Hopeful of privatisation, MFs are still playing on PSUs

MUMBAI, Oct 2: Domestic fund managers, still hopeful of privatisation of Public Sector Undertakings (PSUs), are playing on these stocks expecting open offers by them.

At the same time, the Mutual Funds (MFs) are a little wary of playing open offer stories in the private sector, say analysts, adding that the MFs were hoping for an open offer by prospective acquirers of PSUs which are on the disinvestment hitlist.

As per the investment portfolios of a few leading MFs, majority of the funds are holding several PSUs such as HPCL, BPCL, BHEL, MTNL and ONGC.

The DSP Merril Lynch’s DSP Open Fund shows considerable increase of oil PSU ONGC stock since May 2002. The fund was holding 27,450 ONGC shares in May 2002, increased its holding to 50,700 shares by August 2002. The fund also showed a share holding in MTNL of 83,500 shares from nil since April.

The other funds such as HDFC growth fund, alliance equity fund Zurich India Equity Fund, Cholamandalam Growth Fund, Franklin Tempelton Fund, JM Equity Fund, Pioneer ITI Prima Plus, ICICI Balance Fund, and Reliance Vision have a considerable number of shares of PSUs in their portfolios. These portfolios revealed that except alliance equity fund, none have shown their interest in private sector companies such as aventis, colour chem and seamac in which open offers were expected to come up.

Even in the case of alliance, which was holding shares of South East Asian Marine Corporation (SEMAC) has knocked off seamac in May 2002.

Analysts felt that the delay in the open offers by the private companies was one of the reason for the funds of not including these stocks in their portfolios.

The portfolios of these funds further revealed that some of the funds have also increased their cash components looking for more opportunities in the near future.

While several funds have sold in the August rally and still holding on cash expecting fall in equity prices

In the case of ICICI balanced fund company, the fund had 12.96 per cent cash equity holding as compared to the total Asset Under Management (AUM) as on August 2002, followed by eight per cent cash equity as compared to the total AUM in Zurich India Equity Fund.

The HDFC growth fund has also shown 5.47 per cent cash equity holding as on August 2002 as compared to the total aum. (UNI)

Joshi meets Naik, Fernandes ahead of talks with RSS chief

NEW DELHI, Oct 2: Hardliners against strategic sale in disinvestment process and senior Cabinet Ministers Murli Manohar Joshi, George Fernandes and Ram Naik today met to discuss various aspects of the issue and appeared to have agreed against any privatisation in the oil PSUs due to their strategic importance.

Immediately after the half-an-hour meeting, Joshi left his residence for a discussion with RSS chief K S Sudarshan, who also is believed to have some reservations against strategic sale of equity in oil PSUs, highly placed sources indicated.

While none of the participants were willing to comment on the nature of the discussion, Petroleum Minister Ram Naik told PTI that "we met for exchange of information over a cup of tea. We are getting feedback from various quarters including economists."

He, however, declined to entertain any query but said that it would be wrong to presume that "we are against disinvestment. We are disucssing the route that should be take for disinvestment."

Meanwhile, sources indicated that the three ministers were of the opinion that oil sector could be included in the strategic sectors list which now includes railways and atomoic energy due to its inherent economic importance for the country.

In case, the Government takes a decision to include oil in the strategic sector, it would countinue to have a majority stake in petroleum PSUs, sources said.

During the discussion that went into the decision of the Cabinet Committee on Disinvestment to put on hold for three months any verdict on sale of Government equity in oil PSUs, the three ministers are also believed to have disfavoured any privatisation in profit making psus through strategic sale route.

They are believed to have felt that the public offer route should be adopted for disinvestment in profit making PSUs.

But the Government should give first priority to privatisation of loss-making psus, even by selling equity to strategic partners before looking at profit-making corporations, the ministers are understood to have suggested.

The three ministers were also apparently buoyed by the support they were getting from various constitutents of the NDA Government including Akali Dal, BJD, Shiv Sena and Samata Party besides Sangh Parivar.

Sources said that not only BJD was taking cudgels against proposed privatisation of NALCO, Coal and Mines Minister Uma Bharati had also written to Prime Minister on the proposal for strategic sale in the corporation.

Likewise, Fertiliser Minister S S Dhindsa, Public Enterprises Minister Balasaheb Vikhe Patil have also made known their views, sources said. (PTI)

NDDB ‘mnemonic symbol’ in Aavin milk packets launched

MADURAI Oct 2: The Madurai unit of Aavin, a cooperative milk marketing agency, is among the six districts in the State to qualify for using the "mnemonic symbol" of the National Dairy Development Board for marketing the Aavin Milk, according to Balasubramanian General Manager of the Aavin.

Participating at a function organised to inaugurate the new "common logo" sachet along with the slogan "fresh and pure" to mark the Gandhi Jayanthi celebrations here today he said new logo would advertise the "uniqueness"of the Aavin milk in the market which had been flooded with private milk companies.

