Bank IPO funding put at par with loans against sha
Microsoft case comes up before MRTPC
Plan to spin off Balmer Lawrie before IBP sale
Northwest Airlines to double flights
Thomas Cook, TCI marriage plan off
Mantra, IT to launch portal
Foreign Exchange, Bullion, Stock Indices

Mumbai, Sept 21: 
The Reserve Bank of India (RBI) today said banks should fund initial public offerings (IPOs) on the terms and conditions that apply to loans given against shares.

Banks have been given the freedom to invest any amount within 5 per cent of their total advances. More important, there will be no limit on investments in mutual funds made by banks that do not have capital market research skills.

Earlier, there was a proposal which sought to limit mutual fund investments by these banks to two-third of the exposure to capital markets.

The draft guidelines on bank financing of equity and investment in shares are based on recommendations made by a RBI-Sebi committee. Banks can now invest up to Rs 10 lakh in a maiden offering � the limit that applies to advances made against shares offered as collalteral in physical form.

The guidelines forbid loans which can be used by companies to invest in the IPOs of other firms. Similarly, banks have been told not to provide credit to non-banking finance companies (NBFCs) which on-lend the funds to individuals for subscribing to IPOs.

The funds a bank invests in an initial public offering will be treated as an exposure to the capital market.

Banks� investments in shares, convertible debentures and units of mutual funds should not exceed 5 per cent of their total outstanding credit on March 31 of the previous year, the Reserve Bank said.

However, it clarified that the 5 per cent cap on investment in shares is not mandatory. In other words, banks will be free not to invest anything at all in equity shares, convertible debentures and units of equity-oriented mutual funds.

�In view of the volatility in capital markets and the banks� overall risk profile, the board of directors of each bank shall formulate its policy on exposure to the capital market,� the RBI added.

The advances against collateral security of shares and personal loans for education, housing and consumption, will not have to be included in calculating banks� aggregate exposure to the capital market. Similarly, credit substitutes such as commercial paper and non-convertible debentures will be kept out of the credit portfolio for arriving at the banks� exposure to the market, the committee said in its report.

On the issue of guarantees given by brokers, the panel said a minimum margin of 25 per cent, inclusive of cash margin, should be charged.

In addition, banks may, at their discretion, ask brokers to pay a margin higher than 25 per cent as per the policy approved by the board of directors.

It agreed with the recommendation of the RBI-Sebi committee, that the ceiling prescribed for banks investment in shares and convertible debentures should be related to outstanding advances and not to incremental deposits of the previous year.    

New Delhi, Sept 21: 
While the dust over Bill Gates� visit has almost settled, the controversy regarding Microsoft�s monopolistic practices is yet to die down.

Tomorrow, a battery of six lawyers will defend the company in a case before the Monopolies and Restrictive Trade Practices Commission (MRTPC).

The case was filed after the Director General of Investigation and Registration recommended action by the Commission, on the basis of initial investigations.

However, in a bizarre turnaround, the government last month withdrew its own statement regarding the �action,� after Microsoft issued a counter statement claiming that the Director General had not recommended any action, but had only submitted its report. The company claimed that �no recommendation for initiation of any inquiry has been made against Microsoft.�

Sources in the department of company affairs (DCA) said the initial statement was withdrawn following pressure from the Prime Minister�s office.

The government also took great pains not to embarrass the Gates during his India visit by temporarily burying the issue. Sources said care had been taken to schedule the case at the MRTPC only after Gates fever subsided.

The investigation by the DG was conducted after a complaint filed by a resident in Mumbai who alleged restrictive trade practices by the company. The complaint said Microsoft sold its proprietorial software only for a specific PC. If a user had more than one computer he/she would have to buy separate software for each and would not be able to install the first copy.

Windows Me

Microsoft Corporation India Pvt Ltd today launched Microsoft Windows Millennium edition (Windows Me), its operating system for home PC users. Windows Me is an improved version of Windows 95 and Windows 98 and is available for retail as a full version for Rs 6500.    

New Delhi, Sept 21: 
The disinvestment ministry wants IBP to sell off its 61.8 per cent controlling stake in its subsidiary Balmer Lawrie Ltd before the government brings its equity holding in the parent oil company down to 26 per cent.

The ministry seems to have agreed with IBP that it should be allowed to sell off the Rs 700 crore Calcutta-based company in a parallel move. Otherwise, whoever buys into IBP will gain control of another highly profitable company at no extra cost.

In a note sent to finance secretary Piyush Mankad, disinvestment secretary Pradip Baijal has proposed that IBP be asked to explore various options in selling off Balmer Lawrie which include sale to financial institutions, small buyers, and


The missive assumes significance in the light of the fact that the cabinet committee on disinvestment is slated to clear the move to sell off 73.8 lakh government-owned shares, or a 33 per cent stake, in the oil sector major to a strategic buyer next week itself.

