Banks want tighter legal leash on loan defaulters
Signal to FIs to fund local acquisitions
Kopran tonic to boost Smyle brand
Infy spikes on bonus buzz
Money making is child’s play for Apollo
Bullion, Stock Indices

New Delhi, June 15 
Banks, wilting under the weight of loans never repaid or locked up in court battles, are pressing for sweeping changes in the country’s bankruptcy laws, powers to force a change in management and provisions for debt-equity swaps as the most effective antidotes to the increase in non-performing assets (NPAs).

Bank chiefs have asked the Reserve Bank of India (RBI) to introduce a mechanism which detects potential defaulters before they actually start reneging on their financial obligations. This, they say, requires a comprehensive institutional framework which addresses critical issues such as debt restructuring and the way bankruptcies are carried out.

“It is necessary to nip the problem in the bud. Therefore, it is important to identify defaulters early,” sources in the banking industry said.

Bank chiefs have underlined the need for a time-bound recovery process which gives troubled companies time to draw up revival or restructuring plans acceptable to their creditors. However, they have warned that there must be provisions to ensure that companies do not use this pretext to buy more time and delay settlements. At the same time, say bankers, there is a need to explore other restructuring options like management change, debt-equity swaps and methods to restructure debt obligations.

More important, banks have proposed an authority which they say will co-ordinate the restructuring process. It should have the power to take over the management wherever it deems necessary.

“Internationally, banks have taken different initiatives to restructure debt. These should be modified to suit Indian conditions,” the sources said.

There is also the suggestion that banks lay down a time-frame to complete the restructuring exercise. According to them, it should take no more than 6 to 12 months to take a decision on the future of a problem company. Non-viable units should just be wound up quickly and in the simplest way possible.

On the question of setting up an asset reconstruction company, bankers feel this method can work only if the legal system is changed to facilitate quick recoveries. “Unless this is done, no one would come forward to buy an impaired asset,” said sources.

They have listed a few pre-requisites to attract investors to an asset reconstruction fund. One, there should be an authority which takes over the control of a company, makes changes to turn around operations or sell off the assets to recover loans. In addition, a secondary market for securitised assets needs to be developed soon enough. To prevent fresh NPAs, bankers say there is a need for greater professionalism in credit management, better credit appraisal, project evaluation and a closer examination of borrower’s integrity.

Banks should also monitor the changes in industries and examine their possible impact on the firms they finance. There should be greater exchange of information between banks and improved co-ordination with financial institutions.

Meanwhile, NPAs have declined marginally in year ended March 31, 2000 to Rs 51,667 crore, which is 14.30 per cent of gross advances. Net NPAs as percentage of net advances stood at 7.44 per cent.


Calcutta, June 15 
Financial institutions should come forward to finance the Indian industry in its merger and acquisition efforts and help it face the rigours of competition, said N.K. Singh, secretary in the Prime Minister’s Office (PMO).

Singh, addressing the members of the Indian Chamber of Commerce in the city here today, said the pace of mergers and acquisitions in the country was much too slow compared with the near-frenetic activity in overseas markets.

Ficci president G. P. Goenka rued the fact that while banks are financing the mergers and acquisitions of foreign companies at rates below their prime lending rate (PLRs), they have been reluctant to do so for Indian companies.

Talking about the government’s disinvestment programme, Singh said the Cabinet committee on disinvestment headed by Prime Minister Atal Behari Vajpayee will meet on June 23 to frame a medium-term programme on selloff.

The plan will be spread over 18 to 24 months. Singh said the meeting will discuss ways to utilise the funds raised from disinvestment. Suggestions put forward by chambers like Ficci and CII will be considered. “The government plans to use the proceeds of disinvestment to retire high-cost debt, make interest payments and to meet social sector requirements,” he said.

Singh said the work on ‘right-sizing’ the government is under way. The committee set up to look into the matter will submit its report soon. “We can decide what portfolios and departments to keep with the government,” he said, adding the government is also drawing up a medium-term labour policy. Singh appeared upbeat about the growth of Indian economy in the current fiscal but expressed concern about the shrinking foreign direct investment inflows. The country, he said, has received only a small proportion of the sanctioned amount. Since 1991, FDI approvals worth $ 18 billion have been cleared but only 15 per cent of it has actually poured in.

He singled out the telecom sector as an area which could attract large FDI inflows once issues relating to revenue sharing, Videsh Sanchar Nigam’s (VSNL) monopoly and inter-connectivity charges were sorted out. Also, the replacement of the Indian Telegraph Act of 1885 with the Convergence Bill 2000 will help bring in more funds to the sector.    

Mumbai, June 15: 
The Somanis’-owned Kopran Pharmaceuticals Ltd is planning to extend its flagship sore throat brand Smyle to cover the oral care category.

Speaking to The Telegraph, Adarsh Somani, managing director, Kopran Pharmaceuticals Ltd, said the plan was supported by a large distribution reach of 2.25 lakh retailers, 500 distributors and aggressive pricing to transform the product into a Rs 50-crore brand in a short-term.

While the revenue generated from this brand is put at Rs 12 crore, it is slated to surpass Rs 25 crore in this fiscal.

Kopran Pharmaceuticals, whose focus is “creating brand-wealth”, according to Somani, is aiming to create a portfolio of more than Rs 300 crore which include its current brands and others in the pipeline.

“We have the technology for creating brands. Further, with our extensive reach, we also have the recipe for good brands. Therefore, our focus on creating a massive brand wealth would be attained,” he said.

