BMW: 'Made in India' tag to be attached soon

Think twice, it's all right. Having once aborted plans of setting up a production base in India, global auto giant BMW is now taking a hard look at making cars in India. Says Rania Rostom, spokesperson for BMW's Middle East operations: ''Right now our focus is on homologation of cars in India. But we are also interested in setting up a production base-provided it's profitable and feasible to do so.''

Currently, BMW is conducting a feasibility study for setting up a production base, besides being in talks with the Automotive Research Association of India, the homologation authority in the country. Since the customs duty on fully-built cars is as high as 120 per cent, the import route doesn't make much sense for the German carmaker (unless of course duties are brought down drastically). Rostom reveals that the feasibility study does not exclude any model from the BMW stable-which means that Mini, the entire BMW luxury car range, as well as the Rolls-Royce brands are being considered for launch. Don't rub your hands in glee. Not yet.

-Swati Prasad

LEASEPLAN
No Car, No Cry
Don't buy that car for your blue-eyed boy; outsource it.

Companies don't buy cars any more in these hard times. No, they don't farm-out bicycles to their employees or educate them on the virtues of walking: They just outsource their automobile needs. That's where companies like LeasePlan Fleet Management come into the picture. Today, big names like Whirlpool, Coca-Cola India, Philips India, Procter & Gamble, Sun Microsystems, HCL, Colgate-Palmolive, LG, and Cargill are among over 150 other companies that are outsourcing their fleets, their repair and maintenance from LeasePlan. A year back, LeasePlan had only around 70 clients. To keep pace, the company hopes to nearly double its fleet by the year-end-from 2,400 to 4,000.

On an investment of Rs 9 crore so far (via two companies), LeasePlan hopes to break even in the current financial year, points out Veerle Behets, Managing Director, LeasePlan. Clearly, she's hoping the recession never ends.

-Swati Prasad

LIMELIGHT-I

S. Ramadorai: Another feather in his cap

K.M. Birla: Cutting costs

TCS bags Rs 500-crore SBI contract

Coming in the wake of $100 million GE deal, the contract to supply and set up SBI's core systems adds more sheen to the software giant's much-awaited public issue.

Delhi cellular operators stop pre-paid activation without ID proof

Sales of pre-paid cards plunge 90 per cent. This will slow down overall cellular subscriber growth, since pre-paid account for over 60 per cent of Delhi's new connections.

AV Birla group integrates chemical business

Hitherto under three different companies, the group will have common marketing and procurement to leverage synergies. The idea: Slash costs in the commodity business of chemicals.

Nedungadi Bank may be up for sale

The RBI-initiated move, coming in the wake of revelations of the banker-broker nexus in cooperative banks, will help curb broker influence to an extent.

POLARIS SOFTWARE
Cashing In On Conflict
Polaris' acquisition of OrbiTech not just takes care of conflict of interest, but also places the new company on a better footing.

Arun Jain: This looks much better

Barely six months after Polaris Software Lab's shareholders expressed concern over growing competition from OrbiTech Solutions, Polaris' Chairman and CEO Arun Jain has found a way out. As BT went to press, Polaris was all set to announce a merger with OrbiTech-one of the few companies it had been talking to for a merger since January this year.

Details of the merger were not available when this story was written, but people in the know said that the stock-swap deal would give Citigroup a majority holding in the merged entity, although Jain would continue to be its Chairman. According to sources, Jain would get to nominate six directors on the 12-member board, three would be from Citigroup, while the other three would be members mutually acceptable to Citi and Polaris.

Although Polaris is describing the deal as a merger, it effectively is an acquisition, where Jain cedes majority control to Citi, which already owns 6.25 per cent in Polaris. His gain: He not only keeps OrbiTech from eating into his Citi business-which accounts for more than a third of Polaris' Rs 294 crore revenue-but also helps OrbiTech look outside Citi for customers. (The Polaris stock has doubled to Rs 250 since January this year.) Understandably, the Citi ownership was proving to be a problem for OrbiTech in getting rival banks as customers. That's one reason why, according to sources, Citi will post-merger lower its stake below the 50 per cent level by roping in a strategic third partner.

Jain started off in 1983 by setting up a company called International Information Systems in Delhi, and three years later co-founded Nucleus Software Workshop and made his foray into banking software with Citibank India. By 1993, Jain had set up Polaris in Chennai to tap other customers in the banking industry. OrbiTech, on the other hand, was born last October of a merger between Citicorp Overseas Software India Ltd (COSIL) and Citibank's technology department.

OrbiTech had revenue of $68 million (Rs 333.20 crore) last year, which means Polaris' revenue straightaway doubles, making it a major player in the banking and financial services segment. Incidentally, Citigroup also owns another software company, I-Flex Solutions, which may still compete with the merged company. It will be interesting to see how Jain tackles the next time his shareholders raise concern over I-Flex.

-Nitya Varadarajan

LIMELIGHT-II

Hindustan Motors launches Pajero
The first true-blue sports utility vehicle arrives with a price-tag of Rs 33.80 lakh (ex-showroom, Delhi). It should speed up maturing of the market and raise standards as well as customer expectations.

RIL pips IOC in IPCL race
If IOC's acquisition of IBP proved a setback for the Ambanis' retailing plans in petroleum, Reliance's successful bid for IPCL could also hit IOC where it hurts. IOC supplies naphtha to the Baroda facility of IPCL. But Reliance also produces naphtha at its Jamnagar unit. Obviously, IOC will now have to find another customer.

ISPs rush to surrender licences
Finally, consolidation is round the corner in this highly fragmented industry. Looks like even free entry into net telephony isn't enough for those inactive 350 licence holders.

Peter Mukerjea: Stars shining

STAR offloads 1 per cent holding in Zee

It's safe to assume that Zee has decided not to exercise its right to buy its 3.9 per cent equity parked with star. Expect more Zee shares in the market.

-Brian Carvalho