Packer puzzle in HFCL stake shuffle
South Africa, Australia beckon Tisco
Q1 net profit drops 80%
Public sector banks loath to pick up UTI stocks
Koshika move to get back licences
L&T net profit leaps 245% to Rs 65 cr
PC sales log 34% growth
Passenger car sales rev up, spurt 30% in June
Top guns queue up for Hyundai Sonata
Foreign Exchange, Bullion, Stock Indices

 
 
PACKER PUZZLE IN HFCL STAKE SHUFFLE 
 
 
BY ANIEK PAUL
 
Calcutta, July 18: 
The shareholding pattern of Himachal Futuristic Communications (HFCL) as of June 30 has thrown up a strong possibility that entertainment czar Kerry Packer has been co-opted as a co-promoter of the company.

The promoters hold 26.9 per cent, according to the quarterly distribution schedule filed by the company with exchanges on Monday, in contrast with 17.79 per cent mentioned in the last annual general meeting notice dated August 8, 2000.

HFCL group chairman Mahendra Nahata could not confirm whether Packer’s holding has been treated as promoters’ stake. “I do not know how Packer’s holding has been classified in the distribution schedule filed with exchanges, but there has been no decline in his 9.09 per cent stake,” he added.

The Australian media moghul had acquired 9.09 per cent in HFCL last year through Ecom.Com, a nominee of his Consolidated Press Holdings, in a deal worth more than Rs 1,039 crore. The deal was wrapped up at Rs 1,450 per share.

The shareholding pattern filed by HFCL with the stock exchanges on Monday does not mention Packer’s stake, even though it lists all non-promoter holdings above 1 per cent.

Had the promoters raised their stake to 26.9 per cent through market purchases over the past one year, they would have fallen foul of Sebi’s creeping acquisition norms. The annual limit on creeping acquisitions is 5 per cent.

Since that is unlikely to have happened, there are two possibilities: either the promoters have bought out the stake held by Ecom.Com, something Nahata has denied, or, Ecom.Com’s holding has been classified as that of a co-promoter — implying that Packer has been co-opted as a co-promoter in HFCL.

The combined stake of the Indian promoters and Ecom.Com, based on its last AGM notice, stands at 26.885 per cent, almost the same as shown in the company’s distribution schedule for June 30 this year. Therefore, Packer’s inclusion as a co-promoter appears to be the only way the promoters’ holding could have increased by over 9 per cent in less than a year.

HFCL had said there would be “no change in the board or the control of the management of the company” when 71,65,650 shares were issued to Ecom.Com last year as part of a tie-up with Packer’s Consolidated Press Holding Group.

HFCL Nine Broadcasting, the company formed by the alliance between HFCL and Consolidated Press Holding, was wound up this year after its operations floundered. HFCL had to write off the loans extended to the failed venture.

   

 
 
SOUTH AFRICA, AUSTRALIA BECKON TISCO 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 18: 
Tata Iron & Steel Company (Tata Steel) is being wooed by Australia and South Africa, both among the lowest cost producers of power in the world to set up ferro chrome operations in their countries.

“Tisco had finalised a site at Gladstone in Australia in January, but the South African Trade Commission has now offered it an alternative location at Richards Bay,” Jamshed J. Irani said. We did not approach the South African government agencies, they approached us instead,” he added.

He was speaking at a press briefing, incidentally his last as managing director of Tata Steel. The meeting was called to announce Tisco’s number one ranking among 12 leading steel corporations in the world, based on a study by World Steel Dynamics — an authority on the global steel industry.

Irani said Australia had offered power at a uniform price for 15 years at 1.5 US cents per unit, while South Africa had linked its power prices to international ferro-chrome prices.

“We have also looked at South Africa and are now evaluating which is the better place for us.”

With attractive offers from both, the steel major is clearly spoilt for choice.

Tisco plans to spend Rs 250 crore on the project, which would produce 1.20 lakh tonnes per annum of ferro-chrome. The rationale behind relocating its ferro-chrome plant to foreign shores was mainly the exorbitant rates for power in the country.

   

 
 
Q1 NET PROFIT DROPS 80% 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 18: 
The first quarter profits of steel major Tata Iron and Steel Company (Tata Steel) tumbled 80 per cent in April-June from the previous comparable period, falling far short of market expectations.