He also said that strict quality control was ensured from the stage of procurement to marketing. The Aavin logo milk would not only be pure but healthy. "Infact we have launched a clean milk production campaign at the village level, and the quality of the milk would be constantly monitored by the NDDB. Unlike some private milk companies the Aavin was not using "harmful preservators or stabilizers to enhance the shelf life.

While all over the world Governments subsidised milk products milk products, no such subsidy was being offered in India. Therefore, the competition from the private companues was severe. Unless the people supported the cooperative milk societies, they would perish and render many jobless, he said.

Balasubramanian, said Aavin should conform to the quality standards of the NDDB for marketing the milk under its common logo.

He said the Aavin also planned to stop sale of loose milk following complaints malpractices in its sale.

The District Collector S Ramachandran who introduced the new logo sachet said that Madurai Aavin was planning to export "Milk Gova" to the US and sample containers were being despatched in a week’s time.

He said the market share of the Aavin was still 42 per cent but it should reach sixty per cent.

RCharles, NDDB’s State Director, said that India stood first in milk production with 84 million metric tonnes of milk being produced in the country. The cooperatives should improve their market share to 80 per cent to sustain in the highly competitive milk business.

Earlier, rally to mark the introduction of new logo was taken out.(PTI)

SIDBI ties up with global agencies for NE development

MUMBAI, Oct 2: The Small Industries Development Bank of India (SIDBI) has signed a Memorandum of Understanding (MoU) with the South Asian Enterprise Development Facility (SEDF), an agency established by the World Bank and the International Finance Corporation (IFC), for the economic development of the North Eastern States in India.

The partnership aims to achieve this by the development of small enterprises in the industrially underdeveloped States in the region.

The MoU was signed by SIDBI Chairman and Managing Director PB Mimbalkar and the Director of IFC’s small and medium enterprises department Harold Rosen, at the IFC headquarters in Washington D.C. On September 30.

As per the MoU, SIDBI and SEDF will identify the sectors having potential for growth in the North East, a SIDBI release said here.

This will enable SEDF and SIDBI to initiate detailed techno-economic feasibility reports for each of the sectors with potential for fuelling growth in the region.

Feasibility reports will be drawn employing the expertise of IFC and international consultants in the respective sectors. Based on these reports, potential entrepreneurs will be invited to set-up industries, for which financing will be arranged from banks in the region.

Training and support services to entrepreneurs, bankers and other stake holders is an integral part of the project.

Sedf seeks to promote industries and business in Northeastern India, Bhutan, Bangladesh and Nepal and has committed funds of about US dollar 40 million.

SIDBI has emerged a strong and forward looking financial institution having a net worth of US dollar 810 million (Rs 3,951 crore) and an asset base of US dollar 3,614 million (Rs 17,640 crore) as on March 31, 2002.

It has also introduced various innovative products and services for the development of the SSI sector. (UNI)

India hasn’t gone for as much reforms as it should have: Paul

LONDON, Oct 2: Emphasising that national character always remains the "top matter" of any country’s progress, leading NRI industrialist Lord Swraj Paul said India has not gone for as much reforms and transparency as it should have.

"I got heavily criticised when I first started talking publicly about corporate accountability and economic liberalisation (in India)," Lord Paul, co-chairman of the India-UK round table, said in an interview published in the latest issue of Earth Times.

"But since 1991, everybody jumped on the bandwagon of opening up the economy. They’re still talking about it, though they haven’t gone for as much reforms and transparency as they should have and they could have. And in my view the earlier they do it, India will gain more. India should be far higher in hierarchy" of development among world’s nations, he said.

Stating that India has nothing to be embarrassed about concerning the ability of their people to achieve, Lord Paul said: "it has certainly given me lot of satisfaction that perhaps I had some little part to play in the change. But the change has definitely come."

Asked whether India’s economic growth and social development increasingly going to be a test of national character, Lord Paul, ambassador for Overseas British Business, said: "national character will always remain the top matter of any country’s progress.

"The biggest problem of developing countries - and now, even some of the developed countries - is corruption. And that corruption has to go. If you see the progress of nations, you can almost draw a graph between corruption and their development. I think that corruption is the number one enemy hindering sustainable development." (PTI)

Dr Reddy’s to double spending on RD

NEW DELHI, Oct 2: Leading drugmaker Dr Reddy’s Laboratories (DRL) plans to spend 8 per cent of its turnover on research and development (RD) in the current fiscal, almost double of the last financial year, and set up two new research laboratories.

The company’s expenditure on research in the last financial year stood at Rs 98 crore out of its turnover of Rs 1,652 crore. This itself was more than double of Rs 41.54 crore it spent during 2000-01, according to DRL’s annual report.

It said Dr Reddy’s will set up two more RD Labs in Bangalore and Boston, USA, to take the total number of research Laboratories of the company to five.

The existing laboratories are Hyderabad-based Dr Reddy’s research foundation and the new technology development centre, and Dr Reddy’s US Therapeutics Inc. (RUSTI) at Atlanta, USA.

