Andhranews

Mumbai, Sept. 3: ICICI Bank will make a bid for amalgamating the Satara-based United Western Bank (UWB) with itself. The UWB was put under moratorium on Saturday till December by the government on an application by the Reserve Bank of India. Barely 24 hours after the announcement of the moratorium, which threw thousands of unsuspecting depositors into a tailspin, the ICICI Bank in a brief notice to the Bombay Stock Exchange said the board of directors of the bank would meet on Monday to consider “whether an expression of interest should be submitted to the RBI for amalgamation of the United Western Bank with ICICI Bank, pursuant to the order of moratorium”.

The South-based Federal Bank has also evinced interest in taking over UWB. Sources say that the ICICI Bank will have to invest around Rs 300 crores to revive the ailing bank which has not had a chairman for the last two months. Source say that the RBI will decide on who can take over the bank on the basis of the suitor’s balance sheet and synergy. The RBI in its moratorium notice said that the bank’s assessed capital to risk weighted asset ratio (CRAR) turned negative at (-) 0.3 per cent as on June 30, 2006. This, it said, has jeopardised the depositors’ interest. “The bank was also unable to come up with any credible plan to raise fresh capital to bring its CRAR to the prescribed level,” said the RBI.

If ICICI Bank does get the 70-year-old bank in Satara, Maharashtra, it will have access to its network of 230 branches, 12 extension counters and 75 ATMs. It is listed on the BSE. The UWB’s liabilities are close to Rs 200 crores. As on March 31, 2006, the bank’s deposits were at Rs 6,480.19 crores and advances were Rs 4,006.27 crores.

The bank incurred net losses of Rs 98.64 crores and Rs 106.48 crores during the years 2004-05 and 2005-06, respectively. Its net NPAs were 5.66 per cent as on March 31, 2006 as compared to the peer group figure of 1.97 per cent. For the last one year, UWB board had been in talks with Mr Udayan Bose, an investment banker who is chairman of Thomas Cook India and his own investment company Tamara. According to sources, Mr Bose had given a proposal for the revival of the bank where he intended to change the management structure. His proposal was submitted to the RBI which, however, did not accept it.

Others in race

* UCO Bank, though not decided yet, may bid for the bank, its chairman and managing director V. Sridhar told PTI.
* “Bank of India is, as of now, not in the race but you don’t know what happens tomorrow,” top management sources told PTI.

Hyderabad, Sept. 3: You’ve seen and flown low-cost airlines, now get ready for low-cost commercial airports. That is what Capt. G.R. Gopinath, promoter and managing director of Air Deccan, has up his sleeve next. He is planning to persuade various State governments to pony up the money to build low-cost airports. Capt. Gopinath said here on Sunday he will be meeting Andhra Pradesh government officials next week with a concrete plan to steer ahead ideas for 5-6 low-cost airports in the State, inspired by the Maharashtra government-owned airport in Sholapur.

Built at an investment of Rs 10-15 crores, low-cost airports are mere “bushstrips” with airstrips, night-landing and basic navigational facilities. The target sites here are the ones in district headquarters and can be replicated in places like distant towns like Kandla in Gujarat, Kadapa and Warangal in Andhra Pradesh, Ambikapur in Madhya Pradesh and Bellary in Karnataka. Kingfisher Airlines chairman Vijay Mallya seconded Capt Gopinath’s idea.

“We need to develop ‘grass-strips’ as smaller versions of a full-fledged airport. Look at Kenya... It has the largest number of grass-strips in the world and that has done wonders for its tourism sector,” Dr Mallya said addressing delegates and members of the Indian Travel Congress here on Sunday. On its part, the Andhra Pradesh government wants an assured connectivity from Air Deccan.

“Once you assure connectivity, we will call a meeting in 10 days to take the matter forward,” Y.S. Rajasekhar Reddy, State Chief Minister told Capt. Gopinath while speaking at the Indian Travel Congress. Capt. Gopinath said he intends to ask the State to underwrite 20-30 seats on its flights from such airports. “The State governments must create and enable infrastructure
and get out of the way as far as business operations are concerned,” he said. Capt. Gopinath said about 450 airstrips in the country are underutilised, adding that he has so far received favourable responses from the Madhya Pradesh and Jharkhand governments to his idea.

