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Satyam opens at $11.16 on NYSE

Hyderabad/Mumbai: The Satyam Computers’ American depository share offering opened at the NYSE at $11.16 per share, a 14.9 per cent premium to the offer price of $9.71. It rose to a high of $11.93, before closing at $11.80. This created history of a kind and by the end of the day, 1,793,300 shares were traded with 165,400 shares being traded in the first lot.

The offer price to foreign investors was almost on a par with Satyam’s closing price of Rs 228.20 on the Bombay Stock Exchange on Tuesday.Satyam chairman B Ramalinga Raju, flanked by managing director B Rama Raju and executive vice-president & chief operating officer Ram Mynampati, rang the opening bell from a virtual studio.Satyam will trade under the symbol ‘SAY’. Each ADS represents two equity shares, which are already traded on the BSE, NSE and the Hyderabad Stock Exchange.

The total issue size was $140.8 million, excluding the 15 per cent greenshoe option. According to company officials there was an overwhelming response from retail investors and during the roadshows, the company raised the ADS size from $115 million to just under $141 million.Merrill Lynch was the managing underwriter for the issue. The issue was oversubscribed nearly seven times with total demand of close to $1 billion, company officials said.

Satyam is the fourth-largest provider of IT services in India. It offers a comprehensive range of services, including software development, system maintenance, packaged software integration and engineering design services. The company began providing IT services to businesses in 1988 and, as of December 31, 2000, had 7,560 technical associates servicing over 300 customers.
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DCB may take equity in UTI Bank
—The Development Credit Bank (DCB) is believed to be in talks with UTI Bank with the offer of an equity stake. The two banks are exploring the possibility of leveraging each other’s retail strengths, such as synergising their ATM networks and customer bases.

Both banks are likely to work out the modalities of the new arrangement, which will include UTI Bank allowing DCB customers to share its ATM network.
DCB has a 43 lakh customer base which seems to be prompting UTI Bank, to explore potential business opportunities with it to cross-sell their products and services.
DCB chairman, Naushad Padamsee, some time ago had gone on record saying that he was willing to offer up to 26 per cent equity DCB to another bank.

However when contacted UTI Bank chief Nayak said UTI has taken a decision on allowing other banks to share UTI Bank’s network of 314 ATMs. He said UTI waould take the lead in establishing a common pool of ATM nodes.

However he denied that UTI Bank was picking up an equity stake in DCB at the moment
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The race for DVB distribution network starts
Mumbai: The race is on for the coveted power distribution system of Delhi Vidyut Board.
The final bids received by SBI Capital Markets, DVB’s investment banker, for picking up a 51 percent stake in DVB are from companies like Reliance Power, Tata Electric Companies, A V Birla group, China Light & Power and the Indian arm of US-based power major AES.
Other bidders include BSES and the Calcutta-based CESC controlled by the RP Goenka Group.

The disinvestment when it happens will fetch close to Rs 750 crore. Under the scheme of things, the government will hold the balanced 49 per cent stake but the strategic partner will be given complete freedom in running the distribution companies.
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Despite IT meltdown TCS revenues zoom to Rs 3,000cr

