Private bank stocks set alight
Railways to depend less on SEBs
Bharti falters on debut run
Zee set to acquire ETC
Infosys retains best employer trophy
Tea firms� cup of woes brims over in January
Data gun to hunt down cyber felons
Stiffer norms for loans to company directors
Fresh talks on patents sought
Foreign Exchange, Bullion, Stock Indices

Mumbai, Feb. 18: 
Shares of several private banks zoomed on optimism that they will be courted by foreign banks following Reserve Bank�s clarification that the foreign direct investment (FDI) cap stands at 49 per cent.

Even stocks that have failed to generate buying interest in the recent past hit the upper-end 20 per cent circuit filter. One of them was Federal Bank, which has a strong presence in the southern region. Its share hit a year�s high at Rs 82.80 against its previous finish of Rs 69. Nedungadi Bank was another big gainer of the day, closing at Rs 49.30 compared with last Friday�s finish of Rs 41.10, an increase of 19.95 per cent.

Speculators and other investors swarmed the counters with buy orders on the hope that foreign banks, which have long been hunting for a partner, will intensify their quest. It is believed they would be looking at the new-generation private sector banks that have a strong retail presence and technological prowess.

So heady were buyers in their dash for the shares that they overlooked a key RBI stipulation that limits foreign banks� voting right to 10 per cent � even if they hold the maximum permissible 49 per cent. There is a feeling that this caveat could put off foreign banks, many of which have been keen on management control.

The spotlight was also on banks that have always wanted to rope in strategic investors to raise fresh capital. These included Centurion Bank, Global Trust Bank and IndusInd Bank. Among these, Centurion Bank today advanced 19 per cent at Rs 12.75, while Global Trust Bank gained more than 14 per cent at Rs 28.90.

Other notable gainers were J&K Bank and IDBI Bank. Vysya Bank, being eyed by Bank Brussels Lambert, shot up 19 per cent at Rs 229.35 compared with Rs 191.45 on Friday.

What was remarkable was that even banks, whose promoters do not want to divest their stake, soared on bourses. Of these, HDFC Bank jumped Rs 15.40 at 248.45, while UTI Bank � which has already sold off 26 per cent stake to CDC � increased by Rs 2.75 at Rs 41.35.

There were those like ICICI Bank, which surrendered gains made earlier in the day, as it ended lower at Rs 127.80 after opening at Rs 134 and rising to a day�s high of Rs 139.75.

The bank, and its parent, ICICI, have been big draws in the past couple of sessions on hopes that the financial institution will sell its 16 per cent stake to a foreign investor. Analysts say the shares could go to an overseas bank.

Brokers said another reason was the optimism among some bankers that the 49 per cent FDI cap, along with the FII limit, could take foreign stake in private banks to 98 per cent.

The likes of Citibank, HSBC, ABN Amro, BNP Paribas are among the few that are scouting for stakes in domestic private sector banks.


New Delhi, Feb. 18: 
The railways is planning to reduce its dependence on state electricity boards (SEBs) to power the trains that traverse the vast electrified stretches of its 168,000-km network.

The Indian Railways and National Thermal Power Corporation (NTPC) will jointly set up power projects to supply 2000 MW each day to the railways, enabling the latter to save around 40 per cent on its power purchase costs. NTPC�which is fighting its own battle with the SEBs to recover dues�will get immediate payment.

The arrangement will reduce the railways� dependence on SEBs to around 15 per cent of their power requirements. Initially, it will still need to wheel the power through SEB grids for which the railways will have to pay a charge. Even so, the railways will be able to purchase power at Rs 1-1.50 per unit from the joint venture power projects as against Rs 4.50 per unit paid to SEBs.

A 50:50 special purpose vehicle (SPV) will soon be launched for the project. Under the memorandum of understanding (MoU), the joint venture will set up 300-350 MW power projects. Besides greenfield projects, some of the existing plants will also be expanded by the proposed joint venture. The total cost for the various projects to generate 2000 MW each day is likely to be about Rs 8,000 crore.

Buoyed by the prospects of faster cash flows for the power supplied or transmitted, Powergrid Corporation of India Ltd is also planning to have a similar tieup with the railways, �It is a good beginning where both parties stand to benefit. We will also explore the possibilities of a similar understanding with the railways,� said R.P Singh, chairman and managing director of PGCIL.

At present, the railways spends about Rs 4,500 crore a year on electricity for traction and non-traction purposes. The railways has been purchasing a major part of its everyday power requirement from SEBs.

