B U S I N E S S

Enron, SIA fiasco not to hit Plan target
New Delhi, September 3
The jolt to investors confidence following the Enron fiasco and the pullout of Singapore Airlines from Air India bid was not serious enough to derail the ambitious Tenth Plan target of 8 per cent economic growth, Deputy Chairman of the Planning Commission, Mr K.C. Pant said here today.

Maruti market share rises
New Delhi, September 3
Maruti Udyog said today domestic sales had remained flat in August 2001, at 29,859 cars over 29,787 cars in the same month last year. Overall, the company’s total sales touched 31,016 units, including exports of 1,157 cars.

ITC agro division to start operation in Haryana
New Delhi, September 3
ITC is aiming at export of agro-commodities worth Rs 750 crore in the current fiscal, a substantial portion of which, will be through the e-commerce initiative and is expanding its operations both in terms of region and products.

Cabinet panel to deal with AI selloff: Joshi
Mumbai, September 3
The issue of Air India’s strategic sale will be taken up once again by the Cabinet Committee on Disinvestment following decision of Singapore Airlines (SIA), a joint bidder with Tatas, to withdraw from the race, Union Heavy Industries and Public Sector Enterprises Minister, Manohar Joshi, said today.

SEBs losses touch Rs 20,000 crore
New Delhi, September 3
Commercial losses of State Electricity Boards (SEBs) have crossed Rs 20,220 crore during 2000-01 with Andhra Pradesh topping the list with estimated losses of over Rs 3,800 crore.

Himachal unit of LIC records 26 pc growth
Shimla, September 3
The Himachal Pradesh Division of the Life Insurance Corporation here registered a growth of over 26.1 per cent in the sum assured and 25.8 per cent, in the first premium insurance (FPI) during the 2000-01 financial year.

Samsung to launch 18 new products
Kolkata, September 3
Samsung Electronics India Information and Telecommunication Ltd (SEIIT) would launch a set of 18 new convergence products by this year while setting up call centres and mobile plazas targeting a turnover of $ 500 million by 2003.

ANALYST’S DIARY

Bharti Telecom IPO may raise eyebrows
BHARTI Telecom plans to foray into the market with an IPO whose proposed size aggregates Rs 950 crore. Given the beleaguered state of the primary market in India, this announcement is bound to raise several eyebrows. Is the group biting off more than it can chew, is it a sign of overconfidence or is it plain and simple business prudence? Perhaps the answer lies in a combination of these three factors.

ROUND-UP

Compaq to establish PNB’s ATM network
New Delhi, September 3
Compaq India today announced that it has bagged a contract from Punjab National Bank (PNB) for establishing ATM network, involving networking of 500 branches in the first phase.

• FICCI, Korea Intl sign MoU

Enron, SIA fiasco not to hit Plan target
Tribune News Service

New Delhi, September 3
The jolt to investors confidence following the Enron fiasco and the pullout of Singapore Airlines from Air India bid was not serious enough to derail the ambitious Tenth Plan target of 8 per cent economic growth, Deputy Chairman of the Planning Commission, Mr K.C. Pant said here today.

Apprehensions on this count have been expressed as the feasibility of 8 per cent growth hinges on India managing higher foreign direct investments and increased domestic savings.

While investment analysts have forecast a dip in foreign direct investments inflows in the coming years as a result of the loss in investors confidence, domestic savings too are not expected to register a healthy growth as the interest rates of late have been falling and deduction of income tax at source have been made applicable to small returns in fixed deposits.

Mr Pant felt cases like that of Enron or SIA were isolated incidents and it would not be fair to draw a larger picture based on the developments. As long as international investors can make profits they would continue to come in, he added.

Similarly on the domestic investment front, he felt corrective measures can be taken to boost savings.

The Approach paper, which was placed before the National Development Council on Saturday and adopted unanimously, talks not only about the inputs that are needed for 8 per cent growth but also calls for a number of difficult political decisions.

