Homebuyers can file complaints against builders with CCI

CCI has received several complaints against builders for unfair trade practices post DLF verdict

NEW DELHI: After the verdict of CCI imposing Rs.630crore on the biggest real estate company DLF, several home buyers approaching to CCI with their grievances that, builders are cheating them.
The Competition Commission of India (CCI) has received several complaints against the real estate companies for practicing unfair trade, senior officials said. We have received approx 10 complaints in the last month against the real estate companies, sources said. Pertaining to these complaints CCI will soon conduct a meeting to consider if the complaints are to be dealt with individually or collectively as a sector on the whole.
As per the competition Act 2002, home buyers can file complaints against builders with the CCI under section 3 and 4, pertaining to abuse of dominant market position and anti-competitive agreements, respectively.
However, CCI has charged fine at the rate of 7percent of the average of the turnover for the last three years on real estate giant DLF Ltd. The amount of Rs.630 crore has been imposed for the irregularities in business, bias business deeds and inequitable conditions made before the home buyers in Gurgaon.

Posted: 29 Sep 2011 05:46 AM PDT

By AT Delhi Bureau

Current affairs

Want to know what is happening NOW in India? Indian Current Affairs 2011

 

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No Prepayment Penalty on Floating Home Loans

The Reserve Bank of India (RBI) in a meeting with Banks representative agreed to remove the prepayment charges on floating rate loans. The exact date by which this notification will be implemented is to be announced shortly. The move is aimed at bringing fairness in bank charges. Prepayment penalty in some banks can range between 1 � 3 percent on the outstanding loan amount. The removal of prepayment penalty will make it easier for customers to partly pay their loans in case they are able to generate surplus cash or shift loans to other banks if they get a better interest rate. Also, it will increase competition among banks. Already a few banks like Axis Bank do not charge pre-payment charges. Banks have also been asked to revive fixed rate home loan products, which have become almost a thing of the past, as they are increasingly focusing on floating rate schemes to protect themselves from interest rate fluctuations. The RBI is of the view customers should not be exposed to rate volatility and banks should be able to hedge their risk through appropriate instruments. Source:- India Properties

INDIA'S RARE PICTURES

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I Hope you will find these interesting............ SOME VERY VERY OLD AND UNEXPECTED PICTURES IN THIS PPS ATTACHMENT.

THE HISTORY OF THE INDIAN FLAG-- You might find this very interesting!!

You might find this very interesting!!       THE HISTORY OF THE INDIAN FLAG. The flag that was first hoisted on August 7, 1906, at the Parsee Bagan Square in Calcutta.   Called the 'Saptarishi Flag', this was hoisted in Stuttgart at the International Socialist Congress held on August 22, 1907. Associated with the names of Dr. Annie Besant and Lokmanya Tilak, this flag was hoisted at the Congress session in Calcutta during the 'Home Rule Movement'.   In the year 1921, a young man from Andhra presented this flag to Gandhiji for approval. It was only after Gandhiji's suggestion that the white strip and the charkha were added.   This flag was suggested during the All India Congress Committee session in 1931. However, the Committee's suggestion was not approved.   On August 6, 1931, the Indian National Congress formally adopted this flag, which was first hoisted on August 31.   Our National Flag, which was born on July 22, 1947, with Nehruji's words, "Now I present to you not only the Resolution, but the Flag itself". This flag was first hoisted at the Council House on August 15, 1947.   The man who designed Tiranga versatile genius Lt. Shri Pingali Venkayya.  Lt .Shri Pingali Venkayya India's flag is a tricolor standard, with bands of saffron, white, and dark green. The saffron represents courage, sacrifice, patriotism, and renunciation. It is also the color of the Hindu people. The green stands for faith, fertility and the land; it is the color of the Islam religion. The white is in the center, symbolizing the hope for unity and peace. In the center of the white band is a blue wheel with 24 spokes. This is the Ashoka Chakra (or "Wheel of Law"). The Chakra represents the continuing progress of the nation and the importance of justice in life. It also appears on the Sarnath Lion Capital of Ashoka " .          ===================================================================== .

10 reasons why one should do business in India!!