Railway officials say, �We had been raising the issue of unreasonable high tariffs with the SEBs and state electricity regulatory commissions. But we were unable to get a positive response and whatever was offered was not rational tariff. So we explored the MoU route.�

�A committee will soon be set up to identify the projects sites and other details. The project report prepared by the committee will be submitted within a month. Both the power and railway ministers are keen to see the project taking off by the middle of this year,� officials added.

The government recently had accepted the railways� proposal to avail direct power supply from central generating agencies (like NTPC) from 15 per cent unallocated central share of power. The railways has been able to save around Rs 50 crore as a result of this approval and is in process of identifying a few other schemes to avail direct power from NTPC, Nuclear Power Corporation and Neyveli Lignite Corporation in different parts of the country.


Mumbai, Feb. 18: 
Bells pealed in Bharti Tele-Ventures� debut on the Bombay Stock Exchange (BSE) as the man who has built India�s leading private telecom company did on Dalal Street what dignitaries do on Wall Street � strike the gong and set the shares apace.

When Sunil Bharti Mittal rang the bell thrice at 9.55 am today at the Rotunda Hall in Phiroze Jeejeebhoy Towers, he gasped at the opening flourish, but before he could savour the taste of success, sellers crawled out of the woodwork to send the stock tumbling.

From a high of Rs 55 to a low of Rs 43.40 � a discount to the issue price of Rs 45 � the share went on a roller-coaster after the first few deals were sealed at Rs 49.

The celebrations were dampened by a Reserve Bank notification that said foreign institutional investors (FIIs) were only two percentage points away from the 49 per cent cap � the first time it happened to a stock on debut.

The stock, listed simultaneously on the National and Delhi stock exchanges, could not hold on to the premium and, by the time the launch function was over, it had started losing ground before ending below its issue price.

The share touched a high of Rs 55 and an intra-day low of Rs 43.40, before closing at Rs 44.15. Over 69.25 lakh shares changed hands on a traded turnover of Rs 31.76 crore. The RBI�s terse statement that FII holding in the company was already 47 per cent dampened the euphoria.

The bell-ringing ceremony, the first such event in the history of Indian capital markets, was held in the presence of Bharti officials, merchant bankers, brokers and senior officials of Bombay Stock Exchange.

The listing ceremony was also conducted simultaneously at the Delhi Stock exchange, and a commemorative ceremony was held at the National Stock Exchange. The scrip of this size has been listed after more than two years of drought in the primary market. �Like we delivered in the past, we will continue to deliver in future. Each and every partner has made money. I will deliver on the promise of making Bharti the leading company in the telecom sector and we will fight the war very effectively and give the MTNLs a run for their money,� Mittal said.

Speaking on the occasion, A. N. Joshi, executive director of BSE, said this is a great achievement in a market starved of initial public offers. �It has not only lifted sentiment but also proven that there is no bad time for good issues,� he added. Nimesh Kampani, the man who managed Bharti�s issue, expressed hope that more such IPOs were in the pipeline. JM Morgan Stanley and DSP Merrill Lynch, the lead managers, have claimed that India�s first 100 per cent book-built IPO had been a great success and received a very good response across categories.�


Mumbai, Feb. 18: 
A day before its board is scheduled to meet to discuss corporate restructuring, Zee Telefilms today took everyone by surprise and announced its plan to acquire a majority stake in ETC Networks Ltd. The acquisition will not only consolidate Zee�s position in the Hindi music segment but it will also extend its reach in northern India where the ETC channels have a strong presence.

Zee will have to shell out Rs 25 crore for the two-step acquisition process.

According to the memorandum of understanding signed today, Zee will first pick up a 48.4 per cent equity stake in ETC from its promoters, Jagjit Singh Kohli, Yogesh Shah and Yogesh Radhakrishnan for a consideration of around Rs 18 crore. Then it will buy another 8 per cent stake through a preferential allotment for Rs 7 crore. Though there is no official confirmation, it is learnt that Zee will be picking up the stake at Rs 31.50 per share.

Zee is also planning to make an open offer to the shareholders of ETC. Though company officials refused to divulge the open offer price, only saying that Sebi guidelines will be followed, market observers believe that it will be in the region of Rs 35-40 per share.

The acquisition news buoyed up the Zee counter and the scrip rose by around 10 per cent. Opening at Rs 147, the scrip closed at Rs 160.60. On the other hand, the ETC scrip saw selling pressure, closing lower at Rs 34.50 after opening at Rs 40.