Hyderabad, Sept. 3: Kingfisher Airlines chairman Vijay Mallya lambasted the low-cost airline model here on Sunday, and asked the industry to gear up for the acute challenges in the next two years. He also picked holes in the government’s privatisation policy of the Mumbai and New Delhi airports. In a speech favouring the full-service carriers, Dr Mallya said, “What is low-cost about low-cost carriers (LCC) airlines? It’s all about low-fares and the result is they can’t even match their operational costs.”

“The airline sector has grown 50 per cent in January-June 2006, most of it driven by low fares. Please think how sustainable would low fares be two years down the line. Either they have to go out of business or have to increase fares. These airlines (LCCs) are only fooling people... My dear friends don’t be fools, think for yourself,” Dr Mallya said, addressing delegates at the Indian Travel Congress.

On the prospective market of Rs 100 crores in the country that most airlines quote as the potential of the Indian aviation industry, Dr Mallya said that nearly 400 million are farmers who do not have dreams of flying. “Therefore, the market size immediately gets contracted,” he said. Dr Mallya, picking the greenfield airports in Bangalore and Hyderabad as examples, asked the Centre not to go for “quick-fix solutions” as was the case in the privatisation of Mumbai and Delhi airports and think beyond existing airports to ease congestion.

Hyderabad, Sept. 3: Deccan Aviation Ltd, which runs the low-cost airline Air Deccan, expects to make a turnaround by mid-2008 even as it spreads its wings with untouched flight destinations in the country and adds an aircraft nearly every month to accommodate the orders of 96 Airbus aircraft that it placed recently.

“We are not making net profits yet, but our business model is robust and with the growth in volumes we may turnaround in may be 12 months or may be 15 months...,” Capt. G.R. Gopinath, MD of Air Deccan, said here on Sunday, on the sidelines of the Indian Travel Congress.

“The 96 aircraft ordered are a mix of Airbus and ATR planes which have a list price of $55 million and $19 million respectively. However, there is a discount of 30-40 per cent on each plane and we make close to $4-5 million using the lease-buyback model,” Capt. Gopinath explained.

Undeterred by the tepid market response that its public offer received earlier this year, Air Deccan, with a claimed market share of 21.8 per cent, is confident of garnering a leadership position in the market. “For us, being the No.1 player is inevitable,” Capt. Gopinath said. The Bangalore-based company has also initiated talks with the GMR group, that is building a new international airport in Hyderabad and renovating and upgrading the IGI airport in New Delhi, for low-cost terminal buildings, which according to Capt. Gop-inath, will boost the budget carrier segment. Capt. Gopinath proposed a Nasscom-like association for the aviation industry which represents airlines, the DGCA, engineering section and representatives of operational sections to lobby the industry’s interests.

Hyderabad, Sept. 3: In a bid to attract more tourists to the State and boost the tourism sector, the Andhra Pradesh government is giving final touches to a new tourism policy that would be released after September 8. This was disclosed by Chief Minister Y.S. Rajasekhar Reddy, who addressed representatives from the aviation, travel and tourism sector during the 55th edition of the Indian Travel Congress, here on Sunday.

“It would be an enabling policy framework to accelerate growth in the tourism sector. The tourism policy, which will have incentives for various sectors, is in the final stage of preparation and will be released after a meeting on September 8,” Dr Reddy said. The Chief Minister did his bit to hardsell the tourism potential in the State, saying, “Andhra Pradesh is a distinctive state that can fit all kinds of tourism bills. Be it health tourism or business tourism, the sectoral business is bound to rise.”

Referring to the new international airport being built in Shamshabad, Dr Reddy said that once it is ready by March 2008, Hyderabad has the potential to be a major transit hub for flights from Europe and West Asia, which stands to benefit the State. However, concerned over the fact that Andhra Pradesh does not figure in the top five slots of States receiving inbound tourists, Dr Reddy hoped that there would be a change once other tourist spots are smartly showcased. “It is necessary to develop a Hyderabad in every district. The beaches hold tremendous potential,” he said.

Okay, did I tell you about a nifty piece of personal technology I own. I didn’t? Well, here goes: It’s an iPod Nano, and, baby, believe you me, you ain’t heard nothing yet till you own an iPod. Any iPod. It’s “Designed by Apple in California, assembled in China”. As Apple Computer so arrogantly says on the back of every iPod. Nobody accused Steve Jobs of being modest. The one I own has a one GB (gigabyte) memory and can store up 300 songs. A GB is a measure of computer memory or disk space consisting of about one thousand million bytes (a thousand megabytes). The actual value is 1,073,741,824 bytes (1024 megabytes).

