Insurance headstart for HDFC
Sensex sheds 73 points as FIIs stay off the ring
24 rogue firms in the dock
Market fears cracks in Raymond cement deal
Row over GAIL top post selection
Century Textiles cuts Q2 loss
HelloBrain puts a stop to brain drain
Foreign Exchange, Bullion, Stock Indices

Mumbai, Oct 23: 
As the first sheaf of insurance licences were handed out on a day that marked a turning point in the highly protected industry, the companies which have been allowed to set up shop said they were confident their bets would pay off.

The old war-horses who thrived under the state-imposed curbs that kept private firms out — Life Insurance Corporation (LIC) and General Insurance Corporation (LIC) — were unfazed. Displaying the kind of self-assurance that comes with age, they shrugged off fears that the new kids on the block could pose a threat to their business and, indeed, survival.

Reliance, HDFC and Sundaram — as well as several others in the queue — had been humming with plans for long. Most had even finalised their foreign partners, except Reliance, which had decided that it would venture out alone.

The Ambanis, who had kept their plans under wraps for a long time, had applied for licences in both the life and non-life categories, but the insurance regulator today okayed its application for an entry into the general insurance sector.

Royal & Sun Alliance will forge a venture with Sundaram Finance to offer general insurance products. In the life segment, HDFC has teamed up with the UK-based Standard Life. Industry circles say they would be the first to hit the market.

Speaking to The Telegraph from New Delhi, Deepak Satwalekar, managing director of HDFC said: “We plan a soft launch in December in Mumbai. This will be followed by a national launch a month later. We intend to cover 12 cities in a year.”

HDFC-Standard Life will start with 12 products. Explaining the company’s strategy, Satwalekar said his company will design a host of unit-linked products. Once the government allows pension products in the insurance sector, the joint venture will diversify into it as part of its efforts to cater to a diverse market with myriad requirements.

Max New York Life Insurance managing director Anuroop (Tony) Singh said, “Our aim is to now be the first private life insurnace company to issue a policy in India.” Max India chairman Analjit Singh said, “ I believe that we have the ability to become the leading life insurance company.”

At the other end of the divide, the PSU monoliths were not showing their worries, even though the licences given today could change their destiny. GIC chairman D Sengupta was unruffled: “We welcome the competition. I must give credit to IRDA for completing a difficult job within a very short time.” GIC, he said, will be unfolding its plans to take on the new players on the block, but he would not like to discuss the topic now.

LIC chief G N Bajpai was not available for comment.

HDFC’s Satwalekar said his company’s 45,000 agents will be enough to rival the public sector majors. “We’ll be taking them on board,” he added. He said the problem of having common agents will be sorted out with IRDA amicably.    

Mumbai, Oct 23: 
The Bombay Stock Exchange (BSE) sensex today slipped 73 points as investors ignored Friday’s strong gains on the US markets and sold shares across the board.

To hasten the decline, the foreign institutional investors (FIIs) kept off the trading floor, preferring to abstain even when good blue-chip stocks were quoting at low, attractive prices. Brokers said the market discounted reports of the weekend rally on Wall Street and the 65-point increase in Nasdaq after a crop of healthy results from key infotech firms.

The 30-share sensitive index opened stronger at 3709.54, later gradually moved downwards to an intra-day low of 3608.36 before closing at 3619.53 as against last Friday’s finish of 3692.75, reflecting a sharp fall of 73.22 points or 1.98 per cent.

What was also lacking was the support from local institutions to counter the lack of purchases by FIIs. Speculators remained on the sidelines largely because of the 15 per cent new volatility margin imposed by BSE from today.    

New Delhi, Oct 23: 
The government has initiated prosecution against 24 of the 142 vanishing companies listed by the Securities and Exchange Board of India (Sebi), raising hopes that small investors who lose their savings will see the perpetrators brought to justice.

The field offices of the Department of Company Affairs (DCA) have started prosecuting these companies, and will refer them to the regional economic intelligence agencies soon. Besides filing police complaints against these firms, the DCA has written to the chief secretaries and finance secretaries of the states concerned that penal action should be taken under the Investors Protection Act and the Indian Penal Code.

The DCA has also directed its field organisations to file winding-up petitions under Sections 433 and 439 of the Companies Act, 1956 against the companies which have vanished.

Under the provisions of the Companies Act, 1956, it is not mandatory on the part of these firms to pay dividend to shareholders every year. The DCA, therefore, does not maintain such records.

However, with a view to protecting the interest of investors, a new Section 205C has been inserted in the Companies Amendment Act, 1999 to establish a fund called the Investor Education and Protection Fund. A committee has been set up to notify the rules for the fund and administer it.

