Limited mobility gets cheaper
Firms have to bare all from today
Singh hums middle-class tunes
Tisco helps investment arm prune interest cost
Century Textiles picks growth drivers
Rs 841-cr lifeline for IISCO
Bengal gets Rs 400-cr investment till March
Govt clears Rs 102-cr Silverline FDI plan
Workaholic Tapan Sikdar takes wait & watch stance
Foreign Exchange, Bullion, Stock Indices

 
 
LIMITED MOBILITY GETS CHEAPER 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 4: 
The Telecom Regulatory Authority of India today set a monthly rental of Rs 200 for wireless in local loop (WLL) facility — the poor man’s mobile service to be offered by basic telephony operators. At present, the rental for WLL under the standard tariff package is fixed at Rs 450.

The issue of limited mobility is now before the Supreme Court which must decide whether to allow basic operators to continue offering a facility that spells trouble for cellular operators. The next date of hearing is set for July 19.

The WiLL services were launched by BSNL, MTNL, HFCL, Shyam Telelink and Tata Teleservices last year. Reliance is also waiting in the wings with its own service.

Currently, BSNL has 75 ,000 WiLL subscribers in the country while MTNL has 40,000 subscribers in Delhi and Mumbai where it offers this service. Tata Teleservices in Andhra Pradesh has about 40,000 subscribers with HFCL in Punjab cornering around 5,000 and Shyam Telecom has about 4,500 subscribers.

The cellular service providers are peeved with the new rates announced by Trai and are examining legal remedies to challenge the Trai order.

Trai’s decision to fix a lower monthly rental could boost the business proposition of the fixed line operators in the country and badly singe the cellular service providers.

The airtime for the Will service will be Rs 1.20 per three minutes with incoming calls free as against Rs 4 for both outgoing and incoming calls offered by the cellular service providers.

“The authority has specified a monthly rental of Rs 200 per month in the standard tariff package as against the rentals fixed last year which gave a range of Rs 450-550 per month as floor and ceiling respectively,” said Trai.

Monthly rental has been specified as part of the standard tariff package which must mandatorily be provided to customers as per the Telecom Tariff Order 1999.

The WiLL service providers would now be able to offer alternative tariff packages similar to other tariffs of basic services and all other telecom services provided in the market.

Trai has also offered a choice to the customers on handset. The consumers can either pay Rs 6,000 (refundable) as deposit to the service provider for handset or can go for a package of additional monthly rental Rs 50 per month (maximum).

A WiLL network can be deployed very quickly: activating a system within 90 to 120 days is feasible. Although this economic benefit is difficult to measure in purely economic terms, it is a key advantage in a market where multiple service providers are competing for the same user base.

Officials in Trai pointed out that last year the authority had specified a floor and ceiling for WiLL monthly rentals in view of the major uncertainty about the underlying costs and the rollout plans, and large range for the cost-based rentals that were calculated from the data submitted by the service providers.

   

 
 
FIRMS HAVE TO BARE ALL FROM TODAY 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 4: 
About 200 companies will start filing financial details and other market-sensitive information with the Securities and Exchange Board of India (Sebi) electronically today in what is seen as the first step towards greater transparency in the dissemination of corporate information.

The filings will be made over the Electronic Data Information Filing and Retrieval (EDFIR) system, which is modelled on the Electronic Data Gathering Analysis and Retrieval (EDGAR) system of the United States.

“Investors will be able to check shareholding patterns, financial statements, annual reports and other filings as soon as they are made,” Sebi chairman G. N. Bajpai said.

India has talked about introducing such a system for sometime but the usual glitches had held it up. The system will begin operations at a time when a Xerox Corp filing to the Securities and Exchange Commission (SEC) was trawled by a few enterprising reporters who hit pay dirt with its bribery admission in India, causing embarrassment to the Vajpayee government as well as Xerox Modicorp, the US company’s Indian subsidiary.

“We plan to have electronic filings by another 500 companies by September. We will have at least 2000 companies filing their financial statements on the electronic system by April 1, 2003.”

The EDGAR system performs automated collection, validation, indexing, acceptance and forwarding of submissions by companies and others who are required by law to file forms with the US Securities and Exchange Commission (SEC).

It allows the both professional and individual investors the ability to extract and manage the valuable information found in SEC’s EDGAR. The US regulator requires participants to file most disclosure information in an electronic format through EDGAR rather than by traditional paper filing system.

Speaking at a conference on strengthening the debt market organised by CII, Bajpai said the settlement system on bourses, which is T+3, will be brought down to T+2 in the financial year 2003 and further to T+1 by 2004.

