Satyam crashes on buzz of rock-bottom pvt placemen
Cetma-CII war of words intensifies
RBI steps fail to halt rupee slide
Indal eyes control of Annapurna Foils
ITW Signode shelves plant in Haldia
Infotech highway under way
Wired to the world of wine and wealth

 
 
SATYAM CRASHES ON BUZZ OF ROCK-BOTTOM PVT PLACEMEN 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 26 
Satyam Computers Ltd was clobbered on the stock markets today as brokers expressed their outrage over rumours that the promoters had privately placed a chunk of the shares with a family member in April last year at a massive discount to the prevailing market price.

The stock of the computer services major, which sank to the lowest level of the circuit filter, tanked 12 per cent of its value when it closed at Rs 2181.55 from the day’s opening of Rs 2455.20.

Earlier in the day, the markets were rife with unconfirmed reports that Srinivasa Raju, a director of Satyam Enterprise Solutions Ltd (SESL) which has since merged with SCL, obtained SCL shares on April 1999 at Rs 10 per share as against the then prevailing price of over Rs 1,500 per share. Raju, according to reports was allotted around 8 lakh SCL shares when SESL was being merged with SCL. Srinivasa Raju is the brother of SCL chairman, Ramalinga Raju. SESL was merged with Satyam Computer to make the latter an entirely computer services company.

Although an official statement from the SCL management was awaited till late evening, market circles who were disappointed by the talk said the decision to allot Satyam shares at a massive discount was perceived to be anti-shareholder.

At present, Satyam focuses on consulting, system integration, application development, e-commerce and internet-related activities.

While it has more than six development centres in the country, it has lined up plans to enlarge its market reach by opening up more branches in the overseas markets. SESL was on the other hand, involved in providing solutions for various systems.

Even as the Satyam and other prominent ICE scrips were dumped by operators today, a late spurt of buying enquiries from foreign funds in old economy stocks led by Hindustan Lever pushed up the sensex by another 85.68 points to close at 4084.71 on the BSE today. Besides Hind Lever, scrips like Grasim, Gujarat Ambuja, ACC, Nestle, ITC, and Reliance Industries showed sizeable gains. Brokers said the interest in most of the cement stocks was due to reports that about a good monsoon in the current year as well. However, software counters suffered a further setback in line with the overnight fall of 65.26 points in the Nasdaq

While the sensex opened barely steady at 3994.40, it moved in a range of 4097.60 and 3947.33 before closing at 4084.71 due to the purchases in old economy stocks as against yesterday’s close of 3999.03, netting a gain of 2.14 per cent. Of the 139 traded specified shares, 80 gained while 56 declined. HLL, Cadbury, Grasim and Nestle closed at the extended upper price band while Satyam hit the lower circuit filter of 12 per cent.    


 
 
CETMA-CII WAR OF WORDS INTENSIFIES 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 26 
The tussle between the Confederation of Indian Industry (CII) and the Consumer Electronics & TV Manufacturers Association (Cetma) took a new turn today amid claims and counter-claims by the two industry associations.

While CII said Cetma secretary general A. Basak withdrew the letter of protest immediately after sending it, Cetma president Deepak Jhaveri said, “we haven’t withdrawn our letter and we still think CII hasn’t done enough for CTV manufacturers.”

It had been reported that late last month Cetma decided to withdraw from CII.

According to sources, Cetma’s grudge against CII is that the apex chamber has not lobbied enough to bring down the custom duty rates on coloured picture tubes to 25 per cent from 35 per cent to protect the interests of domestic CPT manufacturers like Samtel, JCT, Hotline and others. As a result, CTV prices could not become competitive, affecting its sales volume.

CII, however, has refuted all charges. It has pointed out that anomalies in customs duty structure needs to be corrected and an ideal duty structure should be one where the raw materials, components and intermediate products attract a lower duty than finished good.

Meanwhile, Cetma today said it would knock the Federation of Indian Chambers of Commerce and Industry’s (Ficci) doors for taking up its cause. “ A decision on approaching Ficci is likely to be taken during our next executive committee meeting on June 25,” Jhaveri said.    


 
 
RBI STEPS FAIL TO HALT RUPEE SLIDE 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 26 
Heavy dollar demand from importers, triggered by fears about a slight depreciation in the value of the rupee, brought the Indian currency down by 27 paise today to end at a new closing quote of 44.37/38 per dollar.

The sharp loss in value of the rupee came despite Reserve Bank of India’s (RBI) measures announced on Thursday to arrest the slide of the rupee. The RBI had imposed a 50 per cent surcharge on import bank besides asking banks to fix a minimum 25 per cent interest rate on overdue export bills.

Forex dealers said that even as the central bank was unable to prevent a fall of the rupee today, its measures succeeded in bringing down the volatility which was a major highlight during the past few sessions. Today’s fall, especially coming after the RBI measures, however surprised a large section of the market.

