Unitech recovers from 52-week trough

Unitech spurted 6.85% at Rs. 46 at 14:50 IST on BSE on reports the company's promoters have repaid Rs. 50.6 crore to creditors from whom they had raised about Rs. 250 crore a year ago by pledging their shares.

Meanwhile, the BSE Sensex was up 166.12 points, or 0.92%, to 18,188.34.

On BSE, 1.06 crore shares were traded in the counter as against an average daily volume of 33.56 lakh shares in the past one quarter.

The stock hit a high of Rs. 47.15 and a low of Rs. 43.65 so far during the day. The stock had hit 52-week low of Rs. 42.35 on Tuesday, 1 February 2011. The stock had hit a 52-week high of Rs. 98.45 on 7 October 2010.

The stock had underperformed the market over the past one month till 1 February 2011, falling 34.97% compared with the Sensex's 12.13% decline. The scrip had also underperformed the market in past one quarter, sliding 51.74% as against 11.46% decline in the Sensex.

The large-cap real estate developer has an equity capital of Rs. 523.26 crore. Face value per share is Rs. 2.

Shares of Unitech plunged 25.64% in the preceding five sessions to Rs. 43.05 on 1 February 2011 from a recent high of Rs. 57.90 on 24 January 2011.

The creditors from whom the funds were raised had issued a notice to Unitech promoters on Friday, 28 January 2011, saying they would sell the pledged shares in the market on Monday, 31 January 2011, in case of non-payment.

This forced the Unitech promoters to move the Delhi High Court on Sunday, 30 January 2011, and got stay on selling shares in the stock market by the investors.

Reacting to reports on the potential sale of the pledged shares, Unitech's scrip had plummeted by 10.59% to Rs. 43.05 on Tuesday, 1 February 2011.

The Unitech promoters had raised Rs. 250 crore from high net-worth individuals (HNIs) last year through issue of non-convertible debentures and had pledged their shares in Unitech to raise the fund, reports suggested.

The total outstanding by the end of last week was Rs. 178 crore, which the promoters firm was required to pay by May this year, reports suggested, adding that the promoters have started repaying the amount.

In loan-against-share transactions, the lender keeps a security cover of two to three times depending on borrowers' credit rating and track record. Similarly there are other conditions such as downgrading and additional borrowings which call for extra margin. In most cases when loan agreements are breached, the lenders are entitled to sell shares to cover up margins.

Unitech's consolidated net profit declined 2.30% to Rs. 173.76 crore on 26.50% increase in net sales to Rs. 644.51 crore in Q2 September 2010 over Q2 September 2009.

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Mahindra Aerospace to roll-out first aircraft by March

Mahindra Aerospace, the first Indian private firm to manufacture small civil aircraft for the domestic aviation market, is likely to roll-out its first aircraft by March this year.

"We are hopeful of rolling-out our first indigenous small aircraft by March this year. But we should make sure that the aircraft is properly certified for airworthiness standards," Mahindra and Mahindra's President (Systech Sector), Hemant Luthra, said on the sidelines of an event here.

"We will provide the aircraft at a price at least 20 per cent lesser than a Cessna aircraft," Luthra said.

Mahindra Aerospace is the first Indian private firm to manufacture smaller civil aircraft for the Indian general aviation market.

Mahindra Aerospace is developing a five-seater and eight-seater version of small aircraft for the Indian market at its Bangalore facility, Luthra said.

However, Luthra, didn't reveal the cost of the flight and development.

Mahindra Aerospace acquired a majority stake (75.1 per cent) in GippsAero and Aerostaff Australia for Rs 175-crore (USD 38-million) in December 2009 jointly with Kotak Private Equity .

Aerostaff is a 20-year-old manufacturer of aerospace components and assemblies for global aerospace original equipment manufacturers (OEMs) at Port Melbourne in Victoria state.

The 26-year-old GippsAero is a leading turboprop aircraft manufacturer for the general aviation sector and has certification in 32 countries world-wide, including the US Federal Aviation Regulations (FAR 23), which testifies the highest degree of safety to fly fare-paying passengers between small and remote airfields.

