Andhranews

Targets Rs 7,000cr in revenues

By Our Correspondent

Kolkata, Aug. 8: The Tata Tea group is aiming for a turnover of Rs 7,000 crores in three years by focusing on the beverage segment and acquisition opportunities in countries like the United States.
The group, which recorded a turnover of Rs 3,124.56 crores in the last fiscal, plans to pay special attention to the beverage segment and also to evaluate growth opportunities in the flavoured tea and speciality tea segments, Tata Tea Limited’s vice-chairman R. K. Krishna Kumar said. He was speaking on the sidelines of Tata Tea Limited’s AGM in Kolkata on Tuesday.

“Our ambition is to acquire companies which are bigger than Tetley. We are looking at two to three companies at present,” he said. Referring to the possible destinations the company was targeting, Mr Kumar said that they were looking for opportunities in the US market because it would set the trend. The products could later be marketed in other countries like Russia, Central Europe and China. “We are looking at the US market, because that market has set the trend,” he added.

Earlier, Tata Tea chairman Ratan Tata indicated that the company would introduce tea-based products in the future. “We are trying to develop a company, not just a plantation company, but a company which will deal in branded and packaged products. Tea is not just a beverage, but it has many other attributes,” he added. The company is in the process of developing such products, he said.

In reply to a question on whether the Tata group would increase its holding in Tata Tea, Mr Tata said: “We are keen to increase the group’s holding in Tata Tea. This increase might come by creeping acquisition at a maximum 5 per cent every year.” The Tata group has a holding of 28.95 per cent of which Tata Sons has 15.06 per cent, Tata Chemicals 7.68 per cent and Tata Investment Corporation Ltd 5.12 per cent.

He also said that Tata Tea was restructuring its tea plantation business in north India. On the cross holdings in the Tata group, Mr Krishna Kumar said: “The cross holdings will be restructured in due course. However, in certain areas, the cross holdings will remain for strategic reasons.”

New Delhi, Aug. 8: Tata Sky Ltd, an 80:20 joint venture between Tata and Star, launched its Tata Sky satellite television service across 300 cities in India on Tuesday.
With attractively priced hardware (Rs 2,999) and a special introductory offer of only Rs 200 per month, Tata Sky said that the service has been designed to give subscribers a choice of all their favourite television channels in DVD quality picture and CD quality sound.

Mr Vikram Kaushik, managing director and CEO, Tata Sky, said, “By bringing satellite television directly into Indian homes, Tata Sky is set to change the way viewers watch television with pristine quality, choice, convenience and control at their fingertips, delivered at a competitive price.

We are confident that offering a television service that is second to none, while providing top-of-the-line convenient and efficient customer service to our subscribers throughout every contact point including sales, service and billing, will set us apart from the competition. We look forward to bringing the magic of Tata Sky to television viewers throughout the country.”

To offer maximum convenience to subscribers, Tata Sky has set up a pan-India distribution network of popular consumer electronic stores and mobile phone outlets for retailing its hardware and prepaid recharge vouchers.

Washington, Aug. 8: India may be among one of the countries which could lose preferential trade benefits granted by the United States as the Congress complained that these countries were not adopting a stand that is beneficial for solving the stalemate in WTO talks.

The US trade representative Susan Schwab has said that Washington wanted to determine whether certain countries should be excluded from the generalised system of preferences programme which grants duty-free treatment for goods from 133 developing countries. The review follows complaints from Capitol Hill that India and Brazil, which avail trade benefits, have not been helpful in efforts to achieve agreement in the Doha round of global trade talks.

“Countries that don’t want to give us access to their markets in the WTO negotiations, why should we continue to give them preferential treatment?” wondered Charles Grassley, the chair of the Senate Finance Committee that has jurisdiction over any legislation to extend the GSP programme.

“For 30 years, Congress has given the GSP programme broad bipartisan support. GSP serves as an important bridge for developing countries to facilitate their transition from unilateral preferences to full economic partnership. Both the US and participating countries benefit from expanded trade under GSP, and it is important that this programme be reauthorised,” Ms Schwab said.

New Delhi, Aug. 8: India’s largest private carrier Jet Airways plans to launch services ahead of the 2008 Olympics to China, from where it plans to fly to the US. “We are planning to connect Mumbai and Delhi to Shanghai and Beijing and from there to different US destinations.

