Gail plots ONGC exit plan
ICICI Bank ready for global plunge
Trio and a dark horse in race for IT secretary’s post
Khaitans test export brand
Sebi plan to boost bourses

Calcutta, May 26: 
Close on the heels of Indian Oil’s move to sell shares of Gas Authority of India Ltd (Gail) and Oil and Natural Gas Corporation Ltd in the market, Gail has firmed up a plan to offload its 2.4 per cent stake in ONGC. A back-of-the-envelope calculation shows that if Gail sells its stake in ONGC at today’s market price, it will rake in over Rs 400 crore. On the Bombay Stock Exchange, the ONGC scrip closed at Rs 334.65 on Friday.

“Holding on to ONGC’s stake does not make any sense as the dividend that Gail gets is meagre vis-à-vis the outgo on account of interest charges on the loan it took to part-finance the acquisition of the stake two years ago. But the matter is yet to be taken up with the board of directors for a formal approval,” sources said.

In February 1999, Gail, at the government’s behest, picked up the 2.4 per cent stake in ONGC at an investment of Rs 589 crore.

According to sources, Gail, at that point of time, had to borrow at a high rate of 14 per cent to raise this Rs 589 crore.

While the gas major has paid over Rs 145 crore on account of interest charges in the last two years, it has received merely Rs 16 crore as dividend from ONGC.

“This hardly makes any business sense as return on investment is very low. Generally speaking, a 25 per cent return on investment is something the oil and gas industry is looking at worldwide," they added.

When Gail had picked up the 2.4 per cent stake, ONGC’s share price was hovering around Rs 160 per share. Now the price has soared to over Rs 300.

Sources, however, pointed out that Gail would have to seek a formal approval from the government after its board decides on selling the stake.

“Once all the approvals are secured, it is likely that Gail will sell the shares in the open market and not to any strategic investor,” they said. It could not, however, be ascertained whether ONGC will adopt a similar stand on its stakes in Indian Oil and Gail.

Observers tracking the industry feel that once Indian Oil and Gail sell their stake in ONGC in the market, the liquidity of the oil-producing company’s shares will improve. At present, the public holding in ONGC is merely 3.88 per cent and the employees hold most of it. Hence there is hardly any free float in the market that could drive up the trade volume. With international crude prices firming up, the ONGC scrip is expected to harden in the coming days.

At present, the government holds 84.11 per cent in ONGC while Indian Oil holds 9.61 per cent. If Gail and IOC offload their stakes in the market, the public holding in ONGC will go up to 16 per cent in one shot.

A senior Gail official said the proposed sale plan is not going to affect the relationship between the two companies regarding future business programmes.

“The stake has nothing to do with the various joint venture plans that both the companies have. In fact, the future of Gail, ONGC and IOC lies in how best we derive synergies from each other and move into new areas of operations,” he said.


Mumbai, May 26: 
ICICI Bank is going places. After a reverse merger where the parent ICICI Ltd merged into the bank, ICICI Bank is now giving final touches to its international banking plan that seeks to make it a preferred choice in the vast Indian diaspora.

While the country’s second largest private sector bank has picked the US and the UK, where the financial markets are more developed, as its initial ports of call, West Asia and the Far East are also likely destination points.

According to the initial blueprint that has been drawn up, the bank is toying with the idea of setting up four centres, one each in New York, London, Singapore and Dubai.

In its bid to embrace the concept of universal banking in full, ICICI Bank, which is listed on the New York Stock Exchange, has chalked out a diversified business model and wants to position itself as a one-stop provider of financial solutions. Sources said the bank has realised that in order to grow domestic business is not enough and that is why it is now focusing on international banking.

It is understood that K.V. Kamath, the managing director and chief executive officer of ICICI Bank, will announce the bank’s international business plan at a news conference here on Monday.

ICICI Bank officials, however, refused to divulge details about the proposed announcement.

According to sources, late last year ICICI Bank had identified international banking as one of its focus areas and had plans to unveil the programme by the beginning of this year. The announcement was delayed because the bank did not get the necessary regulatory approvals.

This view is, however, countered by some who point out that the bank has already received approvals from regulators in the US and the UK to set up representative offices in those countries.


New Delhi, May 26: 
The race for the hot seat of secretary in communications and information technology ministry has entered the final leg.

As of now, there are three official contenders, Arun Bhatnagar, Dhanendra Kumar and Rajiv Ratan Shah, for the post. But, sources said, there might be a dark horse in the running as well.

Rajiv Ratan Shah now holds the post of secretary, department of information technology, which was a separate ministry earlier. Last year the ministry of information technology was merged with the communications ministry.

While Arun Bhatnagar is currently holding the post of additional secretary in the Planning Commission, Dhanendra Kumar is the additional secretary in the department of telecommunications.

“Though the names of these three officers have been shortlisted for the post of secretary in the ministry of communications and information technology, a dark horse pipping them at the post is not ruled out,” sources said.

“The two officers currently in the communications ministry are unlikely to get the post since the personnel department had pointed out a few technical issues that could go against them. A strong lobby is supporting the officer from the Planning Commission, but the home ministry may not be inclined to back him. Technically, the race seems to be between the officer from the Planning Commission and an outsider,” they added.


Calcutta, May 26: 
Eveready Industries India is evaluating plans to introduce a quality packet tea brand that will be exported to the US, Europe and Australia. At the same time, it intends to sell less through auctions and switch to direct marketing of bulk tea.

“We have plans to come out with a quality packet tea, meant for exports, by the end of the current financial year. We are working out whether that will be a prudent decision,” Deepak Khaitan, executive vice-chairman and managing director of the company, said.

Eveready has three packet brands — Tez, Jago and Premium Gold. It sold 3,500 tonnes of packed tea last year, and targeted 5,000 tonnes this year.

Khaitan is not optimistic about the growth potential of packet tea in the domestic market. “It is not growing at the expected pace. Companies are having to give freebies for selling packet tea,” he added.

The distributors of Eveready’s Lava brand of batteries have showed an interest in marketing packet tea in foreign markets. These batteries are exported to 14 countries in West Asia, Latin America, Africa and Mexico.

Talking about the plan to reduce the amount of tea sold through auctions, Khaitan said: “A final decision has not been taken. We are thinking of directly marketing our bulk tea here. We have been approached by distributors in Maharashtra and Gujarat.”

Of the total bulk tea output, 20 per cent is exported, 10 per cent privately placed and 70 per cent is sold through auctions — where Eveready is one of the largest participants. “All our teas are of the top-end variety,” he said.

The company appointed Greenfield Trading Company of Dartford in the United Kingdom as an agent to sell tea in all countries, except India, Nepal and Bhutan.

He said depressed market sentiment affected tea prices, fetching the industry much less in sales revenues. “Prices went down by Rs 25 per kg, which affected the bottomline of all tea companies,” Khaitan added.


New Delhi, May 26: 
The Securities and Exchange Board of India (Sebi) is considering the option of having different sets of products for regional and national stock exchanges.

The aim will be to use the regional stock exchanges, which are already equipped with modern and updated on-line trading system and experienced members, to expand the network and enhance the competitive spirit on the bourses.


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