A step-down transformer: Bingo!

In the end, all it may have taken to put the country's beleaguered power sector back on track is a simple innovation. That is if Delhi is any example to go by. To counter rampant theft of electricity in the capital, its distribution companies bses Rajdhani/Yamuna and New Delhi Power Ltd (NDPL) have made a minor innovation-but a major commercial revolution-in the way they supply electricity. They are beginning to replace the 440 volt conductors (read electricity cables) with those of 11kv. One of the reasons why Delhi boasts one of the highest rates of power theft is that illegal consumers simply sling a wire onto the overhead cables to draw electricity. The 11kv voltage, however, is unusable unless "stepped down" by a transformer-it's like trying to run your car on crude oil, instead of petrol. Says Rakesh Aggarwal, CEO, BSEs Delhi: "High voltage distribution is the norm in developed countries."

BSEs has identified 400 centres in Delhi where the high voltage distribution system (HVDS) will be implemented over the next four months at a cost of Rs 400 crore. NDPL has already started the conversion at more than 200 centres. In areas where HVDS has already been put in place, the results are impressive. Losses that used to be as high as 80 per cent are down to a low of 10 per cent. As for illegal tapping, the loss can be brought down to as low as 2 per cent (theft cannot be eliminated because the last mile to the consumer home has to be stepped down and that can be stolen). Says Anil Saradana, CEO, NDPL: "With virtually a private transformer for each consumer, there's no peril of power failure or voltage fluctuation."

It may be decades before the whole country switches over to HVDS, but at least the transformation has begun.

-Supriya Shrinate

Toyota's "Maruti 800"
There may never be one, but it'll be a target.

Daihatsu Storia: Small car manufacturers beware

Almost ever since Toyota entered the passenger car market in India more than six years ago, its rivals have talked of and dreaded the prospect of the world's smartest automobiles manufacturer launching a small car. But until now the company, which has a joint venture with the Kirloskars, has maintained a Japanese-style stoic silence.

Fortunately for competitors, Toyota Kirloskar Motors' new Managing Director, Atsushi Toyoshima, is more forthcoming-relatively, that is. When asked about Toyota's plans for a small car at a recently-held press meet, Toyoshima said something to this effect: "We are not stupid not to be in the small car segment, but we have a brand image to protect and at the same time India is a price-sensitive market...we cannot price a small car at Rs 5 lakh."

Knowing Toyota, competitors are taking his statement to mean that Toyota has started work on a small car for India. In reaction to the statement, a top rival was heard saying, "Be scared of Toyota, be very, very scared." What kind of a small car will it be? Perhaps not as small as the Maruti 800, but Toyota does have slightly bigger (but small by world standards) cars in its portfolio, especially under the Daihatsu marque. (Yaris may be too expensive for a small car.) Most likely, Toyota may adopt a Qualis-like strategy: Pick up an older model, but fine tune it for India. So, the Daihatsu Storia, which comes in engine sizes of 1 to 1.3 litre (64 to 110 BHP) may be a potential candidate. Another could be the YRV, which is a 1.3 lt tall boy, but with angular design. Toyota will probably take its time on the small car, but it will work to ensure-like with all its launches so far-that it hits the mark.

-Kushan Mitra

DASH BOARD

A
To Ranbaxy's D.S. Brar for successfully steering his company's bid to acquire RPG Aventis. For years, Ranbaxy Laboratories has been touting itself as India's first real MNC. It is.

C
To Andhra Pradesh Chief Minister Chandrababu Naidu whose populist approach to power-pricing could see the state-owned Andhra Pradesh Power Generation Corporation slip into bankruptcy.

CELLUWARS
Bharti Sets The Ball Rolling

The widely anticipated M&A game in the cellular industry has begun with Bharti Tele-Ventures snapping up a 27.5 per cent stake in Rajasthan's service provider Hexacom for Rs 100 crore. Another partner in the company, which operates the Oasis brand in the state and has 2 lakh-odd subscribers, the government-owned Telecommunications Consultants India Ltd owns another 30 per cent and is said to be keen on an exit ''at an appropriate valuation''. The first tranche of shares bought by Bharti comprises the entire holding of Telesystem International Wireless of Canada in Hexacom. ''It is a fair valuation (at $400 per subscriber) given that it is a minority stake, but much higher than other deals in the past," says Aditya Sanghi, Executive Director (M&A) Rabo Bank. Given that Bharti would want 100 per cent of Hexacom and that its promoters, the Shyam Group, would want otherwise, a battle may be brewing. "The market is full of action, anything is possible," says Bharti's Sunil Mittal. Indeed.

-Vandana Gombar

Diamonds Are For Certification
New gem labs are popping up in Mumbai.

IGI's Tehmasp Printer: He's got competition

For a country that's the biggest exporter of polished diamonds, it's a miracle that it has got by so far without much certification. But that miracle is now ending. With global customers demanding that Indian traders speak the same language in terms of carat weight, cut, and clarity, certification has become a buzzword in the industry. Says Tehmasp Printer, Managing Director, International Gemological Institute (IGI): "Certification ensures that the buyer is paying the right price for the right quality."

Considering that India re-exports $6.1 billion of diamonds each year, certification laboratories are queuing up. Printer brought in the Antwerp-based IGI four years ago and has since seen business grow from 500 diamonds a day to 5,000. Global major Gemological Institute of America (GIA) set up a liaison office in July 2002, and sends around 1,000 diamonds a month for certification to its labs in the US, Belgium, and Israel. And the latest to enter is European Gemological Laboratory, whose India Managing Director Pritish Jhaveri was until recently running his own International Gemological Laboratory. The labs charge between Rs 1,700 (of EGL) and Rs 5,600 (GIA) per carat.

Besides the export market, the local market is demanding certified diamonds. Says Sanjay Kothari, Chairman of the industry association, GJEPC: "Crores of rupee are spent each year on buying diamonds, and knowing that it is what you are paying for is a big confidence booster." For the labs, that means big business.

-Dipayan Baishya