Daily Excelsior...Business

James Rubin

WASHINGTON, Mar 1: The United States has said it is studying India’s budget proposal to hike defence spending by 13,000 crores in the 2000-01 budget. Noting that the 28.2 per cent hike had been largely attributed by India on the Kargil conflict in May last year, State Department Spokesman James Rubin said yesterday......more

Finance Minister Yashwant Sinha

Sinha’s optimism echoed
by the capital market

NEW DELHI, Feb 1: Defending the hike in dividend tax.....more

RIL announces steep
hike in produce prices

MUMBAI, Mar 1: Reliance Industries Limited (RIL) today....more

CRISIL upgrades rating
status, outlook for
CMTS in India

MUMBAI, Mar 1: The Credit Rating Information Services of India Limited ....more

Santro sales drop,
Accent inches up

NEW DELHI, Mar 1: Introduction of Wagon-R by Maruti Udyog Limited (MUL) and increasing demand for Zen saw Hyundai Motor India Limited’s (HMIL) vehicle sales lose steam in February to record a 13.5 per cent drop in sales over the previous month.........more

Tanishq opens
exclusive jewellery
showroom in Jammu

Excelsior Correspondent

JAMMU, Mar 1: Tanishq, one of the biggest branded jewellery players in the country, synonymous with superior.....more

New Nestle MUNCH
arrives in Delhi At
Rs 5/- it's a steal.....

Having stormed Bangalore, Chennai and Mumbai with successful launches over the last 6 months in the South and the West........more

Idlx Tech partners of
US to set up 4
development centres

CHENNAI, Mar 1: Idlx technology partners of the United States is planning to set up four development centres in the country..........more

Sinha’s optimism echoed by the capital market

NEW DELHI, Feb 1: Defending the hike in dividend tax in his first budget of this millennium, Finance Minister Yashwant Sinha today said that the stock market would bound once it properly understands the financial implications of the budget.

In fact, the sentiment started looking up in the morning session today. The sensex was up around 113 points by 1230 hrs, against a record crash of 315 points yesterday.

In a way the market seemed to be more hopeful than mr sinha himself and did not wait even for "few days" for a rally.

"Various benefits given in the budget would take some time to sink in. Next few days, stock market is bound to bounce back, " Mr Sinha said at a function organised by FICCI here.

A cent per cent increase in dividend tax to 20 per cent might have sent a wrong signal to the capital market yesterday, but it should not be forgotten that it has zoomed up by 70 per cent in the last 12 months, he added.

He said the increase in dividend tax will affect only affluent section of investors as mainly those who are in the 30 per cent income tax bracket are investing in the equity market.

"Any way every income should be treated as income and there is no reason why should dividend income be looked at differently. The problem is that each one of us wants to be special. That mind-set has to go".

A hike in dividend tax is not such a calamity as is being made out to be, he said. "Afterall, corporates know how to pass the tax on to shareholders," he quipped.

Mr Sinha also justified the procedure of taxing investors of employment stock option scheme at the time of purchase of shares, stating that levy at the time of disposal of such scrips would make matters complicated.

The Finance Minister said if tax is levied at the time of share disposal, it will create a problem of putting a levy on transfer of shares as gift tax no longer exists.

Twenty per cent tax on export earnings was also a move in the right direction as domestic investors also face similar competition as exporters in the changing economic scenario. As such exporters should also be brought under the tax net, the Finance Minister added.

These measures, alongwith rising fiscal deficit, created tremors at the capital market yesterday. Even other measures like increase in the FIIs’ investment cap to 40 per cent from 30 per cent and liberalisation of acquisition norms abroad for knowledge based industries could not lift the sentiment. (UNI)

CRISIL upgrades rating status, outlook for CMTS in India

MUMBAI, Mar 1: The Credit Rating Information Services of India Limited (CRISIL) has upgraded its rating status and outlook for the Cellular Mobile Telephony Services (CMTS) in India following reduction of duties from 25 to 5 per cent on cellular phones in the Union Budget proposals.

