Bharti rings in one cell firm
New order to keep 35 drugs under control
RIL bids bye-bye to buyback
Product prices hiked
Flare-up signs for oil stocks
ICICI model for funding rural phones
Steel scrips claw their way back into spotlight
Another round of talks to speed up HPL recast
PC Chandra Group plans big
Foreign Exchange, Bullion, Stock Indices

New Delhi, June 3: 
Bharti Tele-Ventures will consolidate its sprawl of cellular businesses under Bharti Cellular.

One of the largest cellular mobile service operators in the country, the company has 1,39,9095 subscribers in seven of the country’s 22 circles. It intends to provide cellular services in eight more circles for which it bagged licences recently. According to Cellular Operators Association of India (COAI), 93 per cent of India’s mobile subscribers will come from circles that Bharti Televentures already has and will have in future.

Bharti Cellular Ltd, a wholly owned subsidiary of Bharti Tele-Ventures, holds licences for Delhi, Mumbai, Maharashtra, Gujarat, Madhya Pradesh, Uttar Pradesh (West), Haryana, Tamil Nadu and Kerala circles. Besides, it controls Bharti Mobile, which provides cellular services in Karnataka, Andhra Pradesh and Punjab.

Bharti Mobitel offers services in Calcutta while Bharti Mobinet operates in Chennai. Bharti Telenet, offering mobile services in Himachal Pradesh and basic phones in Madhya Pradesh, will demerge its cellular division, which will be folded into Bharti Cellular Ltd.

Bharti’s cellular service comes with the AirTel brand-name in Delhi, Himachal Pradesh, Punjab, Karnataka, Andhra Pradesh, Calcutta and Chennai. It will soon enter in Mumbai, Maharashstra, Gujarat, Madhya Pradesh, Uttar Pradesh (West), Haryana, Tamil Nadu and Kerala.

Bharti Tele-Ventures, the group holding company, has its operations split into four divisions. These are run by wholly owned subsidiaries — Bharti Cellular (cellular), Bharti Telenet (access), Bharti Telesonic (long distance) and Bharti Broadband Networks (broadband Solutions).

Recently, Bharti unveiled the new group corporate identity and brand philosophy as an extension of the group’s restructuring exercise initiated in August last year.

The new-look Bharti brand identity is based on the vision that telecom companies of the future would have to operate in a different environment.

Unveiling the new identity, Sunil Bharti Mittal, chairman and managing director Bharti Group, had said: “The strategic move also takes forward the ethos of change and trends, including diminishing of geographical barriers, convergence, and building of telecom infrastructure.”

The decision to merge these operations under Bharti Cellular was taken on Saturday by the Bharti board. Sources say the company had been planning to consolidate its cellular operations under a single company for some time. The announcement made today will come into effect after legal and regulatory approvals.


New Delhi, June 3: 
The new Drug Price Control Order (DPCO), which is expected in a month’s time, is likely to drastically prune the list of drugs under control. At present, there are 74 drugs which are under price control. According to the industry as well as sources in the government, the new list will have about 30-35 drugs.

P.K. Mishra, chairman of the National Pharmaceutical Pricing Authority (NPPA), told The Telegraph, “The final DPCO list, is expected to be notified within four to five weeks. The new list as well as some recommended changes in the rules pertaining to control order have been sent by NPPA to the ministry of chemicals and fertiliser. After scrutiny, it will go to the law ministry, before being notified by the government.”

For seven drugs out of the 74 bulk drugs now under price control, a court case is going on based on a writ petition filed by drug makers.

According to industry sources, about 45-50 drugs will go off the list while 10-15 new drugs will be added to it on the basis of the criteria arrived at in the Pharmaceutical Policy 2002.

The new policy has stipulated that bulk drugs with turnover of more than Rs 25 crore and market share at or above 50 per cent will remain under price control.

The rule was also extended to bulk drugs whose turnover is between Rs 10 and 25 crore but market share is 90 per cent or more.

One of the drugs that is likely to go off price control is Ciprofloxacin—the anti infection drug that is made by a host of pharmaceutical companies including Ranbaxy, Cipla, Dr Reddy’s Lab, Sun Pharmaceuticals and Unichem.

Levodopa, the drug used to treat Parkinson’s disease and made by Nicholas Piramal, Glaxo and Sun Pharma is also likely to go off the list. Anti-asthmatic drug Salbutamol—whose makers include Cipla and Glaxo—is also set to go off the list, sources said.

