Infosys doubles first-quarter profit
Maiden Maruti debt issue to raise Rs 200 crore
Satyam net leaps 95% on e-commerce boom
Gail pact with Karnataka
Bandwidth panel for fast allocation
Ad jingles sound hollow for Zee
Tata Steel weighs foreign buyouts
Govt to invite bids for Air-India in August
21% rise in HDFC net profit
Foreign Exchange, Bullion, Stock Indices

Mumbai, July 11 
Infosys Technologies racked up a 101.4 per cent increase in its first-quarter income and doubled its net profit in a sterling performance driven by a buoyant e-commerce business.

Total income in the quarter ended June 30 jumped to Rs 370.64 crore from Rs 184.05 crore in the corresponding period of the previous year. Net profit zoomed to Rs 121.30 crore from Rs 60.61 crore.

The company attributed the sparkling numbers to the prized assignments it bagged from Fortune 1000 companies looking to harness the infotech boom and internet for cost savings and revenue gains.

Other income jumped to Rs 15.11 crore from Rs 13.79 crore in the same quarter of the previous year. This includes Rs 7.42 crore (Rs 8.13 crore) arising from differences in exchange rate when its foreign currency deposits kept abroad were converted into local currency.

After-tax profit, but before extraordinary items, was pegged at Rs 113.88 crore, up a staggering 117 over Rs 52.48 crore recorded till June 1999.

�The industry is all about innovation and change. We believe that our ability to innovate and to keep pace with technological changes globally has made us a trusted partner for Fortune 1000 companies,� company chairman and chief executive officer N R Narayana Murthy said in response to the results.

�Web-enabling traditional economy players is an unprecedented opportunity,� company managing director Nandan Nilekani told The Telegraph. He said he could not forecast the performance in the nine months that lie ahead, but expressed confidence Infy will keep pace with the overall industry growth.

The company was silent when asked when it will mount its much-awaited big-ticket acquisition; it also did not say how long it will continue to boost its topline and bottom line growth by relying only on organic growth. �We are yet to identify companies for acquisition,� is all that Nilekani would tell curious scribes on the lookout for names of possible targets.

Analysts tracking the industry are not happy, while some investors are miffed at the silence. The mood was reflected in the behaviour of the Infy share on bourses today. On the BSE, it opened at Rs 8349.90, touched an intra-day high of Rs 8543 but closed at Rs 8277.60, down from Rs 8326.45.

Infosys continued to expand its client base across the world and has added 32 clients this quarter. New clients have been added in many countries including Korea, Japan and Germany. In Australia, the company secured its first client during this quarter.

Underlining its strong stress on e-commerce revenues, Infosys revealed that first quarter revenues show almost 28.7 per cent of its total revenues have come from e-commerce initiatives as compared to 6.4 per cent in the corresponding period of last year.

Revealing the new orders secured by the company during the quarter under review, the company said a B2B marketplace initiative of Samsung for trading in fish is the first fisheries consortium, with which it is involved in design and development of this B2B marketplace. Fishround provides an economical and efficient way to search, communicate offers, trade and auction.    

New Delhi, July 11 
Maruti Udyog Ltd entered the debt market for the first time today to raise Rs 200 crore through non-convertible debentures (NCDs).

Merchant banking sources said, �This is the first time Maruti has raised money from the debt market. It is being used mainly to fund its expansion plans.�

The company will issue seven year NCDs with a five-year put call option. The Rs 200 crore NCD programme will include a Rs 100 crore green shoe option. The debt is being raised through a book building route with an interest rate band of 10.90 per cent to 11.40 per cent.

�We expect the rates to settle at 11.20 to 11.25 per cent. Recently, the Reserve Bank of India auctioned a five-year paper at 10.22-10.3 per cent. Usually PSUs attract 100 basis points higher rates than an ordinary paper. Hence the estimate of 11.20 to 11.25 per cent,� said merchant bankers.

The company has appointed I-Sec, SBI Caps, Kotak Mahindra and DSP Merrill Lynch as leaders to the issue.

Maruti had earlier said that it would raise a total of Rs 300 crore of which Rs 200 crore would be long term NCDs and Rs 100 crore through a commercial paper programme. �The Rs 100 crore commercial paper programme would be completed after the NCD programme,� said sources.

Earlier, the company officials had said that with increased competition from foreign car companies, more investments would have to be made on a regular basis. Hence there was a need to look at alternate forms of funding.

The company has already announced its plans to launch one new model each year from the Suzuki stable. Last year it launched mid-size car Baleno and small car Wagon R.

