Fiat to enter India's bus market
Mumbai: With auto major Fiat taking over Renault's 50 per cent stake in Irisbus, a bus and coach making venture, there are reports to suggest that Fiat will get into the bus and coach market in India too, although Fiat officials have said their focus would be on getting their Palio project underway.

The Fiat stake in Irisbus is held through Iveco, its commercial vehicles arm. In India, Iveco has a license arrangement with Ashok Leyland through which it had produced and sold 34,500 units of trucks in calendar year 2000. Iveco will hold 100 per cent of Irisbus.

The move also assumes significance in the light of Fiat entering into a 50:50 joint venture with the Changzhou Bus company of China, where Iveco would invest 40 million dollars.
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Tighter provisioning squeezes ICICI bottomline
Mumbai: ICICI has reported a 55.47 per cent lower net profit at Rs 537 crores for the year 2000-01 from Rs 1,206 crore the previous, thanks largely to accelerated provisioning and write-offs totalling a hefty Rs 813 crore. It also suffered a net loss for the fourth quarter of the fiscal, with losses of Rs 257 crore against a Rs 395 crore net profit the previous fiscal.

On adding back the accelerated provisions and write-offs, profit are up 21 per cent to Rs 1,332 crores. Dividend is proposed to be maintained at 55 per cent, or Rs 5.50 per share of Rs 10.

Tighter provisioning for NPAs amounted to Rs 66 crores, the provision coverage against non-performing loans increased to 50.2 per cent, from 34.2 per cent last year. Net-income stood at Rs 581 crore, and was adversely affected due to depressed market conditions in equities. Total assets as per US GAAP norms stood at Rs 73,963 crore with stockholders equity being Rs 7,511 crore during the period. ICICI’s approvals increased 29 per cent to Rs 56,092 crore (Rs 43,523 crore) while disbursements grew by 24 per cent to Rs 31,965 crore (Rs 25,836 crore).
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HDFC buys Bank stake held by arm
Mumbai: The Housing Development Finance Corporation will acquire the entire equity holding of its subsidiary HDFC Holdings in HDFC Bank.

This will raise direct HDFC equity in HDFC Bank from 18.3 per cent to around 24 per cent. HDFC Bank has a paid-up equity capital of Rs 244 crore comprising 24.4 crore shares of Rs 10 face value. The 1.33 crore shares, which were held by HHL, constitute 5.5 per cent of HDFC Bank’s equity.

The HDFC group has an equity holding of 28.30 per cent in the bank, which is collectively held by HDFC, HHL and HDFC Investments. HHL and HDFC Investments are fully-owned subsidiaries of HDFC, which hold close to 10 per cent stake in HDFC Bank. Hence the transfer will be a treasury operation.
The transfer of shares will not alter the group holding in the bank, but would bring about a change in the structure of the holding. It will also allow HDFC to book higher income through appreciation of share price and dividend declared by the bank.
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VSNL negotiates lower accounting rates
Mumbai: Videsh Sanchar Nigam Ltd has negotiated a lower telecom accounting rate (TAR) with US carriers. The rate has dropped from 85 cents per minute to 68 cents, effective April 2001.

The reduction in tariff will be passed on to other carriers, which in turn could impact the revenues of VSNL.

The TAR varies from region to region, and is a mutually agreed rate between VSNL and other international telecom operators.

Usually VSNL receives net settlement payments in foreign currency because the volume of calls made to India exceeds that of outgoing calls.

The decrease in the TAR is in line with falling global telephone tariffs. Last year, TAR had been slashed to 85 cents from the earlier 180 cents a minute.

A reduction in the TAR impacts the total quantum of settlement payments made by foreign carriers to VSNL, but will not reflect in lower international telephone call rates. Rates will drop only if it is brought down by the Telecom Regulatory Authority of India , which in turn, will help to increase call volumes, and earnings, for VSNL.
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Kale to license cargo solutions to Asiana
Mumbai: Kale Consultants will be licensing its cargo products software and services to South Korea's Asiana Airlines in a five million dollar deal.

Kale, which specialises in software products for the banking and airline industry will license its cargo solutions -- Amber and CSP -- to Asiana, South Korea's second-largest carrier, and also partner it in software development and marketing to other airlines.

