Bajaj Auto net profit leaps 98%
China explores trade scope
UTI cuts dividends on MIP schemes
Legal hurdles to selloff lamented
ONGC pays more for risk cover
WBIDC sets Rs 50-crore borrowing target

 
 
BAJAJ AUTO NET PROFIT LEAPS 98% 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 11: 
Bajaj Auto Ltd, the two- and three-wheeler major, has posted a 98 per cent jump in its net profit at Rs 521.1 crore for the financial year ended March 31, compared with Rs 262.6 crore for the fiscal 2000-01.

The board of directors has recommended a dividend of Rs 14 per share (140 per cent) aggregating Rs 141.6 crore, BAL president Rajiv Bajaj told newspersons here today.

Sales for the period under review grew by 14.4 per cent at Rs 4,221.4 crore against Rs 3,690 crore in the previous fiscal.

The 55 per cent growth in the motorcycle segment helped the company to boost sales and record an impressive hike in profits, Bajaj said.

The operating margins improved during 2001-02 to 16.8 per cent (as against 9.8 per cent the previous fiscal) with better control over the fixed costs and supply chain management.

In the fourth quarter ended March 31, the net profit and sales stood at Rs 148.4 crore (Rs 63.9 crore) and Rs 1,124 crore (Rs 878.1 crore) respectively, he said.

The company earned an extra income of Rs 117 crore as premium from its insurance venture with German financial group Allianz.

Income from treasury operations showed a decline at Rs 160.2 crore (Rs 263.9 crore).

Total sales of two- and three-wheelers grew by 12 per cent at 13,58,980 units as against 12,09,078 units in 2000-01, with the motorcycle segment showing an improved performance at 55 per cent overtaking industry growth of 41 per cent.

Meanwhile, inspired by the success of Pulsar, Bajaj Auto has lined up four new products for the current year.

A global bike in the range of 125cc to 135 cc, in technical collaboration with Kawasaki Heavy Industries is on the building block. The new bike will have an international launch by the end of the calendar year and will be outsourced by Kawasaki for its overseas markets while Bajaj Auto will sell the bike locally.

The other bike is still under a cloak of secrecy. “We are still working on it” said R.L. Ravichandran, vice-president, marketing.

As for the other two new products, Ravichandran said they would be variants in the Boxer and Caliber categories.

   

 
 
CHINA EXPLORES TRADE SCOPE 
 
 
BY A STAFF REPORTER
 
Calcutta, May 11: 
The Guangxi trade delegation from China has met representatives of nearly 20 firms, including Eveready Industries, Exide Industries, Electrosteel Castings, Balmer Lawrie and Nicco Corporation, to find out business opportunities.

He Xiaoling, deputy director general, foreign trade and economic co-operation, department of Guangxi, said they are interested in trading in areas like metallurgical machinery, industrial products and chemicals.

They are keen to import iron and manganese ore from India.

“We had a friendly meeting with the companies we met today. However, it is too early to take a decision. We will let them know after we return to our own country,” Xiaoling said.

She said that earlier they used to import more from India. But now that gap has narrowed down. China is now giving more thrust on exports. Guangxi exported goods worth $ 1.5 billion last year.

Guangxi Wuzhouu City Light Industrial Products Import and Export Corporation, a member of the Chinese trade delegation, has developed business with India clients on exporting flashlights for over three years. It now wants to export titanium and has already initiated talks with Indian clients.

The trade delegation had been to Delhi and they will visit Mumbai and Bangalore to discuss business opportunities with the companies. The meetings are being organised by CII.

In 2000-2001 total Indian exports to China were valued at $ 830.59 million, a rise of 53.98 per cent over the previous year. The major items of export are iron ore, marine products, plastic and linoleum products, cotton yarn fabric, chemicals, drugs and pharmaceuticals and others.

Imports by India from China in 2000-01 were in the tune of $ 1470.37 million. Main items were coal, coke and briquettes, electronic goods, organic and inorganic chemicals and others.

West Bengal commerce and industry minister Nirupam Sen said India and China have close trade links. “We should find opportunities to enhance the co-operation between the two countries,” he said.

Sanjay Budhia, deputy chairman of CII (eastern region), said, “CII is committed to promoting international economic co-operation and we look forward with keen interest to increasing our commercial activities with China.”

   

 
 
UTI CUTS DIVIDENDS ON MIP SCHEMES 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, May 11: 
The woes of monthly income plans (MIP) of Unit Trust of India (UTI) seem to continue with the mutual fund major announcing deep cuts in dividends and in some plans even deciding to forego payout for one year.

Announcing the dividend for five MIP schemes, UTI said that under MIP 99 (II), MIP 2000 (II) and MIP 2000 (III), an annualised 5 per cent dividend will be paid in the monthly dividend option. This works out to a monthly dividend of below 0.50 per cent. However, in doing so, the dividend declared was lower than the payout made in the previous year at 9 per cent.

When these MIP schemes were launched, returns were assured only for the first year. Subsequently, UTI linked dividend payment to the prevailing market rate of interest.

In the case of MIP 2001, an annualised 6 per cent dividend was announced in the monthly dividend option and 6.17 per cent in the annual dividend option.

However, investors of the MIP 2000 scheme have reasons to be disappointed as the fund has decided not to hand out any dividend this year. UTI had paid a dividend of 9 per cent for this scheme in the previous year.

