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PNB calls off Kazakh JV with Allahabad Bank

MUMBAI: Punjab National Bank has decided to call off a proposal to set up a joint venture subsidiary with Allahabad Bank in Kazakhstan. The JV proposal was floated in 2004 when PNB had an office in Alamty. Since then the bank had received permission for a branch.

ICICI to sell 5% in Arcil to First Rand of S Africa

ICICI Bank will sell 5% of its equity stake in Asset Reconstruction Company of India (Aral) to an African bank. First Rand Bank, for little less than Rs 40 crore. Aral deals in bad loans, and the development reflects a growing interest among foreign players in the local stress asset business.

Last year, ICICI Bank had decided to sell 10% of its stake to British bank Barclays Bank. However, this was rejected by the Reserve Bank of India (RBI) on the grounds that the bank would overstep its capital market exposure limit.

When the deal was stuck between ICICI Bank and Barclays, RBI’s capital market norms stipulated that a bank’s exposure to stocks should not be more than 5% of the advances portfolio. Since Barclays did not have a large advances portfolio, the proposal could not be pursued. Under the present norm, a bank’s market exposure can be up to 20% of the net worth or 5% of advances, whichever is lower.

As a result, ICICI Bank could sell only 5 % of its stake to Barclays at Rs 39.6 crore. The balance 5% would be sold to the African bank. Following this, ICICI Bank’s shareholding in Aral will be 19.58%, slightly lower than that of the other two key shareholders — State Bank of India and IDBI Bank — each holding 19.95%.

Confirming the development, Aral MD & CEO S Khasnobis said, “With this, ICICI Bank equity holding will come down to 19 % as was originally planned.” First Rand Bank is among the top four commercial and investment banking groups in South Africa. It has over 4,000 ATMs and 650branches.

Aral’s paid-up equity share capital is Rs 220 crore comprising of 22 crore shares of Rs 10 each. The other large shareholders include Punjab National Bank which holds 10% and LDFC with 8.71 %. The minority shareholders include Karur Vysya Bank (2.9%), Karnataka Bank (2.74%), Citicorp Finance (2%), Federal Bank and South Indian Bank (1.33% each) and HDFC and HDFC Bank (0.53% each). Besides this, ITCOT Consultancy, trustee of Aral employees’ stock, owns 0.46%.

Euro falls against dollar, yen

LONDON: The euro weakened against the dollar and yen, as some traders pared bets on interest rate increases this year by the European central bank after comments by President Jean-Claude Trichet. The ECB on Wednesday raised its benchmark borrowing cost to a six-year high of 4%. The European currency fell as far as $13495 and was trading at $1.3503 in afternoon trade in London from $1.3524 late on Tuesday in New York. The currency traded at 163.58 yen, from 164,16 yen on Tuesday. Traders pared bets that the ECB will lift rates to 4.5% this year. The implied yield on the December Euribor contract fell to 4.54% from 4.57% earlier.

Cadila receives tentative nod for Topiramate tablets

MUMBAI: Cadila Healthcare on Wednesday said it has received tentative” USFDA approval for Topiramate tablets, an anti-epileptic drug in multiple strengths. In a communique to the Bombay Stock Exchange, the company said it has received the USFDA approval for Topiramate tablets in the strengths of 25 mg, 50 mg, 100 mg and 200 mg. It is scheduled to be launched in September 2008 upon patent expiry, it added. The group has 24 approvals since the commencement of filing process in financial year 2003-04. Currently, the group markets 10 generics through its subsidiary Zydus Pharmaceuticals (USA) Inc.

Rolta to invest Rs 250 cr to set up IT Park in Kolkata

MUMBAI; Rolta India plans to set up a park in Kolkata at an investment of Rs 250 crore as part of its expansion plan. The park would have facilities for delivery of IT-based geospatial services, engineering design services, software development and ERF implementation services worldwide, a company release said. The facility is likely to provide jobs to as many as 5,000 technical professionals and domain experts, tapping talent in West Bengal, it said.

BSNL offers iron-life cover to all customers

Operator Mulls Foraying Into Life Insurance

PLANNING to surrender your BSNL landline connection? Here is one reason why you should keep your fixed line or take up BSNL’s mobile service: the PSU is planning to provide free non-life insurance cover to all its customers. A top company source told ET that BSNL is planning to provide a cover of Rs 50,000 to each of its 78-million landline and mobile subscribers, in case they were to suffer any mishap or accident.

In the next phase, the operator is mulling the possibility of a full-fledged foray into life insurance sector in partnership with an insurance player.

