Cellular tariff war set to hot up with BSNL entry
IOC mulls independent valuation of IPCL unit
Sebi booster for rolling settlement
SBI defers plan to close 166 branches in east
Cisco pledges $ 50 million more investments
ITC stock option cleared, third-quarter net up 29%
Atal wants budget for the masses
Dr Reddy’s Q3 sales up 28%
Aptech Internet rings in TringTring
Foreign Exchange, Bullion, Stock Indices

New Delhi, Jan. 17: 
It is time for Cheshire cat smiles on the faces of mobile-phone users as Bharat Sanchar Nigam (BSNL) announced a cellular service that promises to be the cheapest in Calcutta, a city just getting a taste of low tariffs amid a bare-knuckle battle for subscribers between the two existing players.

The service will be launched in Calcutta, Haldia, Patna, Chennai and Hyderabad on January 31 in the first phase. In all, 5,000 connections will be offered in the city and 1,000 each in the other four centres. The service will be available in 600 places across the country later.

The tariff has been set at Rs 3.50 per minute for outgoing and incoming calls between 7am and 7pm. During the off-peak hours and on holidays, the air-time rates will be only Rs 3. The monthly rental has been fixed at Rs 400.

Total startup charges, which includes the registration and activation fee, will be Rs 1,000 only. In comparison, Command’s startup charges are much higher at Rs 2,760, which includes a registration fee of Rs 1,500 and an activation charge of Rs 1260. However, its cash-card option is cheaper with an activation charge of Rs 840. The registration fee for MTNL’s service in Mumbai and Delhi, works out to Rs 7,050. It varies between Rs 9,000 to Rs 15,000 for private operators.

“A tariff package has been received from BSNL for its cellular mobile service.” BSNL will be eligible to offer the tariffs from today,” sources in Trai said.

Under Clause 7 of the telecom tariff order 1999, the service provider has to inform Trai about its proposed tariffs and “unless the authority intervenes within the mandatory notice period of five working days, the service provider may implement the proposed tariff.”

BSNL had sent its proposed tariffs to Trai on January 10. Its proposed airtime rates are higher than those offered by MTNL in Delhi and Mumbai, and by private cellular operators in various other cities. However, its registration and activation fees are much lower.

MTNL has offered a rate of Rs 2.70 per minute (per 30 second pulse) for an outgoing call and Rs 1.50 per minute (per 30 second pulse) for an incoming call. Private operators offer an airtime package of Rs 1 for incoming and a maximum of Rs 9 for outgoing calls.


Mumbai, Jan. 17: 
Indian Oil Corporation (IOC), the public sector oil giant, may go in for an independent valuation of the Vadodara unit of IPCL, which, according to reports, has been valued at over Rs 3,400 crore.

Though developments are in preliminary stages with the Union government yet to approach IOC with the valuation, sources close to the company indicated such an event is a possibility if the government sticks to the amount proposed by Deloitte, Haskins and Sells for the unit. “We cannot say anything at this stage. The board will take a decision when the government approaches the company,” senior IOC officials told The Telegraph.

While the proposed valuation has largely been seen as ‘high,’ industry circles fear that the sale of the unit to IOC may be delayed if it decides to go in for another valuation.

The situation will be similar to that involving BPCL for Kochi Refineries and IOC for Chennai Petroleum Corporation and Bongaigaon Refinery where both these companies had expressed reservations on the value of the government’s stake. While the government had proposed to sell its equity at book value in these stand-alone refineries, both IOC and BPCL called for a valuation based on the market price.

“It is unlikely that IOC will be comfortable with such a high valuation for the Vadodara unit. The company will certainly call for a review since it also planning to invest more in the unit and will offer a VRS to the workforce,” industry circles said.

IOC is now believed to have been mulling an investment of around Rs 4,000 crore to upgrade the plant and offer a VRS to half of its work-force.

There are others however, who feel the corporation is unlikely to go in for an independent valuation considering the importance of the unit.

