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Tatas to invest 5,000 cr in 11 S&P’s raises Tata Motors’ rating to BB
Power cuts force units to head for HP
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Speed up reforms to trim deficit: experts
Budget to curb deficit,
CORPORATE NEWS
Hyundai sales jump 66 pc
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Tatas
to invest 5,000 cr in 11 telecom circles
New Delhi, February 4 Also, the Tata-owned VSNL’s undersea cable project would go on stream in September this year. A due diligence process for acquiring the company started a week back, Tata Industries Managing Director Kishore Chaukar told mediapersons on the sidelines of the inauguration of Supercomm India, but refused to divulge the name of the company. Tata-owned VSNL has already announced its plan to buy the Internet services business of Chennai-based DishnetDSL Ltd. Dishnet’s services cover over 200 cities in the country. Tatas are targeting 15 million broadband subscribers in the next 5-6 years, out of the expected 50 million customers in the country by that time, Mr Chaukar said. Besides, Tata Tele Services Ltd (TTSL) would spend Rs 5,000 crore in starting its operations in 11 new circles, for which the company has already acquired unified telecom service licences. This would provide TTSL an almost national footprint. The company was currently operating in six circles, Andhra Pradesh, Delhi, Gujarat, Karnataka, Tamil Nadu and Maharashtra, with a total of around 1.5 million subscribers across its networks. The new circles include Kerala, Punjab, Haryana, UP (West), UP (East), Rajasthan, Madhya Pradesh, West Bengal, Himachal Pradesh, Bihar and Orissa. The other major wireless operators such as Reliance Infocomm, Bharti and Bharat Sanchar Nigam Ltd already have similar footprints across the country. Besides, the VSNL’s Chennai-Singapore submarine cable project would go on stream in September, he said. VSNL was setting up the Tata Indicom Chennai-Singapore Cable System, with an estimated cost of around $ 100 million. The 3,100 km-long fibre optic cable network, linking Chennai with Singapore, was slated to have an initial carrying capacity of 320 gigabyte of data per second. On completion, the cable would carry around 5.12 terabytes of data per second, making it one of the fastest under sea cable networks in the world. VSNL had signed a Memorandum of Understanding with US-based Tyco Communications for setting up the cable on a turnkey basis. As many as 100 telecom and IT companies, including 40 from overseas, are displaying their products and technological excellence in the three-day Supercomm India, 2004, being organised by the US-based Telecommunications Industry Association and Inter ADS Ltd.
— UNI |
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S&P’s raises Tata Motors’ rating to BB
Chandigarh, February 4 In the past two years,
Tata Motors has successfully cut its operating costs, divested unrelated
businesses, got equity infusions, and halved its debt burden; at December 31, 2003, the company’s debt was Rs 17 billions, compared with Rs 34 billion at March 31, 2001. As a result, production levels required to achieve a breakeven have come down. The improvement in Tata Motors’ financial performance has also been driven by a very strong 25-30 per cent growth in sales volumes in the past two years, due partly to the cyclical upswing in the commercial vehicles business. “Vulnerability of Tata Motors’ cash flows to a cyclical downturn in the commercial vehicles markets remains the main constraining factor in its rating,” said Standard & Poor’s credit analyst Sharad Jain, Director in the Asia-Pacific Corporate and Infrastructure Ratings group. He added: “Nevertheles, the financial impact of a cyclical downturn is expected to be less severe than that of the last one, which occurred in 2001 and 2002.” |
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Power cuts force units to head for HP
Bari-Brahmanan (Jammu), February 4 The industrial estate of Bari-Brahmanan on the Jammu-Pathankot national highway, which is considered the industrial sector has as high as about 25 per cent sick units. The export promotion industrial park separately established over 1,000 kanals about seven years ago wears a deserted look and only about five units, mostly pharmaceutical, are operational. Entrepreneurs are keeping their fingers crossed over the new industrial policy of the state government, but hope that it will help improve the industrial atmosphere in case officials implemented it seriously. The industry, also in the state, is being hit hard because of the nine hours power curtailment and the unscheduled electric cuts in between. The record of the industrial units here indicates that besides the daily cut of nine hours, there were 67 electricity trippings and 30 hours of unscheduled power failures during January. A large number of applications, with attached fee of several thousand of rupees, for industrial power connections had been lying unattended in the power development department for the past two years as no fresh industrial connections are being granted, Mr Sanjay Mehra, general secretary of the industries association here, said. Those desiring to go in for expansion of their industrial units, are not in a position to do so because of unavailability of power. Mr Mehra said the medium and large industry was heading towards Himachal Pradesh and Uttaranchal where not only the electricity position was far better, but these places were advantageous from the location point of view. The local industry was surviving on generators which were uneconomical as each industry was forced to pay the tariff on the basis of the sanctioned electric load even if there was no electric supply. The smaller units were the worst sufferers. Another reasons for the sluggish growth of the industry was that the state government’s industrial policy had generally been on ad hoc basis. Mr Mehra said some entrepreneurs came here sometime ago to explore the possibility of setting up their textile units, but they headed towards Himachal Pradesh because they were not satisfied with the industrial atmosphere in the state. |
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Speed up reforms to trim deficit: experts