The PSU is confident that free insurance cover, where it will bear the premium, in addition to stopping the surrender of land-lines, will also be a major boost to expand its cellular subscriber base.

“The plan is in a preliminary stage. We’re yet to formulate a road map and a timeframe for offering this service. While free insurance will cost BSNL a good amount of money, it will bring in value-addition to the services we provide our customers,” a top BSNL executive said.
The executive also didn’t rule out the possibility of a full-fledged insurance foray, in partnership with an insurance player. “If this plan takes off, then we would look at providing a life insurance policy to our subscribers, It will be possible for us since we know our customer profile and history. The revenues from pure telecom services are declining and voice services won’t be very profitable in the future,” the BSNL executive added.

Industry analysts estimate that BSNL will have to shell out a premium of between Rs 100 to Rs 200 per subscriber annually to offer them an insurance cover of Rs 50,000. Providing the service to its 78-million existing users would mean an annual bill of Rs 780-1,560 crore for BSNL. The PSU’s net profit in 2006-07 was a little over Rs 10,000 crore.

Currently, BSNL has a corporate group life insurance policy from the Life Insurance Corporation (LEC) for its over 3.5 lakh employees for a sum assured of Rs 4,770 crore. Under this scheme, over 10,000 senior BSNL executives are insured for a sum of Rs 5 lakh for a monthly premium of Rs 500, about 40,000 officers are covered for a sum of Rs 3 lakh and three lakh non-executive employees get a life insurance cover of Rs l lakh each.

The public sector communications company currently has just under 28 million mobile subscribers and about 50 million landline users. It is also in the process of finalising orders for 45.5 million GSM lines with Ericsson and Nokia, in addition to another 18 million lines from State-owned ITI. Industry analysts estimate that at the current pace of growth, BSNL will have about 100 million subscribers (both landline and fixed) within by mid-2008. Even if a mere 10% of the PSU’s subscriber base were to opt for an insurance policy, BSNL will have about 10 million insurance customers.

Private Telcos such as Bharti Airtel, Reliance Communications and Tata Tele-services already offer life insurance services through insurance arms of their parent companies.

RCOM may launch EV-DO

RELIANCE Communications is working on the possibility of launching EV-DO (wireless broadband data connectivity) for its 28 million CDMA users.

EV-DO stands for Evolution-Data Optimized or Evolution-Data only and is typically used to provide ‘broadband-speed’ internet access to mobile telephone subscribers. Loosely put, EV-DO in CDMA is equivalent to 3G in GSM network both offers high speed, broadband data connectivity that allows features like streaming video, watching online movies and high-speed internet. “We are working on the possibility of introducing EV-DO for our CDMA subscribers.

However, there are a lot of factors that need to be evaluated and we are yet to take a final decision,” said president personal business SP Shukla.

3G, stands for third generation standard for GSM networks and wide-area wireless voice telephony, and broadband wireless data, in a mobile environment. It is a wireless radio broadband data standard adopted by many CDMA mobile phone service providers in the US, Canada, Mexico, Europe, Asia, Russia, Brazil, and Australia. EV-DO allows same data download and upload speed as is available for 3G.

Interestingly, BSNL is also looking at the possibility of launching EV-DO for its CDMA subscribers.
Talking about Reliance Communication’s plans for the east, Mr. Shukla said that the company intends to cover 9,000 towns in east by the end of the fiscal. Currently, it has covered only 2,000 in this region. Nationally, Reliance Communications has decided to cover 22,000 town by the end of the year against 10,000 now.

Incidentally, Reliance Communications on Wednesday slashed its tariff for life time validity package to Rs 222 from Rs 495 for its GSM users in all its eight circles. Lifetime validity allows customers to remain connected for life time without paying any extra amount. However, to make call one has to refill the mobile with coupons of certain denominations.

MTNL may win race for Lanka’s Suntel

Beats Telekom Malaysia with $160- 180m Bid

STATE-owned Mahanagar Telephone Nigam Ltd (MTNL) is believed to have emerged as the highest bidder for Sri Lankan fixed line operator Suntel. According to sources dose to the development, MTNL is learnt to have bid between $ 160 million and $ 180 million for the Colombo-based telephone company.

The Sri Lankan Rs 3.31-billion Suntel will give MTNL a foothold in the island country’s fast-growing telecom market. It will also be the first overseas acquisition by the NYSE-listed MTNL, which had earlier tried unsuccessfully to enter the Saudi Arabian and Kenyan telecom markets.

A formal announcement on the Suntel deal is expected to be made by mid-June, said sources. When contacted, MTNL chairman R S P Sinha refused to comment.

