Glenmark Pharma’s US arm gets USFDA approval for Norethindrone and Ethinyl Estradiol

Glenmark Generics’ (GGL) United States (US) subsidiary -- Glenmark Generics Inc., (GGI) -- has been granted final approval for its Abbreviated New Drug Application (ANDA) from the United States Food and Drug Administration (USFDA) for Norethindrone and Ethinyl Estradiol, USP 0.4 mg/0.035 mg tablets, their generic version of Ovcon 35 tablets by Warner Chilcott, Inc. The product will be marketed under the trade name Briellyn and distribution is expected to start immediately.

Briellyn provides a continuous 28 day regimen for oral contraception derived from 21 tablets composed of Norethindrone and Ethinyl Estradiol to be followed by 7 inert tablets and is indicated for the prevention of pregnancy. Glenmark remains the only Indian company to be granted ANDA approval for an oral contraceptive product and today’s approval marks their fourth female hormonal product authorized for distribution by the USFDA.

The company received approval in April 2010 for Heather tablets, their generic version of Watson’s Nor-QD tablets as well as approvals in July 2010 for Norethindrone 0.35mg tablets, their generic version of Micronor tablets by Ortho McNeil Janssen Pharmaceuticals, Inc. and Norethindrone Acetate 5 mg tablets. Total market sales of Glenmark’s current hormonal product line are approximately $141 million for the 12 month period ending December 2010.

The company’s current portfolio consists of 69 generic products authorized for distribution in the U.S. market and approximately 40 ANDA’s filed with the US FDA pending approval. In addition to these internal filings, GGI continues to identify and explore external development partnerships to supplement and accelerate the growth of the existing pipeline and portfolio.

Glenmark Generics (GGL) is a subsidiary of Glenmark Pharmaceuticals and aims to be a global integrated Generic and API leader. GGL has an established presence in North America, EU and Argentina and maintains marketing front-ends in these countries.

India Infoline gets SEBI approval for IIFL Mutual Fund

India Infoline (IIFL) has received SEBI’s final approval for IIFL Mutual Fund sponsored by the company. This enables commencement of mutual fund business and launching of mutual fund schemes in due course.
IIFL is engaged in business of equities broking, wealth advisory services and portfolio management services. The company was incorporated in October 1995 as Probity Research and Services and later in April 2000 the name was changed to India Infoline.com. In March 2001 the company again changed its name to India Infoline. The company is part of India Infoline Group. It has pan- India presence through its distribution network of 607 branches, 151 franchisees located in 346 cities.

M&M to establish tractor manufacturing unit in Andhra Pradesh

Auto-maker Mahindra & Mahindra (M&M) is planning to establish its tractor manufacturing unit at its existing facility at Zaheerabad in Andhra Pradesh to give boost to industrialization in the backward Telangana region. In this regard, the company will invest Rs 300 crore on the tractor manufacturing facility over the next three years and provide direct employment to about 2,000 people and indirect employment to another 5,000 persons.
This will be the company’s first facility in South India which intended to manufacture 90,000 tractor units per year and also 3 and 4-wheeler commercial vehicles.
At present, the company has its automobile plant spread over 343.36 acres of land at Zaheerabad, 136-km from Hyderabad, where its products like UV (Maxx), 3-wheelers (Champion Alfa), Light Commercial Vehicles and buses are manufactured. It now has employee strength of 641 and a vehicle assembly capacity of 218 vehicles per day.
M&M reported a surge of 77.59% in net profit from ordinary activities after tax of Rs 734.68 crore for the quarter ended December 2010 compared to Rs 413.70 crore in the same quarter last year.

BILT Paper planning raise $330 million from a London listing

BILT Paper Plc - unit of Ballarpur Industries is planning to raise at least $330 million from a London listing next month to fund its expansion and to pay its debt. The paper production capacity of BILT Paper has increased by nearly 90 percent over the last two years and it plans to grow it by another 50 percent by the end of 2014.

Ballarpur owns a 79.5 percent stake in the firm, part of the Mumbai-based Avantha group, with the rest held by private equity investors JP Morgan Mauritius and Lathe investment.

The company would be raising $330 million from the sale of new shares while the private equity investors may also sell some secondary shares in the offering, is also expecting to be eligible for inclusion in the FTSE 250 index.

The listing is expected to be completed in mid-April with a price range due during the week of April 4. Citigroup and JP Morgan are joint global co-ordinators and joint book runners of the initial public offering.

