Govt plans to auction 5 mt wheat
Local prices of hot rolled coil unlikely to go up
PNB Gilts to tap market in July
Command to offer surfing facility

New Delhi, June 10 
In an attempt to make space for fresh wheat stock in the government�s overflowing granaries, the Cabinet committee on prices today decided to auction five million tonnes of wheat besides giving wheat loans to Saarc countries and entering into barter trade with other nations.

The government has some 25.4 million tonnes of wheat while it needs to keep just 14.3 million tonnes in accordance with its own buffer norms, a set of rules it follows in keeping a stock of food to guard against bad crops, price rises and war-time shortages.

This huge excess stock has led to overflowing granaries with no space to keep fresh wheat which will be harvested this winter. As a consequence, consumer affairs and public distribution minister Shanta Kumar was forced to plead with his Cabinet colleagues to agree to this move.

However, Kumar faces an uphill task in auctioning the wheat stock. While he sells wheat to states at Rs 9 a kg for onward sale through the public distribution system, wholesale market prices are lower at about Rs 8-8.50 a kg. The auction is expected to fetch even lower prices, something which would be difficult for Kumar to explain to the state governments with which he does business at higher prices.

Kumar, however, tried to defend today�s potentially ticklish decision by stating at a press conference that states too could participate in the auctions to be held in Punjab and Haryana, where most of the government�s wheat stocks are lying.

According to officials, wheat loans which the government will offer to all Saarc neighbours, including Pakistan, will be repayable in either cash or commodities. The norms for barter trade in wheat are, however yet to be worked out.

The government will be looking to exchange wheat for goods such as petro-products, edible oils and certain minerals under barter trade.

The Cabinet committee today also gave post facto sanction to a scheme to pay up to Rs 5 a kg as subsidy to small tea growers, who have been badly hit by falling auction tea prices, particularly in south India.

The scheme is already in operation from May 1 this year and today�s decision was merely to formalise the legality of the scheme. It will remain operational for the next six months or till the average auction prices touches Rs 55 per kg.

The subsidy would be available to only those tea growers whose land holding is less than 10.12 hectares, and is expected to benefit about 50,000 small tea growers mainly in the south. The scheme will be implemented by the Tea Board and there will be weekly review of the auction prices at different centres.    

Mumbai, June 10 
Domestic prices of hot rolled coils (HRC) are not expected to rise in the near future despite the firm trend in international steel prices. This is due to the excess capacities coupled with the absence of significant demand in the local market.

While international prices of HRC are now ruling firm at over $ 330 per tonne, up marginally from the March level of $ 315 per tonne, domestic prices of HR products are relatively stable at over Rs 16,500 per tonne.

Industry expects the prices to remain at these levels in the immediate term, largely due to the excess supply generated by the commissioning of new capacities of both Ispat Industries and Jindal Vijaynagar Steel recently.

�Firstly, capacity in this segment has been building up consistently. Secondly, though demand for steel has shown some signs of improvement as of late, it has not reached such a level to cause a good upswing in local prices,� sums up an industry analyst.

Despite such a forecast, it is still expected in some quarters that there may be marginal improvement in HRC prices due to a emphasis on exports of the commodity.

Here, while Essar Steel which is the largest exporter of HRC from the country has fixed a target of around 1.2 million tonnes for the current fiscal, exports of other steel manufacturers comprising Tisco, SAIL, Jindal and Ispat is expected to touch around 1 million tonne.

�A possibility now looms that there could be a shortage of HRC in the local market which could push up prices. However, the price increase would not be sharp enough,� sources added.

Presently, while the supply of HRC is put at over 12 million tonnes, demand for the commodity, according to reliable estimates could be over 10 million tonnes. With the full commissioning of both Ispat and Jindal units, it is projected that supply of HRC may surpass 15 million tonnes in the next fiscal.

The beneficial impact of firm steel prices was seen recently when Tisco announced a 50 per cent jump in net profits at Rs 422.59 crore on a 10 per cent increase in sales at Rs 6,890.87 crore for the year ended March 31, 2000.

Tisco had attributed this performance not only to the improvement in world steel prices but also to its efforts in reduction of costs.    

New Delhi, June 10 
PNB Gilts, a subsidiary of Punjab National Bank (PNB) will hit the capital market with an initial public offer (IPO) in early July to raise about Rs 73 crore.

The PNB Gilts initial public offer was earlier scheduled to be launched in January, but due to the controversy surrounding a CBI probe against PNB chief Rasheed Gilani, the issue had to be postponed.

Shares will be offered to the local investor at Rs 30 per share which includes a premium of Rs 20 per share.

The company has received the requisite approvals from the Securities and Exchange Board of India (Sebi).

The share will be listed on the Bombay, Delhi and National stock exchanges.

About 25.92 per cent equity or 3.5 crore shares would be offloaded to the public, and the price has been kept low to get a good market response, said company officials.

PNB Gilts decided to go in for a public issue to increase the paid up capital from Rs 50 crore to about Rs 123 crore.

The company has already borrowed close to Rs 673 crore. �The increased capital will help us bring down our leverage,� said company sources.

The government securities market has been a booming business in the last few months. Trading of government securities has gone up to Rs 2000 crore a day from about Rs 200 crore a day few years back.

Banks, too, are finding it attractive to invest in government paper.

�Banks are also buying more of government securities as there is virtually no NPA attached to them,� the officials added.

But there is fierce competition among primary dealers with several foreign banks like HSBC and some others also joining in. Hence it is essential for PNB Gilts to increase its capital.

This is not the first time that PNB Gilts has enhanced its paid up capital. Earlier it was increased through the issue of bonus and rights share of Rs 25 crore, each in the ratio of 1:2 and 1:3 respectively to the parent company.    

Calcutta, June 10 
Command, the leading cell phone provider in Calcutta, is set to introduce a new product, based on the wireless application protocol (WAP) technology to offer the subscribers the internet surfing facility from their mobile phones.

The product � w@p.command � will be available to the customers in a week�s time, said Arun Kapur, managing director & CEO of Command.

�This innovative service is in synergy with the company�s mission of responding to customers needs proactively and being a total communication solution provider,� said Kapur.

W@p.command will empower subscribers with the power to leapfrog into an era of complete wireless connectivity, he added.

The commercial aspect of the product, however, is yet to be finalised.

�The rates (for this service) will not be high. It may be at par with our rates pertaining to data transferring services. There may also be a nominal one time charges attached to the scheme,� Kapur said.    


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