Andhranews

Nainital, Sept 24: The rush by business groups to put up Special Economic Zones (SEZs) and the red carpets rolled out for them by various states could face speed breakers following the complaints about the way lands of farmers were sought to be grabbed for the SEZs.

The leadership, on the last day of the Congress conclave here, was warned of the impending disaster and unrest if permissions to scores of SEZs are given in their present mode. Congress president Sonia Gandhi herself stepped in to say that the interest of farmers should be uppermost when implementing plans for industrial development. She indicated unequivocally that she disapproved of attempts to use the land of farmers for setting up SEZs.

Commerce minister Kamal Nath has been in the forefront of promoting and encouraging SEZs across the country. Approvals have been given to 150 SEZs involving 2,68,000 hectares of land. Another 225 applications are pending. The finance ministry is against the several concessions given to the SEZs as they would involve revenue loss in crores of rupees. Even the Reserve Bank of India (RBI) has said that the SEZs are nothing more than real estate deals.

Bhupinder Singh Hooda, the Haryana Chief Minister, Punjab Chief Minister Amarinder Singh and Vilasrao Deshmukh, the Chief Minister of Maharashtra, which has the largest number of SEZs, 50, coming up tried to convince the party leadership that they have been taking measures to ensure that farmers are not affected by such ventures and that they would get a fair deal.

Several participants at the meet, being attended by 14 chief ministers and senior Congress leaders, sought to poke holes in the SEZ issue. Some of them warned how certain industrialists are planning to become the “biggest landlords” in the country by acquiring huge tracts of land at throwaway prices. These industrialists would become real estate tycoons and make “a killing” by selling part of the land in the future, they said.

Some said that SEZs were a mockery in the name of industrial development as developers of some zones are demanding thousands of hectares of land. Taking a cue from Ms Sonia Gandhi, some leaders suggested that those SEZs should be given priority which would be set up on non-agricultural land and wastelands in backward and hilly regions.

Meanwhile, on the disinvestment front the Prime Minister Dr Manmohan Singh said that he would talk to the partners in his government before reviving the disinvestment process. Dr Singh said, “It is certainly true that bec-ause of certain differences among the partners of UPA, I had to put that process on hold. But we will talk to our colleagues before we move forward in that direction (disinvestment).”

Singapore, Sept. 24: It’s not necessary to build an empire like Mittal Steel and become a billionaire like Azim Premji to make it to the cover of Forbes magazine; a corporate thesis as basic as excelling in your business can also take you there — just like Rajiv Bajaj.

The MD of Bajaj Auto has done it by executing a turnaround in his family-run automaker and reclaiming the top position in the two-wheeler market, while earning himself a place on the cover page of the Asia edition of the world’s most famous capitalist magazine.

Besides, Bajaj Auto also finds a place in Asia’s Fab 50 list, featured in the same October issue of Forbes Asia — among the companies that the magazine describes as the best.

New Delhi, Sept 24: Service tax collections of the government has been on a surge for the last few years. For the current fiscal (2006-7), the estimated service tax collection is Rs 50,000 crore, as against the finance ministry target of Rs 40,000 crore. In the fiscal year 2007-08, service tax collection is set to touch Rs 1lakh crore.

According to industry chamber Assocham, which has come up with estimates on service tax collections, the service sector is registering a substantial growth rate in the last couple of years and the trend will not only continue but also yield high revenue collections for the government.

Assocham estimates will be shared and debated with senior officials of the finance ministry in Mumbai on Monday. In the fiscal, 2003-04, the finance ministry earned revenues of Rs 7,750 crore through service tax imposition. This almost doubled to Rs 14,150 crore in the next financial year, i.e. 2004-05. In the subsequent fiscal year of 2005-06, the government earned Rs 23,000 crore by way of service tax collections.

The government also fixed a target of Rs 34,500 crore for 2006-07 at the time of budget presentation for service tax collection. This was revised by the finance ministry officials to Rs 40,000 crore as they exuded confidence that the way services are being expanded, the target for service tax collections should be set higher.

