Basic licence calls go out for Tatas, Reliance & HFCL
Cooperative bank woes won’t spill over: Jalan
Dr Reddy’s warms up for US flotation
BPL to appoint consultantsfor revamp
MMTC to raise stake in Neelachal Ispat
Saharias sell tea business to Assam Co
Who wants to grow up, retorts Pepsi
Bata net dips to Rs 5 crore
Banks to be open on April 3
Foreign Exchange, Bullion, Stock Indices

New Delhi, March 27: 
The government has issued 40 letters of intent (LoIs) for basic telecom services to Reliance, Tatas and Himachal Futuristic (HFCL), communications minister Ram Vilas Paswan said here today.

“We have issued 40 LoIs for basic telecom services from the 132 applications that were received by the department of telecommunications. We have sought clarifications from others,”he said.

Sources say Reliance has been offered 18 telecom circles, including Delhi, Mumbai. Calcutta, Chennai, Maharashtra, Punjab and Haryana. The group, which is currently operating in Gujarat, had not applied for Assam and other areas in the north-east.

The Tatas have got letters of intent for 15 circles, which include Delhi, Mumbai, Chennai, Calcutta, Maharashtra, Karnataka, Tamil Nadu, Punjab, Haryana, and Uttar Pradesh.

The group, which offers basic services in Andhra Pradesh, had not applied for Andaman and Nicobar, Himachal Pradesh, Jammu and Kashmir, Assam and other north-east circles.

Himachal Futuristic, which has a basic licence for the Punjab circle, has got LoIs for seven circles, including Delhi, Haryana, Uttar Pradesh (West), Maharashtra and Karnataka.

The letters of intent will be converted into licences once the companies pay the fee and provide bank guarantees for future payments.

The move follows the allocation of frequency bands to fixed-line phone operators which want to offer wireless in local loop (WiLL) mobile services. The new fixed-line phone operators will also be allowed to offer Will-based mobility.

Issuing the letters of intent marks the beginning of greater competition in basic phone services, a segment that will now see multiple players vying for a slice of the pie in all zones. Many with licences have not even started operations. There are only six private firms which offer basic services in different parts of the country since the sector was opened up.

In a move to pre-empt competition, BSNL today launched its first WiLL mobile services in Haryana with free incoming calls, outgoing calls at Rs 1.20 and a monthly rental of only Rs 400.

The aggressive pricing, substantially lower than those charged by cellular operators, is expected to lure customers in a big way. Though it remains a limited mobility service, it compares favourably with the packages offered by cellular operators at tariffs which range from Rs 2.85 to Rs 4.00 a minute for outgoing calls and up to Rs 4 for the incoming ones.

Cellular operators have been railing against the Telecom Regulatory Authority of India’s (Trai) decision to allow fixed line phone companies an entry into their domain by allowing them to use WiLL-based limited mobility.

BSNL fixed its tariffs for WiLL mobile services on the basis of recommendations made by Trai, but the regulator has not said what the rental should be.

Rival basic operators have already announced their intention to offer WiLL-based cellular services. Shyam Telecom has started offering limited mobile services in Rajasthan at the same tariff but has taken a flexible approach to rental.

Bharti seeks NLD licence

Bharti Telesonic, the joint venture company between Bharti Enterprises and Singapore Telecom, became the second company after Reliance to apply for an licence to offer national long distance services six months after the sector was opened to private operators. Sources say the paid up capital of the venture is expected to be around Rs 600 crore.


Mumbai, March 27: 
Reserve Bank governor Bimal Jalan expressed confidence in the banking system, saying the problems that plague cooperative banks will not spill over to the entire industry.

“The troubles of co-operative banks will not harm the banking system,” he declared. The RBI governor was speaking to reporters on the sidelines of a function where awards were conferred for excellence in corporate governance.

