Tuesday, October 19, 1999
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B U S I N E S S | Tuesday, October 19, 1999 |
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Govt identifies 24 PSEs
for privatisation through joint ventures Hassle-free entry for FDI: Sinha Hyundai ‘Accent’
unveiled in city Two-pronged approach for export
growth ATMs malfunctioning PNB to interconnect 500 branches SBI clears 750 crore loan to NTPC Market yet to show signs of
revival |
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Government
identifies 24 PSEs for privatisation through jv NEW DELHI, Oct 18 — The Union Minister for Heavy Industries and Public Enterprises, Mr Manohar Joshi, today said he will initiate immediate measures to convert 24 public sector enterprises, most of them sick and directly under his Ministry’s charge, for privatisation through the joint venture route. The former Maharashtra Chief Minister, in his first press conference after taking charge of his Ministry, said the Government would dilute its equity holding in the ventures to 49 per cent. Of the 24 PSUs identified for joint venture, Bharat Heavy Plates and Vessels, Scooters India Ltd and Bridge and Roof Company, are the only profit making units. Mr Joshi said the Merchant bankers for the 24 units have already been appointed. The other units identified for joint venture include HMT (Bearings), HMT, Hindustan Photo Films, Andrew Yule, Bharat Leather Corporation, Hindustan Paper Corporation Ltd and Instrumentation Ltd. On the earlier decision of the Government to close down 10 sick PSUs, Mr Joshi said he did not wish to change a decision that had already been taken. When asked if the Government would dilute its equity in the Maruti Udyog Limited, Mr Joshi said it was too early to comment. “That decision has not been considered. I won’t be able to say anything about Maruti at this stage”, he added. Apart from the Department of Heavy Industry and Public Enterprises, Mr Joshi has also been entrusted with the divisions dealing with Heavy Engineering Industry and Auto Industry in the department of Industrial Policy and Promotion. The Minister said his goal would be to carry forward the process of liberalisation and usher in an industrial regime in which significant fresh investment, both domestic and foreign, comes into various industries under his Ministry’s charge. “Improving the performance of the PSUs attached to the Ministry would also get my close attention though it must be said that revival of sick PSU units merely for the sake of keeping them going cannot be justified any longer”, he added. He said the PSUs should learn to survive and stand on their own feet in the new competitive and market driven environment. He also proposed to review the position regarding grant of autonomy to PSUs, including the Navratna and Mini Navratna companies, so as to make them more independent in their operations. “A review of hundreds of rules and guidelines which continue to bind them down is urgently needed and I propose to get down to look into this immediately”, he added. He said the programme of disinvestment would be pursued with much greater urgency and commitment not only because there was a need to raise resources but also to infuse greater outside skills in the management and running of these PSUs. “This might necessitate not just token disinvestment but in many a case a much higher degree of privatisation”, he added. Mr Joshi disclosed that the Chairman of the Disinvestment Commission, Mr G.V.Ramakrishna, has submitted his resignation to enable the Government to reconstitute it. When asked if he would press for giving statutory powers for the Disinvestment Commission, Mr Joshi said he would discuss the matter with other related ministries. Speaking on the need for further accelerating the growth of the fast developing automobile sector, Mr Joshi said the Indian consumer must get greater variety and value for his money in the passenger car as well as commercial vehicle segments. Increasing competition and a growing market can provide the sustenance needed by both the consumer and the manufacturer, he added. Mr Joshi said as the
automobile industry makes the transition from a
relatively protected environment to the rigours of a
globalised market, there would be an all round need for
upgradation of capabilities to international standards
including a major change in mindsets backed by
substantial investments in modernisation, scaling up of
capacities and skills upgradation. |
Hassle-free entry for FDI: Sinha NEW DELHI, Oct 18 (UNI) — The Government will soon remove procedural hassles for overseas investors so that the Foreign Direct Investment (FDI) can be trebled from $ 3 billion to $ 10 billion, Finance Minister Yashwant Sinha said. “We have already defined our priorities and only procedural hassles need to be removed and we will do it soon’’, Mr Sinha said in a television interview today. The Central Government will soon frame transparent procedural guidelines for FDI. “As long the foreign investors come within these guidelines they would not have to run from this pillar to that post’’, The Finance Minister told BBC. The Government has already defined the priority areas for foreign investment, these are power, telecom, roads and ports. “There will also be a clear negative list where FDI will not be permitted’’. However, this would be a restrictive. As for the pending legislations like the Insurance Regulatory Authority Bill, Foreign Exchange Management Bill and Money Laundering Bill, these would be taken up in the Winter Session of Parliament. The session starting from October 