Tech rally pulls up Sensex
MumbaiThe stockmarkets opened on a positive note this morning after a rally in technology scrips. FMCG stocks and second-rung media counters though, remained weak.
In morning trading at 10:45 am, the Sensex was up 0.58 per cent at 3306.82. The Nifty, shadowing the Sensex, rose 0.39 per cent at 1067.15.
In ICE stocks barring CMC, all others showed good gains with the major gainers being Infosys, Wipro, Satyam and Global Tele while Balaji and Mukta were the major losers in the segment.
Aluminium scrips are weak over concerns regarding the falling prices in the international markets and a weak dollar. Hindalco, Nalco and Indal are down marginally.
The other major losers are Telco, Hero Honda, BSES, Cipla, Novartis and Hindalco.
Meanwhile in the US, with Goldman Sachs upgrading chip makers like Intel and Analog Devices, the Nasdaq composite reversed its six-session losing streak yesterday. Intel gained 25.78 points to 1,982.25 but the Dow slipped less than a point (0.34) to 10,415.91.
Indian floats, too, were divergent.
Infosysy declined 3.3 percent ($2.10) to $61.50. Wipro, Satyam and Silverline also closed in the red.
Dr. Reddy shed 1.68 percent ($0.41) to $23.99.
The winners were ICICI, ICICI Bank, HDFC Bank and VSNL.
While ICICI moved up 0.72 percent ($0.05) to $7, ICICI Bank was up 1.56 percent ($0.08) to $5.20.
VSNL and HDFC Bank also closed with marginal gains.
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Bajoria ups stake Bombay Dyeing again
KolkataBajoria is at it again. Bajorias associate company Mega Resources Limited has informed Bombay Dyeing, that the formers holding along with other associates stood at 5.14 per cent of the total paid-up capital of Bombay Dyeing.
Mr Bajorias company claimed it held 4.93 per cent or 2,023,615 shares and had acquired 86,475 equity shares through market purchases on July 31, which increased their total holding to 2,110,090 shares or 5.14 per cent of the total paid up capital of Bombay Dyeing.
Following this, Bombay Dyeing in a letter to stock exchanges said that there appeared to be discrepancies in the recent disclosure made by Mega Resources in both the number and percentage of total share capital held by the latter as well as in the names of the persons identified as acquirer in the disclosure made to them in the letter given on August 1 last year.
Mr Bajorias letter claimed last year, Mega Stocks Ltd held 1,059,000 (2.58 per cent), The Hooghly Mills Co. Ltd 674,615 (1.65 per cent), IndusInd Bank 2.9 lakh (0.71 per cent) while 2,650 (0.01 per cent) were with the CSE and 2,000 shares with Kotak Securities Limited.
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Telco cuts rights issue size to Rs 978 crore
Mumbai--The board of Tata Engineering today decided to cut the size of the company's proposed rights issue by about 30 per cent, and is now looking at raising up to a maximum of Rs 978.65 crore. The company is planning to come out with the issue in September this year.Earlier the company was planning to raise between Rs 1,228 crore and Rs 1,382 crore through the issue (subject to future conversion of attached warrants), to fund new product development and provide for prepayment of high cost loans.
Under the scheme finalised today, shareholders will get one FCD for every four shares held, and one NCD for every ten shares.
Since the issue was planned, Tata Engineering has already raised Rs 145 crore by selling its investments in UTI and another Rs 85 crore from the sale of its stake in Mercedez Benz India and plans to sell stake in some other subsidiaries as well said a top source in the company.
The FCDs would have a face value of Rs 65, and would compulsorily be converted into one ordinary share of Rs 10 each on March 31, 2002 at a premium of Rs 55 per share. They would carry an interest of 7 per cent per annum on its face value. Every five FCDs would have one detachable and tradeable equity warrant, which can be exercised and converted into one ordinary share of Rs 10 each at a price of Rs 120 after 18 months from the date of allotment till September 30, 2004.
