Microsoft, Infosys in grand alliance
Sebi relaxes venture capital regulations
Deal fails to impress Dalal Street
Apex court slaps Rs 1 cr sales tax on Maruti
Reddy’s buys three brands
SSI set to acquire software company
New-look Wipro team to power growth
Foreign Exchange, Bullion, Stock Indices

 
 
MICROSOFT, INFOSYS IN GRAND ALLIANCE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Sept 14: 
Bill Gates, the man who owns an unmatched fortune and a company that provides software for the 80 per cent of the world’s computers, today sealed an agreement with Infosys Technologies, one of India’s most treasured companies, to offer a panoply of applications based on the US giant’s dot. Net enterprise server platform.

Business solutions that the Infosys-Microsoft alliance intends to offer can be used in a wide variety of areas such as customer relationship management, e-commerce, financial services, insurance and retailing.

However, this is not an exclusive technology tieup with Microsoft, which has a tradition of clinching lucrative strategic alliances with several firms, instead of keeping it confined to a single company. But the partnership is its first with an Indian outfit.

In the first year, Infosys’ software solutions developed by using Microsoft’s.Net platform will be marketed in the US and India. “We believe in leveraging relationships based on repeat business. We have 4,000 people competent in Microsoft technology platforms. The two companies will be able to offer the most advanced solutions to customers world wide,” Infosys chairman and CEO N. R Narayana Murthy said.

Microsoft India and Infosys will work closely to bring world-class solutions development and delivery capabilities to large Indian enterprises. The partnership will cover Infosys’ planned competency centre at Bangalore, which will showcase high-end solutions developed on Microsoft technologies.

After signing the agreement with Infosys, Gates announced an investment of $ 50 million, spread over three years, in Microsoft India’s development centre at Hyderabad.

He also unveiled msn.co.in, a comprehensive portal that offers local and international content integrated with MSN services such as Hotmail, Messenger and Passport. Users can also get business news, stock market commentaries, entertainment and three-day weather forecasts for more than 136 Indian towns.

“Our goal is to move beyond today’s world of standalone websites to an internet of interchangeable component, where devices and services can be assembled into cohesive, user-driven experiences,” Gates said while outlining the dot-Net platform.

A software developed in a dot.Net platform will allow subscribers to send an e-mail through small devices.

Earlier in the day, officials told Gates about the initiatives taken by the ministry of information technology (MIT) to widen the reach of infotech in India’s outbacks. “Gates showed keen interest in our project to connect 464 blocks in north-eastern region and the spread infotech to the masses,” Union infotech minister Pramod Mahajan said.

Gates, also one of the world’s best-known celebrity donors, had his share of philanthropy when he announced a $ 5-million donation to finance the government-sponsored rural education programme that takes the infotech revolution to India’s villages.

The funds will be disbursed through the ministry of information technology, which will be given $ 1 million for five years.    


 
 
SEBI RELAXES VENTURE CAPITAL REGULATIONS 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Sept 14: 
The governing board of the Securities and Exchange Board of India (Sebi) today relaxed several regulations governing both domestic and foreign venture capital firms.

The board also approved the proposal to permit the Over the Counter Exchange of India (OTCEI) — which lists companies with an equity base of less than Rs 3 crore — to develop a trading window for unlisted securities where qualified institutional buyers would be permitted to participate.

The market regulator also gave a boost to venture capitalism in the country by allowing mutual funds to invest in venture capital funds up to 5 per cent of the corpus in the case of open-ended schemes and up to 10 per cent of the corpus in the case of close-ended schemes.

Apart from raising the resources for venture capital funds, this would provide an opportunity to small investors to participate in venture capital activities through mutual funds.

The amendment was approved today wherein the Sebi (Venture Capital Fund) (Amendment) regulations, 2000, applicable to domestic VCs, envisage relaxation of norms pertaining to disclosure and information to investors, and the applicability of the takeover code, Sebi chairman D R Mehta told reporters after the meeting.

Besides, the new norms make venture capital funds eligible to act as qualified institutional buyers for the purpose of participation in initial public offers through book-building route.

The move was intended to augment the resources of domestic VC funds, he said adding the amendments would be notified by Saturday, Mehta added.

In addition to norms relating to the domestic VCs, the market regulator has introduced a set of new regulations called Sebi (Foreign Venture Capital Investors) regulations, 2000, facilitating easy entry by foreign venture capital funds.

He said it would replace the Government of India (MoF) guidelines for Overseas VC Investments in India dated September 20, 1995.

The foreign venture capital funds shall be permitted to make investments without any approval from the FIPB. Sebi also permitted venture capital funds to bring in or repatriate funds without having to seek prior Reserve Bank approval for the pricing. However, there will be ex-post reporting requiring for the amount transacted.

Some members of the board felt that the controversial decision to relax the lock-in period for investments by domestic venture capital funds in start-ups to one year post-listing for availing of tax benefits could be reconsidered by the government in the light of international experience and the need to avoid operational restrictions and optimise venture capital flows into the country.    