Other drugs on which price control may be taken off include anti-ulcer drugs Ranitidine and Famotidine, made by Sun Pharmaceuticals and Cadilla. Antibiotic drug Cloxacillin and Gentamycine and bulk drugs Dexamethsone, Nalidixic acid, Cefazolin and Dextro Propoxyphene are also likely to be off the list, industry sources said.

The new drugs that are likely to come under price control include Piroxicam—a pain killer (made by Pfizer under brand name Dolonix) and Glibenclamide which is an oral anti diabetic drug (Aventis makes it by the brand name of Daonil). The other drugs that are likley to be included are antibiotic Amikacin, pain reliever Diclofenac (Novartis is a prime maker of this drug) and arthritis drug Piroxicam.

The function of NPPA is to implement and enforce the provisions of the DPCO order.


Mumbai, June 3: 
The buyback plan announced by petro-chemical major Reliance Industries Ltd will close tomorrow, without the company buying a single share from the markets.

The buyback, valued by marketmen at more than Rs 2,000 crore a couple of years ago, was ostensibly aimed at indicating a benchmark price. The company had offered to buy shares at a maximum price of Rs 303 or lower. The scrip is currently ruling at Rs 270.55.

In a notice to the stock exchanges today, DSP Merrill Lynch Ltd, the merchant banker for the exercise, said that the buyback of equity shares of Reliance Industries Ltd is scheduled to close on June 4. The news had little impact on the bourses with the RIL share surging ahead by Rs 6.10 in line with general market trend, to Rs 270.55.

Observers had pointed out at the time of the announcement that as per prevailing regulations, Reliance was permitted to deploy up to 25 per cent of its net worth to buy back its equity shares.

Back-of-the-envelope calculations show this would translate into a buyback programme of over Rs 3,000 crore, with RIL’s net worth pegged at over Rs 13,000 crore as on March 31, 2000.

At a share price of Rs 300 per share, it would have meant a buyback of up to nearly 10 crore shares and represented nearly 10 per cent of RIL’s paid up equity share capital of Rs 1053.70 crore. RIL’s equity capital will eventually increase in view of the merger of Reliance Petroleum Ltd with itself.

The buyback price of Rs 303 was expected to act as a benchmark for the RIL counter and as a morale booster for RIL investors. However, off late the buyback had little impact on Reliance’s share price, with the scrip ruling far below Rs 303 for many days.

Reliance Industries, incidentally was one of the first companies to an enabling resolution for a possible buyback passed by its shareholders. There are many theories floating in the market on why Reliance kept the buyback plan inactivated for so long, foremost being that its ambitious expansion and acquisition plans would require a huge amount of funds and the buyback exercise would have been a waste of resources.


Mumbai, June 3: 
Reliance Industries (RIL) today announced a range of price hikes across all products, except polymers, which will now be sold marginally cheaper.

The revision, attributed to rising input costs, was the steepest in purified terepthalate Acid (PTA), where the rates went up 15.6 per cent to Rs 38.50 per kg from Rs 33.90.

Prices of polyesters and fibre intermediates were increased in May, when PTA was made dearer by 16.4 per cent to Rs 33.30 per kg compared with rates in April.

The company has also hiked prices of partially oriented yarn by 6.3 per cent to Rs 67.84 per kg from Rs 63.82 per kg in May; polyester staple fibre will cost 9.1 per cent more at Rs 57 per kg compared with Rs 52.25 per kg.

In the case of polymers, the prices of polyethylene (PE) and polypropylene (PP) were nudged down marginally — the fall being 3.5 per cent to 2.3 per cent respectively. PE will now be selling at Rs 41.50 against Rs 43 in the previous month; the price of PP will be lower at Rs 43.25 per kg from Rs 44.25 in May. The company has left the price of linear alkyl benzene unchanged.

Following Reliance was Indo-Rama Synthetics, which announced hike in product prices with effect from June 1.

Polyester staple fibre (PSF) will cost Rs 55.50 per kg, up from Rs 52.50, while 130/34 partially oriented yarn (PoY) will sell at Rs 66 a kg compared with Rs 63, a company release said.

Fully drawn yarn (70/34) will now fetch the company Rs 81 a kg, up from Rs 78. The prices of 100 per cent polyester yarn 30/1 and blended carded yarn 30/1 have been hiked to Rs 84.75 from Rs 81 and to Rs 85.25 from Rs 83 respectively.

