IA dolls up for flights of fancy
Rupee closes at new low, stocks volatile
Task force shuts out foreign airlines
Infy to help UTI Bank launch Net banking
Institutes of professionals come closer
Indian Rayon net loss at Rs 241 cr
Telco vehicle sales surge 36%
Hyundai may hire 3 ad agencies

New Delhi, April 20 
Indian Airlines (IA) plans to go in for a Rs 30-crore image overhaul — a snazzier look for its 30-odd Airbus 320s, designer sarees for its airhostesses and, possibly, even a new logo that will replace its time-worn IA insignia.

Shades of light and dark blue, overlapping grey, will add a touch of gloss to the loss-making national carrier. As part of the costly overhaul, ordered by civil aviation Sharad Yadav, the state-owned airline is working out ways to spruce up the interiors of Airbuses — the mainstay of its 52-plane fleet — without disrupting flight schedules. More important, the airline is also trying to find the money for the makeover.

Says Kripal Mathur Nanda, a NIFT associate professor who headed the team that designed IA’s new look: “We were asked to re-design the airline’s interiors for the new millennium and we did just that. Then, the airline said it wanted a new look for its airhostesses, one that would gel with the planes.”

In the process, NIFT came up with a logo which they inscribed on all dresses and furnishings. “Simple dots fading into a design, which suggests birds or airplanes in a group. That became our theme inscription,” says Nanda.

The airline appears to have been impressed enough to start thinking of replacing its decades old IA logo with the new emblem. If the IA board decides to go ahead with the tune-up effort, the tails of all IA aircraft will have to be re-painted. Globally, new logos have not always been successful. British Airways tried out a new colourful logo suggesting its multi-ethnic society and its global ambitions, but it is now planning to revert to its original colours after the new designs led to confusion at airports and in passengers’ minds.

Nanda says one of her students, Munawar Ali, won in the contest for designing sarees for AI airhostesses. “She conceived a simple set of three south silk sarees — grey, dark blue and sky blue — with thin orange-white borders and the flight logo all over. The sarees had to be unusual, elegant, yet not the kind a housewife would wear. It had to be a corporate wear.”

The aircraft seats and furnishings have also been done up in the same set of three colours. Business class seats are sky blue, economy class are darker blues with grey colours for aisle seats. Another of Nanda’s students, Ruchi Tandon, designed the interiors.

“Once all that was over, they came around to ask for new in-flight accessories such as crockery and napkins. We suggested white, blue and orange,” Nanda says. In all, NIFT took about 11 months in redesigning the airline and charged Rs 13 lakh.

This is not the first image-job for a state-owned organisation done by NIFT, which as already designed the new formal wear for civil servants and uniforms for postmen.

“Next on our agenda is a similar makeover for Air-India if they ask us to do it,” NIFT director general L.V. Saptarishi said.    

Mumbai, April 20 
The rupee today plumbed a new low of 43.66 after banks scrambled to make heavy dollar purchases while the Bombay Stock Exchange (BSE) sensex closed at 4657.42 in smart rally from its intra-day low of 4431.74.

Forex dealers attributed surge in dollar demand to short-covering by banks. The rupee opened steady at 43.6425/65 and remained range-bound between 43.6425-34.6450 in the early hours of trading.

However, a sudden demand for dollars by a few banks in post-noon trading made the market volatile and put pressure on the rupee, which slipped to 43.63-43.66 around noon. Just before the close, a virtual rush for greenbacks due to short-covering sent the currency tumbling to 43.6650/67.

Forex analysts say though the market expects the rupee to consolidate around 43.70 mark, they fear a mad scramble for dollars if this level is breached. The rupee had plunged to historic-low of 43.68/72 on August 19, 1998 following the economic sanctions imposed after the nuclear tests.

After months of remaining steady, the rupee dipped to a 21-month low of 43.6675 on Wednesday, largely due to massive dollar purchases by State Bank of India (SBI). However, a few public sector banks stepped in to sell dollars and helped the rupee recover to 43.6450/6500 at the close.

