GM keen to bid for Maruti
Tata titans fund group’s new economy ventures
IDBI commits fresh loans to Essar refinery
ONGC net spurts 55% in first quarter
Indian Oil to stay in race for IBP stake
Usha Martin to exit cellular business
Glaxo to sell weak brands
Ministry divided on Sidbi chief’s extension
BPL Cellular’s overseas issue cleared
Foreign Exchange, Bullion, Stock Indices

New Delhi, July 26: 
General Motors is interested in bidding for a majority stake in Maruti Udyog Ltd, in case the government divests its stake in the car major.

Launching another variant of Opel Corsa here today, Richard C Swando, president and managing director of General Motors India said, “We will not be pro-active in the divestment of Maruti. But we would like the government to make the offer. We have maintained that we are open for such an offer.”

Swando also revealed that GM would be launching another model in the mid-size passenger car segment in India by the year end. Worldwide GM has a tieup with Suzuki, which is the Indian government’s joint venture partner in Maruti.

The ministry of disinvestment has been trying to push through a plan to sell off the government’s share in MUL in two tranches, though this is being opposed by the department of heavy industries.

The company today launched ‘Achtung Baby’, meaning, ‘Watchout Baby’ a 1.6 GSi Opel Corsa for Rs 6.36 (ex-showroom Delhi). The product has been positioned against Ford’s Ikon 1.6 Zxi and Hyundai’s Accent 1.5 GLS.

Meanwhile, the company has firmed up plans to launch another model in India soon. “We are awaiting a few clearances. The car would be launched by the year end or even earlier,” he said.

The company is also examining a few other variants of Corsa. It already has four variants, two each in 1.4 and 1.6 segments. At present, Corsa 1.4 GL without stereo is available for Rs. 5.81 lakh, the 1.4 GLS with stereo is available for Rs 6.27 lakh. In the 1.6 category, Corsa 1.6 GSi with stereo is available for Rs 6.43 lakh while Corsa 1.6 GLS with stereo is available for Rs 6.80 lakh (all ex showroom Delhi).

However, faced with embarrassingly low sales figures, General Motors has discontinued the production of the automatic transmission model of Opel Astra. It has also decided to go slow on the introduction of a diesel heart on Corsa, Swando said.

“We have been watching the demand pattern for both automatic transmission and diesel cars. The automatic transmission variant accounted for merely 5-6 per cent of our total Astra sales and this was very low to make it feasible for us to produce an additional variant. So we have dropped the model out of production.”

Regarding the diesel option on Corsa, Swando said, the demand for diesel cars has been on a decline in the past. “The penetration of diesel cars is going down and demand is on a low ebb. So we have decided to put plans for a diesel corsa on hold...We will be careful about getting into diesel.”

General Motors India plans to break-even in the current financial year. “We made profit in 1997. But in 1998 and 1999 we could not make any profit. We hope to break even in this financial year,” he said.

The company sold 643 units of Opel Astra and Corsa in June . GM has set a target of selling more than 10,000 cars this year. “We have set a target of selling 7,000 units of Corsa and about 3,500 units of Astra in the current financial year,” he said.    

Mumbai, July 26: 
The old economy is funnelling cash into the new economy. That’s how the cards are falling at the Tata group where steel giant Tisco and automobile major Telco are among a clutch of old economy businesses which have together shovelled about Rs 100 crore by way of subscription to the equity of Tata Industries, which is the holding company that promotes the group’s initiatives in the new economy sectors.

During fiscal 1999-2000, Telco acquired nearly 20.98 lakh equity shares of Tata Industries with a face value of Rs 100 at par amounting to Rs 20.98 crore. Not to be left behind, Tata Steel subscribed to 16.04 lakh shares at a cost of Rs 16.04 crore.

Corporate observers say almost all the Tata group companies were subscribing to Tata Industries’ equity as the realisation dawns that many of the start-ups spawned by Tata Industries may over a period of time become relevant to their needs.