Credit rating agency, ICRA, has assigned highest safety to the borrowing programme taking into account its dominant position in the domestic car market, with an established vendor base, diverse product portfolio and geographically widespread sales/service network.

Maruti has amortised its capital cost over large volumes, funded its working capital from advances from customers and dealers, and used internal generation for capacity expansion, new model launches and trade investment. This has resulted in the company having a large installed capacity funded mainly through internal accruals, which is largely depreciated, according to ICRA.

ICRA, however, warns that in future increased capital investments through borrowings to fund capacity expansion, new car launches and increasing working capital requirement would impact Maruti�s profitability.

Maruti to assist Ignou

Maruti today joined hands with Indira Gandhi Open University to form Vidhyavahini to assist the university in creating social and educational programmes for Gyandarshan, the public service television channel run by Ignou. Maruti will make an initial investment of Rs. 5 crore in the project. It will also utilise Ignou�s training and development communications channel for disseminating specific training for drivers and mechanics.    

Mumbai, July 11 
Riding high on the e-commerce crest, Satyam Computer Services today announced a staggering 95 per cent leap in its first-quarter net profit and a 76 per cent increase in sales.

While sales jumped to Rs 240.73 crore from Rs 136.81 crore in the corresponding period of previous year, net profit (after tax) galloped 95 per cent to Rs 50.36 crore from Rs 25.84 crore.

The company said it realised Rs 170.13 crore from the sale of 3.47 lakh equity shares it held in Satyam Infoway to the Government of Singapore Investment Corporation Pte Ltd. The accrual is reflected in the company�s accounts as extraordinary income, a Satyam release said.

The results helped the Satyam share open higher at Rs 3150 over Monday�s close of Rs 3139.10, but profit-booking hammered it to an intra-day low of Rs 3115, before it closed at Rs 3150.35.

�The growth momentum we have maintained reflects our focus on high-value additions and application of new technologies,� Satyam chairman B Ramalinga Raju said, adding future growth will be fuelled by the internet segment: �We have moved quickly to tap the substantial business opportunities in internet and e-business related projects.�

Fluctuations in currency exchange rates helped total income increase by Rs 8.09 crore and profit before tax by Rs 7.05 crore.

The mix of projects confirms the growing importance of technology-intensive solutions in its product portfolio. E-business orders increased to 25.3 per cent in the first quarter from 17.4 during the last financial year; enterprise resource planning (ERP) projects contributed 4.8 per cent (9.5% in the last fiscal) to sales in the first quarter, while telecom solutions accounted for 6.3 per cent.

In all, 21 new customers were added during the quarter, including Microsoft, Hewlett Packard, TRW Lucent and Origin. North America accounted for 80.71 per cent of its business. The staff strength increased by 642 to 5709 between March 31 and June 30.

Things were rosier for its subsidiary, Satyam Infoway. Its first-quarter revenues rocketed 298 per cent to Rs 32.17 crore from Rs 8.08 crore in the corresponding period of the previous year. It, however, suffered a net loss of Rs 17.83 crore.    

New Delhi, July 11 
The Gas Authority of India Ltd (Gail) and the Karnataka government have signed a gas co-operation agreement, for developing a gas pipeline network and marketing natural gas.

The agreement follows a meeting between chief minister S.M. Krishna and C.R. Prasad, CMD of Gail.

Under the agreement, Gail proposes to lay a pipeline up to Mangalore to transport the unutilised gas from the proposed LNG terminal at Cochin, as there are not enough corporate units in Kerala to consume the imported gas.

This could be extended to other parts of Karnataka later.    

New Delhi, July 11 
The government has constituted a six member special group to streamline the allocation of bandwidth.

The group will interact with industry bodies to identify issues regarding frequency clearances and submit the same to the competent authority for speedy resolution. The group under the chairmanship of the wireless advisor to the government, R. N. Agarwal includes senior officers from the licensing wing of the department of telecommunications (DoT) and the ministry of information technology.

The special group was formed following the decision of the group on telecom and IT convergence (GOT-IT) under the chairmanship of the Union finance minister. The group will ensure all applications to the Standing Advisory Committee on Frequency Allocation (Sacfa) clearance are put up on DoT�s website. It would review applications pending for more than two months and ensure that steps are taken to expedite clearance of such applications. It would also ensure that the applications have been received by the concerned appraising agencies.

The group will suggest procedural steps to facilitate expeditious and timely clearance by Sacfa of all applications for frequency allocations. It would also moot bi-monthly interaction between industry associations and Sacfa for expediting any pending case.