The NCDs would have a face value of Rs 100, and would carry an interest of 11 per cent per annum. The NCD could be redeemed in three installments of Rs 30, Rs 35 and Rs 35 each at the end of the fourth, fifth and the sixth year respectively from the date of allotment. It would also have a put and call option at the end of 24 months from the date of allotment.
Every two NCDs would have one detachable and tradeable equity warrant which can be exercised and converted into one ordinary share of Rs 10 each at a price of Rs 120 after 18 months from the date of allotment till September 30, 2004.
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Sebi wants strict vigilance on corporates floating NBFCs
Mumbai--The Securities and Exchange Board of India (Sebi) says there should be strict vigilance on corporates setting up large number of subsidiaries as non-banking finance company (NBFC) to buy shares including their own.
In a report submitted to the Joint Parliamentary Committee (JPC), Sebi says that the Reserve Bank of India (RBI) jointly with the Department of Company Affairs should look into the matter of corporates dealing in shares through their NBFCs, so as to tighten the monitoring.
At the same time Sebi has also clarified that such investments and treasury operations of companies in shares through various investment companies, which may be subsidiaries or associates of these companies, do not fall under its purview.
At present, while the NBFC operations are regulated by RBI, companies and their investments come under the purview of the Companies Act 1956. In case any such investment violating the provisions of the Sebi Act or regulations related to insider trading, market manipulation and unfair trade practices, they will be dealt by Sebi.
Sebi in its preliminary report had mentioned that the HFCL group has given Rs 425 crore.
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Tata Fin to reduce liabilities
Mumbai-- Tata Finance (TFL) is planning to reduce its outstanding public deposits, and has already stopped renewing deposits, which have reached maturity.
In recent meetings with the Reserve Bank of India, Tata Finance has said it will limit the size of the total fixed deposit liability.
TFLs outstanding public deposit is close to Rs 900 crore. Tata Group spokesman confirmed that the finance company was not extending deposits, which were coming up for renewal though he declined to comment as to what level TFL would scale down its deposits. The companys public deposits have come down from Rs 1,200 crore about a year ago.
Unlike the case of other troubled NBFCs, this time the Reserve Bank of India has not clamped down on mobilisation of public deposits primarily because of the backing of the Tata Group.
The apex bank has received certain commitments from the company that the deposit liability will be kept at a manageable limit.
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UTI may rope in 5 outside fund managers
Mumbai--The Unit Trust of India (UTI) may consider paying salaries of as much as Rs 30 crore each to around five fund managers outside the mutual fund behemoth. This was a suggestion made by the Indira Gandhi Institute of Development Research (IGIDR) professor Ajay Shah and endorsed by UTI chairman M Damodaran at a public meeting on UTI and Investors organised by the Forum of Free Enterprise. He added that this would help test their performance and set a benchmark for the UTIs own fund managers.
Earlier Mr Damodaran had indicated that UTI would consider roping in outside fund managers to improve the poor performance of UTI.

Meanwhile, the redemptions of US-64 till date from August 1, is put at Rs 63 crore and UTI is expected to declare its NAV two months ahead of the January deadline, Mr Damodaran said.
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Tata Chemicals buy back
Mumbai--Tata Chemicals board of directors has taken a decision to buyback up to 15 per cent of its share capital at a price of up to Rs 60 per share.
The buyback will involve a maximum cash outflow of Rs 162.58 crore, while the total subscribed capital comprises 18,06,38,651 shares of Rs 10 each.
The maximum buyback price recommended by the board is at 45 per cent premium on the aforesaid price.
Further, the board has recommended the adoption of the open market route for the buyback through the stock exchanges.
However, the companys board will decide the implementation of the buyback scheme at an appropriate time, after the requisite approvals and taking into account other relevant factors.
The companys share closed at Rs 41.40 on Monday on the Stock Exchange, Mumbai (BSE).
The company has posted a net profit of Rs 13.19 crore for the quarter ended June 2001 as compared to Rs 3.76 crore for the corresponding quarter last year.
Net sales declined to Rs 291.42 crore from Rs 326.55 crore last year. However, the figures are not comparable with the corresponding quarter since the merger of Sabras Investment and Trading Company Ltd was pending due to legal formalities.