Of the 24 companies that have disappeared, three are in Gujarat, five in Tamil Nadu, eight in Delhi, two in Orissa and six in Madhya Pradesh. Following is the list of the firms: Bhavna Steel Cast Ltd., Topline Shoes Ltd. and Gujarat Bonanza Auto and Steel Rolling Ltd. in Gujarat; Global Blooms (India) Ltd., Navakkarai Spinners Ltd., Pappilon Exports Ltd, Shyam Prints & Publishers Ltd., and Amigo Exports Ltd. in Tamil Nadu; ICP Securities Ltd, Lakshya Securities & Credit Holdings Ltd., Star Electronics Ltd., Stat Exim Ltd., Kalyani Finance Ltd., Zed Investments Ltd., Big Star Films Ltd. Formerly Moon Holdings & Credit Ltd., and Hatron Networks Ltd. in Delhi, Orissa Luminaries Ltd, and Universal Vita Aliment Limited in Orissa; Janak Intermediaries Ltd., Rajadhiraj Ind. Ltd., Hi-Tech Drugs Ltd., Madhyavarat Exxoil Ltd., Sterling Kalks and Bricks Ltd, and Total Exports Limited in Madhya Pradesh.    

Mumbai, Oct 23: 
The deal was struck on April 28 this year. But the money hasn’t come in yet. And as textiles major Raymond Ltd eagerly waits for the cash to flow in from the sale of its Bilaspur cement plant, rumours are already swirling in the market that Lafarge India, the buyer of the cement plant, may delay the payment of Rs 785 crore.

As the rumours of the delay spread in the market, the Raymond scrip dropped to Rs 91.20 from Rs 97.60 on the Bombay Stock Exchange (BSE) today.

Top Raymond officials, however, denied any delay in payment. “These are baseless rumours. We have to get some paper work done from our side and no sooner it is done, we will approach Lafarge for payment.”

According to Raymond sources, the delay, if at all, is because of the time taken to get the Madhya Pradesh government’s approval for necessary clearances to transfer mining rights to the new owners. “We expect to get the approvals in the next two weeks,” Pradeep Bhandari, president (finance), said.

Lafarge India, a subsidiary of the French global construction materials major, signed an all cash deal to acquire Raymond Ltd’s 2.4 million tonne capacity cement division for Rs 785 crore.

The acquisition is expected to strengthen Lafarge’s presence in eastern India. Raymond’s cement plant at Bilaspur has a capacity of 2.24 million tonnes.

This was the second major acquisition made by Lafarge in the country. The acquisition was touted as a “win-win deal” for both parties. “We have been working on the company’s restructuring for some time and this is a significant step”.

Raymond, which paid the price for diversifying into sectors like cement and steel businesses, plans to to use a portion of the funds to prepay some of its debts. The remaining portion is expected to be used to strengthen its presence in the textile, garments and retail distribution businesses.

“We may also look at some acquisitions in our core business,” officials said.    

New Delhi, Oct 23: 
Senior executives of Gas Authority of India Ltd (GAIL) are agitated over the recommendation of the Public Enterprises Selection Board (PESB) to appoint Prashant Banerjee, executive director of Indian Oil Corporation (IOC), to the post of chief executive.

Banerjee emerged as a candidate just two days before the interview and is understood to have the backing of circles close to Prime Minister’s Office (PMO).

Banerjee has been appearing before PESB for quite some time now to be interviewed for various posts in IOC, Bharat Petroleum and GAIL. He also tried his luck for the newly created post of (international business and corporate planning) of IOC and lost to M.S. Ramachandran. In this race also he had the backing of circles close to PMO but Ramachandran turned out to be too strong a candidate.

The top management of IOC was divided on the issue of backing Banerjee. Sources say Onkar Nath Marwah, director (marketing) consistently supported Banerjee, whereas chairman M.A. Pathan and director (personnel) Subir Raha never felt comfortable in his company. Though rated competent, they may not be averse to the idea of his leaving IOC.

For Banerjee,the very recommendation for the top post in GAIL could be a welcome relief from the series of setbacks he suffered in recent years. Normally, PESB does not recommend executive directors for the post of CMDs. It seems to have made an exception in the case of Banerjee.

The PESB recommendation is not binding on the government which has the option either to accept or reject it.    

Mumbai, Oct 23: 
Backed by strong growth in other income, Century Textiles, the B K Birla flagship, has managed to reduce its losses to Rs 3.16 crore in the second quarter of this financial year against a loss of Rs 29.48 crore in the same period last year.

In the first half of the current year the company came back into the black with a net profit of Rs 3.52 crore against a loss of Rs 43.45 crore during the same period previous year. While net sales shot up to Rs 1,080.11 crore (Rs 1,031.76 crore), other income was at Rs 37.58 crore (Rs 27.71 crore) during the first half.

Other income during the quarter shot up to Rs 23.46 crore as against Rs 14.84 crore in the previous corresponding quarter. Net sales, on the other hand, rose modestly to Rs 526.82 crore over Rs 502.84 crore in the same period. The other income included Rs 3.24 crore which was surplus on sale of a ship.