The investment is also significant as it comes at a time when the subscribing companies are facing rough weather in their own sectors. Telco is finding the going tough because of the slowdown in the economy which has depressed demand for cars this year and its commitment to Tata Indica. Tisco was also hurt by the slowdown but managed to claw back because of a major restructuring programme which has boosted demand for its value-added products.

What is interesting is the fact that it is not the flagship companies alone that have subscribed to the fresh equity. Even corporates like Voltas Ltd, which is in the midst of a major restructuring exercise has invested although in a small manner. Voltas subscribed to 2.80 lakh shares of Tata Industries to take their total holding in the company to 5.59 lakh shares.

Interestingly, cement giant ACC from which the Tatas withdrew last year in favour of Gujarat Ambuja Cement, has also subscribed to the issue. ACC has subscribed to 2.5 lakh shares of Tata Industries bringing its total holding to 5 lakh shares. Observers expect that the ACC holding to be transferred subsequently to some other Tata company at a later stage.

While Voltas and ACC have doubled the shares after the subscription, corporates like Tata Engineering and Tata Steel have increased their stake in Tata Industries substantially.

Telco raised its shareholding from 4.19 lakh shares to 25.18 lakh shares during fiscal 1999-2000. Similarly, Tisco increased its holding from 4.01 lakh shares to 20.05 lakh shares during the said year.    

Mumbai, July 26: 
The Industrial Development Bank of India (IDBI) today sanctioned Rs 345 crore in fresh loans to Essar Oil’s long-delayed 10.5 million tonne refinery coming up at Vadinar in Gujarat.

Of the total amount cleared, Rs 237 crore is to be invested in the refinery while Rs 108 crore will be used by Essar Shipping to set up a terminal next to the refinery. Today’s sanctions takes the combined additional assistance disbursed by all institutions to Rs 1,154 crore. Industry sources say the project has now achieved full financial closure.

Apart from the institutions and the Ruias, ABB Lumunus Crest will bring in Rs 395 crore in the form of deferred credit and bridge loans.

With more funds on the way, work on the project will start soon and is expected to be completed in 18 months. So far, equipment valued at $ 430 million are believed to have already arrived while another consignment worth $ 200 million is being shipped.

Earlier, the IDBI board had asked Essar to report the progress achieved in finding a strategic partner. Essar Oil, the company which is setting up the refinery, was planning to place around 26 per cent of its equity with a strategic partner to fund the project. It had held talks with Bharat Petroleum, but the public sector oil major lost interest.

In all, Rs 5,800 crore is believed to have already been invested in the Rs 7,500-crore refinery, expected to go on stream by the last quarter of 2001.

IDBI had earlier agreed to share with other financial institutions the total additional assistance of Rs 1,154 crore While its share was Rs 345 crore, ICICI, as the lead institution, has committed Rs 504 crore. Others include IFCI (Rs 50 crore), LIC (Rs 193 crore) and General Insurance Corporation (Rs 62 crore). The combined exposure of all institutions to the project is pegged at more than Rs 6000 crore.

Meanwhile, the IDBI board has decided not to hike lending rates a fallout of the Reserve Bank of India’s (RBI) move to increase the Bank Rate and the cash reserve ratio (CRR).

Senior IDBI officials said the board had decided to hold fire because it felt that the measures announced by the central bank were temporary, and aimed primarily at protecting a weak rupee.

Even ICICI today sent out signals that its lending rates would remain unchanged, for much the same reasons.

Profits down

IDBI’s first-quarter net profit declined 23 per cent at Rs 22.36 crore compared with Rs 19.12 crore in the same period of the previous year. During the period, income from operations rose to Rs 198.65 crore as against Rs 186.07 crore in the same period of the previous year.    

July 26: 
Oil and Natural Gas Corporation (ONGC) has reported a net profit of Rs 938 crore in its first quarter of the current financial year.

