Maruti gears up for fresh price hike
Broadband biggies doll up for debut
Bollywood holds bourses in thrall
Nasdaq sounds bourses for trading platform
Govt in the dark on mobile firms’ equity
Wipro land
Hind Motors plans 5-day week
BoB plan to cut 15% jobs
Arvind Mills may seek debt moratorium
Foreign Exchange, Bullion, Stock Indices

 
 
MARUTI GEARS UP FOR FRESH PRICE HIKE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Dec 5: 
Jolted by plunging profits, Maruti Udyog Limited (MUL) has decided to raise prices by 5 to 7 per cent, the second hike after the first one in October, in a move the company says is necessary to recoup the increased costs arising from the addition of new features.

The new prices are likely to be announced by the end of this month or early next year, and there are indications that the rise will be sharper for its best-selling Alto and Zen models.

“It was inevitable. We had raised prices this year to balance our bottomline and the proposed hike is part of that plan,” sources said. The revision in prices during October was rather modest, the highest increase being only 3 per cent.

The management was tight-lipped on the fresh round of hikes, but sources said India’s largest car maker was left with no options. “We are compelled to raise the prices again.”

Maruti introduced new models, and upgraded others with new features, such as the electronic power steering in the Wagon-R model, but the price increase made two months back had been less than commensurate, sources pointed out.

The company faced problems because of the workers’ strike at its plant in Gurgaon, but officials claim its average daily production in November touched 1,311 vehicles compared with 1205 in the first six months of the current financial year. It suffered a 35.7 per cent decline in sales at 18,721 units in October as against 29,126 units sold in the same month last year; the market-share shrivelled to 49.2 per cent from 60.4 per cent. Cumulative sales in the April-October period were 18.6 per cent lower at 1.86 lakh vehicles compared with 2.29 lakh units in the same period of the last financial year.

The dip was part of a larger first-quarter slump in the automobile industry blamed on a variety of factors such as the implementation of uniform sales tax and compliance with Euro II norms — both combined to drive up prices and depress sales.

As the market leader, Maruti slashed the prices of its entry-level models by 4 to 10 per cent for a limited period on June 24 to reverse the downtrend. This led to a 30 per cent increase in its second-quarter sales over the first. The industry also reaped the gains, recording a 12 per cent improvement.

Its market share swelled from 50 per cent in the first quarter to 58 per cent in the second quarter, and, despite the labour unrest, its surpassed the 60 per cent-mark in November. It sold 27,007 vehicles in the domestic market last month.

“However, the sales spurt has had no effect on the profit. This has to be corrected, which is the reason why we have decided to go ahead with the hike,” a senior Maruti executive said.    


 
 
BROADBAND BIGGIES DOLL UP FOR DEBUT 
 
 
BY PALLAB BHATTACHARYA
 
Calcutta, Dec 5: 
After internet, Calcutta is set to witness an intense three-way duel between RPG Netcom-Satyam Infoway, DishnetDSL and Siticable in broadband services.

While RPG Netcom and Satyam Infoway are forging a joint venture, the other two companies, Siticable and DishnetDSL, will set up stand-alone ventures to provide the services.

RPG Netcom and Satyam Infoway are in the final stages of setting up a 50:50 joint venture to provide broadband services in the city.

Siticable has chalked out a Rs 100-crore investment plan to lay a hybrid fibrecoaxial (HFC) network in the city, which will serve as a carrier for the services. And DishnetDSL, which made its debut in the city’s internet services recently, is getting ready to grab a major slice of the broadband pie.

A senior RPG Netcom official said the services were likely to start from early next year. The two companies are now involved in working out the finer details of investment.

While the official refused to disclose the nature and size of the investment plan, sources said the investment could be in the region of Rs 200 crore. The aim is to reach the service to over 4.5 lakh households that buy RPG Netcom’s cable services.

“We have already taken decisions on many aspects of the proposed joint venture, but some fine-tuning needs to be done,” the official said. He expressed optimism about the success of the new venture, even though Calcutta is known to be price-sensitive when it comes to buying these services.

“Calcuttans are touchy about the price. However, they are keen to increase their knowledge about global developments,” he said. The new company will use the RPG Netcom’s formidable 800-km cable network, which runs on lease. The RPG also intends to make substantial investments in expanding the network.

“There will certainly be a long-term agreement between the RPG Netcom and the new companies. But the terms of reference of this agreement are yet to be finalised,” he said.

It is however decided that the optic-coaxial fibre backbone, set up by the RPG Netcom, will be used by the new company. It will initially offer internet services through cable. “But we shall offer other value-added services like video-on-demand and leased lines to companies at a later stage,” the official said.

Siticable, which currently has around three lakh subscribers in the city, is also making an investment of Rs 10 crore to strengthen its marketing and distribution network.

