Guj Ambuja to buy back 10% at Rs 170 a share
Germany to push for new trade talks
Nargis charm to woo Russians
Sebi to take up PSU open offer price plan
FIs want more surety for Essar refinery loan
EIH loses hope of finding a partner
Bank of Baroda net dips 22.3% to Rs 98.4 cr
Foreign Exchange, Bullion, Stock Indices

Mumbai, Oct. 29: 
Gujarat Ambuja Cements (GACL) today became the first company to announce a buyback after the recent amendment in Companies Act made it easier for firms to purchase their own shares.

The company said it would buy back shares worth 10 per cent of its equity capital at a maximum price of Rs 170 each in a transaction estimated to cost Rs 50 crore.

The government had recently promulgated an Ordinance allowing promoters to buy back up to 10 per cent of their equity without shareholders approval. This was followed by a Securities and Exchange Board of India decision to double the creeping acquisition limit to 10 per cent.

Sources said the Sekhsarias would raise their stake in the cement company to 38.5 per cent if they manage to mop up the targeted amount of shares. At present, FIIs (including Warburg Pincus) hold 15 per cent, mutual funds/banks at 21 per cent, the Washington-based International Finance Corporation 2 per cent; the public the rest of the company�s Rs 155.11-crore equity capital.

There is a feeling among many in the market that the Ambanis, Tatas and Birlas are likely to take advantage of these relaxations in buyback norms and the hike in creeping acquisition cap to boost stake in their companies.

The Gujarat Ambuja scrip finished higher on the Bombay Stock Exchange (BSE). Opening at Rs 157.40, the scrip scaled an intra-day high of Rs 164.80, before closing at Rs 160.40 amid 5952 deals valued at Rs 8.97 crore.

Meanwhile, the company announced a 112 per cent surge in net profit rose at Rs 53.23 crore in its first quarter ended September 30 against Rs 25.06 crore in July-Sept 2000. Net sales jumped to Rs 340.08 crore from Rs 290.26 crore. It sold 14.58 lakh tonnes of cement, an increase of 14 per cent over 12.81 lakh tonnes.

The cement major said high productivity, lower production costs and firm prices helped improve its operating margin to 38.2 per cent from 35.2 per cent. Operating profits rose 30 per cent to Rs 114.43 crore. Pre-payment of high-interest loans reduced interest expenses to Rs 24.67 crore compared with Rs 32.22 crore.

The company said demand went up 15 per cent in August and September, taking the first-half growth to 5.2 per cent at 49.4 million tonnes.

It expects things to remain that way in the second half.

The 2-million tonne plant coming up in Maharashtra will start production on schedule in December.


New Delhi, Oct 29: 
Germany today made it clear that it would not waver in its resolve to push for a new comprehensive round of world trade talks at Doha next month. �We can�t wait till everything from the last round is finished ... we have to have a new round of talks,� said German chancellor Gerhard Schroeder while addressing a gathering of Indian industrialists here today.

India has been insisting that the unfinished agenda from the previous ministerial talks should first be completed before WTO grapples with new issues.

�India�s voice is heard as a heavyweight among developing countries. I hope India will raise its voice for implementation issues, but will decide in favour of making the Doha meet a success,� he said.

Schroeder made it clear that Germany would continue to insist on raising new issues like human rights and environment at the trade talks.

As a quid pro quo to secure India�s endorsement to the widening of the WTO agenda, Schroeder held out the promise that he would look into India�s objections to the frequent use of anti-dumping duties and high duty rates by the European Union that have hurt Indian exports. Schroeder also promised greater co-operation in the field of service sector industries, including information technology.

Indian exporters of steel and farm goods to the EU have long suffered because of the frequent use of EU�s anti-dumping duties and restrictive quotas. The EU recently warned that over-production of rice by its own farmers might see it restricting Indian exports of the grain in the near future.

In an encore, Britain also asked India to adopt a more flexible approach at Doha as did the chairman of the International Chamber of Commerce (ICC) Richard D. McCormick, who is here on a visit.

The high level lobbying with the Indian government stems from the fact that India has major reservations about a new trade round. At a Cabinet meeting held last week, the government decided it would staunchly oppose the inclusion of any new item on the WTO�s agenda.


Calcutta, Oct. 29: 
With Sri Lankan orthodox tea gnawing away at India�s share of the Russian market, the commerce ministry and Tea Board have decided to revamp the Nargis brand to regain lost ground and retain customer loyalty.

Nargis was launched in the mid 90s by top five tea companies � Rossell Industries, Tata Tea, Williamson Magor, Warren Tea and Goodricke � under Project India Blend Limited (PIBL). However, the initiative faltered in recent times, largely due to payment problems.

Tea Board chairman N.K. Das is leaving for Russia on Tuesday. He will discuss the promotion of Nargis with members of the Russian Tea Association and government officials.

�The chairman will ask Russian tea buyers to procure more orthodox tea from India. The Tea Board will promote other brands,� a senior board official said.