We hope to commence these operations next year,” Jet Airways chairman Naresh Goyal said. Once operational, Jet would be the second Indian carrier after Air-India to offer services to the eastern neighbour. While the airline can fly directly to China, it is yet to get landing rights in the US. The Jet chief expressed confidence that the airline would get clearance from the US civil aviation authorities within a year.

Hyderabad, Aug. 8: After achieving a dominating position in the software and customer services outsourcing, India seems to be emerging as a preferred destination for induction outsourcing, albeit a tad slowly. Although Infosys, TCS and Genpact train students from Ivy League colleges in India and place them across their global operations, a US-based IT consultancy company ThoughtWorks has successfully tapped induction outsourcing to train its hires from the United States, the United Kingdom and Australia in Bangalore.

“More than the cost benefits and offshoring, we’ve begun induction outsourcing for our own benefits. The programme targets graduates, people who are new to the IT consulting business or software development space and later hone their skill-sets,” says Mr Sitaraman D., managing director of ThoughtWorks India.With induction and training in India close to 30 to 35 per cheaper, the 6-week ThoughtWorks University programme aims to provide new recruits with skills to integrate into their companies in different geographies.

Besides, the rapid ascent of India Inc. on the world map has made it favourable for new hires from the West to begin their corporate learning curve in one of the fastest-growing economies, feel ThoughtWorks India officials. Having trained 75 graduates every year for the last two years, ThoughtWorks India intends to train about 150-200 graduates this year, Mr Sitharaman said in an interview with this newspaper.

But induction outsourcing is still in a nascent stage in the country and the variety in the cultural component of every company still proves to be the biggest block that cannot be outsourced yet. That’s the reason why the ThoughtWorks programme is captive and the $100 million company has not firmed up plans to offer its expertise to other companies.

However, ThoughtWorks India sees potential in the process and, therefore, has decided to expand locally. Sources say ThoughtWorks would announce a a facility in Pune in a few months and after that would expand into the North and the East.

Trading on the exchanges is expected to be spiced up with the announcement by Kotaksecurities.com of a fixed fee based on per trade brokerage offering which they said is the international trend. It is being implemented for the first time in India. By paying a fee of Rs 9, a trader or investor can do trade worth Rs 50,000. If there are two lakh shares traded, the trader will be charged Rs 36.

Rush for smaller pie

This is against the present brokerage charges of Rs 30 for shares worth Rs 5,000. With this charge, Kotak expects their market share in the Internet trading to grow from 20 per cent to 40 per cent.

Reliance Capital is also said to be coming out with something akin which will make trading cheaper for retail investors. Brokers, who are watching this development, say that there will be cut-throat competition as the pie is really small. For instance on Tuesday, trading on the Bombay Stock Exchange was just Rs 2,133 crores and on the National Stock Exchange Rs 4,275 crores. It is some of this pie that all the brokers are after. There are some 800 brokers on the BSE with the real active ones being about 400.
Brokers will have to reduce their brokerage charges if they want to capture volumes in this business.

Woes of cut-throat competition

Cut-throat competition already exists and this is one of the causes for the instability in the market that happens ever so often. Brokerage houses give clients easy money to play around with in order to retain them. And when the clients cannot pay up, the brokerage houses offload the shares in the market and this causes the steep falls that one witnessed recently.

When the market is up, investors with the prodding of the brokerage houses that also have banking facilities, go beserk. So it will be interesting to watch what happens now that Kotaksecurities.com has set the ball rolling.

Great Eastern’s dilemma

The Great Eastern Shipping demerger seems to be an unending story. Sometimes it’s on and sometimes it seems that it may not go through. Earlier, the company had said that it was ONGC that was standing in the way of the merger and ONGC clarified its position which it said was in no way affecting the demerger. Now there are some other hitches and the company is expected to take a decision on
these problems on Wednesday.

The RIL experience

Shareholders are said to be looking forward to the demerger. Following the fight between the Ambani brothers, Mukesh and Anil, Reliance was split and it really unlocked shareholder value. The shareholders have been gainers and have also got stocks in the four new companies formed from the demerger.

In the case of the Seth family of Great Eastern, the demerger was decided to give the different Seth cousins and brothers their own turf. In the bargain, the shareholders were to be benefited. However, the delay is making the shareholder restive, because in all the uncertainty, the Great Eastern share has lost over Rs 100.