Recently, Ballarpur Industries has acquired entire paid up capital of Premier Tissues India (PTIL), a company engaged in business of manufacturing and trading of tissue paper and related products under the Brand names “Premier” and “Royal”.

Jain Irrigation in green on its bank facilities getting ratings upgrade by CRISIL

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 264.57 on 09-Aug-2010 and a 52 week low of Rs. 155.15 on 01-Feb-2011.
Last one week high and low of the scrip stood at Rs. 187.00 and Rs. 178.00 respectively. The current market cap of the company is Rs. 6987.15 crore.
The promoters holding in the company stood at 30.76% while Institutions and Non-Institutions held 57.82% and 10.78% respectively.
Credit rating agency, CRISIL has upgraded its ratings on the bank loan facilities of Jain Irrigation Systems to ‘A-/Stable/P2+’ from ‘BBB+/Stable/P2’. The upgrade reflects rating agency’s belief that the company’s business risk profile will benefit on the back of healthy growth in revenues and continued strong profitability. The rating agency also believes that the company will fund its ongoing capital expenditure towards capacity augmentation with prudent proportion of debt and accruals, thereby improving its financial risk profile.
The ratings continue to reflect the company’s diversified revenue profile and strong market position and benefits. The company is expected to derive the healthy growth prospects from the micro irrigation system (MIS) segment in India over the medium term. These rating strengths are partially offset by Jain Irrigation’s large working capital requirements and the high dependence of the company’s MIS division on government policies.
Jain Irrigation is a diversified company with a market capitalization of Rs 7,500 crore approx. Jain’s product portfolio includes Irrigation Products, Piping Products, Plastic Sheets, Dehydrated Foods, Fruit Puree and Juice concentrates.

Jindal Saw gains on talks to acquire a logistic firm

indal Saw is currently trading at Rs. 184.50, up by 1.50 points or 0.82% from its previous closing of Rs. 183.00 on the BSE.

The scrip opened at Rs. 184.70 and has touched a high and low of Rs. 185.30 and Rs. 184.50 respectively. So far 5,171 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 234.40 on 25-Oct-2010 and a 52 week low of Rs. 170.00 on 26-Nov-2010.

Last one week high and low of the scrip stood at Rs. 194.35 and Rs. 181.05 respectively. The current market cap of the company is Rs. 5054.96 crore.

The promoters holding in the company stood at 46.00% while Institutions and Non-Institutions held 33.84% and 20.16% respectively. 

Jindal Saw is in talks to acquire a logistic firm that operates container trains and owns terminals for about Rs 100-150 crore. The deal is likely to be closed in three months, officials stated.

The company is planning to acquire a firm in such a space which has terminals at critical locations. At that level, it would probably become India's only multi-modal logistics company which has its own terminals, its own rail operations and ships.

The company has consistently created value by creating low-cost capacities in capital-intensive industries in businesses largely overlooked by other corporate. Jindal SAW had recently launched its Jindal ITF (infrastructure, transportation, fabrication) subsidiary.

Golden Tobacco to ink pact with Sheth Developers and Suraksha Realty

Golden Tobacco has received its members’ approval to enter into an agreement with Sheth Developers and Suraksha Realty or their affiliates/nominees for the joint development and or sale or otherwise disposal of plots of land owned by the company admeasuring about 31128.48 square meter situated at S V Road, Vile Parle (West) in Mumbai.
The company is engaged in manufacturing of cigarettes and tobacco related products. Its first manufacturing zone is a primary manufacturing division which is a tobacco processing plant located at Vadodara. This unit caters to the needs of the factory, as well as the requirements of Mumbai unit.

AI Champdany Industries suspends work at its Rishra unit

AI Champdany Industries has declared suspension of work at one of its 100% EOU - Wellington Jute Mill unit located at Rishra from March 21, 2011. The company has declared suspension for eradication of all wasteful practice, indiscipline, frequent concerted stoppages of work on one pretext or other, state of lawlessness throughout the mill and to comply with manning pattern followed in the industry by the workers of the unit.

In January this year an incident of fire occurred on the night of January 21, 2011 in the same unit. The fire came under control in the early hours of January 22, 2011. The fire caused damage to the mill's finishing department. The work has been resumed on January 24, 2011 after suspension of work on 22nd & 23rd January 2011.

