The FIs, which have a big exposure in the two companies, are closing ranks to ensure that the management of the two ailing companies is handed over to professionals. This is being done in a bid to prevent the two companies from closing down and the FIs losing their money.

According to sources close to the FIs, a highly ranked official of the Steel Authority of India may be asked to step in and manage the Orissa-based Mesco Steel, while the search is on for a professional to head Malvika Steel.

Senior FI officials said that the entire board of both companies will be reconstituted with a mix of institutional nominees, professional experts and the promoters. But the task of running the company will be given to professional managers.

The FIs had earlier tried a similar approach with the Mumbai-based Lloyds Steel, but the exercise ran aground when it was blocked by the State Bank of India.
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Murugappa Group to enter insurance sector via wholly-owned arm
New Delhi: The Chennai-based Murugappa Group, which broke off its talks with French insurance company, AXA, is all set to enter the sector on its own steam. In doing so it will be the third company, after Reliance and Sahara, to enter the insurance business without a joint venture partner.

The company is planning to invest over Rs 100 crore into the proposed insurance venture and is expected to file its application with the IRDA within the next two to three months. Managing director M Anandan confirmed the development and stated that the company is likely to prepare the project plan for the non-life business by next month and apply to IRDA subsequently.

Though the exact amount of investment is yet to be finalised, the group is planning to bring in close to Rs 105 crore as equity for its insurance venture through various group companies.

Mr. Anandan also clarified that the group would look at divesting around 25-30 per cent equity to a financial ivestor, which could be a multilateral financial institution or compatible investor. The group would look at any insurance company only if they were interested in joining in as a financial investor.
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Metaljunction.com plans global online alliance
Kolkota: Even as dotcoms around the world crumble, India’s steel majors, Steel Authority of India, Tata Steel and Kalyani Steel, who jointly promoted metaljunction.com are looking at global online alliances.

The joint venture site is understood to be talking to established metal trading communities like metalsite.Com, iSteelasia.Com and gmx.Com to set up a global online steel marketing alliance.

It is expected that such an alliance would not only allow the Indian steel making trio to offer products in the international market, it will also open up doors for international steel companies, mainly in the US and South East Asia, to sell their products in Indian markets.

The site, which which has deferred the launch of its steel trading market place till October 2001, will be joining hands with one of the three international online metal trading platforms which have managed to generate business volumes and stay afloat.

In fact, with the US slapping anti-dumping duties on Indian steel makers, both SAIL and Tata Steel have virtually pulled out from the US market. An on-line alliance may open the doors to the US market again.
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Government finally gives Eli Lilly approval for Ranbaxy stake
New Delhi: US pharmaceutical giant, Eli Lilly, finally got an approval from the Indian government for converting its 50-50 joint venture with Ranbaxy Laboratories into a wholly owned subsidiary of the company.

Contrary to earlier indications, the Eli Lilly subsidiary would also be allowed to outsource its range of products by entering into third party manufacturing arrangements.

With this, Eli Lilly becomes the second pharma MNC, after Pfizer, to set up a 100 per cent-owned pharma venture in India in the post-liberalisation period. Both the MNC subsidiaries would essentially function as marketing ventures.

Eli Lilly is likely to sign the final agreement with Ranbaxy for the stake buyout deal shortly after it receives the approval letter from the government. It is estimated that the stake would be bought out for a consideration of approximately Rs. 78 crore.

The two companies had already signed an "in-principle" agreement for the buyout earlier this year and this was subject to the approval from the government.

According to senior Eli Lilly executives the company would continue with its existing arrangement for manufacturing by Ranbaxy and the Halol (Gujarat)-based MJPL.

Distaclor and Keflex, both antibiotics, are among the trade mark products of Eli Lilly being manufactured by Ranbaxy in India, while MJPL manufactures some of the generic products for the Eli Lilly venture in India.
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Chowgule Group hikes stake in Mandovi Pellets
Mumbai: Through an allotment of fresh equity shares on a preferential basis, the Goa-based Chowgule Group has increased its stake in the ailing Mandovi Pellets from 63 to 90 per cent.

Of the rest, about 3 per cent of its equity capital is owned by the National Mineral Development Corporation and the balance is held by the public.

