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The software behemoth could use the erstwhile PSU to shore up its domestic ops at a cost. By the time you read this, the GoI should have been able to satisfactorily answer questions being raised about how it is selling CMC short to Tata Sons of which TCS is a division. For the record, Tata Sons acquired a 51 per cent stake in CMC for Rs 152 crore. One argument in its favour is a list of the suitors who walked away from the company. That list includes Compaq, H-P, and Wipro. Two of them, Compaq and Wipro won't say why, and all h-p President Arun Thiagarajan will say is, ''We withdrew since we felt there were limited synergies.'' Fact is, no one was looking for 'synergies'. Most companies expressed interest in CMC, simply because more than 50 per cent of its revenues come from government contracts. Maybe it was the absence of a sweetener-HTL, the company whose divestment happened around the same time will supply 10 per cent of the dot's requirement of equipment in specific categories till 2003-that discouraged suitors. The profitability of CMC, at 4.43 per cent in 2001, could be a cause for concern. A Mumbai-based analyst believes this means CMC is involved in low-end work, but adds that TCS (which refused to comment) could redeem the situation. What's causing more concern to TCS, though, is probably the spike in the share price of CMC: since the disinvestments-deal involves Tata Sons making an open offer to acquire shares of CMC from the public, the company could find its acquisition more expensive than it thought. -Ashutosh Sinha PARADIGM FLIP
This is the story of a financial institution that first promoted a bank, then wanted to be one, albeit of the universal kind, itself. The company is ICICI and its desire is to be everything to everybody (at least as far as financial services are concerned). ''An universal bank will not only provide customers with a convenient and speedy single-window solution but also bring down transaction costs" says Kalpana Morparia, Executive Director, ICICI Ltd.
Diversifying from high-risk project finance, the reasoning of FIs like ICICI goes, will help them hedge their risks and provide them with long-term funds. At a theoretical level, everyone, and that includes the Finance Ministry, agrees with that logic. It's the implementation that's proving tricky. Since commercial banks have more stringent statutory reserve requirements and provisioning norms, financial institutions will need to clean up their financials before thinking of a merger (or reverse merger as is being considered in the ICICI, ICICI Bank case). Specifically, ICICI would need to shore up its balance sheet by between Rs 15,000 and Rs 20,000 crore. With ICICI CEO K.V. Kamath announcing that the profitability of the new entity will suffer in the short-term, courtesy provisioning norms and Non Performing Loans it may acquire from ICICI, the reverse merger may leave ICICI Bank shareholders feeling they have got the short end of the stick. -Abir Pal SOUTHERN
EYEBALLS
It is only apt that we discuss the fortunes of a channel named after the gentleman on the left-Vijay Mallya, and this done was back in 1995 when he owned the channel-on this page. Since then, the ownership has changed-to Ronnie Screwvala's UTV in 1998, and finally, to Star in 2001. Now Star is hoping that the born-again Star Vijay will help it make a dent in the Rs 180 crore Tamil-advertising market, which is dominated by Kalanithi Maran's Sun, with a 80 per cent marketshare. Star's secret weapon is the thing that worked wonders for Star Plus, programming. That means viewers can expect to see soaps, soaps, and more soaps on Star Vijay in the coming months. And not just ordinary soaps, Ajay Vidyasagar, Star's general manager in charge of regional channels hastens to add; these include ones directed by some of Kollywood's best names, Telephoto Entertainment (managed by actress Revathi and her director husband Suresh Menon), Min Bimbangal (owned by director K. Balachander), and Balaji Telefilms (surely, that's a familiar name).
Star Vijay has upped its ad rates too, from Rs 6,000-8,000 for 10 seconds to between Rs 20,000-Rs 60,000 for 30 seconds. Surprisingly, Star hasn't bundled this channel into its other offerings. That could have helped Star Vijay attract advertising from large companies that are heavy advertisers on the Star network. ''We don't want to disperse the focus on Vijay by clubbing it with other network channels,'' offers L.S. Nayak, Executive Vice President (Sales), Star India. However, media planners believe it is only a matter of time before Star does this, and suggest its reluctance to do so rightaway could stem from Star Vijay's weak TRPs. For the month of September, the channel's average ratings were, at 2-3 per cent, well below rival Sun's ratings of 18 per cent. Sun's studied act of indifference-''We've remained unchallenged for the past three years,'' is what a senior exec told BT-was spoilt some by its launch of KTV (guesses welcome on what the K stands for), described by media-watchers as a ''flanking'' channel around the time this magazine went to press. Now, it gets interesting. -Nitya Varadarajan SWITCH FIGHT
Quick, who's the leader in the domestic switches market? These are, of course, the hardware that links computer and telecom networks together, not those thingamajigs mounted on walls. If you answered Cisco, the company that is the market leader in the global switches market, you'd be wrong. The correct answer is Enterasys Networks, part of the US-based $2 billion (that's less than Rs 10,000 crore) Cabletron group of companies. The switches market in India isn't very large. Market researcher IDC estimates it at Rs 612 crore; of this, statistics for the first quarter of 2001 show that Enterasys boasts a 37 per cent share of the market as compared to Cisco's 35 per cent. Cisco claims, and rightly so, that switches are just part of its larger portfolio, and hopes that the growth of the call centre business in India will help it steal an edge over its competitors. ''We offer end-to-end solutions,'' says Manoj Chugh, President, Cisco's Indian operations. ''Some of our competitors don't have what it takes to do this.'' Enterasys' country manager Uday Birje scoffs at this claim. ''We may not be present in certain segments, but we have world-class partners, and together we offer total solutions to customers.'' In a market that's growing, according to IDC, at a healthy 30 per cent, the competition between the two companies promises to be interesting. Don't switch off. -Venkatesha Babu Executive Tracking
Rekha Nigam's exit from Sony Entertainment Television (SET) in the first week of September set tongues wagging in the head hunting domain. First, there were rumours that the head of programming hadn't quit but had been asked to leave-since she hadn't been able programme a surge in ratings the same way Sameer Nair did for Star. Then, the buzz increased a notch: the parent company was said to have got into the act, and there was talk of many more in the team being replaced. However, SET Max head Kacun Sethi denied that there was anything of the kind happening, although SET CEO Kunal Dasgupta declined to comment on the topic. Purely for the record, one of the names doing the rounds as a possible replacement for Dasgupta himself was Ravina Raj Kohli. Now, by the time you read this, either things may have blown over or... This one's confirmed. Hasit Joshipura, the business unit manager of consumer services at HLL takes over as the president of J&J's pharma business, Jansenn Cilag. Another Lever-man moves on. The most intriguing development of the fortnight, though, was the exit of the entire senior management team at Epson India. CEO Paramjit Singh Puri, General Manager (Sales and Marketing) Arun Gupta, and CFO Vijay Hariharan were all asked to leave. The company brought in Yoshihiro Takeda as Executive Director, and, when last heard of, was still hunting for a CFO.
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