Reliance Petro beats parent in sales
Rs 15,000 crto be spent on infotech
Gopalakrishnan at helm of wobbling Telco
Shaw Wallace repays ICDs worth Rs 114cr
MTNL’s Dolphin caught in security net
VRS seekers exceed SBI estimate
Bombay Dyeing in the red
Foreign Exchange, Bullion, Stock Indices

 
 
RELIANCE PETRO BEATS PARENT IN SALES 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Jan. 31: 
Reliance Petroleum (RPL) has raced ahead of its parent, Reliance Industries (RIL), racking up sales of Rs 23,457 crore in the first nine months of its operations compared with Rs 21,564 crore notched up by the flagship. It is also the highest-ever nine month-sales tally for a private firm.

On profits however, Reliance Industries beat its offspring hands down and posted Corporate India’s best three-quarter figure at Rs 2106 crore against Reliance Petro’s Rs 1167 crore.

Anil Ambani, the man who is the managing director of both companies, had enough had enough reason to smile as he wrapped up the board meetings with the prediction that RPL was on its way to declaring its maiden dividend this year.

Reliance, which holds 64 per cent in Reliance Petroleum, may bounce back into the reckoning in terms of sales once the accounts of the two companies are consolidated from the next financial year. The sales and profits of RPL in proportion to its holding will be reflected RIL’s accounts.

“Reliance has now reported quarter-on-quarter sales and profits for 43 consecutive quarters in succession, through several economic and business cycles. This is a reflection of our continuing market leadership, and the overall global competitiveness of its operations,” Ambani said.

Earlier, he asked those present at the meeting to observe a minute’s silence as a mark of honour for the people who perished in the Gujarat quake. He listed the measures taken by the group to help victims recover from the trauma.

Meanwhile, Reliance Industries has set its sights on the broadband business, drawing up plans to knit 13 states into a fibre-optic network.

The $ 3.3-billion project will be executed by Reliance Infocom, 45 per cent of which will be held by Reliance Industries. The remaining portion of its equity capital will be shared by employees and group companies.

“The firm may be listed in 2 to 3 years, which will unlock the value for Reliance’s shareholders,” said Ambani, dangling the carrot before Reliance’s army of shareholders.

The company will also consider several options to sell a portion of RPL’s equity — probably around 10 percent — as a way to unlock value for shareholders of the parent firm. “Reliance is exploring various options for unlocking value of RPL shares.”

Expressing his displeasure at the way the government conducted the IPCL selloff, Ambani said his company got a raw deal when the Baroda plant of the state-owned chemical company was hived off to Indian Oil, even though Reliance spent considerable ‘time, money and energy’ in pursuing it.

“Had Reliance been a foreign company, the response from the government would have been different. Proposals are tossed around, but nothing seems to be happening,” he added.

Reliance’s third-quarter production volumes were up 24 per cent at 7.9 million tonnes from 6.4 million tonnes in the same period last year.

Exports surged 200 per cent at Rs 2292 crore. The success in selling overseas demonstrates the international quality of products, and reflects the diversified nature of its markets.

The company, the second largest and the lowest cost producer of polyester in the world, will raise its capacity through a de-bottlenecking plan. It is also looking at acquisitions to do that. A study is under way to increase the capacity of its Hazira complex. “We like to double our polyester capacity and it might be through acquisitions,” Ambani said.

Reliance Petro, on the other hand, has already applied for marketing rights to controlled products because it says it meets all conditions specified by the government. Its refinery has operated at a 101 per cent of its capacity in the third quarter, and at 96 per cent in the nine months of the year. Exports were pegged at Rs 4714 crore, making it the country’s top manufacturer exporter in the first nine months.

This compares with other Indian refineries at 93 per cent during the same period and also with those in other countries. The capacity utilisation by refineries is 91 per cent in North America, 88 per cent in Europe and 99 per cent in Asia-Pacific.

RPL is the world’s largest grassroots refinery, and the seventh largest at a single site. It has been set up at a capital cost which is 30-50% per tonne lower than refineries built recently in Asia.

   

 
 
RS 15,000 CRTO BE SPENT ON INFOTECH 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Jan. 31: 
The Reliance group is planning to pump in a whopping $ 3 billion (Rs 15,000 crore) in the information and communication sectors.

According to the group’s gameplan, Reliance Infocom Ltd will be the lead company which will undertake and promote all future telecom/infocom initiatives of the Reliance group and it will offer the full range of services—voice, data, image and video.

Reliance Infocom may go for an international listing in two to three years to bring down RIL’s shareholding in Reliance Infocom. At present, RIL is the major shareholder with 45 per cent while the remaining equity is held by employees, other Reliance group companies and the promoters.

Outlining the plans, Anil Ambani said the company, at present, is involved in laying a nationwide tetrabit bandwidth network traversing across 13 states.

In the voice segment, the company plans to provide end-to-end connectivity to customers on a nationwide basis. According to Ambani, the group wants to be present in all the segments of the voice market—local, national long distance (NLD), international long distance (ILD) and mobile.

In the data segment, the company plans to offer a wide range of services, including internet data centres, web-hosting, media-casting, call centres, bandwidth selling/trading and e-commerce.

