Portal Group's Chairman Glenn Hurley (centre), CEO Probir Dutt (left), and Indian ops CEO Rohit Dean: Look ma, no centres

Last month, a multi-national called Portal Group launched its call centre operations in India, Portal Net Services, without building call centre capacity from scratch. Business Today met with Portal's Chairman Glenn Hurley, its CEO Probir Dutt, and the CEO of its Indian ops Rohit Dean for the lowdown. Excerpts:

Why not build call centre capacity from scratch?

Glenn Hurley: We came here last November and we saw empty call centres. We went back and thought, if we've got one dollar to invest, why invest in the infrastructure when there's so much sitting there? (We thought it better to) invest our dollar in the things that were lacking, processes, people, and quality management.

Why should people choose Portal?

Glenn Hurley: They'd choose us for our understanding of their needs based on our experience and also for the quality of our delivery.

What next?

Probir Dutt: After India, we'll be looking at providing Mandarin (language call centre services) in non-metropolitan China and Japan. We'll (also) be looking at doing French and German from Central-Eastern Europe, Portuguese from Brazil, and Spanish from Argentina.

When do you expect to break even and what kind of revenues do you have in mind?

Glenn Hurley: We expect to break even within two-to-three years. The UK business made profits within a year. Within the first three years, we expect to rake in $15 million in India.

Why Delhi, Hyderabad, and Mumbai?

Rohit Dean: Delhi for the availability of talented, English-speaking workforce, Mumbai for the financial services (expertise), Hyderabad, because the Andhra Pradesh government is visionary.

-Subhajit Banerjee

STEEL AUTHORITY OF INDIA LTD
SAIL Can't Dance
With losses burgeoning and divestment plans still pinned to the drawing board, the public sector steel behemoth is slowly but surely going down the tube.

SAIL's Arvind Pande: Overseeing a sluggish performance

Last year, Arvind Pande, chairman, steel authority of India Limited (SAIL) had declared that the bleeding public sector behemoth would enter the black by March 2002, and would complete a string of disinvestments in a bid to become a focused steel major. Status: SAIL's losses more than doubled from Rs 729 crore in 2000-01 to Rs 1,707 crore in 2001-02. As for the disinvestment of non-core businesses, that exercise has barely begun.

You can't heap all the blame for the bloated losses on Pande since the market for steel was one of the worst in 20 years. But what prevented SAIL from getting a move on with the divestments?

As per the financial and business restructuring plan approved by the government in February 2000, SAIL was supposed to divest its stake in the Oxygen Plant at Bhilai, the Alloy Steel Plant, the Salem Steel Plant, Visvesvaraya Iron & Steel Plant (VISL), Rourkela Fertiliser Plant and IISCO by entering into joint ventures by March 2002. The only successes SAIL has met with so far is in selling 50 per cent stake in four power plants by entering into a joint venture with NTPC, and raising Rs 902 crore in the process.

Pande's record in implementing the entire blueprint can be questioned, but the government too has a share of the blame. For instance, Tyazpromexport (TPA) of Russia had shown interest in buying a stake in IISCO (which had been referred to the BIFR way back in 1994). The proposal went to the government for review. In the meanwhile, a Rs 1,080-crore proposal was submitted to the government for reviving IISCO. Till BT went to press, SAIL officials were not clear whether the proposal has been accepted or not.

The Salem Steel Plant has become a political issue in Tamil Nadu. The deadline for selling this plant was March 2001. The Alloy Steel Plant has found no bidders (deadline: March 2002) and the Oxygen Plant at Bhilai has had to go for re-tendering because the chosen bidder-Messers of Germany-had put too many conditions (deadline: November 2000).

In the case of VISL, one bidder, Seamless Metals and Tubes, has withdrawn and the other, Sunflag Iron, is to submit its financial bid by June 20 (deadline: March 2002).

The technical bids for Rourkela Fertiliser Plant are expected to be submitted shortly. Two companies- Rashtriya Chemicals and Fertilisers and Deepak Fertiliser-are bidding for Rourkela Fertiliser Plant (it was supposed to have been sold by December 2001). Similarly, little action has been taken on splitting SAIL into two strategic business units.

The steel sector may be showing signs of revival, but unless SAIL is able to gain some much-needed focus, it's unlikely to benefit much from the upturn. Pande retires in September, and it will be up to his successor to pick up the pieces-and sell some of them.