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India software giant TCS net profit up near 30%

MUMBAI: India's largest software exporter Tata Consultancy Services on Monday said consolidated net profit rose 29.8 percent in the third quarter, beating forecasts, as outsourcing orders strengthened.

Net profit was 23.69 billion rupees ($526 million) for the three months to December, up from 18.24 billion rupees a year earlier.

Turnover for the quarter rose 29 percent to 98.57 billion rupees, a statement to the Mumbai stock exchange said.

Analysts expected TCS to show profit of about 22 billion rupees.

"We have delivered another stellar quarter, capturing volumes. Demand continues to be strong," the company's chief executive N Chandrasekaran said in a statement.

The US and European markets continued to lead demand recovery, the company said.

During the quarter, TCS added nearly 12,500 employees and 35 new clients.

On Monday, TCS shares rose 1.74 percent or 19.45 rupees to 1,138.45 on the Mumbai stock exchange prior to the earnings announcement.

Last week, rival tech giant Infosys posted a disappointing 14.1 percent rise in consolidated net profit to 17.8 billion rupees, warning future growth could be hurt if recovery in developed markets weakens.

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Vibrant Gujarat 2011: Mahindra to invest Rs 3,000 cr

AHMEDABAD: Farm equipment-to-software group Mahindra & Mahindra on Wednesday said it will invest Rs 3000 crore in Gujarat to step up presence in the hospitality and real estate sectors in the state.

"Our group companies have signed six MoUs with the Gujarat government totaling an investment of Rs 3000 crore," Mahindra & Mahindra Vice-Chairman and Managing Director Anand Mahindra said here at the 5th Global Summit of Vibrant Gujarat. He, however, did not specify the time frame for these investments.

Mahindra Lifespaces , the real estate development arm of USD 7.1 billion Mahindra Group , has signed two MoUs with the state government. "Mahindra World City is developing a real estate project spread across 500 acres of land," he said.

Another group company, Mahindra Holiday & Resorts , that runs the Club Mahindra resorts, will open seven new resorts in the state, Mahindra said, adding "all these new projects will create a lot of new jobs". Moreover, investments will also be made on solid waste management and domestic waste management projects, he added.

Acknowledging that the investment by M&M is much less compared to those announced by other corporates during the summit here, Mahindra said "but we are doing it with passion". "Mr Modi I hope you are not angry now as you have been saying that we do not make investments in the state," he quipped.

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Loan scam: 17 companies on CBI radar

New Delhi: A day after it arrested the very top rung of some of India's public sector banks and financial institutions for allegedly sanctioning loans in return for bribes, the Central Bureau of Investigation (CBI) has now shifted its focus to 17 companies that allegedly received loans.

The investigating agency has served notification to all companies under the scanner in the multi-crore scam and asked them to submit details of the loans they got as alleged beneficiaries. The companies have been asked to file their replies by today.

A total of eight people have been arrested by the CBI. Among them: Ramchandran Nair, the Chief Executive Officer (CEO) of LIC Housing Finance; RN Tayal, General Manager of Bank of India; and Venkoba Gujjal, Deputy General Manager of Punjab National Bank.

"A private financial services company, its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large scale corporate loans. They were also gathering confidential business information from financial institutions," the CBI had said.

The private company involved is Money Matters, and three of its senior-most officials, including Chairman and Managing Director Rajesh Sharma have been arrested.

The men at Money Matters allegedly acted as middlemen, bribing officials at public sector banks to get loans worth crores sanctioned for private firms, mainly real estate companies. The bank officials are also accused of selling confidential information.

In another case, Naresh Chopra of LIC Mumbai has been accused of receiving Rs. 16 lakhs from Money Matters' Rajesh Sharma. Chopra allegedly traded confidential information on LIC investments into the Adani Group.

LIC's Vigilance arm is also investigating the case independently. Sources in LIC have told NDTV that the frauds were committed in the officers' own capacity, and no norms were violated. In a statement released after the arrests on Wednesday, LIC had said, "All procedures and approved guidelines were adhered to in approving the loans. All loans have been secured by underlying assets to the satisfaction of approving authority. Steps will be taken to protect interests of various stakeholders." The company has said there will be a new CEO for LIC Housing Finance. The announcement can be expected in two to three days.

