15 steps to export boom
Rabobank, Kotak clear main hurdle to banking
Tarapore for limiting US-64 to individuals
Ranbaxy to get $ 15 m from Eli Lilly
Sparks fly at ICICI meet
Bandwidths to be cheaper
State Bank net leaps 179%
Foreign Exchange, Bullion, Stock Indices

New Delhi, Jan. 30: 
The government today unveiled a five-year mid-term export policy to increase India’s annual export to $ 80 billion from a current $ 45 billion, which would raise its share of world trade to one per cent.

The 15-point strategy, which aims at achieving a 11.9 per cent annual export growth rate, speaks of garnering a competitive edge by “maintaining an appropriate real effective exchange rate.”

This is being taken to mean government sanction for a continued soft devaluation of the rupee.

The policy also seeks to create a new tax rebate scheme for exporters as well as a system of subsidies for farmers, both of which will comply with WTO rules.

The focus items of the policy will be on sectors like engineering, textiles, gems and jewellry, chemicals, agriculture, and leather.

“With this policy, we want to grab a good chunk of the world trade once the economy comes back to normal,” said commerce minister Murasoli Maran today while releasing the policy document.

The long-awaited strategy has adopted a sector-specific approach to identify products that will be price competitive in the international market. The technical strategy has identified 220 commodities for stepping up exports, mainly to the country’s major trading partners such as United States, European Union and Japan, which constitute 55 per cent of exports.

Though Maran described the strategy as a “paradigm shift from the past”, exporters and chambers dubbed it as “old wine in a new bottle”.

T.K. Bhowmik, economic advisor to the Confederation of Indian Industry (CII), said: “The government can only go for pro-active plans for exporters at this stage. The schemes to help exporters will continue in spite of WTO.”

Ficci president R. S. Lodha lauded the policy, but said: “Though an Action Committee is being set up to monitor the implementation of the medium-term export strategy, yet the acid test would be its effectiveness in resolving these inter-ministerial macro issues and those pertaining to greater involvement of states in boosting exports.”

Assocham president K. K. Nohria said: “The policy is just a re-statement of the strategy outlined in the exim policy last year, and unless the infrastructure bottlenecks are removed, it cannot yield the desired results.”


Calcutta, Jan. 30: 
The Reserve Bank of India has, after a two-year hiatus, given ‘in-principle’ approval to two applicants, including Kotak Mahindra Finance Ltd, to set up a bank in the private sector under the new guidelines.

The two applicants—Ashok Kapur and two other banking professionals with Rabobank, and the non-banking finance company (NBFC) Kotak Mahindra—were recommended by a high level committee chaired by former RBI governor I.G. Patel.

The central bank has, however, decided not to invite fresh applications for three years, and indicated it may revise guidelines issued last year on private sector banks.

Kotak has been advised to convert itself into a new bank, instead of setting up one, and continue simultaneously as a non-banking finance company. The firm, which has a presence in consumer finance, asset management, investment banking and securities trading, reported a net profit of Rs 10.83 crore in the third quarter ended December.

Rabobank provides advisory services ranging from merger and acquisitions to equity transactions, besides lending arrangements and structured financing.

The fresh approvals will be valid for a year, during which banks can mobilise capital and fulfil other RBI conditions.

If RBI is satisfied, it will consider granting a licence to start business under Section 22 (1) of Banking Regulation Act, 1949.


Mumbai, Jan. 30: 
S. S. Tarapore, the man who headed the panel that tossed the skeletons out of UTI’s closet, says the presence of institutional and corporate investments have left US-64 more vulnerable to instability.

This is the first public comment Tarapore made after submitting a report that generated a lot of public interest against the backdrop of restructuring taking place at UTI.

The recommendation that UTI’s flagship scheme be closed to investors other than individuals was among the most important made by the former Reserve Bank deputy governor, but has been shot down by the government.

Tarapore, speaking on the UTI report at a function organised by the Press Club-Tata Consultancy Services Speakers’ Forum here today, called for a leaner and smaller UTI, instead of one that is driven by market-share.

