Sensex bleeds 222 points on raid rumour
HCL debuts with a bang
Officers call off oil strike on Naik’s assurance
Big jump in Satyam turnover
Assocham secretary general quits
Infosys third quarter net profit at Rs 74 cr
Mercedes to roll out two more models
Qualis launched, price Rs 4.58 lakh
Chambers at odds over import of used cars

Mumbai, Jan 11 
Investors in an overheated market need an excuse — not a reason — to cool off. Dalal Street found one when rumours about an income-tax swoop on a key broker triggered a selling avalanche that knocked down the Bombay Stock Exchange (BSE) sensitive index a whopping 222.09 points in the largest single-day loss since April 17 last year.

It all started with a buzz: Unconfirmed reports about an income-tax swoop on Ketan Parikh — better known as the Big Bull or the mover and shaker of BSE — ignited a selling frenzy that intensified when foreign institutional investors (FIIs), domestic institutions and, even bull operators, dumped shares.

It was not a tumble all the way. When the 30-share bluechip index opened only a shade lower than Monday’s record close of 5518.39 at 5513.04, there was no inkling of the typhoon. In volatile pre-noon activity, the index peaked and ebbed like it does on a normal trading day.

However, in late-afternoon trading, when the sensex was seen hovering around 5395, market confidence was abruptly shaken by reports about the raids and searches on Parikh. In the freefall that ensued, the sensex plumbed its intra-day trough of 5221.28 before closing at 5296.30 in a 222.09-point, or 4.02 per cent, loss over Monday’s finish. The benchmark index had crashed 245.93 points on April 17 last year.

The BSE-200 index and the dollex were quoted sharply down at 607.73 and 237.96 compared with previous close of 630.43 and 246.79 respectively. The BSE-500 index slipped by 67.80 points to 1832.64 from yesterday’s close of 1900.44.

Some brokers say there were indications of a bearish undercurrent in early-session trading. A key reason for it was the less-than-expected third-quarter profits announced by software major Infosys Technologies. A Rs 73-crore figure disappointed many brokers who were expecting rosier numbers from a company that has achieved dizzy valuations and awesome market capitalisation. The Infy scrip was hammered, dragging down the sensex in which it has a heavy weightage. However, good results from other infotech companies like Satyam Computers limited the damage.

End-account considerations on the National Stock Exchange also drove investors to offload their holdings. Punters, who were in heavily overbought position on the National Stock Exchange had to square up their holdings on the last day of the current account, forcing speculators to fall in line.

A mild recovery was seen towards the close of trading hours as the benchmark index closed in on the 5300-mark. This brief recovery was largely fuelled by purchases in selective counters like Mahindra & Mahindra, Hindustan Lever, Zee Telefilms.

Broking circles said the selling was so heavy that even positive reports such as the Nasdaq zooming another 167 points to 4049.62 were lost in the selling spree. “The market only wanted an excuse to sell. Today it found out that the best way to do this was to believe in the rumours about income-tax raids on Ketan Parikh,” said a dealer with Khandwala Securities as he tried to put the selloff into perspective.

Another broker with a foreign brokerage actually welcomed today’s slump, saying it has provided the much-needed correction. “The ridiculous rise in the sensex in the early days of this year is now petering out.” He believed the recent volatility seen in the markets would take time to subside.

In the specified group, 13 shares, including seven index heavyweights, were locked in their lower-end circuit filters at close. Satyam Computers remained the most active scrip with a turnover of Rs 641.94 crore on a total volume of Rs 4896.90 crore.

Other top traded shares were Zee Telefilms (Rs 589.28 crore), Infosys (Rs 312.06 crore), Global Telesystems (Rs 311.31 crore) and RIL (Rs 298.49 crore).

Zee Telefilms jumped by Rs 51.80 to 1020, Global Telesystems by Rs 51 to Rs 1010, ICICI by Rs 8.30 to Rs 112.50, M&M by Rs 36.50 to Rs 534 and Novartis by Rs 21.15 to Rs 1299.70.

However, ICICI and Carrier Aircon hit the upper price band after exhausting the daily price limits.

