SBI salve for slump victims
IDBI net profit plunges 77%
9-month loss of SAIL spurts to Rs 1290 cr
Ranbaxy net rises 32%
Mahindras to merge three arms
First Global hearing sans Sebi chairman
CSE set to name five more defaulters
Telecom twins in Bengal plan
Foreign Exchange, Bullion, Stock Indices

Mumbai, Jan. 29: 
The chairman of State Bank of India (SBI) says his organisation is ready to help slump-stalked companies with cheaper loans, waiver of penal interest and more time for repayment of loans.

Janki Ballabh, the man who heads the country’s largest bank, told a Ficci seminar here today that the sops would not be lavished on all firms, but only doled out to textiles, chemicals, steel, construction and commercial vehicle firms with clean loan-servicing records.

Those who seek help in tiding over the slowdown should be companies whose loans were standard assets with banks on March 31, 2001, but turned sub-standard in the downturn over the past six months to a year.

The idea is to ensure that non-performing assets (NPAs) —banks’ euphemism for bad loans — do not pile up at a time when they struggle to present clean balance-sheets.

Ballabh’s statement is significant against the backdrop of an industry-wide NPA burden of Rs 56,000 crore — much of it coming from textiles and steel firms. “Banks have turned cautious in extending financial assistance. The legal system, including the debt recovery tribunals, have severe limitations in dealing with problems of non-performing assets,” he added.

Ficci president R. S. Lodha said banks, bound by tight prudential norms, have been restrained in credit distribution. Ballabh, too, said the planned concessions would not be given to wilful defaulters and companies that are found using outdated technology.

At the seminar, which brought together several industry leaders and senior bankers, there were calls from captains of India Inc to address the recent decline in the flow of funds to the industry, particularly those that have wilted in the current, and most cruel, phase of recession.

A section of bank officials, pointing to the problems and dilemmas of low-cost credit for the industry, said they had to walk a tightrope between meeting the needs of companies and safeguarding the interests depositors.

Housing Finance Development Corporation (HDFC) chairman Deepak Parekh said the government should speed up the second phase of reforms so that the economy can be propelled into a high-growth orbit. “High real interest rate are inhibiting economic growth and are also responsible for a large fiscal deficit.”

It is the decline in credit demand, he said, that has forced banks to invest heavily in government securities. The hunt for safe avenues amid spiralling NPAs was another reason why bank funds were flowing into gilts. “Banks have been eager to expand their loan portfolios faster, but they are inhibited by lack of easy exit from financial exposure,” Parekh added.

Speaking at the seminar, Mukul Kasliwal, director of S. Kumars, lamented the fact that the “NPA bogey” has come to haunt Corporate India during the past few years, putting good firms in the small pack of “black sheeps”.


Mumbai, Jan. 29: 
Groaning under the blight of bad loans and hobbled by poor business, Industrial Development Bank of India (IDBI) today reported a 77 per cent decline in its third-quarter net profit at Rs 35.2 crore against Rs 154.8 crore in the same period of last year.

Income from operations during the period was lower at Rs 1,909.4 crore compared with Rs 2,120.3 crore in the third quarter of 2000-01. Other income declined from Rs 39.2 crore to Rs 21.3 crore, a release issued today said.

Nine-month (April-December) net profit fell to Rs 242.3 crore against Rs 543.2 crore in the same period of the previous year, while net income dropped to Rs 5,965.5 crore (Rs 6,235 crore). During the quarter, a provision of Rs 217.3 crore was made against bad and doubtful debts/investments, up from Rs 197.3 crore in the same period of 2000-01.

Operating performance during April-December took a beating as sanctions and disbursements declined in the face of a slowing economy, a downbeat business sentiment and a sluggish capital market. This led to a fall in demand for assistance from traditional industries, delays in project implementation and fewer applications for credit, the institution said.

Given the poor shape of the economy and an industrial slump, the Mumbai-based term-lending institution has decided to be selective in sanctions and limit loan approvals to companies with good credit rating.

While its focus in the long run will be on plans to transform itself into a universal bank, the strategy in the immediate future will call for lending to less risky sectors/clients, speeding up loan recovery and cost cutting.

BoB net up

Bank of Baroda (BoB) today announced a 4.87 per cent rise in net profit at Rs 158.13 crore in the third quarter of the current fiscal. Nine-month profit shot up to Rs 439.18 crore from Rs 429.21 crore in the same period last year. Bank chief P. S. Shenoy said the performance was achieved despite the fall in yields on investments and a reduction in the average lending rates by about 150 basis points.

Operating profit during the third quarter stood at Rs 324.65 crore, up 13.20 per cent over Rs 286.79 crore in the year-ago period. Operating profits in the first nine months have been pegged at Rs 935.3 crore compared with Rs 837.24 crore achieved during the same period of last financial year.


New Delhi, Jan. 29: 
Steel Authority of India Ltd (SAIL) has suffered a loss of Rs 1,290 crore for the nine-month period ending December, nearly twice the Rs 698 crore loss during the same period last year.