Reserve Bank of India recently painted quite a gloomy picture for the Indian economy and rating house Moody's too pointed out how corruption and scams are hampering the country's business environment.

However, things are not as bad as it seems. For, quite a few contradictory statements are doing the rounds as well.

According to research firm Dun and Bradstreet, India will become a $5.6 trillion economy by 2020.

The firm has also predicted a three-fold jump in the country's gross domestic product, from $1.7 trillion last fiscal, on the back of rapid investment and growing consumer expenditure.

1. India's GDP is on a roll

India's gross domestic product is reaching new heights every year.

India is now the 11th biggest economy in the world.

The GDP expanded 7.7 per cent in the second quarter of 2011 over the previous quarter. From 2000 to 2011, India's average quarterly GDP growth was 7.45 per cent.

India reduced poverty by about 10 percentage points from 1997.

2. India's trade is growing steadily

India's imports are increasing more than 25 per cent year on year (since 1960).

Even if 2009 saw a small fall-back due to global recession, in 2010 imports were however again growing at 32.2 per cent (August, 2010

PE investment in real estate down 20% in April-August

NEW DELHI: Private equity investment in India's real estate sector declined by around 20.2 per cent to $ 831 million (about Rs 3,740 crore) in the first five months this fiscal due to sluggish demand.

Factors like the tight availability of funds with PE players and delays in project execution prompted fund houses to adopt a cautious approach toward the real estate sector, according to data compiled by research firm Venture Intelligence.

PE players had pumped $ 1,041 million (around Rs 4,685 crore) into the realty sector during the April-August period of the previous fiscal, as per the data.

"Funding through the PE route is lower compared to the previous year, as fund houses are cautious about investing into realty due to a dip in general demand and uncertainty over timely completion of the projects by developers," said the Chief Executive Officer of Fire Capital, Om Chaudhry, while commenting on the data.

The lower availability of funds with PE players was another reason behind the dip in investment figures, he said.

Chaudhry also said repayment of funds raised during 2006-07 was likely to have reduced the corpus available with the fund houses.

"A lot of funds, which were raised during 2006, are due for return to investors in this year," he said.

The real estate sector is also suffering on account of declining flows from commercial banks and tightening of provisioning norms by the Reserve Bank.

Source:- Economics Times

PTI Sep 13, 2011, 03.38pm IST

Ministry to give Incentive on VC funding for MSMEs

The Ministry of MSME has been facilitating venture capital / risk capital assistance to micro, small and medium enterprises (MSMEs) by way of creation of separate funds for the purpose. Small Industries Development Bank of India (SIDBI)’s wholly owned subsidiary, ‘SIDBI Venture Capital Ltd. (SVCL)’ provides venture capital assistance to MSMEs under two funds - an exclusive Information Technology (IT) fund and an SME Growth Fund. In addition, Technology Information, Forecasting and Assessment Council (TIFAC) under the Ministry of Science and Technology along with SIDBI have set up TIFAC-SIDBI Revolving Fund for Technology Innovation to provide venture capital (VC) assistance for demonstrating and scaling up of technology innovations by first generation entrepreneurs or existing MSMEs. SIDBI also provides VC assistance to MSMEs by way of contributions to the corpus of various VC funds. In order to provide risk capital support to MSMEs, the Government has created a ‘Risk Capital Fund’ with SIDBI under which risk capital assistance is provided to MSMEs. The Ministry is implementing various schemes / programmes for the promotion and development of MSMEs and enhancing their competitiveness. The major schemes include Credit Guarantee Scheme, Credit Linked Capital Subsidy Scheme, Performance and Credit Rating Scheme, Cluster Development Programme and National Manufacturing Competitiveness Programme.  This information was given by the Union Cabinet Minister of Micro Small and Medium Enterprises, Shri Virbhadra Singh in a written reply to a question in the Rajya Sabha , yesterday. Written by SEI News Desk    Wednesday, 07 September 2011 12:34

Four elements of Business Cards

Promotion of any business starts with its employees. The first impression which gets reflected from the employee of the organization is vital aspect for the growth of business. One of the important influencer of this first impression is the business card.