“To be completely honest with you, I was somewhat apprehensive about the course that the NDC meeting could take as the draft Approach paper is frank and direct in its analysis, and calls for a number of difficult political decisions”, Mr Pant said while giving a flavour of the discussions that took place in the meeting.

As it happened, the discussions were refreshingly businesslike and constructive and there was practically no dispute or disagreement on the major objectives and strategy of the Approach paper.

While there has been a steady convergence of views among different political parties on the broad strategy of economic development and the need for reforms, “what came as a surprise is that this convergence now appears to be an almost complete congruence”, he added.

The Deputy Chairman pointed out that one point that emerged very clearly was that a more rapid implementation of the reforms agenda was being held up by competitive politics.

To sort out the major reform issues, the Prime Minister has agreed to convene an all-party meeting where labour and power reforms would be at the top of agenda, Mr Pant said.

On the demand of several States to reduce the number of Centrally sponsored schemes and to provide greater flexibility to states in the selection and design of their implementation, Mr Pant said the Planning Commission was supervising the process of identifying schemes for transfer, convergence and weeding out.

He said the Finance Minister was looking into the demand of states to reduce the interest rate on Central Government loans to states and to change the loan: grant ratio for non-special category States from the existing 70:30 to 50:50.

Mr Pant described the Approach paper as frank and honest where the harsh realities have not been hidden.

Maruti market share rises

New Delhi, September 3
Maruti Udyog said today domestic sales had remained flat in August 2001, at 29,859 cars over 29,787 cars in the same month last year.

Overall, the company’s total sales touched 31,016 units, including exports of 1,157 cars.

The August sales also increased marginally by 1.18 per cent compared to 29,509 units sold in July this year, a company statement said here.

Cumulative sales (April-August 2001-02) grew by 11.8 per cent at 1.41 lakh cars from 1.26 lakh cars in the year-ago period.

Maruti said it has increased its marketshare to 62 per cent in August, 2001, from 58 per cent in the year-ago month.

Sales have been powered by the growth in the performance in the “B” segment where it sells the premium small car models Zen, Alto and Wagon-R.

Sales in this segment have grown by 44 per cent in April-August, 2001-02, over the same period last year, Maruti said.

The company sold 7,133 Zen cars, including exports of 771 units while that of Alto and Wagon-R stood at 2,299 units and 2,569 units respectively.

Sales of the entry level Maruti 800 and Omni van models was 12,794 units and 4,778 units, respectively, during the month.

Maruti also sold 944 units of Esteem model and 113 units of the premium mid-size model Baleno.

Hyundai Motor

Hyundai Motors India registered a 13 per cent increase in sales in August compared to the corresponding month last year.

Santro, Accent and Sonata together sold 8,241 units in August compared to 7,285 units in August last year and 6,963 units in July this year.

During the first five months of the current fiscal, Hyundai sold 39,013 units, 9 per cent more than the corresponding period of last year.

Lancer

Hindustan Motors said its car sales had declined by 32.4 per cent during August, 2001, at 1,803 cars against 2,671 units in the year-ago month.

But, it grew by 24.1 cent compared to 1,448 cars sold in July on the back of a rise in sales of the premium mid-size car Mitsubishi Lancer, a company spokesperson told PTI.

The August sales included 641 Lancer cars and 1,162 units of the old workhorse Ambassador.

The August sales of the Lancer car grew by 5 per cent at 641 units over 610 units in the year-ago month. Compared to July sales of 430 units, it grew by a massive 49 per cent. PTI, UNI

ITC agro division to start operation in Haryana

New Delhi, September 3
ITC is aiming at export of agro-commodities worth Rs 750 crore in the current fiscal, a substantial portion of which, will be through the e-commerce initiative and is expanding its operations both in terms of region and products.

The company whose agro-commodities division is based in Hyderabad will widen its business activities by including wheat and Basmati and establishing base in western Uttar Pradesh and Haryana.

“Of the projected exports of Rs 750 crore in agro-commodities, including soyabean, aqua-culture and coffee, about Rs 100 crore will be through the click and mortar concept of e-chaupal,” S. Sivakumar, Chief Executive of the International Business division of ITC said here.