New Delhi: Tata Consultancy Services has clocked in revenues over Rs 3,000 crore in fiscal 2000-01, up from the Rs 2,115 crore in 1999-2000 which indicates an uninterrupted growth chart..
TCS earned about 60 per cent of its exports revenues from the US and 24 per cent from Europe, with the domestic market contributing about 8 per cent.
In terms of verticals, 35 per cent of its revenues came from banking and financial services, 13 per cent from telecom, and 17 per cent from manufacturing.
Pheroz Vandrevala, executive vice-president, TCS, said the company was not totally dependent on the US for revenues and that it had a broad base of cutomers.
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Tata Info to phase out Tulec; bring in Tata Infotech Education institutes
Mumbai: Tata Infotech is planning go in for a final phase-out of Tulec, its brand name for training institutes launched in the nineties, and replace it with a chain of Tata Infotech Education institutes.
The latter will also incorporate a new business model in that Tata Infotech will be the dominant partner in the training institutes, in variance with the industry practice of allowing franchisees the larger chunk of profits.
Company officials said that the company intends to appoint its own faculty in every institute to ensure a standardisation of service. The faculty will be on Tata Infotech’s rolls. Further, the company has also set in place a centralised Career Advancement Group, based in Delhi, which will be responsible for all post-training placements anywhere in the country.
The company is looking at an investment of Rs 60 crore for revamping the training business. Part of the investment outlay would be borne by franchisees in the form of real estate and basic infrastructure.
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RPG Cellular's to invest Rs 85-cr to expand switch capacity
Chennai: The top mobile phone service provider in the Chennai circle, RPG Cellular, is gearing up to maintain its leadership position in the fast growing Chennai market.
For this it has drawn up a Rs 85 crore investment plan to expand switch capacity from 75,000 to 2 lakh subscribers and to increase the number of base stations from 48 to 93 in Chennai.
The plan will be partly funded by ICICI with a Rs 35-crore term loan while the balance will be met through internal accruals. In the first phase, scheduled to be completed by July this year, the installed switch capacity will go up to 130,000 subscribers and the base stations will increase to 93.
In the second phase, which will be completed before the end of this financial year, the switch capacity will increase to two lakh subscribers. The company has roped in Ericssion as the switch and network supplier.
RPG Group holds a stake of 68 per cent in RPG Cellular, while Vodafone Airtouch and Cellfone are minority shareholders.
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Infosys plans to employ 1,500-2,000 more techies
Kolkata: Another Indian company unfazed by the slowdown in the US information technology market is Infosys. The company is actually planning a capital expenditure of $80 million (around Rs 370 crore) in the current fiscal year, and plans to add around 1,500 to 2,000 fresh techies to its pool.
However, the company will reduce its exposure to dotcoms and Internet based venture-funded companies and intends to "work even more selectively in this space."
The slowdown in US market led to Infosys to announce a near-term revenue warning which projects a growth of around 30 per cent for 2001-02.
Infosys letter to shareholders states: "Clearly, these are challenging times for an IT services company. As self preservation and prudence descend on US industry, the near-term demand outlook for IT services is not as rosy as in the boom years. The immediate future is, therefore, uncertain."
Last year, Infosys increased its employee strength to 9,831, up from 5389 at the end of the previous year.
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Coats Plc to hike stake in Madura Coats to 74 percent
New Delhi: Madura Coats's proposed share buy back, has been given the green signal by the government allowing Coats -- the parent company of Madura Coats -- to increase its stake in the company to 74 per cent from 51.64 per cent.

Madura Coats proposes to buy back about 25 per cent of the paid-up capital. Sources say that the buyback is part of the British garments and threads major's consolidation process in its Indian subsidiary, before embarking on a market expansion programme.
Post-buyback, Madura Coats' paid up capital would come down to Rs 54.14 from Rs 72.18 crore, provided the company is able to buy back the whole quantum of shares it is targeting.
Madura Coats proposes to buy back 18,044,000 shares at a price of Rs 30 a share, which would cost it a little over Rs 54 crore.
Madura Garments owns leading menswear brands including Allen Solly, Peter England, Van Huesen, Byford and Louis Phillipe.
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Morepen in tie-up with Ameritek
New Delhi-- Pharma company, Morepen Labs has announced setting up a joint venture with Ameritek USA, the world's largest manufacturer of rapid diagnostic assays.
Under the agreement, Morepen will manufacture Ameritek's range of products for India and all the Saarc countries except Pakistan.
Announcing the new JV, Sushil Suri, chairman, managing director, Morepen, said the range of rapid diagnostic kits, which comprise HIV detection test kits, pregnancy and fertility testing kits, tumour markers, cardiac markers, urine analysis and blood occult kits, from the Ameriteck' stable would be introduced in India and the adjoining markets under the brand name 'dBEST-Morepen'.
In all five diagnostic test kits will be launched under the pact by June 2001 in the Indian market.

The market size of rapid diagnostics is estimated at about $30 million and is growing at 30 per cent per annum. Morepen has priced all its products below Rs 100.
Suri said the dBEST-Morepen products would be targeted at two different segments - clinical laboratory tests focussed on private labs, nursing homes and home tests.
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Piaggio withdraws from Scooters India bid
New Delhi:
Italian scooters major Piaggio SpA has withdrawn from the disinvestment process of the Lucknow-based public sector unit Scooters India Ltd (SIL).
Piaggio had evinced interest in taking over 74 per cent equity stake of the profit-making SIL and had plans to manufacture three-wheelers and two-wheelers.

SIL, at present, produces the Vikram range of three-wheelers.
When contacted, Mr Mario Emprin, resident manager of Piaggio India, said he did not want to comment on the matter.
Sources conjecture that Piaggio has finally lost patience, as the disinvestment process of SIL seems to be moving at a snail’s pace.
Piaggio’s proposed takeover of Scooters India has been hanging fire for almost three years now. Also, post-restructuring, the group’s plans for overseas markets have undergone a change and India is one of them, the sources added.