AI Champdany Industries has gradually moved from manufacture of traditional Jute products like Hessian, Sacking etc. towards more value-added non-traditional Jute Products like Jute Yarn, Blended yarn made of Jute blended with other natural and man-made fibres like Cotton, Ramie, Viscose, Poly Propelene, Flax, Wool etc. Special Food Grade Jute Bags, Jute blended carpets, Fabrics for soft luggages / shoe uppers / wearing apparels for export markets.

CARE upgrades the ratings assigned to D. B. Corp

Credit rating agency CARE has upgraded the Long Term Loans (including Working Capital Limits) of D. B. Corp from ‘CARE AA (Double A)’ to ‘CARE AA+ (Double A plus)’.
Recently, DB Corp’s subsidiary company - DB Power is planning to raise Rs 2,625 crore to part-finance its mega power project in Chhattisgarh.
DB Corp is the only media conglomerate that enjoys a leadership position in multiple states, in multiple languages and is a dominant player in its all major markets. The company’s other business interests also span the radio segment through the brand - MY FM - radio station with presence in 7 states and 17 cities and a strong online presence in internet portals.

Domestic markets likely to consolidate after a big rally

The Indian markets went for a rally in previous session with a broad based buying after round of sluggishness. Today the start is likely to be flat-to-cautious as the global cues are not very supportive. Sugar stocks that have rallied in last session may move up further as government allowed sugar exports to the tune of 5 lakh tonnes. The move comes after a delay of about 3 months after the Food Minister announced exports of 5 lakh tonnes of sugar in December last year. But, the issue was referred to EgoM in the wake of surging inflation. There will be lots of scrip specific actions keeping the market buzzing however the continued rise in crude prices is likely to put further pressure on the PSU oil marketing companies.

Meanwhile, the government cleared the Bureau of Indian Standards (Amendment) Bill, 2011 paving the way for introduction of mandatory hallmarking of more products including gold. At present, about 77 items including cement, mineral water and milk products are certified with mandatory hallmarking under the BIS Act to conform to the quality level of goods and services to consumers.

The US markets closed marginally lower on Tuesday, though there was no economic report to influence the trade but the continuous rise in crude prices led the momentum go slow. The weakening of housing markets weighed on the sentiment. Most of the Asian markets have made a soft start and the Japanese markets are once again reeling deep in red, it has been reported by the nuclear safety agency that workers at Japan nuclear plant are unable to continue work at reactor no.2 due to high radiation levels.

Back home, after remaining most part of the session around the crucial support levels of 5,400 and 18,000, the domestic benchmarks have snapped the day with about a percent gain but off the day’s high level. The local markets were outclassed by the markets across the globe by a large extent on Monday, however, the frontline indices smartly bounced back in day’s trade as many investors, smarting from huge losses, took up reverse positions, vowing to avenge the next day. Sanguine local and global cues too buttressed the chances of a rebound for the domestic indices which were reeling under the pressure of spiraling crude oil prices for three consecutive days. The consolidation in crude prices was seen as an opportunity by the local investors who resorted to broad based buying as they closely watched the developments in Parliament where the Indian finance Minister tabled GST and Banking Laws Bill. On the sectoral front, the high beta Realty index amassed 2.19% as strong position build up in stocks like DLF and Mahindra Lifespace which rose 3.17% and 3.66% respectively pulled the index to the top of the table. The other counter which saw huge buying interests was rate sensitive Auto which surged 1.53% on the back of jump in bellwether stocks like Maruti Suzuki up 3.58% and Apollo Tyres up 4.09% in the session. Meanwhile, shares of Healthcare companies like Opto Circuits and Fortis Healthcare jumped 3.46% and 2.23% respectively after Pranab Mukherjee rolled back the proposed 5% service tax on healthcare announced during the federal budget for 2011-12. While sugar stocks also surged on the buzz that Government will be allowing 200,000 tonne of sugar exports under unrestricted sales or the open general license (OGL). The benchmarks got a gap-up start and the indices gradually gained traction and conquered the crucial support levels of 5,400 and 18,000 and gyrated around those levels for most part of the trade. Some bouts of profit booking were witnessed in late trade when the frontline indices touched intra-day highs which dragged the bourses below crucial supports. However, some short covering in dying minutes helped the indices to snap the three day losing streak with gains of almost a percent. Finally, the BSE Sensex surged by 149.25 points or 0.84% to settle at 17,988.30 while the S&P CNX Nifty climbed by 49.10 points or 0.92% to end at 5,413.85.

