RCoVL plans Rs5000 crore capex
Mumbai: Anil Ambani controlled Reliance Communications Ventures (RCoVL) plans to invest Rs 5,000 crore every year for the next three years, which will be funded through a mix of debt and internal accruals.

The company will use the Rs 5,000 crore capex for network expansion of its CDMA business to over 4,500 towns from the present 2,000 towns, expansion of its GSM operations, and for roping in both enterprise and retail customers for its broadband business.

RCoVL's global business comprises the recently acquired FLAG and to-be-commissioned FALCON submarine cable systems, banking on which the group is also looking at becoming a carrier's carrier.

The company's wireless activities include its GSM business in the north-east, and fixed wireless and CDMA services across the country. The telecom business has a total subscriber base of 18.3 million.

Reliance Communications will be the holding company for Reliance Infocomm, Reliance Telecom and Flag Telecom and Reliance Communication Infrastructure.
ADAG also recently acquired insurance firm AMP Sanmar for about Rs 100 crore and has set aside a capital expenditure of Rs 1,000 crore in the insurance business.
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Gujarat Maritime Board sends show cause to P&O
New Delhi: Even though an order from the shipping ministry has not yet come, the Gujarat Maritime Board which regulates ports in Gujarat has sent a show-cause notice to the management of P&O Ports India asking why its concession agreement for the Mundra International Container Terminal (MICTL) in Gujarat should not be cancelled. MICTL, earlier owned by Adani Ports, is now fully owned by the UK-based container company.

Sources said P&O Ports, which offloaded a stake to Dubai Ports World, should have taken prior consent of the central and state government for equity dilution in the company and transfer of assets and property. As per the original letter of clearance, dated May 10, '03, P&O Ports was told that it has to maintain a minimum of 51 per cent of the paid-up capital of MICTL for a minimum period of seven years from the date of acquisition. It was also mandated that the company would have to take prior consent of GMB for any dilution of stake, subsequently.
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Actis cancels Nutrine deal
Bangalore: Private equity fund, Actis, which entered into an understanding with the BV Reddy family to acquire confectionery company Nutrine for Rs275/ 300 crore, has decided to cancel the deal as it could not find a strategic partner to run the operations, said informed sources.

The deal would have been the first private equity acquisition in the FMCG space, and its falling through is likely to put private equity firms on alert regarding the perils of management takeovers in India, sources added.

This development comes at a time when another major investment of Actis in Punjab Tractors is embroiled in a boardroom battle with the existing management led by Yash Mahajan.
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LIC hikes stake in BAL
Mumbai: Leading Indian insurance company LIC has hiked its stake in Bajaj Auto (BAL) to about 6 per cent from the previous 3.8 per cent. LIC's stake in BAL is now valued at over Rs153 crore.

As of December 2005, the Bajajs family held a 29.79 per cent stake in the company, while foreign institutional investors owned 19.84 per cent, banks and insurance companies 5.35 per cent, mutual funds and UTI 2.14 per cent, private corporate bodies 13.44 per cent, public 26.56 per cent and GD Rs2.28 per cent.

Analysts said that LIC's move is guided by the recent growth opportunities in the two-wheeler and automobile industries.

The launch of new models in the motorcycle and ungeared scooter segments and a rebound in the three-wheeler market is expected to fuel BAL's volume and revenue growth. BAL witnessed a 31 per cent jump in motorcycle sales in the April-January 2006 period.
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Adobe plans hike in investments in India over 5 years
New Delhi: Adobe Systems is upbeat on India and has big plans for the country. In his first visit to India after acquiring Macromedia for $34billion in December 2005,
Bruce Chizen, CEO of Adobe Systems has announced a slew of new initiatives for India.

The company would be investing over $200 million in the country over the next five years and will increase its India headcount to 900, up from the current 650, by the end of the year. India accounts for 12 per cent of Adobe's total global employee base, and a fourth of its global engineering strength.
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Bombay Rayon plans Rs85 crore expansion
Mumbai: Garment maker Bombay Rayon Fashions is planning to spend Rs85 crore ($19.2 million) to expand capacity.

The company's board has approved the acquisition of a garment unit with a capacity to produce 0.45 million pieces a year for Rs2.8 crore.
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ADAG's market cap at Rs72,059 crore
Mumbai: The market capitalisation of the Anil Dhirubhai Ambani Group (ADAG) stood at Rs72,059 crore on Monday with the listing of Reliance Communication Ventures (RCoVL). The market capitalisation of parent RIL and the rest of the Mukesh Ambani companies adds up to Rs1,08,707 crore.

The current market capitalisation of the four holding companies of ADAG, spun off from Reliance Industries, is Rs46,929 crore, almost 60 per cent higher than the valuation immediately after the split of the Reliance shares.

The valuation of the entire ADA group also includes Reliance Energy, Reliance Capital and Adlabs Films and comes to Rs72,000 crore.

However, there is a duplication in the total group market-cap as Capital Ventures and Energy Ventures derive their value from the shares they hold in Reliance Capital and Reliance Energy.

RIL's share price closed at Rs928.5 on January 17, the last day of trading for the 'pre-split' Reliance. The closing price on the next day was Rs 693.7 — the market had valued the four holding companies at a total of Rs234.8.
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RIL employees get company offer to shift to Airtel
Mumbai: Reliance Industries controlled by Mukesh Ambani is learnt to have offered all its employees, the option to replace all Reliance Infocomm mobiles with subscriptions from Bharti Tele-Ventures, which operates services under the Airtel brand.