While Smyle was positioned as a sore throat reliever, officials said that extensions such as a nasal inhaler were later introduced. Plans are afoot to launch around three extensions of its throat drops. Somani said that the foray into the oral care category would be in lip cream and tooth polisher segments.

Apart from Smyle, Kopran Pharma recently forayed into the Rs 1000 crore perfume market through the launch of American Dreams. The brand, which is projected to generate a revenue of Rs 10 crores this year, is likely to serve as the company’s platform for its entry into the cosmetics industry, Somani revealed.

These figures are expected to be achieved by a combination of aggressive pricing and promotional campaigns.    

Mumbai, June 15 
Rumours that technology major Infosys Technologies would reward shareholders with a bonus set the pace for a 28.18-point gain in the Bombay Stock Exchange (BSE) sensex today, helping other index heavyweights end with positive figures at the end of a volatile trading session.

Apart from Infosys, which finished 6 per cent higher at the final count after dipping 1.5 per cent earlier in the day, ITC and Satyam Computers staged a smart rally during the day.

Dealers said there was brisk buying by foreign institutional investors (FIIs), which helped stoke the end-of-the-session rally. They were believed to be net buyers in Infosys, besides Wipro, Satyam Computer, Himachal Futuristic and Global Telesystems.

The 30-share key market barometer opened slightly weaker at 4609.98 and fluctuated in a narrow range of 30 points in the early stages. Later, it recovered smartly, hitting the day’s high of 4685.63, before closing a little lower at 4653.22 as against Wednesday’s finish of 4623.08 in a gain of 28.18 points. The BSE-100 index also closed 27.22 points higher at 2326.14 compared with its previous close of 2298.92.

The dramatic recovery was attributed to the market buzz that Infosys was considering a bonus issue. Though the speculation was later scotched by the company, it helped trigger a turnaround and took several stocks, languishing at the time the session started, into positive territory.

However, majority of the old-economy stocks shares suffered a sharp reverses due to unwinding by operators and scores of small investors who were digesting a Sebi order they feel will allow key shares to be traded in the rolling settlement mode. The capital market regulator had on Wednesday allowed a daily and weekly carry-forward product apart from a continuous NET settlement by exchanges.

Though the specified list contained 101 losers, including 18 in the index, the sharp rise in Infosys, Satyam computers and ITC ensured that the sensex ended on a positive note.

Tata Power was in the limelight today, helped by reports that the company was planning to enter the high-tech broadband sector.    

New Delhi, June 15 
Picture this—a toddler bouncing away in ball pools, another gurgling down a 35 feet long rubber chute, while a few older kids try out the flight simulators — all at a play station.

Now picture these play stations next to places like malls, cineplexes and the like, or in any place where adults enjoy themselves but where children feel left out. While that means uninterrupted play time for kids, it also means music at the cash registers.

Turning money making into child’s play is Apollo group chief Onkar S. Kanwar, who plans to set up a nation-wide chain of indoor amusement play parks for children.

“We are looking at about three in Delhi, besides at least one each in Calcutta, Mumbai, Bangalore, Chennai and Ahmedabad,” his son Raaja R. S. Kanwar told The Telegraph.

The chain will be run by Onkar’s wife Taru, with assistance from Raaja.

The first of the play park chain, ‘Funkie Orbit,’ is set to kick off on Sunday in the city’s newly built Ansal Plaza.

In Calcutta, the Kanwars are looking at large retail malls planned for the city and wish to pick up strategic properties for their venture, which has been registered as ‘Panoramic Entertainment.’

The play stations comprise an intricate two-storey high building made of moulded plastic with soft flooring. They come with an assortment of ball pools, vision adventure panels and sight and sound panels, mock space satellite communicators, radar receptors, choppers and space crafts where ‘flights’ can be simulated. The ultimate will be a 35-feet long curving rubber chute which lands a child back to where he started.

Up to 200 children in the age group 2-12 can use the multi-tiered building under the supervision of trained supervisors called ‘rangers.’

To ensure higher cash flows, each play station will be complemented by a cafe and a cyber cell where families can get together after an outing.

“We are targeting mothers who visit the Mall. They can keep their kids here for a fee,” Raaja Kanwar said.

The costs are however, no child’s play—an hour’s play could cost up to Rs 120. While a membership for 50 visits in a year may come for Rs 6,000, a pass for unlimited visits could cost Rs 18,000.

Said Vippan Kapur, CEO of Panoramic Entertainment, “While income levels are on the rise in big metros on one hand, families are turning nuclear at a faster pace on the other, which means lesser people to look after children at home. And that creates a need for children’s amusement complexes like ours.”

The concept is obviously a take-off from similar parks in the US, Europe and south east Asia.

While the viability of such a venture in India is yet to be tested, the Kanwars have one thing in their favour — the cost factor.

The first play park at Delhi came up at an expense of just Rs 2 crore and their estimates suggest starting at least another 5-6 in the next two years within a budget of Rs 10 crore.

Further expansions would obviously mean more outlays, but by then they hope the cash registers will start ringing. And the kids will be at play.    

Calcutta		Bombay
Gold Std (10gm)	Rs. 4610	Gold Std (10 gm)	Rs. 4550
Gold 22 carat	Rs. 4355	Gold 22 carat	Rs. 4210
Silver bar (Kg)	Rs.7950	Silver (Kg)	Rs. 8010
Silver portion	Rs.8050	Silver portion	Rs. 8015

Stock Indices Sensex 4653.22 +28.18 BSE-100 2326.14 +27.22 S&P CNX Nifty 1445.25 +9.75 Calcutta 125.50 -0.54 Skindia GDR 942.09 +7.23    


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