Alcatel eyes stake in Agrani
Bajaj Auto net skids 57%
Lanka wants joint action to help tea traders
Bharti allies pump in more funds
Add Spice to life for 90 bucks a day
Sebi set to clear Damani’s VST bid
Icra rating rap for Samtel
Foreign Exchange, Bullion, Stock Indices

 
 
ALCATEL EYES STAKE IN AGRANI 
 
 
FROM VIVEK NAIR
 
Mumbai, May 7: 
Alcatel Space Industries, part of the French telecommunications giant Alcatel, is close to picking up a stake in Agrani Satellite Services (ASSL), a high-stakes project floated by Subhash Chandra’s ASC Enterprises.

The size of equity to be bought has not been decided, but sources close to Agrani say it would be substantial. The Rs 1,400-crore project, which aims to lease out transponder space to telecom, broadcasting and dotcom ventures, has a debt-equity ratio of 1.5:1.

Industrial Development Bank of India (IDBI) has sanctioning Rs 300 crore in loans to the project, while Chandra has underwritten the equity component to the extent of Rs 750 crore. Sources say the company is looking for debt from banks and other financial institutions to finance the project.

The re-orientation of the Agrani project follows a restructuring drive at ASC Enterprises as part of which the plan to offer mobile communications in India, Nepal, Bangladesh and Bhutan, apart from direct-to-home transmission, was shelved. Sources say these initiatives will now be routed through ICO Global Communications, a venture co-promoted by Chandra.

ASC Enterprises, after the revamp, is more like a holding company with Agrani Satellite and Agrani Convergence (ACL), which will set up a multi-format retail chain that offers telecom, information technology and learning, media and entertainment products.

ASC also intends to provide public mobile radio trunking services based on digital wireless communication systems. The company recently acquired three Bhilwara group companies which have 11 licences to provide mobile radio trunking services across the country. The aim is to offer a range of services by integrating direct connect services, wireless telephony services, messaging, data and internet services.

Agrani Satellite is counting on the ever-increasing demand for space on C and KU band transponders from internet, V-Sat, satellite television channels and large companies to keep it going.

It will also offer to the satellite communication services industry what it calls bundled solutions, which should be ready in 19 months.

“The prices will be competitive,” sources said. Alcatel Space Industries is already a vendor to Agrani Satellite, having wrapped up a deal to deliver the first in-orbit satellite.

ACL, on the other hand, will put in place a massive network of 2,500 self-owned and franchisee stores by 2008, which will use the traditional and virtual methods to reach out to customers.

   

 
 
BAJAJ AUTO NET SKIDS 57% 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 7: 
Bajaj Auto Ltd has recorded a sharp decline of 57.21 per cent in its net profit at Rs 262.56 crore for the year ending March 31, 2001 compared with Rs 613.73 crore in the previous year. The company attributed the squeeze on the bottomline to the poor performance of geared scooters—its best selling product in the past. Total income for the year ended March 2001 fell by six per cent to Rs 3,963.94 crore compared with Rs 4,215.55 crore in the previous fiscal.

Income from investment of surplus funds was also down by Rs 141.12 crore to Rs 263.94 crore by end of March 2001 mainly due to the reduction in funds (Rs 728 crore utilised for buying back shares and Rs 80 crore for the voluntary retirement scheme).

The Bajaj Auto board was, however, bold enough to recommend a dividend of Rs 8 per share, amounting to a total outgo of Rs 89.20 crore.

Two and three wheelers sales during the last financial year was 12.09 lakh units as against 14.32 lakh in 1999-2000.

For the current financial year, BAL officials painted a grim scenario for the two-wheeler industry, stating that the whole industry had a negative growth of 0.4 per cent in the last financial year.

In the motorcycle segment, BAL registered a 65 per cent growth in 2000-2001.

Godrej net down 33%

Godrej Industries Ltd (GIL), formerly Godrej Soaps Ltd, has reported a 33.34 per cent fall in net profit at Rs 40.65 crore for the financial year ended March 31, 2001, compared with Rs 60.99 crore in previous fiscal. The board has recommended a 30 per cent dividend compared with 27 per cent last year. Income from operations increased by 21.04 per cent at Rs 890.02 crore (Rs 735.25 crore in 1999-2000), it added.

Other income was also higher at Rs 3.24 crore (Rs 1.24 crore).

Exceptional items include a provision for depletion in the value of long term investments made in certain companies aggregating Rs 19.51 crore (Rs 5.47 crore) in view of continuing erosion in their net worth. It also includes certain deposits/loans of Rs 14.31 crore written off in view of non-recovery of principal amounts and interest thereon, GIL said.