That is why, start ups, micro businesses must have to carefully look into the aspect of presentation of these business cards.

Business cards are an essential part of every entrepreneur. The employee or the entrepreneur himself have to share this to the a potential customer. This is the first official document that stays with potential customer, stakeholder of the respected industry and so on. Ultimately, this small card carries company’s image with itself. If the business card is shared by a sales person, it can lead to new sale for the company. But in this whole issue, effectiveness of the business card is really sensitive. And it can only be effective if they are better than others out there.

Let us go through the process of designing your business card, step by step.

1. Determining the goal of business card

   There are certain questions, an entrepreneur must have to answer while designing the business cards. These questions are: Are you simply trying to introduce yourself and your business? Are you trying to gain an advantage in a competitive market? Whatever your goal is to make your new business card, always remember to stick with it. Business cards do not only represent name and contact information anymore, they can also reflect the business focus, vision. So it is advisable, that an entrepreneur must have to be bold when he /she think of the business goals.

2. Decide what your business card will say

Once the overall business strategy is clear. Decide the content which will be included on the business card. In this, it is advisable to have a discussion with like-minded people, they could be the senior employees of the company. Some suggested content on the business card could be; write your business slogan on the card. If you are offering incentives to new customers, put the incentive right there on your business card! You can even put special offers or coupons on them. All this will influence the receiver of the card.

3. Look around, analyse the market competition

The worst thing you can do is take this design straight to the business card printing company you have chosen and have it done up. The results may not be very encouraging. First, look around at some sample cards or at the cards of your competitors. You want to make sure that your cards are unique. At the same time, you want to make sure that your cards are not so “out there” that they will distract the customer.

So evaluate your design for a few days before you commit to it.

4. Follow the trend

One suggestion or hint to produce an effective business card is by doing away with the same old way of -black and white business cards. Coloured business cards with creativity in them, are significantly more effective. Moreover, do not worry about the extra cost. Business card printing is not that expensive anymore, even for colour business cards, and the increased profits you will see make it well worth the expense.

Small Enterprise India

Monday, 12 September 2011 14:40

DLF is all set to sell its NTC Mill Land

Posted: 14 Sep 2011 02:51 AM PDT

Mumbai: DLF, country’ biggest property developers is all set to sell its valued assets spread over 17.5acre and that is NTC Mill Land located in central Mumbai. According to the bakers estimation fetch between 3,000crore and4,000 crore. If this property transaction will happen then it will be the biggest ever property deals in India. In year 2005 DLF had bought that land for Rs. 702.2 crore and now according to the Bankers land will bid 4000crore in real estate market.
Whereas, company has received several offers from foreign investors for this deal including UBS, Morgan Stanley and Deutsche Bank. The appointment process is likely to complete by month end. Rajiv Talwar, group executive director, refused to comment. “We do not comment on market speculation.”
On the basis of anonymity company executive said that “this move by selling assets is in line with annual target to raise 7,000 crore through this route.” He added that “transaction amount will be used to reduce company’s debt, which is slightly over 21,000 crore.” According to the market experts Mumbai land is considered to be of great importance for the country’s largest builder as it would have helped it to venture into the Mumbai market.

Provogue India To Demerge Realty Biz

rovogue (India) Ltd is restructuring its business by demerging its real estate business in a move which will give strategic and private equity investors more liquidity. The apparel retailer, backed by ace investor Rakesh Jhunjhunwala, has raised funding for its real estate business from the UK-based Capital Shopping Centres Group (one of the largest REITs focused on shopping centre management and development) and Triangle Real Estate India Fund.

The move is similar to that of Agre Developers, which was demerged from Pantaloon Retail (India) Ltd last year, to focus on retail real estate, infra-logistics parks and development of wholesale markets.

The new entity, to be listed, will be called Prozone Capital Shopping Centres Ltd. The share price of Provogue (India) closed at Rs 30.5 per unit on the BSE on Monday, down 2.87 per cent. The company currently has a market capitalisation of around Rs 350 crore.

