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GS Autos aims to be major manufacturer
Industry bigwigs make a beeline
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Cable men say TRAI favouring pay channels
National Hydrogen Board
Reliance plant GRAPHIC: Weekly
Stock Movement
Volatility leads to uncertainty
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GS Autos aims to be major manufacturer The company has plans to invest Rs 10 crore this year and come out with a public issue by the end of next year to expand its production capacity. With an employee strength of over 1000 , GS Autos is exploring new horizons to provide a diverse range of vehicle parts. Unlike other units in the state, it has employed over 50 per cent of its total labour from the local population. It has developed an expertise in the development and manufacturing of components for all types of vehicles. Mr Jasbir Singh, CEO and Joint Managing Director of the company, in an interview to The Tribune, said that after the auto revolution in the country during the last decade, the company had emerged as a dominant player in the auto component market. The company was started by his father Jagat Singh in early fifties to manufacture bicycle parts but later it shifted to manufacturing of auto components. Ramgarhia by caste, the family had migrated from Pakistan after the partition. He claimed that besides other components, the company had recently developed a hydraulic lifter to lift all four rear wheels of a truck that would revolutionise heavy vehicle transportation in the country. Elated over this achievement Mr Jasbir Singh said, “The devise can raise the rear tyres of a vehicle by 6 inches, even if it is with 35 tonnes of material. It has already been patented to the GS Auto, and will help trailing rear axle of the 10-tyre trucks. This device, which has been successfully experimented, will be available in the market by April this year. “ He said, “With sheer dedication, focus on quality and customer services, we have followed a steady growth path. Consequently, the annual turnover of the company has increased from Rs 5.5 crore in 1986 to over Rs 80 crore in 2002-03. With an increase in demand for auto components due to spurt in vehicle sales, we are hopeful to achieve an annual turnover of over Rs 100 crore by the end of this financial year.” With in-house facilities for design, the company is manufacturing a wide range of products like wheel, hub bolts, axle, bushes, centre bolts, king-pin kits, spring pins, U-bolts, shackles, brackets, plates, clamps and check nuts through hot and cold forging techniques. In addition, it is also manufacturing bicycle parts, machine tools and engineering goods. Regarding the impact of steel prices on the company’s performance, Mr Jasbir Singh said, “Despite the steep increase in steel prices by over 60 per cent within one year, we have succeeded to maintain a growth rate of over 25 per cent in our sales value this year. For this, we have cut down cost of production by following the total quality management (TQM) of Japan implemented by few auto part manufacturing companies in India.” It has helped in reduction of wastage of raw material and reduction in defective products. Further, the company is retraining its manpower to work in a new environment, he added. He, however, lamented that the government had done little to check the increase in steel prices. “Most of the small scale units in Ludhiana and other towns in Punjab, which are dependent on steel as raw material, have been forced to cut down their production or close down. It is difficult to pass on the increased costs to the customers. The profit margins have been badly affected during the past one year.” He said that to upgrade the production capability the company was investing about Rs 1.5 to Rs 2 crore every year. The company had installed new imported machines to upgrade its production. The company had issued detailed quality guidelines to its employees. “Each component passes through numerous tests at the stages of design, raw material procurement and during the manufacturing process. Workers are given adequate incentives for following the quality guidelines.” The strength of the company lay in their manpower and sound engineering skills developed over five decades had helped them keep customers happy. “With skilled manpower and in-house cost cutting techniques we are ready to exploit the growing market for auto components,” he added. At present, the GS Autos was exporting auto components worth over Rs 10 crore annually to the UK, Germany, Holland, Malaysia, Indonesia, Singapore, Egypt, Iran and Afghanistan. Mr Jasbir Singh, along with his brother Surinder Singh, has chalked out a plan to find new buyers for their products in the domestic and international market. “Instead of diversification, we are focussing on expanding our production capacity by adding new buyers and by strengthening the retail network.” Regarding the company’s HR policy, he claimed, “We are paying the highest salary in the industry to our workers. As part of the restructuring exercise at the plant, we have brought down the manpower by about 300 persons during the past three years without any retrenchment. At the same time we have not recruited new employees after the retirement of old employees.” As part of company’s social commitment, the CEO of GS Autos observed, “We are running a chain of Ramgarhia educational institutions, which include public school and a postgraduate college, at no-profit-no loss basis. Over 18,000 children are studying there and
more than 25 per cent of children are getting education, free of cost.”
