They love to fight: RIL's Mukesh (left) with ADAG's Anil

This is turning out like one of those television serials that just go on and on and on. Of the many fault lines that separate the two Ambani siblings, the one that holds the greatest potential of sparking of another scrap is their proxy war over gas. The genesis of this dispute? The Gas Sale & Purchase Agreement (GSPA) between Reliance Industries Limited (RIL) and the public sector National Thermal Power Corporation (NTPC), which the former has refused to sign. NTPC claims that the Mukesh Ambani-controlled RIL has gone back on its commitment to supply gas to its Kawas and Gandhar power projects in order to avoid having to bear unlimited liability on the gas price. RIL, apparently, wants to limit its liability to 175 per cent of the gas price. It is not clear why it did not raise the issue when it approved the draft GSPA. Company officials decline to comment on the matter.

Where does Anil Ambani fit into this picture? His Rs 11,000-crore, 3,740-mw power project in Dadri depends critically on gas supplied from RIL's fields in the Krishna-Godavari Basin. It is learnt that RIL's agreement with NTPC to supply gas at $2.86 (Rs 129) per million metric British thermal unit (MMBTU) is a virtual photocopy of its deal with the Anil Dhirubhai Ambani Group (ADAG). Gas prices are currently ruling at $9 (Rs 405) per mmbtu. Supplies to NTPC and Reliance Energy at the agreed price will result in RIL having to forego hundreds of crores of rupees worth of revenues that will otherwise go almost straight to its bottom line. Sibling rivalry apart, there are solid financial reasons for Mukesh wanting to walk out of the deal. Here, too, RIL's official line is "no comments".

NTPC, meanwhile, has taken RIL to court over the issue. The next hearing is scheduled later this month at the Bombay High Court. Younger brother Anil will be keeping a keen eye on it. The fate of his pet project hinges critically on the court's verdict. But even if NTPC wins, Anil's battles will be far from over. He will then have to convince his elder brother to extend the same terms to him. Going by the way the partition saga and the actual transfer of companies played out, this demand for parity of treatment vis-a-vis NTPC might spark off the third round of skirmishes in this family saga.

-Krishna Gopalan

A Credit Card From The Tatas

Coalition: Tata (L) with SBI's Purwar

It's an intensely competitive market and offers small margins. But the Tatas still want a slice of it. Result: the Tata Credit Card. It marks the re-entry of the Tatas into the credit business-their last foray into this space was through Tata Finance. This time around, the Tata Credit Card has been launched by the Tata Group in association with SBI Card and MasterCard International. SBI Card is a joint venture between the State Bank of India and GE Capital. "The Tata Credit Card is extremely customer-friendly and offers greater choice and convenience (than other cards)," says Kishor Chaukar, Managing Director, Tata Industries.

Currently, the card is available in six cities-Delhi, Mumbai, Kolkata, Jamshedpur, Bangalore and Hyderabad-and will be available in all major cities and towns by May 2006. It is not yet clear if this is a one-off event or the first of many more steps into the financial services sector. Market grapevine suggests that it is the latter. The card has a reward scheme called The Tata Privilege Program. Says Roopam Asthana, CEO, SBI Cards & Payment Services: "This is India's first multi-brand coalition rewards programme. Customers can use the card at various Tata establishments like Trent and Indian Hotels and on brands like Voltas (and non-Tata brands like Jet Airways and Bharat Petroleum).

The battle for space in your wallet just got more intense.

-Krishna Gopalan

Betting On Hardware
It's the local market that Dell and others want.

Dell's Rollins: Eyeing India

As recently as two years ago, if you were a hardware firm planning on manufacturing in India, you would have found a dozen reasons-all relating to infrastructure and bureaucracy-why not to. But how things change. Most of the reasons for not bringing hardware manufacture to India still remain. Yet, over the last year or so, some of the biggest names in the business have either announced plans to manufacture in India or have already got started. Kevin Rollins, CEO of the world's biggest pc marketer, Dell, announced on January 29 in Delhi that his company was seriously mulling setting up an assembly plant in India. Rollins obviously was drawing inspiration from a spate of similar announcements from Nokia, contract hardware manufacturer Flextronics, Samsung, Huawei, Cisco, SemIndia (read: AMD), and even Intel. Nokia, for instance, is setting up a manufacturing facility in Chennai at an investment of $150 million (Rs 675 crore), while Flextronics unveiled plans of investing an additional $500 million (Rs 2,250 crore). Internet gear giant Cisco said that a chunk of its proposed $1-billion (Rs 4,500-crore) investment would include a local manufacturing facility. Suddenly it seems, India has a real shot at becoming a hardware destination.

