ASSAM

CHIEF MINISTER: Tarun Gogoi, Congress
SHADOW CHIEF MINISTER: Brindabon Goswami, Asom Gana Parishad
POPULATION: 26.66 million
STATE DOMESTIC PRODUCT: Rs 35,431.42 crore
PER CAPITA INCOME: Rs 7,335
TOTAL INVESTMENTS IN THE LAST 10 YEARS: Rs 997 crore
TOTAL FDI: $0.33 million
FDI IN 2004-05: N.A.
ADULT LITERACY: 63.3 per cent
INFANT MORTALITY: 74 per 1,000
INSTALLED POWER CAPACITY: 574.4 MW
REQUIREMENT OF POWER: 614 MW
DEFICIT: 40 MW
UNEMPLOYMENT: 12 per cent

Tea industry workers have been demanding better wages and benefits for years. The Tarun Gogoi government has not been able to sort this out. Human rights violations by the security forces have alienated a section of the population; and illegal migration issue continues to boil following the abolition of Illegal Migrants Determination by Tribunal Act 1983. But despite these problems, the Congress is expected to retain power in the state. The Asom Gana Parishad is no longer the force it was since it expelled former Chief Minister P.K. Mahanta and the BJP has only pockets of influence in the state. Gogoi, who's in the good books of 10 Janpath, is, therefore, likely to retain his chair.

-Ritwik Mukherjee

KERALA

CHIEF MINISTER: Oomen Chandy, Congress, UDF
SHADOW CHIEF MINISTER: Pinaryari Vijayan, CPI(M), LDF
POPULATION: 31.84 million
STATE DOMESTIC PRODUCT: Rs 78,933.13 crore
PER CAPITA INCOME: Rs 24,053
TOTAL INVESTMENTS IN THE LAST 10 YEARS: N.A.
TOTAL FDI TILL DATE: $2 billion
FDI IN 2004-05: $1.75 billion
ADULT LITERACY: 90.86 per cent
INFANT MORTALITY: 9 per 1,000
INSTALLED POWER CAPACITY: 2,637.74 MW
REQUIREMENT OF POWER: 2,500 MW
SURPLUS: About 137 MW
UNEMPLOYMENT: 20 per cent

Conventional wisdom has it that anti-incumbency will cost the Oomen Chandy-led United Democratic Front (UDF) dear. The expected winner: the Left Democratic Front (LDF), led by state CPI(M) General Secretary Pinaryari Vijayan. The UDF, in a last ditch attempt to woo the electorate, has unveiled pensions for small farmers, provided incentives for fishermen, and announced insurance schemes for government employees and teachers. But former Congress strongman K. Karunakaran's expulsion will cost it crucial votes. The only point of interest is over whether CPI(M) hardliner V.S. Achutanandan can stymie Vijayan's chances of becoming Chief Minister by claiming the chair for himself.

-Rahul Sachitanand

WEST BENGAL

CHIEF MINISTER: Buddhadeb Bhattacharjee, CPI(M), LF
SHADOW CHIEF MINISTER: Mamata Banerjee, Trinamul Congress, NDA
POPULATION: 80.18 million
STATE DOMESTIC PRODUCT: Rs 94,500 crore
PER CAPITA INCOME: Rs 12,671
TOTAL INVESTMENTS IN THE LAST 10 YEARS: Rs 26,680 crore
TOTAL FDI TILL DATE: $1.733 billion
FDI IN 2004-05: N.A.
ADULT LITERACY: 77 per cent
INFANT MORTALITY: 51 per 1,000
INSTALLED POWER CAPACITY: 7,600 MW
REQUIREMENT OF POWER: 6,877 MW
SURPLUS: 800 MW
UNEMPLOYMENT: 8.3 per cent

The left front is expected to romp home to power for a record seventh term. Its biggest trump card, ironically, is its challenger-in-chief Mamata Banerjee. Her frequent tantrums turn off even the committed anti-Left voter. It will, however, be interesting to watch how the electorate react to the CM Buddhadeb Bhattacharjee's pro-industry policies. If the Left Front gets a reduced majority, party hardliners will blame the new policies for it and clip the CM's wings. Given the arithmetic in the Lok Sabha, this can have major implications for the country's economic future.