However the Assocham study expects this to touch Rs 50,000 crore. Assocham has pointed out that since the intention of the government is to move towards Goods and Services Tax (GST) by 2010, it is important that all States should introduce VAT at the earliest.

It has suggested that the central government should bring all services under the tax net barring basic essentials and public utilities. It is important that a comprehensive ‘Service Tax Act’ should be put in place instead of amending the Finance Act every year, the chamber has said.

Assocham also suggested that a master circular of service tax should be issued every year, which also covers the list of notification issues in the last one year. This, it says, will benefit trade and industry not only to update but clarify doubts which may help reduce litigation.

Hyderabad, Sept. 24: Indian biotechnology companies, most of them involved in vaccine development and manufacture or research services, must take more risks in terms of product development to grow in the highly capital intensive industry, the head of a large American venture capital fund says.

According to Srinivas Akkaraju, MD of Panorama Capital, which has $1 billion under management, the Indian biotechnology industry was characterised by their exclusive focus on providing research services. “The problem here is that such services will only account for less than one per cent of the biotech product company’s eventual revenues. While the model is sustainable, the Indian bio-tech industry will be stuck doing only low-end work,” Dr Akkaraju said on Sunday.

He said that the biotech sector had a substantial opportunity to become partners in new drug development with companies in the US and Europe because of the cost factor. “Drug development is characterised by a long, expensive, and risky product development cycle. Each discrete step has its own probability of being positive, which is then a gate for proceeding to the next step.

Overall, the cumulative probability of getting an approved drug after entering clinical trials is only 10-15 per cent, which means that the probability of earning revenues on a potential drug is also only 10-15 per cent, whereas the probability of spending money on clinical trials is much higher than this,” Dr Akkaraju said.

It is because of the high cost of drug development in the developed countries, that Indian biotech firms should step in and seek stakes in new drugs being developed. “They need to take the risk and join as partners with small biotech companies in the US and Europe, so that when the drug comes to market they can create a lot more value,” he said. “In the end, a calculation of probability-adjusted NPV results in a low positive or even negative number (esp for low revenue products, as cost of clinical trials is similar).

By doing these trials in India, the probability-adjusted NPV can be increased — more importantly, if one can increase the probability of success the equation cha-nges fundamentally and the probability-adjusted NPV increases significantly.”

Romi Malhotra is managing director of Dell International Services (DIS) India, responsible for running Dell’s operations in India, implementing its services strategy. Mr Malhotra, a graduate in metallurgical engineering from Punjab University, took over the reins of DIS in March, 2004. Before joining Dell, he was CEO and MD of SCOPE International, a subsidiary of Standard Chartered Bank. Prior to that, he was the CEO of one of the outsourcing businesses of GE Capital in India.

Okay. What is it exactly that DIS does in India?
It is a captive BPO operation of Dell Inc., the largest computer manufacturing company in the world. We have centres in Bangalore, Hyderabad, Mohali and Gurgaon. The Bangalore centre is the biggest with over 5,000 employees, followed by Hyderabad with 4,000.

In all, we have 13,000 employees at Dell International, making it the largest captive BPO company in India. Our centres in India handle sales, customer care and technical support. Sales of Dell products in the Europe, Middle East and Asian markets, excluding Japan and China, and in Australia and New Zealand, basically the English-speaking world, are handled from India. More imp-ortantly, though, technical support constitutes the largest pie-ce, more than 50 per cent, of DIS’ business in India.

Some critics of outsourcing have argued that Dell’s sales are being impacted because the calls landing in India are not handled properly. What do you have to say to that?
Dell has 50 global delivery centres. As I said, India handles the sales and customer function in many mature markets like the UK and Ireland and Australia. We have the metrics in place to keep track of how each engagement is being handled by the agents. Our productivity has never been higher.