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Industry bigwigs make a beeline for Uttaranchal New Delhi, February 22 The state government has already allotted industrial plots to over 225 industrial units measuring 600 acres of land in Hardwar and Pantnagar that will involve investment of over Rs 2000 crore, said Mr Parag Gupta, Managing Director, State Industrial Development Corporation of Uttaranchal Ltd (SIDCUL). Talking to The Tribune today, he said that all major industrial houses of the country had proposed to invest in the state. Elated over the response from the industry, Mr Gupta said, “We have received an overwhelming response from investors after the announcement of concessions in the industrial policy last year. In the next three to four months, the construction work will start in all industrial estates in Hardwar and Pantnagar. By the year-end, we are expecting that most of the units will start production.” He said, among others, the Hindustan Lever Ltd, Britannia, Mahindra and Mahindra, LG, Titan, Marico, Dabur, Videocon, Parle, Samsung, Liberty and Control Switches had submitted their expression of interest (EOI) worth over Rs 7,000 crore to invest in the state. Some of them had already been allotted land. The LG Group alone had announced to make an investment of Rs 120 crore to set up an air conditioners’ manufacturing plant. The HLL would also make an investment of over Rs 100 crore and Britannia would invest about Rs 70 crore. The Titan would set up a watch manufacturing unit with an investment of around Rs 50 crore, he added. He said that the state would also set up a growth centre at Kotdwar in Pauri district to boost industrial development of the hill state. It would be a Rs 17-crore project, for which the Central Government had already sanctioned Rs 15 crore. Mr Gupta maintained that besides excise and income tax exemptions announced by the Central Government, the state was making efforts to provide best infrastructure, cheap power, hassle-free and fast sanctions to the project proposals. “In Hardwar we are focusing on IT and engineering units, where Bharat Heavy Electrical Ltd can be a knowledge partner, and in Pantnagar, the Agriculture University’s knowledge base can be utilised to set up agro-processing units.” Reacting to the apprehensions of haphazard growth of industries in the hilly state, he said, “Unlike other states, we are trying to regulate the industrialisation of the state by promoting environment-friendly industrial units. All industrial estates will have to comply with the ISO 14000 norms and will have common effluent treatment plants.”
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Guidelines for intra-circle telecom mergers
New Delhi, February 22 Under the guidelines, mergers and acquisitions can take place within a telecom circle with the condition that that there are at least three operators and the market share of the merged entity should be less than 67 per cent. “In order to ensure that sufficient competition exists, merger of licences will be permitted subject to the condition that, post merger, there are at least three operators in that service area for that service. Unified Access Service Licensee (UASL) will be counted for basic as well as cellular service separately while deciding the number of operators in a given service area,” it said. With a view to preventing the occurrence of any monopoly situation, the guidelines provide that any merger, acquisition or restructuring, leading to an operator having more than 67 per cent of the market in the given service area, shall not be permitted. The merger of licence is restricted to the same service area and this will be effective only in the fixed and mobile telephones. “With a prior approval of DoT, merger of licence is permitted in categories cellular licence with cellular licence, basic with basic, unified with unified, basic with unified and cellular with unified,” it said. In case of a merger of a basic service license with UASL, the basic service licensee shall pay, at the time of application for merger, the difference of amount of the entry fee. This means in case of a merger of basic service licence with unified licence, the basic licensee will have to pay the difference in entry fee at the time of application of merger. After the merger, the merged entity will be entitled to total amount of spectrum held by the merging companies subject to the condition that the amount of spectrum should not exceed 15 Mhz per operator for metros and category ‘A’ service areas, 12.4 Mhz in category ‘B’ and ‘C’ service areas.
— TNS
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Cable men say TRAI favouring pay channels
New Delhi, February 22 Reacting to the latest clarifications issued by TRAI earlier this week on the implications of charges in the Telecommunication (Broadcasting and Cable) Services Tariff Order 2004 of February 19, the operators said that the pay TV broadcasters would arbitrarily start increasing the subscriber base and would switch off some favoured channels like those showing the Indo-Pak cricket matches if the subscribers did not agree to their demands. The National Cable and Telecommunication Association and the Cable Operators Federation of India said that any increase in subscriber charge or increase in subscriber base had to be passed on the consumers. They said that cable service were being made available within the range of Rs 200 to Rs 300 per month to consumers as on December 26 the cut-off date accepted by TRAI — though the total actually came to Rs 460 per month (the total outflow to pay TV broadcasters per subscriber per month was Rs 240, the cost of delivery/ distribution/ network maintenance/collection was Rs 150, Copyright charges Rs 20, and service tax at the rate of 8 per cent and over and above, and Rs 20 as entertainment tax).
