Cement units to extend plant shutdowns to jack up prices
L&T, ACC scrips in limelight
ICI to hive off Rishra unit, sell polyurethanes wing
Chip that can guess your next move
Tips listed at a small premium
Rating shock for CESC
State finance corps seek funds
Pant conjures up power-packed ICE vision
AtIndia at your doorstep
Foreign Exchange, Bullion, Stock Indices

Mumbai, Nov 20: 
In a bid to artificially jack up prices by controlling supplies, major cement manufacturers in the country have closed their ranks and decided to shut down their plants for routine maintenance for a longer period than the conventional 20-25 days.

The move, which smacks of growing cartelisation in the industry, is being seen as an answer to the problem of cut-throat competition and price undercutting at a time when demand for the commodity has yet to show significant improvement.

However, analysts reckon that the understanding will be fragile and it will not hold for long because of the intense competition in the sector.

Confirming that major cement manufacturers have reached an understanding to bring about a �pricing discipline��, Anil Singhvi, executive director of Gujarat Ambuja Cements Ltd (GACL) said the pact was reached at a high-powered meeting of the Cement Manufacturers Association (CMA) last week.

While the decision will lead to reductions in both production and despatches in the country, the precise figures for various regions were not available.

Sources in the sector who are aware about the understanding said that as per the formula, companies will extend the annual shutdowns by a period ranging between 15-35 days in addition to the prevailing practice of 20-25 days.

�The idea is to see that cement supplies get tightened and the opportunity will be used by the manufacturers to raise prices,� they added.

Efforts made by this correspondent to obtain the schedule for planned shutdowns from individual companies such as ACC and Larsen & Toubro proved fruitless with officials unavailable for comment. GACL is believed to have been considering to extend its shut down by 10-15 days.

Analysts said the decision could have been a major factor responsible for the hike in prices by Rs 5 per bag in Mumbai.

This will be the second time that players will be raising prices in the region; dealer prices have now risen to Rs 137-140 per 20-kg bag.

Going by the last week�s decision, it is now felt in many circles that cement prices in the western region, particularly Mumbai which is the country�s largest market with a monthly consumption of 3 lakh tonnes, may touch Rs 150 per bag by December.    

Mumbai, Nov 20: 
The BSE sensex closed 21 points higher at 3927 today, helped by moderate buying in the long-ignored scrips from the compulsory rolling settlement category, and fresh interest in the shares of cement companies arising from reports that predicted an increase in prices.

The bourses were agog with talk that cement despatches to the Western region would be stopped for a week. Marketmen said the move has been proposed to bring a price increase of Rs 20 per bag from the current levels. However, this could not be confirmed from the industry circles.

Reports that a deeply divided industry had finally reached an understanding on production cuts prompted investors to buy the shares of cement firms, many of which had been languishing at the lower end of their circuit filters. ACC, Gujarat Ambuja. L&T and Grasim made impressive gains.    

Mumbai, Nov 20: 
ICI India Ltd has decided to spin off its motor and industrial (M&I) paints division at Rishra into a joint venture with Berger Paints India Ltd. The two paint makers will hold 50 per cent each in the new venture.

The ICI India board which met here today also cleared a proposal to sell its polyurethanes business to a wholly-owned subsidiary of Huntsman Corporation of the US.

The two deals will involve a total consideration of Rs 99 crore.

In a notice sent to the stock exchanges today, ICI said the competition in the M&I business had become intense. It had decided to transfer its M&I business to the joint venture with Berger as a going concern, including all the assets at Rishra unit exclusively used by the paints business, for an aggregate consideration of Rs 16.5 crore.

ICI India and Berger will subscribe 50 per cent each to the share capital of the joint venture company and will have equal representation on the board. A nominee of Berger Paints will be appointed as a chairman who will have a casting vote.

The Rishra factory supplies to the M&I business and the sales revenue from this business for the year ended March 31, 2000 was Rs 43 crore.

According to the notice sent to the stock exchanges, ICI will transfer its polyurethanes business as a going concern to a wholly-owned subsidiary of the US company or its affiliate to be incorporated in India at a consideration of Rs 82.5 crore.

The agreed consideration includes a sum of Rs 10 crore payable over a three-year period, the eligibility for and quantum of which will depend upon the performance of the business during each of these years against agreed parameters.