And the best part of the iPod is the control wheel, which moves just by touching it. And it has a special bass arrangement, which gives a nice heavy touch to the drums in the song if that’s your thing. Anyways, the thing about the iPod is while it has the Shuffle priced between $66-$99, it is the Nano, which can store pictures and has a calendar as well, that is considered as the base model. The Nano is priced between $149—$249. And it is the price point that Apple’s competitors hope to get traction in the MP3 player segment.

One such player is is SanDisk Corp., stated to be the world’s largest supplier of flash memory data storage products, which expects its below-$100 price point for its flash-based MP3 player to get fresh traction. The new MP3 line, called Sansa C200 series, has a 2GB memory. According to SanDisk the memory can be expanded with the addition of an optional SanDisk microSD card, which currently is available in capacities of from 256-megabytes (MB) to 2-GB.

For example, with a 2-GB microSD card, a user can transform a 2-GB player into a 4-GB player to hold nearly 2,000 songs. SanDisk says the c200 supports WMA, MP3 and the protected WMA DRM format. Offered on the Sansa c200 are an FM tuner/recorder with presets for 20 channels, a voice recorder and a user-replaceable lithium-ion battery that provides up to 15 hours of continuous playback. Yumm!

The SanDisk c200 is Microsoft Windows PlaysForSure compatible, meaning that it will support subscription music from on-line music providers such as Rhapsody, Napster and Yahoo! Music. SanDisk last month unveiled what the company claims is the world’s largest capacity, flash-based MP3 player.

Many companies innovate by accident — that is, they hope someone will come up with an idea for a product or service and then capitalise on it. At a time when companies need to generate more ideas than ever before and turn those ideas into viable products and services before the competition can catch up, the accidental approach is no longer enough. We have developed a four-step methodology that can improve your company’s idea-management process and help you bring better products and services to market more quickly and effectively.

Step 1: GENERATE IDEAS, GOOD ONES

The first step of successful innovation is better ideas, not more ideas. To generate ideas, many organisations use brainstorming, both real-time and extended. For brainstorming to be successful, its focus needs to be sharp enough to exclude extraneous ideas but wide enough to allow wild ideas that might be combined to solve the problem in a unique way.

For example, the Vienna, Virginia-based National Captioning Institute, the world’s largest video-captioning company, decided to develop a real-time scheduling, or RTS, system to automatically generate scheduling assignments for more than 90 captioners across the country. NCI tapped managers, functional experts and employees who scheduled captioners for a brainstorming session.

Each participant received a detailed preparation document that outlined brainstorming guidelines (e.g., “Defer judgement”), 22 questions to spark thinking (e.g., “How will the RTS automatically handle sporting event overtime?”) and some basic requirements (e.g., “Captioner skill level must be taken into account”). This level of specificity provided participants with enough context to create useful ideas without forcing a particular solution on the group.

Step 2: CAPTURE IDEAS

Few firms have organisation-wide idea-management systems. Instead, companies develop spreadsheets, wikis, databases and other mechanisms on a team-by-team basis, leading to redundancy, inefficiency and, in some cases, the waste of great ideas. Initial idea concepts need discussion, interaction and incubation.

Several web-based idea-capture-and-evaluation tools allow users to enter and interact with ideas; add documents, links and comments; participate in online discussion forums; visually connect ideas and people; set up and use evaluation schemes; and compare ideas. The organisation has control of who can access what and who can invite external customers, experts and others to provide input.

Step 3: EVALUATE IDEAS

Evaluation criteria should be appropriate to the idea category, line of business, type of innovation and/or market you intend to serve. For example, pharmaceutical companies generally look at intellectual property protection and risk before pursuing research, while commercial lawn equipment manufacturers look at technical feasibility and market competition. Your goal is to evaluate ideas to determine their viability.

A consistent evaluation system provides documentation for innovation decisions, thereby allowing a team to gather and share information about both successful and unsuccessful ideas

Step 4: BRING IDEAS TO LIFE WITH PROTOTYPES

Customers have difficulty defining requirements for products or services they have not seen. But when you can present an example, they will provide excellent feedback. We’ve found it is more important to create a reasonable facsimile of the final product and let the customer interact with it as quickly as possible than to pursue a traditional requirements-definition approach.

