BSES chalks out mega investment over next 10 years
Mumbai--BSES in its corporate investment plan submitted to the finance institutions for says it will invest about Rs 40,000 crore over the next ten years. It said it plans to add 9,000 mw more in generation capacity. It said it also planned to enter the transmission business and add five more areas to its existing distribution business.
The company will execute each of these projects through a series of special purpose vehicles (SPVs) in which it will hold majority stake. This plan is at present being discussed with financial institutions—the Life Insurance Corporation, the General Insurance Corporation and the Unit Trust of India, which have a combined stake of about 39 per cent in BSES.
BSES plans to invest in the equity of the SPVs, which will be raised through internal accruals, debt and convertible bonds. The current debt- equity ratio of the company is 0.3:1 and with the SPVs, the debt-equity ratio will be 1:1.
BSES plans to acquire two distribution circles during 2002. These will be selected from Delhi, Kanpur, Haryana, Andhra Pradesh and Karnataka. The distribution rights in three more areas are to be acquired by 2012.
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Zydus Cadila; the first pharma co into retailing biz
Mumbai--Zydus Cadila is entering the lucrative business of drug retailing, mainly because operating margins here are higher. This is possibly in the face of slowdown in the pharma industry.
The Ahmedabad-based company has already set up two retail outlets, under the brand "Dial for Health," through a wholly owned subsidiary Dial for India in Mumbai on a pilot basis. It also plans to set up five more stores in the city by December this year. Apart from this, it plans to spread out to Delhi.
Initially plans are to open its outlets only in metro cities.
This makes it the first Indian pharma company to get into retail.
The company has already invested Rs 3 crore in infrastructure, and intends to spend another Rs 20 lakh on each store, which will service orders placed through the telephone and the Internet.
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SBI Caps, Gilts, AMC to become autonomous bodies
Mumbai--The State Bank of India has decided to make its subsidiaries-- SBI Capital Markets, SBI Gilts, SBI AMC and State Bank of Credit and Commerce International--
autonomous in that they will have independent chairmen and external executives at the senior management level at market-related salaries.
At present, the SBI chairman is the ex-officio chairperson of all the subsidiaries, including the associate banks. Though he does get involved in the day-to-day affairs of the subsidiaries but merely chairing the board meetings and keeping abreast of the board papers itself is a huge task keeping in mind that the bank has over a dozen subsidiaries. This may even go up with the bank planning to set up a separate arm for information technology.
SBI chairman Janki Ballabh said the bank chairman cannot have a focus if he has to be chairman of all the subsidiaries. We have been holding discussions on this issue. SBI’s role in the associate banks was not under review as they are governed by a separate Act, he said.
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Premium beer launch soon from S African brewery
Johannesburg—South African Breweries, SAB, has big plans for its Indian operations after it has taken over Mysore Breweries in a $ 17.6 million deal.
For starters it may launch the Castle Lager brand the leading beer brand in S. Africa, in India
After its first acquisition of Narang Brewery near Lucknow comes the MBL acquisition. It is believed that the two together will give SAB about 6 percent share of the Indian beer market.
Company sources said that Castle beer would be launched as a premium brand and would have to compete strongly with Mysore's leading brand Knock Out.
SAB is banking on its track record of producing quality beer at low cost to achieve its objectives in India.
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BPL-Batata may go public by end 2001
New Delhi—The BPL Tatas-Birla-AT&T combine may go public by the year-end.
Senior sources said the combined entity is contemplating an IPO by Christmas, which may be a combination of domestic and international offerings.
Sources said the merged entity would require around Rs 500 crore to Rs 700 crore for its expansion plans and cash will also be required for investments in new circles for which the group has bid together in the fourth round of bidding.
The combine has bid for Delhi, Chennai and Karnataka circles.
The merged entity has a subscriber base of around one million and its enterprise value is estimated at $2 billion. The debt component of the enterprise value in the merged entity is around $800 million-$900 million.
It is expected that BPL would have around 24 -25 per cent stake in the new company while the Tatas and Aditya Birla group around 17 per cent each, AT&T around 23-24 per cent while the rest will be with other financial investors including France Telecom and AIG amongst others.
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MRL decides to hive off tyre business
New Delhi—Modi Rubber (MRL) has decided to hive off its tyre business into a wholly owned subsidiary before offloading equity to German tyre company Continental as the latter wants the MRL board to be completely restructured as a pre-condition to consider acquiring equity in the ailing company.
The two Modi brothers, B K Modi and V K Modi, hold 24 per cent stake in MRL and have launched an open offer for another 35 per cent at Rs 90 per share. The offer closes on July 3.
B K Modi said MRL could offload up to 51 per cent equity to Continental but "nothing will be finalised till the two of us brothers succeed in acquiring over 50 per cent stake and restructure MRL's operations." He also said that the promoters were capable and willing to infuse fresh funds into the company, as they had done in the past.
He said that he did not accept the present UTI nominee Pandu Ranga Rao as chairman of the MRL board since "Sebi regulations do not allow an FI member to hold this post. The chairman should be an independent nominee, which is what the past chairman Bodhishwar Rai was.
Financial institutions hold 44 per cent stake in MRL whereas independent investor Purnendu Chatterjee is said to hold another 12-13 per cent.
As per the latest available balance sheet for 12 months ended September 2000, MRL went into the red with Rs 38.1 crore net loss, over a Rs 812.44 crore turnover from a Rs 8.83 crore net profit in the corresponding period of previous fiscal.
MRL's subsidiaries include Modistone, Superior Investment India and Spin Investment India.