Though Zee will control the board of ETC, day-to-day operations of the company will remain with the existing management team, consisting of three executive directors headed by Kohli.

ETC Networks has two channels that are free on air. These include �etc� and �etc Punjabi�. While �etc� is the country�s leading music channel, �etc Punjabi� is India�s top channel in the Punjabi language. ETC, which has a strong presence in the northern region and among Punjabi speaking audiences, also has exclusive worldwide rights to telecast Gurbani live from the Golden Temple of Amritsar for 11 years.

Explaining as to how the acquisition would benefit the company, senior Zee officials told The Telegraph that at present, Zee Music holds the third position in the Hindi music segment with a market share of 11 per cent. After the acquisition of ETC, the combined market share will rise to 46 per cent. For ETC, its two channels would now be a part of a strong 17-channel Zee-Turner bouquet.

Addressing a news conference here today, Sandeep Goyal, group broadcasting CEO of ZTL, said both the ETC channels will be soon converted into pay, thus leading to additional revenues for the Zee group. �The proposed acquisition will not only strengthen our pay revenues, but also lead to a larger pile in our advertising revenues apart from leveraging on content creation,� Goyal said.


New Delhi, Feb 18: 
Infosys has done an encore by figuring at the top of the totem pole for the country�s best employers for the second year running.

The study conducted by Hewitt Associates, the $ 1.5 billion global outsourcing and HR consulting firm, said the others in the top five were: Procter & Gamble Hygiene and Healthcare Ltd, Hewlett Packard (India) Ltd, SmithKline Beecham Consumer HealthCare Ltd and Satyam Computer Service Ltd.

It�s a list that companies would love to figure on�since it is a resounding endorsement of its HR policies by a glowing group of happy employees.

The list includes the country�s largest corporation (IOC), the largest private corporate (Reliance Industries), the biggest automaker (Maruti Udyog), the Tata twins Telco and Tisco, and the biggest PC maker�Compaq Computers India.

The top 25 have been chosen from among 204 companies across 15 industry groups that participated in the study. The data was collected from more than 52,000 employees.

The study, which analyses HR systems and philosophies and determines how these effectively meet employee needs and drives business results, was open to all organisations in India that had been operational for at least three years and had not less than 100 white-collar employees.

�This is a great opportunity for companies to appraise their people practices,� said Mick Bennett, Asia Pacific managing director of Hewitt Associates. �Best employers create an empowered environment for people to develop and demonstrate their abilities. They also place considerable faith in their employees.�

So, what separated the men from the boys? The first thing was that the employers had implicit faith in the leadership. The leaders were trusted, communicated more and were more passionate about their employees.

Secondly, they offered a compelling employment offer that went beyond pay packets. The best employers have a higher purpose and offer a different work experience where the employee is seen as a key partner in aligning the organisation in a changing business environment

Thirdly, they were seen as offering an accelerated development by investing significantly greater resources in learning and development of employees.

Fourthly, they were regarded as companies with a cool culture where business results were driven by an emphasis on performance management, openness, employee recognition, fun and celebration.


Calcutta, Feb. 18: 
Tea companies appear destined to end the current financial year on a bitter note as prices fell by Rs 25-30 per kg across all varieties in January � a month in which there is hardly any production.

The prices were weak till December 2001, but the January plunge has set off alarm bells, senior officials in tea companies said.

CTC tea, which fetched Rs 88.41 per kg in January 2001, was selling at Rs 61.54 per kg last month. The prices of Darjeeling tea have declined to Rs 83.95 from Rs 126.55 per kg in the same period. Orthodox tea finds takers only at Rs 57.43 per kg, down from Rs 64.47 a year ago.

The sharpest fall has occurred in dust tea, whose prices have come down to Rs 49.37 per kg in January from Rs 85.82 per kg in the same month of the previous year.

This has happened largely because Tata Tea and Hindustan Lever have pulled out of the market. �They are the largest buyers of dust tea. But in the current financial year, they have withdrawn from the market early, depressing prices,� senior auctioneers said.

�This will hurt the bottomline of all tea companies. Depressed exports, along with lower offtake in the domestic market, has affected prices,� said G.P. Goenka, chairman of Duncans Industries. Senior officials of Eveready Industries, Warren Tea, Goodricke Group and other tea firms echoed the same view.

Tea exports during the year 2001 dipped 13.01 per cent to 179.79 million kgs from 206.82 million kgs last year, according to the Tea Board of India. Exports to Russia, UAE and UK have recorded considerable deceleration.