The shareholders are threatening to write to the Securities and Exchange Board of India to look into the whole affair. They allege that someone has been consistently buying the share in the open market with a hidden agenda. However, it is hoped that the board of the company will throw some light on the demerger status. Whether it is on or off and what exactly is holding it up.

Mumbai, Aug. 8: The Sensex started on a high note on Tuesday morning mirroring the buoyancy of the Asian markets and spurted towards the end of trade due to short covering and bargain hunting. The Sensex closed with a flourish, after two lacklustre trading sessions, up 202.33 points at 11,014 while the Nifty crossed the 3,200 mark to close at 3,212.40, up 61.30 points.

Among the Asian markets, the Nikkei was up 310 points, the Hang Seng 94.65 points and the Kospi 21.56 points.Both the Sensex and the Nifty were fuelled by the bank, auto and heavyweight stocks like Reliance and ONGC.

Hyderabad, Aug. 8: Microsoft Corporation will be opening between 10-15 flagship stores in seven cities and 1,500 demo centres around the country for its Xbox 360 gaming console, which the software giant will be launching before Diwali, Mr Mohit Anand, country manager, India, entertainment and gaming devices, said here on Tuesday.
Speaking to reporters, Mr Anand said the flagship stores would be set up by Microsoft’s partners and would be located in upscale neighbourhoods. They would all open before Diwali. Microsoft now runs an 850-sq. feet studio featuring the Xbox 360 at the Imax facility of Adlabs in Mumbai.

Declining to elaborate on the number of Xbox 360 consoles Microsoft expects to sell in India, Mr Anand said that when the company had announced that it would be launching the console in India in May, it has received 55,000 “leads”. The Xbox 360 will be sold in two variations, including the Xbox 360 Core System and the Xbox 360 System. While the Core System will have a leading game title thrown in and will be priced at Rs 19,990, the premium Xbox will be priced at Rs 23,990, according to a Microsoft statement.

“We will be launching 7-8 new game titles, developed by our partners like Electronic Arts, every month for the premium Xbox,” he said. Asked whether Microsoft would be customising the content for the Indian market, Mr Anand said, “We will bring out content for the local market, though gaming console enthusiasts around the world prefer to play in English.”

He said Microsoft had designed the Xbox to be tamper-proof to stymie efforts by pirates to hardwire the product to obtain cheaper knockoffs. “There is no scope for hardware modification in the Xbox, and the economics don’t work for the grey market,” he said.The Xbox 360 system will have a 20GB detachable Xbox 360 hard drive for storing music, video and games and a Xbox 36 wireless controller.

What does the acquisition by Advanced Micro Devices of ATI Technologies, which has begun to give semiconductor market leader Intel Corp a run for its money, arguably
the smartest maker of 3D graphics cards for the gaming industry (among other goodies for said segment) mean for India.

Both AMD and ATI Technologies have advanced research and development centres in India. AMD’s is located in Bangalore, and has 50 specialists working on the development of what Raghuram Tupuri, general manager of the India Development Centre, calls “cutting-edge semiconductors”.

ATI’s centre is based in Hyderabad, and has nearly 240 engineers, who are involved in the development of gaming chipsets like Radeon. Will both the centres be merged into one, with AMD Bangalore setting the research agenda for ATI Hyderabad? That appears unlikely, at least for the time being, because the area of expertise for two companies is entirely different. In fact, one of the stated reasons for AMD to acquire ATI was to get a foothold, and a rather strong one at that, in the 3D graphics chipsets segment.

“The PC gaming industry is among the fastest growing, if not the fastest, segments in the world,” says Mohit Anand, country manager, India, for Microsoft’s Entertainment and Devices Division, which markets Microsoft’s XBox game console business. “In the face of stiffer competition from Intel, AMD’s acquisition of ATI may be another game changing event with the planned integration of Graphics Processing Units (GPUs) into future PC processors. The battle for the PC is no longer just a processor war, but truly a platform war,” says Jim McGregor, a principal analyst with In-Stat, a market-research firm.

Also, while AMD has emerged as a much stronger and more focused competitor than Intel has faced before, says Mr McGregor, it is still a much smaller company than Intel and must continue to innovate and execute to maintain its momentum in the market. It also has to contend with a much-larger Intel which, despite declining margins and layoffs, now has a new sense of urgency and is responding with new products and strategies. In the future, AMD will have to continue to be innovative to maintain its momentum.