Jalan was standing in for Union finance minister Yashwant Sinha, who was supposed to be the chief guest for the function, but dropped out with finance secretary Ajit Kumar at the eleventh-hour due to ‘unscheduled meetings in Delhi’.

Jalan presided over the function and said he was there on the finance minister’s request. In a remark that lent the occasion a moment of levity, he said folks at the central bank ‘are forever cleaning up the central government’s deficit’.

The industry grapevine has been abuzz with stories about a cash crunch for a few cooperative banks, caused mainly by their exposure to stock markets. The apex bank recently suspended Madhavpura Mercantile Cooperative Bank and stopped City Cooperative Bank from carrying on operations.

Classic Cooperative Bank, specialising in bullion trading, has also come under the glare of the RBI and central enforcement agencies after its cheques to four commercial banks bounced. There are reports that the cooperative bank owes State Bank of India, Bank of India, Punjab National Bank and Standard Chartered Bank a sum of Rs 69.6 crore.

Jalan said the issue of corporate governance has gained greater urgency after the problems that surfaced in the financial sector this month. “Corporate governance is important for everybody — for shareholders, for employees and for the economy,” he added.

Some of the qualitative standards that companies have to meet to win the corporate excellence award are in the areas of shareholder value, social obligations, promotion of employee welfare, general concern for the environment, ethical code of conduct, sound HRD policies, empowerment of the staff and innovative practices to improve the quality of life for other stakeholders — as distinct from shareholders — of the company.

Referring to the turmoil in the markets at home and abroad, Jalan said it was a time when the country’s business fraternity needed to do introspection. “Reforms imply liberalisation, deregulation, more individual initiatives and a movement towards a competitive system. We have prudential norms but we must avoid micro-regulation,” he added.


Mumbai, March 27: 
Dr Reddy’s Laboratories Ltd (DRL), the Hyderabad-based pharmaceutical major, formally kicked off the process of getting listed on the US markets, filing a registration statement with the Securities and Exchange Commission (SEC) for a primary offer of 1.15 crore American Depository Shares (ADS), representing 57.50 lakh equity shares.

If the proposed plan materialises, the pharma major will become the first Indian company in the manufacturing sector and outside the infotech and banking sector to list on the US bourses. DRL is planning to raise around $ 200 million through the issue and the proceeds will be used in funding its research and development activities for undertaking clinical trials.

Sources said part of the funds raised from the ADS issue will also be reserved for investment in other high growth areas.

Most pharmaceutical analysts were, however, surprised by the sudden announcement, considering the present state of the US markets.

Meanwhile, news of the overseas listing drove up the Dr Reddy’s stock to finish at Rs 1224.95 after opening at Rs 1194 and rising to a day’s high of Rs 1235. The counter saw 97,966 shares being traded, resulting in a total turnover of Rs 11.93 crore.

DRL, in a communication to the stock exchanges, said the price of ADS will be determined by reference to the prevailing market prices of its equity shares. On March 23, the scrip closed at Rs 1215 on the Bombay Stock Exchange (BSE). That makes it equivalent to $ 13 per ADS. Merrill Lynch and Co is the managing underwriter for the offer.


Mumbai, March 27: 
Consumer electronics and appliances major, BPL Ltd, will appoint consultants for the proposed re-organisation of its manufacturing facilities.

This was decided at a board meeting held today. In a communication sent to the stock exchanges, the company said the board of directors have authorised chairman and managing director Ajit G Nambiar to appoint consultants/experts in connection with the reorganisation.

However, the company did not specify the details of the proposed restructuring programme or the agenda for the consultants. Senior BPL officials too were unavailable for comment.

Market circles speculate that BPL may hive off or dispose some assets of its three units or exit certain non-remunerative businesses. The company has factories in Palakkad in Kerala and Bangalore and Maddur in Karnataka. Colour televisions and home theatre systems are a major contributor to BPL’s turnover and the company, according to reports, has an over 25 per cent share of the CTV market. It also manufactures alkaline batteries at its plant in Karnataka, for which it had a buy-back arrangement with Sanyo, Japan.