20, 1999 is “formal for meeting certain constitutional obligations’’, he said. Mr Sinha dismissed fears that the international financial market would be subdued towards the end of the calendar year because of the year 2000 problem affecting disinvestment of the public sector companies. “We have checked up this and expecting for a week or so the problem (Y2K) would not be as much as thought to be’’. The Finance Minister had set an ambitious target of Rs 10,000 crore to be raised through disinvestment in the financial year 1999-2000. While only six months have gone, Mr Sinha sounded quite confident about achieving the disinvestment target. “You are talking about only six months, there are full six months left and I am sure we will achieve our disinvestment target’’, he said. Disinvestment of the public sector companies is being seen as one of the major initiatives to check the fiscal deficit, a big worry for the government. The Finance Minister in his new stint in North Block said he has a strategy worked out for keeping the fiscal deficit within the budgeted target of 4 per cent. Mr Sinha asked why media
was obsessed with levy of fresh taxes every time there is
a problem of fiscal deficit. “There are other ways
to control fiscal deficit and I am as much concerned with
the problem as anybody else’’, he said. |
Hyundai
‘Accent’ unveiled in city CHANDIGARH, Oct 18 — Ultimate Hyundai in association with Bank of Punjab unveiled Hyundai “Accent” for the first time in Chandigarh today at Bank of Punjab’s Sector 9-D lawns. The bank has entered into an arrangement with Ultimate Hyundai for financing of it’s newly launched car at very competitive rate of interest. Bank of Punjab is among the fastest growing new private sector banks with 51 banking offices has permeated into consumer finance. The bank’s auto
loan product is so designed that interest rates are as
low as 16 per cent. |
Two-pronged
approach for export growth NEW DELHI, Oct 18 — President of Assocham, K.P. Singh has suggested a two pronged approach to achieve an export of $ 75 billion by 2005. The suggested approach focuses on knowledge based products by adding more products and widening the enterprise base. At the same time India should focus on specific Indian products like basmati rice, granite and spices and sunrise products like drugs and pharmaceuticals, IT and telecom, software, processed food, agriculture, cut flowers, fresh fruits and auto components. Mr Singh said that strategy should be devised to obtain over 30 per cent growth in value per annum in these products in the next five years. At the same time, India must attain high product quality and efficient delivery of products. There is need for bringing down the cost of exports by lowering the export credit rate to international level (say 7 per cent) and investing in export infrastructure, particularly ports, containerisation, cold storage, air cargo and telecom. In the next five years, Mr Singh said, average tariff rates would be brought down to be at par with South East Asian economies, i.e. in the range of 10 to 14 per cent with peak tariff rate to 30 per cent. A road map should be
prepared for this tariff reduction and the tariff
reduction should be proposed where there is no sufficient
Indian manufacturing capacity to cater to the Indian
market or where over 50 per cent of imports are meant for
re-exporting. |
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CHANDIGARH, Oct 17 (PTI) — The two ATMs installed by Punjab National Bank in its branches here to provide “day and night service” have failed to provide cash all through the 24 hours due to frequent system connectivity problems. The ATM at the main
branch located in the Zonal Office building here has been
unable to provide cash with the customers getting a
message on the screen that “temporarily the
transaction cannot be handled”. The temporary
failure in Sector 17 and Sector 22 branch has become a
regular feature, especially on weekends.
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PNB to interconnect 500 branches NEW DELHI, Oct 18 (PTI) — Punjab National Bank (PNB) plans to enter the 21st century by modernising its overall branch network including interconnection of more than 500 of its branches with an investment of over Rs 200 crore. “We plan to not only fully computerise our branches but also create a network which will interconnect around 500-600 branches and Tata Consultancy Services (TCS) has been asked to work but the entire process,” PNB Chairman and Managing Director Rashid Jilani told PTI. The networking will enable PNB to offer to its customers the facility to do a banking transaction from any of these branches resulting in time and cost reduction. Investment in the networking is expected in the region of Rs 200 crore, he added. He said these branches will cover 75 per cent of the bank’s business and help reduce the cost and improve efficiency in its operations. Asked about the bank’s proposed public issue, “Mr Jilani said “the bank’s capital adequacy is comfortable as per the latest RBI norms and we have no haste in entering the market.” “We are watching
the market carefully and will approach at an appropriate
time,” he said adding the bank was unlikely to hit
the market in this fiscal. |