US markets closed marginally lower on Tuesday to snap the three days winning streak, though there was not much on economy front, the earthquake-tsunami disaster in Japan and the crisis at the country's nuclear plants that followed sent stocks lower. Energy stocks rose higher for the second day as Crude oil prices, a major source of concern, rose $2 per barrel. Oil briefly topped $105 on concerns that conflicts in the Middle East could pinch oil supplies as demand begins to rise.

According to the Federal Housing Finance Agency's monthly home-price index US home prices fell for a third straight month in January, adding to evidence that the housing market is weakening even though the economy is improving. Home prices fell 0.3% on a seasonally adjusted basis in January compared with December.

The Dow Jones Industrial Average lost 17.90 points to close at 12,018.63. The broader Standard & Poor’s 500 index fell by 4.61 points, or 0.36 percent, to 1,293.77, while the Nasdaq composite index closed lower by 8.22 points, or 0.31 percent, to 2,683.87.

Crude prices rose to their highest level on Tuesday since Japan's devastating earthquake struck 11 days ago, as fighting in Libya and tensions in the Middle East renewed and Allied air strikes against targets in Libya stoked more concerns about supply disruptions. raders will receive an update on US oil and fuel supplies from the Department of Energy on Wednesday, oil inventories are expected to rise.

However, American Petroleum Institute reported a 970,000 barrel build in domestic crude stocks last week, far less than the expected. The API data showed a 7.9 million barrel drawdown in gasoline stockpiles and Distillate stocks fell 612,000 barrels.

Benchmark crude for April delivery settled up $1.67, or 1.6%, at $104 a barrel on the New York Mercantile Exchange. With the expiration of the April contract, the more heavily traded May contract rose $1.88, or 1.8%, to settle at $104.97 a barrel. In London, Brent crude for May settled up 74 cents, or 0.6%, at $115.70 a barrel on the ICE.

Maruti, Hero Honda, M&M and Vascon Engineers may hog the limelight today

The country's largest car maker Maruti Suzuki India will consider taking different measures after April to protect its margins due to fluctuation of Japanese Yen, post the devastating earthquake and tsunami.

Honda and the Hero group have ended their joint venture. However, they have signed an agreement under which Honda will give technology for new and upgraded bikes to Hero in return for royalty till June 2014.

In a major fillip to industrialisation in the backward Telangana region, Mahindra and Mahindra will set up its tractor manufacturing unit at its existing facility at Zaheerabad in Medak district of Andhra Pradesh.

Cairn Energy Plc raised expectations of Indian approval for the long-delayed sale of a stake in its Indian business to Vedanta Resources, as the UK oil explorer posted a return to profit in 2010.

The Aditya Birla Group's plans to re-enter the power sector have had a setback, as its move to buy into a Chhattisgarh-based power unit has fallen apart. AB Group is very close to purchasing Sona Power, which had plans of putting up a 660-Mw power project in Chhattisgarh.

India's top iron ore miner NMDC expects to renew soon a five-year iron ore contract with Japanese customers which expires at the end of March. The state-owned miner plans to build steel plants in India, has moved closer in its bid to acquire a coal mine in the US.

A fluid catalytic cracker (FCC) at India's Reliance Industries' old plant could start product output from today.

The need for raw material integration for its European operations is keeping Tata Steel officials busy. The company has initiated talks with the government of British Columbia, a Canadian province, to acquire coking coal mines.

Monnet Ispat & Energy, flagship Company of the Monnet Group, has bought a 65-million tonne coal mine in Indonesia for $24 million (Rs 290 crore). And, it is in talks to buy another coal mine, besides looking to set up power plants, in that country.

A consortium of Lanco Infratech and US-based Massey Energy Company, emerged as the lowest bidder for a power project by Maha Tamil Colleries.

Kotak Realty Fund, the property investment arm of India's Kotak Mahindra Bank, plans to raise as much as $500 million by the second quarter of this year, in a bet on the long term case for property in Asia's third-largest economy.

BILT, the country’s largest producer of writing and printing paper, plans to raise $330 million from London Stock Exchange, through a book building process and making offer to select institutional investors.

