the changing liability that comes with a typical floating rate home loan, along with an optional cover where they can pay off the home loan even in the unfortunate event of any major disease or other unforeseen circumstances.

The fresh capital infusion will also help IDBI Fortis in meeting the solvency requirements and expanding operations due to increased sales besides launching new products and branches.

Reliance Money Exp acquires UK's No 1 Currency

Mumbai, March 13, 2009: Reliance Money Express, part of the Reliance Anil Dhirubhai Ambani Group, today announced that, the company would acquire 51 per cent of No1 Currency, the UK’s fastest growing independent foreign currency specialist.

The announcement was made by Mr. Sudip Bandyopadhyay, Director & CEO, Reliance Money Express here today.

Reliance Money Express plans to acquire a 51 per cent stake in No1 Currency, subject to appropriate approvals. It is the first Indian company to acquire an international foreign exchange company.

“While looking for opportunities to widen our services internationally, we found that No1 Currency offered a strong proposition both in terms of synergy and added value. As one of India’s leading FOREX players, we were impressed with No1 Currency's approach to business and the valuable services which they provide to individual customers and businesses,” said Mr. Bandyopadhyay.

As the UK’s fastest growing foreign currency specialist, No1 Currency provides safe and secure worldwide transfers and Bureau de Change services. Its Bureau de Change is one of the largest chains of bureaux in the UK with over 295 outlets in a variety of stores and locations throughout the UK.

Commenting on the acquisition, Mr. Mark McElney, Managing Director, No1 Currency said, “We are delighted to have Reliance Money Express as a large shareholder in our company and on becoming a part of the Reliance Anil Dhirubhai Ambani Group.”

“The synergy between No1 Currency and Reliance Money Express will open up new and exciting opportunities for business growth,” Mr. McElney continued, “No1 Currency already has a rapidly expanding network of 295 Bureau de Changes throughout the UK, however this alliance will present development opportunities for No1 Currency to lead Reliance ADAG into the European market.”

No1 Currency has a dedicated team of foreign currency specialists who provide a professional and tailored approach to all customers regardless of the amount or regularity of exchanges.

“This acquisition will mark our foray into the international foreign exchange arena. We plan to build synergies between both the companies thereby capitalizing the growth potential of the foreign exchange business.” added Mr. Bandyopadhyay.

Last year, Reliance Money Express acquired a majority stake in Wall Street Finance. It has become the largest private sector player in the remittance business in India.

About Reliance Money
www.reliancemoney.com
Reliance Money, a part of the Reliance Anil Dhirubhai Ambani Group is a comprehensive financial services and solution provider, providing customers with access to Equity, Equity and Commodity Derivatives, Portfolio Management Services, Wealth Management Services, Mutual Funds, IPOs, Life and General Insurance and Gold Coins. Customers can also avail Loans, Credit Card, Money Transfer and Money Changing services.

The largest broking house in India with 3 million customers and a wide network of over 10,000 outlets and 20,000 touch points in 5,000+ locations. Reliance Money endeavors to change the way investors transact in financial markets and avails financial services. The average daily volume on the stock exchanges is Rs. 3,000 crores, representing approximately 4% of the total stock exchange volume.

Reliance Capital is one of India's leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking groups, in terms of net worth.

About No1 Currency
www.no1currency.com
Founded in 1996, Edinburgh-based No1 Currency is the UK’s fastest growing independent foreign currency specialist. No1 Currency is accessible to all, providing safe and secure worldwide money transfers for individuals and corporate clients, as well as competitive Bureau de Change services. No1 Currency offer a range of products to cover corporate clients currency needs, from immediate Spot Price contracts to longer-term Forward and Time-Option Forward contacts, as well as a Limit or Stop Loss Order which protects businesses from adverse currency movements. No1 Currency Bureau de Change is one of the largest chains of bureaux in the UK, with 295 outlets across the UK offering 0% commission on currency exchanges. In 2008 No1 Currency was short-listed for the Ernst and Young Entrepreneur of the Year 2008 prize. For two years running No1 Currency has been listed as a Sunday Times Fast Track 100, making 54th place in 2008. With plans for further growth including doubling size of its Bureau de Change network over the next year and building a greater market in the UK and Europe, this Edinburgh-based Foreign Currency Specialist is paving the way to become a global leader.

Indian Economy on road to turnaround

by Ashok Handoo*

Is the Indian economy showing early signs of revival or a turnaround? It may be too early to say yes, but the figures thrown up in recent days certainly point to that. And that should be good news for the managers of the Indian economy. Despite that there is no room for complacency as the challenges ahead are indeed, enormous.

Let us first talk of the turnaround indicators. The official data shows that the cement sector has grown 9.97 percent in December 2008 as compared to November and the year on year increase is 11%. Steel, which declined from September onwards last year, has shown a recovery in December last and January this year. It has now touched 22.86 million metric tones, a figure it achieved in May 2008 when the sectoral growth rate was 4.1%. This may not be quite impressive but the very fact that the sector is growing is a matter of some satisfaction. Passenger vehicles grew at 32% in January 2009 compared to December 2008. Commercial vehicles grew at 23%. These are all encouraging signs.

