Banks set terms for loans to UTI
SBI net profit vaults 26%
Battered DSQ still a big draw for city brokers
Tatas take biotech plunge
ICI pins hope on sale of non-core businesses
Philips loss mounts in Q2
Stanchart sees cash in idle properties
ONGC spots fissures in seismic surveys
Tarapore blames it on system
Foreign Exchange, Bullion, Stock Indices

Mumbai, July 25: 
Public sector banks led by the State Bank of India (SBI) are likely to be squeamish in accepting collaterals � assets which serve as a security in securing credit � while handing loans for the rescue package of US-64, the flagship scheme of the embattled Unit Trust of India (UTI).

Top officials from a leading nationalised bank, which is a part of the consortium lending to UTI,said they will not only insist that shares of dividend-paying companies with a good track record be pledged, but will also try to ensure that these have an underlying asset value and easy liquidity. �Banks will accept only those shares which have value, are traded regularly and are liquid,� the official said. Though the modalities of lending to UTI are not ready, sources indicate that banks could prefer more government securities than equity in an attempt to hedge their risks better.

In equity shares, banks could insist on a larger proportion of old-economy scrips from the US-64 portfolio. At present, government securities account for the largest chunk of US-64�s portfolio at around 21 per cent. The rest is made up of shares like Reliance, ITC, RPL, Infosys, Tisco and HDFC. �The ratio of government securities to debt is one the issues on which banks have not reached an agreement so far. This shall be done in due course. However, we will not accept shares such as Cyberspace Infosys,� said the chief of a leading nationalised bank financing the rescue package.

SBI has already promised a Rs 1500-crore loan to UTI, whose chairman has received assurances from eight banks for an additional Rs 1500 to Rs 2000 crore at a recent meeting.

According to industry sources, all banks have expressed their commitment to bailing out the country�s largest mutual fund, but the actual disbursements will depend on its requirement. SBI, Punjab National Bank, Bank of India, Bank of Baroda and Central Bank of India comprise the consortium which will help UTI tide over the present crisis. There signs two other private sector banks may join the group.

Most banks which promised funds to UTI had indicated that they would prefer a comfort letter from the government, but that request has been shot down. They are now exploring other options of disbursing the share-backed loans.


Mumbai, July 25: 
State Bank of India�s (SBI) first-quarter net profit surged 26 per cent at Rs 579.78 crore against Rs 461.70 crore for the same period of the previous year.

Chairman Janki Ballabh attributed the good crop of numbers to improvement in all areas of operations, especially the rise in interest income and non-interest income, and described the business outlook for the months ahead as �sustainable�.

Another reason for the bottomline boost was the cost-saving impact of the voluntary retirement scheme (VRS) implemented earlier this year. In addition, the bank recovered around Rs 140 crore through a one-time settlement scheme. It had ferreted out Rs 385 crore at the end of March, and the figure has shot up to Rs 522 crore at the end of June.

The SBI scrip gained 0.25 paise to close at Rs 210.50 on the Bombay Stock Exchange (BSE) today amid volumes of Rs 4.82 crore in 1,926 transactions. The stock had opened the day at Rs 209.50 and scaled an intra-day high of Rs 213.50.

First-quarter operating profits stood at Rs 1463 crore against Rs 1086.76 crore in the same period of the previous year. Net interest income went up 15 per cent at Rs 2145.80 crore from Rs 1872.65 crore.

Advances were higher by Rs 10,921 crore. Average yield on advances declined to 10.17 per cent from 10.19 per cent while other income rose to Rs 990.47 crore (Rs 804.08 crore)

Total provisions increased to Rs 883.22 crore from Rs 625.06 crore made in the same quarter of the previous year, mainly because Rs 450 crore was set aside for bad loans in the three months ended June compared with Rs 350 crore a year ago.

This includes the �proactive provisioning� that has been made to facilitate the switchover to the 90-day payment delinquency norm from the financial year ending March 2004.


July 25: 
The DSQ Software share plummeted 20 per cent ahead of its suspension next week even as there was a surge of buying in the scrip on key bourses across the country.

It racked up volumes of 9.55 lakh on the National Stock Exchange (NSE) and 6.17 lakh on the Bombay Stock Exchange (BSE).

The stock, which has lost 53 per cent of its value in the past eight sessions at its current price of Rs 29, is still a big draw for some high profile Calcutta-based brokers. They said they were buying it because there was a good bargain and a possibility that the ban imposed by the NSE and BSE would be contested in court. The Calcutta Stock Exchange (CSE) has still not decided whether to suspend trading in the share.

DSQ Software promoter Dinesh Dalmia told The Telegraph his company has appealed to the two exchanges to reconsider the matter in the interest of shareholders. He said he would also request the Securities and Exchange Board of India (Sebi) to review its decision to forbid him from entering the capital markets and trading in shares for a year.

The regulator cancelled the company�s acquisition of Fortuna Technologies which was being done on a swap basis.

