The government has rolled back the prices of liquefied natural gas and kerosene sold through public distribution system by Rs 10 (US$ 0.21) a cylinder and Re 1 (US$ 0.02) per litre respectively. The move was a political compulsion by the Vajpayee government to pacify railway minister Mamata Banerjee. This move is expected to increase the oil pool deficit by Rs 6 billion (US$ 130 million) for the current year.
The Bombay Stock Exchange (BSE) has revised listing norms for companies seeking a listing on the BSE. As per the revised norms, new companies seeking a listing on the BSE should have a minimum equity capital of Rs 100 million (US$ 2 million) and a post-issue net worth of Rs 200 million (US$ 4 million). However, for companies in the technology sector, norms have been relaxed to a post-issue paid-up capital of Rs 50 million and a minimum market capitalisation of Rs 500 million (US$ 11 million).
Tata Engineering and Locomotive Company (Telco), the country’s largest automaker, has planned to prune its work force through a voluntary retirement scheme. This, along with a host of restructuring measures is expected to result in savings close to Rs 3 billion (US$ 63 million) by the current fiscal for the company.
Balaji packs Packer
Balaji Telefilms, the television software company, has decided to merge Nine Network Entertainment, the wholly owned subsidiary of Kerry Packer’s Nine Broadcasting India Limited. The all-stock deal has been finalised at a swap ratio of 65 shares of Balaji for every 200 shares of Nine Network. Balaji recently got listed on the bourses at a 17 percent premium to the offer price. Incidentally, the merger was announced on the day the company got listed on the bourses. One of the lead managers to the issue holds nearly 4% stake in the company.
ICI India has sold its polyurethane business to Huntsman Corporation, a US based company, for a consideration of Rs 825 million (US$ 18 million). In addition, the company has decided to transfer its motor and industrial paint businesses to a 50:50 joint venture with Berger Paints. This is in line with its parent company ICI Plc’s restructuring exercise. However, apprehensions about entry into starch business still remains.
Bajaj goes overseas
Bajaj Auto has tied up with Kasanki of Brazil to set up a two-wheeler assembly line in Brazil to produce motorcycles for the entire South American markets. The setting up of assembly plant in Brazil is a part of Bajaj Auto’s strategy to go global, given the fact that volume growth has slowed down in the domestic market and the company is facing severe competition from multinationals. The company is also bidding to acquire a 50 percent stake in Maruti Udyog Limited, the state owned automobile major.
Snowcem India, the country’s largest manufacturer of exterior paints, has decided to enter into a new line of business with the acquisition of Geekay Exim’s gold fabrication and atomizer plant in an all-stock deal. This is expected to increase the turnover of Snowcem to Rs 2 billion (US$ 42 million) from Rs 1.5 billion (US$ 31 million) currently. However, it is not clear as to why the company is diversifying into gold fabrication when its core business i.e. exterior paints has been doing well.
The Indian Hotels Company (Taj Group) is planning to buy atleast two hotels in the US, apart from Carlyle Hotel in New York, for which it has bid already. Recently, the company has signed a deal to manage a 400 room hotel in Dubai, renaming it Taj Palace. The company has also been scouting for acquisitions in the domestic market to expand its reach.
Exide enters the South East Asia
Exide Industries has acquired Singapore based Chloride Batteries (South East Asia) for a consideration of Rs 179 million. The company is also acquiring a 49 percent stake in Associated Battery Manufacturers (Ceylon) Ltd. for a consideration of Rs 112 million. This is expected to give the domestic automobile battery major entry into the lucrative South East Asian markets.