While gross profit after interest but before depreciation and taxation stood at Rs 15.42 crore over Rs 6.45 crore, depreciation was at Rs 18.51 crore (Rs 35.85 crore). With provision for taxation accounting for Rs 0.07 crore, the net loss stood at Rs 3.16 crore.

Asian Paints net up

Asian Paints (India) Ltd has posted a 28 per cent rise in net profit during the second quarter ending September 30. Net profit rose to Rs 30.46 crore as against Rs 23.86 crore in the corresponding previous quarter.

In the board meeting held today, the directors announced an interim dividend of Rs 3 per equity share on the increased equity capital after considering the issue of bonus shares in the ratio of 3:5 earlier this year.

For the six months period, gross sales up Rs 754.25 crore, an increase of 19 per cent over Rs 636.48 crore. Net profit rose by 24 per cent to Rs 49.01 crore as against Rs 39.51 crore during the same period last year.

Asian Paints said that during the year, the decorative business unit recorded a volume growth of 23 per cent with its sales in the wall finish segment registering an increase of 23.6 per cent and the exteriors segment posting a growth of 46.8 per cent.

The industry environment was a mixed picture with solvent prices rising due to increase in crude oil prices and declining prices of vegetable oils. However, the price of Titanium dioxide, a significant raw material for the paint industry was stable during the year.    

New Delhi Oct 23: 
You could call it the wonders of technology, but cyber malls will no longer require individuals to hop across the globe. HelloBrain has floated the first ever intellectual capital exchange — a Web-based marketplace — that will offer technology solutions, and open up a goldmine of opportunities for Net geeks.

This means Dewang Mehta, chairman of National Association of Software and Services companies (Nasscom), will face fewer demands from its members to secure more H1B visas for professionals who want to head for the US.

The company also plans to use an intellectual capital exchange model for a wide range of fields, including biotechnology, chemical engineering and agriculture.

Given that virtually all aspects of human knowledge can now be represented digitally — on a computer — there are no practical limits to the scope of the intellectual capital exchange.

Says Anil Dixit, vice-president (business development), “The opportunities provided by such an exchange are limitless. Not only do companies across the world have access to cutting-edge software professionals, but it opens up several vistas for software professionals. A developer sitting in a remote corner of India, has the same work opportunities as the one living on the other side of the globe. I think the description of the internet as the greatest leveller appears most appropriate here.”

The company is targeting two specific markets — a buyer’s market, where companies post their needs on the exchange in the form of a ‘problem description’. The other is a seller’s market, where individuals or firms advertise either a pre-existing piece of intellectual property, or their willingness to develop it.

In addition to an on-line trading floor, where intellectual capital may be bought or sold from anywhere in the world, the virtual exchange provides all the other necessary mechanisms to support such trading. These include a transaction infrastructure, pricing mechanisms, information exchange, and security.

HelloBrain has made substantial refinements made necessary by the unusual challenges inherent in the electronic trading of human knowledge. The process is simple — a client submits a technical specification or a problem, using a HelloBrain template. The editors review the proposal to make sure it is legal. In other words, this means that it does not include requests for bomb-making materials, or things that could amount to copyright violations.

The client submits a purchase order or pays upfront for the intellectual capital. HelloBrain holds the payment in an escrow account. Registered contributors, who have specified their solution offerings, will get e-mails on the proposal if it matches their profile. Client and contributors then reach an agreement.

Both validate and verify the technology and manage the project using the range of software available on the site. After the project is completed, HelloBrain will pay the contributor from the escrow account. It will charge a commission on each transaction, ranging from 5 to 25 per cent depending on the project value.

In a project worth $ 20,000 the buyer will provide a down-payment of $ 25,000, of which $ 20,000 goes to the seller of the solution on completion of the project while gets $ 5,000.

According to the company, the market opportunities are tremendous. US-based technology companies, for instance, are projected to spend a staggering $ 40 billion on intellectual capital for research and development next year. Companies will look outside for $ 10 billion of that intellectual capital in the next year. HelloBrain is ideally positioned to tap that opportunity.    


Foreign Exchange

US $1	Rs. 46.37	HK $1	Rs. 5.85*
UK £1	Rs. 67.56	SW Fr 1	Rs. 25.60*
Euro	Rs. 38.99	Sing $1	Rs. 26.10*
Yen 100	Rs. 42.59	Aus $1	Rs. 24.20*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 4580	Gold Std (10 gm	4560
Gold 22 carat	Rs. 4325	Gold 22 carat	4220
Silver bar (Kg)	Rs. 8000	Silver (Kg)	8090
Silver portion	Rs. 8100	Silver portion	8095

Stock Indices

Sensex		3619.53		-73.22
BSE-100		1833.25		-52.14
S&P CNX Nifty	1143.95		-28.05
Calcutta	100.52		-2.06
Skindia GDRNA	571.34		+9.71

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