GMMF, Tata to brew coffee together
Bangalore-- The Rs 216-crore Tata Coffee and the over Rs 2,258-crore Gujarat Co-operative Milk Marketing Federation are planning to jointly launch an instant coffee brand aimed at the premium end of the market. The rationale for the synergy is that GCMMF has developed a very comprehensive national distribution network while Tata Coffee has the expertise in manufacturing and marketing coffee.
The plan is that GCMMF will source the instant coffee from Tata Coffee and distribute it through its network perceived as a key factor for the success of Amul brands of butter, milk powders, cheese, chocolates and ice cream. GCMMF operates an efficient distribution infrastructure, consisting of 46 sales-offices and catering to 3,000 distributors and five lakh retailers.

V Kurien, chairman GMMF said in order to leverage its distribution network while optimising market supervision expenditure, GCMMF had amalgamated its different distribution networks.
While the domestic coffee market is estimated at Rs 1,090 crore, the instant coffee segment is around Rs 453 crore — Rs 283 crore for chicory mix and Rs 170 crore for pure instant.
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FIs reject open offer of Modis
New Delhi—With the FIs deciding against subscribing to the open offer by brothers VK Modi and BK Modi for a 35 per cent stake in Modi Rubber, things may turn sourer for the Modis.
The open offer price is Rs 90 per share and the offer closes tomorrow. There was some relief for the Modi brothers today with the Bombay High Court asking the Sebi to reconsider its decision to debar MK Modi from selling his 4.52 per cent shares on the grounds that he was a part of the promoter group. This is unlikely though to fetch the Modi brothers their targeted 35 per cent share. While the brothers themselves have 24 per cent shares, the FIs control another 44 per cent, Purnendu Chatterjee of the Chatterjee Group 13-14 percent and sick Modi group companies like Modi Industries and Modi Spinning have another 4-5 per cent shares, which they cannot sell unless allowed by the BIFR. Thus, the floating stock of Modi Rubber, including the shares with MK Modi, would be around only 15 per cent.
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HLL most valuable; HDFC latest entrant in top 200 companies in Asia
Mumbai— According to the latest BusinessWeek ranking by market capitalisation of the top 200 emerging market companies, Hindustan Lever Ltd (HLL) has again topped the charts as India's most valuable company, followed by Reliance Industries and Wipro.
While no Indian company figures in top ten rank-- China Mobile (Hong Kong) tops the list, followed by Taiwan Semiconductors, Petrobras, Samsung Electronics and other Taiwanese and Chinese companies.
13 Indian companies figure in the latest top 200 list, one more than last year's dozen. The new entrant is housing finance institution HDFC at a lowly 184 rank. HDFC made it to the list this year because of a massive 40 per cent jump in its share price over the previous year.
While HLL clearly remains the most valuable Indian company with a market capitalisation of $9.23 billion, its rank has, however, tumbled from 15 to 22, following a 23 per cent fall in its share price.HLL was followed by Reliance Industries (market cap: $8.80 billion), which improved its ranking in the list from 38 to 23, and Wipro ($8.3 billion), which managed to improve its ranking from 30 to 27. Reliance Petroleum too moved up the charts, from last year's 78th rank to the current 57th rank (market cap $5.3 billion).
Indian companies such as ONGC, ITC, Indian Oil, State Bank of India, VSNL and MTNL also performed well, considering the fact that seven of them improved their rankings from a year ago. However, Infosys Technologies and HCL Technologies, which have suffered more than 40 per cent fall in their market values, lost out on last year's high rankings. Infosys, ranked 25 last year; was down to No. 58.Wipro had shed most of its high valuations much before May 31, 2000, which explains the comparatively lower fall in its share price.
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ITC recasts subsidiaries
Kolkata—ITC Ltd is planning to restructure its subsidiary companies. As part of this, it will wind up BFIL Securities, a subsidiary of ailing BFIL Finance Ltd, in turn a subsidiary of ITC Bhadrachalam Paperboards Ltd (ITC-BPL).
ITC holds 60.25 per cent of the paid-up equity of ITC-BPL and through it, 99.99 per cent of the equity of BFIL and BFIL Securities.
ITC-BPL’s total exposure to the two subsidiaries is Rs 72.24 crore. BFIL incurred a loss of Rs 6 crore in 2000-2001 and is now solely focused on recovery of dues from clients. It has recovered Rs 83.25 crore in four years, and used it to pay off debts of Rs 57.76 crore to banks and FIs and Rs 15.71 crore to repay fixed deposits. The accumulated deficit of BFIL was Rs 88.85 crore as on March 2001.
Other subsidiaries it is restructuring include ITC Infotech India Ltd (IIIL), the corporate entity under which the dispersed IT operations of ITC have been brought together. Some of the employees and assets of ITC’s information systems division has been transferred to IIIL, which has also bought out ITC’s total stake in ITC Infotech UK and ITC Infotech (USA) Inc.