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Arvind Mills lenders to pull out
Mumbai--Four major lenders to textile major Arvind Mills, including United Bank of Switzerland (UBS), Bank of Nova Scotia, Dai-Ichi Kangyo Bank, and Commerzbank are pulling out of the financing consortium.
These banks had an exposure totalling Rs 850 crore but are now willing to sell off their loans at a discount of up to 52 per cent.
"They are taking a hit of 52 per cent on the principal amout of loans extended to Arvind Mills besides the interest payment of Rs 50 crore," said chief financial officer Arvind Mills, Jayesh Shah.
He added that another eighty-five global lenders have agreed to put in an additional Rs 120 crore to restructure the debt of the beleaguered company.
Among these, ICICI, Exim Bank, State Bank of India, IDBI, ABN Amro, Deutsche Bank and Standard Chartered Bank among others will invest an additional Rs 75 crore, he said.
These lenders have already extended the loan period to an average of 10 years and cut the interest rate.
The textile major also has a Rs 75-crore rights issue in the pipeline and awaits clearance from the Securities and Exchange Board of India. The balance funding will come through the super priority debt, where banks and institutions have agreed to cede their first charge on the companys receivables in order to service this fresh debt.
Domestic and foreign lenders opting to extend the loan period have gone in for a haircut in the debt restructuring scheme, agreeing to reduce the interest rate from an average 14 per cent to 10 per cent.
Arvind Mills approached the Ahmedabad High Court with a proposal to restructure its debt, and "go in for a one-time settlement to buy-out upto Rs 750 crore of its Rs 2,200 crore debt".
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New norms for co-op bank on ATMs
MumbaiThe Reserve Bank has stipulated that cooperative banks will have to meet prudential norms prescribed by the Reserve Bank before they install onsite or offsite automated teller machines.
The apex bank has listed three criteria: non-performing assets, capital adequacy ratio and profit record for grant of permission to install ATMs.
As per the new norms, banks should restrict NPAs to below 10 per cent of net advances and also have a three-year track record of earning operating profits.
Cooperative banks will be required to meet the minimum capital adequacy ratio. RBI has stipulated that scheduled cooperative banks should have CAR of 8 per cent and 6 per cent for non-scheduled cooperative banks by March 02.
It has also said that only security guards should be posted at offsite ATMs. "No person other than the security guard should be posted at such a non-branch or standalone ATM centre," RBI has said.
This move is aimed at preventing banks from treating offsite ATMs as virtual extension counters of their banks by posting bank officials for opening deposit accounts at the site.
RBI has also said all cooperative banks will have to take prior approval from the central bank before installing an ATM. The RBI has also said that inter-account transfer from an offsite ATM will have to be restricted to accounts of the same customer at the same centre.
The other services that can be provided by cooperative banks through offsite ATMs include PIN (Personal Identification Number) changes, requisition for cheque books, statement of accounts and balance inquiries. RBI has also allowed cooperative banks to connect their ATM to the IBA promoted Swadhan network.
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Amfi wants compulsory certification for new agents
Mumbai-The Association of Mutual Funds in India (Amfi) has approached the Securities and Exchange Board of India (Sebi) to make it mandatory for new persons being recruited as agents and distributors of mutual funds products to pass the certification program conducted by it. At present, mutual funds products are being offered/sold to investors by all and sundry, including agents and distributors of mutual funds.
Amfi feels that given the growing complexities of investing in the stock market through mutual funds, it would be better for agents and distributors to undergo a certification program before taking up the fund product-selling exercise.

In a recent meeting with Sebi on July 27, the Amfi board had a detailed discussion with Sebi chairman DR Mehta, executive director RM Joshi and other Sebi officials on several matters concerning the mutual fund industry wherein Amfi requested Sebi to make it mandatory with immediate effect atleast for new people to be recruited as distributors and agents to pass the Amfi certification program.
Amfi chairman AP Kurien said: "We have urged Sebi on making the Amfi certification course mandatory, to which Sebi had shown a positive response. Amfi has been pushing to make passing the certification program mandatory for all distributors and agents."
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