“The continuation of investors other than individuals in the scheme does leave US-64 vulnerable to instability in future. This was a major lacuna in the scheme in the past and will continue to be a major problem.”

There are UTI schemes, he said, tailored to the needs of institutions, which can be used by companies to park excess funds. Firms make bulge-bracket investments, and withdraw as soon as the amount they have put in, appreciates.

As a result, there are imbalances as they move in and out of a scheme, unfettered.

Tarapore felt measures to cut costs in the top echelons of UTI are misplaced, and said the organisation will require more hands to carry out the trustee and asset-management functions. The chairmen and CEOs of asset management companies, he said, should be given a position where they can function totally independent of each other.

He denied there was a breach of confidentiality in the wave of corporate redemptions in US-64 between April and May 2001. There were 176 institutions — apart from PSUs, trusts and societies — that liquidated units.

More important, there were redemptions by 13.8 lakh individuals. Given the all-pervasive nature of redemptions, Tarapore said it was reasonable to conclude that there was no misuse of privileged information.

“I am afraid we are looking for a black cat in a dark room, which is just not there. Such things merely deflect attention from vital matters,” Tarapore told reporters.

He emphasised the need for an omnibus monthly income scheme, and said it is not necessary to have too many of them. “It should be possible to dispense with the annual master equity plans in favour of one scheme.”


New Delhi, Jan. 30: 
Ranbaxy and Eli Lilly have terminated their strategic alliance under which the US giant manufactured certain multi-source generic products for the Indian pharmaceutical company’s US arm.

Ranbaxy Pharmaceutical Inc (RPI), the US arm of the Indian drug maker, will receive $ 15 million as compensation from Eli Lilly. It received $ 5 million on Tuesday and is expected to get the rest tomorrow.

Eli Lilly has also assigned and transferred to RPI the intellectual property rights comprising certain patents and trademark rights to 6-7 drugs meant for pain management and central nervous disorders including morphine sulphate. These products have a turnover of about $ 6-8 million, said Ranbaxy.

“We are terminating the agreement since we now have adequate production strength in the US. Initially, we needed Eli Lilly’s help to break into the US market,” said a Ranbaxy spokesperson.

The termination of the agreement comes almost a year after Ranbaxy and Eli Lilly scrapped their joint venture with the Indian company selling off its 50 per cent stake in Eli Lilly Ranbaxy Ltd for Rs 78 crore.

A spokesperson from Eli Lilly & Co Pvt Ltd said the alliance was being terminated by mutual consent. The Ranbaxy statement said the two companies would continue to maintain a cordial relationship with mutual goodwill. Ranbaxy recorded a net profit of Rs 240.1 crore for the year ended December 2001, a 32 per cent increase over last year’s level of Rs 182.4 crore.


Mumbai, Jan. 30: 
Shareholders are likely to give their overwhelming approval today to a resolution calling for the merger of ICICI with ICICI Bank, creating the second largest commercial bank in the country, even as several minority shareholders voiced their displeasure over the share-swap ratio for the reverse merger.

At an extraordinary general meeting of ICICI held here today, several minority shareholders called for a review of the ratio of one ICICI Bank share for every two ICICI shares, which they said were detrimental to the interests of ICICI shareholders. Some shareholders also asked the ICICI management to appoint a new investment banker to fix a fresh swap ratio. The EGM, called to seek shareholders approval for the merger, lasted for more than five hours. At present, while government bodies hold 33 per cent in the bank, 19 per cent is held by the public, while the remaining is with FIIs and ADR holders.

While results of the poll are expected to come late tonight, it is likely to be passed by a heavy margin, with sources saying that well over 90 per cent of its shareholders would approve the merger. The creation of the country’s first universal bank now only awaits court approval and a green signal from the Reserve Bank of India (RBI).

Allaying shareholder fears that dividend paid by the new entity may come down following the merger and that the RBI may oppose any high dividend payout, given the large NPAs, K.V. Kamath, managing director and CEO said the merged entity will have “adequate profitability to service its equity”.