“We are readying ourselves for the challenge, which is expected to be thrown up by the spate of broadband services. Here only they will exist who have their own networks,” a senior Siticable official said.    


 
 
BOLLYWOOD HOLDS BOURSES IN THRALL 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Dec 5: 
The name Bollywood seems to hold magic. Whether it is movies or stocks, they are runaway hits. Otherwise how do you explain the stellar performance of newly-listed entertainment media stocks on the bourses while scrips of infotech and television media scrips are seeking lower levels?

Scrips such as Mukta Arts, Balaji Telefilms and Tips Industries are hogging the limelight on bourses much to the delight of punters and investors. The other media entertainment stock that was listed recently and attracting interest is Hyderabad based Padmalaya Telefilms.

The stocks, listed recently on the B2 segment of the Bombay Stock Exchange (BSE), has consistently remained at the upper bracket for the past few days.

Speaking to The Telegraph, Jignesh Shah, strategist at the investment advisory division of Ask-Raymond, said: “The entertainment industry is restructuring itself and getting more professionalised.” “It’s still a virgin area,” he added.

Bollywood’s Jumping Jack-Jeetendra’s Balaji Telefilms jumped Rs 20.80 today from its previous close of Rs 260.60 on the BSE to close at a high of Rs 281.40. The scrip has been consistently hitting upper bands on the back of operator and investor interest.

Subhash Ghai’s Mukta Arts was close behind hitting an intra-day high of Rs 280 before profit taking ate into early gains. The scrip closed at Rs 265.20, showing a modest rise of Rs 3.50 from the previous day’s 261.60.

Tips Industries has also gained in the current frenzy for Bollywood stocks. The scrip gained Rs 9.40 to end the day at Rs 362.85.

The scrips have a lot of favourable things going for them. For Mukta Arts, it is the impending release of Yaadein. For Balaji Telefilms, it the extra-ordinary performance of its serials that have clocked higher television rating points (TRPs).

Rumour is also doing the rounds that big bull Ketan Parekh is very active in this sector. The news has gained credence, as Triumph International—a stock brokerage close to the big bull—has lead managed the IPOs of a few media entertainment companies.    


 
 
NASDAQ SOUNDS BOURSES FOR TRADING PLATFORM 
 
 
BY A STAFF REPORTER
 
Calcutta, Dec. 5: 
The National Association of Securities Dealers (Nasdaq), the world’s first electronic-based market, has opened talks with a few stock exchanges in India to persuade them to jointly create a common trading platform.

The talks are at a very basic stage and, in any case, nothing will get off the ground until the Reserve Bank of India allows full rupee convertibility on the capital account, said Patrick Sutch, vice-president and managing director of Nasdaq Asia Pacific.

Sutch, however, refused to name the Indian bourses with which talks had been initiated.

The government has been extremely wary about going in for full convertibility of the rupee — which was recommended by the Tarapore committee. “Three years ago, the Indian officials said that it would take three years to bring it about. Now, they say it will take another three years. We are prepared to wait,” the Nasdaq official said.

“Earlier this year, we launched Nasdaq Japan where we expect to list about 80 companies initially. We also have plans for Nasdaq Europe,” said Sutch. Nasdaq Europe is a creation of a venture between Softbank of Japan, the world’s largest venture capitalist, Rupert Murdoch-owned News Corporation’s epartners VC fund and Vivendi’s Viventures Capital.

“Our grandplan is to integrate the three trading platforms — Japan, Europe and the US — into a round-the-clock 24-hour trading system in, maybe, three years’ time. Mumbai could be an ideal trading outpost because it is located in a time zone that places it almost halfway between Japan and Europe. It certainly is superior to Singapore (which could arguably also lay claim to that honour) because India has some of the best brains in the world and we intend to leverage that strength.”

The idea of having a common trading platform first surfaced in Europe where Nasdaq tried to bring together the London Stock Exchange and Germany’s Neue Market. “But it got to a stage where Germans and the English wouldn’t speak to each other,” said Sutch ruefully. “But we are still confident that we will work something out.”

Nasdaq International is opening a representative office in Bangalore — a sign of its lasting commitment to India — which will start operations in February. Initially, it will deal with the queries of the three Indian companies currently listed on Nasdaq — Infosys, Satyam Infoway and Rediff. Later, it will hand hold the 25 Indian companies that Sutch expects will seek listing on the bourse next year.

Nasdaq has a turnover of $ 17 trillion — far in excess of the combined turnovers of New York Stock Exchange, the London Stock Exchange and the Tokyo Stock Exchange.

Sutch admitted that this year’s rollercoaster ride on the tech-heavy Nasdaq, which has seen its index lose almost half its value since its all-time high of 5048.62 on March 10 this year, has prompted a number of companies to put their initial public offerings on hold.

