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J E W E L L E R Y Her New Best Friend
All that glitters need not be gold. Or that's what Platinum Guild International has been trying to tell Indian women ever since it debuted two months ago. In a series of high-profile campaigns, PGI has been showcasing its platinum jewellery, including earrings, pendants, bracelets, and rings, priced between Rs 1,000 and Rs 45,000. In a country notorious for its gold craze-India is the largest consumer of gold-will the silver-looking platinum work? PGI thinks so. Says Vaishali Banerjee, Manager (India), PGI: ''Our research indicates that women have become bored with gold and are on the look out for pieces (of jewellery) they can wear to, say, a party or dinner." Currently, PGI sells only high-end diamond-encrusted numbers, although a plain, chunky pure platinum line is due for launch. To be sure, a few things are going PGI's way in the estimated Rs 26,000 crore jewellery market. For one, a whole host of players like Gili, Enchante, Carbon, besides Tanishq, have livened up the Rs 500 crore branded segment of the market. Also, there is a growing shift towards white-coloured jewellery-be it diamonds, white gold or platinum. Gold, it seems, is passe in the American and South East Asian markets and PGI says it is India's turn now. Despite the skepticism, jewellers are moving in for the kill. Enchante borrowed a traditional concept from South India and gave it a contemporary feel. For decades, South Indian women have worn diamond ear rings, typically set in a floral pattern, with seven to eight diamonds in gold. Enchante took the concept, played around with it and came up with a range of alternative diamond jewellery from ear rings to necklaces. The Enchante range is priced upwards of Rs 8,000 and a diamond-encrusted Tanishq pendant costs Rs 5,000 and above. Gili, with a price range of Rs 3,500 onwards, comes at the more affordable end of the market. Says Dharen Chadha, Managing Director, CDH, the admen for PGI: "Even though we were initially scared about the suitability of platinum for the Indian skin tone, many outlets have already sold their first tranche of such jewellery." Taking the heat from gold shouldn't be a problem for platinum. After all, it only melts at 1,769 degree celsius. -Angana Bharali T E C
H N O L O G Y
It isn't just personal messages that are riding the wireless waves. A whole range of services, from checking bank account to news are finding their way on to mobile phones. And the appetite for SMS is growing day by day. Notes Atul Jhamb, VP (Marketing), Airtel: "Every month, there is an increase of over 25 per cent in the number of SMS being processed by the network." It costs an operator approximately Rs 1 crore to set up a basic SMS server. But every time a text message is sent over the mobile, an operator like Airtel makes Rs 1.50. The company earns a little over 10 per cent of its revenues through data services. That number is expected to grow to 40 per cent five years hence, when a host of other services will come up. Now, that's what you call a sticky service. -Ashutosh Sinha B A N K I N
G
It's a fiscal bomb that could blow up India's banking industry. After years of shovelling non-performing assets (NPAs) under the carpet, public sector banks now face the unpalatable choice of either shaping up or shipping out. By the looks of it, there will be more of shipping out than shaping up. According to the finance ministry, nearly 30 lakh notices have been sent out to defaulters, but to little effect. Between April and September 2000, banks have only been able to recover Rs 3,050 crore from a total npa of Rs 53,600 crore. The Reserve Bank of India, which has forced the clean-up act, is optimistic. Says Jagdish Kapoor, Deputy Director, RBI: ''The recovery will pick up in the latter half of this fiscal. That's usually the case with tax payments as well.'' Yet, the fact remains that years have come and gone and the NPA figures simply refuse to dwindle. According to the the Indian Banks' Association (IBA), the NPA of public sector banks in 1998-99 was Rs 51,710 crore and at the end of last year, the figure had come down just a notch to Rs 51,667 crore. Why? For one, high-value NPAs (Rs 1 crore and above) constitute nearly 52 per cent of the gross NPAs. Worse, Rs 9,932 crore is locked up with sick companies alone. And of the 1,952 cases referred to the Board for Industrial and Financial Reconstruction (BIFR) between 1987 and 1998, only 12 per cent were found to be fit enough for rehabilitation. The others will effectively be write-offs. Admits a senior finance ministry