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Top stories this week… - Views on News from Equitymaster
 
 
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  • Feb 10, 2001

    Top stories this week…

    Budgetary estimate goes for a toss...
    Food subsidy is expected to overshoot the budgetary estimate by nearly 50 percent in the current year. As per the latest estimates by the food and civil supplies ministry, food subsidy for the current year is around Rs 120 billion (US$ 2.6 billion), against Rs 81 billion (US$ 1.7 billion), which was provided for in the current year’s budget.

    Good news for RBI...
    Foreign exchange reserves of the Reserve Bank of India (RBI) continued to grow for the tenth consecutive week primarily led by improved institutional flows and higher remittance from abroad. Reserves of the central bank went up by US$ 458 million to US$ 40 billion. The rise was on account of increase in foreign exchange assets by US$ 458 million to US$ 38 billion.

    Smoker’s blues...
    The cabinet has approved the introduction of the Tobacco Products Bill 2000, which seeks to put a ban on advertising and sponsoring of sports and cultural events by tobacco companies. Media companies too are also to be banned from advertising tobacco products. Together, the tobacco companies account for more than Rs 2.5 billion (US$ 53.8 million) in advertising for the mass media.

    Glaxo disappoints...
    Glaxo has reported disappointing results for the year fiscal year ending December 2000, with net profit falling 8.7 percent year on year to Rs 705 million (US$ 15.2 million). Trade boycotts of its products in some southern states, which reduced offtake by wholesalers and retailers, caused the fall in profits. The company’s explanation for the boycott is that there was a change in the sales tax rates, which they passed on to in the prices. The topline growth has been mainly a price led growth.

    UTI: NPAs are its bane...
    Unit Trust of India has disclosed its Non Performing Assets (NPAs) in various schemes, in line with the regulator, The Securities and Exchange of India, requirement for its various schemes. One of its biggest debt funds, US ’71, has about 6 percent of its net assets as NPAs. Another scheme, CRTS-1981, has NPAs amounting to 10 percent of its Net Asset Value (NAV).

    Whirlpool: Back in the black...
    Whirlpool of India, a subsidiary of US white goods major Whirlpool Corporation, reported a maiden net profit of Rs 204 million (US$ 4.4 million) on a turnover of Rs 11 billion (US$ 237 million) for the financial year ended December 2000. The operating margins have also shown significant growth. The company has pruned its expenses, which is evident from the fact raw material costs have come down by 3 percent in the current year.

    Thomas Cook looks at Sri Lanka...
    Thomas Cook (India), the Indian arm of Thomas Cook Holdings, the UK based foreign exchange and travel management company, has decided to acquire the operations of the parent firm’s Sri Lankan arm, Thomas Cook Overseas, for a consideration of Rs 27 million (US$ 0.6 million). The Sri Lankan arm had gross revenues of Rs 25 million (US$ 0.5 million) in the year 2000.

    Power companies’ bonanza...
    The government of India has plans to withdraw the 16 percent cap on the rate of return for power projects in the upcoming budget. Instead, the power companies will compete on the efficiency of their plants and tariffs. At present, power developers can build in an assured return of upto 16 percent on equity.

    Telco rights issue...
    Tata Engineering had decided to mop up upto Rs 14 billion (US$ 301 million) through a rights issue of convertible and non-convertible debentures to funds its capex and product development plans. The company has planned to retire its high-cost debt from the issue proceeds. The proposed issue will result in equity dilution of around 20 percent at the time of the conversion of these debentures into equity shares.

     

     

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