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Reliance Petro leads in sales
New Delhi—Reliance Petroleum recorded the highest sales among all private companies at Rs 30,963 crore in the previous fiscal.
According to the latest data the old economy companies including the Tata and A V Birla flagship companies, Reliance Industries, Hindustan Lever, ITC, Telco, Larsen & Toubro, Tisco, Grasim, Mahindra & Mahindra and Bajaj Auto
together clocked sales worth Rs 1,15,000 crore in 2000-01.
RIL was a shade behind RPL despite an impressive 38 per cent growth in sales at Rs 28,008 crore last fiscal, though its net profit of Rs 2,646 crore was almost twice that of its group company.
The two Ambani group companies logged more than 50 per cent of aggregate sales turnover of top-10 companies.
Hindustan Lever was the only other company to cross the landmark sales figure of Rs 10,000 crore in the fiscal ended December 2000, closely followed by another FMCG major ITC with over Rs 8,800-crore sales.
Telco was, however, engrossed in the downturn of auto industry and increased its losses to over Rs 500 crore and dip in sales by about 9 per cent to Rs 8,096 crore.
Dismal performance of construction sector, however, failed to affect Larsen & Toubro, which posted positive growth in sales at Rs 7,825 crore.
Tata Steel, too, beat the recession in its sector to post over 12 per cent growth in sales at Rs 7,759 crore.
The two Tata companies outsmarted A V Birla's Grasim Industries, which increased its sales by 12 per cent to about Rs 4,840 crore.
The two other auto majors -- Mahindra and Bajaj Auto -- still managed to make it to the top-10 list despite posting negative sales growth in the last fiscal.
Mahindra's sales slipped by 1 per cent to Rs 4,294 crore, while Bajaj Auto posted lower sales at Rs 3,690 crore.
Except Telco, all the other nine companies posted positive profits.
None of the technology, media and telecom companies figure in the top-10 list, though many of them grew by over 50 per cent last fiscal.
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Visa to double card base by ’03; focuses on debit cards
Mumbai -- Visa International, the leader in the payment services industry in India aims to double the growth of credit cards by year 2003, and has also begun relying more on debit cards for growth.
While credit cards in the country have taken over seven years to reach its current base of 4 million cards, Visa’s debit cards base has touched the 500,000 mark in just 18 months.
Visa recently signed up with UTI Bank, the Standard Chartered Group, HSBC and BNP Paribas for issuing debit cards. Visa’s debit cards in India at present account for 20 per cent of all Visa card spends of $1bn (Rs 4,700 crore).

In credit cards Visa International is now focusing on three new areas — cellular, basic telecom and petroleum companies — for issuing co-branded credit cards.
Senior sources said the company has initiated talks with number of companies in these sectors for issuing co-branded cards
In addition to this; Visa is also negotiating with big retailer chains for co-branded cards.
With dominant market share of 56 per cent in credit card industry in the country, Visa has 23 member banks in India including foreign, private and nationalised banks with over 2.67 million cards.
Sources said Visa is also planning to launch "affinity-cards" in association with non-government organisations like Child Relief and You (CRY) and World-Wide Fund. Visa International has set an ambitious target to increase merchant establishment from 110,000 to over two lakhs in next two years and also doubling its Visa Electron sale terminal from existing 15000.
India is one of the fastest growing markets for Visa in the Asia-Pacific region. Apart from credit cards, Visa has established largest cash advance facility, with over 1,100 ATMs and 6,600 cash disbursements branches in 130 towns and cities in the country.
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Hutchison’s Mauritius arm seeks FIPB nod for 49 percent in Barakhamba
New Delhi--Hutchison Whampoa’s special purpose vehicle, AI Amin Investments which is based in Mauritius, has applied to the Foreign Investment Promotion Board for a 49 per cent equity stake in Barakhamba Sales and Services Pvt Ltd, for Rs 9.8 crore.
Barakhamba has been set up primarily with the intention of bidding for the fourth round of cellular licenses completed recently.
The total equity capital of the new floated company is around Rs 20 crore.
The remaining equity is held by Sterling Cellular which runs the Delhi cellular business in which the Essar group has 49 per cent equity with the rest being controlled by Hutchison.
Confirming the development Ashim Ghosh who heads the Hutchison business in India said: "We have formed a special purpose vehicle in Mauritius through which we will route the investments. The remaining portion of the equity will be through Sterling Cellular."
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IOC to invest Rs 5,850 cr in 2001-02
New Delhi—The Indian Oil Corporation (IOC) the public sector behemoth has planned a capital expenditure of Rs 5,850 crore during the current fiscal.
Out of the entire capital investment outlay for 2001-02, Rs 2485.95 crore would come from internal resources, while Rs 940 crore would be raised from market borrowings. Another Rs 1218.97 crore would be in the form of loans, the sources said.
In the period IOC will invest Rs 1,275 crore in the nine million tonnes Paradip Refinery Project, while Rs 840 crore would be invested in expanding the Panipat Refinery from six million tonnes to 12 million tonnes.
The low cost expansion of barauni refinery to six million tonnes and high speed diesel hydrotreater would cost another Rs 485 crore. Another Rs 109 crore would be invested in refinery schemes including quality improvement of high-speed diesel produced from Haldia, Gujarat and Mathura refinery.
Augmenting supply of additional crude to Gujarat-Mathura-Panipat pipeline would cost Rs 609.16 crore in 2001-02, while installation of additional crude handling facilities in west coast would entail expenditure of Rs 100 crore.
Construction of LPG bottling plants and setting up various marketing infrastructure throughout the country would cost Rs 653.60 crore during the current fiscal, sources said.
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