Speaking on the sidelines of a seminar on agricultural marketing he said e-chaupal was a comprehensive agri-marketing mechanism which not only facilitated buying of inputs and selling of products by farmers but also ensured proper storage.

Under the mechanism, the farmers were given updated information on the web on both local and international prices speedening transactions and ensuring price discovery, he said.

While the inputs were purchased by the farmers directly from other companies, the output was sold to ITC at rates determined through e-chaupal channels.

At present e-chaupal had three channels, one each in Madhya Pradesh (soyabean), Andhra Pradesh (aqua-culture products like shrimps), and Karnataka (coffee).

Sivakumar said the company already had physical infrastructure in 14 states and was in the process of establishing its base in western UP and Haryana.

The move was aimed at marketing Indian wheat and Basmati in a big way in the international market.

It was also purchasing sesame seeds and handpicked selected groundnuts in Gujarat, he said, adding that another commodity they were targeting at were spices.

For putting in place the hardware for e-chaupal, the company had invested Rs 10 crore and the concept was becoming popular with the farmers as it gave the marketing details in vernaculars like Telugu, Hindi and Kannada.

The farmers were guaranteed price discovery due to easy comparison of domestic and international prices through e-chaupal, knowing fully well which part of their produce was meant for export purpose.

“The farmers have access to all information they require through e-chaupal,” he added.

For compiling latest local prices, it relied on the Agricultural Produce Marketing Committees, he said. PTI

Cabinet panel to deal with AI selloff: Joshi

Mumbai, September 3
The issue of Air India’s strategic sale will be taken up once again by the Cabinet Committee on Disinvestment following decision of Singapore Airlines (SIA), a joint bidder with Tatas, to withdraw from the race, Union Heavy Industries and Public Sector Enterprises Minister, Manohar Joshi, said today.

“The withdrawal by SIA has created a problem and CCD will now deal with the issue”, Joshi told reporters on the sidelines of a seminar on corporate restructuring here.

Asked about Shiv Sena’s objections to disinvestment of the international air carrier, the minister said it was “only for reasons like unemployment”.

The government has now begun to speak with “one voice” on reforms, including disinvestment, he said.

“In a democracy there is room for opinions and once a decision is made we adhere to it”, he added. PTI

SEBs losses touch Rs 20,000 crore

New Delhi, September 3
Commercial losses of State Electricity Boards (SEBs) have crossed Rs 20,220 crore during 2000-01 with Andhra Pradesh topping the list with estimated losses of over Rs 3,800 crore.

Andhra Pradesh State Electricity Board is estimated to have incurred commercial losses of Rs 3855.94 crore in 2000-01 while its revenue during the year was Rs 6775.14 crore, according to official sources.

Ninteen SEBs across the country are estimated to have netted Rs 82,462.58 crore revenue during 2000-01 and reported transmission and distribution (T&D) losses of 23 per cent.

SEBs are incurring commercial losses mainly due to mismatch between cost of power and tariff. The average cost of supply of power per unit is estimated to be Rs 3.04 in 2000-01 as against average tariff of Rs 2.12 per unit, sources said.

Uttar Pradesh reported commercial losses of Rs 2784.04 crore on a revenue of Rs 6180.52 crore while Madhya Pradesh incurred commercial losses of Rs 2200.78 crore on a revenue of Rs 5935.64 crore.

Other states with high commercial losses include Gujarat (Rs 1446 crore), Rajasthan (Rs 1352.12 crore), Punjab (Rs 1308 crore), Delhi (Rs 1186.43 crore), Bihar (Rs 1080.96 crore), Tamil Nadu (Rs 956.73 crore), West Bengal (Rs 933.16 crore), Jammu & Kashmir (Rs 858.41 crore) and Haryana (Rs 819.51 crore). PTI

Himachal unit of LIC records 26 pc growth
Tribune News Service

Shimla, September 3
The Himachal Pradesh Division of the Life Insurance Corporation here registered a growth of over 26.1 per cent in the sum assured and 25.8 per cent, in the first premium insurance (FPI) during the 2000-01 financial year.