What else does Dell do in India?
Contact centres form only 10 per cent of our business. Dell has a software applications development centre in Hyderabad, an R&D centre which is involved in hardware R&D. Some of Dell’s global financial accounting is done in Bangalore and Hyderabad. We have recently started an analytics service, which has statisticians and economists, to mine the data from our Web engagements, so we can refine our sales initiative.

Why did Dell decide to set up its manufacturing unit in Chennai, after indicating that several other cities, including Hyderabad, were being explored?
There are several reasons for selecting Chennai, including the location of a port.

What other reasons? Could the biggest reason for choosing Chennai be Dayanidhi Maran, the Union minister for communications and IT, who is from Chennai?
I would not like to comment on that. Dell sees a huge market for computers in India. In fact, Dell computers are the largest-selling brand in India.

Is a captive BPO operation scalable?
Yes, it is. Phase I of our Gurgaon operation has a 2,500-seat capacity. We are on track to be a 20,000-employee-strong company, as indicated by our chairman, Michael Dell, and our CEO, Kevin B. Rollins, during their visits to India earlier this year. Dell International is the largest employer in the Dell family outside the US.

At least one technology research firm has said that captive BPOs are a mistake, and that they should pack up and leave because captive BPOs are spoiling the market for other players by paying salaries which the others cannot match. What’s your opinion on that?
Captive BPOs are successful. And I don’t believe that captive BPOs are paying salaries higher than what the market demands. At least at Dell, we do not pay high salaries to retain our people. We retain our people by offering them a career path, which is designed right from the time they join. We have a strong training programme. And we offer them a career path because Dell International is growing.

Will increasing wages make India uncompetitive as a BPO/ITeS destination?
I don’t think so. For the reason that while wages have been rising, the cost of other parts of the outsourcing business are coming down. For example, when the first contact centre opened in India about five years ago, the cost per byte of broadband formed 70 per cent of the centre’s cost. But now telecom costs are far cheaper, so it evens out a bit. One area of concern though is the infrastructure, which is under strain. Roads are in poor shape in most cities. Police patrolling is patchy at best, forcing BPO companies to provide their own security to employees.

How long will the contact centre and BPO party last?
That depends on how Indian outsourcing companies innovate and bring more expertise to the clients’ table. In India, outsourcing, or offshoring, is no longer a cost game. Sure, earlier a lot of technology companies outsourced their requirements to India because of the relatively inexpensive labour. Now they are coming for the quality of work being done in India, and staying with partners who innovate and add value to their business.

There is no reason why the offshoring story cannot continue, provided Indian technology companies, including third-party BPO firms, innovate. Also, the demographics are in India’s favour. We have a large labour pool, which can speak English.

Where does Dell International figure in Dell’s big picture?
Dell’s biggest operation outside the US is in India. If the quality of technical support, customer care and sales efforts are not up to speed, we would not be expanding so rapidly.

Minar International Limited, an exporter of made-ups to the US markets, proposes to enter the capital market on September 25 with an IPO of 69,23,077 equity shares of Rs 10 each. The issue closes on September 29. The company aims to set up a wider width fabric processing unit in Sipcot, an industrial growth centre in Perundhurai in Tamil Nadu, where it has acquired 22.13 acres of land at Sipcot under 99 years lease. The company has decided to pay Rs two crores as lease rent.

According to the company, the unit will have state-of-the-art processing machinery and will initially process and finish 60,000 metres per day of bleaching or dyeing of light/medium/dark shades. Later the capacity will be extended to 1,00,000 metres per day.

The company also plans to import processing machines from leading European manufacturers that include Benninger of Switzerland and Osthoff, Kusters, Monforts of Europe. “We will be spending around Rs 46.77 crores for the import of new machines for our unit,” Mr Sankara Krishnan, director, Minar international.