-Ritwik Mukherjee

TAMIL NADU

CHIEF MINISTER: J. Jayalalithaa, AIADMK
SHADOW CHIEF MINISTER: K. Karunanidhi, DMK, DPA
POPULATION: 62.41 million
STATE DOMESTIC PRODUCT: Rs 1,30,917.46 crore
PER CAPITA INCOME: Rs 20,975
TOTAL INVESTMENTS IN THE LAST 10 YEARS: Rs 1,54,105 crore
TOTAL FDI TILL DATE: Over $3 billion approx.
FDI IN 2004-05: N.A.
ADULT LITERACY: 73.47 per cent
INFANT MORTALITY: 51 per 1,000
INSTALLED POWER CAPACITY: 11,383 MW
REQUIREMENT OF POWER: 8,453 MW
SURPLUS: 1,930 MW
UNEMPLOYMENT: 12.05 per cent

The J. Jayalalithaa-led AIADMK and K. Karunanidhi's DMK-led Democratic Progressive Alliance (DPA) have alternately ruled Tamil Nadu for years now. Thus, the DPA was expected to win this round. But Chief Minister J. Jayalalithaa has rolled back several measures that cost her dear in the 2004 Lok Sabha polls. Her government has restored free power for farmers, cut bus fares, dropped action against government servants and scrapped a controversial anti-conversion law. These measures, coupled with her alliance with Vaiko's mdmk, means the polls will probably be too close to call.

-Nitya Varadarajan

PONDICHERRY

CHIEF MINISTER: N. Rangasami, Congress
POPULATION: 0.97 million
STATE DOMESTIC PRODUCT: Rs 5,209 crore
PER CAPITA INCOME: Rs 50,936
TOTAL INVESTMENTS IN THE LAST 10 YEARS: N.A.
TOTAL FDI TILL DATE: N.A.
FDI IN 2004-05: N.A.
ADULT LITERACY: 81.24 per cent
INFANT MORTALITY: 24 per 1,000
INSTALLED POWER CAPACITY: N.A.
REQUIREMENT OF POWER: N.A.
SURPLUS: N.A.
UNEMPLOYMENT: Above 18 per cent

Pondicherry has traditionally been a Congress stronghold and the party is expected to retain power in the forthcoming Assembly elections, despite its uneasy relations with alliance partner PMK. The main Opposition, the AIADMK, is not considered a serious contender for power. The issues in this election: drinking water and corruption. Even if the Congress wins, Chief Minister N. Rangaswami may not retain his chair. P. Kannan, a dissident Congressman, and R.V. Janakiraman, former DMK CM, are expected to claim the position.

-Nitya Varadarajan

Analjit Returns To Hutch
Ex-promoter buys 8.33 per cent for Rs 1,019 crore.

Max's Singh: Ringing in again

Analjit Singh is back as a shareholder in Hutchison Essar Ltd (HEL), the telecom company he had originally co-promoted with the Hong Kong-based Hutchison Whampoa, and then cashed out of. He has bought Kotak Mahindra Bank's 8.33 per cent stake in HEL for Rs 1,019 crore. However, sources close to Singh says he bought 7.3 per cent for Rs 772 crore. The deal values HEL at $6 billion (Rs 27,000 crore), "adjusted for debt and other liabilities", a Kotak Mahindra press release says. Kotak's purchase price: Rs 2 crore. Therefore, its profit on the deal: Rs 1,017 crore.

