Hint of petro-goods price hike
HPCL gears up for decontrol
MEP-92 fate hangs in balance
Wockhardt buys out Rhein stake in JV
High-speed roaming at India Inc’s doorstep
DEPB scheme to stay
Green signal for Bilt rights
RIL to raise PET capacity
Samsung focus on east
Foreign Exchange, Bullion, Stock Indices

 
 
HINT OF PETRO-GOODS PRICE HIKE 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, March 26: 
Indian Oil Corporation, the oil and petro-product giant, today indicated that unless the government reduced duties on crude, it may have to increase retail prices of petro-goods from April 1 when the market is freed from state control.

“It will be difficult to keep prices steady...however, the government can consider adjusting the excise duty structure. We have told government what will be the impact and what relief is required,” IOC’s chairman-designate M.S. Ramachandran told newspersons here today.

Crude prices have increased by $ 4 a barrel from $ 20 which had been the benchmark price for fixing retail prices under an administrative price mechanism which will be dismantled by the end of this month. Increases in crude prices were absorbed under the old system through a system of cross-subsidisation. In a free market situation, such crude price rises would naturally translate into higher retail prices of finished products like petrol and diesel. However, petroleum minister Ram Naik had recently said that state-run oil companies would try to maintain the price line for at least two months even after the market is freed.

Ramachandran, who was speaking at a farewell luncheon for M.A. Pathan, the outgoing chairman, said the price hike would have a Rs 400-500 crore impact on the oil company. He said the company was working on a mechanism for fixing retail prices countrywide.

He, however, admitted that there could be differential prices in different states, depending on the cost of delivery.

Analysts feel unless this is handled sensitively, such a policy could lead to chaotic situation where the price differential between even retail outlets in neighbouring towns in two different states could be significant enough to lead to petro-products being “smuggled” across state boundaries.

Speaking on moves to merge IOC with ONGC and Gail in order to create a mega oil sector giant, IOC’s outgoing chief Pathan said “As far as IOC is considered, a company should be an integrated one.”

   

 
 
HPCL GEARS UP FOR DECONTROL 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, March 26: 
Bracing up for life in the decontrol era which begins in less than a week, Hindustan Petroleum Corporation Ltd (HPCL) today launched a range of value-added services under the “Club HP” brand, to ensure stronger customer loyalty. Its other PSU brethren have already come up with similar initiatives to stay afloat when the oil segment comes out of the administered pricing mechanism (APM) on April 1.

HPCL plans to offer the facility in 85 of its petrol stations across Mumbai, Delhi, Bangalore and Calcutta. The “Club HP” brand will offer services like automated teller machines, communication facilities, bill payment services, vehicle finance and over-the-counter drugs. It will be rolled out in a phased manner, with the oil major targeting 1,000 outlets under the “Club HP” brand by 2003-04.

Each Club HP outlet will provide basic and value-added services, including consumer certifiable fuel quality and quantity assurance, efficient and expert service, quick care points, digital air towers, vehicle finance and insurance related services and bill payment facilities.

The cost of converting an existing retail station into a Club HP outlet is being put between Rs 10 and Rs 30 lakh, depending on the services it will offer

Speaking at the launch, N. K. Puri, director, marketing, HPCL, said, “The Club HP concept has been developed after an exhaustive research of over a year, which encompassed collating feedback from more than 13,000 respondents from nine key markets across the country.”

   

 
 
MEP-92 FATE HANGS IN BALANCE 
 
 
FROM SOTISH JOHN
 
Mumbai, March 26: 
Uncertainty still surrounds Unit Trust of India’s Master Equity Plan-1992 (MEP-92), the fifth largest equity-linked scheme in the country. While the scheme is due for redemption in four days, the mutual fund major has approached the finance ministry and the Securities and Exchange Board of India (Sebi) to allow it to be extended by five to 10 years.

But even as the D-Day draws near, both the finance ministry and Sebi are yet to communicate their decision on extending the scheme beyond March 31.