Curiously, the losers included Satyam which dropped by Rs 115.10 to Rs 2352. Infosys dipped by Rs 1095.95 to Rs 12604.05, Reliance by Rs 18.70 to Rs 288.55, ACC by Rs 15.45 to Rs 219.30, Grasim by Rs 40.70 to Rs 469.30, ITC by Rs 39.50 to Rs 880, NIIT by Rs 209.20 to Rs 2405.90, State Bank by Rs 21.35 to Rs 245.65, Telco by Rs 20.65 to Rs 237.65 and Tisco by Rs 14.35 to Rs 165.55.

Meanwhile, the BSE has decided to place the equity shares of 25 companies under the Z group as these companies had not complied with and were in breach of several provisions of the listing agreement.    

Mumbai, Jan 11 
Unfazed by the blood-bath on the Bombay Stock Exchange, HCL Technologies Ltd made its debut on the premier bourse today with a bang, opening at a premium of 98 per cent over its issue price of Rs 580 per share.

The scrip, which opened at Rs 1150, indicated the stock market’s insatiable appetite for information technology stocks.

Brokers said that after the strong opening, the counter was flooded with buy orders, and the scrip hit a high of Rs 1720, thus indicating a premium of 196 per cent over its issue price.

However, the bull run at the counter was short-lived, as the scrip fell to a bear run which by then gripped the entire market. The scrip nevertheless finished at Rs 1576.70, indicating a rise of over Rs 426.

In fact, HCL Technologies was the top traded scrip in the B1 category. While total trades at the counter stood at 7932, the total turnover was placed at Rs 220.98 crore.

HCL, which came out with a public offer in 1999, was billed as the largest initial public offer for an Indian information technology company.

The company had initially planned to raise a sum of Rs 639-767 crore from domestic investors, but later utilised the book building route for arriving at the right price for its shares.

While HCL initially targeted a price range of Rs 450-540 per share (at a face value of Rs 4 per share), the issue closed at a price of Rs 580 per share.

The public offer was primarily used to make acquisitions in India and abroad, as well as to grow organically.    

New Delhi, Jan 11 
The striking officers of public sector oil companies have withdrawn their agitation with immediate effect, Ram Naik, minister for petroleum and natural gas, announced here today.

The government has not conceded to any of the demands of the officers. However, the strike was withdrawn on the strength of an assurance from Naik that he would try his utmost to solve their problems. Naik refused to disclose the issues on which the government agreed with the strikers.

After the talks failed yesterday, the officers went on strike with effect from 6 in the morning today. Except MRPL and MRL ,none of the PSU refineries operated today.

There was no disruption whatsoever in supplies to civil aviation which are made by outlets at airports directly operated by oil companies.

Work at ONGC came to a standstill and as a result gas supplied by GAIL to fertiliser companies along the HBJ pipeline and power plants remained suspended today.According to NTPC executives federation, power plants at Anta and Dadri stopped work due to non availability of gas whereas the plant at Auriya operated on naphtha.

The co-convener of Oil Sector Officers Association (OSOA) Sridhar Vats said the minister had assured them that their demands for bringing down of periodicity of wage revision to five years would be taken to the Cabinet.

Vats said the minister had directed the management of oil PSUs to discuss other job-oriented perquisites like operational allowances, hardship allowances and compensation for working under hostile conditions.    

Jan 11 
Satyam Infoway (Sify), which got listed on the Nasdaq last year, has reported a turnover of Rs 18.06 crore in the third quarter of the current fiscal compared with Rs 2.19 crore in the previous year. Sify also said its subscriber base had risen to 1.18 lakh in the nine months ended December 31, 1999.

Sify parent Satyam Computers Services has recorded a revenue of Rs 177.88 crore during the period, an increase of 62.33 per cent compared with the corresponding period of the previous year. Net profit during the period rose 75.45 per cent to Rs 36.19 crore.

A Satyam release said internet and and e-commerce has become the bulk income earner, displacing earnings from the Y-2K business which now makes up less than one per cent of the total revenue. The share of e-commerce in total revenue has climbed to 21.3 percent, while engineering services make up 13 per cent, enterprise resource planning (ERP) 12 per cent and telecom projects 11.8 per cent of the total revenue.

The board of Polaris Software Lab Ltd today decided to go in for a 2-for-1 stock split of its equity shares: a sub-division of every equity share from the current par value of Rs 10 into 2 equity shares of par value of Rs 5 each.