Several years ago, Dean worked with Michelin to put together a promotion of its new performance tires for its booth at the Detroit Auto Show. The idea was to create a virtual reality experience. People would step into a go-cart, put on a VR helmet and have the sensation of being pulled behind a Dodge Viper driven by a former NASCAR star and outfitted with Michelin’s new tires.

Dean and Michelin created a prototype and tested it at an automotive convention three months before the Detroit show. They quickly learned how the promotion could make a greater impact in Detroit. Participants at the event wanted to be in a Dodge Viper themselves rather than in a go-cart. What’s more, they didn’t want to be towed behind the Dodge Viper; they wanted to be able to pass it. Making these changes paid off handsomely. Attendees at the Detroit Auto Show voted Michelin’s booth one of the top three displays to visit, and it earned a spot on the TV programme Entertainment Tonight.

QUESTIONS TO ASK YOURSELF ABOUT YOUR INNOVATION PROCESS

GENERATE

* Do we routinely brainstorm and examine opportunities with staff, customers, suppliers, experts and others in a focused manner?
* Have we defined effective ways of directly observing and gathering unarticulated needs of existing and new customers? Of lead users?
* Who is looking at trends?

CAPTURE

* If an employee, customer, partner, supplier or anyone else valued by our organisation has an idea, do they know how to contribute it?
* Do we have an idea-capture system that people can use to share and incubate ideas? Is it available 24/7/365?
* Do people know what happens after they contribute an idea?

EVALUATE

* Do we have a defined process for evaluating contributed ideas?
* Do contributors know how the process works and what to expect?
* Are we focusing on the right mix in our portfolio of ideas?

DEVELOP

* What is our mean time from idea to prototype?
* Are we focusing on what we need to develop by exploiting prototypes we can throw away?
* What’s the best way to provide a prototype or simulation to the customer of a new product or service as quickly as possible?

MANAGING LAUNCH LOGISTICS

Many companies find managing the complicated logistics of the launch to be the most challenging part of the innovation process. Fortunately, tools exist to make this easier.
OVO, the innovation division of NetCentrics (Raleigh, N.C.), makes one, but many are available; the Project Management Institute’s Web site (www.pmi.org) is a good resource. When choosing a tool, look for one that will help you identify:

* All stakeholders related to the launch (e.g., internal departments, external vendors).
* The launch-related deliverables that each stakeholder will have to produce.
* The key activities associated with each deliverable.
* Any key interdependencies among stakeholders, deliverables and activities.

Closing in the green for the sixth consecutive week, the Sensex on the BSE gained 206 points to close on a strong note at 11,778 and the Nifty on the NSE logged a 50 point gain to finish at 3435.

For the week ended, it is pertinent to note that despite strong price action in frontline counters a bout of profit booking was seen in mid-cap and small-cap stocks. Stock specific action is indicated in the coming days with the bulls becoming selective in buys. Modest fall in crude oil prices, strong global markets and good institutional buying from both domestic and foreign investors kept the sentiment positive.

The collapse of United Western Bank is unlikely to have any impact on the markets. Barring any unforeseen events like the escalation of the Iran issue on the global front or negative surprises in Q2 results, markets are likely to be show strong uptrend in the medium term. Chartists predict a trading range of 11,620-12,000 for the Sensex and 3,380-3,540 for the Nifty for the week ahead. Above 11,860 on the Sensex and 3,480 on the Nifty, markets may gain momentum to spurt to new highs in the near term. Strong supports for the Sensex are 11,660 & 11,520 and for the Nifty they exist at 3,380 & 3,320. Stay invested with a trailing stop loss to ride the rally profitably.

F&O SEGMENT

Despite being the settlement week, volumes in the F&O segment continued to be robust on an optimistic outlook. Expectedly with markets in a strong uptrend, healthy rollover of positions was seen during the week ended. Sentiment indicators like the implied volatility, the put/call ratio and the open interest together indicate positive outlook. Take a long strangle position in Nifty by buying put option of 3,400 strike and call option of 3,500 strike to take advantage of the volatile market in either direction.

Among the active stock futures, buy RIL, SBI, Infosys, TCS, Tata Motors, Maruti, Bajaj Auto, BEL, HPCL,BPCL, Sun Pharma, Divi Labs and Cipla with a stop loss at Rs 1,090, Rs 910, Rs 1,750, Rs 968, Rs 835, Rs 850, Rs 2,660, Rs 1,120, Rs 266, Rs 356, Rs 860, Rs 1,840 and Rs 250. Pharma stocks are in the fancy list as good defensive bets. More healthy gains are indicated. Auto and capital goods counters are attracting strong buying interest on every decline.