 
 
DEAL FAILS TO IMPRESS DALAL STREET 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Sept 14: 
Stock markets today gave a thumbs-down to the alliance between Microsoft Corp and Infosys Technologies, disappointed that the deal contained little that would help the Bangalore-based software maker bolster sales and improve profits.

The scrip shot up to an intra-day high of Rs 8,825 on the Bombay Stock Exchange (BSE) after expectations peaked that the two companies would unwrap a lucrative deal, but the share plumbed a low of Rs 8,333 after investors dismissed the agreement as a tame affair.

The alliance will develop business solutions in the areas of customer relationship management, e-commerce, financial services and insurance. The companies will also undertake joint marketing initiatives, besides account planning.

A senior analyst with First Global Securities, a leading city-based brokerage house, told The Telegraph that the tieup, not an exclusive arrangement between the two firms, is unlikely to produce significant benefits for Infosys in the short run.

“If there are any returns for Infosys, it would only be available in the long run. Second, one must not forget that Microsoft has similar alliances with other companies world wide. In any case, the 100 per cent topline and bottomline growth at Infosys will be maintained,” he said.

The selling spree in Infosys spread to other pivotals, pushing the sensex down by about 31 points at the close.    


 
 
APEX COURT SLAPS RS 1 CR SALES TAX ON MARUTI 
 
 
FROM OUR LEGAL CORRESPONDENT
 
New Delhi, Sept 14: 
The Supreme Court has ordered Maruti Udyog Ltd to pay Rs 1 crore as sales tax, as per the 1994 order of the deputy excise and taxation commissioner, pending the company’s appeal against the ruling before the Appellate Tribunal.

A division bench of Justices K.T. Thomas and R.P. Sethi declined to accept Maruti’s contention that its ‘Omni’ should not have been taxed at a higher level.

The company had approached the Haryana Sales Tax Tribunal against the order of the commissioner who had levied a tax of Rs 23,10,995 under the Haryana General Sales Tax Act and Rs 78,44,607 under the Central Sales Tax Act, by taxing the turnover from the Omni at a rate of 10 per cent instead of 6 per cent, treating the product as a ‘van’.

The Tribunal however, rejected its plea for entertainment of the appeal without a prior demand of tax and interest thereon, following which MUL filed an appeal in the Punjab and Haryana high court.

While the high court set aside the order of the tribunal, the same was restored by the apex court on an appeal by the Haryana government, which directed the company to pay the tax fixed at Rs 1 crore.

The apex court rejected MUL’s argument that the company had not collected any additional tax from its customers and “hence is unable to pay the amount fixed as tax” under the “illegal” orders of the tribunal. Justice Sethi, who wrote the judgement for the bench, said, “the legality of the additional demand created could not be made the basis for insisting to entertain the appeal without prior payment, as that would have required the determination on the merits of the appeal.”

Referring to the high court order allowing the appeal to be heard after MUL deposited a bank guarantee, the Bench quoted an earlier ruling of the apex court and stated, “no governmental business or for that matter no business of any kind can be run on mere bank guarantees” and “liquid cash is necessary for the running of a government as indeed any other enterprise. We consider that where matters of public revenue are concerned, it is of utmost importance to realise that interim orders ought not to be granted merely because a prima facie cause has been shown.”    


 
 
REDDY’S BUYS THREE BRANDS 
 
 
FROM G S RADHAKRISHNA
 
Hyderabad, Sept 14: 
Dr Reddy’s Labs (DRL) has acquired three major brands from Dai-Ichi Karkaria, another city-based pharmaceutical firm, that gives it a much-needed toehold in women’s healthcare segment.

Under an agreement signed between the two sides, Dai-Ichi will make the same products for DRL. “The acquisitions will place us in a commanding position in the therapeutic sector of women healthcare,” DRL chairman K. Anji Reddy said.

The products which have been bought are Dinoripe Gel (dinoprost) for cervical ripening, Deviprost (Carboprost) for postpurtum haemorrhage and PG Tab (dinoprost), for inducing and augmenting labor pains. Earlier, Dai-Ichi imported bulk drugs required to make these products under an exclusive arrangement.

The three brands had contributed Rs 80 lakh to Dai-Ichi’s revenues of Rs 58 crore in the previous financial year. Dr Reddy’s now intends to market them through its network, and generate a revenue of Rs 6 crore in the first year.

Dr Reddy’s was weak in the women healthcare segment so far, with only anti-bacterial, anti-acid, anti-ulcerant, pain control and multi-vitamin products. It acquired the Styptic range from Dolphin Labs in 1997 and launched Denfos — a post-menopausal osteoporosis and Velocit — a one-step home pregnancy testing kit.

