Indian, global telecom companies eye VSNL stake
New Delhi: BPL and Sterling Infotech joined hands on Tuesday to form a consortium with US telecom giants TyCom and CenturyTel to take a 25 percent stake and management control of VSNL, the state-owned overseas communications monopoly.
Along with Reliance, Tatas, Birlas, Bharti-Singtel and Videocon-Toshiba, this new consortium forms the line-up for the race for VSNL.
For BPL and Sterling, it is a marriage of convenience. The two are arch-rivals in cellular services in Tamil Nadu and compete with each other for all-India Internet service.
The last date for receiving letters expressing interest in the bid was Tuesday.

While TyCom is one of the largest providers of broadband capacity in the world, CenturyTel is among the largest basic and cellular service providers in the US.
TyCom and Sterling are partners in a submarine project linking India and the US. CenturyTel is an investor in Sterling’s existing telecom services.
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RIL; New cracker at Jamnagar
Mumbai: Reliance Industries is set to construct a one million tonne per annum cracker at the company’s refinery complex in Jamnagar, Gujarat. This will increase its total ethylene capacity to around 2 million tonnes per annum.
The new cracker, expected to be larger than RIL’s existing cracker at Hazira, will have a capacity of 75,000 tpa. The Hazira cracker’s capital cost was around Rs 3,000 crore.
Though the company has not announced the cost of the proposed cracker, a cracker of a similar size globally would approximately cost Rs 6,000-Rs 7,000 crore.
Sources indicated that RIL had started preliminary work on the cracker and a formal announcement was expected soon.
By global standards, the time period for putting up a cracker is roughly 28-36 months, Reliance has not indicated as to when its new cracker will be ready.
The Hazira cracker is mainly used for the manufacture of polymers and textile intermediates. RIL’s own polyethylene, poly vinyl chloride and fibre intermediate mono ethylene glycole plants consume more than 90 per cent of the ethylene produced by the Hazira cracker.

Company sources say RIL’s reasons to set up another cracker stem from the fact that industry estimates say the polymer industry will reach capacity stagnation by year 2004 if the polymer market grows by 12-15 per cent in this period due to rising consumption from cable and packaging industries. Thus it is forecast that by 2002 India will be forced to become a net importer of polymer.
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Ketan Parekh cos borrowed Rs 220 crore from Zee
Mumbai: Zee Network says it lent Rs 220 crore to several Ketan Parekh companies for acquiring shares of media companies, which include a 28.5 per cent stake in ABCorp (Amitabh Bachchan Corporation) and 15 per cent stake in B4U.

A spokesperson of Zee Telefilms said that at present investment companies of the Zee group were trying to acquire media shares from Ketan Parekh companies.
"We have advanced Rs 220 crore to Ketan Parekh companies which held shares of media companies which we now propose to acquire. The investing Zee group companies have executed agreements with Ketan Parekh companies for acquiring the shares," the spokesperson said.
However, the media companies concerned were yet to be approached for transfer of shares, he added.
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AB Corp and B4U say Zee has no stake
Mumbai: Zee Telefilm’s claims of having acquired stakes in AB Corp (formerly Amitabh Bachchan Corporation Ltd) and B4U have been contested by the companies concerned.

Zee’s contention that it had advanced funds to the tune of Rs 220 crore to some Ketan Parekh companies for acquisition of 28.5 per cent stake in AB Corp and 15 per cent stake in B4U has been refuted by both AB Corp and B4U.