-Swati Prasad

C-SNIPS

L&T's A.M. Naik: Dragging his feet

L&T'S CEMENT DEMERGER STUCK
More than two years after it announced its decision to demerge its cement division, engineering and construction major Larsen & Toubro-in which the A.V. Birla Group has a 13 per cent stake-has yet to set a deadline for the merger. Managing Director A.M. Naik says the decision has been deferred temporarily.

THOMAS COOK EYES TRAVEL INSURANCE
Ashwini Kakkar, Managing Director, Thomas Cook, told analysts last fortnight that he sees a great potential in the travel insurance business, which he estimates to be worth Rs 4000 crore. Thomas Cook is initially targeting 1 per cent of that pie, with specialised products.

TCS's Ramadorai: Ambitious plans

TCS SET TO GO PUBLIC IN SIX MONTHS
Tata Sons is set to dilute between 10 per cent to 15 per cent of its holding in Tata Consultancy Services (TCS) in six months. The public issue for this purpose is likely to be as huge as Rs 4,000-5,000 crore. Indications are that the issue will most likely be a domestic one, targeted primarily at institutional investors via the book-building route.

UTI's M. Damodaran: Under siege

UTI'S MARKETSHARE DROPS
The Unit Trust of India's (UTI's) marketshare in May dropped to 47.64 per cent from 49.58 per cent in the previous month, according to data released by the Association of Mutual Funds of India (AMFI). UTI now has close to Rs 49,000 crore of the total Rs 1.02 lakh crore assets being managed by Indian mutual funds.

BHARTI TO LAUNCH MOBILE IN MP
A wholly-owned subsidiary of Bharti Tele-Ventures, which holds the licence for providing cellular services in the Madhya Pradesh circle, will soon launch operations. Madhya Pradesh is one of the eight circles in which Bharti has bagged the fourth operator slot.

GAIL TO FORAY INTO WEST ASIA
The Gas Authority of India (Gail) plans to foray into the businesses of gas transportation, gas processing and related areas in West Asia and South-East Asia. The company is also planning to enter the LPG marketing business in India.

THIRD PRICE HIKE BY STEEL MAJORS
For the third time in three months, the country's steel manufacturers raised prices of hot-rolled and cold-rolled steel, as well as those of galvanised products. Analysts say that the local industry can afford to do so because of an increase in demand in global markets.

SATYAM COMPUTERS
Clean-Up Time
Satyam Computer will close down three subsidiaries, limit investment in another, and exit one JV. But who is going to buy its internet business?

Ramalinga Raju: Moving to prune costs

Call it an attempt to get focussed on its core business, or an exercise in fiscal prudence, or just a good old clean-up act. Whichever way you look at it, Satyam Computer Services' spree of closures and divestments will make it easier for investors to get a better pulse of the Hyderabad-based software services major. Consider: Satyam plans to shut down its three loss-making foreign marketing subsidiaries (in Europe, Asia, and Japan) and divert those businesses to Satyam branches abroad; it's been talking about divesting its holding in Sify, its venture in the internet space, either in whole or in part; it's also getting out of a joint venture with GE; and limiting its investment in US subsidiary VisionCompass Inc.

"Investors were looking for a single entity to deal with, and this is a step in that direction," explains K. Thiagarajan, Director and Senior Vice President (Corporate Strategy Group), Satyam Computer Services. To elaborate on that, the clean-up burst means that the shareholders will get to access a simpler profit and loss statement rather than a tome that's filled with black and red blotches (from the subsidiaries for example).

Equity analysts, for their part, point out that the move was long overdue. Satyam needed to prune its cost base, given the reduced growth rates and heightened competition in the software services business. That's perhaps one reason why its peers enjoy a better valuation at the stockmarket.

Whilst Satyam is today quoting at 13-14 times forward earnings, Infosys gets a better valuation of between 20 and 23 on projected 2002-2003 earnings. Even the second-rung software companies, say analysts, succeed in showing a better price-earnings ratio of between 15 and 17.

Another simple rationale for shutting down the subsidiaries is that they were incurring losses, at least till 2001. In the case of VisionCompass, its burn rate called for a limiting of further exposure. The million-dollar question, though, hangs over the future of Sify, which has been on the market for some time now. Whether, or by when, Satyam will be able to find a buyer for the internet, networking, and e-commerce services company is uncertain, but for now the company's clean-up attempt appears to be just what the markets ordered.

-E. Kumar Sharma