Other companies in the race for Suntel include Telekom Malaysia and Sri Lankan firm John Keelis Holdings. Sri Lanka, with a fixed-line tele-density of around 10% remains a lucrative market for Indian operators who are expected to face saturation in the domestic market in four to five years.

Suntel is the main competitor to Sri Lanka Telecom. While Suntel’s latest results are not available, its net profit for the six months ended June 30, 2006 fell to Lankan Rs 290 million, while revenues doubled to Lanka Rs 3.31 billion. “The growth in net profit for the year ending December 2006, is expected to reach up to 46 %,” Suntel had said an earlier forecast.

Indian operators are keen on the Sri Lankan market. Although the Tatas-owned VSNL has won international long distance and ISP Licenses in Sri Lanka, Suntel was not on VSNL’s radar as the Sri Lankan operator offers CDMA fixed line services, which is not a strategic fit for VSNL.

Bharti Airtel also recently announced an investment of $ 150 million to roll out GSM and W-CDMA services in the island nation.

Suntel’s largest shareholder is Nordic telecom firm Telia AB, which holds a 55 % stake through its holding company Overseas Telecom AB. The remaining shares are held by Sri Lanka’s Metro corp, the National Development Bank of Sri Lanka, Townsend Ltd of Hong Kong and the International Finance Corporation (IfC).

Earlier, only Telia was learnt to have been interested in selling the stake. However, subsequently, other partners have also agreed to exit Suntel. Suntel plans to invest $33m in 2007 to expand networks.

If the deal with Suntel materialises, it will provide a respite to MTNL, which has been under immense pressure to grow abroad as its business remains restricted to Delhi and Mumbai.

MTNL lost the race for Saudi Arabia’s third mobile licence in March and fixed line license in April. It was also out of the race for license in Kenya. It has the licence to offer fixed line, cellular and ILD licences in Mauritius.

Dell sets up unit for govt, education buyers

PC Maker Creates Specialised Product Portfolio for the $500-M Market Growing 50% A Year

PC maker Dell India has set up a new dedicated division and created a specialised product portfolio to tap the $500-million government and education market in the country
“We have formed a new vertical — government and education— to win businesses in the government, public sector enterprises and higher education space. We have also readied the product portfolio, including a full range of laptops and notebooks, X86 servers and projectors. Our Chennai plant, which is on track, would further add to our competitiveness in catering to this market,” said Dell India country head Rajan Anandan.

The government and education market is growing at a CAGR of 50%. According to industry estimates, government and public sector enterprises would account for 20% share of the domestic PC market.

“There is greater IT implementation in PSUs now, the defence IT expenditure is also rising and with the e-governance initiatives taking shape across the country, we see great opportunity in the market,” added Mr. Anandan.

Dell has started providing its products including PCs and servers to the Indian Railways, the Tamil Nadu government undertaking, Elcot and Union Bank of India, it is now looking at enhancing presence in the market and tying up with national and regional system integrators for installation.

The Rs 2,000-crore Dell India witnessed a growth in revenues of over 50% and volume growth of 70%in2006. “While large IT/ITeS companies will continue to provide the largest chunk to our revenues, we have been steadily expanding into other areas. Two quarters ago, we entered the home and small business space. The government and education space is the next opportunity,” said Mr. Anandan.

Dell recently inaugurated its R&D centre in Bangalore, its largest outside its main Austin facility, and a centre of excellence for Dell’s enterprise solutions and products.

According to IDC figures, the domestic IT market docked revenues of Rs 61,761 crore in 2006 and is expected to touch Rs 116177 crore by 2010.

Kingfisher Radio to make open offer for Deccan Aviation

KINGFISHER Radio, a wholly-owned subsidiary of United Breweries Holding, will make an open offer to shareholders of Deccan Aviation, the Bangalore-based low-cost carrier to pick up 27 million shares at a price of Rs 15 5 per share.

The offer, being managed by Edelweiss Capital, is slated to commence on July 25 and will end on August 13. The offer is a consequence of a 26% preferential issue being made by Deccan Aviation to Kingfisher Holdings.
UB Holdings had on May 31 announced acquisition of 26% stake in Deccan Aviation for Rs 546 crore. The company had made an initial investment of Rs 150 crore.

Kingfisher Radio was set up in 1999 to promote and sell media such as satellite, video, television and radio, besides deploying funds by way of investments in assets, properties and securities. The audited accounts indicate that in FY06 Kingfisher Radio had an operating income of Rs 5 lakh with net income of Rs 9,539. The paid-up capital is Rs 5 lakh while the reserves and surplus were a negative Rs 1.35′ lakh while for FY07 the net worth based on (he unaudited financial statement) is pegged at Rs14.49crore.