On Dalal Street however, there was cause for cheer as the sensex closed above the crucial support level of 4632, gaving operators the feeling that the market had bottomed out. The million dollar question every investor is asking is whether today’s recovery will be carried forward on Monday.

Analysts warn that stocks could crash further if the sensex falls below the psychological threshold of 4,600. The market will remain closed tomorrow on account of Good Friday.

The 30-share inex opened weak at 4561.07 and tumbled to the day’s low of 4431.74. However, a sharp rally after midsession took it to 4657.42 at the close in a modest loss of 8.39 points. The BSE-100 index eased 1.99 points to 2498.82 from its previous close of 2500.81.

Earlier in the day, Infosys caused a flutter when its share price slipped below Rs 7000 but it bounced back due to massive buying by bears who rushed to cover their open positions. It closed at Rs 7556.20, gaining an impressive Rs 327.25.

However, it was Reliance that stole the limelight. The share hit the upper price band and closed Rs 25.20 higher at Rs 340.40 on strong buying support. Hindalco and BSES also recorded good gains. Financial institutions and foreign institutional investors (FIIs) made heavy purchases in software scrips like Pentamedia Graphic, Digital Equipment, Infosys Technologies, Satyam Computers, besides a few cyclicals.

Rumours of a bear syndicate hammering select infotech stocks on the assumption that the market’s leading bull had high holdings in these counters continued to swirl even today.

Of the 117 losers in the specified group, nine counters, including five infotech scrips, were locked in their lower end circuit filters at the close. Satyam Computer remained the most active scrip with a turnover of Rs 455.77 crore on a total volume of Rs 2338.04 crore. Other top traded shares were Reliance (Rs 423.72 crore), Infosys (Rs 375.53 crore) and NIIT (Rs 76.84 crore) .

Satyam dropped by Rs 125.05 to Rs Rs 3315, NIIT by Rs 34.90 at Rs 2067.10, SSI by Rs 34.95 at Rs 3000, ITC by Rs 10.50 at Rs 569.50, Telco by Rs 2.25 at Rs 121.75 and Zee Telefilms by Rs 62.65 at Rs 720.80.    

New Delhi, April 20 
The Prime Minister’s task force on infrastructure today dropped the controversial recommendation to offer foreign airlines equity in domestic aviation sector in the wake of a recent Cabinet decision along similar lines.

“In view of the recent Cabinet decision to continue with the present policy on not allowing the participation of foreign airlines in the domestic sector, we have decided not to pursue it,” task force chairman, K.C Pant, told reporters after today’s meeting.

Earlier, the draft integrated transport policy prepared by the task force had recommended that the domestic air transport policy be amended to permit equity participation by foreign airlines in companies formed for domestic air-transport operations.

The issue of allowing foreign airlines in the domestic sector became a controversial one after the government refused to allow a Singapore Airlines-Tata Airlines joint venture.

Other aspects in the draft aviation policy, including upgrading more airports to international standards, were also discussed, Pant said. “The civil aviation ministry should explore the possibility of setting up more international airports by taking regional factors into account,” Pant said.

It also said there should be an attempt to increase the share of airport revenue from services such as shops and hotels. This would not only make airports viable but also help generate funds for further expansion and development.

At its next meeting, the task force will finalise the transport policy by integrating various modes of transport to meet future demand. Pant said the policy is likely to propose rationalisation of rail fare structures in a phased manner and index it with fuel and wage costs.

The task force wants the share of rail freight increased from the current level of 40 per cent to 50 per cent in 10 years.    

Calcutta, April 20 
UTI Bank has entered into a partnership with Infosys Technologies to begin internet banking by the month-end.

Bank chairman, P.J. Nayak told The Telegraph that the bank has also roped in Wipro Ltd as its facilities manager to design and implement the plan as also to instal a totally connected network, linking all its branches.