According to an ONGC release, the unaudited results released show an increase of 55 per cent over the corresponding period last year. The gain has come mainly from better prices for the company’s products and improvements in sales of natural gas and value added products. ONGC, however, did not receive the entire benefit of the recent sharp increase in international crude prices as national oil companies crude prices remain pegged at November, 1999 levels.

The release said 13 major projects, each costing more than Rs 100 crore, were under implementation during the quarter. 10 projects are in the offshore Mumbai High and Heera fields.

Four of them have been shutdown to hook-up new facilities before the onset of the monsoon.

The gain has come from better prices for the products and improvement in sales of natural gas and value added products.

The company’s net profit was placed at Rs 3,629 crore based on a gross income of Rs 21,100 crore, a company release said.

Cipla net at Rs 38.79 cr

Cipla Ltd has recorded a 20.6 per cent growth in net profit for the first quarter of 2000-01 at Rs 38.79 crore as against Rs 32.15 crore in the corresponding previous quarter. Cipla said its sales for the quarter was Rs 241.79 crore, up 20.7 per cent from Rs 200.36 crore in the corresponding period of the previous year.

Other income for the period stood at Rs 7.58 crore, while total expenditure was Rs 192.93 crore.

The paid-up equity share capital has increased to Rs 59.97 crore from Rs 1.99 crore upon allotment of bonus shares in December.

ICI Q1 net plummets 31%

ICI India has recorded a net profit of Rs 14 crore during the quarter ended June 30, 2000. It is 31 per cent lower than the corresponding previous quarter.

The income at Rs 209 crore represents 8 per cent growth in continuing businesses. Significant reduction in the interest charges reflects the improvement in the cash position of the company.

Property disposals had offset the voluntary retirement scheme’s requirement and balance Rs 9.4 crore is left with the company. The board has recommended the 55 per cent interim dividend declared in March 2000 as the dividend for the year.

Zydus Cadila net leaps

Zydus Cadila has posted a 102 per cent rise in net profit at Rs 18.59 crore in the first quarter ended June 30, 2000, compared with the same period of the previous year.

Income from operations in the quarter rose by 13.48 per cent at Rs 132.81 crore as against Rs 117.03 crore recorded during the same quarter in the previous fiscal, said a company release.

Syndicate Bank profit up

Syndicate Bank’s net profit in the first quarter of this fiscal grew 38.23 per cent to Rs 71.27 crore as compared to the Rs 51.56 crore net in the corresponding period of the previous fiscal.

The income earned by the bank in the corresponding period increased by 17.54 per cent to reach Rs 760.29 crore after making provisions of the non-performing assets and for investments, stated a bank release.

“This has been possible due to reduction in cost of deposits to 6.90 per cent. Thereby raising the spread to 5.80 per cent,” the release said.

The bank has increased its yield on investments to 12.61 per cent as of June 2000 as against 11.56 per cent during the corresponding quarter of the last fiscal.

Marico Q1 net grows 96%

The board of directors of Marico Industries Ltd today announced a 40 per cent interim dividend.

Net profit for the first quarter jumped 96 per cent to Rs 11.8 crore, up from Rs 6 crore a year ago, while turnover is up 9 per cent at Rs 147 crore, a statement issued here today said.

Marico has completed acquisition of Parachute and Saffola from Bombay Oil Industries Ltd at Rs 30 crore.

Walchand gives 45% dividend

The board of directors of Walchand Capital has declared a 45 per cent dividend for the financial year ended March 31, 2000. The company showed a higher gross income from operations up by 23 per cent to Rs 643.60 lakh compared with last year’s Rs 522.72 lakh.    

New Delhi, July 26: 
Indian Oil Corporation (IOC) cannot be denied permission to bid for IBP Ltd merely because it dominates the market, say many topguns in the petroleum industry.

The Vajpayee government, which ignored this aspect while clearing the disinvestment in Indian Petrochemicals Corporation (IPCL), cannot invoke it to keep IOC out of the race for IBP.

The Disinvestment Commission headed by G. V. Ramakrishna had recommended that while selecting a strategic partner for IPCL, the government should ensure that the process does not produce a market monopoly. The government, he said, was duty-bound to protect the interests of consumers.