''These are cases of bribery. These are cases of corruption. Bribery by public officials, by people working in public sector organisations, and facilitating and sanctioning loans by taking money. And they have zeroed in on real-estate sector and certain developers who must have paid money to get loans sanctioned,'' said Deepak Parekh, the chairman of HDFC Bank.

The government has, meanwhile, sought to play down the episode. Speaking about the finance racket, Banking Secretary R Gopalan said it was a bribery case involving some individuals and not a large-scale scam. "It's a case of individual greed not a systematic failure," he added.

The arrests came after a CBI investigation that covered five cities and lasted over a year.

Taped conversations referred to in the CBI's First Information Report (FIR) revealed incriminating details.

The CBI charges that Rajesh Sharma of Money Matters paid a Rs. 25-lakh bribe to RN Tayal at the Bank of India. In return, Tayal allegedly assured him of two loans worth Rs. 500 crore for two different companies.

"If you can't get a 300-crore project passed... what is the use of you being in this position?" asks Sharma brazenly.

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Bharti Airtel crosses 20 crore users, launches new logo

Telecom major Bharti Airtel has announced that it has crossed the significant milestone of 20 crore customers, reinforcing its leadership position in global telecom, reports CNBC-TV18.

It has also launched a new identity in 19 countries in Asia and Africa.

Announcing this, Sunil Bharti Mittal, Chairman and Managing Director, Bharti airtel said, “Fifteen years ago Bharti airtel started its journey in India with a promise of delivering world class and affordable services. Today, as we expand on the global stage, this new brand identity gives us the opportunity to present a single, powerful and unified face to our customers, stakeholders and partners around the world. It reinforces our promise to deliver innovative services and a superior brand experience to our 2000 crore customers across Asia and Africa.”

The new face of Airtel is youthful, international, inclusive and dynamic – representing the journey of the first Indian brand to go truly global. The new identity underlines Airtel’s willingness to embrace everything that is new. The red colour, which is an integral part of the brand, continues to represent the energy and dynamism that has made Airtel the success it is today. The new curved addition to the logo is a symbol which will help ensure instant recognition across diverse international markets.

The Airtel signature tune has also been refreshed by A R Rahman making it youthful and dynamic in line with the new visual identity. Like the earlier tune, which has made history as world’s most downloaded mobile music with over 150 million downloads, the maestro has once again delivered a master piece. The new tune retains the essence of the original but uses an inspiring musical style, with a universal appeal, that will be loved by listeners the world over.

The unveiling of the new identity also marks the 200 million customers milestone for airtel. airtel crossed 50 million customers in October 2007 and 100 million in May, 2009. The company added the next 100 million customers in just 18 months. This further cements airtel’s positions as one of world’s leading telecom companies.

For its customers in India, Airtel also announced that it was on course to launch its 3G services by the end of the year.

WATCH AIRTEL NEW TV AD

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Bharti Airtel to re-brand 'Airtel', to spend Rs 300 crores

MUMBAI: Sunil Mittal's Bharti Airtel is going in for a mega brand change of Airtel for which the company will spend Rs 300 crores globally, sources close to the development said. The unveiling of the brand is expected next week.

The new look of the brand is expected to have a swoosh locked with the word Airtel. The way Airtel is written may also change, it is not expected to have a capital 'A' under the new brand. The red colour, though, will still be dominant in the new brand. Sources said the Airtel's re-branding is done by the agency J Walter Thompson .

The new brand is expected to be splashed all across India, Africa, Sri Lanka, Bangladesh, Seychelles. Company had already said that Zain will be re-branded as Airtel, but, this will be part of a bigger brand to give a fresh image to Airtel.

Sources said, the brand makeover is done to give Airtel a more youthful look as it gets more global in it's approach. This will be yet another evolution of the strong brand Airtel, earlier the company had merged all the segmental brands into Airtel once it appealed to the customers.

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Tata Steel swings to profit, Q2 net at 2,000 crore

MUMBAI: Tata Steel, the world's seventh largest steel company, posted a consolidated net profit of Rs 1,968 crore for the September quarter of FY11, defying street estimates.