“Going by the past experiences, after the central bank takes some measures, the rupee stabilises for quite some time. This did not happen today,” said a dealer from one of the foreign banks.

“Today’s buying was largely genuine purchase of dollars. Some of the importers who were unable to cover during the past few days came and purchased the US greenback,” said Pramod Maskeri of Mecklai Finance, dwelling on the developments in the forex markets today.

While the rupee opened steady at Rs 44.10 per dollar from the overnight finish of Rs 44.05.10 per dollar, it weakened quickly as importers started bidding for dollars. The purchase, according to analysts was accounted by both genuine demand as well as short-covering. By mid-morning the rupee had weakened considerably against the dollar when it was traded at Rs 44.28/31.

However, supplies of the US greenback fell well in short of its demand in spite of some intermittent dollar sales by state-run banks.

This demand culminated in the rupee continuing to weaken and at one stage a quote was even said to have been put at Rs 44.40. However, throughout the noon, the Indian currency settled at Rs 40.33-36 levels. It finally closed at Rs 44.37/38 per dollar.

Analysts aver that the rupee is likely to stabilise at around Rs 44.05-44.20 levels.    


 
 
INDAL EYES CONTROL OF ANNAPURNA FOILS 
 
 
BY PALLAB BHATTACHARYA
 
Calcutta, May 26 
Indian Aluminium Company Ltd (Indal) has decided to acquire a controlling stake in the Hyderabad-based Annapurna Foils (AFL). At present, it holds a 26.5 per cent stake in the company.

The company has initiated talks with the Reddys of the Deccan Chronicle group, which promoted the company, and also with the Industrial Development Bank of India (IDBI) for this purpose.

N. K. Choudhary, managing director (operations), confirmed the negotiations started with the Reddys and IDBI.

The Reddys’ holding in the company stands at 24.1 per cent while the financial institutions hold 18.3 per cent. The public holds a 31.1 per cent stake.

Indal sources said the company was interested in buying out the Reddys’ holding in the company, which alone would give it a controlling stake.

An Indal spokesperson, however, said the investment made in AFL was strategic and will help it consolidate its position in the foil and packaging business. Indal acquired the stake in the company, which has a manufacturing capacity of 4000 tonne per annum, as part of the revival plan cleared by the Board for Industrial and Financial Reconstruction in 1994-95.

But even after Indal took up a 26 per cent stake, operations in AFL could not be stabilised due to the adverse working capital situation.

Indal started negotiations for acquisition of AFL as “this would simplify structure, align ownership, upgrade assets and synergise operations.”

Indal, however, put the negotiations on hold for the time being because of the impending change in its ownership pattern following the take-over of its Canadian parent Alcan’s entire stake by Hindalco.

Sources said Hindalco, which earlier attempted to take over India Foils, was expected to renew negotiations once it formally took over the management of Indal.

Hindalco has recently set up a manufacturing facility for foils with a capacity of 5000 tonnes per annum in Silvassa. Following the acquisition of Indal, the company will have control over another 7000 tonnes of foil production.

“It makes sense for Hindalco to continue talks for a controlling stake in AFL as that would give the Aditya Birla flagship a leading edge in the domestic foil market,” sources said.

Currently, Indal is using AFL for conversion jobs. The company is expected to make further investment as and when it acquires a controlling stake in AFL.    


 
 
ITW SIGNODE SHELVES PLANT IN HALDIA 
 
 
FROM G.S RADHAKRISHNA
 
Hyderabad, May 26 
ITW Signode India Ltd has shelved its Rs 20-crore project to set up an engineering plant in Haldia.

Managing director of the company R.V. S. Ramakrishna said the project was shelved in view of the recent shift in steel policy of the government and the imposition of an uniform tax on steel goods production. The Haldia plant was envisaged with an initial capacity of 10,000 tonnes, to be expanded to 25,000 tonnes later.

ITW Signode Ltd, the largest industrial packaging solutions company, had reported a meagre nine per cent increase in its revenue at Rs188.2 crore for the financial year 1999-2000. Net profit stood at Rs 14.6 crore.

The company offered customised packaging solutions in aerospace, metals, automobile, FMCG, white goods, petrochemicals and pharma industries.    


 
 
INFOTECH HIGHWAY UNDER WAY 
 
 
FROM M RAJENDRAN
 
New Delhi, May 26 
The National Highway Authority of India (NHAI) will set up a fibre optic cable network along the proposed golden quadrilateral, which it plans to lease out to private telecom and internet service providers.

This will be the third largest network along with the existing fibre optic cable networks of the department of telecommunications (DoT) and the railways.