“For IOC, the Vadodara unit will be vital as naphtha produced from their refinery is used in this plant,” said Dhiraj Sachdev, senior analyst at HDFC Bank.


Mumbai, Jan. 17: 
The Securities and Exchange Board of India (Sebi) will allow voluntary rolling settlement with carry forward facility for all A group shares. This is being done to make rolling settlement more popular on local stock exchanges.

At present, the perception is that the rolling settlement category is unpopular which has resulted in illiquid counters.

The capital market watchdog, in a meeting today with top officials of premier stock bourses, also stipulated fresh rules to make market operations more transparent. Sebi had made it compulsory for exchange directors and functionaries to disclose their personal trade transactions.

In another move, the capital market regulator made it compulsory for companies to disclose names of shareholders having a minimum of one per cent shareholding on a quarterly basis. The stock exchanges will have to provide this information on their websites on a regular basis.

Brokers felt that the market regulator’s move is a result of the recent case of ACC Ltd where the company is still in the dark as to who holds nearly four per cent of its stake.

The move will also enable companies to monitor their stake pattern on a regular basis and put them on alert if any shareholder acquires more than one per cent.

The stock exchanges will have to create a special department to monitor compliance of the new rules, the regulator said

“Sebi’s code of ethics for the exchange functionaries will improve transparency. All elected and non-elected directors and officials will have to provide information on their personal trading with certain periodicity,” Sebi chairman D.R. Mehta told reporters after meeting stock exchange officials here today.

The Sebi chairman said directors and employees of the bourses would disclose their transactions to the ethics committee of the respective stock exchange having a designated compliance officer.

The committee would be headed by a retired high court judge with non-exchange officials having a major presence on it, he said. The code would be implemented once the Sebi sub-group defines the periodicity and format for disclosures in next few days, Mehta added.

The transparency would help to build investors confidence and make exchange functionaries responsible for their conduct, he said.


Calcutta, Jan. 17: 
The management of the State Bank of India has decided not to close down 166 loss-making branches in the Bengal circle for the “time being.” The rider, however, is that profitability and business of these branches will have to go up substantially.

Banking circles feel that the SBI management does not want to take any step at a time when its voluntary retirement scheme is on.

The number of loss-making branches, according to the chief general manager of SBI’s Bengal circle S. K. Gupta, has jumped from 81 as on March 31 1999, to 135 as on March 31 2000, with a corresponding increase in the aggregate loss amount from Rs 6 crore to more than Rs 20 crore. The position has further deteriorated and as on September 30 2000, the circle is saddled with 166 loss-making branches.

The sudden spurt in the number of loss-making branches is attributed to the revised transfer price mechanism introduced on April 1, 1999.

Under the mechanism, deposits collected by the branches are sent to SBI’s central office in Mumbai, for which the central office pays the branches a certain amount of interest. Similarly, the branches have to pay a certain level of interest to the central office for the advances made by them. The bank has revised the rates in such a manner that the interest rates paid by the central office have been reduced and the interest payable by the branches on advances made by the central office has increased.

Other factors contributing to an increase in the number of loss-making branches is the high level of non-performing assets, low productivity per employee, low level of income from non-funded business, high staff cost and mounting overheads.

A number of these branches which were opened in the city in the early seventies and in rural areas in the mid-eighties are either close to other branches or located at difficult rural centres. With the slowing down of the economy in this part of the country, many of these branches have lost their viability.

In fact, Calcutta has the dubious distinction of having more than half of the circle’s loss-making branches, the highest amongst all metros, with almost one-third of the branches located in the rural areas.

The unions had protested against such a move and requested chairman Janaki Ballabh to intervene in the matter. Sources said the chairman has taken a decision not to go ahead with the closure plan now and is instead keen on working out ways to increase profitability of the branches.


New Delhi, Jan. 17: 
Cisco Systems Inc today said it will invest $ 200 million in the research and development of next-generation networking technologies and solutions, up from $ 150 million it said it would pump in a couple of days back.