SBI clears 750 crore loan to NTPC NEW DELHI, Oct 18 (PTI) — State Bank of India has sanctioned a Rs 750-crore loan to National Thermal Power Corporation (NTPC) to part-finance the latter’s various ongoing power projects. The corporation had initialled the agreement with SBI last week which now needs the ratification of its board for a final agreement, NTPC sources said. The 10-year term-loan, at the Prime Lending Rate (PLR), would be used for the corporation’s 1000 MW Simhadri power project in Andhra Pradesh and the 2,000 MW Talcher super thermal project in Orissa, the sources said. NTPC was also negotiating for similar loan packages from other financial institutions like the IDBI and ICICI, they said. The corporation plans to mobilise about Rs 2,000 crore during the current fiscal for funding its various expansion and on-going projects, they added. NTPC, which is planning to become a 30,000 MW plus company by the year 2007, has worked out a massive Rs 30,000 crore resource mobilisation plan from domestic and overseas market. As much as 17 per cent of the planned investment of Rs 45,000 crore would be raised through Euro bounds while another 11 per cent would come through syndicated loans, they said. NTPC plans to generate Rs 15,000 crore from its internal resources for the investment plan till 2007, sources said. Funding from
multilateral agencies including the World Bank would
constitute 23 per cent of the investment funding, while
another 19 per cent would come from domestic borrowings,
they added. |
Market yet to show signs of revival NEW DELHI, Oct 18 (PTI) — The primary market is yet to show signs of revival with 21 public issues raising a meagre Rs 3,400 crore in the first half of current fiscal, says a study. Prime, an independent primary market monitor, said a revival in the Initial Public Offer (IPO) market was yet to be witnessed as 74 per cent of the total amount raised during the period was through debt. In the corresponding period (April-September) last year, total mobilisation was Rs 3,018 crore. The Prime study said equity offerings continue to be scarce and the ones that were made had been from the software sector. Only 17 equity issues hit the market raising Rs 874 crore, it said adding that this compares favourably with Rs 332 crore raised through equity in the corresponding period last year. According to Prithvi Haldea of Prime, several areas relating to issuers, investors and the regulations need to be addressed in order to achieve a sustained and healthy growth. Of immediate concern was
the sign of alarming frenzy in the market for specific
sectors, Haldea said.
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Wockhardt Ltd has reported a 45 per cent growth in net profit to Rs 34 crore for the first quarter ended September 30, 1999. Sales during the quarter grew by 36 per cent to Rs 209 crore against Rs 153 crore for the same quarter last year, reflecting the total integration of Merind Ltd’s pharmaceutical business into Wockhardt. Wockhardt, in a statement here today, said the UK subsidiary Wallis Laboratories continued its turnaround by achieving a profit of $ 0.6 million for the quarter, against losses of $ 0.3 million in the same period last year. Wallis, to be re-christened Wockhardt (UK) Ltd from January 2000, reported sales growth by 28 per cent to $ 4.6 million. Crisil: The Credit Rating Information Services of India Limited (Crisil) reported a 12 per cent rise in its net profit at Rs 2.77 crore for the second quarter ended September 30, 1999, compared to Rs 2.48 crore in the corresponding period last year. The agency has, however, shown a 3.8 per cent decline in its total income at Rs 9.44 crore for the reporting period as against last year’s Rs 9.82 crore, according to the unaudited financial results released here. Income from operations dipped by 6.06 per cent to Rs 8.30 crore while other income rose by 16.48 per cent to Rs 1.14 crore. Gross profit after interest but before depreciation and taxation declined to Rs 5.10 crore (Rs 5.67 crore for the corresponding period last year). NIIT: NIIT will invest $ 17 million (over Rs 70 crore) to set up software development facilities in India and China. “The facilities, to be located at several centres in India and one in China, will focus on development of Internet-based learning and e-business solutions — the future thrust areas,” NIIT Executive Chairman Rajendra Pawar told reporters here on Monday. Sterlite Ind: Sterlite Industries (India) Ltd has reported a 68 per cent increase in net profit at Rs 49.37 crore during the first quarter ending September 1999. During the three month period under review, the company’s turnover registered a 57 per cent increase to Rs 600.24 crore, against same period last year. Continuous cast copper rod sales volumes increased by 12 per cent to 15,771 tonnes while production increased by 16 per cent to 17,029 tonnes, a company statement here said. Konkan Railway: Konkan Railway has developed an innovative device to prevent collision of trains. The device said to be a revolutionary breakthrough in controlling train accidents is expected to change the safety scenario in the railways. GAIL: Gas
Authority of India Limited (GAIL) has shown an improved
performance during the last quarter with sales increasing
by about 25 per cent to Rs 2102 crore (Rs 1683 crore) and
gross profit (profit after interest but before
depreciation and tax) increasing by about 39 per cent to
Rs 468 crore (Rs 338 crore). Net profit of the period
increased by 54 per cent to Rs 293 crore against Rs 190
crore in the corresponding period of the previous year. |
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NEW DELHI, Oct 18 — The
Union Minister for Heavy Industries and Public
Enterprises, Mr Manohar Joshi, today said he will
initiate immediate measures to convert 24 public sector
enterprises, most of them sick and directly under his
Ministry’s charge, for privatisation through the
joint venture route. 