“We have been working with Infosys for the last few months as it is our partner in this major effort and Wipro is putting everything together,” Nayak, who was Unit Trust of India’s executive trustee till January, said.

He, however, clarified that the bank had no immediate plans for an American Depository Receipt (ADR) issue to raise funds.

At present, UTI Bank’s website offers the facility to download application forms for opening accounts and ATM cards and takes care of the requirements of NRIs and other clients for depository services.

Though Nayak said UTI Bank was pumping in a lot of money to upgrade the organisation’s infotech backbone, he refused to quantify the amount. UTI Bank’s board will meet shortly to finalise the year’s financial results.

The bank’s capital adequacy at the end of 1998-99 stood at a healthy 11.64 per cent (with tier I capital at 11.60 per cent) as against the prescribed benchmark of 8 per cent. Nayak said the capital adequacy for 1999-2000 had improved remarkably with the bank issuing a Rs 100-crore debenture issue to boost tier II capital. The issue closed on March 31.

Together with Infosys and Wipro, UTI Bank is set to storm the stronghold of the more organised ICICI Bank and HDFC Bank. The bank plans to link its entire branch network with ISDN, dial up and leased lines connections. It is also moving towards a centralised operational structure and a centralised database.

At present, UTI Bank is poised to offer a full range of retail load products.The bank completed its fifth year of operations in March 1999 and is understood to have witnessed a good growth in business and profit in 1999-2000.

According to the Reserve Bank of India’s guidelines on private banks, UTI Bank made an offer in 1998-99 for the sale of two crore shares and a simultaneous public issue of 1.5 crore shares each of Rs 10 at a premium of Rs 11.

The offer for sale cum public issue received an excellent response from retail investors and was oversubscribed. As a result of the public issue and the subsequent exercise of the greenshoe option, the bank’s paid-up capital went up to Rs 131.90 crore with a sum of Rs 16.22 crore accruing to the share premium reserve as on March 31, 1999.    

New Delhi, April 20 
The Institute of Chartered Accountants of India (ICAI), Institute of Costs and Works Accountants of India (ICWAI) and the Institute of Company Secretaries of India (ICSI) will harmonise their functions to provide an integrated co-ordinated approach to corporate governance. This was decided at a joint meeting of the board of directors of the three institutes under the chairmanship of the secretary of the department of company affairs (DCA) P. L. Sanjeev Reddy.

A memorandum of understanding to harmonise the three professions will be signed shortly. The proposed MoU will provide for synergic relations of the three professional bodies in order to maintain a competitive edge in the social and responsive business services to society.

The three institutes together would foster, develop and organise professional development programmes for corporate professionals.

They would also put up their common programme for students under the distant learning scheme, on the electronic media.    

Mumbai, April 20 
Indian Rayon and Industries Ltd, an Aditya Birla group company has reported a net loss of Rs 241.23 crore for the fiscal ended March 31, 2000.

Gross turnover for the period under review was also down this year to Rs 1186.95 crore as against last year’s figure of Rs 1466.62 crore. The company attributed the negative impact on net profit to the provision of a one-time non-cash loss of Rs 298.82 crore on the assets of the sea water magnesia plant, as the value of the assets were brought down to their realisable value on the closure of the plant.

“This (the provision of a one-time cash loss) was a value creating exercise done by the company to prevent recurring operating losses and depreciation in future years,” Adesh Gupta, president and CFO of Indian Rayon said.

The company has already recovered Rs 50 crore by selling the machinery in bits and pieces.

In view of the losses posted this year, the board of directors of Indian Rayon has recommended a lower dividend of 10 per cent, which is the maximum permissible presently under law, said V. T. Moorthy, a director of the company.

He clarified that the previous year’s result included the working of the cement division for five months. This division was demerged on September 1, 1998. However, the current year’s results include three months operations of the Madura Garments business from January 1 to March 31, 2000.    