Similarly, the price of 150 draw texturised yarn (DTY) has been increased to Rs 64.41 a kg from Rs 61.49. All these prices are basic (excluding excise), and ex-factory.


Mumbai, June 3: 
Refinery stocks are expected to flare up on Tuesday as the markets digest the slew of announcements made by the petroleum ministry today. The burden of having to keep product prices unchanged despite hardening crude rates not only hit the bottomline of petroleum companies, but also depressed their share prices.

There is a feeling that oil scrips, which have been oversold in the past couple of months, will find many takers. Among the gainers would be companies like HPCL and BPCL, which have seen their share values plunge because of fears that the disinvestment in these PSUs would be stalled by ministries pitted against each other.

The uncertainty over BPCL’s public issue, cleared today by the ministry, had diminished investor appetite in its share. The share touched new highs on selloff hopes and deregulation of the sector by the government a few months ago, but reversed course as the Centre capped petro prices despite a spike in global crude oil prices and fears of a delay in the disinvestment.

However, PSU scrips showed some signs of resilience on Dalal Street. BPCL closed marginally higher at Rs 257.90 from its previous finish of Rs 256.40. HPCL, an impressive gainer today, rounded off the day at a close of Rs 266.40, up from Rs 259.05 on Friday.

Indian Oil Corporation also gained, keeping pace with the other players such as HPCL and BPCL. It crossed the Rs 200-mark to close at Rs 202.85 compared with Rs 199.10. ONGC, the crude producer, also gained, closing at Rs 326.30 against the Friday finish of Rs 319.30.

The much-anticipated increases in prices of petroleum products were finally made by the ministry today when it raised prices of diesel and petrol to bring rates at home closer to the global oil prices — a decision that had been long awaited by public sector companies.

While, the retail price of petrol has been raised Rs 2.50 rupees a litre, diesel prices were increased by Rs 1.50 a litre.


New Delhi, June 3: 
ICICI will develop a bidding model that will help the communications ministry to auction funds from its universal service obligation (USO).

National Council for Applied Economic Research (NCAER) has been asked by the Telecom Commission to determine the subsidy required to meet USO in a study that is supposed to be completed in the next four months.

ICICI’s bidding model to auction money from USO is based on “least quoted subsidy support”. Under it, the service provider quoting the lowest amount to set up village public phones or other facilities would get the money. “Two proposals were deliberated at length — the proxy cost model’ and ‘least quoted subsidy support basis’.

The proxy cost model was rejected since it could lead to inefficiency. An operator could have quoted any amount on an approximate or estimated cost. Therefore, we decided to adopt the second model,” a senior commission member said. “The least quoted subsidy support model was considered better since it obviates the need for data and its verification,” said sources.

Sources in the communications ministry said the bidding process would be worked out after benchmark costs have been fixed. “At present, 5 per cent of the adjusted gross revenue is charged as universal service levy and is kept under a transient head of account till the final head of account is allocated by the finance ministry.”

Last year, Telecom Regulatory Authority of India (Trai) suggested that a universal service levy be imposed as part of the total licence fee paid by firms offering basic, cellular, STD, ISD, paging and infrastructure services.

The funds collected from the universal service levy will be used to set up village public telephones (VPTs) and other telecom facilities. The management and the administration of the USO fund has been a prickly issue with private telecom operators — both fixed and cellular — pressing for an independent authority to allocate funds.

“The administration of USO has been kept with the department of telecommunications in view of the direct responsibility of the government and resource limitation till the Convergence Bill is enacted and the legal position becomes clear. Setting up another body would only be time-consuming and increase expenditure,” officials in communications ministry said.


Mumbai, June 3: 
Steel shares were back in the spotlight today as investors saw in the recent flurry of price hikes a sign that the sector is turning the corner faster than expected.

The rally in shares came as steel makers winched up prices for the third time in as many months.

The euphoria spread to loss-making companies too, with investors rushing into stocks that had been ignored so far.

Steel producers raised prices to the tune of Rs 500 to Rs 800 as demand picked up in the domestic and global markets. The revision was mainly prompted by strong global prices.

Tata Steel was the first company to announce the revision, when it announced a price hike by June 1. It was followed by PSU major Steel Authority and the Gujarat-based Essar Steel.

Tata Steel flared up in the market today with its share gaining almost Rs 9 to close at Rs 118.65 from Rs 109.75 on Friday. SAIL gained more than a rupee over its previous close of Rs 8.40 to finish at Rs 9.55; Essar Steel, still reporting losses like SAIL, closed at Rs 6.45, up from Rs 5.45.