The company earns more than 70% from its European business, Corus, which it acquired in 2007 for $13 billion, and the remaining from India and other south-east Asian countries. Tata Steel's management attributed the improvement in earnings to a mix of volume and value growth and gains from part sale of its investment portfolio. Top company officials explained that while in India it sold more steel at lower prices, in Europe, it clocked lower volumes but at higher prices during the July to September period. Tata steel reported a consolidated loss of Rs 2,720 crore in the corresponding period of last fiscal.

The company's net sales grew 11% from Rs 25,276 crore to Rs 28,091 crore. Other income saw a significant increase to Rs 814 crore compared to Rs 18 crore in the September quarter of FY10. It divested its interest in Malaysia's Southern Steel for $72 million and sold some shares in a couple of Tata Group companies.

In a parallel development, Tata Steel on Friday said that it plans to raise up to Rs 7,000 crore to knock off some debt—mainly taken to purchase Corus—on its books and to fund steel projects. The largest company within the Tata Group said it plans to spend Rs 15,000 crore this year. Though the company didn't reveal the exact financial instrument it would opt for, but added that it is looking at an equity offering, including shares, with differential voting—it may be recalled that group company Tata Motors was among the first to go for such an issue— global depository receipts, debentures and foreign currency bonds. The company's overall debt at the end of the September quarter was Rs 48,096 crore ($10.7 billion). Its debt-equity ratio is currently at 1.5: 1, and the company's intention is bring it to 1:1. During the first half of FY11, it repaid $600 million of debt. Raw material accounted for 36% of total expenditure, with iron ore being the most volatile.

Tata Steel's MD HM Nerurkar said that the Indian steel market expects to see robust demand from construction, infrastructure and auto sectors in the coming quarters. To meet the higher demand, it is expanding its steel capacity by three million tonnes in Jamshedpur.

With regard to its European operations, Tata Steel Europe's MD Karl-Ulrich Kohler said the demand outlook in Europe is uncertain and it would continue to focus on controlling costs. Tata Steel announced the financial results after the close of market hours .

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Sharekhan maintains `Hold` on Bharti Airtel

Sharekhan has recommended `Hold` on Bharti Airtel with a price target of Rs 383 as against the market price (CMP) of Rs 373 in its report dated Sept. 27, 2010. The brokerage house gave the following investment rationale:

Recently, there has been a strong run-up in the stock price of Bharti Airtel (Bharti; +42% in the past three month, +18% in the past one month). The strong performance was on account of a series of factors including improving domestic environment, positive industry news flow (consolidation talks and dilution of Telecom Regulatory Authority of India [TRAI]`s draconian 2G recommendation) and fund houses shoring up the under owned status of the stock in their portfolios on the back of higher liquidity flows.

We reckon the positive news flow and factor in the same by assigning a higher multiple to the stock (from the earlier 15x FY2012 earnings to 16.5x FY2012 earnings). Our revised price target for the company stands at Rs 383. Post the recent upsurge, the stock offers limited upside from the current levels, and hence we maintain our Hold recommendation. Going forward, improving profitability and actual execution of the stated targets of the African business would be the key monitorable for the stock. Any slippages on the same would lead to underperformance.

Domestic environment improving

In the last three quarters, there has been a considerable improvement in the domestic telecom environment which has witnessed reduced competitive intensity as is visible in the form of lower tariff reduction and strong volume growth. On the tariff side, the revenue per minute for Q1FY2011 showed a modest decline of 5.4% as against the sharp sequential decline of 7-8% witnessed in FY2010. Along with stabilising tariffs, there has been a strong upsurge in the volume growth witnessed by Bharti in the last three quarters. For Q1FY2011, the overall minutes of usage for the quarter stood at a phenomenal 190 billion minutes (a 10% quarter-on quarter [Q-o-Q] growth ie 2.1 billion minutes per day), which is the highest ever growth in the minutes reported by an operator.