�We are aware that Nargis did not do well in the Russia, even though it did penetrate the market and attracted the attention of buyers in that country. We have spoken to the promoters of PIBL. Another round of discussion will be held soon. If things play out well, we are confident of reviving the brand,� the official added.

Talks held last year with a few promoters of PIBL, such as Unilever, Tetley and Van-rees, on lifting the fortunes of Nargis failed to produce an agreement on the issue. The ministry will soon introduce a market access promotion scheme for Indian tea in the international markets.

J.V. Gokal, Hindustan Lever Limited, Saraf Trading, Bhansalis, Global Exports, Girnars, Limtex are among the major tea exporters to Russia � a market where Dilham, a Sri Lankan brand, holds sway.

PIBL, which started amid much fanfare, initially exported orthodox Assam tea, but gradually added CTC tea bags, Darjeeling in caddies and south Indian CTCs.

An interesting feature of tea exports to Russia is that the ratio of north and south Indian tea, which was 65:35 earlier, has changed to 30:70. Shipments of the orthodox variety have fallen while that of CTC has gone up.

Trends on tea exports to Russia in recent years have shown a shift in favour of the cheaper varieties, and a growing tendency to associate them with India. �With the tea companies having decided to produce an additional 20 million kgs of orthodox next season, we have to change that impression so that Russians pick up more of orthodox Indian tea,� the board official said.

A protocol signed with the Russian Tea Association in 1998 envisages an annual export of 100 million kgs from India.


Mumbai, Oct.29: 
The Securities and Exchange Board of India (Sebi) will discuss a contentious disinvestment ministry proposal that open offers for public sector companies should be made at the price at which the government divested its stake. It will require an amendment in the takeover code for the idea to be implemented.

This is one of the main items on the agenda of the November 1 meeting, which will also decide how to punish former BSE president Anand Rathi for his role in the March stock crash.

The issue of how an open offer is to be priced in PSUs on the block has set a cat among pigeons for Sebi. Concerned over the brouhaha, the regulator called disinvestment secretary Pradeep Baijal to explain his ministry�s stand and to clear doubts of investors.

Sebi�s takeover code specifies that in case of a change in management, the acquirer will have to make an open offer based on the share�s average price in the past six months. Sebi officials say the �six month average� is aimed at protecting ordinary investors.

In the case of CMC, the government had disinvested a major chunk of its shares at a price of Rs 197 per share.

The Tatas (the new owners of CMC) will now have to shell out a price of Rs 281 in their open offer to the public. This is based on the takeover code principle of handing the average price in the past six months.

This was because the share price of CMC flared up before dis-investment.

Sterlite appeal

Sebi will contest in Mumbai high court a SAT ruling that quashed the regulator�s order banning Sterlite Industries from accessing the capital market for two years.


Mumbai, Oct. 29: 
Financial institutions funding Essar�s Vadinar refinery have sought additional security to hedge against the increased risks in a project which has overshot cost estimates and time limits.

Sources say the ICICI-led lenders want more assets pledged to make sure large their massive investments are safe. The institutions are now moving in to take charge of the oil rigs owned by Essar Oil�s exploration and production (E&P) division before disbursing more funds.

In the normal course, institutional lenders are known to take charge of assets only in the project financed. The fact that they want to take over properties of other group firms shows that they are more cautious than usual. Most of these institutions, already reeling under a pile of non-performing assets (NPAs) over the past few years, do not want to add to their problems.

Calling for assets of group companies as collateral has been done in the case of promoters who have a poor track record of servicing loans, or if the amount at stake is large. Sources now say this procedure is evolving into a �standard model� among institutional lenders.

Sources in financial institutions say Ruias, promoters of the Essar group, have agreed to meet all the conditions, and are believed to be complying with them.

The FIs have laid down other conditions to lend afresh, including more checks and balances, pledging of promoters� shares and the creation of a trust and retention account that will monitor the project�s cash flows.

Term lenders have committed Rs 3,000 crore to the 10.5-million tonne refinery project, which includes a captive power plant. The financial institutions are believed to be in the process of disbursing Rs 1,000 crore soon.

Sources close to the company point out that financial closure has been achieved and work on the project, held up for want of funds, will pick up soon for the refinery to be commissioned on schedule, by mid 2003.

At one stage, the Essar group had offered equity stake in the project to Bharat Petroleum Corporation (BPCL) and other foreign buyers, but it did not find any takers.

In exploration and production, the company has joined hands with international majors such as Premier Oil Pacific of UK, Tullow Oil, Ireland, Polish Oil & Gas Company (POGC) and local company Hindustan Oil Exploration Company (HOEC) to start an oil-hunt before the Vadinar refinery goes on stream.

Essar has unveiled plans to enter the retailing of controlled products once the administered price mechanism in the petroleum sector is dismantled in April.


Calcutta, Oct. 29: 
Hotel major EIH Ltd�s effort to find out a strategic partner for co-branding and marketing has suffered a setback following the Manhattan massacre last month and the subsequent retaliation by the US. EIH has been scouting for a strategic partner for over a year.