Any other issue which requires policy or procedural change will be brought up before Sacfa as well as Wireless Planning and Coordination (WPC) Committee. The GOT-IT had accepted the recommendations of the sub-group on resolution of subsisting problems headed by the member, Planning Commission, Montek Singh Ahluwalia. The sub-group had proposed that a group has to be formed in the WPC wing under the chairmanship of the wireless adviser to interact with the industry associations on a regular basis.    

Mumbai, July 11 
Zee Telefilms (ZTL) has indicated that it may have to bring about a reduction in advertisement rates for non prime-time slots due to the intense competition from rival TV channels, and the threat posed by new ones. Senior executives of the company, addressing a congregation of analysts here today, said growth in future earnings will be driven largely by subscription revenues from pay channels and from charges levied on accessing the Net.

The entertainment major is of the view that revenues from prime-time advertising would continue to show good growth rates, and the planned increase in channels will help the surge.

The company has, on several occasions in the past, said earnings from subscription would replace the money raised from advertisements � which presently form a significant chunk � as the dominant source of revenues in the years to come.

In the first quarter of the current financial year, Zee Network�s advertisement income jumped 35 per cent at Rs 159.13 crore. However, sources say the figure is not representative of the entire financial year because first-quarter numbers are usually lower than those recorded at other times.

�It has been generally observed that of the total subscriptions for a year, 20 per cent comes during the first quarter, 22 per cent comes from the second quarter, 30 per cent from the third and 28 per cent from the fourth,� sources said.

Zee Telefilms now beams 10 channels, but it has drawn up plans to increase it to 18 next year; Zee Sports and Zee Education are expected to be the major additions in the works.

According to company officials, annual revenues from the Alpha group of regional language channels is likely to be over Rs 15 crore because these have a large subscriber base.

The 1.5-million strong subscriber base for every Alpha channel has even surpassed Zee�s own estimates of 1.2 million. On the basis of revenues of Rs 2 per subscriber, the Alpha group is expected to give Zee Rs 1.2 crore every month.

Zee�s hybrid fibre co-axial (HFC) network, a high-stakes plan to offer broadband internet services through the country, will be implemented by subsidiary of Siticable. It will cost around Rs 2,500 crore, and the investment will be spread over the next three years. To start with, Rs 700 crore will be invested in 2001, Rs 1560 crore in 2002 and Rs 218.5 crore in 2003.

Company officials did not specify the mode of financing, but analysts are of the opinion that the money will be raised by divesting shares of Siticable, which has been valued at a whopping $ 3.5 billion.

Zee has launched its Internet service in Bangalore, providing web access through both cables and the dial-up mode. Sources said while it charges Rs 1500 per month with an initial deposit of Rs 10,000 for uninterrupted internet access through cable lines, the dial-up charges for three months are Rs 699.

Notwithstanding the aggressive plans, analysts say the key to Zee�s growth will lie in the way these are implemented. �However, their aggressive effort in accumulating subscription revenues through TV channels would put them in a good shape and the conversion to pay channels would help generate substantial revenue,� Aman Budhwar, senior analyst at Khandwala Securities, said.    

Jamshedpur, July 11 
Tata Steel is exploring possibilities for investment outside India.

Talking to reporters here, managing director Jamshed J. Irani said the company had decided to opt for acquisitions both in the steel and non-steel sectors.

He said Tata Steel has as many as 10 different alternatives for fresh investment and acquisitions, both in India and abroad.

�At present, there are at least ten different alternatives and we are looking at the most profitable one,� he said, hinting that one of the offers came from Thailand.

�In India, talks are on with the Salem Steel Plant. However, our officials are also negotiating with two to three companies in Thailand,� said Irani.

Among other plans of the steel major is investment in titanium mining in the country. �We have sanctioned crores of rupees for survey work. Senior officials of the company are looking at titanium deposits in Tamil Nadu, Andhra Pradesh and Kerala. Once we are sure of the percentage of deposits, we will begin talks with the concerned state government for lease,� he added.

At an earlier function in the morning, Tata Steel�s Works Division was awarded the ISO-14001 EMS certification. With this, the company becomes the first steel plant in India to bag this environment-friendly certification. It now joins the �green club� by committing itself to follow the global environment management practices.

The EMS, designed as per the requirements of ISO 14001 standards, provides Tata Steel a systematic approach for identifying the impact of its operations on the environment, enabling it to review its business strategies accordingly.

In addition to the Works Division, Tata Steel�s Sukinda Ferro Alloys and Minerals Division, Noamundi and Joda Mines Division, Collieries Division at West Bokaro also received the ISO-14001 certificate.