Dark clouds hovering over counters like Zee Telefilms and HFCL in the form of Sebi investigations into price rigging also dampened market sentiments, with even foreign investors turning sellers today.

Meanwhile, bearish sentiments pushed the sensex down 33 points as persistent selling pressure from operators and investors, coupled with select offerings by foreign investors, dampened investor sentiment on the BSE.

After opening weak at 3307.16, the 30-share sensex moved to the day�s high of 3338.22 and thereafter plunged to close at 3301.97 as against yesterday�s close of 3335.08.

HLL scored impressive gains on consistent buying support, rising by Rs 6.05 to Rs 223.40, with other stocks like Grasim gaining Rs 6.25 to Rs 316.30 and Hindalco Rs 13.05 to close at Rs 783.55.

Marketmen also attributed the selling pressure in information technology stocks to US infotech majors scaling down their growth plans, bringing the Nasdaq composite index down by another about 29 points.

ACC dropped by Rs 3.45 to Rs 137, Glaxo fell Rs 10.65 to Rs 276, NIIT dipped Rs 17.85 to Rs 181.40, Satyam Computer dropped by Rs 10.50 to Rs 151.60, Zee Tele lost Rs 15.25 to close at Rs 76.75, Sterlite Optical fell Rs 52.95 to Rs 159.95, DSQ dipped Rs 7.30 to Rs 29.35, SSI Ltd lost Rs 37.65 to Rs 152.45, Polaris dipped Rs 31.70 to Rs 132.35, Aptech fell Rs 11.85 to Rs 52.90 and Sonata lost Rs 2.35 to close at Rs 11.85.


July 25: 
Tata Industries Ltd today said it has picked up a 5 per cent equity stake in the Bangalore-based Avestha Gengraine Technologies Pvt Ltd (Avesthagen), marking its foray into biotechnology and bioinformatics.

�Tata Industries is picking up a 5 per cent stake in Avesthagen,� a Tata group spokesperson said, but declined to give details on the total investment.

�Biotechnology is being seen as an emerging sector and Tata Industries would like to be a part of it,� Tata officials said.

When contacted, Villoo Morawala-Patel, chief executive officer of Avesthagen, confirmed the move but declined to give details of the deal.

Meanwhile, Tata Finance Ltd (TFL), the Tata group�s non-banking financial company, today finally admitted to certain unauthorised financial transactions undertaken by the then management of TFL, led by former managing director Dilip Pendse.


Calcutta, July 25: 
Paints major ICI India expects to garner Rs 200-300 crore in extra-ordinary income from the sale of its non-core businesses over the next three years.

Company managing director Aditya Narayan said the estimate is based on the size of the businesses to be divested. Wholetime director M R Rajaram said talks have been opened with prospective buyers to sell the pharmaceuticals unit for an expected sum of Rs 100 crore. �The turnover of our pharmaceutical business is around Rs 70 crore. Based on the industry trends, its enterprise value should be one to two times that figure,� Rajaram said.

Nitro-cellulose and rubber chemicals are among the other businesses planned to be put on the block. While nitro-cellulose generates Rs 59.5 crore � about 5 per cent of the company�s Rs 1,157.3 crore turnover � the rubber chemicals business contributes Rs 97.3 crore or about 8 per cent to the topline.

During the last financial year, the company sold off its polyurethane business to the Indian subsidiary of the US-based Huntsman Corporation, hived off 50 per cent of its motor and industrial paints business into a joint venture with Berger Paints and forged a joint venture � called Quest � with Hindustan Lever for its flavours and fragrance business. ICI will invest up to Rs 155 crore in Quest, and own 50 per cent of it.


Calcutta, July 25: 
Philips India Limited has registered a net loss of Rs 8.73 crore in the second quarter ending July 1 compared with Rs 3.49 crore loss in the corresponding period last year. The company�s sales depleted marginally to Rs 360.96 crore as against Rs 364.1 crore in the same period last year. The company has charged off Rs 16.49 crore during the quarter as exceptional items.

EIH net profit at Rs 11cr

EIH Ltd has posted a net profit of Rs 11.02 crore for the quarter ended June 30 as against Rs 15.20 crore for the same period last fiscal. Net sales from operations during the same period was lower at Rs 100.37 crore compared with Rs 106.55 crore last year.

SmithKline Pharma net dips

SmithKline Beecham Pharmaceuticals has reported a 71.29 per cent drop in net profit at Rs 2.45 crore for the second quarter 30 compared with Rs 8.55 crore in the previous corresponding quarter. Total income was lower at Rs 65.19 crore as against Rs 91.99 crore last year.


Calcutta, July 25: 
Standard Chartered Grindlays Bank has decided to sell its non-core properties � real estate not central to its key businesses � by the end of next fiscal. The bank is now reviewing its 700-odd properties across the country. �We are now reviewing the entire real estate portfolio, and will sell when we get a good price. The entire exercise will be over by December 2002,� the bank�s official spokesperson said. The bank has already sold White House Gardens in Calcutta and another property located at Malcha Marg, New Delhi.