According to Ambani, the fibre optic backbone is being implemented in 13 states and there are over 35,000-strong construction force at work. While rollout of services will be based on market revenue potential, the nationwide backbone will be completed by end 2002.

   

 
 
GOPALAKRISHNAN AT HELM OF WOBBLING TELCO 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Jan. 31: 
Tata Engineering and Locomotive Company (Telco) today announced that R. Gopalakrishnan will look after the day-to-day operations of the company even as the truck major reported a worse-than-expected net loss of Rs 121.44 crore for the October-December quarter, due to a sharp drop in sales.

The auto major’s tumble downhill gathered speed as net loss doubled from Rs 60.36 crore in the previous corresponding quarter.

Net sales for the third quarter dropped by 25.62 per cent at Rs 1,762.02 crore from Rs 2,368.98 crore in October-December 1999, a company statement said.

Gopalakrishnan, who is the executive director with group executive office and director of Tata Engineering, will assume charge of the company’s day-to-day operations, reporting to the chairman and the board, till such time as a managing director is appointed.

Incidentally, after V.M. Raval’s exit last year, the company was on the look out for a suitable replacement.

In another development, the company postponed a proposal for the rights issue of debentures or any other equity-related instruments to the next board meeting.

A drastic drop in demand for commercial and passenger vehicles was responsible for the poor showing by Telco, which has a presence in the commercial vehicles, utility vehicles and passenger car segments.

Significantly, the loss was derived after including Rs 41.57 crore in the other income arising out of profit on sale of investments as against Rs 73.26 crore in the year-ago period. Sale of occupancy during the year accounted for Rs 17.97 crore.

The company said the figures for year ended March 31, 2000, and the quarter ended December 31, 2000, are not comparable to the previous year’s figures, as last year the company’s machine tool and gear division at Pune and Jamshedpur were transferred to its three subsidiary companies on March 30, 2000.

Net loss for the nine months ended December 31, 2000, stood at Rs 353.79 crore (Rs 59.94 crore), while sales were Rs 5,459.24 crore (Rs 6,019.11 crore), the statement added.

   

 
 
SHAW WALLACE REPAYS ICDS WORTH RS 114CR 
 
 
BY A STAFF REPORTER
 
Calcutta, Jan. 31: 
Shaw Wallace and Company said today it had repaid 97 creditors who held inter-corporate deposits (ICDs) worth Rs 114 crore, and that it would soon enlist McKinsey & Company to advise it on its restructuring plan.

Addressing a press conference here today, executive director Komal Chhabria Wazir said of the total payout, only Rs 67.22 crore was the principal amount. “The joint special officers appointed by the high court had Rs 116 crore with them in an escrow account,” she added.

Komal, daughter of M. R. Chhabria, said the company is in advanced stages of negotiations with McKinsey and Co to work out a global strategy and a blueprint for cost control. “We hope to appoint the consultant within a month,” she said.

“We have already cleared the dues of 97 creditors. We have reached an understanding with 56 others, which cover those who extended lease finance and fixed-deposit holders,” Chhabria said.

In addition, 17,000 fixed deposit holders were repaid an amount of Rs 22 crore. Chhabria claimed banks are ready to provide working capital.

Talking about future plans, she said Jumbo International Holdings, Shaw Wallace’s parent, plans to inject substantial funds to expand and acquire distilleries and breweries.

However, she refused to say how much will be invested and when. “We also want to buy an international brand to turn the company into a global player,” Chhabria said.

Meanwhile, Shaw Wallace is restructuring its liquor and beer businesses, besides valuing assets and manufacturing subsidiaries. A wines division has been set up to consolidate its businesses and focus on the core competence alcoholic beverages.

The division will not only promote existing wine brands, but also introduce new international brands. The company enjoys a 19 per cent share in the liquor market and 25 per cent in beer.

   

 
 
MTNL’S DOLPHIN CAUGHT IN SECURITY NET 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Jan. 31: 
Caught in the security net, the Dolphin failed to keep its date with the city today. Mahanagar Telephone Nigam Limited’s much awaited cellular service failed to take off, as security issues forced it to cancel the launch scheduled for today.

Sources said the cell sites proposed to be set up by MTNL were too close for comfort to the Prime Minister’s residence.

However, the launch itself was a subject of much speculation, with the telecom major initially claiming to have launched the services and later retracting that claim.

MTNL initially claimed the services had been launched today as scheduled, with chairman and managing director Narinder Sharma stating, “MTNL’s cellular services have been launched today as scheduled.”

In a complete turnaround later, Sharma said, “The communications minister has kindly consented to inaugurate inaugurate the service on February 7. New connections will be released from February 8.”

   

 
 
VRS SEEKERS EXCEED SBI ESTIMATE 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Jan. 31: 
The much-touted voluntary retirement scheme (VRS) of State Bank of India (SBI) closed today and a quick estimate put the number of employees likely to have opted for the scheme at 45,000.

This is much higher than the initial guesstimate of the bank management which anticipated around 25,000 employees to apply for the scheme when it opened on January 15.

