Five wise men to guide IDBI into universal banking
New Year wage gift to Bata workers
Economy logs 6% growth in second quarter
SSI Ltd buys Chennai firm
Takeover of India Foils approved

 
 
FIVE WISE MEN TO GUIDE IDBI INTO UNIVERSAL BANKING 
 
 
FROM SATISH JOHN
 
Mumbai, Dec 31 
The Industrial Development Bank of India (IDBI) has appointed a five-member internal committee to draft an action plan that would help the financial institution to move towards universal banking.

The committee headed by K. Kameshwara Rao, chief general manager, will submit its draft to the IDBI board on January 28. Senior IDBI officials from the human resource, project finance, information technology and system departments will also be part of the committee. The board has also decided to spin off its infotech department into a subsidiary. This, IDBI hopes, will help it to attract talent as pay scales will be at par with the industry standard. “The infotech subsidiary will focus more on the financial services sector,” a senior IDBI official said. “Later, we will look at export,” he added.

IDBI also has an equity support scheme with an initial corpus of Rs 1,000 crore. But industry observers said the move is a little late as its closest rival, ICICI Ltd, has covered a lot of ground in this sector. This may now prompt IDBI to consider collaboration with a foreign major.

As part of its foray into the infotech sector, IDBI will set up its own portals, launch e-business initiatives and facilities like e-mail, Rao told The Telegraph.

IDBI will also make its entry into the insurance sector by floating a separate subsidiary. “We are awaiting the Reserve Bank’s regulatory guidelines before setting up an insurance subsidiary,” he said.

The IDBI board had recently accepted the recommendations of the one-man M.B. Athreya panel which called for the transformation of the term-lending institution into a bank and bringing down the government’s stake in the institution from 72 per cent to below 51 per cent.

The board had given its “in-principle approval” to the Athreya report last week. However, the board decided to set up an internal committee to work out the modalities and specify an action plan on implementing the recommendations.

While the report has not explicitly recommended the privatisation of IDBI by bringing down the government stake to below 51 per cent, the report states that unless the government agrees to pare its holdings, the institution will neither be able to raise fresh capital nor recruit and retain talent.    


 
 
NEW YEAR WAGE GIFT TO BATA WORKERS 
 
 
BY RENU M R KAKKAR
 
Calcutta, Dec 31 
The Bata workers at the Batanagar factory will have much to celebrate in the new millennium—the nearly 6500-strong workforce will get an average wage hike of Rs 400 per month, with retrospective effect from January 1, 1999.

The new wage settlement, delayed for a year, has come as a relief to a section of workers who are retiring today and would have been otherwise deprived of the benefits of the revision.

The Bata Mazdoor Union (BMU) which has been under pressure to conclude a wage agreement, today informed workers at a meeting that a “broad understanding on wage negotiations was reached today morning with the management.”

The workers will get a lumpsum payment for the period from January 1 1999 to the date from which the settlement will officially be declared as effective. Sources said that it is most likely to be December 27, but this could not be confirmed.

However, the BMU has also raised the contentious issue of lifting the suspension of Arup Datta and the re-instatement of the other three employees, sources said. Senior Batanagar officials handling the talks have stated that they will respond to the issue only next week.

Icra rating

Icra has upgraded the rating assigned to the fixed deposit programme of Bata India Ltd from MAA- to MAA. The A1+ rating, indicating highest safety, assigned to the Rs 20 crore commercial paper programme has been reaffirmed.    


 
 
ECONOMY LOGS 6% GROWTH IN SECOND QUARTER 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Dec 31 
The Indian economy grew by a robust 6 per cent in the second quarter (July-September) of this fiscal compared with 4.2 per cent in the same previous period on the back of healthy performances by manufacturing, electricity, gas and water supply, construction, trade, hotels, transport and communication sectors.

The figures released by the Central Statistical Organisation (CSO) today also revised the GDP estimates for the first quarter of this fiscal upward to 5.9 per cent from the 5.5 per cent projected earlier due to a revision in the growth rate of the agricultural sector to 3.2 per cent from 2.8 per cent, raising hopes that the economy would grow by more than 6 per cent this fiscal.