Since December 1999, the Piaggio group is controlled by Morgan Grenfell Private Equity, part of Deutsche Bank, which has 81.5 per cent equity stake in the group. The Agnelli family holds 10 per cent equity stake in the group.
The group felt that its service offerings would not be suitable for India and now wants to enter the two-wheeler sector through its wholly-owned subsidiary," the sources said.
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Tatas constitute HR review committee
Mumbai: The Tatas have set up a committee to review human resource development issues across its companies. Official sources say that the review committee, also referred to as HR review committee, will not only look after the developments related to human resource development at the group level but also among the companies.
According to company officials, the committee has set itself an agenda on the basis of which it proposes to monitor HR-related activities. This includes among others indemnifying the work levels among the group companies to enable employee mobility among Tata companies, designing the corresponding compensation package vis a vis work levels, study on knowledge management etc.
The review committee has also decided to work separately to make Tata Management Training Centre (TMTC) the hub for the Tata group to leverage and satisfy their own requirements as far as training and development is concerned.
The committee envisages TMTC to be revamped in such a way that it can provide consultancy to the group companies on various other aspects apart from training.
The group has started serious efforts to revamp the recruitment procedures and is working out a plan to revamp the Tata Administrative Services (TAS) so as to fulfill the requirements of the new economy by recruiting best young talent from the industry.
The group has already initiated the work level study in the 14 Tata Brand Equity model companies. Some of these 14 companies — Tata Chemicals Ltd, Indian Hotels, Tata Sons, Telco and Tisco — are already through with their work levels.
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Godrej & Boyce and Milliken in tie-up for the premium carpet tiles market
Mumbai--Godrej & Boyce Manufacturing Co Ltd and Milliken & Co of US have entered into a marketing tie-up, whereby Godrej will be the primary distributor of Milliken carpet tiles in India through its office furniture division.
The plan is grab at least 40 per cent of the premium segment of the 2 million sq mt of the carpet tiles market,

According to Milliken Carpets, US, regional manager (Middle East and India) James Mathew: Milliken Carpets are made of premium quality nylon fibres and manufactured using the patented ‘Millitron Imaging’ technology, which makes customised designs easier to create, deliver and sustain.

Milliken & Co has also bagged orders from Merril Lynch and World Bank Headquarters in Delhi, which has customized designs for the designed carpet tiles within their interiors.
Milliken Carpet tiles will be available in the price range between Rs 180 to Rs 280 per sq ft.
The office furniture division of Godrej & Boyce has embarked on new product introductions this year. The company plans to introduce Desk-based systems priced at Rs 25,000, very soon.
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NTPC awards Rihand, Ramagundam contracts to Bhel
New Delhi: The National Thermal Power Corporation (NTPC) has decided to award Rs 6,000 crore worth projects to Bharat Heavy Electricals Limited (Bhel), for the 1,000 mw Rihand and 500 mw Ramagundam power projects. Bhel was the sole bidder for these two projects.
It may be noted that the NTPC board, which met last month had deferred the proposal to clear the capital cost of the Rihand and Ramagundam power projects. The deferment was on account of the company’s move to attempt further cost reductions.
Senior power ministry officials disclosed that following the recent meeting between the top brass of ministry of heavy industry and ministry of power, to resolve the deadlock between NTPC board and Bhel, the latter has agreed to bring down its bid prices by over 5 per cent.
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Castrol open offer price forces BP-Amoco, Burmah Castrol to move HC
BP-Amoco and Burmah Castrol UK, have decided to appeal to the Mumbai High Court against the ruling by the Securities Appellate Tribunal’s that the open offer price for Castrol India be raised to Rs 350.08 per share against the previously announced Rs 311.91 a share

Clyde D’Mello, associate president of BP India said the tribunal’s ruling is contrary to existing rules and regulations. The point of contention is the discrepancy in the tribunal’s view on the relevant date for making the open offer.

D’Mello declined to comment on his company’s course of action in case the Mumbai High Court upholds the Tribunal’s ruling.

In March 14 last year, BP-Amoco announced the takeover of Castrol India’s British parent Burmah Castrol, though the official acquisition took place in July.

Going by the takeover code, the new parent announced a 20 per cent open offer in December 2000, which would increase its stake from 51 per cent at present in Castrol India.

BP-Amoco's offer of Rs 311.91 a share was based on the open offer guideline from July, when the actual acquisition took place.

However, Sebi, and subsequently, SAT felt that the calculation of the offer price should be made from March onwards, when the acquisition announcement was made.

This would result in the UK parent shelling out an additional Rs 100 crore for the open offer.
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IPO plan postponed by Baron Intl
Baron International has postponed its plan to come out with an initial public offering (IPO).

Shakun Mulchandani, chairperson of Baron group cited current market conditions to be the reason for this.

Baron International, the consumer electronics distribution company, distributes the Aiwa range of audio and colour televisions.

Aiwa, the Japanese consumer electronics manufacturer has a five per cent stake in the company, while a 20 per cent stake was offloaded to Prime Securities a few months ago while the Mulchandani family holds the balance stake.

While Prime Securities does not intend to hike its stake Aiwa plans to do so.

Mulchandani says that Aiwa is looking at doubling its stake to 10 per cent, but with the company undergoing a major restructuring exercise globally, it is for them to make up their minds.
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domain - B : Indian business : News Review : 16 May 2001 : companies