While Sebi has been approached by virtue of being the market regulator, the finance ministry had to be involved because MEP-92 was evolved primarily as a tax-saving scheme.

Speaking to The Telegraph, A K Sridhar, general manager, department of equity funds in UTI said: “We are keeping our fingers crossed. We are still optimistic of getting a last minute approval from the concerned authorities.”

UTI, is, however, gearing up for any eventuality and has retained 70 per cent of the MEP-92 corpus of Rs 485 crore in cash, in case the extension does not materialise.

The MEP-92 scheme, which had an initial corpus of more than Rs 1,100 crore, witnessed erosion after the mandatory three-year lock-in, after which unit holders are given the option to redeem their units for a small 5 per cent exit load. However, MEP-92 still boasts of a net asset value of Rs 14.95. Sridhar said more than one-third of the unit holders preferred to remain with the scheme.

In case the belated approval comes through, UTI proposes to do away with the 5 per cent exit load, which is likely to make the scheme more attractive. If the scheme is not granted an extension, UTI proposes to give unit holders an opportunity to switchover to other schemes like the bond fund or the G-Sec fund.

Sebi fiat

Sebi has asked mutual funds to disclose the performance of benchmark indices to give investors an objective analysis of their schemes in relation to the rise or fall in the capital markets. To begin with all MFs would be required to disclose the performance of benchmark indices in case of equity oriented schemes.

   

 
 
WOCKHARDT BUYS OUT RHEIN STAKE IN JV 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, March 26: 
Wockhardt Ltd has acquired the 50 per cent stake held by Rhein Biotech GmbH in their Hepatitis-B vaccine-making joint venture. The move takes its stake in the venture to 100 per cent.

Though Wockhardt did not divulge details of the agreement, it said Rhein Biotech will continue to receive royalties on sales of Wockhardt’s Hepatitis-B vaccine and future insulin sales, and will be free to operate in the combined vaccines field in India.

The joint venture—Wockhardt Rhein Bippharm—set up in 1996, produces the Hepatitis-B surface antigen for the vaccine Biovac-B, sold by Wockhardt under an exclusive distribution and supply agreement. The venture also has a license to produce insulin using Rhein’s Hansenula Polymorpha production technology. The product is currently under development.

Wockhardt launched the Biovac-B vaccine in 2000 and the company today said it has already become the brand leader in this segment. Officials said the company is also focussing on biotechnology.

It already has two products in the biotech segment, that includes its Hepatitis-B vaccine. Wockhardt is now slated to launch Rhu-Insulin in the domestic market in the first half of the next year.

News of the buyout had a magic effect on the Wockhardt counter today, with the scrip zooming to touch a new high. Opening at Rs 469, the scrip spiked to an intra-day high of Rs 575, before finishing slightly lower from this level at Rs 565.95, a rise of close to 5 per cent over the previous finish. The counter witnessed 709 trades with over 16,500 shares traded.

The company said last month that it expects its success in the biotech arena to be led by potential blockbusters like Rhu-Insulin.

   

 
 
HIGH-SPEED ROAMING AT INDIA INC’S DOORSTEP 
 
 
FROM M RAJENDRAN
 
New Delhi, March 26: 
Companies in India will soon have access to high-speed roaming over a mobile network through GPRS (general packet radio service)—a facility that allows users to have ‘always on’ access, only paying for the data they download.

GPRS is the first technology to allow packet-based high speed, data transmission over a mobile network. It is a standardised packet-based technology that enables high speed (115 kilo bits per second) wireless access, allowing effective internet and other data-based applications.

In the next few months, the biggies of Indian telecom, like Bharti, Birla AT&T and the government-owned Bharat Sanchar Nigam Ltd are likely to announce the availability of the service in a big way. While BPL has already launched this facility in India, it is still being introduced in the rest of the world: on Tuesday, Vodafone announced that it would be the first to offer the service in Europe.