The stock split will increase the company’s liquidity position and expand its investor base.

The company reported a net profit of Rs 8.77 crore in the third quarter compared with Rs 3.96 crore in the corresponding quarter of the previous year.

Sonata Software reported income of about Rs 42 crore in the third quarter, an increase of 47 per cent over the previous corresponding period. Profit during the period stood at Rs 6.2 crore.    

New Delhi, Jan 11 
The secretary general of the Associated Chambers of Commerce and Industry (Assocham), E N Murthy, has resigned. He relinquished his post on January 7.

Murthy, when contacted, said, “I have resigned on personal grounds. I have received a few offers from some private concerns though I have not made up my mind regarding any of them. It is premature for me to comment on it.”

Murthy had intimated the Assocham secretariat about his decision to quit some three months back, but was asked to continue till the chamber’s annual session was over.

Murthy’s sudden exit has left many Assocham insiders surprised, while many said they had seen it coming.

Sources said Murthy who was hand-picked by then president L Lakshman, saw his role gradually diluted over the past few months, owing to the entry of some senior officials. Insiders say he was perceived as “not being sufficiently high profile.”

Murthy joined Assocham in April 1998 after the unceremonious exit of V Raghuraman who was also perceived as lacking “clout.”    

Mumbai, Jan 11 
Infosys Technologies Ltd, the Bangalore-based software giant, failed to live up to market expectations today with its third quarter results.

While market circles had estimated profits to be in the range of Rs 80 to Rs 90 crore, it posted a net profit of Rs 73.79 crore for the quarter ended December 31, as against Rs 37.74 crore in the previous corresponding period.

A senior Infosys official, however, pointed out that the third quarter results were in tune with the company’s expectations, adding that margins during the quarter had actually increased to over 42 per cent, from 29 per cent in the previous year.

The company said that excluding other income of Rs 7.11 crore for the quarter, net profit stood at Rs 69.48 crore. This is an 84.10 per cent increase over the comparable net profit from ordinary activities, of Rs 37.74 crore, for the quarter ended December 31, 1998.

“The outlook in Infosys is that the company would continue to grow above the industry average in the coming months,” the official stated.

However, the market did not seem to share his view as the disappointment over the third quarter performance was reflected in the movement of the scrip on the Bombay Stock Exchange (BSE) today.

While the Infosys scrip opened slightly better at Rs 13,990, news of its third quarter results, coupled with huge selling in the latter part of the trading session, led to the stock closing at lower levels of Rs 12,604.

Though the market had expected Infosys to do better, sectoral analysts thought otherwise.

“During the third quarter, several US companies had brought down their IT expenditure. Therefore, we did not expect local companies to show any spectacular growth,” an analyst opined.

Infosys’ total income during the quarter was put at Rs 233.52 crore, up from Rs 140.17 crore in the corresponding period of the previous year. Of this, overseas income from software development services and products shot up to Rs 224.41 crore from the previous corresponding figure of Rs 137.83 crore, showing a rise of around 63 per cent. Other income was placed at Rs 7.72 crore.

However, it witnessed a loss of Rs 0.61 crore in the other income component. The loss arose from exchange differences on translation of foreign currency deposits kept abroad, primarily due to the stable rupee, which also showed some appreciation against the US dollar during this period.

The other income of Rs 7.11 crore included Rs 4.20 crore of interest on deployment of funds raised through the American Depository share (ADS), with Rs 0.72 crore arising from the sale of Special Import Licenses.

For the nine-month period ending December 31, 1999, Infosys reported a net profit of Rs 200.10 crore, against Rs 92.16 crore in the previous corresponding period.

Total income was placed at Rs 635.46 crore, up from Rs 359.03 crore, with overseas income from software development services and products standing at Rs 598.10 crore, up from Rs 352.31 crore in the previous corresponding period.    

New Delhi, Jan 11 
Mercedes-Benz India Limited (MBIL) will launch two upgraded E-Class cars by second quarter for the Indian market.

The company which was recently referred to the Board for Industrial and Finance Reconstruction (BIFR) will manufacture the cars at its Pune plant.