New Delhi, February 4 A day after the government projected an impressive 4.4 per cent fiscal deficit for the year beginning April 1, analysts warned that narrowing the financial gap won't be possible without unleashing reforms across all sectors of economy. "The fiscal deficit projection for the next fiscal year is surely impressive but it will need a lot of effort on the part of the government to realise it," said B.B. Bhattacharya, director of the Institute of Economic Growth. "Low fiscal deficit will mainly depend on two things. First is the continuation of high economic growth over the next few years and second is speeding up of key reforms coupled with a check on government expenditure," Bhattacharya told IANS. Presenting a vote-on-account, or interim Budget, for 2004-05 yesterday, Jaswant Singh said he would attempt to restrict the fiscal deficit in the fiscal year beginning April 1 to 4.4 per cent of the GDP. He said the government had managed to rein in the spiralling fiscal deficit in the current fiscal year to 4.8 per cent despite "multiple challenges" like the Iraq war, a global downturn and uncertainty in oil prices. While presenting the Budget for fiscal 2003-04 in February last year, the government had hoped to trim its fiscal deficit to 5.6 per cent for the current fiscal year ending in March from 5.9 per cent last year. The combined fiscal deficit of the Central and state governments is more than 10 per cent of GDP, one of the highest in the world. Leading economic think tanks and rating agencies say a sharply higher fiscal deficit would stymie efforts to put the economy in a higher trajectory of growth and make a significant dent on poverty. Experts, however, say the slew of incentives announced by the government in the last few weeks with an eye on the impending general elections, likely to be held by April, will not help matters. "The move will also have a devastating impact on the exchequer of the state governments, which spend 40 to 50 per cent of their total funds on salary bills." |
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Budget to curb deficit, says S&P’s
Chandigarh, February 4 The Budget deficit for fiscal year 2003-2004 is estimated to reach 4.8 per cent of GDP, from 5.4 per cent in fiscal 2002-2003, but more importantly the deficit for fiscal 2004-2005 is boldly projected at 4.4 per cent of GDP. Measures to meet this target include increasing tax revenue by 17.4 per cent and limiting expenditure growth to 3.5 per cent. While these projections are based on expectations of 8 per cent GDP growth, it is a positive sign that the looming general election has not led to a significant loosening in fiscal policy. Despite some modest pre-election tax concessions, the outlook for reducing the deficit appears more upbeat than it has in recent years. Standard & Poor’s credit ratings on India are constrained by the high public debt burden and fiscal inflexibility, with the consolidated general government deficit at more than 9 per cent of GDP. The ratings on India could improve if the government can press on with reforms. These include reversing the fiscal trajectory by implementing plans to reduce the deficit and accelerate structural reforms to sustain economic growth.
— TNS |
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CORPORATE NEWS Mumbai, February 4 The proceeds of the loan, the first such transaction concluded after the recent liberalisation of ECB guidelines by the Finance Minister and upgrade of India’s sovereign rating to investment grade by Moody’s, will be used to refinance its existing higher cost debt, banking sources said here. The syndicated loan with a maturity of 60 months received an overwhelming response from arranger banks including ANZ, Bank of America, Credity Lyonnais, DBS and HSBC, sources said. RIL’s pricing on the syndicated loan is finer than the one obtained by ICICI Bank on its international bond offering in October last year when it sold bonds aggregating $300 million at 125 basis points over Libor, the sources added. Gujarat Alkalies rights issue Gujarat Alkalies and Chemicals Ltd will make a rights offer to its shareholders in the ratio of 3:5 equity shares at a price of Rs 12.50 per share aggregating to Rs 34.43 crore. The rights issue bid of the company, which has recorded the highest ever gross profit of Rs 227.02 crore as compared to Rs 163.19 crore in the previous year, will be open from February 9 to March 10, Gujarat Alkalies Managing Director P.K. Taneja told journalists here last night. The company has already received a sum of Rs 10.39 crore from the Gujarat Government as an advance against share application money towards rights equity shares and other government corporations promoters have agreed in principle to subscribe to the issue, he said. Leyland to tap foreign markets Ashok Leyland plans to tap foreign markets to raise up to $ 100 million, a top company official said today. “Our board will take a decision on February 28 to either go for a foreign currency convertible bond or global depository receipts to raise $100 million which can be partly utilised for servicing Rs 260 crore debt and capacity expansion,” its Managing Director R Seshasayee told a news conference. Cipla approves demerger of 6 firms The Cipla board has approved demerger of six private companies, that currently own the land and building of the company’s Goa factory. Cipla will issue shares at par and allot equity shares of Rs 10 each to the shareholders of the demerged companies. The six entities are Oncocare India, Medule Pharma, Medix Specialities, Lancet Pharma Inhaled Technologies and Nebumed Pharma.
— Agencies |
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Hyundai sales jump 66 pc
New Delhi, February 4 Domestic sales grew by 25 per cent over January 03 sales of 10,078 units to touch 12,608 units. Led by the huge success of the Santro Xing, the domestic sales of Santro touched an all-time high of 10,041 units, a 19 per cent growth over January 2003 while sales of the mid-size Accent grew 59 per cent to 2,404 units over January 2003. The luxury sedan Sonata registered sales of 101 units and the sale of the SUV Terracan stood at 62 units. The company’s in the month stood at 4,427 units in January 2004, accounting for about 26 per cent of the total sales in this period.
Honda Siel
Riding on the popularity of the new City model, Honda Siel Cars India Ltd. (HSCI) on Wednesday reported an impressive 90.47 per cent jump in sales volume in January at 2,781 units against 1,460 units sold in January 2003. HSCI, more than 95 per cent owned by Japan’s Honda Motor Co, said a total of 2,380 units of the City were sold while the luxury sedan Accord and SUV CR-V saw sales of 226 and 175 units respectively.
— UNI |
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