Meanwhile, Nasdaq is drawing on the strengths of the Indian software programmers to rejig its trading infrastructure. It has formed a joint venture dubbed IndigoMarkets with Chennai-based SSI Technologies to create the infrastructure for its upcoming expansions.The gameplan is to create a Net-based trading and market system for Nasdaq’s global expansion.    


 
 
GOVT IN THE DARK ON MOBILE FIRMS’ EQUITY 
 
 
FROM M RAJENDRAN
 
New Delhi, Dec 5: 
The government does not have adequate information on the equity-holding pattern of several companies that are now offering mobile services in the country. It appears that the finance and communications ministries are unaware of the changes which have taken place in the holding pattern of these companies in the last four to five years.

In a reply sent to the Rajya Sabha, the minister of state for communications, Tapan Sikdar, said his ministry wants time to collect the information. Officials in ministry claim that such details are part of the regular updates carried out in the finance division of the Telecom Commission.

“The list of promoters of private cellular mobile operators with their equity holdings is being collected and shall be placed on the table of the house,” said Sikdar in a written reply.

“The holdings are updated daily. We have performed our duties and will not let down anyone in the public or Parliament,” a senior official in the communications ministry said.

Sikdar is currently away in Hong Kong, attending a three-day conference on International Telecommunications Union (ITU). “When cellular operators migrated from a licence fee regime to the National Telecom Policy (NTP), the holding patterns were submitted. A five-year lock-in on offloading equity was made mandatory for firms under the licence agreement,” sources in the communications ministry said.

A Telecom Commission official said a few companies are yet to submit details on their holding structure after they changed foreign partners. “Everyone is aware that the changes in the last few months were very swift and that many companies are yet to formally announce new tieups. So, it will take a few days. However, we will should be able to provide the necessary details before the end of this Parliament session,” a Telecom Commission member said.    


 
 
WIPRO LAND 
 
 
BY A STAFF REPORTER
 
Calcutta, Dec 5: 
The Cabinet meeting of the West Bengal government today ratified 12 acres of land at Salt Lake for software major Wipro Limited.

Wipro chief Azim Premji had earlier told The Telegraph that they are interested to set up a software development centre either in Calcutta or in Bhubaneswar. Premji told that he will set up the software centre within another six months time.

The state government did not make any delay and approached him with the land.    


 
 
HIND MOTORS PLANS 5-DAY WEEK 
 
 
BY AMIT CHAKRABORTY
 
Calcutta, Dec 5: 
Hindustan Motors will introduce a five-day week at its Uttarpara plant to save on the daily costs of keeping the plant open.

Depending on its order book, the number of working days may further be reduced to four days a week.

The Citu-led workers’ union accepted in principle a management proposal that was drawn up in response to a drastic fall in demand for the Ambassador, the ageing sedan that has been forced off the roads by the sleek and fast Japanese and Korean marques.

The executive committee of the union comprising about 150 departmental leaders will meet on Thursday to take a final decision on the issue.

In a simultaneous development, the West Bengal minister of state for transport Sushanta Ghosh, a CPI(M) leader from Midnapore, announced at a meeting at the factory gate today that the state government would permit the use of Trekker — HM’s rugged vehicle targeted at the rural market — to carry passengers in district towns. This is likely to give a tremendous boost to the factory.

Ghosh said 1000 permits each would be issued in Midnapore and 24-Paraganas districts for the use of the Trekker as a public vehicle.

The plant level management has assured Hindustan Motors and Hyderabad Industries Workers’ Union that there would be no pay cuts for the days that the plant remains idle.

Unlike previous occasions when the HM management resorted to similar production holidays, the workers may be spared the trouble of turning up at the factory gates to mark their attendance on the days that the plant is closed.

The union officials said the management has appealed to the workers’ union that the arrangement would help save on standing charges for power, water and other essential services running into Rs 5 lakh a day.

It is gathered that certain departments such as marketing and spare parts, which have been centralised in Uttarpara, may be kept open as required.    


 
 
BOB PLAN TO CUT 15% JOBS 
 
 
BY A STAFF REPORTER
 
Calcutta, Dec 5: 
Falling in line with several other nationalised banks, Bank of Baroda has decided to push through its job cut programme. The board of the second largest bank in the country will meet on December 13 to approve the voluntary retirement scheme (VRS) which aims to cut its current staff strength of 47,000 by 10-15 per cent.

BoB will spend around Rs 500 crore on VRS and intends to pay the entire ex-gratia amount in cash.

Addressing a press conference here today, BoB chairman P.S. Shenoy said, “We have resources to fund the voluntary retirement programme, though it will have some impact on our 2000-2001 accounts. However, we will make a representation to the government to compensate the amount.”

Talking about the bank’s entry into the insurance sector, Shenoy said they had already applied to Reserve Bank of India for necessary clearance. BoB plans to hold a 74 per cent stake in the insurance venture.

