IT lobbies mend fences for Feb fiesta
Business wants economy pump-primed
Double whammy for jittery markets
UTI brass feel let down
A Simputer that’s light on the wallet
EIH to tap foreign funds for expansion

New Delhi, July 22: 
The titans are finally burying the hatchet. After a prolonged cold war that saw the National Association of Software Services Companies (Nasscom) and the Manufacturers Association of Information Technology (MAIT) pull apart and host rival infotech fairs, the two apex forums representing the software and hardware constituents of the digital world are likely to come together to organise a mega IT event next February.

Blame the schism on a clash of egos, but the slowdown in the IT industry and the futility of holding rival infotech fairs (at times simultaneously in two different cities) has finally forced the two organisations to call a truce. If the two chambers do come together, the February IT fiesta could eclipse the popular IT Asia, the annual exhibition that MAIT has organised since 1993.

“We are in talks with Nasscom and the Confederation of Indian Industry (CII) to hold the biggest IT event in February. The last event jointly held by MAIT and Nasscom was IT Asia in 1996. Later, Nasscom had ceased to be an active participant,” said a senior MAIT official.

Sources in Nasscom confirmed that talks have been held with MAIT and CII. A decision is expected later this month. Neither Nasscom chairman Phiroze Vandrevala nor vice-chairman Arun Kumar was available for comment.

The IT slowdown has roiled both the hardware and software sectors. Early this year, MAIT had revised downwards its sales projections for personal computers from 1.9 million to 1.75 million units.

“For the first time, we are witnessing a slowdown in the PC industry because of economic slowdown and depreciation in the value of the rupee against the dollar,” MAIT director Vinnie Mehta said.

The desktop PC market in India clocked a year-on-year growth of 37 per cent in 1999-2000. MAIT’s latest figures show that sales growth had slowed to 34 per cent during 2000-01.

The software sector, which has consistently achieved an average growth rate of over 50 per cent over the past five years, has also scaled back its growth projection to 40 per cent.

There has been a growing sense of fatigue with the small fairs that the two forums have been organising across the country over the past few years. Saurabh Srivastava, one of the founder member’s of Nasscom, had once said: “What is wrong with holding many exhibitions; the industry has grown multifold and we will have more shows.”


New Delhi, July 22: 
India’s stuttering economy needs to be jump-started through a cut in the bank rate and government investment in a few large infrastructure projects in areas like power, roads, ports, civil aviation and housing. Pump-priming is the only way to stimulate limp demand and spark an economic revival, says a straw poll of chief executives of the country’s leading companies.

A majority of the respondents (63 per cent) to the survey, conducted by the Confederation of Indian Industry (CII), reckon that the economy will slow down further this year with GDP growth hovering between 4 and 5 per cent. In 2000-01, GDP growth slid to 5.2 per cent — the first time that it dipped below 6 per cent since 1993-94.

There is a bright spot: a majority — 55 per cent of the survey — feel the economy will revive in 2002. However, with 41 per cent of the respondents saying they were not sure when it would revive, the survey seemed to indicate an increasing dissipation of the “feel good factor” in the economy.

Ninety-four per cent of the respondents feel that the government has a crucial role to play in boosting demand. “Speedy implementation of infrastructural projects will give an immediate boost to the capital goods and steel sector,” they felt.

The chief executives felt that the rupee would continue to weaken this year with 40 per cent of the respondents projecting that its short-term value would be between 49-50 against the US dollar; the rupee is currently teetering at its weakest level at 47.15. The unanimous view was that the rupee was still overvalued.

An overwhelming 73 per cent of the respondents said the depression blues that had darkened sentiment in industry would lift only if domestic demand revived. Only 27 per cent felt that exports — already showing signs of a deceleration in the first two months of the current fiscal — was the way to go.

Fifty five per cent of the chief executives felt that a bank rate cut would counter the slowdown in manufacturing. However, 31 per cent felt it would not help.


Mumbai, July 22: 
The markets go into the week with too much to fear and too little to count on.

The crackdown on UTI officials and the countrywide brokers’ strike on Monday have raised fears that volumes — especially retail trading — will plunge and force institutions to go slow on purchases.