The Cabinet decision glossed over the recommendation, and the bureaucrats who prepared the note believed that market monopoly could be curbed through a tariff mechanism. However, when it came to IBP, it applied a different yardstick.

The government has, more or less, decided to disinvest its stake in IBP The method of disinvestment may be a bone of contention though, as the bidders are all expected to be industry heavyweights. Reliance Petroleum may enter the fray. Others may join it if there is open bidding. Hindustan Petroleum has already thrown its hat in the ring

Those opposed to Indian Oil’s market dominance, reflected in its share of over 52 per cent, will try to scuttle its chances of buying IBP.

On the other hand, if Reliance succeeds in snapping up IPCL, it will have a combined market share of 90 per cent. The Cabinet, which had no qualms about this, can hardly object to the 56 per cent market share that the merged IOC-IBP will control.

IOC has offered to purchase IBP at a negotiated price. It may be difficult for it to participate in open bidding as the price it intends to quote will be known to rivals well in advance.

At the same time, the government has to take a decision on advancing the deadline for awarding marketing rights to private companies.

The Cabinet-approved deadline is April 2002. If it is not advanced, private companies may be unable to bid.

Reliance Petroleum fulfils all conditions. Shell may find it difficult as it has not invested in refineries. Its proposed investment in LNG terminal cannot be taken into consideration without modifying the Cabinet decision.    

Calcutta, July 26: 
The Jhawars of the Usha Martin group today announced their exit from the city’s mobile telephony business.

Confirming the move, Prashant Jhawar, vice chairman of the group, said they would however retain a token 5 per cent stake in the venture to keep some links with the telecom sector that it may draw some benefit from if and when it forays into e-business.

In a one-line notice issued to the Calcutta and the National stock exchanges, the Usha Martin group said it would “sell equity in Usha Martin Telekom Ltd through an investment banker.’’

Justifying the group’s decision, Jhawar said, “One requires deep pockets to run such a business in Calcutta. It will suit operators in high-growth centres like Mumbai and Delhi.”

Jhawar, who was speaking to reporters after the group flagship Usha Beltron Ltd’s (UBL) annual general meeting, refused to divulge any details of the deal with Hutchison Whampoa of Hong Kong which controls the Hutchison cellular service provider in Mumbai and Delhi. He said al the details would be made public soon.

Telekom Malaysia Berhad, which held 37.7 per cent in UMTL, is believed to have agreed to sell its stake to Hutchison Whampoa. The other Jhawar group companies and Mauritius-based venture capital firms, which hold the remaining equity, will offload their stake in favour of Hutchison, barring a token stake that the original promoter wants to retain.

Hutchison, which operates its Orange brand of cellular telephone services in New Delhi and Mumbai, will be acquiring a 95 per cent stake in Command, UMTL’s signature brand.

Jhawar said the group aims to earn $ 1 billion revenues in the next five years from information technology businesses. Usha Beltron, a fully-owned subsidiary, has tied up with IBM Global Services and a joint team of professionals is exploring business ventures in the new economy.

He said UBL’s 20,000 route km optic fibre cable plant at Silvassa is expected to go on stream by November.    

Mumbai, July 26: 
Glaxo India Ltd has decided to dispose some of its ‘tail-end brands’ during the year. Funds raked in from such divestments will be spent on the promotion of products with greater potential.

Though it reported a hefty 57 per cent rise in net profit for the first half of this fiscal ending June 30, Glaxo does not expect a high growth rate in the second half of the current fiscal.

Briefing newspersons here today, Glaxo managing director H.R. Khusrokhan said during the first half the pharmaceutical industry saw a good growth of 10 per cent. As against this, the company achieved a growth of over 18 per cent.

“In the second half, we do not expect a high growth. I wonder whether the current market growth is sustainable,” Khusrokhan said.