“There is a need for a vibrant debt market, both in the primary and the secondary segments.” He also said there was a need to increase the supply of high-quality debt paper and a need for zeal in individual investor participation”

The chairman stressed that the market for securitisation should be developed. Referring to credit rating agencies as pillars of strength, he said these agencies should maintain their quality of assessment in rating government bonds and papers.

“The accounting standards in our country should now make a transit from rule-based to principle-based standard of accounting. This way things will be much happier for the market,” Bajpai said.

“There is a need to have a fresh look at listing requirements in the market. We now only have listing of equities.”

On disclosure norms, Bajpai added: “The disclosure requirements are inadequate. A system has to be built wherein continuous disclosures exist. Also, there should be a compulsory rating with proper disclosures”.

Bajpai said the trading mechanism would have to move from delivery versus payment (DVP) to a de-materialisation (DMAT) system in order to have a sound back-up which will be present in the electronic record. The Reserve Bank of India has already taken initiatives towards this. Also, all government securities have to undergo a compulsory DMAT.

   

 
 
SINGH HUMS MIDDLE-CLASS TUNES 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, July 4: 
The BJP government will focus on correcting market regulatory mechanisms, restoring investor confidence, especially among small investors, and try to increase the spending power of the people.

These new objectives are obviously guided by the coming round of elections to some 10 state assemblies spread over the coming year, including elections to Madhya Pradesh, Chattisgarh, Delhi, Gujarat, Andhra Pradesh and Nagaland.

Jaswant Singh, who took over as finance minister at North Block today, met among others Sebi chairman G. N. Bajpai and UTI chairman M. Damodaran to work out ways to tighten the market regulatory framework and to revive the fast sinking mutual fund giant — Unit Trust of India — which has a huge middle-class subscriber base running into over a crore.

“We will continue to strengthen the regulatory mechanism which has shown certain infirmities... and try instil confidence in the minds of investors,” Singh said.

The new minister had already done his homework yesterday, reading through a state-of-the-economy report drafted by top aides in his new ministry. Among issues that had been highlighted were low growth possibilities, regulatory problems and the funds crunch that UTI faced.

The government is contemplating arming Sebi with more powers as well as well as widening its ambit to cover the new private pension sector.

But possibly, the big focus will be on measures that will directly affect the common man. Spending on power, road and irrigation projects are planned to be increased besides measures to increase spending power with the poorer and middle classes.

“Hamari koshish rahegi ki garib ke pet mein anya pahuche (we will try to see that food reaches the poor),” he said. The minister was referring to the growing food-mountain in the country and alternate plans to draw it down through various food-for-work programmes.

He also surprisingly spoke of putting “more money in the consumer’s pocket, more money in the housewife’s purse,” fuelling immediate speculation about small tax concessions meant for the salaried middle class.

Officials said Jaswant Singh was also likely to look into the changes that need to be effected in his team of top aides at the ministry. Economic affairs secretary C.M Vasudev, who was functioning as the de-facto secretary is retiring later this month and a replacement has to be found. Among others revenue secretary S. Narayan is tipped to be in the race to take over.

   

 
 
TISCO HELPS INVESTMENT ARM PRUNE INTEREST COST 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 4: 
Tata Steel has picked up 21.37 lakh shares of Kalimati Investment Company as part of a rights issue by the steel major’s wholly owned investment subsidiary.

The shares, each with a face-value of Rs 10, have been purchased at a premium of Rs 240 in a deal that is designed to lower the interest cost of its arm.

Kalimati said the rights issue was made after taking into account the long-term requirement of the company — which is to cut down the rising interest burden.

By virtue of the rights issue, the interest and financial charges on fixed loans have been compressed to Rs 3.95 crore for the year ended March 31, 2002 against Rs 4.80 crore last year.

Kalimati has maintained the dividend at the rate of 50 paise per share, which will entail an outgo of Rs 71.35 lakh. The company holds stakes in several Tata companies, including the group’s main holding company, Tata Sons.

Its investment in Tata Sons — 12,375 shares — has been valued at Rs 68.75 crore. It has also poured some money in Tata Industries, the group’s firm for new-economy ventures.

The total value of its investments stand at Rs 138 crore compared with Rs 137.95 crore last year. During the year, the company has sold long-term investments worth Rs 260.24 lakh. It made a profit of Rs 185.82 lakh by selling these investments. It has made fresh investments worth Rs 441.92 lakh during the year.