Singh's Max Group was Hutchison's original partner in the venture, which was then called Hutchison Max. He had sold a 41 per cent stake in the company to the Hong Kong-based conglomerate in 1998 for Rs 561 crore. Last year, he exited the company by selling the residual stake of 3.16 per cent he owned jointly with AIG India. The buyer: Essar Teleholdings. The price: Rs 657 crore. Singh's share of the spoils: Rs 400 crore. This time, Singh has invested in the company through privately held investment companies and not through his flagship Max. The reason: Analjit believes the sector can still deliver good returns on his investment.

Industry observers say Singh continued to maintain good relations with Hutchison even after selling out; and these ties reportedly played a big role in clinching the deal when Kotak was looking for a buyer. He re-enters the company he co-promoted at a time when the Hong Kong-based Hutchison Telecommunications International Ltd (HTIL), which directly and indirectly owns 53.2 per cent in HEL, is planning a $500-million (Rs 2,250-crore) initial public offer (IPO) in India. The IPO requires a simplified holding structure and stringent compliance to various regulatory provisions, including the one that caps direct and indirect FDI (foreign direct investment) in telecom companies to 74 per cent.

The Hutchison Group now has a direct holding of 42.34 stake in HEL and another owns 19.5 per cent indirectly through joint ventures. HEL Managing Director Asim Ghosh is believed to hold an indirect stake of about 4.7 per cent through one such JV. The Ruias of Essar, who own 33.5 per cent of HEL, are the largest domestic shareholders in the company. (See also Edit: The Fight For The Golden Goose, Page 14)

-Kumarkaushalam

Essar's Telecom Game Plan

Essar's Shashi Ruia: Dialing up DoT

The telecom space seems to have emerged as a favourite turf for corporate jousts. Even as the Tata-Birla spat over Idea Cellular gets shriller by the day, the Essar Group has shot off a letter to the Department of Telecommunications (DoT) seeking clarifications on the change in equity in Hutchison Essar Limited (HEL). The provocation: Egyptian telecom major Orascom's decision to acquire a 19.3 per cent stake in Hutchison Telecommunications International Limited (HTIL), which owns around 42 per cent in HEL (this is only the direct holding. It holds another 19.5 stake through the indirect route). This gives Orascom a total holding of about 10 per cent in the latter. It is not clear why Essar is raising its objections now since the transaction took place last year. Interestingly, the Ruias of Essar, who own 33.5 per in HEL and are its single largest shareholder, are believed to be negotiating with the Hinduja family to buy out its 5.11 per cent holding in HEL.

So what is Essar's game plan for telecom? "We are focussed on expanding the business and in increasing the value of our partnership with Hutchison in Hutchison Essar," says a senior official of the group. Kotak Mahindra valued the company at $6 billion (Rs 27,000 crore). HEL is likely to launch a Rs 2,250-crore initial public offering in June.

-Krishna Gopalan

The Brand New ADAG
Anil Ambani gives his group a makeover.

ADAG's Ambani: All set for a new look

Over the next two to three weeks, the Anil Dhirubhai Ambani Group (ADAG) will unveil its new corporate identity. From what bt gathers, Landor Associates, a WPP Group company, is working on the project. Landor is among the world's leading consultants in the spheres of creative design and branding. It is learnt that the new look corporate identity in all probability will have the letter "A", with the names of the four ADAG companies-Reliance Capital, Reliance Energy, Reliance Communications and Reliance Natural Resources. Ever since the demerger of the Reliance empire was announced in June last year, there had been talk of how the businesses of the Ambani brothers would not enter into any kind of competition and in that context, the non-compete clause was crucial. For instance, retail is clearly a major part of Mukesh Ambani's growth strategy even as Anil Ambani, through Reliance Infocomm's Webworld outlets, already has a retail presence.

The issue of ownership of the famous Reliance logo (said to signify a drop of oil) was also talked about, since it did not make sense for both the brothers to use it if the empire was split. While the ADAG spokesperson declined to comment on any of the issues, it is learnt that the new ADAG corporate identity is being conceived with the twin objectives of having a unique logo for the group and more importantly to give up any ownership over the Reliance logo. One is still not sure if the Webworld outlets, for instance, will move on to the new logo immediately or take a while. For now, the intention is to have a new look for ADAG.