So what has tipped the balance in favour of India? A surge in domestic consumption. This year India will sell some 4.7 million personal computers, including 320,000 notebooks. pc sales in the first half of the current fiscal (the latest numbers available) stood at 2.34 million units, a growth of 36 per cent compared to the same period over the previous year. Notebooks grew at an astounding 94 per cent to 153,000 over the first half of the previous fiscal.

It isn't just PCs, though. Servers, printers, networking equipment, mobile phones and just about every other segment of the it hardware market is clipping, thanks to a booming economy. Says Vinnie Mehta, Executive Director of MAIT: "The original boom was in telecom. With nearly 3 million phones being sold a month, telecom has led the way." Others like Ajay Marathe, CIO and President of AMD's India operations (part of the SemIndia consortium setting up India's first chip facility in Hyderabad) say that the country's excellent engineering base and design skills give it a fair chance of becoming an integrated player in hardware. Throw in the big manufacturers' urge to develop alternatives to China, and India's hardware case becomes compelling still.

-Venkatesha Babu

Fashion Fracas

Indian fashion: Splitting ends

Till last year, the annual Lakme India Fashion Week was the Indian Mecca for fashion buyers. Now, thanks to a split between Fashion Design Council of India (FDCI), the organiser of the event, and its title sponsor, Lakme of Hindustan Lever Ltd, there will be two rival fashion shows held this year on. FDCI, which has roped in ITC's Wills Lifestyle as the sponsor for the next three years, will hold the show in Delhi between April 5 and 9. The Lakme event, to be christened Lakme Fashion Week, will debut on March 28 and run through April 1. In the recent years, the fashion shows have been riven with talks of a Delhi-Mumbai divide between the fashion designers, although FDCI's Director General Rathi Vinay Jha calls it "just a perception". Revealingly, established designers like Rina Dhaka plan to stay with the FDCI show. But the point is, a split may actually be welcome. "More fashion events mean more business opportunities for the Indian designers," says Lakme's Vice President Anil Chopra. Also, more hard selling of the events, more international buyers and greater opportunities for aspiring designers. Free markets, we love you.

-Shalini S. Dagar

No Beating About The Bush
A look at what's in store during US President's visit to India.

Most of the good news has got drowned in the din of the nuclear debate. Will us President George W. Bush-who will land in Delhi late on March 1 and commence his official visit with meetings and lunch with Prime Minister Manmohan Singh the next day-finalise the civilian nuclear deal he had inked with the pm on July 18? Will India get exactly the same rights and same benefits as the other declared nuclear weapons states? Or will the agreement be scuttled by an odd, and unwitting, coalition of Cold Warriors, nuclear hawks, peaceniks and proliferation ayatollahs on either side? PMO sources seem confident that the agreement will go forward and that the us will accept the list of civilian nuclear installations that India will voluntarily open to international inspections. They refuse to divulge any further details, except to reiterate that "the list is in keeping with India's strategic interests".

But there's a lot more to the visit than the nuclear deal. PMO sources say Bush is likely to announce two major initiatives-one in agriculture and the other in the knowledge sector after his visit to Hyderabad on March 3 where he will visit the Knowledge Park, the Andhra Pradesh Agricultural University and, if time permits, the Indian School of Business. As part of the former, the us will provide technology and seeds to India, invest in agricultural research and help fund many more agricultural universities to help the country increase agricultural production. Some PMO officials say this could be the first step to a second Green Revolution. The US President is scheduled to meet Sam Pitroda, Chairman of the National Knowledge Commission, in Hyderabad, where he will make a presentation detailing the kind of collaborative research opportunities that exist between the two countries. Following this, the US administration is expected to announce a comprehensive programme of collaboration in information technology, biotechnology and pharmaceuticals.

But this is causing some concerns too. Domestic pharmaceutical companies fear that the US President will push for a more stringent intellectual property rights (IPR) protection regime in India. "US companies want our IPR protection regime to be in line with the us system; but this will only result in the evergreening of patents held by western multinationals," says a senior executive in a domestic pharma company. Similarly, Bush is also expected to make a forceful pitch for India to further open up the banking, insurance and the retail sectors.