Job losses are an area of immense concern to all of us. Labour Minister Oscar Fernades informed Parliament recently that half a million jobs had been lost in India due to the economic slowdown. That certainly is a cause of concern. But there is a silver lining too. A recent survey conducted by the HR consultancy firm Hewitt says that less than 13% companies in India were considering retrenchment while 60 % are still hiring. India is at the lowest of the ladder of layoffs, with the US topping the list at 55 %. It is followed by China at 30.6%. Japan, Korea, Singapore and Malaysia also are higher up in the ladder.

On the other hand, the survey shows that India is at the top of the ladder with 8.2% in year on year projected salary hike in Asia- Pacific. Even the US and Japan are expected to have a salary hike of only 3.2 % and 2.3 % this financial year. The projected salary hike is indeed far less than 13.3 % India witnessed in 2008 but in these hard days the picture is not all that gloomy. Hewitt says the survey was conducted in December and January for 480 Indian companies.

Finance Minister Pranab Mukherjee has already urged the Indian Industry not to cut down on jobs and salary cuts could instead be effected to tide over the present turmoil.

By all accounts therefore, the pro-active fiscal and monetary measures taken by the Government and the Reserve Bank of India seem to be showing results. But there is a long, long way to go.

Clearly, the key to deal with the present economic crisis is to increase demand domestically, as we have no control on the demand in other countries which are facing a far worse situation than we do. This is precisely why Indian exports have been suffering a big blow as the US, UK the European countries and Japan, which account for more than half of India’s exports, are in the grip of a recession. The downside is that we may have to wait longer than expected in the export sector until these economies revive.

That also explains why the Government is focusing on stimulating domestic demand by ensuring flow of credit to trade, industry, investment in Infrastructure, Housing and Real Estate. Flagship programmes like NREGS and Bharat Nirman too are being allocated adequate resources. But as Shri Pranab Mukherjee pointed out, this is a global crisis and “Global crisis requires a global response and India is playing its own role in fashioning it.”

The Government, on its part, has been injecting huge amounts into the system through stimulus packages and duty cuts. The 3rd package announced by the Finance Minister in Parliament means pumping another 29,000 crore into the system by way of duty cuts in excise and customs as well as service tax. He also announced that the 4% cut in central excise duties made in December 2008, would continue for the next fiscal as well. In the interim Budget also, Shri Mukherjee projected higher spending in the next fiscal year.

The RBI too has reduced the CRR, the portion of deposits banks are required to keep with the RBI, from 9 percent to 5% during the last 4 months. The Repo Rate, at which RBI lends cash to banks, too has been cut 4 times to 5.5%. The reverse repo rate has also been brought down from 6 to 4 percent.

The question now is whether these rates can be further reduced to put more liquidity in the system. The RBI Governor D. Subbarao says there certainly is room for rate cuts. It is now considering whether the rates should be cut, when and by how much.

Fortunately, the situation on the Inflation front is encouraging. The latest figures show that it has dipped to below 4%, 3.92% to be precise, and is heading towards a further fall in the days ahead. It is estimated to touch the low of 2% by the end of current financial year and continue to fall further, thereafter. So, there is no price pressure on the government to work against pumping more money into the system. Despite this one has to take note of Shri Pranab Mukherjee’s words of caution while presenting the interim Budget. “We have weathered the crisis (from inflation) but there is no room for complacency.” The fiscal deficit which was initially estimated to be around 2.5 percent of the GDP is now likely to be in the range of 6% and could thus be a record high in seven years. Higher deficit has also increased government’s borrowing target from Rs. 2.61 trillion to Rs. 3.06 trillion.

The effect of the global recession on India has been “much sharper” than expected. It therefore calls for more measures to stem the tide of low growth and layoffs. The figures reveled by the Central Statistical Organization say that the Indian economy will grow by 7.1% in the current financial year against 9 percent in the three previous years. The Deputy Chief of the Planning Commission Shri Montek Singh Ahluwalia believes that it would continue to grow at 7 percent in the next fiscal as well despite the impact of the global financial crisis. Some economists however feel that it may come down to 6 percent.

On balance, the economic situation does seem to be looking up. Things are better than what it was 2 months ago. As Shri Ahluwalia puts it “banks are now willing to lend to good companies with a strong financial position. What is now needed is to get credit flowing to the lot of companies in the middle.” The risk perception in banks, which is very high at this point of time, must go. That may, however take some time. Boosting of demand and investment continue to remain the mantra to deal with the current economic crisis.(PIB Feature)


(Disclaimer : The views expressed by the author in this feature are entirely his own and do not necessarily reflect the views of PIB)