New Delhi, Jan. 30: 
Videsh Sanchar Nigam Ltd today slashed the international bandwidth rate by up to 60 per cent, benefiting large corporate houses, internet service providers and software companies. However, the new rates proposed by VSNL are subject to the approval of Telecom Regulatory Authority of India (Trai).

VSNL also paid a dividend cheque of Rs 1,132.21 crore to communications minister Pramod Mahajan representing an interim dividend of Rs 75 per share for the 52.97 per cent that the government holds in the telecom giant. VSNL chairman and managing director S.K Gupta said, “This could be the highest dividend paid by a company and could well enter the Guinness book of world records.”

The state-owned telecom company has also resolved the problem with FLAG Telecom, the international private bandwidth provider, which has been now allowed to sell its bandwidth directly to ISPs.

Mahajan said, “I am informed by VSNL, that the outstanding dispute between VSNL and FLAG Telecom has been resolved. FLAG can now sell its bandwidth directly to ISPs with immediate effect. Access and interconnect charges will be soon agreed between VSNL and FLAG on a fair and reasonable basis. From April 1 this year when VSNL’s monopoly on international long distance ends, FLAG will be able to sell its capacity directly to ILD operators.”

However, VSNL is yet to stipulate the access charges with FLAG and sign the interconnect agreement with internet service providers.

VSNL Q3 net drops

VSNL’s net profit in the third quarter ended December 31 fell by 10.7 per cent at Rs 357.2 crore from Rs 400.2 crore in the previous year. Total income from operations also plunged by 10.8 per cent at Rs 1738.6 crore during 2000-01 from Rs 1950 crore during the same period last year. However, its internet subscribers base grew by 18.5 per cent.


Jan. 30: 
State Bank of India’s (SBI) net profit was up almost three times by 178.97 per cent to Rs 613.89 crore in the third quarter of this fiscal compared with Rs 220.05 crore in the same period last year.

The bank’s total income rose by 15.2 per cent in the period under review to Rs 8,366 crore compared with Rs 7,262 crore in the corresponding previous quarter, said Janki Ballabh, chairman.

The interest expended during the reporting quarter was higher at Rs 5,194.42 crore compared with Rs 4,490.50 crore in the same period last year, he said.

For the nine-month period ended December, the bank’s net profit rose by 43.81 per cent to Rs 1,815.93 crore as against Rs 1,262.70 crore in the same period last year, a bank statement said adding the total income stood at Rs 24,943.43 crore (Rs 21,086.31 crore).

Ballabh said the ratio of net NPAs declined from 6.03 per cent in March 2001 to 5.68 per cent in December.

Reliance Petro net dips

India’s largest private sector oil refiner, Reliance Petroleum, today reported a 1.5 per cent dip in its net profit to Rs 402 crore in the quarter-ended December 31 as opposed to Rs 408 crore in the corresponding period of last fiscal.

Subdued domestic demand in a recession-hit economy saw RPL sales slipped 10.7 per cent to Rs 8,166 crore compared with Rs 9,149 crore sales in the same quarter last year, said a company statement.

Net profit, however, increased 18 per cent to Rs 1,269 crore in the first nine months of the current fiscal as against Rs 1,080 crore profits in the last financial year.

Sales were up 9 per cent to Rs 25,497 crore during the period compared with Rs 23,457 crore sales in the first nine months of 2000-01.

During the nine months, Reliance Petroleum maintained its capacity utilisation at a record level of 107 per cent, aided by strong export performance.

Hindalco net inches up

Aditya Birla flagship Hindalco Industries Limited today announced a marginal Rs 0.40 crore increase in its third quarter net profit at Rs 165.50 crore over Rs 165.10 crore in the same quarter last fiscal.

Net sales during the quarter increased to Rs 577.74 crore from Rs 561.10 crore in the corresponding previous quarter. Other income was also up at Rs 54.30 crore from Rs 39.30 crore.

The company said that its cumulative net profit during the nine-month period ended December stood lower at Rs 493.80 crore as against Rs 495.70 crore last year.

The board has approved a buyback of shares to the extent of 10 per cent of its equity share capital at a maximum price of Rs 825 per share entailing a total amount not exceeding Rs 428.20 crore over a 12 month period.



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