Shri Shakti LPG in talks for sale of stake
Mumbai: Shri Shakti LPG is in talks with a multinational Japanese corporation for a possible sale of 10 per cent stake.

Chairman and managing director D V Manohar confirmed , "Talks at an advance stage, but details can't be disclosed at the moment as we have a mutually agreeable confidential non-disclosure contract."

Knowledgeable sources said the Japanese firm has appointed Ernst & Young for due diligence. Additional funds infused by the multinational will be utilised for retiring Shakti's debt exposure and meet working capital requirement. Shri Shakti has secured loans worth Rs 49.80 crore.

The Hyderabad-based Shakti has been going through a rough patch, with hike in international gas prices and high component of subsidy in the public distribution system.

It had suffered a loss of Rs 9.99 crore in the year ended March 2000 on a gross income of Rs 60.08 crore. In order to offset its losses in the LPG market, the company recently diversified into manufacturing of auto kit for three-wheelers.

The kits and gensets have already been introduced into the market. Recently, the company had bagged a contract for 10,000 LPG auto fuel kits to be delivered in the current fiscal.

Shri Shakti had supplied 100 kits in May to test market the product in Sri Lanka. It has also entered into a pact with AVML Auto Gas of Colombo, for exporting LPG fuel conversion kits.

The company has plans to hike its authorised capital from Rs 60 crore to Rs 70 crore. Shareholders' approval will be sought at the annual general meeting scheduled for September 28. Shri Shakti is likely to issue fresh equity to Mitsubishi.

Meanwhile, the stock has appreciated from Rs 5 to Rs 12 in the last three weeks and is currently trading at Rs 8.  
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UTI seeks trustees’ nod to test derivatives waters
Mumbai: IT COULD come as the real excitement that the Indian derivatives market has been yearning for. The country’s largest mutual fund — Unit Trust of India — is to seek the approval of its board of trustees at their forthcoming meeting early next month to invest in derivatives for hedging portfolio risks.

UTI, which constituted a dedicated derivatives cell under the supervision of executive director Manmohan M Kapur, had been restrained from activating its derivatives plans by Sebi in the absence of clear authorisation by its board on investments in derivatives.

Thanks to this, UTI had to scrap its plans to deploy up to 15 per cent of the proceeds of its latest Monthly Income Plan 2000 (Third) for the proposed hedging.

Since Sebi has laid down that MFs can use derivatives only for the purpose of hedging their risks implicit in their underlying portfolios, MFs have been limited participants in the debt and equity derivatives markets.

The absence of significant players like UTI which manage assets close to Rs 70,000 crore further restricted the growth of the market.

In fact, UTI is one of the MFs that’s best placed to use index futures to hedge the portfolio risk as its Unit Scheme 1964 alone holds scrips in nearly 1,341 companies.

UTI is expected to disclose to its board of trustees the risks that derivative transactions could pose and the safety mechanisms that are being put in place by the Trust.

In a related development, UTI is benchmarking the performance of its equity research department to that of its fund managers and department of funds management.

Its 12-member strong equity research cell has been asked to come up with a virtual equity portfolio of Rs 300 crore simulated for that of a close-end equity scheme.

Ten per cent of assets of the portfolio are in liquid instruments. The portfolio mirrors real world restrictions, including not more than 10 per cent of stock in equity of a single company and not more than 10 per cent of assets in unlisted stocks.

"The stocks have been drawn from the list of recommended stocks put out by the equity research cell itself and are aimed at making research output more relevant to fund managers," an UTI chief general manger told ET.

The research cell currently covers about 300 of the over 1,400 stocks that UTI owns.
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Balaji Telefilms plans to raiseRs 57.4 cr from public in October
Balaji Telefilms plans to raise Rs 57.4 crore through an initial public offering by the first week of October to fund its infrastructural requirements.

While Rs 22.65 crore will be towards equipment, Rs 14.5 crore will be invested in setting up a studio in Mumbai. The balance amount will be for working capital requirements.

The company will issue 28 lakh shares, 90 per cent of which will be through the book building route. The floor price is expected to be at a premium band between Rs 190-195.

"We have filed in Sebi. There is a huge demand for television software. We need the funds to set up infrastructure and expand our production efforts," said Balaji Telefilms chief executive officer Sanjay Doshi. He, however, said the company had yet to take a position on the minimum floor price.

11Balaji Telefilms will soon be getting into television software production in Punjabi, Marathi and Gujarati. "We will be supplying content to Doordarshan's regional channels in these three languages," said Mr Doshi.

The Mumbai-based production house also plans to make Bangla programmes for the regional channels. It is already producing in four languages: Hindi for Doordarshan and the satellite channels, Tamil for Sun TV, Telugu for Gemini and Kannada for Udaya TV.

Balaji Telefilms plans to produce 1,500 hours of programming this year. It currently churns out 30 hours of content every week. The production house has a library of 1303 hours of programming till July 31, 2000. "We supply content both to DD and to satellite channels. While sponsored programming is 70 per cent of the mix, the balance 30 per cent is commissioned shows. That is how we cushion the risks of our business. With the funding, we will increase our content production" said Mr Doshi.

While satellite channels do not part with rights to the shows they source out, Balaji Telefilms managed to retain the assets of the daily soap opera Ghar EK Mandir which is being aired on Sony Entertainment Television. "The show is the Hindi version of what we did for a Southern language channel.

Perhaps, this is why we were able to bargain with Sony. But with the launch of a plethora of Hindi entertainment channels, the game is tilting in favour of big production houses," said Mr Doshi.

Balaji Telefilms focuses on fiction-based programming and does not make mythologicals. The production house also does not believe in signing up big stars for its shows. "Our focus is purely on content. That leads to the success of our shows," said Balaji Telefilms creative director Ekta Kapoor.

Among the six programmes that Balaji Telefilms has running in private satellite channels, five feature in the top 50 shows. The most recent of them is Kyunki Saas Bhi Kabhi Bahu Thi, which is Star Plus's current top-rated show after Kaun Banega Crorepati. Koshish, a show on Zee TV, was the only show not to be affected badly by KBC. It was placed directly against Star Plus' KBC but Zee TV has recently shifted it to the 8.30 pm slot.

With the supply of programmes to the private channels, Balaji Telefilms, however, has limited its content library. "Though the risks are spread out, the library assets could have been better," said a media analyst.
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