Assorted articles and Information

Telecom service provider Bharti Airtel on 30 JAN 2008, said that the government has allotted additional spectrum to the company in five telecom circles in the country. The five circles are West Bengal, Gujarat, Uttar Pradesh (west), Assam and Haryana. The company also reported an impressive 42 per cent increase in its net profit at Rs.1,722 crore in the third quarter ended December 31, 2008 against Rs. 1,215 crore in the same period in the previous year.

Bharti Airtel President and CEO Manoj Kohli, said that it had received a formal communication from the Department of Telecom (DoT) for the allotment of additional spectrum to the company in five circles. And the company has also applied for additional spectrum in 10 telecom circles across the country. The other circles, where the company is still awaiting the allotment of additional spectrum are Rajasthan, Andhra Pradesh, Karnataka, Bihar and Tamil Nadu. And it seems that it may be get additional spectrum in the rest of five circles in a couple of months.Bharti will be given the additional spectrum in these 10 circles in tranches of 1 MHz, as against the earlier norms where additional radio frequencies were allotted in blocks of 1.8-2.2 MHz.

Bharti Airtel is also to receive additional radio frequencies in five other circles, Rajasthan, Andhra Pradesh, Bihar, Tamil Nadu and Chennai, within the next couple of days. This marks the first spectrum allotment to the company since the second half of 2006. The additional allotments are based on the new norms prescribed by sector regulator TRAI, where existing operators will have to increase their subscriber base between two to six time before they are eligible for additional radio frequencies.

Bharti Airtel joint MD Akhil Gupta, said that the revenues from Indus towers would start kicking in February 1, 2008. In December, 2007, Bharti Airtel, Vodafone Essar and Idea Cellular had merged its wireless infrastructure businesses in 16 circles to share 70,000 tower to form Indus, the world’s largest independent tower company. He also added that competition from new operators will have no pressure on the company’s growth as it was accounted for in the business. And with its increasing new oppurtunities Bharti will be rolling out Direct-to-Home and Internet Protocol TV in the first quarter of the next fiscal year starting April.

UTI Mutual Fund on Monday, 28 January 2008, declared a dividend under Variable Investment Scheme-Index Linked Plan (UTI-VIS-ILP), under the dividend option of UTI Short Term Income Fund resulting in a gross pay-out of 14 per cent, translating into Rs. 1.40 per unit on a face value of Rs. 10, including the applicable income distribution tax. The quantum of dividend is 0.55% i.e. Rs. 0.55 per unit on the face value of Rs.10. The NAV of the scheme was recorded at Rs 10.1809 as on 28 January 2008 . UTI Short Term Income Fund is an open-ended income scheme with an objective to generate steady and reasonable income with low risk an high level of liquidity form a portfolio of money market instruments and high quality debt.

This scheme is launched with aims to generate regular returns by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the plan. The record date for the dividend is December 20. This is the fifth dividend under the scheme since its launch in 2002. The asset allocation under the scheme as on November 30 was 32.11 per cent in equity and balance 67.89 per cent in debt, central government securities and money-market instruments.

Diligenta, a subsidiary of Tata Consultancy Services (TCS), has won a contract to deliver Business Process Outsourcing (BPO) services to support Sun Life Financial of Canada’s UK operations. The services, expected to commence in May are estimated to be worth Rs 784 crore ($200 million) over the life of the contract. Diligenta has been a preferred supplier since October and it will continue to run the operation in Basinystoke where Sun Life Financial Head Office is based.

Diligenta specialises in providing BPO services to Britain’s life assurance industry. Dillgenta is a UK-based, FSA regulated subsidiary of TCS. Since 2006, Diligenta has provided BPO services for the Pearl Group under a 12-year, pound 486 million contract to consolidate 11 financial and administrative systems onto a single platform.

Phiroz Vandrevala, Chairman of Diligenta said that Diligenta and TCS will ensure Sun Life Financial of Canada will continue to receive market leading standards of customer service.And this contract wins Diligenta’s reputation as a leading player in the UK Life and Pensions outsourcing market. A S Lakshminarayanan, TCS UK and Ireland vice-president and Country Head said that their vision was to establish a centre of excellence on the growing BPO trend and to cultivate new opportunities in this UK life and Pensions market sector.And he added that the services is expected to commence in May 2008 and the contract is estimated to be worth about 200 million dollars.