On a cumulative basis, the loss in the last 45 months has mounted to Rs 5,312 crore, which is well above the 50 per cent of the public sector giant’s net worth of Rs 8,489 crore as on March 31, 1998.

To add to the woes, HDFC chairman Deepak Parekh has resigned from the steelmaker’s board of directors. SAIL, however, did not ascribe any reasons for Parekh’s departure.

SAIL’s third-quarter loss alone more than tripled to Rs 585 crore from Rs 178 crore a year ago. The country’s largest steel maker said its net sales realisation fell 1.6 per cent to Rs 3,966 crore from Rs 4,031 crore.

As a result of the huge loss it has posted, SAIL’s shares ended down one per cent at Rs 4.95 on the Bombay Stock Exchange, while sensex finished 0.13 per cent lower.

The steel major, which has been going through a financial crisis for the last few years, said the loss was on account of a steep drop in sales realisation, increase in input prices and a Rs 150 crore voluntary separation scheme outgo. The higher loss came despite selling a record 6.3 million tonnes of steel, a growth of 3.6 per cent compared with the last fiscal.

SAIL started sinking into the red from 1998-99, when it ran up a loss for the first time. It ran up a huge loss of Rs 1,574 crore, forcing the government its owner to sit up and order a study by management consultancy firm McKinsey and Company. Next year its losses increased to Rs 1,720 crore, though it came down to Rs 728.66 crore in 2000-2001.


Jan. 29: 
Ranbaxy Laboratories has recorded a net profit of Rs 240.1 crore for the year ended December, an increase of 32 per cent over Rs 182.4 crore posted in the year ended 2000. Sales for the fully year rose 17.5 per cent to Rs 2052.3 crore as against Rs 1745.9 crore. Exports for the year grew 27.5 per cent to Rs 1034.4 crore.

During the fourth quarter ended December, net profit stood at Rs 50.3 crore—an increase of 4.1 per cent compared with Rs 48.3 crore in the corresponding period last year. Sales turnover for the quarter was 19 per cent higher at Rs 569 crore.

The company registered a 31 per cent rise in exports to Rs 308.6 crore during the quarter, while earnings per share was also higher at Rs 20.72 against Rs 15.74 in the same quarter of the previous fiscal.

CESC loss mounts

CESC, the R.P. Goenka flagship has registered a Rs 70 crore loss in the third quarter ending December 31, 2001 as against a loss of Rs 31 crore in the previous corresponding period—a rise of Rs 39 crore.

The total loss for the company in the first nine months stood at Rs 203 crore as against Rs 64 crore in the previous year.

Net sales rose marginally to Rs 446 crore as against Rs 439 crore in the previous year.

A release issued by the company says that last year’s third quarter loss was arrived at after considering the unbilled fuel cost of Rs 28 crore, whereas the same for the current year is based on receivables of around Rs 10 crore, including fuel costs as per the revised tariff.

Therefore, the difference arising on account of the poor tariff revision received on tariff orders by the West Bengal Electricity Regulatory Commission is Rs 18 crore. The balance Rs 21 crore increase in loss is largely accounted for by a higher power purchase price and a marginal increase in personnel and other operating costs, the release said.

HM lowers loss

Hindustan Motors, the C.K. Birla flagship has been able to reduce its net loss to Rs 11.16 crore in the third quarter as against a loss of Rs 33.48 crore in the previous comparable period. Net loss in the nine-month period stood at Rs 51.58 crore. Net sales have gone down to Rs 214.15 crore from Rs 262.83 crore in the previous year. The company earned a revenue of Rs 199.02 crore from automobile sales. Net loss from auto sales was at Rs 4.78 crore.

Dr. Reddy’s net up

Bolstered by sales of the generic version of Prozac in the US markets, the net profits of Dr Reddy’s Laboratories (DRL) rose five times for the third quarter of the current fiscal ending December 31, 2001. Net profit soared to Rs 161.5 crore against Rs 34.4 crore in the previous corresponding period.


Mumbai, Jan. 29: 
In a restructuring drive aimed at simplifying its holding structure, Mahindra & Mahindra Ltd (M&M) has decided to merge three of its subsidiaries—e-Mahindra Solutions Ltd, Mahindra Auto Specialities Ltd and Mahindra Alternative Technologies Ltd—with itself with effect from March 31 this year.

Mahindra and Mahindra said during the process of amalgamation, investments held by the amalgamating companies would be “restated” at their respective net asset values. The surplus expected to be generated would be retained to create a provision for diminution in value of investments.

The company posted a net profit of Rs 36.41 crore for the third quarter ended December 31, 2001 compared with Rs 43.60 crore in the same period last year, a fall of 16 per cent.

During the quarter, net sales of the company was higher at Rs 917.79 crore compared with Rs 904.87 crore in the corresponding quarter of the previous fiscal. The results were above market expectations and the counter witnessed good buying towards the close of today’s trading on the stock exchanges.


Mumbai, Jan. 29: 
Sebi chairman D.R. Mehta today stayed away from a board meeting that was supposed to have decided whether the licences of Shankar Sharma’s two broking outfits — First Global Stock Broking and Virudhi Confinvest — should be cancelled.