Amber is a cargo revenue accounting system, and CSP, a flexible, modular enterprise-wide cargo system. These are two of the four products acquired from British Airways subsidiary Speedwing in August 2000. Its suite of cargo solutions would generate business of over 20 million dollars over the next five years for the company, through sales to other carriers.
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Reliance wants stake in MTNL
Mumbai:The Reliance group is said to be eyeing public sector Mahanagar Telephone Nigam (MTNL) which, too, is slated for privatisation.

The government is expected to shed 30 per cent of its stake in MTNL, and keep it at 26 per cent from the current 56.25 per cent.

For Reliance, a stake in MTNL will give it strategic entry in two metro cities of Mumbai and Delhi, where MTNL, despite being a late entrant, has succeeded in building up a good subscriber base for its cellular and fixed line services. MTNL also has an ISP business, and plans for a number of overseas telecom ventures. The only negative factor is MTNL's huge workforce.

Reliance is out to become a major player in the Indian telecom market, estimated to reach Rs 1,00,000 crore in five years. The group is investing Rs 25,000 crores in the business, under the banner of Reliance Infocom.
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LG puts off IPO date
New Delhi: The LG Electronics India Ltd (LGEIL) has postponed its initial public offer, from June- July, to August this year.

The issue has been postponed in order that the company better focuses on its performance in the market.

Such focussing of effort has paid off, with the company registering a 6.4 per cent in revenues, month on month, during April 2001, as opposed to April 2000, while the rise has been to the tune of 38.3 per cent over that of March 2001.

The achievement is a result of a company directive to all regional sales offices to ensure there was no slack in volumes of sales.

The impact was felt in higher volumes in refrigerators, microwave ovens and airconditioners, but a slowdown in CTVs, and stagnation in washing machines.
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Telco to hike truck prices by up to Rs 25,000
Mumbai: Tata Engineering is hiking truck prices across its range of light, medium and heavy commercial vehicles. The price rise will be up to Rs 25,000.

Light commercial vehicles will go up by Rs 9,500, and medium and heavy commercial vehicles by Rs 16,000 and Rs 25,000 respectively. The last increase was in November.

The price increase is meant to offset increase in input costs, and cover the additional costs incurred to make the vehicles Euro I compliant.

Telco has, however, decided not to increase prices of CNG buses. The company received orders for 4,590 CNG buses, priced at around Rs 11.5 lakh each, from transport operators from Delhi.
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Max India to exit speciality products
New Delhi: Max India is planning to divest its 50 per cent stake in Max Atotech, its speciality products joint venture with Atotech of Netherlands. The move is part of its plans to get out of non-core activities.

The group has identified IT, health care and insurance as the areas it wants to focus.

Max Atotech manufactures metal plating chemicals and PCB equipment and material.
Atotech is the world’s leading supplier of processes, services and equipment for general metal finishing and PCB fabrication.

Last year, PricewaterhouseCoopers fixed Max’s speciality products’ enterprise value at Rs 46-52 crore against net investment of Rs 39 crore and pharmaceuticals business at Rs 130-145 crore against a book value of Rs 62 crore.
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Bajaj Allianz gets IRDA clearance
Mumbai: Bajaj Allianz General Insurance — the joint venture non-life company promoted jointly by Bajaj Auto and German insurer Allianz — has received the R3 clearance from the Insurance Regulatory and Development Authority.

The R3 clearance is the final stage in the clearance process and is effectively a licence to do insurance business.

The company will launch its non-life products in the first quarter of the current financial year. Bajaj Allianz is expected to build up its marketshare on large corporate accounts initially, until it gets the retailing and claim servicing infrastructure in place for personal covers.

The joint venture, with authorised capital of Rs 150 crore, and paid-up capital of Rs 110 crore has Allianz holding 26 per cent, and the rest by Bajaj Auto.

Bajaj Allianz General Insurance will be head-quartered in Pune, where Bajaj Auto is headquartered.

Sam Ghosh, who has been Allianz’s representative in India since the company set up its liaison office five years ago, has been named as the chief executive of the non-life business.
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