JHS Svendgaard IPO Opens on Sept. 26th:

JHS Svendgaard Laboratories Limited, a dental and oral healthcare products manufacturing company is all set to enter the capital market with a public issue of 67,00,000 equity shares of Rs 10 each including promoters contribution of 5,00,000 equity shares of Rs 10 each. The issue is being made by the 100 per cent book building process with a price band of Rs 49 to Rs 58 per equity share.

The net issue will constitute 49.60 per cent of the fully diluted post issue paid capital of the company. The bid/issue opens on September 26 and closes on October 4. The company is looking at the vast growth potential in the oral care market in India, and is now setting up an integrated manufacturing facility at Kala Amb, Sirmour district in Himachal Pradesh, and is also increasing its capacity at its 100 per cent export oriented unit at Noida.

Pirojshaw Sarkari is MD of UPS: Pirojshaw Sarkari been appointed managing director for the Indian subcontinent for UPS. He succeeds Thomas Matthew, who has taken on a new role in the UPS Asia Pacific strategy team based in Mal-aysia. Mr Sarkari was earlier MD for UPS in Philippines.

Joshipura to head GSK in India: Hasit Joshipura, currently president and ED of the pharmaceuticals business at Johnson & Johnson, has been designated vice-president and general manager of GlaxoSmithKline Pharmaceuticals. Kal Sundaram, vice-president South Asia and MD, GlaxoSmithKline Pharmaceuticals Ltd., India will assume a new assignment in GSK International with effect from January 1, 2007.

Penumalli is new MD of Analog Devices: Dr Reddy Penumalli has been promoted as MD of Analog Devices’ India. In this capacity, Dr Reddy will be responsible for strategic planning, operations, administration and management of all ADI facilities in India

Haribhakti is partner in Spencer Stuart: Radhika Haribhakti has moved to Spencer Stuart, an executive-search consulting firm as a partner. Prior to this she was executive director in the investment banking division at JM Morgan Stanley and earlier with the Bank of America’s corporate banking group.

PayMate hires Sharma to lead marketing team: Mobile commerce solutions provider PayMate India, has brought in Akshay Sharma as assistant vice-president, marketing, public relations and brand development. Akshay brings with him over three years of experience from MTV Networks India.

Gopinath is Geometric India chief: Geometric So-ftware Solutions has named Ravi Gopinath as the company’s managing director and chief executive. Mr Gopinath succeeds Manu Parpia who will continue as vice-chairman and executive director at Geometric. Prior to accepting the new role, Mr Gopinath headed Engineering and Industrial Services, a strategic business unit of TCS.

Solix hires Lockner as V-P (sales operations): Solix Technologies, a leading provider of information lifecycle management solutions, has named Julie Lockner as vice-president of sales operations. Ms Lockner, who joins Solix from EMC Corporation, will report to Shekhar Dasgupta, president and chief operating officer, Solix Technologies.

Mumbai, Sep 24: TCL India Holdings Private Limited, a 100 per cent subsidiary of TCL Corporation, China, has chalked out a plan to increase its sales of colour television and LCDs to about 300 per cent in the coming festive season. These TV sets are imported from China and reassembled here.

“We will be spending about Rs 50 crores this year on sales promotion, of which Rs 35 crores will be spent in this festival season. It will include advertisements through the print media and ‘Diwali unlimited offer’ to our customers,” said C.M. Singh, vice-president, sales and marketing, TCL India Holdings.

According to Mr Singh, “Our main focus is on the LCD segment, which is expected to grow at about 500 per cent in the near future, and we target to become a top player in India in this segment.” The company is targeting sales of 2,00,00 units of its colour television sets and 4,000 units of LCDs this Diwali. Moreover it also plans to open 20 exclusive TCL shops — TCL Universal — before Diwali through the franchisee route across the country. The company will also set up its own manufacturing unit in India for colour televisions and LCDs.