Stating this at press conference here today Mr K.S. Rana, the Divisional Manager, said that the growth figures were higher in case of the sum assured by 2 per cent and FPI by 4 per cent in comparison to the previous year. The growth in terms of number of policy, however, declined from 16.2 to 5.8 per cent.

He said the achievement of budgeted targets came to 92 per cent (policies) 103.8 per cent (sum assured) and 100.6 per cent (FPI). The division was striving to achieve the target of 1.61 lakh policies this year as against 1,34,586 last year.

Samsung to launch 18 new products

Kolkata, September 3
Samsung Electronics India Information and Telecommunication Ltd (SEIIT) would launch a set of 18 new convergence products by this year while setting up call centres and mobile plazas targeting a turnover of $ 500 million by 2003.

“We expect a turnover of Rs 1325 crore in 2001. Our target is to reach $ 500 million by 2003,” company General Manager Vivek Prakash told reporters here today.

The company, which has a 70 per cent share in hardware components market in the country, would launch 18 new products by December to “enhance our market addressibility both in terms of products variants and market segments,” he said. PTI

ANALYST’S DIARY

Bharti Telecom IPO may raise eyebrows
Ashok Kumar

BHARTI Telecom plans to foray into the market with an IPO whose proposed size aggregates Rs 950 crore. Given the beleaguered state of the primary market in India, this announcement is bound to raise several eyebrows. Is the group biting off more than it can chew, is it a sign of overconfidence or is it plain and simple business prudence? Perhaps the answer lies in a combination of these three factors.

For starters, this is the biggest private sector IPO in the last decade and a half since Reliance Telecom took a bow on the market front. Then, there are clear cut signals that the investors appetite for equity offerings has withered significantly given the battering they received after chasing IPO’s a year and a half ago. However, there are definitely some overwhelming reasons that suggest that the decision, though a bit of a gamble may also be a prudent one.

Firstly, by making the IPO at the time it proposes to, which seems like around the calendar year end, it would pre-empt the several others from the same segment like Mahindra British Telecom in the domestic market and thereafter the likes of China Mobile in the international market. Another possible advantage is that if the company is able to price its IPO in a manner that leaves icing on the cake (read as returns) for investors, there might be a groundswell of the latent demand that might be lurking in the system. Perhaps, some of the excess funds that have gone into bank deposits might find its way back into the market. Furthermore, mutual funds seeking to diversify their portfolios may also make a beeline for this offering if it is appropriately priced. Hence, at the end of the day, it does seem that the group is not taking a shot in the dark, but taking a calculated risk through the key to whether it succeeds lies at the door of its management and issue advisors who will determine its pricing.

Whilst on the topic of telecom let us flashback in time to the IPO of Hughes Tele.com which my team and I had analysed in detail then. I logged on to my PC and scanned through the concluding lines of our analysis. Here are some excerpts.

Overall then where does this issue stand? It has potential no doubt — but is that alone enough given fairly competitive alternative investment avenues on offer at the moment. Furthermore, the floor price of Rs 12 translates into a premium demand of at least Rs 2 per share. Now, this demand is based on potential alone and not performance and thus merits a thought or two. The bottomline — Well, it’s obviously a tough call at this stage as on one hand it does hold out fair promise while on the other it involves the need to be patient and place your bets on the project being implemented optimally. Given such a scenario, it would be best for those with a time frame of eighteen months or so to get in partially now so as not to miss the bus altogether while reserving some part for six months down the line when another call can be taken on the progress in the implementation of the project and finally a third call maybe a year down the line by which time the jigsaw should begin to fall in place.

The clear cut rationale here was that, while the project was a conceptually sound one, that is where the buck stopped. It was our team’s opinion that the company had got the pricing equation wrong as the premium demand of Rs 2 was essentially for nothing more than a novel concept. The financials were unimpressive and what’s more, there was no immediate respite in sight. The infrastructure tax break alone was a plus and thus we recommended limited exposure only for high net worth long-term investors.