   

 
 
LANKA WANTS JOINT ACTION TO HELP TEA TRADERS 
 
 
BY A STAFF REPORTER
 
Calcutta, May 7: 
Sri Lankan high commissioner in India Senake Bandaranayake today said a joint effort is needed to solve the conflict between his country’s tea traders and those of India over export of tea from that country. “It is in the interest of the tea industry of both countries to work out areas where there is no conflict,” Bandaranayake said.

Commenting on the prospect of blending of Indian and Sri Lankan tea for export purposes, he said that experts’ response is required for this. He said, though he is not sure of the statistics, it is believed that Sri Lanka, with a much lower production of tea than India, has a larger share in the global tea market.

He said tea industry of both the countries can jointly work out areas to capture bigger share in the international market and also fetch better prices. The basis for such an initiative has widened with Tatas being one of the major producers of tea in Sri Lanka.

   

 
 
BHARTI ALLIES PUMP IN MORE FUNDS 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 7: 
Bharti Enterprises Ltd has received an additional equity investment of $ 460 million from various global partners, including $ 200 million each from Singapore Telecom and Warburg Pincus, to expand telecom projects in India. Warburg Pincus is one of the world’s largest private equity investors.

According to Bharti group chairman Sunil Mittal, others who have invested in the current round of financing include AIF Funds Management Ltd ($ 35 million), International Finance Corporation ($ 20 million) and New York Life ($ 5 million).

Mittal, however, refused to give the new shareholding pattern after the infusion of funds from foreign partners. He said the company was in the process of restructuring but emphasised that Bharti would remain the major equity holder.

“This investment is more than just resources for the group to realise its vision,” Mittal said.

At present, the Mittals own 65 per cent equity stake in Bharti Televentures, while Warburg Pincus holds 13 per cent and SingTel 15 per cent. The remaining 7 per cent is shared among AIF Funds Management Limited, International Finance Corporation, New York Life and others.

The fresh funds will be spent on setting up new mobile telecom ventures, developing national long distance operations (NLDOs), funding synergistic acquisitions and expanding the company’s basic telecom services.

“The necessary clearance from the Foreign Investment Promotion Board has been received and the money will start flowing soon. We will also monitor the foreign exchange market while deciding the flow of money into the country,” Mittal said.

Bharti Enterprises has already invested about $ 600 million (Rs 2,800 crore) in the existing telecom ventures. The company has also assigned over $ 1 billion (Rs 4,700 crore) towards new projects across all segments of the telecom sector in India.

The company has committed a capital of $ 150 million (Rs 700 crore) to develop NLDO and other new projects. With the raising of fresh equity capital of $ 460 million (Rs 2,150 Crore), Mittal said, “the company now has investible equity funds of over $ 600 million (Rs 2,800 crore) to pursue its ambitious plans. To part fund the balance capital requirement, the company also announced its intention to make an initial public offering (IPO) of $ 200 million (Rs 940 crore).”

The current equity capital, combined with the proposed IPO, gives Bharti a strong net worth, that it can comfortably leverage to raise a further debt capital of up to $ 1 billion (Rs 4,700 crore) bringing the investible capital in the near future to $ 1.8 billion (Rs 8,440 crore) for its balance requirements.

The company plans to float the IPO at an appropriate time in the future. “We are ready and are waiting for the opportunity. We will first tap the domestic market and later explore the international market,” Mittal said.

Hence, with a substantially increased net worth, revised debt raising capabilities combined with cash generation from its projects, Bharti will have a cumulative investment capability of over $ 3.5 billion (Rs 16,400 crore) over the next few years.

Speaking on SingTel’s third largest investment in the Indian telecom sector, Lung Chien Ping, vice-president (international finance and operations) said, “We strongly support Bharti’s vision to enhance its already competitive Pan India position.”

According to Dalip Pathak, managing director of EM Warburg Pincus, “India continues to be a very important investment destination for Warburg Pincus in Asia.”

   

 
 
ADD SPICE TO LIFE FOR 90 BUCKS A DAY 
 
 
BY A STAFF REPORTER
 
Calcutta, May 7: 
Hassled for a connection, distressed at being out of touch and desperate for a buzz, Spice Telecom promises to end that agonising wait with Rent-A-Mobile, a service it plans to launch with the city-based Ankur Telecom.

Pre-paid SIM cards will be available from any of Spice’s 200 outlets in Calcutta and Howrah against a refundable security deposit of Rs 300 and a rent of Rs 40 a day. The call charges will be the same as those paid by regular subscribers — Rs 2.25 per minute for incoming ones and Rs 4.50 for outgoing ones. No activation charges will have to forked out.