Under the deal, Provogue will transfer its retail-centric real estate development division to Castle Mall Pvt Ltd, which will amalgamate the business with Prozone Enterprises Pvt Ltd, a subsidiary of Provogue. While shareholders will get 1:1 share for the demerger, the exchange ratio for the amalgamation is 313:75. Ladderup Corporate Advisory is the advisor to the above transaction.

The Capital Shopping Centres Group, formerly known as Liberty International Plc., had picked up 25 per cent of equity stake in Prozone Enterprises for Rs 202.5 crore in 2005, valuing the company over Rs 800 crore. Prozone is building retail-centric, mixed-use development projects in tier II cities like Aurangabad, Indore, Coimbatore and Nagpur.

Last year, Triangle Real Estate India Fund (co-promoted by ICS Realty Group and Old Mutual Investment Group Property Investments) invested Rs 306 crore for 35 per cent stake in three of its project SPVs – namely, Aurangabad, Nagpur and Coimbatore. The deal valued the projects at Rs 865 crore.

Its Aurangabad property was launched last year with tenants including Shoppers Stop, Globus and Star Bazaar, besides Satyam Cinemas.

BY TEAM VCC

September 12, 2011, 06:38 PM IST

Land Acquisition bill to increase land, housing prices: CREDAI

NEW DELHI: Land acquired by private companies should not be be covered under the land acquisition bill as this would lead to a sharp rise in land cost and affordable housing would become impossible, realtors' body CREDAI said today.

"Land acquired by private companies cannot be subjected to Land Acquisition, Rehabilitation and Resettlement Bill, 2011. It will only increase the cost of land and concept of affordable housing will be defeated," the Confederation of Real Estate Developers Associations of India (CREDAI) President Lalit Kumar Jain told PTI.

According to the bill, introduced in the Lok Sabha today, rehabilitation and resettlement provisions will apply only when private firms buy land for a project - more than 100 acres in rural areas or more than 50 acres in urban areas.

The compensation to land owners would be four times higher than market rate in rural areas, along with other benefits.

Jain demanded that the government should modify the bill and said, "CREDAI would write to the Standing Committee, once the bill is referred to it, for giving us an opportunity to be heard."

Royal Institution of Chartered Surveyors (India) Managing Director and Country Head Sachin Sandhir said, "the bill does not make any distinction between compulsory acquisition and open market transactions and treats the compensation to be given in both cases, equally."

"While we support compensation including solatium and resettlement provisions in case of compulsory acquisition, in market transactions between a willing buyer-willing seller, there is no emotional trauma for which a solatium needs to be given and neither should there by any responsibility of the buyer to provide rehabilitation and resettlement in such cases," he added.

RICS is one of the world's leading self regulatory professional bodies for qualifications and standards in land, property, construction.

"The bill's current approach, not underpinned by sound valuation & compensation principles, will certainly lead to cost of land becoming many times higher than today, thereby worsening the problem of housing affordability in the country," Sandhir said.

PTI Sep 7, 2011, 11.08pm IST

Source:- Economics Times

Floating home loans exempt from prepayment penalty: NHB

National Housing Bank (NHB) is likely to get into contract with Reserve Bank of India’s agreement to exempt floating home loans from prepayment penalty.

According to the NHB officials “we are soon coming with the new orders and according to which will order to housing finance companies to write-off prepayment penalty form floating home loan. They added that “soon we will come out with the new proposed norms to remove prepayment penalties on all accounts.”
We are considering the contemporary market situation and leaving a broad space to borrowers and also consulting with RBI regarding exemption of prepayment penalty form floating home loan. Housing finance companies can not deter to borrowers in a very robust property market.
Hitherto far these HFCs were not charging any pre-closure penalty in case the customer was doing so with his own funds. But the new proposed guidelines will be inculcating to customers to exempt form penalties though the borrower closes his loan with money borrowed from some other lender.

Posted: 12 Sep 2011 05:44 AM PDT

RBI governor D Subbarao favours SLR cut

MUMBAI: Statutory liquidity ratio, the proportion of bank deposits set aside in safe government bonds, 'must' be brought down for an efficient market despite the buffering role it played in the economy during the global financial crisis, said the Reserve Bank of India governor without providing a timeline for the cut.