A further upside is not ruled out. Banking stocks led by big daddy SBI have shown good strength. Buy on declines for steady returns. Cement stocks are vulnerable to selling at higher levels. Book partial profits. Side counters like TVS Motors, Essar Oil, Arvind Mills, Ashok Leyland, Orchid Chem, Ballarpur, Wockhardt, GAIL and Glaxo are tipped for heightened activity. Buy with a tight stop loss for unexpected sharp gains.

SATTA GUPCHUP

* Some mid-cap stocks attracting the attention of savvy fund managers are Rolta, Helios Matheson, NIIT, Geodesic, Micro Technologies, ING Vysya Bank and Zicom Electronic. Low priced counters on the radar include Deccan Gold, NFCL, Timex, TVS Srichakra, Marmagoa Steel, Hindustan Tin and Bartronics. With mid-cap technology counters getting a relook from funds NIIT, Rolta and Micro are tipped for smart gains in the medium term. A good brand equity and support from an MNC parent are the plus points for Timex. Buy at current levels for steady gains in the medium term. The turnaround performance of Marmagoa Steel has enthused savvy punters to buy into it. Stay invested for unexpected returns in short term. After falling sharply from a good listing, Bartronics is attracting attention of punters again.

* Laggards like Paper and Pesticide sectors are attracting renewed attention from market players. Reports of paper manufacturers hiking prices have triggered interest in Ballarpur, TNPL, Orient Paper, Seshasayee and Andhra Paper. Stay invested in the sector for steady returns.

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.

Paris: If Alexander Schoppmann is right, then where there’s smoke, there’s a flier. As more countries ban smoking in public places, his idea might seem malapropos. But Mr Schoppmann, a German entrepreneur, is hoping to turn smokers’ umbrage at ever-expanding efforts to stub out their habit into a highflying business proposal: Smoker’s International Airways.

As the name suggests, the airline, known as Smintair for short, will probably not be for the faint of lung. The carrier, expected to begin luxury service with only business and first-class seats early next year, plans daily flights between Mr Schoppmann’s hometown of Düsseldorf and Tokyo — a 12-hour journey that, for some inveterate smokers, is simply not worth the nicotine-withdrawal headache.

“Many people simply don’t travel long distances anymore because they can’t smoke,” said Mr Schoppmann, 55, who admits to a 30-a-day cigarette habit as well as the occasional cigar. “That has to be why they invented videoconferencing.” It is also about comfort, he insists. “Air travel used to be a luxury experience,” Mr Schoppmann said. “Today the prices are exploding, and the service is going down to zilch. We want to bring back the joy of flying.”

On-board smoking has been prohibited on most major airlines for years: Since 2000, all of the world’s busiest international routes have been essentially smoke-free. Within the United States, the government has banned in-flight smoking for almost two decades. Most European carriers are not required by law to ban smoking but have voluntarily introduced no-smoking policies. In Japan, carriers stopped allowing smoking on most flights in the late 1990s.

Smoking bans on long-haul flights, though, are not just cruel and unusual as far as Mr Schoppmann is concerned — they are downright repressive. “Considering the amount of money I put on the table for the ticket, I don’t understand why somebody should be able to tell me I can’t do what I like,” he said. By starting with service between Germany and Japan, two of the world’s most smoker-filled nations, Mr Schoppmann said he expected Smintair to profit from the steady flow of business travel between the two.

While it might seem a bit out of the way, Düsseldorf — sometimes referred to as Tokyo on the Rhine — is home to a Japanese population of more than 15,000, the third-largest in Europe, after those in London and Paris. Roughly 300 Japanese companies have European headquarters in or around Düsseldorf.

According to the IATA, more than a million passengers travelled between Japan and Germany in 2004, a figure that is expected to increase by an average of 3.6 per cent a year through 2009. While the majority of Japanese visitors to Germany are tourists, fully half of the Germans travelling to Japan are there on business.

What’s more, about one-quarter of Germans smoke, while in Japan, 49 per cent of men and 14 per cent of women confess to the habit, according to government surveys. “We expect all of our flights to be overbooked,” Mr Schoppmann said. Despite his deep empathy with smoking travellers, Mr Schoppmann said Smintair’s raison d’être was not simply to create a haven for nicotine addicts. Smintair is also promoting its exclusivity, offering only business and first-class seats. Its two 747s — normally configured to seat around 415 people — will be fitted with just 138 seats.