ITC has also picked up 70 per cent of the equity of Landbase India Ltd (LIL) from International Travel House Ltd (ITHL). LIL came with eight subsidiary companies in tow. After buying out ITHL, ITC has merged the eight subsidiaries into LIL under order of the Delhi High Court in March 29, 2001, with the merger taking effect from April 2000. In consequence the companies were dissolved without being wound up.
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Citibank net up 41 percent
Mumbai--Citibank NA registered a 41 per cent increase in net profit at Rs 285 crore for the year ended March 31, 2001, from its Indian operations.
The bank's turnover rose by 21 per cent to Rs 2,272 crore.
Nanoo Pamnani, chief executive officer of Citibank India, while announcing the results said, "We continue to retain our competitive edge as the most profitable bank in the country, notwithstanding the consolidation that we are seeing in this segment."
Citibank’s turnover also rose by 21 per cent to Rs 2,272 crore while the asset size of the balance sheet, on March 31, 2001, stood at Rs 19,466 crore, which put the bank in the second slot among foreign banks in India.
While the deposits of the bank grew by 38 per cent to Rs 14,052 crore, advances increased by 40 per cent to Rs 9273 crore.
The bank's net interest income during the year stood at Rs 772 crore, up 20 per cent, while the non-fund based income went up by 35 per cent to Rs 522 crore. Operating expenses went up by 20 per cent to Rs 601 crore. The capital adequacy ratio of the bank increased from 10.62 per cent to 11.24 per cent, while the ratio of the net non-performing assets to net advances also went up from 0.70 per cent to 1.05 per cent.
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1,000 percent dividend from VSNL
New Delhi—Can a PSU can do this or maybe only a PSU can do this!
Videsh Sanchar Nigam wants to reward its existing shareholders by declaring a 1,000 per cent dividend which means a Rs 100 dividend will be paid on a Rs 10 share.
While this may not look too big, it basically means paying out Rs 2,850 crore in dividends this year, depleting half of the reserves of the company.
VSNL is currently sitting on huge reserves estimated at Rs 5,000 crores. Its equity base stands at 285 million shares.
The department of disinvestment overseeing the disinvestment process in VSNL would like it that this reserve remains untouched till disinvestment, failing which the valuation of the company would go down.

It’s because of this tussle that the beneficiary could be the shareholders.
The issue of what should be done with the reserves has been a vexatious issue, which has been deliberated at the inter-ministerial as well as bureaucratic level without arriving at any conclusion.
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Maruti, Hyundai sales up in June
New Delhi—India’s largest carmaker, Maruti Udyog and Korean car maker Hyundai Motor India, which is now the second largest car maker in India, have posted very good sales figures in June 2001.
Maruti posted a 64 per cent rise in domestic sales at 26,092 units in June
against 15,908 units sold in the same month last year.
At the same time Hyundai said its June sales jumped 39 per cent to 8,502 units from 6,116 in the same month last year.

Sales of the entry model Maruti 800, Omni van, Zen, Wagon R, and Alto stood at 10,860 units, 4,236 units, 5,975 units, 1,931 units, 2,192 units, respectively, in June, 2001.
It sold 812 units of the mid-size Esteem, while sales of the premium mid-size sedan Baleno touched 86 units during June.
Maruti's cumulative sales during the first three months of the current fiscal rose 17 per cent over the sales in the same period the previous year.
The company claimed a 60 per cent marketshare during April-June 2001, up from 50 per cent in the same period last year.
Hyundai Motor India said in a statement it sold 23,744 units in the April-June quarter of the current year to March 2002, up 13.6 per cent from the year-ago period.
The company sold 85,448 cars in 2000, including 68,606 Santros and 16,842 mid-size Accents. These include the export of 3,823 cars.
India's overall car sales have fallen 6 per cent in April-May on the heels of a 7.5 per cent drop in the previous year to March.
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ETC Networks ties up with TV Asia of US
Mumbai--ETC Networks has tied up with TV Asia, a leading Hindi channel in the US, to supply software. Negotiations are also on with companies in UK, and Canada for similar arrangements with other companies.
Plans for these tie-ups are on even as the company posted a profit of Rs 2.43 crore on a turnover of Rs 53.82 crore in the year ended March 31, 2000-01.
Commenting on the second year results of the company, Jagjit Singh Kohli, managing director of ETC Networks, said, "We remain committed in our determination to emerge as one of the leading players in the satellite television industry in the country and maximize shareholders wealth."

ETC Networks Ltd is a Bombay Stock Exchange listed company and owns etc Music Channel and etc Channel Punjabi.
By virtue of not being a pay channel etc Channel has achieved tremendous penetration for both etc and etc Channel Punjabi and is very shortly going to convert both the channels into the digital mode. This will not only translate into better quality of pictures but also reduce costs by 30 per cent, Kohli added.
ETC Networks Ltd is the first channel to secure the permission to build a commercial teleport in Mumbai. Once the teleport is commissioned, it will reduce the operating costs of the channel and also provide additional revenue streams for the company by offering uplinking services to other private channels and Internet service providers.