Meanwhile, Irani has been invited to head the state�s Industrial Commission. �I have agreed to head the commission. We have also suggested a list of names to be included in the commission, but are awaiting a final notification from the Bihar government in this regard.�

Members of the proposed commission will suggest measures to boost industrialisation in the state. However, the commission will not be vested with any executive powers.

He added that Tata Steel has agreed to repair the dilapidated bridge over the Kharkai river here at a cost of Rs 2.5 crore and work would start as soon as the government gave the nod.

Further, he said the company also decided to repair the roads and the overhead bridge of Tatanagar railway station, on the condition that the railways should bear 50 per cent of the total expenditure.

Irani said the company also planned to outsource the Tata Main Hospital to hospitals like Apollo or Manipal for off loading the burden. He clarified that the hospital would not be sold out, but it would be given to other hospitals on a contract basis.    

New Delhi, July 11 
The privatisation of national carrier Air-India gathered further momentum with the inter-ministerial group (IMG) today meeting advisors Morgan Stanley and finalising the time-table for completion of the disinvestment process in the ailing airline.

The IMG has decided to seek expressions of interest from potential bidders in the first fortnight of August, for an equity stake in A-I.

The Cabinet has already decided to sell off a 40 per cent stake in A-I to a single buyer, or a consortium of strategic buyers including up to a 26 per cent stake to a foreign airline. Besides, the Cabinet wants to sell off a 10 per cent stake to employees and 10 per cent to financial institutions and the public.

The deadline for disinvestment of A-I has been finalised as March 31, 2001. At the end of the sale which the IMG hopes to conclude by the end of this fiscal, the government will hold a 40 per cent stake in Air India. Top runners for the buyout are Singapore Airlines, possibly in alliance with the Tata group who have announced their interest, British Airways, which is tipped to bid jointly with Jet Airways, Virgin Atlantic Airways, Air France and Lufthansa.

The IMG meeting was attended among others, by disinvestment secretary P Baijal, civil aviation joint secretary Sanat Kaul and A-I managing director Michael P. Mascarenhas.

The IMG today also reviewed the divestment time table for selling off Hotel Corporation of India to ensure the loss making Centaur hotel chain owned by Air-India is sold off before the end of the calendar year 2000.    

Mumbai, July 11 
The Housing Development Finance Corporation Ltd (HDFC) has posted a 21 per cent growth in net profit for the first quarter of the current fiscal year ending June 30. Net profit rose to Rs 91.09 crore as against Rs 75.58 crore in the corresponding quarter of the previous year.

During this period, the corporation�s income from operations rose over 23 per cent to touch Rs 552.23 crore against Rs 448.85 crore in the corresponding period of the previous year.

HDFC said that approvals during the three month period aggregated to Rs 1,205.97 crore as compared to Rs 848.73 crore in the corresponding period of the previous year, representing an increase of 42 per cent.

Disbursements during this period amounted to Rs 937.62 crore compared to Rs 656.18 crore during the previous period, an increase of 43 per cent. The approvals and disbursements in respect of individual loans were higher by 54 per cent and 51 per cent respectively as compared to the previous year, added HDFC.

Addressing the shareholders at the company�s 23rd annual general meeting, Deepak Parekh, chairman, HDFC said that its recent acquisitions would help it to increase its distribution strength and to deliver services and products to a larger customer base more efficiently and cost effectively.

Recently, HDFC has acquired the entire shareholding of Home Trust Housing Finance Company Ltd apart from buying out 26 per cent equity in Gruh Finance Ltd which was held by Gujarat Ambuja Cements Ltd.

The corporation agreed to acquire the receivables pertaining to the loan portfolio of Global Housing Finance Ltd aggregating to Rs 42.55 crore apart from signing an agreement with Weizmann Homes Ltd to acquire part of its receivable up to Rs 15 crore.

On the corporation�s insurance foray, Parekh said that while the first set of licenses will be issued by October or November, the company will be able to commence operations immediately thereafter. HDFC had a tie-up with UK-based Standard Life Assurance for the insurance venture.

Earlier, HDFC had announced its entry into the mutual fund business by launching HDFC Mutual Fund. Parekh said that this marked another step towards transformation of the group from a single product financial services provider to a well-diversified multi-product group offering a wide range of services including housing finance, commercial banking, consumer finance and mutual funds.

HDFC is planning to launch its first mutual fund scheme by the third week of July. Three funds are on the anvil � HDFC Income Fund, HDFC Growth Fund and HDFC Balanced Fund.    

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