The company posted a net profit of Rs 20.53 crore, down from Rs 101 crore in the previous corresponding period quarter.

Mirroring the market trend, sales fell 6.8 per cent to Rs 1611 crore from Rs 1728 crore. The company attributed the lower sales in the first quarter of this year as against the same period last year to the “general slowdown in the domestic economy.” Ahead of the results, the Tata Steel shares closed up 0.86 per cent at Rs 100.10 on the Bombay Stock Exchange.

Irani said the current quarter was bad mainly in view of the market conditions, as consumers stocked up during March, apprehending a price increase.

   

 
 
PUBLIC SECTOR BANKS LOATH TO PICK UP UTI STOCKS 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 18: 
Top officials of the Unit Trust of India (UTI) and chiefs of eight public sector banks met today to hammer out a credit line for the beleaguered mutual fund major. Even as both UTI and the banks put on their thinking caps to find a way out of the mess, the latter are learnt to have shied away from taking on their books equities held by the mutual fund major.

The banks were reportedly disinclined to purchase stocks from UTI as such an exercise would enlarge their exposure to the capital market. Some banks recently faced a lot of flak for their high exposure to the bourses, which saw the Reserve Bank of India come out with revised norms on banks’ exposure to the capital markets. Sources added nationalised banks are ready to provide loans against the collateral of securities, though there are speculations that they would prefer government securities, which form the largest slice of the US-64 portfolio. However, it is understood that the institutions led by the Life Insurance Corporation of India (LIC) and General Insurance Corporation (GIC) are not averse to buying out the equities held by US-64.

Equities being ‘high risk,’ the banks are understood to be seeking a guarantee or some kind of support from the finance ministry, which mooted the proposal in the first place at a meeting held in the capital last week.

However, Brij Gopal Daga, executive director UTI, told The Telegraph, “It was a courtesy call for M Damodaran, the new UTI chairman. Nothing more was discussed in today’s meeting.”

Daga said the UTI top brass met on July 13, to finalise the credit line for the mutual fund, over and above the Rs 1500 crore line extended by the State Bank of India. Banking industry sources reveal the mutual fund has received an assurance of aid to the tune of Rs 1500 to Rs 2000 crore from the eight banks.

However, Daga said the details are yet to be worked out and did not expect the mutual fund to draw on the entire credit line. “It is just a comfort for us as we do not expect too many redemptions to take place,” he added.

Earlier, during the day, Damodaran and the chief executives of eight public sector banks led by the State Bank of India chairman Janki Ballabh met to formulate a financial assistance package for US-64.

The banks are adopting a consortium approach with SBI as the largest member. “UTI will have to come up with its requirements,” Punjab National Bank chairman and managing director S S Kohli told reporters after the meeting. “There may not be any need for UTI to draw on the credit line to ensure liquidity, as the package for small investors has been received favourably,” Daga said.

The Trust has already opened a credit line of Rs 1,500 crore with SBI to ensure liquidity for payment of dividends and redemption for schemes which would be maturing shortly.

Besides SBI and PNB, chiefs of Bank of India, Bank of Baroda, Central Bank of India and Corporation Bank also attended the meeting.

   

 
 
KOSHIKA MOVE TO GET BACK LICENCES 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 18: 
Koshika Telecom is in talks with the department of telecommunications (DoT) to regain licences in three cellular circles — Orissa, Bihar and UP West — which were cancelled two years ago after the company defaulted on licence fee payments amounting to Rs 300 crore.

“Our first priority is to get the licences restored. We will submit a proposal for an entire package policy for the circles in which we want to operate,” Koshika Telecom chairman Vinai Rai said at a hurriedly convened press conference on Tuesday night.

Chiranjeev Kathuria, an NRI businessman who had a 10 per cent equity in the company, is raising his stake to 49 per cent under a $ 120-million deal.

The remaining 51 per cent will be held by the Vinay Rai group. Kathuria will also get management control.

   

 
 
L&T NET PROFIT LEAPS 245% TO RS 65 CR 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 18: 
Larsen & Toubro (L&T) today unveiled a better-than-expected 245 per cent spurt in first quarter net profit at Rs 65.07 crore against Rs 18.88 crore in same period last year. Net sales increased 10 per cent at Rs 1830.97 crore from Rs 1,663.36 crore.