EIH vice-chairman and managing director P.R.S. Oberoi said: �We have discussed the idea with a large number of companies, but could not agree on terms and conditions. Though we still intend to find a strategic partner, after the September 11 attacks, no one seems to be interested.�

The point of inducting a strategic partner was to expand the company�s marketing reach in the US and Europe. About 85 per cent of EIH�s guest come from abroad. The Oberoi chain has a presence in the far East and West Asia, besides India.

To address the downturn in the industry, EIH has decided to reduce variable costs by 10-15 per cent at all its properties, besides putting on hold non-essential capital expenditure, Oberoi said. �I am, however, hopeful that beginning January business will improve,� he added.

Commenting on the rather disappointing results in the quarter ended September, Oberoi said: �The peak season begins in September, but our sales were badly hit by the events in the US. The slowdown in foreign investments in the country has also affected us has resulted in fewer business trips to India.�

Oberoi was critical of the government�s lack of concern for the tourism industry. �I am quite disgusted with the lack of government initiative in promoting tourism. If things do not improve I will stop investing in this country, and look for opportunities abroad,� he said.

Oberoi, however, is still bullish on the prospects of the hospitality industry, and has been investing in EIH�s equity. The EIH promoters have begun increasing their holding, and may even consider taking advantage of the expanded creeping acquisition limit. �We have not had time as yet, but will certainly consider making use of the increased limits on creeping acquisition,� he said.

EIH�s net profit in the July-September quarter at Rs 1.73 crore was substantially (over 79 per cent) lower than the corresponding period of last year. Net sales at Rs 92 crore was lower by 15.78 per cent.


Oct. 29: 
Bank of Baroda has posted 22.27 per cent decline in net profit at Rs 98.44 crore for the second quarter ended September compared with Rs 126.64 crore for the same period last fiscal. The total income for the period under review grew at Rs 1,727.04 crore from Rs 1,592.04 crore in the previous corresponding quarter, the bank said in a release here today.

The net non-performing assets at end of September stood at 6.34 per cent, it said.

The payments and provisions for employees included a pro-rata amount of Rs 87.50 crore write off towards voluntary retirement scheme expenditure in accordance with RBI norms, it added.

Eveready net plummets

Eveready Industries India Ltd has registered over 49 per cent fall in net profit to Rs 20.52 crore for the quarter ended September 30 as against Rs 40.86 crore achieved in the same period last fiscal.

The net sales dipped by 15 per cent to Rs 253.93 crore (Rs 300.69 crore) during the period. While there was a 16 per cent decline in profit before depreciation, interest and taxation to Rs 62 crore, a sharp rise in interest and depreciation charges resulted in a 49 per cent decline in the net.

The half yearly results also showed a steep decline in net profit to Rs 14.02 crore in the first half of this fiscal from Rs 24.25 crore last fiscal.

Net sales declined marginally to Rs 445 crore as against Rs 468 crore in the same period last year.

Results for the current fiscal excluded results from the operations of nine tea estates of the company which were sold subsequent to September 30 last year.

Indal net up 7.5%

Aditya Birla group company Indian Aluminium Company Limited (Indal) has registered a 7.47 per cent increase in net profit at Rs 30.74 crore during the second quarter ended September compared with Rs 28.53 crore in the corresponding quarter of last year. Net sales increased by 3.56 per cent to Rs 342.63 crore in the reporting quarter from Rs 330.85 crore in the corresponding previous quarter.

Other income stood lower at Rs 0.34 crore as against Rs 2.59 crore last fiscal.

Indal�s first half net profit stood at Rs 59.40 crore (Rs 54.10 crore) on a turnover of Rs 678.51 crore against Rs 616.05 crore during the first half of last fiscal.

Indo Gulf Q2 net

Indo Gulf Corporation Ltd (IGCL) has reported a 46.5 per cent rise in net profit at Rs 76.24 crore for the second quarter ended September compared with Rs 52.04 crore for the same period last fiscal. Net sales increased by 31 per cent to Rs 693.71 crore as against Rs 531.55 crore in the same period last fiscal, the company said in a release here today.

Indo Gulf expects greater growth in its exports markets. Apart from West Asia and south east Asian regions, there has been an upward consumption trend in the automotive, white goods and infrastructure sectors in the far east, Korea and Taiwan.

Castrol net dips

Castrol India Ltd has reported a 21.09 per cent decline in net profit at Rs 22.23 crore for the third quarter ended September 30 compared with Rs 28.17 crore in the corresponding previous quarter. Net sales was higher at Rs 294.60 crore as against Rs 290.07 crore in the corresponding quarter last year, the company said in a release here today.

The decline in net profit was attributed to the reduced income tax benefit as well as deferred tax provision for the nine-month period in this quarter, it said. The other income decreased to Rs 2.09 crore from Rs 2.35 crore last year. For the nine months ended September the net profit was lower at Rs 83.61 crore while net sales stood at Rs 944.73 crore.



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