ROUND-UP

Compaq to establish PNB’s ATM network

New Delhi, September 3
Compaq India today announced that it has bagged a contract from Punjab National Bank (PNB) for establishing ATM network, involving networking of 500 branches in the first phase.

“The system would run on Compaq’s NonStop Himalaya Server with Base24 Suite of applications to offer ATM banking and other online banking facilities and delivery channels to PNB’s customers,” a company release said here.

The first phase of the implementation would network 500 branches and add on a 1000 branches more in the second phase.

“PNB is looking at building a state-of-the-art ATM and online banking infrastructure to offer high levels of service to their customers. Compaq with its superior server offering and expertise, will enable PNB to offer its customers anytime, anywhere transaction facilities,” Pallab Talukdar, Director, Enterprise Products, Compaq India, said in a statement.

PNB plans to introduce B2C transactions through the ATM, including utility bill payment facilities, salary and pension disimbursement, as well as train ticketing through the passenger reservation system of Indian Railways.

PNB also plans to add on point of sale operation in future, such as debit and credit card operations. PTI

FICCI, Korea Intl sign MoU

New Delhi, September 3
Federation of Indian Chambers of Commerce and Industry (FICCI) and Korea International Trade Association today signed a MoU to promote bilateral trade and investment.

According to the agreement, both sides will exert their utmost for the promotion of commercial and industrial relations between New Delhi and Seoul on the basis of cooperation and mutual benefits apart from exchanging knowhow and experience on organising and managing trade fairs and conferences.

“India’s growing market, strategic location and edge in knowledge-driven industry, provide an excellent base for fruitful collaborations between the two countries, Chirayu R. Amin, President, FICCI said here. PTI

BIZ BRIEFS

Milling machines
Chandigarh, September 3
Hindustan Machine Tools Limited today unveiled two new models of milling machines in an exhibition at its Pinjore plant, near here, today. HMT’s Executive Director, Mr C.N. Dhar, inaugurated the exhibition. The new Turret Ram type milling machines, which come with 3 and 5 HP motor power can perform milling drilling and boring operations with precision and speed. TNS

IOC Director
New Delhi, September 3
Mr Arvind Murlidhar Uplenchwar has been appointed as Director, Pipelines, of Indian Oil Corporation Ltd. Mr Uplenchwar, who would be in-charge of Indian Oil’s network of over 6500 km long 43.45 million metric tonnes per annum capacity cross-country pipelines transporting crude oil and petroleum products, has succeeded Mr S.N. Jha. TNS

General Motors
Chandigarh, September 3
General Motors India has recorded an increase of 46 per cent in is sales within a month. The company had sold 650 cars in July. The sales for the month of August have been 950 units including 725 units of Opel Swing and Corsa. TNS

Rockwell Elect
Chandigarh, September 3
Rockwell Electronic Commerce and Mahindra British Telecom (MBT) have signed a five year strategic alliance agreement under which Rockwell will engage MBT’s resources to deliver updates and other functional enhancements to its customer contact management software. TNS

Seat augmentation
New Delhi, September 3
The Scandinavian Airlines Systems has augmented its seat capacity on flights going out of Delhi by 40 per cent with the idea of facilitating the travellers from North India. While the airlines has introduced the 261 seater A-340 aircraft in place of the Boeing 767s, it is also planning to add two more flights to its five weekly flights by October next year, making it a daily operation between Delhi and Copenhagen. TNS

Palace on Wheels
Jaipur, September 3
Palace on Wheels, a joint venture of Rajasthan Tourism Development Corporation (RTDC) and the railways, has earned highest ever net profit of Rs 5.77 crore in 2000-01, according to RTDC Chairman Rajiv Arora. PTI

Godrej Prima
Mumbai, September 3
Godrej & Boyce Manufacturing Company Ltd’s Prima Division, Copiers Group, expects to earn Rs 5 crore revenue out of the total Rs 25 crore in this fiscal from sale of digital products. The company introduced ‘Godrej eDoc’ and ‘G-1508’ (multi-function product), he said adding, the company now has a total of 11 digital products. PTI