China's Yanzhou Coal Mining Co and India's Aditya Birla Group are among parties preparing to submit second-round bids for Australian coal miner Whitehaven Coal, which is seeking offers of more than $3.5 billion.

Chennai-based information management solutions provider Saksoft has signed an agreement with US-based analytics and decision management technology firm Fair Isaac Corporation (FICO), to market the latter's solutions in India.

Indian drugmaker Elder Pharmaceuticals plans to raise 1.05 billion rupees through 7-year bonds at 11.25 percent.

Arvind International’s board has approved the right issue price at Rs 13.50 per equity shares. The approval was granted at its meeting held on March 22, 2011.

Vascon Engineers has secured two contracts worth aggregating Rs 241 crore.The company bagged first order worth Rs 131 crore for construction of miscellaneous building for ESIC at MGM in Mumbai. However, the second order worth Rs 110 crore is for carrying out civil work for residential project in Chennai.

Jindal Saw is in talks to acquire a logistic firm that operates container trains and owns terminals for about Rs 100-150 crore. The deal is likely to be closed in three months, officials stated.

Reliance Communications, India’s largest integrated telecom operator announced the launch of free website package for all its Netconnect users.

Zylog Systems' board of directors, have given their approval for the expansion plans of the WiFi business of the wholly owned subsidiary - Zylog Systems (India).

Acropetal Technologies has entered into definitive agreements to acquire 100% equity in Line Beyond Inc and 70% of the equity in Optech Consulting Inc for a consideration of $ 4.90 million each.

Bafna Pharmaceuticals has signed an agreement with NR Jet, an affiliate of Johnson & Johnson, for the acquisition of the TradeMark --RARICAP-- and the transaction is expected to be closed by the first week of April 2011. 

US markets close marginally down after a volatile trade

US markets closed marginally lower on Tuesday to snap the three days winning streak, though there was not much on economy front, the earthquake-tsunami disaster in Japan and the crisis at the country's nuclear plants that followed sent stocks lower. Energy stocks rose higher for the second day as Crude oil prices, a major source of concern, rose $2 per barrel. Oil briefly topped $105 on concerns that conflicts in the Middle East could pinch oil supplies as demand begins to rise.

According to the Federal Housing Finance Agency's monthly home-price index US home prices fell for a third straight month in January, adding to evidence that the housing market is weakening even though the economy is improving. Home prices fell 0.3% on a seasonally adjusted basis in January compared with December.

The Dow Jones Industrial Average lost 17.90 points or 0.15 percent to close at 12,018.63. The broader Standard & Poor’s 500 index fell by 4.61 points, or 0.36 percent, to 1,293.77, while the Nasdaq composite index closed lower by 8.22 points, or 0.31 percent, to 2,683.87.

Indian ADRs made a mixed closing on Tuesday, Infosys was down by 0.68%, ICICI Bank was down by 0.01% and Tata Motors was down by 0.17%.

On the other hand HDFC Bank was up by 0.02% and MTNL too was down by 0.02%.

FII DII DATA 23/03/2011

Net Index Futures (1664), Net Stock Futures (127), Derivative Market: Total Open Interest (Rs 1,44,520 cr), Stock Futures Open Interest (Rs 32,414 cr)

Indian ADRs Update 23/03/2011

INFOSYS Down 0.7 (1.0%), WIPRO Up 0.0 (0.0%), ICICI BANK Down 0.0 (0.0%), HDFC BANK Up 0.0 (0.0%)

Global Markets update 23/03/2011

 DJIA Down 17.9 (0.2%) NSDQ Down 8.2 (0.3%) FTSE 100 Down 23.4 (0.4%) Asian Markets as on 8.45 AM  NIKKEI Down 153 (1.6%) HANG SENG Down 66 (0.29%) SGX NIFTY Down 28

Patel Engineering bags Rs 160.69 crore worth upgradation project from Government of Karnataka

Patel Engineering, an integrated infrastructure company, has bagged Rs 160.69 crore, 73.80km Tinthini kalmala road upgradation project from Government of Karnataka, Karnataka State highways improvement projects (Public Works, Ports and Inland Water Transport Department).
The project comprises upgradation of 73.80 km long stretch from Tinthini to Kalmala, a part of state highway 61 and state Highway 15. It is expected to be completed within two and half years.
Patel Engineering provides a wide range of civil engineering services involved in design and construction of power projects, hydroelectric projects, commercial building, industrial complexes, dams, tunnels, underground structures, steel and concrete structures, bridges, marine works, flyovers and national highways in India and abroad.  It has an experience of 75 dams, 30 hydro electric projects, 30 micro tunneling projects and 130 Km of tunneling, etc.