The ATI bouquet of high-end graphics chipsets could enable AMD to hit the sweet spot among gaming enthusiasts. “AMD’s acquisition of ATI faces many challenges, but it is likely to have a major effect on the PC ecosystem, ranging from various CPU and GPU vendors to semiconductor foundries,” says In-Stat.

New Delhi, Aug. 8: Operations of State-run ONGC, Gail (India) and Reliance Industries’ have been severely hit due to heavy rains in Gujarat, during the last week as various plants have been shut down temporarily.

ONGC has shut down its wells after its facilities were inundated by up to 10 feet of water, affecting gas supplies and crude production. ONGC’s Hazira gas processing complex was flooded last night forcing the company to shut down the facility, which received gas from the company’s Bassein and Panna/Mukta and Tapti fields in Mumbai offshore, company chairman and managing director R.S. Sharma said.

“It may take at least a couple of days to deflood the Hazira facility, before gas production is restarted,” he said. Gail-operated Hazira-Vijaipur-Jagdishpur gas pipeline has also been closed due to floods in the State, affecting gas supplies to power plants and fertiliser industry.

Hyderabad, Aug. 8: Lanco Infratech Ltd is considering private placement of its equity share, prior to its initial public offering, for which the Hyderabad-based company has filed its Draft Red Herring Prospectus with the Securities and Exchange Board of India.

If the private placement of Lanco Infratech’s equity shares is successfully, the company’s DRHP indicated that the net offer to the Indian public would be reduced. Lanco currently operates a gas-fired power plant in Kondapalli in Andhra Pradesh, and the company has several other power and infrastructure projects under development.

According to a Lanco Infratech statement, the company proposes to offer 44,472,381 equity shares of Rs 10 each for cash at a premium to be decided through the 100 per cent bookbuild process to be conducted on the Bombay Stock Exchange and the NSE.

The issue would constitute 20 per cent of the fully-diluted post issue equity capital. The statement said Lanco Infratech proposes to reserve 500,000 equity shares for allotment to eligible employees of the company. Thus, the net offer to public would be of 43,972,381 equity shares.

Of the net offer to public, the company plans to reserve 60 per cent of the issue for allotment to qualified institutional buyers on a proportionate basis, five per cent of which will be available for allotment to mutual funds.

The company also proposes to reserve up to 10 per cent for allotment to non-institutional investors and the balance 30 per cent for allotment to retail investors on a proportionate basis. The book-running lead managers include JM Morgan Stanley Ltd, Enam Financial Consultants, ICICI Securities Ltd and Kotak Mahindra Capital Company Ltd.

New Delhi, Aug. 8: Tata-AIG Life Insurance has entered the micro-insurance (MI) sector with the launch of three new products for the rural people. The MI products have been tailor made to suit the requirements of the rural population with special emphasis on product simplicity and ease of documentation.

Announcing the launch of these products, Mr Trevor Bull, managing director, Tata AIG Life said, “We believe that rural India holds tremendous potential for growth and is hugely untapped in terms of life insurance.” Mr Bull further added that this initiative will enable Tata AIG Life to expand its product suite and offer its insurance services to a larger cross-section of society.

The three products — Navkalyan Yojana, Sampoorn Bima Yojana, and Ayushman Yojana — have been specially created with emphasis on product simplicity and ease of documentation. “Navakalyan Yojana” is a five-year MI plan that provides financial protection to the policyholder’s family with add-on accidental death benefit rider.

“Sampoorn Bima Yojana” is a policy in which the policyholder pays a premium for 10 years and gets a cover for 15 years, and upon survival till maturity gets 100 per cent returns on the premium paid. “Ayushman Yojana” is a single 10-year protection plan with the benefit of payment at the beginning of the policy term and the policyholder gets back the premium amount plus additional 25 per cent on survival at the end of the policy term. Tata AIG Life Insurance Company LTd (Tata AIG Life) is a JV company, formed by the Tata Group and AIG.

Mumbai, Aug. 8: Textile and apparel major Raymond Limited announced on Tuesday that the company and a European denim major, UCO NV, have come together to form a new global denim powerhouse, a single entity with manufacturing facilities spread across the US, Europe and Asia.

With executive headquarters in Belgium, the 50:50 joint venture (JV) company, which is incorporated in India as Raymond UCO Denim Private Limited, will be engaged in the business of manufacturing and marketing of denim fabrics.