GPRS would allow a subscriber to browse the web, chat and download your favourite music by using the mobile phone.

The new GPRS technology can differentiate data and voice and thus speed up the transmission multifold. With this, the GPRS mobile sets can be used to download and even transmit data at unbelievable speeds. The system handles data transmission of up to 30 kbps.

The user can connect the GPRS handset, which starts from Rs 10,000 and goes up to Rs 40,000, to the home PC, laptop or pocket PC and log on to the internet. GPRS also enables the users to shuttle between regular calls and access data simultaneously.

According to a study by Morgan Stanley, “This technology eliminates the existing 8-10 extra seconds needed to access services offered by the mobile operator or the 30 second wait to access other sites.”

“We will soon offer this service in all places where we operate our telecom services. In Delhi, we plan to launch e-mail access to corporate local area network using GPRS,” says Himanshu Kampania, chief executive officer of Birla AT&T Ltd.

However, GPRS has its detractors. Irwin Jacobs, chairman and chief executive officer of Qualcomm, the proponent of code division multiple access (CDMA) technology said in recent interview to a telecom magazine, “The next generation of GSM technology, GPRS, will be capable of no more than 14.4 kilobits per second. CDMA will be ten times faster.”

   

 
 
DEPB SCHEME TO STAY 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, March 26: 
The commerce ministry has decided to retain the popular Duty Entitlement Passbook (DEPB) scheme which gives back exporters duties paid by them on various components in a different form.

“No WTO rules can stop countries from promoting their exports. The only problem that we have to face are anti-dumping duties imposed by other countries. To take care of that, we will continue our schemes with modifications," said director general of foreign trade N. Lakhanpal.

Commerce minister Murasoli Maran and DGFT Lakhanpal today briefed finance minister Yashwant Sinha on the issues that they plan to address in the Exim policy that will be unveiled on Sunday.

“We have discussed the overall approach of the Exim policy as it is a very crucial juncture for trade. We have briefed the finance minister broadly about the important issues like export promotion programmes and special economic zones,” said Lakhanpal. The new exim policy will continue to promote most of the export-friendly polices.

“The threat from Chinese exports has been addressed in the Exim policy but it is a long term strategy. Nothing can be done immediately and the only way is to make our firms more cost effective and efficient. We have to fight Chinese exports,” he added.

Maran intends to push ahead with a slew of concessions for the special economic zones in this year’s Exim policy. The availability of land and the enormity of the projects have posed problems for these projects to be completed in time. Policy announcements for SEZs and export promotion zones will be one of the most important factors in the Exim policy.

“The SEZs already enjoy a tax holiday till 2010 as announced by the finance minister. They will continue with some minor improvements and upgradation. It is one of the most important issues that has attracted maximum attention. We want to promote them as far as possible,” he said.

   

 
 
GREEN SIGNAL FOR BILT RIGHTS 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, March 26: 
Ballarpur Industries Ltd (BILT), the Thapar group flagship company, today received approval to issue rights shares worth Rs 240 crore, or a little less than 19 per cent of the equity, to non-resident investors.

Last month, the board of directors of the pulp and paper product maker had approved a proposal for a rights issue but refused to disclose how big the issue would be and when it would hit the markets.

Today’s approval issued by commerce minister Murasoli Maran gave the markets some inkling of the size of the issue—it is likely to be over 1200 crore, extrapolating from the figures given in the FIPB approval.

Despite several attempts, the Thapars could not be contacted to confirm the ballpark figure.

The Thapars have refused to say whether they are raising the cash for a specific project or for some other purpose. They have claimed that the Sebi guidelines place a gag on them for three months from the date that the board cleared the proposal—February 18.

For the six-month period ended December 31 last year, the net profit of Ballarpur Industries stood at Rs 27.49 crore as against Rs 30.58 crore in the corresponding period in 2000. The turnover of the six-month period was Rs 757 crore against Rs 773 crore in December 2000.