Declining to give further information on the location of the unit, Mr Singh said talks regarding purchase of land for the unit are in the final stages and “we expect to finalise the deal by next month.” The plant is expected to manufacture 1,50,000 TV units per month. TCL has set a target to double its turnover this year to Rs 550 crores from Rs 270 crores last year, along with an increase in market share to 10 per cent from five per cent at present.

Continuing their good run, markets closed higher in the week ended, exhibiting strength and resilience. On the BSE, the Sensex closed at12236, notching a gain of over 200 points and the Nifty on the NSE finished with a gain of 1.9 percent at 3544. Expectations over good Q2 numbers on reports of advance tax numbers, steady FII buying and low global crude prices kept the sentiment positive.

The Securities and Exchange Board of India’s changes in FII and MF exposure limits in F&O segment is a positive signal for derivative segment. Key events for the coming week will be F&O settlement and global commodity trends. Momentum indicates that barring unexpected tsunamis markets are well on their way to lifetime highs.

Chartists predict 13000 for the Sensex in the next few weeks. For the week ahead, key supports for the Sensex are 12080 and 11830 and for the Nifty are at 3470 and 3430. Resistances for the upmove exist at 12450 for the Sensex and 3590 for the Nifty. With focus on Q2 numbers investors are advised to adopt stock and sector specific approach. Avoid stocks that have run up sharply and put trailing stops to protect profits. Avoid shorts for present.

F&O SEGMENT
With markets in striking distance of making new highs, volumes have improved significantly in derivatives segment ahead of settlement week. Sentiment indicators such as put/call ratio, implied volatility and open interest indicate cautious optimism. Buy Nifty call option of 3550 strike for short covering gains.

Buying is suggested in RIL, SBI, Reliance Capital, ACC, ONGC, GAIL, Suzlon, GA Cement, Divi Labs, Cummins and IOB with stop loss at Rs 1,100,Rs960, Rs516, Rs 930, Rs 1,130, Rs255, Rs1200, Rs112, Rs 2,100, Rs210 and Rs102, respectively.

Buy in Oct series Matrix, Dr Reddy’s, GMR Infra, ITC, SCI, GNFC, Chambal Fert and CESC. Fertiliser counters may give unexpected gains on announcement of new policy. R-ADAG group is reportedly acquiring a banking license to increase its presence in the financial sector. Strong rupee may keep tech counters range-bound till results start pouring in. Auto and pharma counters are facing resistance at higher levels. Buy only on sharp declines.

Strong buying interest is evident in banking counters at lower levels. Buy on declines UTI Bank, PNB, OBC, IDBI, Syndicate and Canara. News driven action indicated in Tata Chemicals, HCL Tech, Wockhardt and Nicholas.

Keep an eye on side counters which are witnessing good roll over to new series. A market that is fundamentally and technically poised to move higher is not going to reverse direction because of news item-even a dramatic one.

SATTA GUPCHUP

* Select counters like Biocon, Emami and Champagne Indage are witnessing good buying interest. Industry sources indicate that cancer drug Biomab-EGFR launched by Biocon has immense potential to become a money spinner for the company.

Buy on declines as worst is over for this good biotech stock. Innovative product launches like a hair staightener for thick and curly hair and a whitening cream for dark skin has seen exports to Africa soaring at Emami. The company is emerging as significant FMCG player in Africa. Buy Emami for excellent medium-term gains.

Champagne Indage has attracted investment from large private equity players like EMM and Arisaig. Buy the stock for good long term returns. *With construction activities picking up post monsoon analysts expect cement companies to hike prices again. Sustained buying in frontline counters like ACC, Grasim and GA Cement has seen mid caps of the sector like Birla Corp, Madras Cement and others also buzz with action.

Punters are touting valuation numbers and are pushing small cap counters like Sagar Cements, Rain Commodities and others to new highs. Stay overweight on the sector but avoid companies with low capacities.

* Auto ancillaries are back in the shopping list of funds. Positives like soft metal prices, rising exports and strong rupee may see companies report good results say industry sources.