This is expected to further boost the growth in the cellular subscriber base particularly in metros, says the rating agency. With the reduction in interest rates, CRISIL also expects funding of acquisitions and capital expenditure plans to be done primarily by domestic debt.

While the structural and regulatory changes in the CMTS sector improved the business prospects, the impact of these changes on the financial profile of CMTS operators would vary significantly. Recovery of finances is expected to be faster for metro operators while future financial performance of various state circles would be mixed depending on the capital structure employed by the operators and the difference in parameters related to income and demographic profile.

The introduction of the Calling Party Pays (CPP) regime would lead to large capital expenditure requirements and means of funding this expenditure would be critical to the future financial performance of the operators, CRISIL observed.

CRISIL’s experience in risk assessment and risk calibration in this sector highlights the need to consider metro (Chennai, Calcutta, Delhi and Mumbai) and state licenses (like up East, Haryana, Maharashtra, Tamil Nadu etc) as two entirely separate baskets of CMTS projects.

CRISIL considers that, as compared to state-level CMTS operators, the metro CMTS operators would benefit from a more concentrated cellular market, higher penetration levels of cellular services and a relatively higher degree of flexibility in their capital expenditure and network roll-out schedule. Thus, majority of metro operators are expected to demonstrate relatively faster recovery than state circle operators.

The changes in telecom sector have resulted in a 24 per cent increase in the cellular subscriber base in the four month period, July-October 1999 compared to the growth of 23 per cent for the 12 month period, July 1998-June 1999. The Average Revenues Per User (ARPU) have also shown an improvement in the recent past, primarily due to increase in rentals to Rs 600 from Rs 156 per month.

The buoyant growth in subscriber base has been encouraged by the introduction of the prepaid card, which has significantly reduced the minimum subscription charges. The continuous reduction in cellular handset prices has also contributed to the buoyancy in subscriber base by lowering the entry barriers. CRISIL expects these trends to continue in the short term.

The financial profile of metro operators is expected to improve significantly in the medium term with growth in subscriber base, increase in air time usage and rise in penetration of value added services. However, majority of operators are expected to continue to show losses in the near future, due to large interest costs on debts raised to fund licence fee dues and expected drop in revenues subsequent to implementation of CPP. The introduction of the CPP regime would lead to large capital expenditure requirements and means of funding of this expenditure would be critical to future financial performance.

The future financial performance of various state circles would be mixed depending on the capital structure employed by the operators and the difference in parameters related to income and demographic profile, fixed-line penetration.

On the other hand, these operators are expected to benefit from intra-circle long distance traffic, which can be partially diverted to the GSM network by adopting a more competitive pricing strategy. In general, most state CMTS circles are expected to take longer to cut down their losses and become profitable because of higher capex requirements and relatively lower cellular penetration levels. (UNI)

Santro sales drop, Accent inches up

Santro sales dropped 16.1 per cent in February 2000 to 6,203 units as against 7,402 units in January 2000. However, Accent sales inched up 2.1 per cent to 1,270 units from 1,243 units a month earlier, HMIL Executive Director (Marketing and Sales) J H Kim told newspersons here today.

Hyundai had sold a total of 7,473 passenger car units in February as against 8,645 units in January.

The company, however, attributed the drop to its production constraints. "We are already fully stretched our capacity and are now at 100 per cent capacity utilisation. We have actually sold whatever we produced during the month. If we could produce more, we would have sold that as well." The current waiting period on both Santro and Accent are around two weeks.

The sharp drop in Santro sales have also been due to the company’s increased thrust on marketing the mid-size offering Accent. "With the demand for accent picking up, we did not want our customers to wait for the car and so pulled down Santro production to adjust accent," Mr B V R Subbu, Director (Marketing and Sales) of HMIL, said.

However, the company remained the second largest car manufacturer in India with cumulative sales of 84,887 units as of February 29, 2000. In the first eleven months of the current fiscal, the company has achieved sales of 67,236 units, including 63,034 units of Santro and 4,202 units of Accent.