Commenting on the decision to sell some tail-end brands, he disclosed that Glaxo had sold around three brands, including Macraberin, Multivite FM and Derobin, during the year. “We are using this method to generate resources so that they can be put to promote products which promise growth,” he explained.

Khusrokhan attributed the robust performance to the emphasis on the therapeutic segment of the company which was initiated earlier this year by the creation of seven separate teams.

Recently, the company carved out a separate team to focus on the rural market. The strategy in this area would be to identify separate brands for this market and then promote them aggressively, officials said.

Meanwhile, for the first half of the current fiscal, Glaxo reported a rise in net profit to Rs 43.62 crore as against Rs 27.83 crore in the corresponding period of the previous year. Net sales of the company during this period shot up to Rs 470.02 crore, up from Rs 394.92 crore in the previous year. Other income for the company was Rs 20.95 crore (Rs 18.29 crore) and Rs 15.50 crore, the total income was placed at Rs 506.47 crore (Rs 413.21 crore).

On the other hand, Burroughs Wellcome reported a marginal 3 per cent decline in net profit for the same period.

Net profit fell to Rs 12.46 crore against Rs 12.89 crore in the previous year. Net sales of the company during this period was up at Rs 93.65 crore against Rs 81.55 crore.    

New Delhi, July 26: 
Differences have cropped up between the minister of state for finance, Balasaheb Vikhe Patil, and the finance ministry over the issue of giving Small Industries Development Bank of India (Sidbi) managing director Sailendra Narain a year’s extension in service.

While the finance ministry wants Narain to continue in the top slot at a time when Sidbi is going through a recast, Patil feels doing so would set an unhealthy precedent. According to sources in the ministry, he has even written to the special secretary (banking) a note expressing his ‘dissent’.

Patil is unhappy that the ministry is trying to push Narain’s case even though he had made his stand clear. The government, however, has little time to loose because Narain’s term expires at the end of this month. Also, it has not finalised any other candidate who might succeed Narain.

The rift within the ministry is not the first, though. Earlier, Patil had reportedly disagreed with his boss, finance minister Yashwant Sinha, on the appointment of a chief for Life Insurance Corporation (LIC). Sinha wanted to name the much-younger G.N. Bajpai, but Patil threw his weight behind P. C. Gupta, the senior most actuarial in the insurance monolith.

Meanwhile, Industrial Development Bank of India (IDBI) has started restructuring Sidbi, its wholly owned subsidiary. It intends to offload 51 per cent of its stake to 25 institutions by the year end, which could include public sector banks and insurance companies. The government has already steered a Bill permitting the reduction of IDBI’s equity in Sidbi.    

New Delhi, July 26: 
The government, today, cleared FDI proposals worth Rs 1,544 crore which includes two major proposals worth Rs 1,380 crore in the ICE sector - one of BPL Cellular and another of B4U.

The government gave a green signal to BPL Cellular Holding to go in for Rs 880 crore ($200 million) American Depository Receipt. BPL Cellular, which operates cellular services in Mumbai, Kerala, Tamil Nadu and Maharashtra, would be the first private telecom operator to raise equity in the US market.

Permission has been granted to B4U Multimedia International to generate and export film and other electronic media entertainment software. It would pump in Rs 500 crore as FDI, which includes a Rs 400 crore preference share issue. The foreign holding in the multimedia company would go up to 96.6 per cent after the fresh equity infusion    


Foreign Exchange

US $1	Rs. 44.86	HK $1	Rs. 5.65*
UK £1	Rs. 68.16	SW Fr 1	Rs. 26.85*
Euro	Rs. 42.18	Sing $1	Rs. 25.40*
Yen 100	Rs. 41.13	Aus $1	Rs. 26.00*
*SBI TC buying rates; others are forex market closing rates


Calcutta	Bombay

Gold Std (10gm)	Rs. 4500	Gold Std (10 gm	4500
Gold 22 carat	Rs. 4250	Gold 22 carat	4160
Silver bar (Kg)	Rs.7875	Silver (Kg)	7990
Silver portion	Rs. 7975	Silver portion	7995

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