"The SLR certainly must be brought down although you must remember that it has protected us in the crisis because banks had liquidity," said RBI governor D Subbarao on the sidelines of an Indian Institute of Foreign Trade symposium on Tuesday.

He did not mention by how much the central bank planned to reduce the ratio. The governor has been maintaining that the SLR ratio has been quite high in India and there was a need to bring it down.

SLR is a mandatory requirement for banks to set aside a fixed percentage of deposits for investing in government securities. It limits the amount of deposits available to banks for lending to companies and individuals. The mandated liquidity ratio is 24%, brought down by 1 percentage point last December to ease liquidity pressure.

"I don't think RBI is looking at this as an immediate objective," said Indranil Pan, chief economist at Kotak Mahindra Bank. "The governor was probably pointing out that the SLR-CRR combine was brought down in the reforms process and needs to come down further, but this is clearly a long-term perspective for developing financial markets," he added.

Although high SLR helped the Indian banking system overcome the 2008 credit crisis better than the Western financial system, economists term it as 'financial repression' as it helps the government borrow at lower rates than what market forces would have forced it to pay in its absence.

Reducing SLR may make government borrowing more expensive and corporate borrowing cheaper as more funds would be available with banks to lend them, at least in theory. "We should bring it down so that there is credit available and the private sector does not get crowded out," said the governor.

New banking regulations are not likely to alter the country's reserve requirements. "Basel III has a provision that mimics SLR, so it's not as though it will be thrown away," said Subbarao.

Source: Economictimes

Major Indian realty investment vistas coming to Oman

Unveiling a plethora of major investment opportunities for non-resident Indians in the Sultanate, a two-day Investment Exhibition India 2011will take place on September 9 and 10 here.
Offering a vivid glimpse into the burgeoning India including ongoing real estate trends in the country and the potential complexities witnessed by the market, the realty fest is presented by the Times of India.
Organised by Arabian Gate Expo with Molecules LLC, the expo will attract both Omanis and Indians to invest in various realty projects across the country.
“India is one of the most prominent countries in the Asian continent, which is right on the track of development. After two years, we are back with the most immense Indian realty show in Muscat for mutual business benefits”, Tariq Mohammed al Balushi, Managing Director, Molecules LLC, said.
The organisers said that the entire spectrum of Investment Expo India 2011 has been made to facilitate prospective buyers/sellers and all associated with the real estate fraternity to take quick investment decisions by zeroing in on the latest updates.
“Considering an increase in real estate investments, we bring in a quantum jump, introducing database, current projects and affairs for property prices in India”, Lijuhas Hussain, Director, Molecules LLC said.
“More ostensibly, we offer the right impetus the real estate enthusiasts and industry professionals require following the latest developments in Indian realty”.
The Indian real estate market is growing to newer heights and it has emerged as one of the most profitable businesses in the recent years. Investing in real estate in India is sure to fetch the investor a rewarding deal as the returns on investment in this sector are at an all time high.
Thus, the real estate business has attracted several foreign investors in the past few years like never before. Additionally, Indian GDP has expanded 7.7 per cent in the second quarter of 2011 over the previous quarter.
One can also witness an array of upcoming projects, both in residential and commercial sector, in the Tier 2 and Tier 3 cities.
Property prices in the metropolitan cities of India are spiralling upwards and investing now can assure greater returns.

Source: - omanobserver.om

SMS GupShup Raises Rs 45Cr In Series E Funding

Mumbai-based mobile group messaging service SMS GupShup has raised $10 million (Rs 45 crore) in the series E round of fundraising from venture capital investors, the company has said in a statement. With this round of funding, SMS GupShup has raised a total of $47 million (Rs 215 crore) so far.

Although the firm did not disclose further details of the transaction, the deal has been struck at a valuation of Rs 1,000 crore, according to ET. The company is targeting Rs 100 crore in revenues by March 2012 which means the latest deal  has been struck at almost 10 times its projected revenue for the year, according to the report.

The funding was led by US-based venture capital firm Tenaya Capital and also included existing investors Lloyd George, New Horizons, Charles River Ventures, Helion Ventures and Globespan Capital Partners.