The employees of the company will be transferred to the purchaser with continuity of service on terms �no less favourable than those prevailing on that date�. The company posted a revenue of Rs 98 crore from the polyurethanes business and has been the market leader in the segment.

Both the decisions will be placed before shareholders for their approval at an extraordinary general meeting proposed to be held on December 15.

ICI India has been engaged in restructuring programme over the past couple of years. It had earlier exited from non-core areas like acrylics and fertilisers and reports had suggested that the company planned to pull out of other businesses such as pharmaceuticals, bulk chemicals and cyclicals. It had also sold its animal healthcare business to Glaxo.

ICI had also hived off its explosives business worth Rs 160 crore to a joint venture with a Australian company, Orica Ltd. ICI holds around 51 per cent share in the venture.

Last year, the company also sold a number of residential flats in Mumbai, Delhi, Calcutta and Chennai.

In the paints business, ICI India is into decoratives, refinish and motors & industrial (M&I) segments with manufacturing facilities in Mohali (Punjab), Thane, Hyderabad and Rishra.

After commissioning the new plants at Thane and Mohali, ICI India rationalised its manufacturing operations by sourcing products for the decoratives and refinish sectors from its factories in Mohali, Thane and Hyderabad.

For the second quarter of the current financial year (July-September), ICI India posted a net profit of Rs 7 crore on a sales turnover of Rs 217.4 crore. That was a sharp fall from the Rs 13.88 crore net profit earned in the first quarter ended June 30.

Berger Paints, on the other hand, recorded a net profit of Rs 7.5 crore on net sales of Rs 133 crore for the same period.

On Monday, the ICI stock closed at Rs 82.05 on the National stock exchange, up Rs 3.40 from its Friday close of Rs 78.65. Berger, however, fell to Rs 94.10 from its Friday close of Rs 95.20.    

New Delhi, Nov 20: 
Create ripples in water without getting your hands wet, or edit and synthesise your favourite music sitting in India while it is performed in New York or Mumbai.

Your children can kick the dusty road and see mud flying and still not get dirty, burst crackers and not get hurt, pluck fruit and flowers from trees without falling from them.

Intel�s Pentium4 processor promises to deliver all this through desktop computers. The world�s largest computer chip manufacturer today launched Pentium4, its seventh generation chip.

�The Pentium 4 processor is designed to give users performance where they can appreciate it most. Whether streaming content, playing interactive games, encoding video and MP3 files or creating internet content, the Pentium4 processor is designed to fulfil the imagination of all computer users,� said Intel�s South Asia director, Avtar Saini.

Users of P3, which uses an eight-byte pipe to conduct 133 million transactions, can conduct 400 million transactions in the same space if they use P4. In other words, it means high speed, richer, more dynamic content and graphics.

An important aspect of P4 is its ability to guess the next transaction or command.

�We have added 144 new instructions, which will allow the processor to guess the next possible move and be ready to execute it. We had added 58 instructions in Pentium3. The additional instructions will help speed up the transaction time,� said Jayant Murty, general manager (marketing), Intel Asia Electronics Incorporated.

The Pentium4 processor will be available in two versions � 1.5 gigahertz priced at Rs 36,855 and 1.4 gigahertz priced at Rs 28,980.

The target customers for 1.5 Ghz are companies and business establishments while the 1.4 Ghz P4 is meant for customers who want to see the best of internet. �The prices will come down by next year for home users. It is an important market and we cannot ignore it,� an Intel executive said.

Intel also launched 850chipset. The Pentium4 platform is based on Intel80 chipset which complements P4 processor�s 400 Mhz system bus, providing up to 3.2 gigabytes of data per second. The

Major computer manufacturers like Dell, HCL and Wipro will sell computers with P4 chip soon.

�The PC manufacturers have P4 for the last six month and it is their decision to announce the launch of their system with Intel chip,� Saini said.    

Mumbai, Nov 20: 
Tips Industries was today listed on the Bombay and National Stock Exchanges at a small premium to its offer price of Rs 325 per share.