However, senior SBI officials indicated that since figures are yet to arrive from all parts of the country, an accurate picture is likely to emerge only on Friday. SBI presently has a 2.33 lakh-strong workforce.

Bank sources divulged that as of Tuesday, around 38,500 employees had expressed interest in opting for voluntary retirement. Among these, while the number of applications from the clerical category stood at 20,500, the rest were from the officer cadre.

Analysts are now awaiting the response of the bank in terms of the number of applications it accepts and the resulting outgo. The outgo for SBI based on initial estimates, was said to be in the region of Rs 800-1000 crore. Banking circles now estimate the outgo for the country’s largest bank to be at least Rs 1,500 crore, if it decides to accept more than 25,000 applications.

While a host of nationalised banks have unveiled separation packages, figures available so far reveal that around 74,000 employees belonging to 14 public sector banks, representing over 11 per cent of the total workforce, have opted for the schemes.

An analyst at Khandwala Securities, a local brokerage firm, estimated the number of applications at around 50 per cent of the total workforce, based on the strong feedback received from various banks including SBI, adding if all the applications are accepted, it could lead to a 14 per cent reduction in PSU staff strength.

The analyst added relocation of staff on a large scale consequent to the VRS programmes would be imminent if optimal utilisation of the residual manpower is desired, which could face serious resistance from the workforce.

The scheme unveiled by SBI is touted as the largest of its kind in the domestic banking sector.

The bank, while announcing the VRS, had said it was part of its efforts to re-deploy and re-train staff and that it would launch a technological upgradation exercise involving reorganisation of functions, tasks and activities.

   

 
 
BOMBAY DYEING IN THE RED 
 
 
OUR BUREAUX
 
Jan. 31: 
Bombay Dyeing has posted a net loss of Rs 11.71 crore in the quarter ended December 31 compared with a net profit of Rs 7.8 crore in the same period last fiscal.

Net sales were down by 10.42 per cent from Rs 225.05 crore to Rs 200.61 crore. Other income for the quarter was Rs 13.93 crore as against Rs 23.75 crore in the year-ago period.

Asian Paints net up

Asian Paints posted 10.4 per cent higher net profit of Rs 25.66 crore during the third quarter ended December 31 compared with Rs 23.24 crore of the corresponding period of the previous year. Gross sales also registered a marginal growth of Rs 4.1 per cent at Rs 387.87 crore compared with Rs 372.73 crore for the corresponding quarter of the last year. Net sales increased by 3.9 per cent to Rs 313.64 crore.

Kesoram in black

Kesoram Industries Ltd, the B.K. Birla group flagship, today reported a net profit of Rs 3.01 crore during the third quarter of 2000-2001 against a net loss of Rs 4.86 crore in the corresponding period of the previous year. Net sales during the quarter jumped to Rs 339.06 crore from Rs 151.91 crore last year.

Though the company did not give any specific reason for a sharp turnaround, it was felt that hiving off the textiles division to a separate company had helped.

SSI net leaps

SSI Ltd, a Chennai-based leading IT training and software development provider, posted a 187 per cent jump in net profit at Rs 25.08 crore for the second quarter ending December as against Rs 8.74 crore in the corresponding period last fiscal.

Income from operations also rose sharply to Rs 115.42 crore in the second quarter (Rs 42.41 crore the previous year) while other income was up by Rs 7.97 crore (Rs 28.53 lakh).

Of the total operating income, the education division accounted for Rs 63.44 crore, technologies division Rs 46.03 crore and the enterprise support division Rs 6.3 crore.

For the six months ending December, the company made a net profit of Rs 52.66 crore (Rs 15.5 crore), income Rs 216.95 crore (Rs 76.58 crore) and other income stood at Rs 20.1 crore (Rs 87.34 crore).

Nalco turnover jumps

The National Aluminium Company Limited (Nalco) has reported more than 20 per cent jump in turnover at Rs 606.93 crore during the third quarter of current fiscal (2000-01) from Rs 503.08 crore in the corresponding period last fiscal.

Net profit during the quarter increased by over 22 per cent to Rs 192.01 crore from Rs 157.76 crore last year.

During the nine-month period of current fiscal, the aluminium major’s net profit stood at Rs 494.85 crore against Rs 335.83 crore last year.

Other income during the quarter also stood higher at Rs 45.46 crore against Rs 30.39 crore in the same quarter of last fiscal.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 46.40	HK $1	Rs.   5.85*
UK £1	Rs. 67.86	SW Fr 1	Rs.  27.80*
Euro	Rs. 43.22	Sing $1	Rs.  26.25*
Yen 100	Rs. 39.92	Aus $1	Rs.  25.05*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs.4490	Gold Std (10 gm)Rs. 4440
Gold 22 carat	Rs.4240	Gold 22 carat	Rs. 4110
Silver bar (Kg)	Rs.7900	Silver (Kg)	Rs. 7925
Silver portion	Rs.8000	Silver portion	Rs. 7930

Stock Indices

Sensex		4326.72		-45.32
BSE-100		2209.31		-22.36
S&P CNX Nifty	1371.70		- 8.00
Calcutta	 129.29		- 1.07
Skindia GDR	 744.45		+13.14
   
 

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