HMIL, Mr Subbu said, would be looking at raising production volumes by August this year. "We would be proceeding at around 7,000 per month production level till July and then expand it further."

The company currently has an installed capacity of 82,000 units per annum on a two-shift basis, which can be hiked to 1.23 lakh units per annum by adding another shift.

HMIL had recently announced plans to privately place upto 24 per cent stake in the company in the year 2000. Though an exact time frame for the divestment has not been finalised as yet, the company had stated that it was planning to sell the equity to several institutional investors, including foreign buyers.

The money raised through the private placement would be utilised for funding expansion programme. HMIL equity base is currently rs 800 crore.

"We have placed an upper limit of 24 per cent for the sell-off. We might begin with five or six per cent initially and gradually achieve the total limit," Mr Kim had said.

The decision to sell off stake in Hyundai Motor India stems out of the fact that the company has recorded profit in its first full year of operations. HMIL ended the 1999 calendar year with a net profit of slightly over Rs 20 crore.

Hyundai Motor Corporation had initially announced that it would carry out the divestment in the year 2001, but the plans have been expedited with the company having achieved net profit last year. (UNI)

Tanishq opens exclusive jewellery showroom in Jammu

Excelsior Correspondent

JAMMU, Mar 1: Tanishq, one of the biggest branded jewellery players in the country, synonymous with superior craftsmanship, exclusive designs and guaranteed product quality opened its 33rd showroom here today.

This exclusive showroom at Hotel Samrat near Bus Stand, Jammu was inaugurated by Mr Vasant Nangia, vice-president, Jewellery Titan Industries Limited today. President, Chamber of Commerce and Industries, Jammu Mr Ram Sahai and Mr J. Verghese from Titan Industries were the special guests on the occasion. Besides them, some prominent citizens and traders were also present on the occasion.

Talking to reporters, Mr Nangia, disclosed that Tanishq presently retails from 32 exclusive showrooms in 25 cities across the country. This will increase to 68 outlets in 58 cities across the country by next year.

In designing the stunny showroom, Tanishq has created an art form that blends the traditional with the contemporary. The pleasing ambience is created by a mixture of handcrafted wood and stone that enhance the beauty of the jewellery. Mr Raman Gupta, will be the Tanishq partner in Jammu, he added.

Available in both 18 and 22 karat, the Tanishq range in Jammu showroom has been carefully selected from over 2500 designs to cater to local taste. The themes are inspired by tradition, nature, art and architecture and the intricate designs are created by a dedicated team of talented designers.

Replying to a question, he said Tanishq is promoted by Titan Industries Limited, part of the reputed Tata Group. In just over a decade, Titan is the unrivaled market dealer in watches in India. Titan diversified into jewellery four years ago and has today one of the largest integrated watch and jewellery manufacturing units in the world.

Apart from beautiful designs and craftsmanship that one has come to expect from the house of Titan, what is special about Tanishq is that the purity of gold and the quality of the stones are guaranteed, Mr Nangia added.

Giving some background of the concern he said Tanishq represents a perpetuation, a commitment and an enrichment of Titan’s innovativeness to bring to the Indian customers’ products of style, value and reliability. Designers from India and abroad fuse their inspirations to bring to you a host of collections that draw their inspiration from the rich cultural heritage of India and from styles that flourish in Europe and America. These inspirations take shape in rings, ear rings, bracelets, bangles, necklaces and pendants.

He disclosed that located at Hosur, Tamilnadu the 1,35,000 sq. ft. of built up space is dedicated to jewellery making facilities that are completely integrated and equipped to the highest international standards.

Mr Sahai congratulated Mr Raman Gupta and the members of Tanishq Group for opening its unique showroom at Jammu and maintained that there was no dearth of buyers in the region. He said that with the existing credibility of the Group across the country its clientage will also increase.

New Nestle MUNCH arrives in Delhi At Rs 5/- it's a steal.....