DRL plans to synthesise the compounds-prostaglandins- on its own before it bought these formulations from Dai-Ichi. Safe child delivery is one of the focus areas of DRL, which prompted it to go for Deviprost, a drug which prevents bleeding during child birth.    


 
 
SSI SET TO ACQUIRE SOFTWARE COMPANY 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Sept 14: 
SSI, the high-end software education major, today said it was close to acquiring a software company.

Its board will meet on September 18 to consider the planned acquisition. In a notice sent to stock exchanges today, SSI said the directors will find ways to finance the deal, which could be sealed with cash and an issue of shares/GDRs.

Officials were reluctant to reveal the company’s name, but said negotiations have been held recently to pick up all its shares.

The buyout move comes close on the heels of the company’s March GDS floatation, which mopped up $ 87 million, excluding a greenshoe option of $ 13 million. The issue was priced at $ 14.40 each. The GDS, each of which represented 0.10 equity shares, were listed on the London Stock Exchange. The issue, oversubscribed 16 times, was lead-managed by Merrill Lynch.

SSI had said it would use the money from the floatation to set up state-of-the-art software development centres in Chennai. In addition, the overseas offering was supposed to give it the much-needed resources required to pursue a product-centric, domain-focused software development strategy.

SSI operates in the niche areas of high-end software education (SSI Education) and domain focus software development (SSI Technologies).

SSI Technologies also develops e-commerce, Web-enabled software products and solutions based on state-of-the-art, multi-tier architectures. The division also designs software applications for vertically integrated industries, including securities trading, banking, healthcare, insurance and telecom.    


 
 
NEW-LOOK WIPRO TEAM TO POWER GROWTH 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Sept 14: 
On a day when Bill Gates and N.R. Narayana Murthy inked an alliance to bring Microsoft and Infosys closer, another home-grown information technology major Wipro Ltd announced organisational changes to power the company’s global ambitions.

While Wipro vice-chairman Arun K. Thiagarajan will retire from December 1, after having put the company’s domestic infotech business back on track and fulfiling his charter of grooming young talents, he will continue as the chairman of Wipro e-Peripherals Ltd, the country’s largest employee-owned company where Wipro has a 39 per cent stake. Thiagarajan will also remain the vice-chairman of Wipro Net Ltd.

Meanwhile, Suresh Vaswani, has been appointed as the president of Wipro Infotech, with effect from October 1. Having joined Wipro from IIM Ahmedabad in 1985, he held key positions in the organisation, including that of chief executive of Wipro Acer and Wipro Computers and System Integration. Vaswani will be a member of Wipro corporate executive council.

In a notice sent to the Bombay Stock Exchange (BSE) today, the company said Wipro Technologies, with almost 50 per cent of its revenues coming from the global telecom and internet markets, will set up three separate business groups to sharpen its focus on the emerging global telecom and internet markets.

The telecom and internetworking solutions division will address the market opportunities in telecommunications; data communications and the emerging internetworking opportunities. This will be led by A.L. Rao, who will be the president of the division.

Wipro Technologies, the largest software services company in India, has been in this segment for many years. The internet access solutions division will address the opportunities of computing platforms, embedded software for products in a wide range of industries and emerging access devices. This division will be led by M. Divakaran as chief executive, Embedded & Internet Access solutions.

The telecom and internet service providers division will address the service provider market through systems integration, software development, network management and other remote telecom services. Led by TK Kurien as chief executive, this division will work with professional service arms of product companies to offer solutions to service providers.

Kurien will, however, continue to hold his responsibilities as managing director, Wipro Net Ltd.

The telecom and internet service providers division will be a new initiative from Wipro and will make inroads into an entirely new and vast market which is growing rapidly due to deregulation and emergence of new technologies.

Wipro said that it has already roped in some new customers in this segment like AT&T Sonera, Enron and Globix.

Wipro also announced that Ramesh Emanl will be the Chief Technology Officer of Wipro Technologies to provide greater focus on evolving technologies, create a knowledge management system and build competencies in specific technologies by setting up centres of excellence in various focus areas.

V. Balakrishnan will be the vice-president, finance, and Soumitro Ghosh vice-president, strategic marketing of Wipro Technologies.    


 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 45.68	HK $1	Rs. 5.80*
UK £1	Rs. 64.61	SW Fr 1	Rs. 25.45*
Euro	Rs. 39.74	Sing $1	Rs. 25.85*
Yen 100	Rs. 42.59	Aus $1	Rs. 24.75*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta	Bombay

Gold Std (10gm)	Rs. 4555	Gold Std (10 gm	4490
Gold 22 carat	Rs. 4300	Gold 22 carat	4155
Silver bar (Kg)	Rs.7900	Silver (Kg)	7990
Silver portion	Rs. 8000	Silver portion	8000

Stock Indices

Sensex	4671.92		-30.60
BSE-100	2375034		-18.43
S&P CNX Nifty	1445.30		-10.85
Calcutta	126.56		-1.78
Skindia GDRNA	NA		-
   
 

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