official: ''Recovering Rs 26,817 crore stuck in 6,993 high-value accounts is crucial.'' The recovery problem is compounded by banking secrecy laws that prohibit disclosure of the defaulters list. Saved from public shaming, the defaulters tend to sit pretty until they are hauled into court. That apart, the mandatory priority sector lending rule forces banks to throw good money after bad. The gross priority sector NPA increased from Rs 22,045 crore on December 31, 1999, to Rs 22,229 crore in March, 2000. Incidentally, priority sector NPAs account for 43 per cent of the gross NPAs. Says a senior banker: ''Recovering the money is virtually impossible. The best things to do is to write off bad loans and clean up the balance-sheets.'' But the economic consequences of that is something the government is not willing to wish upon itself. -Ashish Gupta P E R
S O N A L C O M P U T E R S
Last month, Ingram Micro, the world's largest distributor of hardware components, launched its own brand of computer components (called Vesta) that include motherboard, keyboard, mouse, speakers, and cabinets. Says N.Y. Prasad, Chief Operating Officer, Ingram Micro: ''Vesta will be positioned as a complete value-added package for the system assembler market.'' Considering that 60-65 per cent of the pc market is catered to by assemblers, Ingram is tapping into a huge market. PC majors such as Hewlett Packard and Wipro had launched their own version of low-end branded PCs. Even so, the price differential between cheap branded PCs and assembled PCs is more than 15 per cent. The good news for assemblers is that the Vesta components come with assured quality and comparable price advantage of unbranded components. One of the key concerns of resellers is often the quality of assembled products. But Ingram is a leading distributor of components for companies like Seagate, Quantum, and Intel. That apart, Ingram will be sourcing components directly from suppliers in Taiwan, therefore, keeping the prices competitive. Sometime soon, Ingram plans to offer online warranty for the Vesta range through its network of 22 offices across the country. Have markets, will innovate. -Venkatesha Babu S T O
C K M A R K E T S
For regional exchanges in the throes of a prolonged near-death experience, the Securities and Exchange Board of India's new concession hasn't come too early. All told, there are 23 regional stock exchanges, most of which have already applied for NSE membership. ''An NSE membership will bring a lot of business to the existing staff of these exchanges,'' says Ravi Narain, Managing Director, NSE. In any case, most regional exchanges have always been dependent on the NSE and the BSE. Apparently, for a regional exchange, the results of an NSE membership can be quite dramatic. For instance, ever since Interconnected Stock Exchange (ISE, set up in 1997 as a third force after BSE and NSE) signed up with the NSE six months ago, its daily trading soared from Rs 50 lakh to Rs 20 crore. Besides, as P.C. Shrimal of ISE says, the minimum deposit for trading via the NSE is just Rs 3 lakh. If you can't beat 'em, join 'em. -E. Kumar Sharma
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When Damini, sitting next to her father at
the dinner table, pages her boyfriend on the mobile, it is for kicks. And
when a trader in Crawford Market, Mumbai, similarly keys in a message for
his associate in Dubai, it is for economy. No matter what the reason,
short message service (SMS) has exploded on cellular networks. Take a
look: the daily text messages handled by Airtel (Delhi) is around 600,000;
Tata Cellular (Andhra Pradesh) boasts of 100,000; Fascel and Birla-at&t
(Gujarat) are reporting a brisk traffic of 25,000, and Birla-at&t (Maharashtra)
a cool 40,000. Says Sanjeev Aga, CEO Birla-at&t: ''We have seen a 400
per cent growth in SMS messaging in the last 2-3 months.''
When it comes to buying a personal
computer, India is divided into two: One, that swears by branded PCs and
two, that doesn't care about the sticker, but wants a loaded machine-the
hole-in-the-wall assembler's. Now it seems there could be yet another
class that has branded components inside its PCs.
Three years ago, Dattatray Laxmanrao, 43,
had chucked up his job as a broker on the Hyderabad Stock Exchange, (HSE),
to return to his home town of Latur. Today, he's back for round two. The
reason: HSE, like most other regional stock exchanges, has opted to form a
subsidiary company to take up membership on the NSE. For the embattled HSE,
that could be a new lease on life. ''Many of us hope to be active on the
regional exchanges again,'' says Dattatray.