President and CEO John Chambers, wrapping up his India visit today, said the funds will be used to expand Cisco’s Global Development Center in Bangalore. Spread over 2,75,000 square feet, the centre employs over 400 engineers. The additional $ 50 million will help the company promote its centres with HCL, Infosys, Wipro in Bangalore and Chennai.

Chambers said his company will increase the number of engineers in India by 300 per cent in the next three years to meet growth targets. “The internet is a historic change-agent and governments around the world understand the strong correlation between its effective use and growth. In the Internet economy, companies’ investments around the world will be determined by the level of expertise,” he said.

The decision to expand in India is prompted by a desire to tap the vast pool of research and development talent, and the Global Development Center will play a pivotal role in it.

Earlier this week, Chambers discussed Cisco’s investment plans for India with Prime Minister Atal Behari Vajpayee and minister of information technology, Pramod Mahajan. Cisco has already pledged $ 10 million to set up 34 networking academies and excellence centres, which will produce close to 7,000, infotech networking professionals annually. The company itself recruits 4,000-5,000 of them every year.

Cisco Systems India Private Limited (CSIPL) employs close to 500 people at the Bangalore development center and sales offices in New Delhi, Mumbai, Bangalore, Chennai and Calcutta.

In addition, employees from partner development centres offer support to its R&D efforts in the Cisco Wipro Development Center and the Cisco Infosys Development Center in Bangalore, and the Cisco HCL Development Center in Chennai.

Dr Reddy’s Q3

sales up 28%

From Our Correspondent

Hyderabad, Jan. 17: Consolidated sales of the city-based Dr. Reddy’s Labs (DRL) and Cheminor Drugs were up 28 per cent in the third quarter of the 2000-01 fiscal at Rs 217.31 crore, over the previous corresponding quarter.

According to a DRL press release, finished dosages took an upper hand with 46 per cent of the total revenue at Rs 99.82 crore and bulk drugs also registered a resurgence of activity to touch Rs 109.05 crore with a 27 per cent growth. However, domestic bulk actives sales fell by three per cent.


Calcutta, Jan. 17: 
ITC has formally launched a stock option scheme for its employees after the shareholders approved two special resolutions to the effect at an extraordinary general meeting here today.

ITC chairman Y C Deveshwar said the stock option scheme would be an ‘effective strategy’ to attract and retain the best talent in an increasingly competitive business environment.

“The scheme will also be an instrument to reconcile the interest of employees with those of shareholders by creating a common sense of purpose in building sustainable shareholder value,” he added.

The scheme will initially cover only directors and senior managers and its subsidiaries. However, it might be extended to other layers of management if this one plays out well.

The announcement came on a day when the company unveiled a robust 29.26 per cent leap in third-quarter net profit at Rs 216.12 crore compared with Rs 167.19 crore in the same period last year. The jump was achieved on a modest 4.79 per cent rise in sales from Rs 960.75 crore to Rs 1106.84 crore.

Third-quarter gross income was pegged at Rs 2051.23 crore, an increase of 10.27 per cent from Rs 2261.92 crore; net income jumped by 15.62 per cent to Rs 1136 crore from Rs 982.56 crore. Expenditure was 12.04 per cent higher at Rs 717.10 crore from Rs 640.02 crore.

Nine-month at Rs 709.95 crore was up 25.10 per cent from Rs 567.51 crore in the same period of last year. Net income increased by 11.59 per cent at Rs 3201.19 crore from Rs 2868.68 crore. Expenditure was up 4.91 per cent at Rs 1859.39 crore though interest charges dipped 21.47 per cent from Rs 91.98 crore to Rs 72.23 crore. The results do not take into account the disputed excise duties.

The hotel division reported higher occupancy rates. The exclusive offering of ITC One, the super-deluxe extension of ITC Maurya Sheraton, has already become the new benchmark in the premium hotels of the country, the company said.

Agricultural exports were buoyant in the third quarter while exports from its packaging and printing business were up 36 per cent.