Robust African business guidance and increasing scope for improvement

The management remains upbeat on the acquired African business and has time and again reiterated its stance that it would focus on Revenue Market Share (RMS) and improvement in the cost structure as the key profitability drivers for the business. It has set a target to achieve USD 5 billion in revenues and USD 2 billion in earnings before interest, tax, depreciation and amortisation (EBITDA) by FY2013 from the African operations, implying a 11% compounded annual growth rate (CAGR) in revenues and 25% CAGR growth in EBITDA, with EBITDA margins targeted to rise from the current 28% to approximately 40% by FY2013.

Valuation gap bridged, further upside limited

Though we reckon the positive news flow and factor in the same by assigning a higher multiple to the stock (from the earlier 15x FY2012 earnings to 16.5x FY2012 earnings),
our revised price target for the company stands at Rs383. Post the recent upsurge, the stock offers limited upside from the current levels, and hence we maintain our Hold recommendation on the stock. Going forward, improving profitability and actual achievement of the stated targets of the African business would be the key monitorables for the stock, and any slippages on the same would lead to underperformance.

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It's official, Mahindra Satyam FY10 loss at Rs 125 cr

Mahindra Satyam (formerly Satyam Computer) today reported a consolidated loss of Rs 124.60 crore for year ended March 2010, a far better show from the previous fiscal when it had plunged into a deep crisis after founder B Ramalinga Raju admitted to multi-crore rupee scam.

Helped by a sharp reduction in employee cost at Rs 3,981.10 crore in 2009-10 from Rs 6,073.7 crore in the previous year, the company reduced the net consolidated loss from Rs 8,176.8 crore in 2008-09.

In FY09, the company had to incur exceptional expenses related to the scam.

Cash and bank balances were to the tune of Rs 2,176.8 crore as on March 31, 2010. The loan balance as of March 31, 2010 was Rs 422 crore.

The results of Mahindra Satyam were keenly awaited across industry and markets as the real financials were shrouded in mystery after the scam --said to be India's biggest corporate fraud-- came to the light in 2009.

The audited numbers would now give a clear picture about the financial health of the company. The scam had thrown up many questions on corporate governance and accounting practices.

Mahindra Satayam audited financial results are coming after a gap of nearly two years. The company had obtained exemption from the Company Law Board from publishing audited results for the past two fiscals after its takeover by Tech Mahindra in April 2009.

Following the shocking revelation of an accounting fraud in Satyam Computer, a government-appointed board headed by Deepak Parekh, had taken over the administration of the company. Tech Mahindra later took the reins of the company after a transparent bidding.

"With this announcement today, we have fulfilled an important commitment and kept to our promise of transparency and agility. It also marks the beginning of a more significant journey of growth and the future," Mahindra Satyam Chairman Vineet Nayyar said.

Mahindra Satyam CEO C P Gurnani said the company will take two years to turn around.

The total income of the company stood at Rs 5,481 crore for the last financial year. In 2008-09, total income was Rs 8,812.6 crore.

Exceptional items stood at Rs 7,992 crore and Rs 416.9 crore for the fiscals 2008-09 and 2009-10, respectively.

"We will inculcate the highest values of Corporate Governance, for which the Mahindra group is renowned for, in shaping the future of this organisation," Nayyar said.

Tech Mahindra took over reins of the company in April 2009 and rebranded it as Mahindra Satyam.

Post the takeover by Tech Mahindra, the company had taken many cost-cutting measures like downsizing, relocation of office premises. The fruits of these measures can be reaped in 2012 only.

The company employs over 27,000 people.

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L&T Finance to file DRHP for Rs 1500 cr IPO

L&T Finance, the non-banking financial company of L&T is planning to file Draft Red Herring Prospectus (DRHP) for Rs 1500 crore initial public offering (IPO), reports CNBC-TV18 quoting NewsWire18.

L&T Finance had listed its non-convertible debentures (NCDs) on the NSE a year ago, closed today at Rs 1085 as against a face value of Rs 1,000 per debenture.

L&T Finance to file DRHP for Rs 1500 cr IPO

Earlier on August 30 this year, AM Naik chairman of the company had said in an exclusive interview to CNBC-TV18 , "Our IPO will be coming late this year. So, I think investor will know our run rate of profit. L&T brand, which everybody knows is a super brand, also people attach a lot of trust on the world L&T. So, therefore, when they have to come to invest, they feel little more comfortable. So, there is a brand value attached to it, there is a trust value associated with it, there is company’s results, which are far better than I would atleast have expected. By end of the year the picture will be clear, so people will begin to see value."