Tata Steel has managed to reduce its own interest burden significantly. The steel major has restructured its debt portfolio by pre-paying some of the high-interest loans and raising new ones with lower coupon rates.

The effect of this could be seen in lower gross interest charges of Rs 419.16 crore as against Rs 481.90 crore in the previous year. The company exercised its call option and redeemed on November 1st, 2001 the secured redeemable non-convertible bonds of Rs 500 crore issued in 1996, along with accrued interest of Rs 212 crore, together aggregating Rs 712 crore, the largest single redemption of any debt in the history of the company.

   

 
 
CENTURY TEXTILES PICKS GROWTH DRIVERS 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 4: 
Century Textiles and Industries Ltd, the diversified flagship company from the B. K. Birla stable, is pinning hopes on cement, paper and rayon sectors to turn in a better performance this year.

The company is, however, not looking at selling any of its businesses, nor has a proposal before its board to hive off any division or carry out restructuring.

Addressing shareholders at the annual general meeting here today in the absence of B. K. Birla, S. K. Birla said while cement, paper and rayon were showing healthy growth rates, the textile division is unlikely to see a significant improvement in its fortunes, largely due to the sluggish trend in export markets.

In cement, Century Textiles has a combined capacity of over 5 million tonnes. Birla said the industry which clocked an average growth of 9-10 per cent last year, is maintaining a similar trend in this year as well.

“The demand for cement has been healthy. We see a huge potential coming up for cement in road building,” Birla added. Pointing to the geographical diversities the industry has to grapple with, he disclosed that while the southern markets is witnessing a situation of excess supply, surplus capacity in the Northern region is now being “balanced out” with a rise in demand. “The profitability this year depends heavily on cement,” he said.

Century Textiles, which also has a shipping division, is planning to sell off its two ships in the current year. Doing so would completely mark its exit from the business. The company disposed two bulk carriers last year.

Birla’s remarks that no concrete proposal on restructuring has been put before the company’s board comes at a time of speculation that its cement division could be taken over by the A. V. Birla group.

Century Textiles was, at one point of time, planning to sell part of its cement division. Blue Circle (which was later taken over by Lafarge) had showed interest, but a deal did not come through.

Lacklustre export market for textiles have prompted Century to concentrate on domestic markets, Birla said. He was of the opinion that the position of this segment would not deteriorate further this year, sectors such as denim were displaying good growth rates.

The meeting saw a couple of shareholders expressing concern over the large number of divisions of Century, which they suggested could be closed down. Later while replying to a query, Birla said the company’s assets could be valued at over Rs 4,000 crore.

   

 
 
RS 841-CR LIFELINE FOR IISCO 
 
 
BY A STAFF REPORTER
 
Calcutta, July 4: 
The uncertainty over the future of Indian Iron & Steel Company (IISCO) is coming to an end. The government has cleared a Rs 841-crore package for the revival of Steel Authority of India’s (SAIL) ailing subsidiary.

The package will be submitted to the Board for Industrial and Financial Reconstruction (BIFR) by July 7. Talking to the reporters here today, Union steel minister B. K. Tripathy said the government has also decided to allocate budgetary support of Rs 350 crore to the scheme.

The funds will be raised from the market through a mix of financial instruments, including a bond issue backed by government guarantee. Tripathy said the West Bengal government has been apprised of the decision.

“We are looking forward to the state government’s support in the form of a waiver of sales tax and electricity dues, in addition to tax exemption over the next few years,” he said.

The minister said the West Bengal government has, in principle, agreed to extend the support, which will be worth Rs 350 crore. “We are expecting a formal approval on this account from the state government soon,” he said.

Of the Rs 841-crore package, the voluntary retirement scheme will require an amount Rs 540 crore, while the capital investment will be around Rs 341 crore.

On the participation of the Russian steel major, TyazPromExport (TPE), in IISCO’s revival, Tripathy said the government is still hopeful of a successful joint venture.

The Russian government is yet to take a decision on the rupee-rouble account, resolution of which is the key to getting TPE as a strategic partner. Discussions are still on and a joint venture with TPE can be formalised as soon as the Russian firm gets the government nod.

The Indo-Russian Intergovernmental Commission, which met on February 7 in the presence of Russian deputy prime minister Ilya Kleabanov had agreed to look into the TPE’s proposal to invest in IISCO, which was referred to BIFR in 1994-95. Since then, a number of major steel companies showed interest in it, but none invested.

SAIL, which itself is in bad shape over the last four years, also declared that the company cannot make any fresh investment. As a result, a closure threat loomed large on IISCO, which has over 17,000 employees.