New Delhi, March 27: 
The Union Cabinet today approved Minerals and Metals Trading Corporation’s plan to raise its investment in Neelachal Ispat Nigam Ltd from Rs 100 crore to Rs 150 crore.

MMTC has been forced to hike its stake in the Rs 1500-crore shore-based steel project as Lucky Goldstar of Korea and Commonwealth Development Corporation of the UK have backed out, leaving an equity gap of about Rs 130 crore. Both have backed out citing sudden changes in investment plans. Some Rs 50 crore of this gap is being filled by MMTC. The remaining amount will be pumped in by the Industrial Bank of India (IDBI).

MMTC will be funding the extra equity it is picking up out of its own savings.

Neelachal Ispat is an integrated steel plant being set up to make 1.1 million tonnes of hot metal sheets at Durburi in Orissa. The main promoters of Neelanchal are MMTC, IPICOL (Orissa government’s investment arm) and Mecon.

Apart from the MMTC proposal, the Cabinet cleared amendments to the Consumer Protection Act to facilitate quicker disposal of cases, increase powers of the three-tier court structure and widen the scope of the Act.

The Cabinet also permitted the income tax department to lease and renovate Scindia House at Ballard Estate in Mumbai from Scindia Steamship Corporation at a cost of Rs 95 crore to house its offices.


Calcutta, March 27: 
Assam Company has acquired an 85.72 per cent stake in the Dibrugarh-based Namburnadi Tea Company from the Saharia family in a negotiated deal last week.

The acquisition of the almost 100-year company, which has only one garden with an annual capacity of six lakh kgs, could mark Ajay Kumar Saharia’s exit from the tea business.

Assam Company said it will pay Rs 275 for each of the Saharia family’s 1,13,476 shares picked up in a Rs 3.12-crore deal brokered by the city-based Ashika Credit Capital.

Assam Company made open offer to acquire the balance 14.28 per cent stake held by held by the public and institutions. Foreign individuals and entities still own a part of its equity. The offer is meant to mop up a tiny portion 18,899 shares at a cost of Rs 52 lakh. An escrow account has already been opened to pay for the acquisition of these shares.

Ashika Credit Capital said the price of Rs 275 fixed after negotiations between the two sides in the absence of a ruling market price.

Namburnadi has an authorised capital of Rs 25 lakh but its paid up capital at Rs 13.23 lakh is just over 50 per cent of that amount.

According to a senior Assam Company official, Namburnadi was once owned by Shaw Wallace, which sold it to the Saharias. Its garden is near Dibrugrah, an area in Upper Assam known for fine-quality tea. However, production at the estate fell to three lakh kgs last year from a high of six lakh kgs after the firm fell on bad times, an Assam Company official. said.

Under rules laid down by Securities and Exchange Board of India’s (Sebi), the assets of Namburnadi Tea Company, which grossed a turnover of Rs 3 crore in the last financial year but suffered a net loss of Rs 15.64 lakh, cannot be sold for two years.

The Rs 150-crore Assam Company has said in its open offer to shareholders that it will raise production and develop the Namburnadi garden. “Since the promoters of Namburnadi are not in a position to turn it around, they decided to sell their controlling interest to the acquirer. We intend to take control of the management of NTCL through acquisition of these shares, propose to expand tea production and undertake development activities. Assam Tea Company, by virtue of its technical expertise and experience, is in a better position to make the company profitable,” the offer states.

The acquisition gives Assam Company, which produces 15 million kgs every year, a tremendous strategic advantage because of Namburnadi garden’s location and potential.

The shares of Namburnadi Tea, though listed on the Calcutta Stock Exchange, are hardly traded since 85 per cent of the company’s stock was in the hands of the Saharia family.


New Delhi, March 27: 
“Have you grown up to the Thums Up challenge yet,” asked Coke. “Who wants to grow up anyway?” retorts Pepsi in a thumbs down to its arch-rival, set to be aired tomorrow during the one-day international cricket match at Pune.