Mehta explained his absence by saying it was “in keeping with the high traditions set by the market regulator”. He has been accused by certain individuals of being close to the government and acting solely on its whims.

The alibi was greeted with criticism from many in the legal fraternity. They argued that Mehta had set a precedent of sorts that will prompt an officer facing accusations of forging a nexus to abstain from a key hearing.

Rakesh Mohan, adviser in the finance ministry, V. K. Dhall, the DCA secretary and G.P. Muniappan, deputy governor of RBI, sat through the five-hour session to 7.30 p.m.

The official investigating Shankar Sharma’s firms recommended cancellation of their licences. A copy of his report was sent to the two brokerages, which are alleged to have violated Sebi regulations on stock brokers and sub-brokers.

Sources say the charges levelled against the firms include market manipulation, non-payment of margin payments and non-co-operation with the investigating agency.

They have also been blamed for short selling shares after the practice was outlawed in March last year.

An interim Sebi order, issued section 11 B of Sebi Act on May 25 2001, barred the First Global group from undertaking any fresh business as a stock broker and merchant banker until the investigations are complete.

Earlier, the Securities and Appellate Tribunal (SAT) upheld Sebi’s interim order, but directed the capital market regulator to complete the probe and pass final orders within a specified time. Though the inquiry officer’s report has been tabled before the Sebi board, a decision on the findings appeared unlikely today. It will be difficult to set dates within a month given Mohan’s pre-occupation with the forthcoming Union Budget.


Calcutta, Jan. 29: 
The Calcutta Stock Exchange (CSE) is going to declare five more members as official defaulters. These members had failed to meet their payment obligations in March last year.

The decision to declare them defaulters was taken at the board meeting yesterday after the members were asked to appear before the board.

The exchange, however, refused to name them yet. A director of the exchange said: “The decision has yet to receive the official seal of the exchange management, and hence we cannot disclose names now.”

The bourse would initiate legal action against the defaulters, including criminal proceedings, he added.

Though the exchange has yet to finalise the decision, it has already begun planning its legal moves. The total amount due from these five members is between Rs 1.5 and 2 crore. The exchange had to pay in excess of Rs 100 crore out of its reserves to clear the default of members in March last year.

More than half a dozen other brokers of the bourse were also summoned to appear before the board last night.

The board member said: “The exchange had received complaints against them from investors. We gave them time till the next board meeting to settle all disputes.”

On being declared defaulters by the Calcutta Stock Exchange, the five brokers would be barred from trading on other stock exchanges too.

Following the payment crisis last year, the exchange had declared Dinesh Kumar Singhania, Harish Chandra Biyani, Ashok Kumar Poddar and their firms as defaulters.


New Delhi, Jan. 29: 
The two public sector telecom giants—Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd—are set to join hands to form a new joint venture company that will offer cellular mobile services in West Bengal, Bihar and Orissa.

Communications minister Pramod Mahajan has given in principle clearance to the proposal of the Telecom Commission and has asked the chairmen of both the public sector telecom companies to expedite the process and submit a report.

“A meeting scheduled to be held on Monday last week was deferred as the two chairman and managing directors could not finalise the arrangement for setting up the subsidiary. But, they are expected to make the proposal by mid-February,” said sources in the communications ministry.

Early this month, Mahajan had called both Narender Sharma, chairman of MTNL, and D.P.S. Seth, chief of BSNL, and told them that it would not be appropriate to allow one telecom PSU to fight against the other stare-run unit under the same ministry in the same telecom circle.

Private players had shown no interest in bidding for these circles when bids were invited last year. As a result, the communications ministry decided to refer the matter to the Telecom Regulatory Authority of India (Trai). The telecom watchdog had suggested clubbing of the Andaman and Nicobar circle with Tamil Nadu and re-bidding for the other three.

The Bihar and Orissa telecom circles fell vacant following the termination of Koshika Telecom’s licence. In West Bengal, no second licence was granted.

Sources in the communications ministry said, “There are four licensed operators in Tamil Nadu. All the four operators will be issued the letter of intent for grant of cellular mobile licence in Andaman and Nicobar telecom circle.”



Foreign Exchange

US $1	Rs. 48.42	HK $1	Rs.  6.10*
UK £1	Rs. 68.05	SW Fr 1	Rs. 28.00*
Euro	Rs. 41.68	Sing $1	Rs. 26.05*
Yen 100	Rs. 36.39	Aus $1	Rs. 24.60*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 4730	Gold Std (10 gm)Rs. 4660
Gold 22 carat	Rs. 4465	Gold 22 carat	   NA
Silver bar (Kg)	Rs. 7350	Silver (Kg)	Rs. 7395
Silver portion	Rs. 7450	Silver portion	   NA

Stock Indices

Sensex		3313.28		-4.36
BSE-100		1581.83		+0.57
S&P CNX Nifty	1071.65		+0.30
Calcutta	 112.79		-0.45
Skindia GDR	 522.31		-5.88

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