Apart from majors like Bharat Forge and Amtek Auto some of the midcap counters exhibiting good strength are MICO, ANG Auto, Phoenix Lamps, Lumax Inds and Banco Products. Strong buying is suggested in the sector.

C. Kutumba Rao is a Hyderabad based stock market analyst. The views expressed and the recommendations made are those of the author. Readers are strongly recommended to consult their financial advisors before making any financial investments. This newspaper is not liable for investment decisions made on the basis of recommendations in these columns.

Socialtext is a small company, a start-up focussed on developing enterprise social software for collaboration. The Palo Alto-based firm’s flagship software is an enterprise wiki. But before we go further, did somebody ask, what’s a wiki? A wiki is a group-editable website, says Socialtext, which swears by open-source softwaer. Wikis are composed of web pages you can write on, enabling fast and easy collaboration. “The word “wiki” comes from a Hawaiian word for “quick”. Wikis were invented about 10 years ago by Socialtext advisor and friend Ward Cunningham. Wikis became the collaboration tool of choice because they are simple and flexible,” it says.

Wikis are popular with developers. Wikipedia is one high-profile example of its popularity. Microsoft has been experimenting with using wikis throughout its developer network to improve the flow of feedback from and among its users. Now, Socialtext has just unveiled a new user-interface.

Socialtext is a software-as-a-service provider that sells a hosted service offering wiki software tailored for internal corporate deployments. Customers can use the software for team collaboration, project updates and revision tracking, publishing blogs and other tasks. The new, 2.0 version offers a redesigned user interface and additional APIs to ease integration with other applications, according to CRN.

“At the superficial level, Socialtext 2.0 beta just looks nicer: big buttons, cleaner layout and the display areas just make more sense. You don’t feel you’re entering a secret world any more,” one reviewer wrote in his blog. “Socialtext has abandoned its geeky air and made itself much more acceptable to novice and experienced users alike.”

Hyderabad, Sept. 24: Human Biologicals Institute, a division of Indian Immunologicals Ltd., said on Sunday it has launched a vaccine against Hepatitis-B. The recombinant DNA vaccine, Elovac-B,. is indigenously manufactured by HBI at its plant here, K.V. Balasubramiam, managing director of Indian Immunologicals told reporters. Indian Immunologicals is a subsidiary of the National Dairy Development Board.

Mr Balasubramaniam said HBI had an annual manufacturing capacity of 100 million doses of Elovac-B. He said HBI’s focus will be to educate the masses on completion of full course of three doses for complete protection against Hepatitis-B.

He said HBI had priced each dose of Elovac-B at Rs 50 for children. Asked about the company’s financial performance, he said Indian Immunologicals expects to post revenues of Rs 150 crore in 2006-07.It recorded a net profit of Rs eight crore on revenues of Rs 102 crore in 2005-06.

New Delhi Sept. 24: Faced with intensifying competition, the Indian banking sector favours creation of six or seven large entities like the State Bank of India. A study by FICCI on the Indian banking system found that the majority of public sector banks feel that the lack of autonomy to offer attractive incentive packages to their employees is affecting their commitment and hampering growth in productivity.

The major strengths of the banking industry, which have helped it to mark its place on the global banking scene are regulatory systems, economic growth rate, technological advancement, risk assessment systems and credit quality. In the face of growing competition, consolidation in the banking sector is the most significant measure to achieve global standards besides strict corporate governance norms and higher FDI limits to create an efficient, seamless Indian banking system, the survey said.

The survey has also suggested diversification of markets beyond big cities, reduction in transaction costs, increased labour flexibilities and improved human resource management to achieve growth in the future. The majority of the foreign banks rated their working experience in India as “extremely good”. Given India’s potential over the next decade and beyond, all foreign banks in their response stated that they have formulated strategies for future expansion in India.

On the possibility of a Comprehensive Economic Co-operation Agreement with the EU, 85 per cent of the domestic banks emphasised that India should not give full domestic status to the EU based banks.