In some ways, Mr Schoppmann’s business plan is directed at the same type of clientele that used to fly the Concorde until Air France and British Airways cancelled the supersonic service in 2003.

New Delhi, Sept. 3: There seems to be a great divide in the perception of public and private sector banks, in relation to the services they provide. A recent study shows that public sector banks are more in demand for insurance services, whereas for mutual funds, private banks have an edge.

The study has found that 60 per cent of salaried employees prefer the state-owned banking mechanisms for insurance purposes as they feel that such institutions are more reliable, secure and are trustworthy, while 20 per cent prefer private banks for the same purpose. The study shows that the remaining 20 per cent have shown their indifference to either of the two.

However, there are areas in which it is the private sector banks which have an edge.
The study undertaken by industry chamber Assocham reveals that 50 per cent of the salaried employees prefer the private sector for mutual funds while only 20 per cent prefer public sector banks for the same. It shows that 20 per cent are indifferent to either of the two sectors for mutual funds while 10 per cent do not avail this service. The study is entitled “Growth and emergence of Public and Private sector banks in India: Customer’s and Investor’s Perceptions”.

Kamalesh Chandra Chakrabarty is chairman and managing director of the Chennai-based Indian Bank. Dr Chakrabarty, who earned a doctorate from Benaras Hindu University in Varanasi, was earlier executive director of Punjab National Bank. He has had a long career in Bank of Baroda as well.

On the eve of the bank’s centenary celebrations, which are to be launched by President A.P.J. Abdul Kalam on September 4, Dr Chakrabarty spoke to this newspaper’s K.S. Anandan. Excerpts from the interview:

Indian Bank had been going through a difficult phase for over a decade. It is now in the black. What are the factors that led to the bank’s turnaround?
To be frank, I am heading the bank for just over one year now. The bank has definitely passed through very difficult periods. The post-reform period was the most challenging time for the banking industry. At one time, our capital adequacy ratio (CAR) was minus 18 per cent. Our net worth was negative. Today, our CAR stands at 13 per cent. Our balance sheet has healthy figures and ratios on all the financial parameters.

The turnaround of the Indian Bank was the most spectacular in the history of the Indian banking industry. I will attribute this success to the common man. In the most difficult period of the bank, the common people never lost confidence in the bank. That’s why our mission for this century is to make the bank as a common man’s bank.

One of the charges against the Indian Bank was that it never bothered about the common man. Your comment?
You cannot charge this to the bank. Banking was generally for the elite. Post offices are closer to the common man. It was only after the nationalisation of the banks that the common man started enjoying the benefits of banking. Today, our bank’s 51 per cent advances are in the priority sector, 20 per cent advances are in the agriculture sector. In 2004, we have given education loans for just 2,400 students.

In the last fiscal, 24,000 students got educational loan from us. I have enrolled more than 10 lakh self-help group members. In the last 6 months, we have opened 1,24,000 no-frills accounts. If you go by any standard, today we are serving the common man.

What is the bank’s growth strategy?
Our strategy is that we want to be a common man’s bank. We want to provide all financial products and services under one roof in a cost-effective manner. Once I decide to enlarge our customer base I must have a robust technology platform so that I can handle large volumes. That is what we have done. Today, 70 per cent of our business volume is generated through core banking solution (CBS) deployed at 580 branches. This will be increased to 1,000 banks by this year. Technology is going to be a major factor to increase the customer base.

You have been reported as saying that restructuring of the bank’s capital was required before the IPO. Please elaborate?
Our accumulated loss has been set off. The remaining capital is Rs 743 crore. Part of that capital will be converted into preferential shares. Then, our equity base will come down to a reasonable level of around Rs 340 crore. If I go with a huge equity base, serviceability is very difficult. I want to pay a reasonable dividend to my shareholders, and at the same it should fetch a reasonable premium from the capital market.

Did the government agree to the bank’s suggestion on capital restructuring?
The Cabinet has given its approval to bring down the capital base to Rs 342 crore. We are awaiting the RBI approval. The Banking Amendment Bill was also passed recently. Things are moving in the right direction

When do you expect to launch the bank’s public issue?
If we get all clearances soon, the IPO will hit the market next January-February, or it will be by July-August 2007.