Having stormed Bangalore, Chennai and Mumbai with successful launches over the last 6 months in the South and the West, Nestle India today introduces New Nestle MUnch in the capital and in key cities of the North, strategically selected. The Company considers this it's most significant move in the marketplace since it created waves with the launch of Nestle Kit Kat which continues to dominate the upper end of the chocolate wafer and confectionery market.

New Nestle MUNCH is a well calibrated effort to power in with a great value for money offer geared towards expanding the market. The law unit price segment is currently witnessing strong competition as major players struggle to keep the price down with re-launch of existing products in miniature packaging -aka ''big brands in bikini packs''. New Nestle MUNCH therefore comes at the right time, in unabridged version, with a host of exciting new attributes, which are, well... 'new', not least of which is unbeatable value for money.

Nestle prides itself for bringing innovation to the Indian chocolate and confectionery market. The launch of MILKY BAR, POLO, then KITKAT, CHARGE, CRUNCH SNACK- each directed at satisfying specific consumer needs- bear abundant testimony to how the Company has gone about stirring up a sluggish and once undifferentiated market. The launch of New Nestle' MUNCH is not only further evidence of this but is unique in strategy-that Nestle should choose 'product lightness' as a proposition to charm the consumer, even as the Company forges a whole new segment around a wafer!

But this is no humble wafer. Now that Nestle' has covered it with an exquisite chocolayer! New Nestle' MUNCH is a 'crisp, crunchy wafer biscuit hidden in a delicious chocolayer' making it a delightful snack that you can carry on with.. anytime, anywhere, anyhow. Priced at Rs 5/- for a mouthful of a bar and then some more- it is actually the heavy weight in its category, at that price -New Nestle' MUNCH is incredibly ''light'' on the pocket. It is the ''Big Bite, Light Inside'' with an air of freshness that makes it the ideal companion to hang out with and indulge in over and over and over again-satiating the desire,but seeking small financial commitment. The TV commercial prepared by HTA, that comes with the launch, focuses quite precisely on this aura of lightenss-spirits are lifted and consumers delight in moments of gay abandon and lightheartedness resulting in a literal ''takeoff'' as they float Manufacture of New Nestle' Munch at Nestle India's KITKAT factory in Ponda is a success story in itself. It took just six months to conceptualize the product, manufacture and deliver, proving that innovation and speed-to-market go hand in hand at Nestle. Then, in keeping with the young and vibrant brand personality of New Nestle MUNCH a bright purple-yellow packaging has been put to use. This has combined well with the classic Nestle RED for the chocolate category to ensure high visibility in the marketplace and has lent merchandising its attractive colors.

New Nestle' MUNCH is expected to do in the North what it already has in the South and the West-simply 'munch' into market share at the ''light'' end of the Wafers and Waffles segment. The success at launch of New Nestle MUNCH demonstrates over again Nestle' India's ability to appropriately respond to consumer needs in a market where good value for money determines preference, even as effective distribution drives demand.

Idlx Tech partners of US to set up 4 development centres

CHENNAI, Mar 1: Idlx technology partners of the United States is planning to set up four development centres in the country aimed at making India the company’s global production base for serving customers worldwide.

Stating this here today Mr Gus Blanchard, Chairman, President and CEO, Deluxe Corporation, the parent company of Idlx and Dr Nikhil Cinha, CEO, Idlx, said the company proposed to invest 25 million dollars to create four new Indian facilities. The company had already invested about 12 million dollars in India.

The company came to India in a joint venture with HCL Corporation but had since then become a wholly owned subsidiary of its American company.

The Software Development Centre opened today will provide services to a diverse customer base in the international financial sector in E-commerce, internet banking, client server, sap and data warehousing on ibm mainframe, tandem and open systems.

Idlx is in the process of completing a merger with Efunds Corporation, another deluxe business unit and a leading provider of electronic payment management solutions that manage risk and enhance customer relationships for financial services providers, retailers, network and remarketers, E -commerce providers and any business that routinely accepts debit payments. (UNI)