The import of 15 million kgs of tea for re-exports has led to lower demand at home in a year when production is expected to touch a high of 850 million kgs.

�There is oversupply in the market. We had tried to prune production by 20 million kgs in December 2001. That has yielded some results. We are trying to explore new export markets and produce more orthodox tea, which fetch good prices,� Bharat Bajoria, chairman of Indian Tea Association, told The Telegraph.

However, a section of the tea industry feels consumers are not benefiting from the dwindling prices at auctions. Bajoria does not agree: �Retail prices cannot change on a day-to-day basis. Consumers are, however, getting a lot of incentives with their packets.�


New Delhi, Feb. 18: 
Click to rip � cyber crimes are up to your eyeballs and rising. There is no reliable data available but ICC-Crime Services has made a stab at it by putting out a ballpark figure: 2,776 cases of fraudulent financial proposals advertised on the internet, amounting to approximately $ 2.3 billion.

Speakers at a Ficci seminar debating international trade frauds here today agreed that cyber crime has thrived in a medium that guarantees anonymity and accessibility to faceless offenders. And, one of problems faced in dealing with the menace is the lack of reliable statistics. The cyber world has enough to contend with anyway: viruses, logic bombs, blackmails, extortion, hacking and webpage jacking and everything. But, all of those devils lurking behind the PC can be countered. Netizens at the seminar advised policy makers and operational managers to report business attacks to organisations that process data and pass it on to the industry. Greater security is demanded to the use of broadband connections to the internet as it paves an easy route for the cyber criminals to enter the computer networks.

Quality update file walls and intrusion detection maxims should be made a must. And vigil on the Web should go hand in hand with physical security, the lack of which can undo all efforts and expenses on installing and maintaining a sophisticated security system.


New Delhi, Feb. 18: 
The department of company affairs (DCA) has announced stringent norms for loans or corporate guarantees issued in favour of company directors and their relatives.

The rules, issued today under Sections 295 and 372A of the Companies Act, 1956, say interest rates on loans to company directors must be at least 4 per cent higher than the Bank Rate which is currently ruling at 6.5 per cent.

Moreover, the quantum of loan should not exceed 25 times of the gross salary drawn in the preceding six months prior to the application. Besides, no guarantee commission shall be allowed to anyone in respect of the proposals

The application for such loans or corporate guarantees has to be accompanied by the prescribed fee of Rs 500 for company with an authorised share capital of less than Rs 25,00,000, Rs 1000 for companies with an authorised capital of Rs. 25 lakh or more but less than Rs 5 crore, and Rs 2000 fee for company with Rs 5 crore or more authorised share capital. According to a DCA statement, the application is required to be accompanied by a proposal duly approved at the meeting of the board.

To protect the interest of investors, the application must be accompanied by a declaration that the company has not defaulted in making repayments to the investors as and when their deposit amounts become due for payment. Besides, a no-objection certificate or prior approval of public financial institutions or banks in case any term loan subsisting is required.


New Delhi, Feb. 18: 
India will have to renegotiate intellectual property rights and patent law issues under the aegis of the World Trade Organisation (WTO) if it wants to prevent the country�s small scale units from being swamped by competition from foreign companies.

�Patents would have been fine if the Indian office had functioned in tandem with similar offices abroad. In India, it takes a minimum of seven years to get a patent whereas in other places it takes three years. How is a small entrepreneur going to protect his process or product from being forged,� said development consultant Amitava Mukherjee.

There are only two ways to deal with this situation: either the functioning of the Indian patent offices has to be beefed up, or India must press for an international cell that will grant patents that will be accepted all over the world.



Foreign Exchange

US $1	Rs. 48.66	HK $1	Rs.  6.15*
UK �1	Rs. 69.77	SW Fr 1	Rs. 28.25*
Euro	Rs. 42.48	Sing $1	Rs. 26.30*
Yen 100	Rs. 36.70	Aus $1	Rs. 24.85*
*SBI TC buying rates; others are forex market closing rates


Calcutta			Bombay

Gold Std (10gm)	Rs. 5030	Gold Std (10 gm)Rs. 4970
Gold 22 carat	Rs. 4750	Gold 22 carat	   NA
Silver bar (Kg)	Rs. 7750	Silver (Kg)	Rs. 7750
Silver portion	Rs. 7850	Silver portion	   NA

Stock Indices

Sensex		3633.93		+31.91
BSE-100		1761.82		+ 8.15
S&P CNX Nifty	1172.85		+12.90
Calcutta	 123.97		+ 1.16
Skindia GDR	 552.50		+10.72

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