UTI also said that in its GCGIP 94 scheme, an annualised 5 per cent dividend will be declared which will be paid on a quarterly basis, 1.25 per cent each quarter. The fund, which was earlier under considerable flak for poor returns in 2001-02 on its MIP-95 schemes, said the 5 per cent annual return is one-off and is peculiar to the scheme mainly due to its large exposure to debt securities of steel firms.

Once upon a time, Unit Trust’s MIP schemes were considered to be favourite with retired people who used to park their life time earnings in the plan to earn a decent income. They were in for a shock earlier when MIP-95 declared a return of a paltry 5 per cent for the year 2001-02, which was then even less than the interest rate offered on bank savings accounts.

   

 
 
LEGAL HURDLES TO SELLOFF LAMENTED 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 11: 
The selloff of government’s stake in several public sector companies has been snarled in lawsuits and public interest litigations despite a Supreme Court verdict that upheld the government’s stand in the Balco case, said Pradeep Baijal, secretary in the ministry of disinvestment.

In the landmark Balco judgment, the Supreme Court had said the courts should refrain from economic decision making.

Addressing a CII conference on ‘Legal reforms in infrastructure’ here today, Baijal said at present there were 13 PILs in the various high courts in the country relating to privatisation and disinvestment. The total number was 24 but 11 cases have been dismissed. Seven of the pending cases of ITDC have been transferred to the Supreme Court, he said.

Baijal said support was needed from all classes of people, including the legal community, to help the economy by stepping up the pace of reforms and privatisation.

He said that the Balco judgment had rightly said that public interest was now tending to become ‘publicity interest’ and ‘private interest’ litigation. Baijal drove home the point that the delays caused by the PILs on privatisation process have serious economic repercussions. He described that privatisation was the key to resolve the precarious fiscal and revenue situation in India.

The central PSUs with an investment of Rs 80,000 crore are yielding a negative return. He said the government could not raise taxes to meet growing needs of investments in infrastructure, education, health and defence. At the same time, the government’s debt was increasing every year along with the revenue and fiscal deficits.

   

 
 
ONGC PAYS MORE FOR RISK COVER 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, May 11: 
The Oil and Natural Gas Corporation (ONGC) has renewed the insurance of its properties at higher price to cover risks from war and terrorism, apart from other operational risk factors. But it will not cover communal violence or civil unrest.

Companies all over the world have experienced a multiple increase in premium rates post September 11. Even some of the Indian companies also renewed their policies at a substantial higher rate.

“In this background, the insurance renewal by ONGC is highly satisfactory. In the oil sector itself the premiums had gone up by more than 150-200 per cent,” said ONGC sources.

ONGC completed the formalities of insurance risk placement for its offshore and onshore properties at a new annualised premium at $ 51 million.

The new policy is effective for one year starting from Saturday. The package covers all the assets in offshore and onshore which is valued at over $ 14 billion.

United India Insurance Company is the lead insurer with more than eight other foreign insurance companies providing the cover for its offshore rigs. The first installment of the policy was paid on Friday.

ONGC recorded a 8.1 per cent growth in net profit during the financial year 2001-02. The net profit rose to Rs 5,655 crore during 2001-02 from Rs 5,229 crore during the previous year. The turnover during the financial year ending March 31 2002 stood at Rs 23,789 crore.

   

 
 
WBIDC SETS RS 50-CRORE BORROWING TARGET 
 
 
BY A STAFF REPORTER
 
Calcutta, May 11: 
The West Bengal Industrial Development Corporation (WBIDC) has set a market borrowing target of Rs 50 crore for the current financial year. “We have placed a proposal before the executive committee and are awaiting approval from the government for the borrowing programme,” said, WBIDC managing director Gopal Krishna. “We expect to borrow at a rate below 10 per cent.”

Earlier, the nodal agency had borrowed from Industrial Development Bank of India (IDBI) and Sidbi at rates between 13 and 15 per cent. “WBIDC has sanctioned financial assistance worth Rs 14.6 crore for eight new industries today,” said WBIDC chairman Somnath Chatterji. “We expect to disburse around Rs 50 crore during 2002-03.” The agency expects to achieve a net profit of Rs 520 lakh in the current financial year.

WBIDC has also announced an interest rebate of 0.25 per cent after a period of two years for borrowers who make timely repayment.

“We have a special scheme for the iron and steel industry as we believe that they will have a competitive advantage in the state,” Krishna said after Chatterji announced the rebate scheme at a press briefing here today.

According to the scheme, loanees in the steel sector who make timely repayments will get an interest rebate of 0.5 per cent, 0.75 per cent and 1 per cent after the second, fourth and sixth year respectively.

The agency has also initiated a Gold Card scheme, wherein borrowers who maintain a default free account will get 0.5 per cent rebate in interest rate. Loanees who have already paid 70 per cent of their loans will get a 0.25 per cent discount in the interest rate under the Silver Card scheme. There is also a provision for upgradation from Silver Card to the Gold Card scheme.

According to Chatterji, WBIDC has launched a pilot project for credit rating of future borrowers. The agency has also decided to revise the premium on premature repayments to a mere 2.5 per cent per annum on remaining amount.

WBIDC expects to rope in investments around Rs 200 crore in the IT services sector. It has already identified a 4-acre land in Calcutta and is scouting for a consultant to set up infrastructure to provide ready-to-use facilities for IT companies.

   
 

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