New Delhi, Jan. 17: 
Moving away from his earlier request for a growth-oriented budget for the next fiscal, Prime Minister Atal Behari Vajpayee today asked finance minister Yashwant Sinha to come up with a people-friendly version instead.

Earlier this month, concerned over the slowdown of the economy, Vajpayee had asked Sinha to prepare a growth-oriented budget for the financial year 2001-02.

The consensus for a people-oriented budget emerged from a meeting of Union economic ministers, held here today. The meeting to review the economy however remained inconclusive with another round scheduled for January 28, while that on disinvestment will be held on January 30.

Vajpayee had earlier voiced his anxiety over the current slump in the economy, particularly in the capital goods and manufacturing sectors and also the flow of foreign direct investment into the infrastructure sector.

Apart from Sinha, the meeting was attended by defence minister George Fernandes, minister of commerce and industry Murasoli Maran, power minister Suresh Prabhu and disinvestment minister Arun Shourie, home minister L. K Advani and deputy chairman of the Planning Commission K.C Pant. Principal secretary Brajesh Mishra and Vajpayee’s private secretary N. K. Singh, also attended the meeting. As on the previous occasion, this time too communications minister Ram Vilas Paswan could not be present due to a prior engagement in Dehradun.

Talking about the issues discussed at today’s meet, Sinha said, “We reviewed the economic situation and prospects for next year,” adding, “The Prime Minister has asked me to prepare a people-friendly budget. While several issues were finalised at today’s meet, a few outstanding issues will be discussed at the next one.”

Sinha however ruled out any differences of opinion between his Cabinet colleagues over the issue of disinvestment. “The list of invitees is prepared by the Prime Minister’s Office. I have no say in these matters,” said Sinha.

Shiv Sena ministers have in the past questioned the government’s disinvestment decisions. Even Paswan has expressed reservations on the contentious subject. “The discussions remained inconclusive, but that was not due to any differences. More preparations are necessary to concretise ideas discussed at the meeting. Postponement of meetings should not become a matter of speculation,” he said.

The meeting also discussed steps which the government should take in the immediate future and in the medium-term, which could form part of the forthcoming budget.

“The issues discussed today will form part of the forthcoming budget and hence I cannot divulge the details,” Sinha said.


Hyderabad, Jan. 17: 
Consolidated sales of the city-based Dr. Reddy’s Labs (DRL) and Cheminor Drugs were up 28 per cent in the third quarter of the 2000-01 fiscal at Rs 217.31 crore, over the previous corresponding quarter.

According to a DRL press release, finished dosages took an upper hand with 46 per cent of the total revenue at Rs 99.82 crore and bulk drugs also registered a resurgence of activity to touch Rs 109.05 crore with a 27 per cent growth. However, domestic bulk actives sales fell by three per cent.


Calcutta, Jan. 17: 
Aptech Internet Ltd, a wholly-owned subsidiary of the Rs 1,000 crore Aptech group, launched its internet services—TringTring—in the city today. It has roped in Elkom Enterprises Pvt Ltd as a strategic marketing partner in West Bengal.

“The three unique points of this service are unlimited mail space (starting from 5 MB and further upgraded as per request), personal webpage space of 11 MB and a home-delivered internet training program along with each connection,” said Ravi Dighe, vice president, Aptech Internet Ltd.

Aptech Internet has received Rs 22 crore as seed capital from its parent. It is now scouting for Rs 60 to Rs 75 crore investment from venture capitalists.

“We are talking to six venture capitalists. Our performance in the next six months will determine the fund we will get,” said Dighe. McKinsey has been appointed advisor to the internet service provider.

The internet division will leverage Aptech Ltd’s over 1,400 training centres running in more than 700 cities in the country. The ISP will capitalise on the 3-lakh student strength to use and propagate their services.

Plans are afoot to utilise the training centres as logistics delivery centres for e-commerce.

Aptech Internet expects to establish its presence in 112 cities in the country by March 2001 and have a subscriber base of 1,50,000 by April 2001. Currently, TringTring is present in seven cities.



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