The bank, which is in the process of expanding its business in the country, has received four licences from the Reserve Bank of India to open branches in Delhi, Hyderabad and Mumbai. However, it has no plans to expand its business in Calcutta.

The bank has been saddled with these 700 properties following the merger of Stanchart with ANZ Grindlays. The 100-odd freehold properties are valued at $ 130 million and the bank is now valuing its remaining 600-odd leasehold properties. Apart from these, Stanchart has several residential flats in Mumbai and other parts of the country which, it says, are �valuable possessions.� However, the spokesperson refused to comment on the amount the the bank hoped to garner through the sale of its assets. �Real estate prices keep on fluctuating and it is very difficult to assess the amount,� he added.

The bank plans to retain its properties in prime locations which will enable it to take advantage of the fluctuating prices at a later stage.

Besides, the bank is doing a rethink on the leasehold property located at 4, Netaji Subhas Road, in the city, which belongs to Karuna Maharani Devi, a descendant of the king of Burdwan. The lease expires in the middle of 2003. �We are reviewing whether to renew the lease or vacate it. We already have two branches in the same area � one at 19 Netaji Subhas Road and the other at 14, Netaji Subhas Road. And the building too does not have enough infrastructure. The 4, N.S. Road branch functions as the back-office of our card business.


New Delhi, July 25: 
Oil and Natural Gas Corporation (ONGC) experts are sceptical about the quality of seismic surveys conducted both by in-house and hired parties.

Seismic surveys are carried out to identify prospective hydrocarbon-bearing areas and drilling begins only after the seismic data is studied and interpreted. Of late, three-dimensional surveys have advanced to such an extent that prospective areas can be identified more or less accurately.

However, experts have been internally debating the consistent failure of ONGC to strike oil or gas, while the UK-based Cairn Energy has been successful in almost all the wells it has drilled. This has led them to conclude that Cairn owes its success to flawless seismic surveys. Cairn gets seismic surveys done by hired parties. So does ONGC when it comes to 3-D surveys.

However, thanks to political pressure, ONGC drills more dry holes than any other oil company, drilling wells even when seismic surveys do not support the move. Senior officials of the ministry of petroleum and natural gas also ask the ONGC management to step up drilling without owning up responsibility for the dry holes.

While ONGC�s exploration division is headed by highly qualified professionals, this cannot be said about other areas. However, the professionals in the exploration division could not arrest the company�s declining success ratio. ONGC is saddled with rigs which cannot be kept idle.

ONGC�s compulsion to drill is not shared by private companies. For instance, Reliance Industries Ltd, which has entered the upstream sector, is emphasising on identifying prospective areas by conducting high-quality seismic surveys. It hires a rig only after it is satisfied about the prospects in that area. Unlike ONGC, private companies can pull out of an area after drilling a wildcat well. But for ONGC, it is a one-way traffic, it will not be able to get out once it is in. Ministers also compel ONGC to drill in areas from where they may gain some political mileage.

It was during P. Shiv Shankar�s time as minister for petroleum that ONGC made the foray into Andhra Pradesh. Naval Kishore Sharma forced it to drill in Rajasthan. The junior minister, S. Krishnakumar, made ONGC drill in offshore Quilon, his constituency, without even conducting seismic surveys.

What remains to be seen is whether the new management headed by Subir Raha will be able to stave off this sort of pressure and make exploration activity more professional. �It is not enough to have professionally qualified people to head certain departments, they should be allowed to manage it professionally,� a senior ONGC executive said.


New Delhi, July 25: 
S. S. Tarapore, chairman of the three-member committee set up to investigate investment decisions taken at the Unit Trust of India (UTI) over the past 10 years, today slammed the deposit insurance system for breeding a sense of recklessness among banks and warned against their ill-prepared privatisation.

Refusing to answer questions on the nature of his investigations into the UTI mess, the former deputy governor of RBI said it was wrong to blame the regulators for the crisis. On the contrary, he said it was important to strengthen the supervisory capabilities of regulators over stock markets, mutual funds and banks, by fostering an environment where the regulator is not shot for each infringement while the violators walk away scot-free.

�India is a country strong on regulations and weak on supervision,� he said at a seminar to discuss the World Bank Report on Finance for Growth, adding it has become essential to reverse this trend.



Foreign Exchange

US $1	Rs. 47.15	HK $1	Rs.  5.95*
UK �1	Rs. 67.15	SW Fr 1	Rs. 27.00*
Euro	Rs. 41.31	Sing $1	Rs. 25.60*
Yen 100	Rs. 37.99	Aus $1	Rs. 23.65*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 4460	Gold Std(10 gm)	Rs. 4400
Gold 22 carat	Rs. 4210	Gold 22 carat	NA
Silver bar (Kg)	Rs. 7150	Silver (Kg)	Rs. 7225
Silver portion	Rs. 7250	Silver portion	NA

Stock Indices

Sensex		3301.97		- 33.11
BSE-100		1544.00		- 15.85
S&P CNX Nifty	1064.20		-  8.35
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