Janet Fuller, CEO of Sun Life Financial of Canada’s UK operations, said that the contract with Diligenta is on the basis of detailed and thorough review of the BPO market in the UK and Diligenta had satisfied with its cost guarantees, risk transfer capability and its commitment to match or exceed our service requirements. And it expects Diligenta will work closely with us and with our current provider during the second quarter of 2008.

The Indian Group’s automotive arm Tata Motors is the preferred bidder of the US car giant Ford for sale of its two British luxury brands, Jaguar and Land Rover. British luxury car maker Jaguar has shown its new models and the planned product cycle to its probable new parent Tata group. The other suitors after evaluating interests are India’s Mahindra and Mahindra and private equity firm OneEquity.

Ian Callum, Director (design) who is responsible for the Jaguar’s new XF and XK model ranges, has shown Tata the new model lines and the planned product cycle. Tata Motors is currently holding advanced-level talks for buying Jaguar and Land Rover from Ford and a final decision is expected to be announced by the end of February. Tatas have pipped Indian automaker Mahindra and Mahindra as well as US-based private equity firm OneEquity, led by former Ford CEO Jacques Nasser, to attain the preferred status to hold advanced discussions for a final deal.

Tata’s purchase of Jaguar and Land Rover for an estimated two billion dollar was “a done deal” between Tata and Ford. However, the actual cost of the purchase will go up if the pension liabilities of these two businesses and the future technology support deal between the Tata Motors and Ford are taken into account. As a result of this Tata Motors has started talks with a host of banks to raise funds to finance the purchase. Calyon Bank, Standard Chartered Bank, ABN Amro, ICICI and SBI are believed to be in talks with Tata Motors. According to the Investment Banking sources the funds will be mobilised on the strength of Tata Motors’ balance sheet.

Ford and Tata Motors are now engaged in negotiating the terms on over a dozen long-term agreements covering the supply of engines, components and technology for the two brands. The takeover of Jaguar and Land Rover will be Tata Motors’ first acquisition in Europe. Ford had bought Jaguar for $2.5 billion and Land Rover from BMW for $2.7 billion.

The management of luxury carmaker Jaguar is “entirely relaxed” about the prospects of Indian conglomerate Tata Group taking over the brand along with Land Rover. Both luxury brands are owned by US carmaker Ford Motors. Ford had named Tata Motors, which is part of the Tata Group, as the preferred bidder for its British marquees- Jaguar and Land Rover, but a final decision for the sale is yet to be taken.

The Tatas, as owners of Anglo-Dutch steelmaker Corus, are already one of the top suppliers for Jaguar and Land Rover. Eventhough there had been frequent tensions in the relationship between Jaguar and Ford, following the purchase by the latter in 1989. Ford had bought Jaguar for about $1.4 billion. Now it is looking for the deal of $2.5 billion with Jaguar.

The country’s second largest private sector lender, HDFC Bank, is looking to foray into Investment Banking in the next three-four months and also has plans to expand its international presence. It will set up over 250 new branches in next 2-3 months and is also looking to foray into the lucrative investment banking in India and abroad.

HDFC Bank is looking for its presence of global markets in the UK, Hong Kong and the Mid-East. For this purpose, the bank is looking to set up branches at places such as Bahrain, Hong Kong and London and has got SEBI’s approval for investment banking operation. However plans for Bahrain and Hong Kong are in advanced stages, but for setting up a branch in London, it is in the process of seeking regulatory approvals. The bank expects Bahrain branch to start in April-June quarter.

The highly competitive investment banking space is already flush with a number of full-service banks like SBI, ICICI Bank, Kotak Mahindra Bank and Axis Bank, in addition to various pure-play domestic and overseas investment banks. The bank is looking for a strong client base in the wholesale banking business for competing with the existing players.The push into the investment banking market comes amid the Mumbai-based bank planning a major expansion of its retail banking network.

HDFC Bank had investment banking license in late 1990s but bad market conditions had forced it to surrender the same to SEBI. Currently it has 746 branches, over 200 less than those of ICICI Bank. The country’s second largest bank, HDFC is looking for more than 1,000 branches by March-April, which could make it bigger than ICICI Bank, the largest private sector lender, in terms of branch network.