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Anil Ambani mulls public issue, commercial bank for group firms

Mumbai: A public issue, entry in commercial banking and sale of strategic stake to an investor were among a slew of proposals unveiled by the Reliance Anil Dhirubhai Group for three companies during their respective shareholder meetings here Tuesday.

Ahead of CWG, it's about slumdogs v millionaires

Group Chairman Anil Ambani, who presided over the back-to-back meetings from 10 a.m. to 3 p.m., also set an ambitious target of 25,000 MW of energy capacity by 2015 and announced a new initiative on infrastructure lending with a target of $11 billion as asset base.

Anil Ambani group scrips end higher on plan announcements

'The Reliance Anil Dhirubhai Ambani Group is by far the youngest of all large business houses in India, yet we already rank among the top 5 on every important financial and operating parameter,' Ambani told the shareholders.

'In a short span of just four years, our group market capitalization has risen to over Rs.125,000 crore ($27.5 billion), ranking us amongst the top four business houses in India,' he told the shareholders of the three companies.

Reliance Power to raise capacity to 5,000 MW in 2 yrs

The companies were Reliance Power, Reliance capital and Reliance Communications and Amabni's near-to-medium-term plans outlined for them saw their scrips end higher on the Bombay Stock Exchange.

For Reliance Power, the Group chairman said the target was to raise the capacity manifold over the next 24 months to touch 5,000 MW, with an overall target of 25,000 MW by 2015, against the present capacity of 600 MW.

This company, he said, had concluded India's largest fundraising exercise worth $11.1 billion to finance 10,000 MW worth of projects, helping financial closure for two ultra-mega power projects of 4,000 MW each-at Sasan in Madhya Pradesh and Krishnapatnam in Andhra Pradesh.

He also announced an outlay of over $2 billion for the 2,400 MW power project at Samalkot in Andhra Pradesh. The construction for this unit, which had already started, will be completed by 2012, the shareholders were told.

'Split in Reliance empire has benefited India'

For Reliance Communications, India's second largest telecom firm, he said there was a proposal not just to induct a strategic investor with up to 26 percent stake, but also a public issue for its now independent towers arm.

'There is substantial interest in the market for such an offering given that we are now the only telecom operator in the country without a foreign partner,' he said, adding the idea was to become a debt-free company in three years.

On Reliance Infratel, the infrastructure arm now hived off into a separate entity, Ambani said discussions were on with strategic investors to unlock value and create a truly independent, operator-neutral tower company.

'We also have the possibility, if considered appropriate, of combining such a transaction with a possible initial public offering. For this we have necessary approval already from the Securities and Exchange Board of India,' he added.

Ambani said five years ago Reliance Communications had less than 10 million customers. But today, it had expanded to over 115 million, making it India's second largest and among the world's top four single-country operator.

'Reliance Communications will now lead the next wave of change-India's second telecom revolution,' he said, adding third generation (3G) telephony and high-speed data access were high on priority.

'My vision is to make India a 'wire-free' country where every Indian has access to high-speed data at the click of a mouse, the press of a key.'

India among 25 nations to undergo IMF check-ups

At the earlier meeting, the Group chairman said Reliance Capital was committed to playing role in India's infrastructure space and the nation-building endeavour, since over $1 trillion was to be spent in this area over the next few years.

'Reliance Capital will leverage this unmatched domain expertise of our group to offer customized financing solutions to vendors, suppliers and contractors, with targeted returns on equity of 18-20 percent,' he said.

'Our target is to create, in a phased manner, an asset base of over Rs.50,000 crore in the next three-five years.'

He said Reliance Capital was the first Indian insurance company to announce its plans for listing in 2009 and that the group awaited the guidelines in this regard from the industry regulator.

'Once this is done, we will explore the possibility of creating value for our investors by listing our life insurance business,' he said, adding entry into commercial banking space for which rules had just been framed was also top on the agenda.

'We have always regarded banking as a high priority and a huge potential opportunity, and are evaluating the different options contained in the guidelines.'

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