The monies raised would be utilised to move into new markets and expand the team, said Beerud Sheth, co-founder and CEO of SMS GupShup.

“We are very excited about the company’s opportunity to leverage its innovative product offerings to expand beyond India into other high growth emerging markets,” said Brian Paul, managing director at Tenaya Capital.

SMS GupShup is a mobile group messaging service which allows users to create mobile communities and broadcast messages to them. The company is growing rapidly with thousands of groups on topics such as finance, entertainment, lifestyle, health, sports and technology.

“A company like us, which is not yet profitable but has substantial revenues, is valued on the basis of revenue multiplier,” explained Beerud Sheth, co-founder of SMS GupShup.

Incorporated in 2007 by Silicon Valley entrepreneurs and incubated at the IIT Bombay Business Incubator, SMS GupShup is funded by Charles River Ventures, Helion Ventures, Globespan Capital and Tenaya Capital. The company supports 50 million members, five million user-generated communities, 25,000 small businesses and 500 regional and international brands, such as Nokia, Facebook, Pepsi and Sony. It has more than 200 employees, as well as a distributed sales force of around 1,000 contractors.

Currently, India is the fastest growing mobile market in the world, with more than 598.77 million GSM subscribers. The country has seen 8.58 million new GSM connections during June this year, according to the data released by the Cellular Operators Association of India (COAI).

Indian e-commerce is at an all-time high right now. Already, it is a $5 billion market and according to IAMAI estimates, it is expected to touch $10.27 billion by the end of this year. The e-commerce segment continues to see more investments flowing in, as well as strategic shifts, with expansion of categories, verticalisation and the well-capitalised start-ups ramping up and innovating to service the growing customer base.

Earlier this year, Flipkart had raised $20 million (Rs 90 crore) from Tiger Global and it is now learnt that the company is raising another $150 million (Rs 675 crore) in a PE round of funding from General Atlantic Partners, in line with its target of Rs 500 crore, to be achieved by March 2012. It also plans to expand its inventory and include products like printers, Mp3 players, televisions and audio systems.

Daily deal site Snapdeal.com had recently raised $40 million (Rs 180 crore) from Bessemer Venture Partners, NEA Indo-US Ventures and Nexus Venture Partners, at a valuation of Rs 1,000 crore.

September 01, 2011, 08:19 AM IST

By Anil Das

Source:- VC Circle

HDFC unveils dual rate home loan

Housing Development Finance Corp (HDFC), India's top mortgage lender, has launched a dual interest rate home loan offer, weeks after the country's largest private lender ICICI Bank floated a similar scheme.

Under the HDFC offer, borrowers have the option of availing a fixed rate of interest on their loan for an initial period of 3 or 5 years, it said in a statement late on Monday.

The scheme will then move to a floating rate of the lender called Adjustable Rate Home Loan.

Customers should apply by October 31 and avail of the first disbursement by November 30 to avail this offer, it said.

The Reserve Bank of India had earlier opposed such dual rate schemes which it dubbed as teaser loans, following which State Bank of India had to make a hefty provision for such loans. But lenders who have floated these products afresh claim that these new products are offered at market rates for even the fixed period.

SBI may expand to Pakistan soon as central banks explore banking ties

The central banks of India and Pakistan are likely to meet in Karachi later this month to explore banking ties as part of measures to step up bilateral trade between the two nuclear rivals.

The south Asian neighbours, who have been to war three times since independence from British rule, do not allow their banks to open branches in each other's territory.

A decision to open dialogue on this, with the State Bank of Pakistan taking the lead, was taken at the meeting of the Indo-Pak joint working group on economic and commercial cooperation in New Delhi recently.

"The central bank of Pakistan will send an invite to the RBI ( Reserve Bank of India) for holding the meeting by mid-September," a government official told ET.

The two sides had agreed at the commerce secretaries' meeting in April this year that closer cooperation between their banks was important to give a push to bilateral trade and the process of opening branches in each other's country needed to be fast-tracked.

India and Pakistan have signed what is widely considered a path-breaking trade pact that includes grant of most favoured nation, or MFN, status to India, removal of non-tariff barriers, such as strict quality standards by India, cooperation in the power sector and removal of investment barriers.