The move to increase shareholding follows urgent need for cash to improve the operations of the company by achieving higher capacity utilisation. Mandovi is engaged in the manufacture of steel pellets -- a raw material for finished steel --- with an installed capacity of 1.8 million tonnes per annum.
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RPL to use de-bottlenecking for increasing capacity
New Delhi: As part of its strategy to maximise production from existing assets Reliance Petroleum is planning to hike its refining capacity by 2-3 million tons by de-bottlenecking of its capacities.

It is understood that RPL had the ability to increase production beyond the rated capacity through debottlenecking of operations, thus taking its refining capacity to 29-30 million tons.

RPL, which processed 25.7 MT of crude oil during 2000-01, has achieved a record capacity utilisation of 107 per cent in the first two months of the current fiscal. The company produced a total of 4.8 MT of petroleum products during April-May this year, sources said.
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Aurobindo Pharma to host AIDS detection camps
Mumbai: Hyderabad-based Aurobindo Pharma, through its recently launched division Imunus, is to host a series of Aids detection camps in an effort to identify patients, and create awareness about the disease and the drugs available.

To combat the problem of stigma associated with the disease, the company has ensured that these camps will be held discretely in clinics where patients normally come for treatment of other diseases.

Aurobindo created Imunus to network with doctors, non-government organisations and the government in an effort to generate sales for a basket of seven AIDS drugs it has launched in the country.

The camps will make available these tests at prices lower than the market, Srinivas said. "We are in talks with a US firm to see how cheaper diagnostic kits for AIDS can be made available at the camps," he said.
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Accenture to help VIP enhance performance
Mumbai: Accenture (formerly Andersen Consulting) has been retained by Dilip Piramal group company, VIP Industries, to improve the company’s performance with a focus on adoption of cost-cutting measures with particular attention to supply chain management.

Accenture will be evaluating the performance in sales, marketing and manufacturing with a particular attention to the supply chain management, thereby improving the operational efficiency of the company.

Despite being a market leader in various product lines, VIP, has appointed the consulting firm to maintain its leadership position during the downturn. For the current fiscal, the company has taken several steps in product development, retail, personal product division and strengthening its distribution network.
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Ranbaxy Laboratories kicks off expansion drive
New Delhi: Domestic pharma major, Ranbaxy Laboratories, is on an expansion spree through new generic product launches and marketing initiatives. The company is expanding its generic product list substantially from the current 75 to over 125 products by the end of the year. Ranbaxy also plans to enter product segments like ophthalmic preparations, anti-cancer drugs, inhalers, aerosols and paediatric preparations and will offer a range of products.

The growth for its new generic products division will be driven by introduction of new products, increasing market penetration through super distributors and enhancement of its sales team. Ranbaxy’s generic division, Rexstar, has major products like ‘inj Ranbiotic’, inj Alfakim (inj Amikacin), cap Omesec (omeprazole), inj stancef (inj Cefotaxime, Norfloxacin), tab Nortini (Norfloxacin & metronidazole), inj decamycin (inj dexamethasone).

The generic division also markets cough syrups (Rexotuss, cuffit, and decoff) iron tonics (ferimon) and protein tonics (fruitobin). The domestic generic market has acceptance levels and sales volume and has established pharmaceutical companies like Cipla, Cadila and Rhone Poulenc.
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Birla Sun Life to manage break even in six years
Mumbai: Recent private insurance company, Birla Sun Life Insurance, is expecting to break even in six years’ time though the exact time-frame may vary by a quarter. The insurance venture has a six-year gestation project with a ten-year benchmark internal rate of return (IRR).

The company plans to do this by aggressively acquiring new clients and agents and keeping the costs down at the same time.

Major costs incurred by an insurance company are the acquisition and insurance costs. Advertising and marketing costs are also a burden, which are higher towards the beginning of operations. Normally, an insurance company looks to a ten-to-fifteen year relationship. The company spends its premium in the first year.

The insurance sector in the country is seen as being dominated by some big players and there will be some commonality of products between them. Even if there is product-differentiation initially, it may not last since other companies would be moving very fast.
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Bhel to commission Simhadri unit in 2002
Simhadri: Public sector engineering major, Bharat Heavy Electricals (Bhel) is all set to commission the first unit of 1000 MW Simhadri mega power project three months ahead of schedule in March 2002.