The manufacturing sector grew by 7 per cent compared with 5.8 per cent in the second quarter last fiscal. Mining, manufacturing and electricity sectors grew by 2.1 per cent, 7.3 per cent and 11.1 per cent respectively during the second quarter of 1999-2000 compared with -0.5 per cent, 3.9 per cent and 4.6 per cent in the year-ago period.

Electricity, gas and water supply grew at 10 per cent in July-September compared with 5.5 per cent during the corresponding period last year, while the services segment posted a growth rate of 8.6 per cent as against 4.7 per cent in the same previous period. The farm sector growth in the second quarter at 1.8 per cent was lower than in the first quarter but much higher than the -0.8 per cent posted during July-September 1998.

According to information provided by the department of agriculture and co-operation, production of rice and pulses during the kharif season of 1999-2000 is expected to rise by 2.6 per cent and 7.9 per cent respectively over the corresponding season in the previous year.

However, production of coarse cereals is expected to decline by 11.7 per cent during this kharif season over the corresponding season in the previous year.

Sectors which recorded significant growth rates during the second quarter were construction at 8 per cent (1.7 per cent) and trade, hotels, transport and communication at 7.4 per cent (3.3 per cent).

Mining and quarrying continued to be in the low-growth region at 0.4 per cent in July-September this year as against -0.2 per cent last year. Among services sector, the key indicators of railways—the net tonne km and passenger km—have grown by 8.1 per cent and 7.4 per cent respectively during the second quarter of 1999-2000 as against -0.3 per cent and 5 per cent in the second quarter of 1998-99.    


 
 
SSI LTD BUYS CHENNAI FIRM 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Dec 31 
Software education major SSI Ltd today announced the acquisition of an 80 per cent stake in 3rd Agenda, a Chennai-based internet solution company. The remaining 20 per cent stake will be held by the employees of the company.

The acquisition will further consolidate SSI’s existing businesses with its net-related activities.

The company did not disclose the exact amount of the deal though Kalpathi Suresh, chairman and CEO of SSI, told The Telegraph that the amount is below Rs 65 crore. The acquisition money will come from internal accruals.

3rd Agenda, a closely held private limited company, started off as a creative web design firm in 1997 and is now a complete internet solutions architect with specific expertise in strategising, developing and deploying e-commerce enabled sites.

The SSI board met today to pass the necessary resolutions to structure and implement the deal.

SSI had recently announced that it has earmarked $ 15 million for acquisitions.

The company offers software training to students and corporate bodies in specialised areas and develops solutions for corporates.

Suresh said the acquisition is the company’s “first definite step towards web architecture”, adding it will fit in SSI’s strategy of web consulting.

He said revenues from internet-related businesses will form a major chunk of SSI’s income in the coming years. The company has already set up web enabling applications and e-commerce applications for its customers in the US.

An SSI release said the acquisition will enable the company to deliver web-based solutions to enterprises that want to transform their businesses to take advantage of the Internet and allied e-commerce capabilities. The acquisition is also expected to add value to SSI Technologies’ (a division of SSI Ltd) initiatives to deliver web-centric solutions in areas such as banking, insurance, telecom and healthcare.

Further, SSI’s education business is also expected to get a boost as it can now leverage on 3rd Agenda to reach its education content to a worldwide audience via the net.

3rd Agenda is run by a core team consisting of Ganesh Mandalam, a professional, Rajendran and Makash Mythran.

SSI had recently acquired Indigo Technologies, a software company specialising in online transaction processing solutions.    


 
 
TAKEOVER OF INDIA FOILS APPROVED 
 
 
BY A STAFF REPORTER
 
Calcutta, Dec 31 
The shareholders of India Foils Ltd (IFL) today approved the acquisition of majority stake in their company by Sterlite Industries.

At an extra-ordinary general meeting, shareholders passed the resolution allowing the Sterlite group to pick up 55 per cent stake in IFL. The shares and warrants will be issued to the two Sterlite companies, Madras Aluminium Company (Malco) and Manjari Finvest Private Limited.

IFL chairman B.M. Khaitan said the Williamson Magor group, which will be left with a 27 per cent stake in the company, will work towards ensuring the protection of common shareholders’ interest.    

 

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