"It depends totally on the RBI on how they want to proceed on the proposal," the official said.

The two central banks will give inputs to their respective commerce secretaries, who will discuss the issue at their proposed meeting in November.

Although permission to bank in each other's country is likely to boost bilateral trade, the RBI is expected to tread cautiously as the facility could also be used for terror financing.

"There is definitely a concern that the banks could be used as a conduit for transferring money to fund terrorist activities," the official said.

Besides, Indian exporters say any reciprocal access to banks will help Pakistan's exporters more as India already has many national and international banks providing pre-and post-shipment credit.

"Branches of Indian banks there can help make the trade and finance situation better in Pakistan due to better credit facilities, policies and products," Orient Craft chairman and managing director Sudhir Dhingra said.

The current bilateral trade between the two countries is less than $2 billion.

India estimates it could rise to $4 billion if MFN is offered as it would save businesses the trouble of shipping through third countries like Dubai.

Housing prices firm up across cities;Bhopal posts 34% increase, Delhi 17%

NEW DELHI: House prices have displayed a rising trend in 12 Indian cities in the April-June quarter with Bhopal posting the highest gains, a survey by the National Housing Bank (NHB) has shown.

Experts say the demand for property in major cities across the country had dipped after the Reserve Bank of India (RBI) raised interest rates 11 times since March 2010 to tame inflation. The sharp increase in borrowing costs had kept buyers on the sidelines. But the NHB Residex which tracks housing prices in 15 cities shows prices are firming up compared to the January-March quarter. Banks have raised their lending rates sharply in the past few months. Several banks have witnessed a moderation in the demand for home loans as high interest rates hit sentiment.

Bhopal leads the pack with a gain of 34.13% followed by Faridabad which has witnessed an increase of 33.33%. Housing prices in Kochi have risen 24.42%, Surat 16.41%, Delhi 16.67%, Chennai 13.76%, Hyderabad 9.6%), Bengaluru 4.5%. The financial capital Mumbai has shown an increase of only 3.4% followed by Ahmedabad 2.4%, Lucknow 1.9% and Pune 1.35%.

Experts say that the increase in housing prices may not be sustainable against the backdrop of high interest rates. "Demand for housing may remain depressed in some areas. The price increase may not be uniform across the country," said D K Joshi, chief economist at ratings agency Crisil.

The NHB Residex showed that only 2 cities have seen a decline in prices over the previous quarter. These include Kolkata where prices dipped 8.05% and Jaipur 4.47%. The capital of Bihar, Patna did not show any change over the previous quarter.

The index helps the consumers and property buyers and borrowers in their decision-making by enabling comparisons over time and across cities and localities and the emerging trends in the property market.

The NHB Residex has been prepared for 15 cities and takes into account the price trends for residential properties in different locations and zones in each city, according to the classification devised for evaluation. The classification has been designed to give a representative Index for each city based on the transactions in the market and data collected from various sources. The trends seek to bring greater transparency in the property market.

The Residex for the January-March quarter, which was released in July, had shown that property prices rose only in six of the 15 cities covered by the residential price index-a situation similar to what was witnessed at the peak of the global financial crisis.

Source:- Economics Times

Realtors Have Been Adding Rs14 Crore Debt A Day

Realtors Have Been Adding Rs14 Crore Debt A Day

The debt load of 11 listed real estate companies in the country has risen 15 per cent, or by Rs 5,000 crore, to Rs 38,500 crore in the last 12 months. That’s nearly Rs 14 crore of debt added every single day. Most of the increase happened in the latter half of the last fiscal which ended on March 31, an analysis by Mr Aashiesh Agarwaal and Mr Adhidev Chattopadhyay, analysts with Edelweiss Securities. A huge chunk of this or Rs 21,520 crore is being borne by DLF. That number is up 16.6 per cent, or by Rs 3,060 crore, from Rs 18,460 crore in the last 12 months. Meaning, DLF alone added more than Rs 8 crore per day to its debt bloat.

Daily News & Analysis, 24th August 2011