Bond yields trade range bound on Tuesday

Bond yields are trading range bound on Tuesday in the absence of fresh triggers. High global oil prices which stoke inflation fears might send the yields higher, but hopes for an improvement in cash supply and the lack of debt sale until April would limit the gains of bond yields.

The yield on the most-traded 8.08%-2022 tad low at 8.12%, from its previous close of 8.13 % in the absence of fresh triggers, with price rises seen limited due to more monetary tightening in the offing

The yields on less liquid 10-year benchmark, the 7.80%-2020 bond yield was at 8.00% from its previous close of 8.01%.

The benchmark five-year interest rate swap was at 8.03% higher from its previous close of 8.06% on Monday.

Three State Governments have announced Auction of State Development Loans 2021 for Rs 218.650 crore on March 22, 2011.

The Reserve Bank of India has announced the auction of 91-day and 364- day Government of India Treasury Bills for notified amount of Rs 5,000 crore and Rs 3,000 crore respectively. The auction will be conducted on March 23, 2011 using 'Multiple Price Auction' method.

Call rates steadily high on Tuesday

The Inter-bank call money rates were steady at 7.70/75% from its previous close as tightness in liquidity persisted following large advance tax outflows, while demand for fund remained strong even in the second week of the reporting fortnight. Banks via Liquidity Adjustment Facility (LAF) borrowed Rs 55,400 crore through repo window on March 21, 2011. While banks via Second Liquidity Adjustment Facility (LAF) borrowed Rs 23,490 crore through repo window and parked Rs 55 crore via reverse repo window on the same day.

The overnight borrowing rates has touched a high of 7.70% and a low of 7.80%, so far.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 7.71% on Monday and total volume stood at Rs 12,545 crore on the same day.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 6.71% on Monday and total volume stood at Rs 55,609 crore on the same day. 

Rupee picks up pace on Tuesday; surging oil prices weigh

Rupee strengthened on Tuesday supported by gains in the stock market and dollar weakness against other currencies. However, surging oil prices have maintained lid on further appreciation of the local unit, while, even demand for dollars by oil importers may play spoilsport for the rupee's gains during the day. Brent crude futures were supported near $115 on Tuesday by supply concerns triggered by the spreading unrest in the Middle East, while uncertainty about demand from the world's No. 3 consumer Japan capped gains.
Meanwhile, dealers are also turning more optimistic about the rupee's outlook in the near term on expectations of robust dollar inflows with companies getting funds via ECBs , and remittance in this quarter due to the Middle-East crisis.
The partially convertible Rupee is currently trading at Rs 44.96/97, stronger by 5 paise from its previous close of 45.01/02 on Monday. It touched a high of 45.00 and a low of 44.96 respectively. The Reserve Bank of India's Reference Rate for the US dollar stood at Rs 45.05 and for Euro it stood at Rs 63.81 on March 21, 2011. While, the RBI's reference rate for the Yen stood at Rs 55.65 and the reference rate for the Great Britain Pound (GBP) stood at 73.0508 on March 21, 2011. The reference rates are based on 12 noon rates of a few select banks in Mumbai.

Date	1US$	1GBP
March 21,2011	45.05	73.0508
March 18,2011	45.09	72.8226

                                                       RBI-reference rate

Prefer direct investment to portfolio inflows: RBI

The Reserve Bank of India (RBI) said on Tuesday that it preferred greater amount of long-term and stable flows through foreign direct investment (FDI) into the country rather than often short-term oriented foreign institutional investment (FII) to bridge the current account deficit (CAD) that faces.

The Governor of the central bank D Subbarao said that while inflow of foreign capital was welcome for bridging the CAD, the RBI would always prefer the stable inflows in terms of FDI, which comes with a long term commitment, rather than volatile portfolio inflows which can reverse in case of even a small change in either domestic of global economic scenario.

In fact the RBI had raised the issue in its last two monetary policy reviews as well. The Central bank had expressed concern about the widening of the CAD and the nature of its financing in its third quarter review released on Jan 25. Going by the recent robust export performance though, the CAD for 2010-11 is now estimated to come lower than earlier expected, at around 2.5% of GDP.