Revenues from the engineering and construction segment accounted for Rs 917 crore, showing a modest growth of 2 per cent over the same period in the previous year. The division bagged orders worth Rs 1,304 crore despite the lingering economic slowdown and poor business conditions.

Operating profit stood at Rs 261.10 crore, up from Rs 179.43 crore in the previous quarter. Tax outflows were more than Rs 20 crore, including Rs 8 crore for deferred tax.

Sales of the cement division, which benefited from firm prices, stood at Rs 675 crore, up 21 per cent year-on-year, and accounting for 37 per cent of the company’s revenues. The average sales realisation per tonne during the period was Rs 1,478 compared with Rs 1083 in the previous year.

Investors applauded the first-quarter numbers, sending the L&T share 0.63 per cent higher at Rs 215.50 on the BSE after opening at Rs 216.90 and rising to the day high of Rs 221.80. The scrip witnessed 6878 transactions on a turnover of Rs 16 crore.

Managing director and CEO A M Naik said his company expected bids for cement division next month. There are plans to spin off the cement division into a separate joint venture in which a foreign partner will be offered an equal stake. Lafarge, Holderbank and Cemex are the three companies which are keen on the deal.

   

 
 
PC SALES LOG 34% GROWTH 
 
 
FROM OUR CORRESPONDENT
 
New Delhi July 18: 
Personal computers (PC) sales jumped 34 per cent to 1.8 million units during 2000-01 with assembled personal computers dominating the market. The PC sales are projected to grow by 38 per cent to 2.5 million units this year. The assembled PCs accounted for 53 per cent of the total PC sales in 2000-01 registering a growth of 22 per cent over the previous year. With a growth of 59 per cent, the market share of MNC brands increased from 23 per cent to 27 per cent.

The Indian brands accounted for 20 per cent of the market. Share of the Indian brands has significantly decreased in the past two years — from 25 per cent in 1998-1999 to current 20 per cent.

MAIT, the apex body representing the hardware, training and services sectors of the IT industry today unveiled annual industry performance study for the year 2000-01. The desktop PC market crossed 1.88 million units registering a growth of 34 per cent over the previous year, the second half of 2000-01 grew by 25 per cent over the first half.

PC sales had clocked a growth of 37 per cent in the financial year 1999-2000 over 1998-99. The MAIT-IMRB study reveals that PC sales to the business segment grew by 31 per cent while in households grew by 45 per cent compared with the sales in the last year. The business segment continued to account for 78 per cent of the total PC sales.

Within businesses, the larger businesses (over 50 employees) grew at 71 per cent; however, the small and the medium segments exercising caution in spending registered a growth rate of only 11 per cent and 1 per cent respectively. The smaller sized establishments had registered a growth of 50 per cent in 1999-2000 accounting for over 25 per cent of the total PC sales. The size of the small and medium enterprises have come down from 35 per cent and 26 per cent in 1999-00 to 27 per cent and 22 per cent respectively in 2000-01.

According to Vinay Deshpande, president, MAIT: “To harness the true potential of the Indian market, one needs to come up with cost effective unique Indian solutions for unique Indian needs.”

   

 
 
PASSENGER CAR SALES REV UP, SPURT 30% IN JUNE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 18: 
Passenger car sales jumped 30.4 per cent at 48,243 units in June, propelled by Maruti, Ford and Hyundai. The figure was 36,974 in the same month last year. Cumulative sales for April-June went up 3.4 per cent at 1,47,995 units compared with 1,43,066 cars in the same period last year.

Ford India topped the charts in June, its sales surging 73.2 per cent at 2,993 units against 1,728 in the corresponding period last year. Maruti Udyog sold 26,129 units, an increase of 64.3 per cent over 15,898, while Hyundai Motors recorded sales of 6,146 units compared with 8,472 in June 2000. Telco’s car sales inched up moderately from 4,096 units to 4,837.

Mercedes Benz bucked the impact of the economic slowdown on the high-end luxury car segment, selling 143 cars in June this year against 47 in the same month last year. Korean car company Daewoo Motors India, Fiat India Automobile, General Motors India Ltd, Hindustan Motors India Ltd, Honda Siel Cars India Ltd were among those which sold fewer cars last month than they did at the same time last year.