Market circles reckon that the wave of weekend arrests at the country’s largest mutual fund has soured investors’ trust in the ability of their fund managers. The implicit suggestion is that the heat on UTI could scald other mutual funds. There are others who believe GIC and LIC, both big movers and shakers of the stock market, will turn chary and prune their investments in equity. “These institutions slow down their purchases from the market,” a broker said.

The brokers’ strike means only institutions with in-house broking services will be able to trade, and there could be virtually no day trading at all. “In the short-run, the equity markets will certainly become volatile and volumes will take a beating,” says Nikhil Vora, senior portfolio manager at

There are some who see light at the end of the tunnel, and hope that something positive will emerge from the purge that is underway in institutions that handle public money and use them to play the market.

“From a long-term perspective, the arrests have conveyed the message that investors’ interests will be protected,” said a leading operator.


Calcutta, July 22: 
The Unit Trust of India (UTI) top-brass feel its officials have been hounded for salvaging markets, and expects investors to see the recent developments in their true light and appreciate the constraints facing the mutual fund major. Speaking to The Telegraph, a UTI board member said: “We were surprised at the terms of reference set out for the Tarapore Committee, which included investigation of UTI’s role in the Calcutta Stock Exchange (CSE) crisis. But Trust stepped in, as it usually does, to rescue bourses when they went through a bottomless plunge after the CSE payments crisis.”

UTI had bought 13.2 lakh shares of DSQ Software from the CSE at Rs 189 after erstwhile exchange president Kamal Parekh persuaded it do so on a day when the share closed at Rs 216. A request was also made to buy 20.95 lakh HFCL shares at Rs 290 —when the stock closed at Rs 330 — but UTI refused. These shares had been bought by defaulters, who could not pay up and take the delivery. The exchange then sold them to intermediaries to clear pay-out to brokers. “UTI had saved the exchange on March 9. Without its support, we could not have cleared the pay-out,” CSE executive director Tapas Datta said.


Bangalore, July 22: 
A computer for Rs 4,500 — if that sounds outlandish, think again. The Indian Institute of Science (IIS) and Encore Software, a Bangalore-based software company which is developing a newer and cheaper version of its ‘Simputer’ a low cost PC, aim to bridge the digital divide by increasing the penetration of the information highway deep into the rural areas.

Vinay Deshpande, chief executive officer of Encore and president of the Manufacturers Association of Information Technology (MAIT), told The Telegraph, “The earlier product was designed to take IT to the masses. But we felt the need for an information-accessing device unique to the rural areas. We are working on a gadget that will be half the price of the Simputer.”

IIS and Encore formed a Simputer Trust early this year to market the Simputer for Rs 9,000. Now Encore plans to set up a subsidiary with a initial corpus of $ 3-4 million that will not only market the Simputer but also undertake research and development to develop new products on the same platform at half the price.

IIS has also set up a subsidiary named ‘Picopeta’ (meaning from the smallest to the largest) that is expected to work closely with the Encore arm to develop new internet-enabled products.

“We (Encore) will hold a majority stake in the subsidiary and the rest will be held by foreign institutional investors (FIIs). We are in advanced stage of negotiations with a few foreign institutional investors,” said Deshpande.

The Simputer Trust has set a one-time manufacturing licence fee of $ 25,000 for Indian PC manufacturers and those from developing countries. For firms from developed countries, the fee for developing this product on a mass scale will be $ 250,000.

The Trust has so far been approached by 12 companies, including four Indian computer hardware manufacturers, for the licence to develop this product.

The Trust expects to sell about one million Simputers within a year and hopes to double the number each year from the commercial launch, which is scheduled this September.


Calcutta, July 22: 
EIH, the country’s second largest hotel major which runs the Oberoi chain of hotels, may issue securities abroad to finance its expansion drive.

It will seek shareholders’ approval at its forthcoming annual general meeting for issuing ADRs and GDRs, among other securities.

The company’s investment arm, EIH International has entered into a joint venture with Morocco-based ONA group to set up hotels at Casablanca and Marrakech. EIH plans to hold over 60 per cent in the properties in Morocco.

The projects will be financed by debt and equity in the ratio of 1.5:1, said EIH managing director P. R. S. Oberoi.

The company plans to raise up to Rs 400 crore through private placement of equities in India or abroad.

EIH will also seek shareholders’ approval to increase its borrowing limit to Rs 700 crore. The fund will be utilised to develop the planned projects.


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