The two E-class models with V6 E-240 petrol and E-220 CDI diesel engines were recently introduced in Europe. Unveiling the cars, Till Becker, the outgoing vice-chairman and CEO of MBIL said: “The prime aim is to make the sedans even more attractive and dynamic, as well as luxurious in appearance.’’ He said the financial problems of MBIL were part of any business activity. “Today we are confident that we would be able to roll out our plans as scheduled without any problem.’’

Jurgen Ziegler, the designate managing director and CEO of MBIL, said the company is now in good financial health, being free of debts.

He said in 1999 the company, for the first time, reported a profit of Rs.2.6 crore. “DaimlerChrysler AG (MBIL’s parent) has extended full financial support and demonstrated long standing commitment to India.’’

Ziegler said the company is upbeat on its prospects in the country and plans to strengthen its marketing network further.    

New Delhi, Jan 11 
Toyota Kirloskar Motor (TKM) today launched its multi purpose vehicle (MPV) Qualis with a price tag of Rs 4.58 lakh.

The MPV would be available in three variants: family saloon (FS), grand saloon (GS) and grand saloon-touring (GST). The MPV has been re-designed to meet Indian road and weather conditions.

“This is the first Toyota product to be manufactured and launched in India and soon we would be developing many more vehicles, ‘’ a Toyota official said.

The family saloon model, with an option of power steering and air conditioning, is priced at Rs.4.58 lakh (ex-showroom Delhi); the grand saloon has been priced at Rs.5.76 lakh with an option of eight and 10 seats, metallic paint, central locking, power steering, power windows, audio and single/dual air conditioning.

The grand saloon-touring (GST) model is a fully loaded eight front facing seats model with metallic paint, central locking, power steering, power window, rear spoiler, rear wiper and dual air conditioning as a standard fitment.

It has been priced at Rs.7.39 lakh.

The company said the prices would be revised soon depending on market demand.    

New Delhi, Jan 11 
Rifts in the industry on the question of allowing the import of second-hand cars came into sharp focus today when CII and Ficci — the top two chambers — took conflicting positions a day before the AutoExpo-2000 opens in the capital.

While Ficci wanted lifting of curbs on used-car imports, CII president Rahul Bajaj took a hawkish line on the issue, saying easy access to second-hand vehicles made abroad would sound the death-rattle for local firms.

“CII is categorically against the import of second-hand cars, or any consumer goods. With no dumping laws against second-hand vehicle imports, the move will kill the domestic automotive industry,” Bajaj said. The fact that they were sharing the same dais didn’t keep Ficci president G. P. Goenka from speaking in favour of the move. “What is so sacrosanct about not importing second-hand cars at a time when other products are being brought into the country,” he argued.

Donning the mantle of the domestic industry’s champion, the CII chief said the government put off the move for five to 10 years if it is serious about the ‘existence of domestic industry’. Even a 200 per cent duty on second-hand imported vehicles, he insisted, would not be effective since used cars are priced extremely low in several countries.

The Society of Indian Automobile Association (SIAM) and Association of Component Manufacturers Association (ACMA) joined the issue with the CII chief. “If the import of second-hand cars is allowed, is there a mechanism to monitor issues like environment, spare parts service of vehicles, warranty and other related issues,” SIAM president Venu Srinivasan said.

“We are aware of the problems and would like the government to take necessary measures to oppose it and save the domestic industry. However, we are geared to meet the challenge and are integrating with world market. Major car manufacturers are already sourcing components from Indian manufacturers,” ACMA president V.K. Mehta said.

He said the component industry could flourish only in the presence of a strong domestic auto industry. The move will not only affect the auto industry but component firms as well.

AutoExpo-2000, to be inaugurated by Union commerce and industry minister Murasoli Maran, will draw more than 1,000 component makers and ancillary firms, besides 27 vehicle companies. In all, 25 new vehicles/models would be launched during the auto show. Daewoo, Fiat India, Majestic Auto, Telco and Tatra Udyog are among the companies expected to unveil new models.

For the first time ever, the exhibition will have a green pavilion in an effort to show auto firms as pollution-conscious entities which care about the environment and public health. “The green pavilion will focus issues of pollution and road safety. It will put an emphasis on creating awareness about green norms through interaction and even entertainment,” Pran Talwar, chairman of CII trade fairs, said.    


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