When contacted, a senior executive of B4U said that the company had learnt only today from reports in the press about Zee’s claims of a stake acquisition in the company. It is the same with AB Corp.
However, a Ketan Parekh company, Triumph International, not so long ago had been mandated to help AB Corp find investors and also help the ailing company of superstar Amitabh Bachchan undergo a financial re-structuring.
A senior executive of Zee responded by saying the confusion has arisen because Zee is acquiring those stakes in AB Corp and B4U, which were earlier held by Ketan Parekh companies.
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Satyam Q4 net up 165 percent
Hyderabad: Satyam Computer Services has posted a 165 per cent increase in its bottomline at Rs 111.34 crore for the quarter ended March 2001.
The figure, coming after a total income of Rs 384.24 crore for the quarter, has taken analysts by surprise.
The company said that the effects of the US slowdown were more likely to be felt in the next quarter.
The phenomenal net profit for Q4 is as a result of the company’s wider technology portfolio and decentralised organisational focus.
The Satyam board has recommended a final dividend of 22 per cent (Rs 0.44 per share on par value of Rs 2 per share) taking the total recommended dividend for the year to 40 per cent.
The total dividend recommended includes an interim dividend of 18 per cent on an expanded capital base. The EPS for the Q4 of 2001 works out to Rs 15.84 on an annualised basis, discounting the earnings by 14.71 times.

For the year 2000-2001, the net profit was up 134.44 per cent at Rs 316.16 crore compared to Rs 134.86 crore during the year before. However, the net profit stands inflated at Rs 486.29 crore if the extraordinary items are to be taken into account.
The extraordinary items include the divestment of 1.5 per cent stake in Satyam Infoway to SingTel, realising Rs 170.13 crore. The extraordinary items rose from a negative Rs 4.88 crore last year to Rs 170.13 crore.
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Wipro to invest Rs 100 crore to set up software centre at Kolkata
Kolkata:  According to Wipro chairman, Azim Premji, Wipro Technologies will invest about Rs 100-crore over a two-year period in its upcoming state-of-the-art software development complex in Kolkata.
The construction work for this project would start in October and the software development complex would become operational by end-2002. Nearly 2,500 techies will work round the clock, be it in development of telecom software, embedded systems, e-commerce/datawarehousing solutions and financial applications.
About 500 software engineers belonging to Bengal will be transferred from existing development centres to the Kolkata operation and the balance 2,000-odd will be sourced locally since West Bengal happens to be one of the largest repositories of knowledge workers, Premji said.
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Zydus Cadila to acquire 27.72 percent stake in German Remedies
Mumbai:  Zydus Cadila is acquiring a combined 27.72 per cent controlling stake in German Remedies from Asta Medica and Heller Vermogensverwa-ltungs GmbH. The acquisition is being routed through Recon Healthcare and will cost Zydus Cadila Rs 148.6 crore, at Rs 650 a share.
Zydus Cadila shall also make an open offer to acquire a further 20 per cent stake from the public through Recon Healthcare at Rs 650 per share, the company said in a release here on Tuesday.

At the same time, Zydus Cadila has also entered into an agreement with Asta Medica to acquire, through a subsidiary, perpetual rights to five brands, namely Deriphyllin, Paractol, Ildamen, Xipamid and Beta Xipamid (estimated Indian sales of Rs 42.7 crore during fiscal 2000-01) for Rs 52.6 crore.
The release added that the licence for the largest brand Deriphyllin (aimed at respiratory indications), among the top 50 pharma brands in India with estimated sales of Rs 40 crore, shall extend to 63 countries.
Zydus Cadila’s exports are estimated to be Rs 60 crore for the year ended March 2001, constituting 12 per cent of its total revenue.

With the acquisition of this stake Zydus Cadila is now second only to Cipla in the size of its product basket. Its portfolio has swelled to 292 brands, and now has more products than even Glaxo or Nicholas Piramal.
In brands the significant advantage for Zydus Cadila is its entry into the gynaecology and antiasthamatic segment in which German Remedies is quite strong.

With this, the number of Zydus’ products in the ORG MARG top 300 pharmaceutical brands will jump to 11, that is up by 4.
The gynaecology segment contributes to around 35 per cent of GR’s total sales. Primolut-N and Proluton, both hormonal preparations, are among the company’s top five products. The two brands come in from the Schering AG stable.
In addition to gynaecology, GR has a significant market presence in the respiratory segment, which contributes to 21 per cent of the company’s sales and gastro intestinal, which makes up for another 13 per cent of the sales turnover.