Earlier, SAIL planned to sell off its majority stake in IISCO, for which it floated a tender. The BHP-Mitsui combine and TPE carried out due diligence but later backed out.

TPE has been keen on a majority stake since 1998 when it submitted a Rs 2,107-crore investment proposal for the ailing firm. Later, the Russian steel major submitted another proposal, promising Rs 800 crore in investments.

   

 
 
BENGAL GETS RS 400-CR INVESTMENT TILL MARCH 
 
 
BY A STAFF REPORTER
 
Calcutta, July 4: 
West Bengal has received an investment of Rs 400 crore in the first three months of this calendar year.

Talking to the newspersons after his interaction with the Confederation of Indian Industry (CII), state commerce and industry minister Nirupam Sen said: “From January to March, the state has received an investment of Rs 400 crore. Much of it has gone into the small and medium-scale industries. Though mega projects are welcome, the government is focusing more on small and medium industries.” The state received Rs 2,194 crore in investments in 2001.

Apart from Sen, the interactive session with CII was attended by the principal secretary, commerce and industry, Jawhar Sircar, Webel managing director S.K. Mitra, managing director of West Bengal Industrial Development Corporation, Gopal Krishna, and the managing director of West Bengal Industrial Infrastructure Development Corporation (WBIIDC).

Sen said industrialists have pointed out the problems being faced by them in setting up units in the state. One of the major irritants is in the area of land. “There are two main problems regarding land — one is availability and the other is the mutation problem. There are other problems in the area of infrastructure. Non-availability of power is one of them.”

The industrialists also drew the minister’s attention to the procedural delays being faced by entrepreneurs.

The minister said the government is in the process of addressing the problem. “It is not the problem of the industry department alone. Other departments are involved in it too. There should be more inter-departmental co-ordination. The government has already set up state investment facilitation centre (SIFC) comprising representatives of the concerned department. The industry should put up their problems before SIFC first. If SIFC fails to address the problem, the Cabinet committee will look into the matter.”

The minister admitted industrialists face problems at the district level too. He said the government has directed the Zilla sabhadhipatis and deputy commissioners to address the problems at the district level.

The CII members also said they do not get financial assistance from WBIDC in time. The minister admitted there is a problem on the availability of funds, but the government is trying to sort the problems. “WBIDC has also come out with flexible financing norms,” he said.

Sen dwelt on the new bio-technology and mineral policy announced by the state recently. The bio-technology policy has attracted quite a handful of investors.

   

 
 
GOVT CLEARS RS 102-CR SILVERLINE FDI PLAN 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 4: 
The government today allowed Silverline Technologies Ltd to issue 20 million preferential warrants to Silverline Holdings Corp of Mauritius that would bring in foreign investment worth Rs 102 crore.

The Silverline proposal was the largest of the 42 foreign direct investment proposals worth an aggregate sum of Rs 218 crore that were approved today by commerce and industry minister Murasoli Maran.

The other major proposals cleared were an investment of Rs 50 crore by Mauritius-based Rama Mines Ltd to undertake mining exploration through Wasper Trading Ltd and a Rs 25-crore proposal by French company Aldes Aeraulique to provide air diffusion, quality and management solutions and related services in India through an NRI, Anil Maheshwari.

Three pharmaceutical companies—Solvay Pharmaceuticals BV, Lupharma GmbH, Willmar Schwabe GmbH & Co—were permitted to raise their overseas stakes in their Indian subsidiaries.

Netherland Solvay Pharmaceuticals BV will raise its stake from 63.96 per cent to 68.975 per cent in Solvay Pharmaceuticals BV at a cost of Rs 24 lakh.

German-based pharma giant Lupharma GmbH has been allowed to increase its foreign equity from 58.2 per cent to 61.7 per cent through the buyback of shares in Knoll Pharmaceuticals Ltd, which makes formulations. The inflow of investment was, however, not indicated and will depend on the offer.

LuPharma is a 100 per cent subsidiary of Knoll AG. In a related proposal, Knoll AG was allowed to change the foreign collaborator in Mumbai-based Knoll International—a company that makes laboratory reagents and diagnostic reagents—because of an overseas acquisition. There is no fresh inflow of foreign funds here.

Dr Willmar Schwabe GMBH will invest Rs 18 crore to increase its stake in Dr. Willmar Schwabe India Pvt. Ltd from 89.32 per cent to 93.80 per cent. The unit manufactures and distributes homeopathic and herbal medicines.