Equating the ‘grown-up’ drink stance of Thums Up to a fuddy-duddy one, the ad shows an authoritarian mom feeding a ‘grow-up’ tonic to her reluctant Munna (both played by Cyrus Broacha, who does a Mrs Doubtfire). The idea is to turn him into a mature “accha-baccha” with no music, no girlfriends. She gets the desired result when Cyrus, with neat, oiled hair, addresses a pretty girl on the street as ‘sister.’ The mother rejoices hoping “slowly, slowly the boy will forget Pepsi.”

But her dream is shortlived, when the son takes a sip from a Pepsi bottle and metamorphoses into a regular fun-loving guy, looking for his share of fun, even as the mom screams, “When will you grow up?”

Amrish Puri then materialises to deliver the punch line: “Grow up? Never Auntyji, never.”

And it is no coincidence that Amrish Puri is shown wearing a T-shirt sporting Bryan Adam’s famous lines: “18 till I die.” Pepsi is also co-sponsor to the Bryan Adams concert scheduled for May in Delhi, Calcutta and Mumbai.

While with this ad Pepsi reiterates its youthful positioning, it also wants to hook the not-so-young consumers with its “youth is a state of the mind today” dictum.

Vibha Rishi, Pepsi’s executive director (marketing) said, “Our ad is intended to send a message to all those who try to drill it in to young minds that you should do this, should not do that .... those who are trying to attach a kind of stigma to being young. We want to say being young and youthful is fun, who wants to grow up?”

“Our target consumers are between 15 to 25 and Pepsi has always been very focused on its core group,” she adds.

Countering Thums Up’s claim to be the preferred drink, Pepsi added that in March 2001, AC Nielson conducted a blind product taste test for Pepsi, Coke and Thums Up, in the top four metros and Bangalore. The sample age group was 12-39. Without knowing the brand, the respondents were asked to indicate their preference of one over the other. Pepsi was preferred significantly over both Coke and Thums Up, on overall likeability, it states.

Rishi pointed out that Research International, whose research figures are used in the Thums Up ad, never sought to know the consumer’s own preference, though the ad shows otherwise. The research had three questions — which drink is sweeter, which is stronger and which one is preferred by children — thereby excluding the consumer’s own preference, she says.

Coming down heavily on Coca-Cola’s advertising plank using the product taste test, Rishi added, “Their testing does not cover the five top Indian cities, like it is supposed to do. For example, they took Hyderabad instead of Chennai.”

The latest Pepsi commercial, made by HTA, has been directed by adman Prahlad Kakkar.


Mumbai, March 27: 
Bata India Ltd, the Calcutta-based footwear maker, has recorded a 47 per cent fall in its net profit for the quarter ended December 31, 2000.

Net profit of the company fell to Rs 5.05 crore against Rs 9.48 crore in the same period of the previous year.

Net sales in the quarter were down to Rs 187.63 crore from Rs 193.23 crore, while other income stood at Rs 0.43 crore, against Rs 0.34 crore in the previous comparable quarter.

For the year ended December 31, the company announced a net profit of Rs 15.6 crore, which was lower than Rs 30.46 crore the previous year.

Net sales also fell to Rs 719.2 crore from Rs 731.57 crore in the year-ago period.


Mumbai, March 27: 
The Reserve Bank of India said today that all banks will be open on April 3, revising an earlier decision to keep the banks shut for annual closure of accounts. The decision to keep banks open on April 3 has been taken to reduce inconvenience to the public, as there are several holidays ahead, the RBI spokesperson said. Bankers will report for work on Sunday, April 1, for closure of their annual accounts.

Nevertheless, barring certain banks with automated teller machine (ATM) facilities, a large number of bank customers might feel the pinch, as salaries are generally deposited in the first week and also withdrawn in the same week.



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