The Reliance Industry offer comes into effect from March 1, is likely to give Bharti a potential subscriber base of about 1,00,000 subscribers, which is the total employee base of RIL across all group companies.

This move is similar to Reliance Industries' initiative in December when it had replaced some landline phones at its corporate headquarters in Mumbai with MTNL's landlines.
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Trai to send notices to telcos on quality of service
New Delhi: The Telecom Regulatory Authority of India (Trai) plans to issue notices to almost all mobile operators on Tuesday for poor quality of mobile services. Trai is believed to have said the current situation is "scandalous".

The main reason behind network congestion is shortage of points of interconnect between service providers as they have been unable to arrive at an agreement between themselves.

According to Trai's latest quality of services (QoS) report issued last November, 404 points of interconnection are less than the benchmark of less than 0.5 per cent congestion. At 201 points the level of congestion was more than 10 per cent which is twenty times worse than the benchmark. Similarly, at 70 points the level of congestion was more than 40 per cent.

Cities like Patna, Agra, Lucknow, Jaipur, Chennai and Meerut face the highest level of congestion.

However Trai is powerless in resolving the issue since the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has held that interconnection agreements should be negotiated between the service providers and in cases of disputes they must be brought before TDSAT.

Observers said it would be interesting to note how the operators react to the Trai notice.
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Number portability soon
The Telecom Regulatory Authority of India (Trai) will announce its recommendations on number portability on Wednesday, official sources said. The recommendations will be submitted to the Department of Telecom (DoT) whose ratification is a must before number portability becomes a reality. Number portability allows subscribers to switch service providers without changing their phone number. It is in practice in countries like Hong Kong, UK, Australia, US, Germany and France.
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Essar Steel enters into JV in Vietnam
Mumbai: Essar Steel is entering into a joint venture with Vietnam Steel Corporation to build a hot-rolled steel mill in Vietnam with an investment of $300-million. The mill would be Vietnam's first to produce hot-rolled steel and would have a designed capacity of two million tonne per year.

The mill would be built in the southern province of Ba Ria-Vung Tau and its construction would take about two years to be complete according to media reports in Vietnam. Essar Steel officials were unavailable for comments.

The plant incorporates the latest 6-Hi Hitachi mill from Japan and hydrogen annealing from Ebner, Austria. The plant includes a push-pull pickling line with an acid regeneration plant, electrolytic cleaning line, recoiling line, shearing and slitting line.

Vietnam Steel is the country's largest steel producer and had started a $430 million project last year to mine about 5 million tonne of iron ore a year. The project is expected to help in its new venture with the Indian company.
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Piramyd Retail to be split into two
Mumbai: Piramal Group promoted retail venture Piramyd Retail is planning to recast its management structure.

Expected to be completed by March end the restructuring would separate the lifestyle retailing, food, home and personal care (FHPC) retail into two independent business units — Piramyd Megastore and TruMart — each having its own business heads.

Bipin Gurnani, at present chief operating officer (COO) of Piramyd Retail, will soon take over as head of the lifestyle business, while the board is in the process of selecting a head for TruMart.

At the time of the IPO in November last year, the company had said that it was planning 13 Megastores and 61 TruMarts by 2008.

The company plans to open 35 TruMarts in the next 15 months and about four-five Megastores every year. Of the 35 TruMarts, about 12-15 would be the large format stores of 7,000-8,000 square feet while the rest would be the TruMart Daily's of 1,500-2,000 square feet each. Piramal added that the new Megastores coming up were all in the range of 60,000-70,000 square feet.

For the Megastores, the company is focussing on the tier two cities in the north and the west like Jaipur, Ludhiana and Lucknow and is in the process of finalising its first store in Bangalore.

The reorganization comes after the resignation of Krish Iyer, the chief executive officer (CEO) last month.
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Nestle December quarter net falls 3 per cent to Rs74.16 crore
New Delhi: FMCG major Nestle India has reported 3 per cent drop in net profit to Rs74.16 crore for the quarter ended December 31, 2005 against Rs76.49 crore for the quarter ended December 31, 2004, even as its total income rose 9 per cent during the quarter.

Total income net of excise increased to Rs628.54 crore for the quarter ended December 2005 from Rs576.86 crore for the previous corresponding quarter.

For the full year ended December 31, 2005, the company's net profit grew 22.88 per cent to Rs309.57 crore, against Rs251.92 crore. Total income net of excise rose 11.53 per cent to Rs2,500.64 crore from Rs2242.03 crore last year.

The company's operating profit for the year, as a percentage of net sales, increased to 21.1 per cent in 2005 versus 20.2 per cent in 2004. Operating profit for the last quarter, however, slipped to 19.0 per cent from 23.3 per cent in 2004.

The Nestle board has recommended a final dividend of Rs2 per equity share.
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Tatas to reveal idea stake today
New Delhi: The Tata group is likely to disclose the details of its shareholding pattern in Idea Cellular on Tuesday. The department of telecommunications recently asked the group to reveal its shareholding in Tata Industries, which has a stake in Idea, and other telecom companies — Tata Teleservises and Tata Teleservices Maharashtra.

The move follows allegations by the Birlas that the Tatas have not complied with the licence conditions and should be asked to exit from Idea, where they hold over 48 per cent equity.

Earlier, the AV Birla group had urged the government to act fast on its plea, saying non-compliance by the Tatas was "grave, wide ranging and comprehensive."
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