The steel industry is sensing the whiff of revival as lending institutions look afresh at extending new loans to them and broking outfits give them a rating upgrade.

Jindal Vijaynagar, the Bellary based steel company in the midst of undertaking a major restructuring plan with the financial institutions, also rose marginally from Rs 3.45 to Rs 3.90 while Jindal Steel made impressive gains from its Friday close of Rs 166.70 to Rs 179.35 today.


Calcutta, June 3: 
The petroleum ministry today discussed the valuation of Haldia Petrochemicals’ (HPL) shares with the West Bengal government to speed up Indian Oil Corporation’s (IOC) entry into the project.

Details of what transpired at the meeting are not known, but Indian Oil is believed to have made it clear that it would invest in Bengal’s showpiece venture on a par. A proposal will be sent to the state government soon.

The meeting was attended by West Bengal commerce and industry secretary, Jawhar Sircar, chairman of IOC M. S. Ramachandran, Purnendu Chatterjee of The Chatterjee Group, Tarun Das, HPL chairman, Swapan Bhowmik, chief executive officer, besides the additional secretary in the petroleum ministry, Naresh Narad.

The state government has not indicated to IOC the price at which it has agreed to transfer the shares of HPL to Purnendu Chatterjee in a move that would increase his stake in the project from 43 per cent to 51 per cent.

The IOC top-brass feels Bengal is ready to transfer shares of HPL to The Chatterjee Group (TCG) below par. The state government signed a memorandum of understanding on January 12 to hand over 51 per cent to TCG. However, no shares have changed hands so far.

“IOC has decided to invest only at par. If we do not do so, we will be pulled up by our auditors. Last week, we sent our queries to the West Bengal government on the valuation of shares,” senior Indian Oil officials said.

The state government has appointed L.B. Jha & Co to arrive at the valuation of HPL shares. “Once we have the valuation, we will terms and conditions for investing. We will also take up the matter with the financial institutions and banks before finalising our proposal. However, we are firm on getting management control with a 26 per cent stake,” the officials said.

IOC had said it would it would pump Rs 468 crore into Haldia Petrochem, and provide a naphtha credit of Rs 500 crore. However, the navartna PSU insisted that the stakes of other promoters should be less than 26 per cent.

A week back, Purnendu Chatterjee sent IOC a proposal under which TCG would pledge its shares to the state government to limit his voting right to below 26 per cent.

The petroleum major is also keen to rope in FIs and banks as equity partners in HPL by converting their loans into equity. “There will be a lock-in of five to seven years. Given their huge exposure of Rs 4,200 crore, they should have a say in the company,” the IOC officials said.


Calcutta, June 3: 
The PC Chandra Group has drawn up an ambitious plan to take its jewellery business outside the state’s borders. It will adopt the franchisee route to expand its jewellery business and is already in the process of considering proposals for the same.

The Rs 200-crore plus PC Chandra Group has interests in jewellery, chemicals, plastics, rubber, software, real estate and the hospitality business. The focus for now will be on the jewellery, chemicals, software and the construction businesses.

To expand its business opportunities and drive growth, the group, which was till recently a closely held family affair, inducted four outsiders on its board.

Elaborating on the future plans for the jewellery business, chairman B. K. Chandra says, “Currently, we have four showrooms in the city and two more being set up. We are scouting for reliable partners to set up showrooms in the commercially viable districts of Bengal and also outside the state.”

“Though we will do business through franchisees, all ornaments will be manufactured in Calcutta by our own artisans. This will ensure uniform quality of our products,” adds Chandra.

The group also exports gold to West Asia, USA and the UK. Chandra says the group is considering plans to set up shop in neighbouring Bangladesh, which is also a big market for gold jewellery.

J. L. Chandra, group chairman said it currently has no plans for an initial public offering (IPO), but is considering seeking loans from financial institutions to boost growth and spread its network.



Foreign Exchange

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Euro	Rs. 45.73	Sing $1	Rs. 27.05*
Yen 100	Rs. 39.51	Aus $1	Rs. 27.40*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 5545	Gold Std (10 gm)Rs. 5400
Gold 22 carat	Rs. 5235	Gold 22 carat	   NA
Silver bar (Kg)	Rs. 8600	Silver (Kg)	Rs. 8430
Silver portion	Rs. 8700	Silver portion	   NA

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