A senior NHAI official said, “We can use our assets to generate revenue by developing the infrastructure for telecom and information technology. We will soon float a tender, inviting companies to lay the fibre optic cables which will be leased out to telecom and infotech companies. We plan to use duct pipes for higher resistance and longevity. Both projects — laying of the cables and duct pipes would be given to private companies under the build-own-operate-and-transfer (BOOT) scheme.”

DoT is also expected to float a Rs 30 crore tender for duct pipes. A major contender for the job of laying duct pipes is Bharti Dura-Line, a Rs 15 crore 50:50 joint venture between Bharti Enterprises and Dura-Line Inc of USA, which is part of the $ 15 billion Emerson Electric Company.

Vijay Kiyawat, director operations, Bharti Dura-Line told The Telegraph, “The proposal is pending with the NHAI and we hope that a decision will soon be taken soon. The proposal to lay duct pipes along the proposed national highway including the golden quadrilateral would be an additional source of revenue for them. The investment for the project would be one per cent of the total investment in building the golden quadrilateral.”

Bharti Dura-Line is also targeting the private basic fixed line telephone and cellular service providers, internet service providers, cable network service providers, and broad band service providers, who are building optical fibre networks for their use and for leasing them out to other service providers willing to pay a premium for the facility.

“Our unique selling proposition is solid lubricated silicone HDPE telecom ducts and use of a cable blowing technology for faster, easier and safer laying of cables. We manufacture only telecom ducts,” said Kiyawat.

The company recorded a net profit of Rs 26 crore during 1999-2000.    


 
 
WIRED TO THE WORLD OF WINE AND WEALTH 
 
 
FROM SATISH JOHN
 
Mumbai, May 26 
Computer geeks in the country finally have a club of their own, thanks to a fellow geek.

On a Tuesday, every month, the young entrepreneurs of the computer world will meet over wine at an exclusive location to talk shop about their wired world. Inaugurated this Tuesday at ‘Indigo’ a premium city restaurant, the bash was termed a thumping success by the organisers.

Says Rajeev Samant, a geek himself and the man behind the idea, “We have a group here, educated and sophisticated with a lot of money coming, in the age group of 24-to-40 years. Wine is the beverage of choice for the wired generation.”

And for wine to meet wire, Samant has launched ‘Sula Tuesday club,’ which will enable the wired generation to stay networked.

Rubbing shoulders at the do were geeks of all varieties — leading dotcom entrepreneurs, internet lawyers and representatives from venture-capital funds, advertising agencies, public relation firms looking for clients, head hunting firms like Egon Zehnder.

But it was Savio Chow, the Yahoo! Asia chief specially flown down for the party, who stole the show.

Tailing him, as he could be a prospective client what with Yahoo’s future plans for India, were a host of head hunters, besides advertising and public relations agencies. Noted cyber lawyers like Akshay Chudasama and lawyers from Nishit Desai & Co were present, as was Cyrus Oshidar from MTV and leading merchant banker Alok Vajpeyi from DSP Merrill Lynch.

With so many geeks around, venture capitalists could not be far behind. Making their presence felt were Raj Kondur of Chrysalis Capital, Neeraj Bhargava from e-ventures, Ramanan Raghavendran, CEO ConnectCapital.

Samant, an industrial engineer who graduated from Stanford University in 1986 also had a brief stint as a teaching assistant in the prestigious university.

Later, working for Oracle Corporation in Silicon Valley for a few years, he came back to India in 1994, to grow grapes, of all things!

Explaining his strange career switch to something more exotic as growing grapes, Samant told The Telegraph, “In California, there are two famous valleys — the famous Silicon Valley and the Napa valley — which is famous for its grapes.”

“Even in the Silicon Valley, ‘winning and dining’ is the favourite pastime for computer geeks after working crazy hours. Wine is the preferred drink for them as it does not have too much alcohol,” he says.

With India, making great strides in the infotech world, it is only expected that a concept popular in the Silicon Valley finds takers here. He expects his fellow geeks closer home, to similarly unwind with Bacchus.

He is motivated mainly by the state-of-the-art winery established in concert with eminent Californian wine maker Kerry Damskie and designed by Rahul Malhotra, set among 30 acres of estate vineyards in Nashik.

The Sula Vineyard has just produced India’s first world class Sauvignon Blanc and Chenin Blanc white wines and this was a perfect launch pad for him. Initially, the invitees were served Sula White wine and later as the evening progressed it was turned into a cash bar. The very delightful limited edition white wines, he says is made in the ‘new world style’ rather than the ‘traditional French style.’ He also has plans to make sparkling wine, he revealed.

The next splash will be held on June 20, next month at a bigger venue as the ‘Indigo’ is constrained for space. Already, companies are vying to co-sponsor the parties. According to Samant, in the future he may even entertain the possibility of spreading the concept to other cities like Bangalore.

And aiding him in this endeavour to connect Net entrepreneurs would be A D Singh, of Bowling Company, known for his skills in managing mega events in the city.    

 

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