Asta has assigned five of its brands to Zydus. Of these, Deriphyllin — GR’s brand of theophylline — is the most promising. The brand ranks among the top 50 brands and is available as tablets and injection.
Deriphyllin tablets sales are growing at a rate of 10 per cent, whereas the injection is losing sales at 3 per cent. The two together grossed close to Rs 32 crore during the year ending February 2001.
The other four brands — Paractol, Ildamen, Xipamid and Beta Xipamid — are totally worth a little over Rs 3 crore. While Asta has granted Zydus rights to market Deriphyllin in 63 countries, the agreement for the other four brands is restricted to the sub-continent.
Other brands such as Dulcolax (GR’s laxative product) will strengthen Zydus’ gastro intestinal portfolio, Zydus already has Ocid, its brand of omeprazole and Pantodac, its brand of pantoprazole, both anti-ulcer drugs.
GR also has a presence in oncology, cardiovascular, dermatology and radio contrast medica. In the radio contrast media segment, the company’s two products angiographin and urographin enjoy a virtual monopoly.
GRL’s portfolio is also attractive from the DPCO coverage perspective with only 22 per cent of sales under DPCO.
Another advantage for Zydus is that both companies have almost exclusive product portfolios and there is virtually no product overlap.
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Dalmia asks Sebi to expedite Castrol open offer
New Delhi: Abhishek Dalmia, chief of Utlkal Investments, who recently bought around one lakh shares of Castrol India, on Tuesday asked Sebi to expedite the open offer for this company at the lower Rs 311.91 per share price to save small investors from further losses.

Dalmia, holds close to 1 per cent equity in Castrol. In a letter to Sebi appellate tribunal, he has requested it to direct British major BP Amoco to proceed with the offer of Rs 311.91 per share, but with an undertaking that the UK major will pay the balance to shareholders in case Sebi decides that the offer price should be Rs 350.
The small shareholders are unable to decide whether to wait or sell in the market.
BP Amoco had, in December last, said it would take 20 per cent stake in Castrol India at Rs 311.91 per share.
The open offer was scheduled to begin on January 29 and close on February 28 but ran into rough weather when Sebi asked BP Amoco to revise the offer price to Rs 350 per share.
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Voltas to merge with Voltas International
Mumbai: Domestic air-conditioning major Voltas is merging with its wholly owned subsidiary, Voltas International (VIL) with effect from April 1, 2001.VIL’s turnover for 2000-01 was Rs 140 crore with a networth of Rs 20 crore.

According to an official release, with the requirements of the Indian infrastructure projects, mass transit systems, power plants, large water supply projects and airports becoming more complex, the merger with Voltas International would have a definite synergy.
The merger will also have the benefit of strengthening Voltas’s position in the field of engineering, procurements and construction for electro-mechanical projects in India, the official statement said.

Meanwhile, changes are happening at the top level at Voltas. Ashok Soni is taking over as deputy managing director of the company and will take over as managing director of Voltas from N D Khurody following the latter’s retirement in October 2001.
Currently he is the vice-president (finance & operations) and had joined the board of Voltas in September 2000.
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SBI wants NIBM to frame a new company structure
Kolkata: State Bank of India is asking the National Institute of Bank Management, NIBM, to frame a new organisational structure for it. The extraordinarily successful voluntary retirement scheme offered by SBI, which had 35,000 personnel opting for it, left SBI in a disorganised state.

Sources said, that there has been a dislocation in branches with 12-13 per cent of the bank’s officers opting for VRS. With almost 21,000 officers having left, a scientific study is needed to arrive at functional efficiency.
As part of its exercise towards ‘right sizing,’ the bank has asked most of its administrative offices to submit a detail action plan. Most of the bank circles are now preparing the total agenda for the purpose.
Apparently, SBI has decided to initiate a massive restructuring of its corporate centre and business group headquarters in Mumbai. The bank has also decided to merge many of its departments.
Bank sources said that the executive committee of the bank, which met recently has approved the appointment of NIBM, which will submit its recommendations within three months.