The company will invest Rs 50 crore for the Bangalore facility, to be set up by aurigene discovery technologies — a wholly-owned subsidiary of DRL — and it will go on stream in a couple of months. The Bangalore lab will have dedicated facilities for molecular biology, protein expression and purification, structural biology, pharmacology and medicinal chemistry.

The aurigene discovery technologies will set up another lab in Boston by this year. Though its facility will be much smaller than the one at Bangalore, the specialised lab would be the new global hub of Dr Reddy’s discovery research, the company added.

Hyderabad-based Dr Reddy’s will be entering into a co-marketing alliance with a US-based company for its restenosis drug. The molecule was in advanced pre-clinical stage.

The drug, which was developed by RUSTI, will be used for coating stents that are used for Angioplasty.

DRL will launch its new biotech drugs to combat cancer later this year, the report said adding that the drugs are in different stages of development and will be released in phases.

The company’s research laboratories in the US have three compounds in the speciality segment and nine new chemical entities (NCES) under development.

The report highlighted that DRL is developing the NCEs in the metabolic disorders, cardiovascular and cancer segments.

Of the nine NCEs, three — DRF 4848, DRF 4832 and DRF 3188 —were in the pre-clinical trial stage for pain management, metabolic disorders and cancer, respectively.

Besides its continued focus on generics, the company, which filed a total of 44 Abbreviated New Drug Applications (ANDAS) in the US, Europe, Canada, South Africa, Australia and New Zealand, has made it a corporate strategy to file more andas, challenging weak patents of multinationals, enabling it to launch a generic version of the patented drug before the expiry of the patent period. (UNI)

Hexacom to invest Rs 50 cr this fiscal

JAIPUR, Oct 2: Hexacom India Ltd, a cellular operator in Rajasthan, will invest Rs 50 crore this fiscal for expanding its services to 60 cities in the state against 30 at present.

The company has already taken loans of Rs 25 crore from ABN Amro and GE Capital, while the remaining part of investment will be made through internal sources, Hexacom chairman Rajiv Mehrotra told mediapersons here.

Hexacom is eyeing a net profit of Rs 25 crore this fiscal, up around 46 per cent against Rs 16.44 crore last fiscal. It expects to clock a turnover of Rs 150 crore during 2002-03, he said.

The company has invested Rs 300 crore since it began its operations in June 1997 in Rajasthan.

Hexacom is a joint venture between Shyam Telecom Ltd and Shyam Infrastructure of the Shyam Group, the Canada-based Telesystems international wireless and public sector TCIL. Shyam Telecom owns 10 per cent equity, while the rest holds 30 per cent each.

The joint venture provides telecom services under the brand name of Oasis Cellular in Rajasthan. The other cellular operator in Rajasthan is Aircell Digilink which provides services under the brand name of Essar.

Talking about Shyam Telelink, another company of the Shyam Group that provides basic services in Rajasthan, Mr Mehrotra said it would roll out services in 63 cities of the state by March 2003 against 18 at present.

The company had already invested Rs 500 crore in the project and plans to pump in another Rs 500 crore by 2004, he said.

It has laid 2,200 km of optical fibre cables in the State and will lay another 2,000 km by 2004. Telelink has customer base of 55,000 in the state. Besides basic telephony, it provides ISDN, leaselines, internet services, CDMA phones and unified messaging services.

On providing village public telephones as asked by Communication Minister Pramod Mahajan, Mr Mehrotra demanded that a conducive environment be set up to enable the company to connect 3000 villages with telephone networks in the State by next year-end.

The Universal Service Obligation (USO) fund, meant for the Village Public Telephones (VPTs), should be activated, while the market regulator should set the cost-based tariff, base the numbering plan on the long distance charging area against the present short distance charging area and finalise the access deficit charge so that pace of VPT installations was increased, he said.

The Government has set a deadline of 2003 for basic operators to connect all villages in the country. (UNI)

US praises India for its software development

WASHINGTON, Oct 2: Lauding India for the advances it has made in the field of software development, the United States has asked the developing countries to make the broadband revolution an instrument to expeditiously educate their masses.

"India is one of the great offshore places for software development," Secretary of State Colin Powell said addressing the US President’s council of advisers on science and technology.

"If you want that kind of good job in your country, you have to have people who can perform that kind of work. How do you take a nation that has not had this educational foundation to work from in its whole history?."

Powell said "one of the great challenges of developing nations is to try to educate their populations as quickly as possible for the 21st century economy, which places a demand on education."

"How do you educate that population quickly? you can’t do it in one little schoolhouse at a time any longer. You have got to figure out ways to use science and technology, to use the broadband revolution," he said.( PTI)

Khadi rebate to continue this year also

CHENNAI, Oct 2: With a view to promote Khadi among the public, the Tamil Nadu Government announced continuation of the year long rebate on Khadi products in the State.

In a statement here last night, Chief Minister Jayalalithaa said, as was done last year, the 20 per cent rebate on Khadi silk and 30 per cent rebate on other khadi products would continue this year also.

Rural development through the production of khadi was the vision of Gandhiji, the Chief Minister said. (PTI)

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