The project, bagged by Bhel against stiff global competition, has been funded by Japanese Bank for International Co-operation. According to the general manager of Bhel, Anwar Baig, as per the time schedule specified in the contract, the engineering major was to commission the project 43 months from the date of Letter of Award (LoA) in November, 1998, while the second was to be commissioned within a span of 48 months.
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Scoprio spurs Safari variants
Mumbai: With Mahindra & Mahindra due to launch its Scorpio model shortly, Tata Engineering has been working on overdrive to launch new variants of its sport utility vehicle, Safari, thus taking competition headon.

The new variants are likely to have an indigenously-developed petrol engine during current fiscal, which will be followed by the introduction of a more powerful diesel variant.

In addition to this, the company is also understood to be planning the launch of a new variant of the Deluxe version of Tata Sumo, the company's offering in the utility vehicle segment.

The company's initiative may have been prompted by M&M's decision to launch the Scorpio in the SUV segment later this year with powerful 2.8-litre engines for both the petrol and diesel versions.

M&M is considering two diesel options with the same capacity but different outputs, and is planning to source the petrol engines from French auto giant Renault for the Scorpio.

On the other hand, the Safari, which is so far available only in the diesel version, comes with a two-litre turbo-charged engine.
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Ranbaxy Labs increases stake in Fortis
New Delhi: Ranbaxy Laboratories is understood to have picked up a 16 per cent stake in Fortis Healthcare Ltd, a company promoted by Malvinder and Shivinder Singh, the sons of late Parvinder Singh, for an estimated Rs. 6.14 crore.

The balance shareholding remains with the two brothers. Malvinder and Shivinder are also the principal shareholders in Ranbaxy with a stake of over 30 per cent.

Fortis is setting up a network of hospitals in the north based on the hub-and-spokes model. Under this model it is putting up a super specialty hospital Fortis Heart Institute at Mohali near Chandigarh, which will be connected to six multi-speciality secondary care hospitals located at Jullundhur, Ambala, Ludhiana, Amritsar, Simla and Jammu.

These hospitals will focus on orthopaedics, neurology, oncology and gastro intestinal problems.
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Kotak Mahindra to decide soon on pension sector
New Delhi: Noted NBFC, Kotak Mahindra, is to shortly decide on whether it will enter the pension fund management sector following its liberalisation. The company is open to the idea of launching annuities linked to life insurance through its joint venture insurance company Old Mutual Kotak Mahindra Life Insurance.

This was stated by managing director Shivaji Dam as the company entered its branch expansion with the launch of its products in Delhi.

The company is said to be doing well in the city of Mumbai where it launched its first products. The company is currently selling a array of three products with two riders. The products are money back, endowment and single premium policies with term life and accident insurance as rider.

The company is targeting the rural sector, bank customers who invest in fixed deposits and those who have opted for VRS
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FIs tender 10 per cent of their RPL holdings for GDR offer
Mumbai: In response to the offer made by Reliance Petroleum to offer its proposed global depository receipts (GDRs) in lieu of its domestic shares, the financial institutions are understood to have tendered about 10 per cent of their total holdings from prices ranging from Rs. 55 upwards.

According to Reliance group sources, the response to the GDR offer from the domestic shareholders has been lukewarm, with 7 crore shares being tendered in all during the period which was earmarked for them to submit their shares in an escrow account. The number of shares tendered works out to just over one per cent of RPL’s equity. The total number of applications is less than 400.

The existing domestic shareholders had been given an option to deposit their shares in an escrow account to participate in the proposed GDR offer, between May 19 and June 2 if they wished to sell. Significantly, of the 7 crore shares, those tendered by retail investors accounts for less than one per cent of this amount, with the rest being tendered by the FIs.
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BT close to exiting ventures in India and Canada
London: According to reports in leading English dailies, British Telecommunications, as part of its revamping plans, is said to be close to selling its shares in Bharti Cellular of India and Rogers Wireless of Canada for an estimated $421.8 million.

As part of the company’s restructuring plans it is also said to be on the look out for a new finance director for its mobile phone arm, BT Wireless.
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