Among the 28 other investment proposals cleared today by the FIPB was the one by Mauritius-based Jardine Fleming India Holding Ltd to raise its stake in JP Morgan India Pvt Ltd—the merchant banking and corporate finance outfit—to 100 per cent from 75 per cent at present with an equity investment of Rs 101.94 crore.

Gillette of the US also won an approval to provide a capital grant of Rs 94 crore to Gurgaon-based Gillette India Ltd, the maker of razor blades and advanced shaving systems.

Citibank Overseas Investment Corporation was permitted to invest Rs 50 crore to lift a 100 per cent stake in Citicorp Finance, the New Delhi-based non-banking finance company.

Nestle SA of Switzerland has been allowed to increase its foreign stake in its local subsidiary from 53.96 per cent to 63.96 per cent with an investment of Rs 9.64 crore.

A group of NRIs, including Ashish Malhotra and NH Kale, were allowed to raise their stake in Kale Consultants, the software company, to 28.3 per cent from 7.7 per cent at a cost of Rs 2.35 crore.

Holland-based Koeleman Foods International B.V. also got the permission to bring in Rs 2 lakh to increase its foreign equity from 77.77 per cent to 78.66 per cent in Koeleman India Pvt Ltd. The plant manufactures processed vegetables and fruits packed in bottles and cans.

   

 
 
RIL TO RAISE PET CAPACITY 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, March 26: 
Reliance Industries Ltd (RIL) is planning to expand its polyester packaging resin (PET) capacity by about four times to cater to the fast growing bottle market in a big way. At present, the PET capacity of the petrochem major is 80,000 tonnes. Reliance plans to raise it to three lakh tonnes.

The capacity expansion will be brought about through a 2.20 lakh tonne PET plant that is being set up at Hazira. The plant will be using NG-3—touted to be the newest generation process from Dupont. Kvaerner Powergas India (KPGi) has been selected to provide design engineering services for the plant.

This new plant will be located alongside the existing PET facility at Hazira.

Reliance, according to a company statement, is already the second largest polyester yarn and fibre producer in the world with a capacity of 9.25 lakh tonnes. With this new plant, its total capacity for polyester yarn, fibre and polyester packaging resin will exceed 1.2 million tonnes.

   

 
 
SAMSUNG FOCUS ON EAST 
 
 
BY ALOKANANDA GHOSH
 
Calcutta, March 26: 
Samsung Electronics India Information and Telecommunication (SEIIT) has launched a range of IT and convergence products and plans to strengthen its distribution and service network to ensure a strong brand presence in the country.

“Affordability, after sales service and an effective delivery channel are the three main factors that contribute to the growth of a product,” general manager Vivek Prakash said. “We have set up nine authorised service centres in the east, taking the total number of centres to 46. The region will be a focal point for us in terms of sales and marketing this year.”

The company has decided to focus on the eastern region, which contributes around 11 per cent to the company’s sales, to increase its contribution to 18 per cent. SEIIT expects to achieve a turnover of Rs 1325 crore for the year 2001 and has set a target of $ 500 million by 2003.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 48.75	HK $1	Rs.  6.15*
UK £1	Rs. 69.43	SW Fr 1	Rs. 28.90*
Euro	Rs. 42.71	Sing $1	Rs. 26.10*
Yen 100	Rs. 36.63	Aus $1	Rs. 25.45*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 4990	Gold Std (10 gm)Rs. 4950
Gold 22 carat	Rs. 4710	Gold 22 carat	NA
Silver bar (Kg)	Rs. 7825	Silver (Kg)	Rs. 7805
Silver portion	Rs. 7925	Silver portion	NA

Stock Indices

Sensex		3466.29		-49.82
BSE-100		1705.41		-17.04
S&P CNX Nifty	1123.05		-15.40
Calcutta	 117.83		- 0.63
Skindia GDR	 557.85		- 5.25
   
 

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