Mumbai, April 20 
Tata Engineering and Locomotive Company (Telco), the country’s largest manufacturer of commercial vehicles, has registered a 36 per cent increase in total sales of medium and heavy commercial vehicles.

Telco sold 70,732 medium & heavy vehicles in the domestic market during 1999-00 against a sale of 51,992 units in 1998-99.

With the sales growing, the auto-major also improved its market share to 66.6 per cent. Significantly, the sales of the advanced cummins-powered Tata vehicles have gone up dramatically by 343 per cent, from 5,248 in 98-99 units to 23,280 units in 1999-2000.

“For Tata Engineering, what is heartening is the great confidence which customers have shown in the advanced cummins powered Tata range of vehicles. These vehicles offer the benefit of more trips due to shorter transit times, better fuel efficiency, lower operating cost, lower down time and longer engine life. Hence these vehicles considerably enhance the revenues of transport operators and are a compelling business proposition,” Ravi Kant, senior vice-president of the company said.

“The 343 per cent increase in sales of these vehicles makes it apparent that the market today appreciates the superior performance and value for money propositions of the Cummins powered Tata range of trucks and buses,” he added.

Kant attributed the sales growth to the reorientation in operations and increased customer focus. The break through in sales of Cummins-powered Tata vehicles have displayed the superiority of these vehicles. Moreover, strong after-market support and other marketing initiatives contributed to the growth.    

Calcutta, April 20 
Hyundai Motor India Limited (HMIL) is likely to farm out its Rs 20 crore advertising account among two to three advertising agencies.

Last week, Saatchi and Saatchi dumped the Hyundai account after a legal storm erupted over a series of knocking ads against rivals Daewoo though the agency claimed the decision was unrelated to the controversy.

Market sources said Bates India (the erstwhile Clarion) is a front-runner in the race to capture a slice of the account.

Bates India has a competitive advantage over the others because its parent —- Bates International — handles Hyundai’s advertising world-wide. Ad industry sources said, “Bates has an excellent relation with Hyundai Worldwide.”

HMIL will appoint its ad agencies early next week.

Sources said leading advertising agencies including Bates made presentations this week before Hyundai officials in Delhi.

Generally, companies with large advertising budgets appoint two to three agencies to handle their accounts — one which handles the creative side, and another which serves as an agency on record which handles the media planning and buys media space. Sometimes, however, the companies appoint a specialised media buying outfit — which can get it the possible rates — and have an agency on record which releases the ads.

It is, however, not known whether HMIL will appoint separate agencies to handle these functions.

Alternatively, they could appoint one agency to handle the entire Accent account and farm out the more lucrative Santro account to another ad firm.

Untill now, HMIL had only one advertising agency which handled the creative side and also served as an agency on record.

Saatchi & Saatchi used to handle all three activities, confirmed a senior official of HMIL.

A top-level official of a Mumbai-based advertising agency said that the entire ad world is eagerly awaiting HMIL’s appointment of its agencies.

Industry sources said Saatchi’s exit means that the auto major will have to select a new agency that will craft a communication strategy that is in tune with the one drawn up by Bates.

While Saatchi’s departure is being seen by the ad world as a fallout of the string of tawdry advertisement campaigns —especially the insinuations and carping pot-shots at Daewoo’s financial woes, the agency has however refused to link the two. The agency said it dropped the account because of internal reasons.

Saatchi & Saatchi, which bagged the Hyundai account in late 1997, splashed the Santro ad campaigns featuring Shah Rukh Khan in a series of TV commercials to introduce Indian consumers to Hyundai Motors and push the brand.

The ad went on to win several awards like the Advertising & Marketing Effectiveness in the product introduction category at the New York Festival early this year. Subsequently, the two sides worked on launching the campaign for Accent.

Saatchi & Saatchi has said it will continue to work with the Korean car maker till it makes alternative arrangements. In fact, a new ad featuring Shah Rukh Khan will be released next week.    


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