Those who do not have handsets can get one — all for Rs 50 a day — against a security deposit which could range from Rs 1,500 to Rs 2,000, though it is not part of the rental scheme.

The company plans to target what it calls a large floating population, the kind of people who would prefer limited-period connections with value-added features such as STD and SMS.

Spice chief operating officer Arun Kapoor said Calcutta, as the hub of the eastern region, draws a large number of mobile-accustomed visitors and, therefore, offers a lucrative market for such a service.

“We will target traders, small businessmen and patients who come to the city for treatment from neighbouring areas,” says R Mahesh, vice-president (marketing).

People from Bangladesh will form another target group for the service, which will help customers who do not have a roaming facility to stay connected when they visit the city.

Spice feels the product will take some time to catch on, but is confident it will generate monthly revenues of Rs 50 lakh six months from the launch.

Ankur Telecom, an old player in the rental business which has a tieup British mobile giant Vodafone, will receive 35 per cent of the airtime charges and rentals from the service.

   

 
 
SEBI SET TO CLEAR DAMANI’S VST BID 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 7: 
After dithering on R.S. Damani’s open offer for VST Ltd, the Securities and Exchange Board of India (Sebi) is now all set to clear the Bright Star Investment’s bid.The capital market watchdog was dragging its feet mainly because of Damani’s broking outfit coming under the scanner for alleged price manipulation in the stock markets.

Once Sebi clears Damani’s offer, the VST counter is likely to come alive as Bright Star is expected to make up for the lost time by setting a new benchmark price.

Merchant bankers say this will be done by acquiring shares from the stock market at a higher price, which would be more than what Russel Credit, its rival bidder, has offered to VST shareholders.

At present, Bright Star’s offer price is pegged at Rs 112 per share. The open offer was for acquiring 30,88,384 shares of VST Industries Ltd. The book value of the cigarette company is pegged at Rs 140 per share.

The counter-offer of Russel Credit, a subsidiary of ITC Ltd, was pegged at Rs 115.

When contacted, John Band, the chief executive officer of ASK-Raymond James, said he was expecting Sebi’s green signal at any moment.

The VST share today closed at Rs 111.05 on the Bombay Stock Exchange, after climbing to an intra-day high of Rs 116.

   

 
 
ICRA RATING RAP FOR SAMTEL 
 
 
FROM SHASHWATI GHOSH
 
New Delhi, May 7: 
Investment Information Credit Rating Agency Ltd (Icra) has downgraded Samtel Color’s long-term non-convertible debentures (NCDs) and fixed deposits from LA and MA to LA- and MA- respectively. While the revised ratings continue to indicate adequate safety, the degree of safety has, however, declined, Icra said.

The downgrade throws a spanner in Samtel’s plan to raise money from the market for its new project. The company is planning to start a third production line to manufacture computer display tubes and super flat tubes.

According to Icra, apart from the financial risk, this will be the first time that such production will be undertaken by the company here. Samtel does not have any technological partner to back this venture. “The in-house building of tubes has increased the risk factor,” the rating agency said.

Samtel chairman Satish K Kaura said, “This rating has been given on the basis of the debt-equity ratio of the firm. We are a Rs 900 crore group and currently investing Rs 320 crore in a new line of production. As the risk factor rises, Icra has downgraded our rating.”

At present, Samtel has two production lines with a capacity to manufacture 3.1 million colour picture tubes per annum.

According to an Icra spokesperson, previous performance of Samtel and substantial debt repayments in their books will keep the risk below adequate safety levels. “Due to the sluggish market performance and the rise in glass prices, net sales of the company has already decreased. At this juncture the risk increases,” he said.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	 Closed	HK $1	Rs.  5.95*
UK £1	Closed	SW Fr 1	Rs. 26.70*
Euro	Closed	Sing $1	Rs. 25.30*
Yen 100	Closed	Aus $1	Rs. 24.00*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 4430	Gold Std(10 gm)	Rs. 4340
Gold 22 carat	Rs. 4185	Gold 22 carat	Rs. 4015
Silver bar (Kg)	Rs. 7350	Silver (Kg)	Rs. 7365
Silver portion	Rs. 7450	Silver portion	Rs. 7370

Stock Indices

Sensex		3544.81		+30.22
BSE-100		1733.84		+23.02
S&P CNX Nifty	1139.20		+ 9.15
Calcutta	 119.36		+ 0.29
Skindia GDR	 637.79		+ 1.84
   
 

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