However, the gems and jewellery, textiles and food processing industries are bullish about the visit and expect it to result in greater opportunities for them. Textile companies, in particular, believe this trip could be the catalyst for us companies to dramatically increase sourcing from India. "This visit will generate renewed interest in India as an alternative sourcing point for textiles, since us importers are worried about the value of the Chinese yuan," says Rafeeq Ahmed, former President of the Federation of Indian Export Organisation. Adds Rajiv Kumar, CEO of Indian Council for Research on International Economic Relations: "American companies will now integrate India into their global production network."

Bush and his team will come to an India that is no longer caught up in Third World-non-aligned-Cold War rhetoric. Senior Indian leaders have even called the two nations "natural allies"-unthinkable even a decade ago. President Richard Nixon's 1972 visit to China resulted in a dramatic breakthrough in ties between the two countries and changed the geo-politics of Asia. Does Bush's visit hold the same potential? We'll have to wait till March 4 to find out.

-Ashish Gupta

Rahejas Go Shopping
Dairy Farm finds new partners for Foodworld.

A Health & Glow outlet: Glowing again

The Hong Kong-based dairy farm International, which operates supermarkets, hypermarkets, drug stores and convenience stores, has finally found Indian partners for the Foodworld supermarket chain and Health & Glow health and beauty stores that it runs across the country. Replacing Sanjiv Goenka's RPG for the 51 per cent stake are Arko Ltd and Bestow Contractors and Developers Private Ltd, whose major shareholders are Rajan Raheja, Chairman of the R. Raheja Group (of Globus) and Hemendra Kothari, Chairman of DSP Merrill Lynch. Foodworld has 48 branches and Health & Glow 35 outlets primarily in Bangalore and Hyderabad. Dairy Farm had earlier invested in the company seven years ago with its previous partner, the RPG Group, but the two split last year to focus on their respective retail plans. The RPG Group has bought three Foodworld stores in Chennai, which it will rename and operate. Raheja and Kothari were unavailable for comments. Howard Mowlem, Group Finance Director of Dairy Farm International, says Dairy Farm will not be directly involved in running the stores.

-Ahona Ghosh

Intel Inside Bollywood
Chip maker to make a splash with in-film ads.

Intel will soon go to town with its new VIIV technology, which offers a new platform for PC-, laptop- and TV-based lifestyle products. The message: Intel is present not only in PCs and laptops, but is a part of other aspects of your life as well. The medium: in-film advertisements. It has tied up with Mahesh Bhatt's Vishesh Entertainment to showcase the technology in his films. "This isn't in-movie advertising of the kind used by apparel companies. We are working with Vishesh on a Hindi remake of the 2004 Tom Cruise and Jamie Foxx movie Collateral called Killer. The film shows the stars of Bhatt's film (Irfan Khan and Emran Hashmi) access information on the latest Intel-powered Centrino Duo laptops and o2 mobile phones," says Surendra Arora, Director, South Asia (Customer Solutions Group), Intel, adding: "The brand and the products will be woven into the storyline of this thriller. This is perhaps the first time that such a deal has been signed in India. And more such deals are in the pipeline." He declines to reveal any financial details. Mahesh Bhatt could not be contacted for his comments.

-Rahul Sachitanand

Succession Buzz At Cipla

Cipla's Hamied: Passing on the baton?

Has Yusuf K. Hamied, Cipla's Chairman & Managing Director, finally anointed an heir apparent? Company sources respond with an emphatic no. But the buzz refuses to die. The facts of the case are still a little sketchy. Hamied, who has no direct heirs, is believed to be keen to pass on the baton to his 30-year-old nephew Kaamil, son of his brother M.K. Hamied. Kaamil has been working "sporadically" in the marketing department of Cipla for about one year. The buzz grew loud when he began coming to work a little more regularly than before.

The top brass at Cipla calls the entire reportage on the matter speculative. "No successor has been named," Amar Lulla, Managing Director of the company, has been quoted in the media. "We are a team of professional managers. That is our succession plan," he adds.

Cipla's future is being discussed with considerable interest in industry circles. There has been a persistent buzz about the promoters wanting to cash out. Sections of the media have even named the US-based Sandoz and the Israel-based Teva as potential suitors. But Y.K. Hamied has consistently denied any intention of selling out.

It is the absence of a credible succession plan that is fuelling these rumours. Only the Hamied family can shed light on this, but it is keeping mum. Meanwhile, the company has declared a bonus of 3:2. That should drown the succession talk for a while.

-Krishna Gopalan