On the BSE, the scrip rose to an intra-day high of Rs 374 after opening at Rs 342, and dipped to Rs 325 after some selling. However, it rebounded to finish marginally higher than the day�s low of Rs 332.35. On the NSE, the scrip opened at Rs 325 and shot up to a high of Rs 370. Thereafter, it fell to Rs 326.90, but finished marginally at Rs 333.55

The company, run by the Tauranis, entered the capital market with an IPO of 30 lakh equity shares, included a book-building portion which consisted 27 lakh shares. Tips is planning to set up a compact disc manufacturing plant and a studio for recording music, apart from expanding its cassette-making facilities.

It is also looking at acquisitions or audio rights, and is keen on forging alliances with overseas companies. After the issue, the public will hold 25 per cent of the company�s equity while the rest will be controlled by the Tauranis.

Balaji Telefilms

Balaji Telefilms, an entertainment company promoted by actor Jeteendra, will be listed on the Bombay Stock Exchange on Wednesday. The company had come out with an initial public offering issue last month with a book building portion of 25.20 lakh shares and fixed price portion of 2.80 lakh shares for retail investors, a release said.    

New Delhi, Nov 20: 
Icra Ltd has lowered the rating of CESC Ltd�s Rs 155-crore non convertible debenture programme from LA to LBBB+. The credit rating agency has cited �temporary deterioration in the financial risk profile of the company� as the reason for the downgrade.

The new rating indicates moderate safety for the debenture issue which takes into account the financial risk due to an increase in the transmission and distribution costs after a tariff revision.

The Calcutta-based power utility continued to record losses in 1999-2000 though operating margins improved.

The rating also takes into account the essential nature of the company�s business, the significant improvement in the generating efficiency after the stabilisation of the 2x250 MW Budge-Budge power plant, the recovery in high tension industrial sales and continuing access to credit from domestic financial institutions and multilateral agencies.

The RPG group-owned CESC has been suffering losses since 1997-98 due to high depreciation and interest charges incurred because of the Budge Budge project. Despite a marginal decline in absolute debt in 1999-2000, the steady erosion of the net worth has strained the capital structure further, Icra said.

Although earlier disputes regarding the project cost of Budge Budge and recovery of arrear fuel surcharge have been settled, a change in the power regulatory framework of the state has continued to delay fresh round of tariff revision. With the constitution of the West Bengal Electricity Regulatory Commission (WBERC), the tariff revision process is now expected to be regular and streamlined.

�However with emphasis on efficiency in the new regulatory environment, concerns remain regarding the extent of tariff hike that would be allowed by the commission,� Icra said.

The credit rating agency also said the profitability and debt servicing ability of the company in the medium term would depend on the timeliness and the extent of tariff revision, the ability to maintain generation, transmission and distribution efficiency levels within the stipulated norms.

CESC has set up capacities to generate 1,065 MW of power through its generating stations at Budge-Budge (250X2MW), Titagarh (240MW) and Southern (135MW).    

New Delhi, Nov 20: 
Ailing state financial corporations (SFCs) have asked financial assistance from central and state governments, as well as, IDBI and Sidbi to restructure their balance sheets.

In a closed-door meeting of the nine member committee working on restructuring of SFCs, headed by IDBI chief G P Gupta, the SFC chiefs asked IDBI and Sidbi to convert their loans into equity as part of the recapitalisation.

They also wanted other banks and financial institutions to follow suit and pick up stakes in the SFCs in order to strengthen the balance sheets.

The state finance corporations have been in deep financial mess with several such state-run institutions turning sick. Currently, the equity of about 18 SFCs have eroded by more than 50 per cent. IDBI has been worst hit, being the single major shareholder with investment of Rs 426 crore locked in them.

The committee is expected to study the suggestions made by the SFC representatives and submit a final report by December-end or mid-January. �The proposal for recapitalisation came up from SFC. But the way it would be done is yet to be finalised,� G P Gupta said.

Former Sidbi chairman and chief consultant to the committee, Sailendra Narain said the committee has decided that the state financial corporations would have to first clean up their balance sheets before tapping the market for more funds.

The panel discussed other issues like the relevance of SFCs, revamp of ailing units, the future business model for their sustenance in the current competitive environment were discussed in the meeting, he added. Besides the issue of recapitalisation, the SFCs in north east and Jammu & Kashmir pleaded for special dispensation of funds for their regions.    