Bank sources said that adjustments in terms of proper manpower planning in the post-VRS scenario necessitated a fresh study on the organisational policy of the bank.
An impartial study will help in reorganisation of the bank’s redeployment pattern in the coming months. An in-house team is in the process of assisting NIBM to formulate its recommendations.
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Tatas exit Mercedes Benz venture in India, sells 14 percent holding
Mumbai: Tata Engineering by divesting its 14 per cent holding in Mercedes Benz India has completely exited from the latter.
Tata Engineering was one of the original promoters in the joint venture with the American giant with a 49 per cent stake. It has sold its remaining stake for Rs 84 crore.

It has been "mutually agreed" between the two to convert Mercedes Benz into a wholly owned subsidiary of DaimlerChrysler AG, the parent company.
However, Mercedes Benz India will continue to hold its 10 per cent stake in Tata Engineering.
Speculations were on that the Tatas could enter into a swap deal with DaimlerChrysler regarding the Tata Engineering stake. This would be a shot in the arm for Tata Engineering and it will end up with an improved cash flow position.
Tata Engineering’’s stake in Mercedes Benz India declined from 49 per cent in 1994 to 14 percent, as it did not subscribe to further equity infusions in the company, primarily due to its own plans for "expanding its presence in the Indian automobile industry," the company said. However its decision to walk out of Mercedes-Benz has come at a time when the latter has begun to make profits in India.
In the calendar year 2000, Mercedes-Benz India reported a net profit of Rs 20 crore, for the first time after setting up base in the country.
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LPG stations for automobiles to be launched by IOC
Mumbai: In a revolutionary move Indian Oil Corporation (IOC) will soon become the first oil company to set up liquid petroleum gas (LPG) dispensing stations for automotive use.

IOC recently completed a pilot project for dispensing LPG in New Delhi. And it is planning over the next six months to set up eight auto LPG dispensing stations in New Delhi, Kolkata, Mumbai, Chennai and Bangalore.

LPG is already used as an automotive fuel in many developed countries in the North America, Europe and East Asia, as a non-polluting alternative to petrol and diesel, the commonly used automotive fuels.
Auto analysts predict that the growth for LPG, so far used as a cooking gas, will gradually increase in the automotive sector. The issue at the moment is availability of kits and their cost. The price will of these will come down as their demand goes up and auto companies are likely to fit these kits on all new vehicles. Industry sources have said that LPG is a safer alternative to CNG as it can be stored at a much lower pressure. Also, since oil companies already have a wide distribution network in place for LPG, its availability will be easier.

LPG, currently one of the four controlled petroleum products, will probably be decontrolled from April 1, 2002.
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Domino's now targets the railways
Kolkata: Domino's Pizza India is targeting travelers in India as a whole. After a tie-up with Jet Airways, the local arm of the global pizza chain, is eyeing railway catering. The company is in talks with Indian Railways to set up outlets at major railway stations, apart from serving on trains. Company officials expect to bag the contract by the year-end. They also said the company plans to double the number of outlets from 100 by March 2002.
Other plans include opening outlets on highways for which it has tied up with the Indian Oil Corporation to launch outlets at the oil major's petrol pumps.
The first phase of the plan entails an investment of Rs 9 crore.
According to a senior company official, among all the regions in India, Kolkata has been the most profitable region for Domino’s in the first year of operations. On an all India basis, profits exceeded targets as the company achieved a turnover of Rs 60 crore in last the fiscal year of which about Rs 4 crore came from Kolkata, he said.
As part of the plan to set up 18 stores in the Eastern region by March 2002, Domino's is planning outlets at Bhubaneshwar, Ranchi and Jamshedpur within the next three months.

Siliguri, Darjeeling, Dhanbad and Bokaro are also identified for launch its outlets. Five more shops would be set up at Kolkata making the number of stores there 12.
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Bajaj Tempo tractor unit to open by May
Pune: Bajaj Tempo will finally open its new and fully automated agricultural tractors manufacturing facility at Akurdi, near Pune, in May this year.
The new manufacturing facility will produce the entire range of `Tempo OX’ agricultural tractors. The company had to postpone the opening of its new tractor manufacturing facility due to the depressed demand for agricultural tractors in the last fiscal year.
Bajaj Tempo is also likely to launch the new and upgraded version of its small-size tractor, but the company officials were reluctant to comment on it.