Balmer Lawrie, which is multi-product company engaged in tea exports, cargo, lubricants, industrial packaging and speciality containers, chemicals and travel, has a widely disbursed private holding. Of the 30.2 per cent held by private individuals currently, foreign nationals hold less than half per cent, financial institutions and banks hold nearly 22 per cent, employees hold nearly one per cent, and the public holds over 14 per cent.

Balmer Lawrie is slated to report a profit of over Rs 17 crore on a share capital base of just Rs 16 crore. It also has reserve and surpluses in excess of Rs 150

crore, an EPS of over 8 and a debt-equity ratio of just 1:1.4, making it a plum target for acquisition for any corporate predator.

Although its share price has been fluctuating between Rs 17 and Rs 46 over the past 52 weeks, brokers expect a price of Rs 80 a share if Balmer Lawrie is offered to a single buyer.    

New Delhi, Sept 21: 
Northwest Airlines today announced it will double the number of its flights out of India to 14 with effect from October 29, with a daily flight out of both Mumbai and New Delhi.

This will give the KLM-Northwest combine some 21 flights out of India, as KLM already has seven flights � 3 starting from Delhi, 3 out of Mumbai and one from Calcutta via Delhi.

KLM also said it would �wait and watch� for the Indian government�s disinvestment offer for Air-India. �We don�t know yet what the offer is,� Juan Torres, KLM�s India chief said.

The KLM chief executive had visited India recently, fuelling speculation of a possible bid by the airline.

Torres said, �We want to increase frequencies out of India besides adding new cities in the south, but this can be done only after bilateral talks between the two countries allows such a move.�    

Mumbai, Sept 21: 
Thomas Cook (India) today announced that its plans for a tieup or acquisition of Travel Corporation (India) have fallen through.

The Rs 75-crore finance and travel company informed stock exchanges that its discussions on the purchase of TCI�s equity shares have been discontinued, and that a deal is unlikely.

Thomas Cook officials offered no comment on the reasons for calling off the deal, and only said a detailed press release would be issued tomorrow. �The decision was taken early this morning by the directors of both companies,� a company spokesperson told The Telegraph.

Thomas Cook said in July it initiated negotiations to acquire Travel Corporation of India. The move, which followed the buyout of SOTC and Sita Travels by Kuoni Travels, would give Thomas Cook � which is strong in the forex business � a strong foothold in the three segments of the travel business: outbound, inbound and corporate travel.

Further, it was also estimated that with the good brand identity of TCI and its strengths in inbound tourism market, its business would not only be expanded, but that the company would obtain a wider reach in terms of infrastructure.

According to the initial understanding reached between the two companies, while the TCI brand would continue to have its own identity, a decision on whether it would be retained or not would be taken only after the acquisition was completed.

The combined turnover of the existing travel and tourism business, excluding foreign exchange, would make the merged entity the largest travel and tour operator in India. Thomas Cook had also unveiled expansion plans which included allied activities such as cruising, hotels, e-commerce business and other leisure travel business, which is expected to grow 20 per cent annually.    

New Delhi, Sept 21: 
Bharti BT Internet Ltd and India Today group plan to jointly launch news portal, �Mantra Today�. Bharti will hold a majority stake in the venture. The portal is scheduled to be announced on September 28 at the India Internet World to be held here. India Today will develop the content for the site which would also source news and features from outside for Mantra Today.

While confirming the plan, Atul Kunwar, chief executive officer of Bharti BT Internet said, �We are negotiating with India Today. But we are yet to sign a final agreement which is expected soon.�

However, he refused to comment on whether it would be an exclusive arrangement.

�It is difficult to say. I cannot comment on this issue now,� said Kunwar. Sources said, initially the new portal will offer news. Later it would expand to other services.

Bharti BT offers internet services in four metros, Calcutta, Chennai, Delhi and Mumbai besides Pune and Hyderabad under brand name Mantra Online.    


Foreign Exchange

US $1	Rs. 46.21	HK $1	Rs. 5.85*
UK �1	Rs. 65.50	SW Fr 1	Rs. 25.65*
Euro	Rs. 39.38	Sing $1	Rs. 26.15*
Yen 100	Rs. 43.45	Aus $1	Rs. 24.55*
*SBI TC buying rates; others are forex market closing rates


Calcutta	Bombay

Gold Std (10gm)	Rs. 4565	Gold Std (10 gm	4490
Gold 22 carat	Rs. 4310	Gold 22 carat	4155
Silver bar (Kg)	Rs.7925	Silver (Kg)	8000
Silver portion	Rs. 8025	Silver portion	8005

Stock Indices

Sensex	4257.20		-68.05
BSE-100	2147.86		-42.61
S&P CNX Nifty	1329.85		-13.05
Calcutta	118.93		+0.01
Skindia GDRNA	NA		-

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