“RBI has already allowed State Bank of India to foray into insurance with a 74 per cent stake. We are confident to get RBI’s nod. We have also told RBI that we will bring down our stake to 50 per cent within a year’s time and allow any other domestic bank to pick up the stake. We had appointed DSP Merrill Lynch to find out a foreign partner for the 26 per cent stake.”

According to Shenoy, DSP Merrill Lynch has identified four partners. “The foreign partners are in the process of making presentation to us,” he said and added that the bank will finalise the foreign partner within a month.

BoB is also looking for joint venture partners for its mutual fund and credit card subsidiaries. “We are refocusing our four subsidiaries dealing with asset management, credit card, mutual fund and housing finance by roping in professionals from open market,” Shenoy said.

The bank, which had registered a net profit of Rs 500 crore in 1999-2000, will soon choose an advisor for its Rs 400-crore technology upgradation plan. The bank has already shortlisted five international firms for this purpose.

“We will select one from them within 15 days,” Shenoy said.

The bank has already computerised 600 branches and by the end of this year another 400 will be computerised. “Our plan is to integrate these 1,000 branches through intra-city connectivity. The integration of the branches will be done within 18-24 months’ time,” Shenoy said.    


 
 
ARVIND MILLS MAY SEEK DEBT MORATORIUM 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Dec 5: 
The beleaguered Arvind Mills Ltd, which is facing a huge repayment obligation, is likely to approach the domestic institutions by the end of this month seeking a rescheduling of interest payments and a moratorium on debt repayment.

Sources close to the company said as per the financial restructuring exercise under way in the company, Arvind Mills is likely to seek interest rate reschedulement on the foreign exchange loans.

Recent reports said the company had defaulted on interest on its $ 125 million floating rate notes (FRNs).

Prior to this, it had defaulted on its $ 75 million external commercial borrowings.

The company has a total debt exposure of over Rs 2,000 crore, of which term lending institution ICICI Ltd alone said to have an exposure of Rs 500 crore as on March 31, 2000.

Details of the proposed restructuring could not be ascertained from senior company officials including managing director Sanjay Lalbhai and finance director Jayesh Shah as they were unavailable for comment despite repeated attempts made by this correspondent.

However, sources confirmed that the restructuring was likely to be approved by the end of this month following which the proposal would be presented before the institutions.

“We have heard about the restructuring programme, but concrete proposals are yet to come to us,” said a senior official from ICICI Ltd.

The markets have been buoyed by expectations that the institutions are on the verge of accepting the restructuring plan. As a result, the Arvind Mills scrip has risen from its 52-week low of Rs 9 to over Rs 13 recently. In today’s trading, the scrip finished at Rs 13.70 after opening at Rs 13.65 and rising to an intra-day high of Rs 14.10.

Analysts indicate that if the restructuring plan is accepted by the institutions, it could be a reprieve for the company as denim, its core business, has been witnessing an upturn with demand for the commodity on the rise.

Arvind Mills is one of the top three denim producers in the world with a significant portion of the production being exported.

Last year, the company had reported a massive loss of over Rs 271.4 crore on a turnover of Rs 1,210.6 crore and its interest burden was put at over Rs 250 crore.

The Lalbhai group has been going through a restructuring process over the past year. At the start of the previous year, the group divested its stake in Anagram Finance and later in Amtrex Appliances.

The restructuring was done to focus on its core activity of cotton textiles. Recently, it hived off its clothing business into a separate company called Arvind Brands Ltd in which the institutions picked up a stake by subscribing to its optionally convertible debentures.

Earlier, three companies — Arvind Polycot Ltd, Arvind Cotspin Ltd and Arvind Intex — were merged into Arvind Products Ltd, a shell company wholly-owned by Arvind Mills.

While the industry is still agog with talk that Arvind Mills is likely to offload a part of its stake in the company to a foreign collaborator, company circles have dismissed this as mere speculation.    


 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 46.76	HK $1	Rs. 5.90*
UK £1	Rs. 67.63	SW Fr 1	Rs. 27.15*
Euro	Rs. 41.27	Sing $1	Rs. 26.45*
Yen 100	Rs. 42.21	Aus $1	Rs. 25.10*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 4575	Gold Std(10 gm)	Rs. 4540
Gold 22 carat	Rs. 4320	Gold 22 carat	Rs. 4200
Silver bar (Kg)	Rs. 7800	Silver (Kg)	Rs. 7880
Silver portion	Rs. 7900	Silver portion	Rs. 7885

Stock Indices

Sensex			4071.98		+35.49
BSE-100			2130.25		+30.63
S&P CNX Nifty		1284.65		+9.05
Calcutta		117.16		+1.71
Skindia GDR		621.03		+4.70
   
 

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