The launch of the new small-size tractor and the new tractor manufacturing facility has been kept under closed wraps, as the company does not want to alert the competition in the highly competitive and crowded Indian tractor market.

Currently, Bajaj Tempo sells three range of agricultural tractors: "OX-45", "OX-35" and "OX-25" with 45 horse power (HP), 35 HP and 25 HP respectively.
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ICICI Bank to open office in New York in six months
Mumbai: ICICI Bank has received approval from the Reserve bank of India, (RBI), to open its first representative office in New York. It is further awaiting approval from RBI for setting up representative offices in London and the Gulf (Dubai), also. The bank expects to commence overseas operations in the first half of the current fiscal, once the US Federal Reserve gives its nod. The bank has identified an office at Sixth Avenue, New York, which would be converted into a full-fledged branch after a period of one year, based on overall performance.

ICICI Bank managing director and chief executive officer H N Sinor said the representative office would target two key segments -- Indian-related trade for trade finance and non-resident Indian business.
The flow of funds of NRI business is mainly from the US followed by the Gulf countries, Europe and other countries. The three regions account for around 30 per cent each of the fund flow.
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Videocon joins the bid for VSNl on final day
New Delhi: Six interested parties have finally emerged for the 25 per cent stake on sale in Videsh Sanchar Nigam Limited (VSNL).

On Tuesday Reliance, Tatas, Birlas, the Bharti-SingTel combine, BPL-Sterling-Tycom and Videocon-Toshiba submitted their expressions of interest (EoI) for the 25 per cent stake in VSNL.
One of the conditions of the strategic sale, that the promoters of applicant company need to have a combined net worth of a minimum of Rs 2,500 crore has meant that BPL has bid as a consortium with rival Sterling and Tycom, Bharti is with Singapore Telecomas while Videocon has combined with Toshiba. The net worth of only those promoters will be counted who have at least a 10 per cent stake in the total equity of the company.
A top VSNL official added, "All these EoIs are only indicative of an interest, which may or may not materialise into legitimate bids. After the due diligence some of them may also fall out."

The government of India currently holds 52.97 per cent of the equity capital of VSNL. Earlier, the Cabinet had approved the disinvestment of 25 per cent of the share capital of VSNL Ltd through strategic sale in late January 2001. SBI Caps and Credit Suisse First Boston were engaged as global advisors to advise and manage the disinvestment process successfully. After the strategic sale of 25 per cent, the successful bidder will also have to make an open offer for another 20 per cent.
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M&M eyes auto accessories market
Mumbai: Mahindra & Mahindra Ltd (M&M) is planning a major foray into the auto accessories market. For this it has floated a 100 per cent subsidiary Mahindra Auto Specialities Ltd (MASL),
According to Jaideep R Devare, managing director, MASL, the company has started 18 warehouses across the country, to cater to its customers directly (in this case, M&M dealers).
MASL will use mainly third party logistics for its warehouses and is also in the process of setting up 900-1,000 stock-keeping units (SKUs), he added.
Initially the company will offer accessories for the entire Mahindra range of tractors and utility vehicles and at a later stage will provide accessories for passenger cars in the various segments.

MASL has an equity base of Rs 5.25 crore.
Another thrust area for MASL , according to Mr Devare, is designer cars, which the company recently launched. The basic thrust behind the venture is to provide a range of custom delivered cars for the Indian market.
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Nestle in race to set up vending machines at railway stations
Kolkata: The race for setting up automatic vending machines at several locations under the Eastern Railways is on. Among the three companies short-listed for setting up these AVMs at 105 locations selected by Eastern Railway is multinational food and beverages giant Nestle.
Eastern Railway floated a tender a year back inviting bidders to come forward to set up AVMs in Mughalsarai, Gaya, Patna, Howrah, and Sealdah among other stations under it. Nine companies expressed interest in the project, including Pepsi foods and Hindustan Lever.

The short-listed companies include Nestle India, Black Diamond Beverages at Dankuni and Fresh and Honest Cafe of Chennai.
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