There is a view in the industry and in the government that Indian banks should merge and consolidate to take on the challenges of the globalised economy. Your comments.
Consolidation is inevitable, but the time for consolidation has not yet come. We have to do a lot of groundwork before it happens. Banking is becoming a business of size. If the global players come into India, our banks should have reasonable size to take them on. The banks should have minimum deposit base of Rs 1,00,000 crore by 2010, or it will be difficult to survive.

You cannot have consolidation without large-scale financial inclusion. Society will doubt your intentions. Some 70 per cent of the population in this country does not have bank accounts, more than 90 per cent of the population does not have access to insurance products and 98 per cent population does not have access to the capital market products.

Is there any move from your side to merge with any bank or are you planning any acquisition?

A merger or an acquisition will not happen immediately. Before a merger or an acquisition, I must start discussions. It is a like a marriage. Before marriage, we have to find out common interests and synergy.

What is your view on the present interest rate regime?
Interest rate is a function of inflation. It will remain soft. We are in a cycle of benign interest rate regime. The rate has already come down. It will not come down drastically and will not go up also.

Atlanta Ltd., a company in the business of construction, realty, infrastructure and mining, has entered the capital market with a public issue of 43,00,000 equity shares of Rs 10 each in a price band of Rs 130 to Rs 150 per equity share. The issue closes on September 7 and will constitute 26.38 per cent of the post issue paid up capital of the company.

The company proposes to utilise part of the net proceeds of the issue to meet the investment requirements in Balaji Tollways Limited, a SPV incorporated for the execution of the Nagpur-Kondhali four-lane BOT project. Atlanta also has plans to invest in real estate projects, purchase of plant and machinery for mining activities and investments in construction and real estate business.

Out of the funds raised in this issue Rs 42.92 crores will be invested in the equity capital of the SPV. Presently, the company holds 34 per cent and SREI Infrastructure Finance Ltd holds 26 percent of the paid up equity capital of the SPV. The remainder of the equity shares of the SPV are held by individuals forming part of Atlanta’s promoter group.

Usher Agro public offer opens on Sept. 5:

Usher Agro Ltd., an agri-processing company, is all set to enter the capital market with a public issue of 120.12 lakh equity shares of Rs 10 each for cash at a premium of Rs 5. The issue opens on September 5 and closes on September 11. The total offer includes a promoters’ contribution to the extent of 32 lakh equity shares at the same price of Rs 15 per share. Thus the net offer to public stands reduced to 88.12 lakh equity shares.

The funds raised through the IPO will be utilised to funds the company’s wheat roller flour-mill with a capacity 250 metric tonne per day at Mathura, which is expected to start its commercial production shortly, apart from modernising its existing rice mill plant there and set up new 1 mega-watt co-generation power plant based on rice husk for captive consumption.

Chellani to lead agency channel biz at MetLife:
MetLife India has announced the appointment of Chander Chellani as officer-agency, to lead the agency channel of business at MetLife. In his new role Mr Chellani will be responsible for formulating and driving the sales and distribution of the agency sales channel at MetLife. In addition, he will also oversee the sales training function for the company.

Kronschnabl is country head, BMW Group:
German automobile company BMW has appointed Peter Kronschnabl as country head and president of its Indian subsidiary. The company has already earmarked an investment of Rs 110 crore in the Indian luxury car market, and is expected to complete its plant in Chennai by the end of 2006.

Patel is head of Tellabs, Asia Pacific:
Sanjay Patel is the new vice-president and general manager of Tellabs for the Asia Pacific region. In this role, Mr Patel will oversee Tellabs’ strategy and growth of sales in the region. Mr Patel joined Tellabs in 1991, and has held a variety of sales, services and engineering positions for the company. Most recently, he served as vice-president of sales for the South Asia region.

Goa Hyatt gets new general manager: Andrew Mensforth will don the mantle of general manager at Park Hyatt Goa Resort and Spa. A native of Australia and an alumnus in hotel and business management from Adelaide University, he brings with him a 16-year service with the Hyatt International Hotels and Resorts.

Rowland Moriarty on Virtusa board:
Rowland Moriarty has been appointed as a director on the board of Virtusa Corporation, a provider of software development and IT services, with its biggest development centre in Hy-derabad. Mr Rowland Moriarty currently serves as chairman at Charles River Associates.