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National Hydrogen Board
New Delhi, February 22 A spokesperson said the members of the board would be experts from government institutions and industry, including Mr N.K. Singh, Member (Energy), Planning Commission, Mr Ratan Tata, Chairman Tata Sons, Mr Mukesh Ambani, Chairman, Reliance Industries, Mr A. Mahindra, President, CII, Dr Y.K. Modi, President, FICCI, Mr Mahindra K. Sanghi, President, ASSOCHAM, Dr K. Kasturirangan, former Chairman, ISRO and Chairman IIT-Madras and Prof CNR Rao, Chairman IIT-Kanpur.
— TNS
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Reliance plant
New Delhi, February 22 Mr Amar Singh, Chairman, Uttar Pradesh Development Council said, “ We are grateful that the Reliance Group has come forward to invest over Rs 10,000 crores in Uttar Pradesh. “ With an investment outlay of more than Rs 10,000 crore the project is the single largest investment across any sector in the state of Uttar Pradesh.
— TNS
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by J.C. Anand Volatility leads to uncertainty
The IPO issues have led to a short decline in the market indices. On last Thursday the Sensex was down by 172 points. On the last trading day last week there were sharp swings in the market with a high of 5848 points and a low of 5771 points on the Sensex with the market closing by mere 4 points. The trading volumes have also been affected. Continued volatility in the stock market has led to a lot of uncertainty. Even genuine investors do not know when to buy where to invest in the stock market. In fact IPO have led to a lot of selling. The common investors are anxious to raise funds even by liquidating, a part of their holdings in the equity shares, as well as in the mutual fund investment so that they can subscribe to the IPO issues. Whereas the FIIs continue to be good buyers, the investors have been the major sellers. Even mutual funds have been hit due to sharp redemptions. It, however, appears that allotment of shares in the IPO issue is likely to be very stringent for the retail investors. For instance, the allotment in the Patni equity share of Rs 2/- each has been made at the offer price or Rs. 230/- per equity share on the proportionate basis and those who applied in the “Retail Bidder category” will be allotted not more than 50 shares per application by lot. Only 10 out of 93 applicants, who applied for 50 shares will be allotted 50 shares each. Again, only 3 out of 7 applicants, who applied for 200 shares will be allocated 50 shares each. Patni shares will be enlisted on the BSE and NSE on February 25. Similar kind of proportionate allotment is expected to be made in IPCL and Gail issues as well. A more allotment is expected to be made in the Bank of Maharashtra issue but this issue is not very attractive and may offer only small market premium when it is listed. It is also possible to argue that it may be better to pick up the PSU blue chip scrips, which are now on offer, in the IPOs from the market than to be content with relatively small proportionate allotment prospect. There appears to be no need to sell good equity shares in the market to raise funds for the IPOs. In case investors have spare funds they may apply for the IPOs but not otherwise. The economy no doubt is doing well. The NCAER Business Confidence Index now stands at an 8-year high at 138.1 points. Capacity utilisation in the core industries (cement,
aluminum and steel) is higher than 80 per cent. Business Standard had ed-itorially commented that, “the impossible may be about to happen: India’s physical problem could become manageable”. It adds the GDP deficit of 3.6 per cent may be achieved in not more than four years. Stay invested on a long term basis and pick up fundamentally strong scrips at every suitable opportunity Hot rolled coil Domestic manufacturers have raised the price of hot rolled coil by upto Rs. 4000/- tonne. While TISCO has hiked its price by Rs. 2000/- per tonne, some manufacturers have hiked it even more. It is not surprising that TISCO scrip has not suffered during the last week’s market decline. Bank, pharma shares Banks and pharma shares, however, have noted down. All multi-pharma shares, including Glaxo and Prizer, have gone down badly. But the multi-pharma shares are bound to bounce back after the IPO fever subsidises. Pfizer is a good investment scrip.
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New Delhi, February 22