The proposals of Mauritius-based Franklin Templeton Holding Ltd and JP Morgan Services Asia Holdings Limited were also cleared. Franklin Templeton’s acquisition of 100 per cent of the share capital of Pioneer ITI AMC Ltd has been cleared. The acquisition will be through its Indian arm Templeton Asset Management (India) Pvt Ltd. No fresh FDI inflow is involved.

JP Morgan Asia has been allowed to raise its stake in JP Morgan services India Pvt Limited from 96.81 per cent to 100 per cent for an investment of Rs 6.6 lakh.

Koniklijke Philips Electronics NV has been allowed to set up a Rs 5-crore plant to assemble and customise customise printed circuit boards. It will also provide other services for the manufacturers of all kinds of electronic products.

Owens Corning of the US also got the nod to increase foreign equity from 61.99 per cent to 72 per cent in Owens-Corning India Ltd for an investment of Rs 7.35 crore.

Mauritius based Walden Nikko Co. was permitted to raise its stake in Webdunia.com India Ltd from 22.15 per cent to 42.80 per cent. Webdunia designs, develops and deploys internet websites and portals and also provides e-mail, e-commerce and internet-related services.

   

 
 
WORKAHOLIC TAPAN SIKDAR TAKES WAIT & WATCH STANCE 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
New Delhi, July 4: 
BJP’s new minister of state for chemicals and fertilisers Tapan Sikdar remains a seriously disgruntled man and is contemplating chucking ministerial responsibilities and going back to organisational work for his party in case he does not get sufficient work to do in his new job.

“Kaajer subidha na hole karbo na, organisationer kaaj dekhbo (if there is no scope for work in the ministry, I will go back to organisational work,” Sikdar said after performing a ritual puja before entering his new office. “If I find I can’t work here, I will ask the Prime Minister who is my leader to either give me work elsewhere or else to send me back to organisational duties.”

The West Bengal BJP leader has already met his senior in the new ministry S.S. Dhindsa to ask for suitable allocation of work. The last minister of state in the ministry Satyabrata Mukherjee had been left cooling his heels in his office with little or no work to do under the allocation handed out by Dhindsa.

Sikdar said he would be writing to Dhindsa on the work allocation issue even as he stressed that his statement should not be construed against his senior with whom “I share an old friendship as we are both sportsmen.” (Sikdar used to play football in his prime while Dhindsa was sport minister earlier).

Bewildered by the Prime Minister’s decision to shunt him out of the telecommunications department and into fertiliser, Sikdar also plans to meet his leader Atal Bihari Vajpayee to ask him where he went wrong or whether he had felt there was need to use his talents in a different department.

“Pradhan Mantrir Kaache jante chaibo ki karon chilo (I would like to ask the PM what were the reasons for the change),” he said. “The Prime Minister has ordered me, I am a loyal soldier, so I have come here. I have performed Puja here but that does not mean I have started working,” he remarked.

Sikdar asserted he had been a success in his last job and claimed credit for rapid spread of telecommunication in rural India, a charge he had been handling there. And therefore expected to at least be told that he was shifted out.

He said his primary aim at the chemicals and fertiliser ministry would be to turn around the now sick state-run fertiliser plant at Dugapur as well as West Bengal-based central government pharma companies like Bengal Immunity and Bengal Chemicals, which are in the administrative control of his ministry.

“There is a great deal of potential in these firms and its just bad trade unionism and inefficient management which has brought them to this situation,” he said.

“I will try turn them around.” However, he ruled out reviving the Haldia fertiliser plant which he admitted was a hopeless case from where not a single drop of fertiliser had been produced.

Sikdar also took on Trinamool leader Mamata Banerjee stating she was trying to bill the railway division issue as a Bengal-Bihar fight whereas this was really an Indian Railway issue. “She is merely falling into a Communist-inspired trap and turning this non-issue into an emotive inter state dispute.”

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 48.81	HK $1	Rs.  6.15*
UK £1	Rs. 74.46	SW Fr 1	Rs. 32.10*
Euro	Rs. 47.66	Sing $1	Rs. 27.20*
Yen 100	Rs. 40.64	Aus $1	Rs. 26.80*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 5275	Gold Std (10 gm)Rs. 5150
Gold 22 carat	Rs. 4980	Gold 22 carat	   NA
Silver bar (Kg)	Rs. 8325	Silver (Kg)	Rs. 8320
Silver portion	Rs. 8425	Silver portion	   NA

Stock Indices

Sensex		3316.77		+6.58
BSE-100		1673.41		+1.00
S&P CNX Nifty	1070.55		+0.65
Calcutta	 118.79		+0.63
Skindia GDR	 508.93		+7.52
   
 

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