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Nestle to spread Pure Life
Mumbai—FMCG major Nestle India is looking out for acquisitions of bottling plants for its Pure Life bottled water as part of its expansion plans.
Reportedly it is in advanced stages of talks with various bottled water companies. While Mumbai-based Atco Healthcare, manufacturers of Brilliant mineral water, seems to be a strong possibility for a tie-up, there are reports that Nestle is also in talks with Ramesh Chauhan of Bisleri for picking up a stake in his company.
Analysts tracking the sector say that in case Nestle picks up a stake in Bisleri, it would become meaningless for it to retain the interest it has evinced in Atco Healthcare.
Nestle India's spokesperson however denied any discussions with Atco.
Nestle launched its Pure Life brand of bottled water in February this year. Compared with other players in the segment, the company has kept a low profile.
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Nestle to focus more on Maggi brand
New Delhi-- Nestle India has more or less has had a focused approach to its brand of coffee, Nescafe for the past three to four years with the brand receiving a majority of advertising and marketing support.
The entire coffee range of Nestle, which is part of the beverages segment, is marketed under the Nescafe brand with about four to five products in the portfolio like Nescafe Select and Sunrise.
On the other hand there is the Maggi brand, which comes under the foods segment and under the Maggi portfolio there are products like Maggi 2-minute noodles, Maggi ketchup, Maggi cubes, Maggi pickles and Maggi soupwith five flavours such as rich tomato, rich chicken, rich mushroom, mixed vegetables and chicken sweet corn, the flavour cubes come in prawn, vegetarian and chicken flavours.
Says Carlo Donati, Nestle India chairman and managing director, "The focussed approach on Nescafe, which was the company’s flagship brand over the last few years has yielded rich dividends and we plan to replicate the same in case of Maggi as well.’’
Though it was not clear what is in store for Maggi he said the company planned to enter new segments under the Maggi brand.
It is already in the process of strengthening its flavours within the instant noodles and ketchup segments and has launched a new tomato flavour within the 2-minute noodles segment and a tamarind variant in the ketchup segment.
It has meanwhile, discontinued all the flavours in the 2-minute noodles segment except the popular `masala’ flavour.
The company has once again emerged as the leader in the instant noodles category after it lost its pre-eminence with a failed attempt to change the flavour of its top selling masala flavour.
The new focus for the Maggi brand would provide the much needed impetus for the culinary segment, which has lagged behind some of the others.
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VRS for Balco executives
Mumbai—At long last Sterlite Industries has started planning to trim the flab in its recent acquisition, Bharat Aluminium Company (Balco) and will introduce a voluntary retirement scheme (VRS) for the executives of Balco.
Say senior group executives that as per the divestment clause, the new management cannot retrench the workers affiliated to the recognised Unions and thus the executive rank that does not fall under this category would be soon offered a VRS.
Sterlite Industries is at present conducting a feasibility study on the merits of hiving off its aluminium business into a separate company, officials said. On the other hand, the company has mandated PricewaterhouseCoopers to handle the post divestment processes. This involves ensuring that the post-divestment issues are carried out as per the conditions laid out in the memorandum of understanding and the inking of further agreements in this regard.
Sterlite plans to infuse around Rs 2,000 crore in Balco to rejuvenate it and is expected to spend Rs 350 crore to restart production at the Balco facility at Korba in Chhattisgarh. This is expected to lead to a fall in turnover, as it would take about three more months to get the plant operating at full capacity. The smelter at Balco began facing technical problems earlier this year due to a strike by Balco workers who were opposed to the divestment process.
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Cipla for huge gain from omeprazole supply deal
Mumbai--Cipla, the drugs major is expected to reap huge gains, pegged at $ 15-30 m by analysts, next year once its American alliance partner, Andrx Corporation, launches generic omeprazole, used in Astra Zeneca’s blockbuster drug Prilosec.
Prilosec (R) is used for the treatment of duodenal/gastric ulcers and gastro-esophageal reflux disease. Cipla is expected to supply bulk omeprazole which goes into Prilosec, to Andrx.
Astra had earlier reportedly taken Andrx and Cipla to a US court on alleged patent infringement.
A recent report by Kotak suggests that there is no longer any uncertainty on the timing of the Prilosec patent infringement trial against Andrx by Astra Zeneca.
Based on this, Cipla may generate revenues from the last quarter of fiscal 2002 and the report pegs the company’s omeprazole exports at $30 million.
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Essar out of power for now
New Delhi--Essar will not make any fresh investments in the power sector and will also put on hold its proposed 250 mw captive power plant of Essar Steel.
Senior company officials said, "Whereas the Gujarat government has already given an in-principle approval for setting up a captive power plant for Essar Steel, no new investments will be made by the company in the next two years."
Sources said financial institutions (FIs), with a large stake in Essar Steel and Essar Power by way of loans, are also reluctant to permit the companies from making new investments in power projects. A senior FI official said that Essar group has assured the institutions that it will not make fresh investments till it completes the restructuring and improves the financial position of the company.
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