New Delhi, Nov 20: 
Planning Commission deputy chairman K. C. Pant today said an integrated regulatory framework for the ICE and power sectors was needed to pave the way for convergence between the two key core industries.

The Planning Commission, he said, will make a fresh assessment of the assets with the power sector. It feels there is a wealth of opportunities for state-owned power utilities to make money in an age of seamless services and diversified companies.

Speaking at a conference, Powercom India 2000: Redefining business opportunities of convergence of the power sector with the ICE sector, Pant said the transmission and distribution networks in the power sector, and pipelines owned by gas companies, can double up as the basic infrastructure for telecom, infotech, cable and internet companies, which can use them to service customers better and faster.

He said the phenomenon of convergence will hardly leave any sector untouched, but warned it could take a long time to happen in India unless the myriad ministries and different departments improve co-ordination. �One of the issues thrown up in the mid-term appraisal of the Ninth Plan is the lack of convergence between the activities of different ministries and departments. It will be the Planning Commission�s endeavour in the Tenth Plan to realise synergy, increase convergence and maximise efficiency,� Pant said.

To meet the ever-rising demand, the telecom sector will require an investment of Rs 12,000 crore, Rs 1,40,000 crore by 2005 and Rs 2,80,000 crore by 2009 in capacity expansion. At the same time, the power sector needs large investments in 10 years to fulfil a projected demand of 1 lakh megawatts.

Since the government will not be able to generate all the investment it needs, Pant said private sector participation is essential to meet the shortfall. He lamented that participation from the private sector had remained thin in spite of government initiatives.

�I am concerned that the response of the private sector to our initiatives in the infrastructure sector has been much below our expectations. We are now identifying the thrust areas for Tenth Plan to raise private sector investment in infrastructure sector, particularly power,� Pant said.

Emphasising the need to accelerate the pace reforms in the power and telecom sectors, he said: �Convergence will bring down the cost and ensure better delivery of services. It cannot be a substitute for additional capacity. Therefore, we should continue to accelerate reforms in telecom and power.�

Talking about the problems of the power sector, Pant listed three areas which will have to addressed in the immediate term: Minimising pilferage or thefts in distribution, devising an efficient mechanism of collecting user charges and building an effective system to redress consumer grievances.

The power sector, he said, will have to take tap infotech, adopting e-commerce a way to collect user charges to improve the financial health of the distribution companies and state power boards.    

New Delhi, Nov 20: 
At a time when dotcom dreams are turning sour, venture capital firm AtIndia today started work with an initial corpus of $ 50 million and a pledge to pour in $ 250 million into promising internet upstarts over two years.

Founded by Ramesh Vangal, former chief executive of Coca-Cola India, and H&Q Asia Pacific, a private equity investment firm, AtIndia will invest in tech firms floated by the Indian Diaspora. These include ventures in the areas of wireless and communication, optical components and networking, internet software infrastructure and enterprise.

HDFC chairman Deepak Parekh will be a member of the AtIndia advisory board. The core team will comprise senior management experts joining from a variety of companies such as Hindustan Lever, Microsoft, Motorola, and Citibank.

A business value accelerator, as the company prefers to call itself, the company will fund Silicon Valley Indians, but some new back-end ventures at home might also be eligible.

Vangal made it clear his brainchild was not about nurturing the fledgling breed of dotcoms, but about technology firms with an edge, a robust revenue model and a global outlook.

H&Q Asia Pacific has committed a $ 32-million investment in At India. It has already injected $ 17 million in three Silicon Valley-based Indian technology companies. These include Purple Yogi, an internet discovery engine, Onscan Inc, a Infosys-incubated venture, and Techsar Inc, a company that provides web-based software tools to enable ASPs.

AtIndia CEO Kannan Ramaswamy � who worked for GE Capital� his company will focus on forging a strategic partnership with Indian companies that provide world-class back-end platforms.

According to Vangal, his company aims to rack up revenues which would be three times its investment in two years �$ 150 millions on an initial investment of $ 50 million.

The fifteen-year-old H&Q Asia Pacific has been bank-rolling technology start-ups in Asia ever since it was set up. For the Bangalore-based AtIndia, the association will give it a presence in the Silicon Valley.    


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