Daewoo’s sales declined to 2,033 units from 4,702 in June 2000, while Fiat India could sell only 570 units against 830. General Motors sold 585 units last month against 603, while Hindustan Motors saw its sales slump to 1,768 units from 2,123.

According to figures released by the Society of Indian automobile manufacturers (Siam), motorcycle sales fuelled the growth in two-wheeler sales, which went up by 5.97 per cent at 3,24,187 units in June compared with 3,05,929 in June 2000.

Bike sales zoomed to 2.81 lakh units from 1.64 lakh in June 2000. On the other hand, scooter sales dipped to 78,121 from 78,679 in June last year. Sales of commercial vehicles declined 7.8 per cent month-on-month at 10,937 units over 11,874 units. Multi utility vehicles (MUV) sales declined 8.9 per cent at 8,894 units last month compared with 9,771 a year ago.

   

 
 
TOP GUNS QUEUE UP FOR HYUNDAI SONATA 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 18: 
Six chief ministers are lined up to take home the ‘Sonata,’ the D-segment offering from the Hyundai Motors India stable, launched here today.

Company sources said the chief ministers of Karnataka, Andhra Pradesh and Haryana have already shown “positive interest” in buying the car at their personal expense. The Maharashtra chief minister and a couple of CMs from two northern states are also likely to follow suit.

B. V. R. Subbu, director, sales and marketing said, “Our policy is not to reveal the names of our customers. But it is true that six CMs are expected to buy the car.”

Meanwhile, the company has put its plans for an initial public offering on hold till the market situation improves. The company had planed an IPO to offload a 25 per cent stake to generate funds for HMIL’s expansion plans.

HMIL is now exploring three means to generate funds for expansion. According to A. P. Gandhi, president HMIL, “We need to expand our current capacity levels. We are likely to meet the funds either through internal resources since our profits have been increasing, or through debt or by disinvestment of our shares.”

The company will invest $ 30 million to expand its assembly line.

Sonata is the second D-segment car to be launched in the country following the Honda Accord launched early this month.

J. H Kim, executive director, marketing and sales said, “There is a big gap between the C-segment models like the Accent and the super premium segment like the Mercedes. This model will fill the gap and provide C-segment customers in India, who seek more comfort and style, an opportunity to graduate to the D-segment.”

Sonata will be available in two variants — GLS for Rs 11.90 lakh (ex-showroom Delhi) and Sonata Gold for Rs 13.10 lakh (ex-showroom Delhi) — while a Sonata Gold with options like air bag and alloy wheels, air purifier, leather pack, chrome platted outdoor handles will be available for Rs 13.30 lakh (ex-showroom Delhi).

According to Subbu, “The production of the engine for Sonata will be undertaken in a phased manner. We are launching the car with a 40 per cent localisation content and it will go up to 60 per cent.”

“It will not be possible to bring the localisation levels to what we have achieved for the Santro and Accent models. But we will maintain a higher localisation levels as compared to our competitors in this segment.”

Both Accent and Santro have about a 70 per cent indigenisation level.

HMIL has projected a market share of 7,000-15,000 units in a year and expects to capture 30 per cent of the market in this segment.

Sonata comes with a two-litre 16-valve double overhead combustion engine (DOHC) with multiport electronic fuel injection system. It is fitted with a 65-litre fuel tank.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 47.17	HK $1	Rs.  5.95*
UK £1	Rs. 66.33	SW Fr 1	Rs. 26.55*
Euro	Rs. 40.72	Sing $1	Rs. 25.40*
Yen 100	Rs. 37.71	Aus $1	Rs. 23.65*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 4450	Gold Std(10 gm)	Rs. 4380
Gold 22 carat	Rs. 4200	Gold 22 carat	N.A.
Silver bar (Kg)	Rs. 7150	Silver (Kg)	Rs. 7250
Silver portion	Rs. 7250	Silver portion	N.A.

Stock Indices

Sensex		3383.41		- 48.52
BSE-100		1598.87		-  4.98
S&P CNX Nifty	1091.95		- 11.15
Calcutta	 123.98		-  1.45
Skindia GDR	  N.A.		    -
   
 

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