-Krishna Gopalan

Why The Colonel Didn't Catch The Flu

Not chickening out: Customers at a KFC outlet

Seven years after Pepsico's Kentucky Fried Chicken (KFC) shut shop in the capital, it returned on February 16 with an outlet at Rajouri Garden in West Delhi. But KFC, which serves over a billion chicken meals ever year in over 80 countries, couldn't have chosen a worse time. Two days after it opened, the first case of bird flu in India was reported in Maharashtra's Nandurbar district. But guess what? KFC, founded by Colonel Harland Sanders, claims its sales were not hit. "We witnessed record sales of 1,309 transactions on Saturday (February 18) and 1,320 transactions on Sunday," says Arvind Mediratta, Chief Marketing Officer, Yum Restaurants International, which owns the KFC chain. He, however, does admit that sales were impacted the following week, but only slightly, and there was a sharp recovery the week starting February 27. "We again had record 3,500-4,000 customers visiting on each of the weekdays, and 4,500-5,000 customers coming in on Saturday and Sunday," says Mediratta. What helped? "Customer education through print ads and leaflets around the trade area," he says. They don't call it "finger lickin' good" for nothing.

-Shaleen Agrawal

Rollback Primer
Five Budget proposals that may be rolled back.

Chidambaram: Will he oblige?

Will they? Won't they? ...Be rolled back, that is. Obviously, no one can predict that with any degree of certitude. But the grapevine says the following proposals may be rolled back or altered:

• Banking Cash Transaction Tax (BCCT) of 0.1 per cent on the withdrawal of every Rs 10,000, but only after the scrutiny of Annual Information Reports on high-value transactions is over.

• Central sales tax of 4 per cent once all the states implement value-added tax (vat) and the Empowered Committee on vat submits its recommendation on the compensation to be paid to the states.

• The increase in minimum alternate tax (MAT) to 10 per cent from 7.5 per cent.

• The custom duty on petrol and diesel may be cut from 10 per cent to 7.5 per cent in terms of the recommendations of the C. Rangarajan Committee on Pricing and Taxation of Petroleum Products.

• Fringe benefit tax paid by companies on sales and promotions.

When? During the Budget Session of Parliament.

-Ashish Gupta

Sweetening The NELP
Deora ushers in more investor-friendly norms.

Petro Minister Deora: Luring more investors

The government is serious about attracting more foreign investment in hydrocarbons. The proof: it is offering 55 oil blocks, the highest ever, under the New Exploration and Licensing Policy (NELP) VI; and has changed the bidding criterion to make them more attractive. There is heightened global interest in India following large discoveries in the Krishna-Godavari Basin and Rajasthan recently by Reliance, Cairns and ONGC. The government wants to cash in on this interest by sweetening the most important component of the bid: profits. Says Deepak Mahurkar, Principal Consultant, PricewaterhouseCoopers: "Industry would welcome the rationalisation of weightages under Bid Evaluation Criteria." The other concessions: a new system of categorising blocks that is more investor-friendly than now; and a more transparent system of evaluating bids. These, new Petroleum Minister Murli Deora, hopes, will mobilise more FDI than the $5 billion (Rs 22,500 crore) that the last five rounds of NELP bidding have.

-Kumarkaushalam

Morgan Stanley Buys Into Mantri

MD's Mantri: Betting on the realty boom

Sushil Mantri has all the trappings of new money. He drives around in a silver-grey Mercedes E-class, his office in Bangalore's tony Vittal Mallya Road has a rock garden and marble floors and eye-catching chandeliers. Just seven years after moving from Pune, where he ran a property business with his three brothers, Mantri, 44, Managing Director of Mantri Developers, has hit the headlines by snagging Morgan Stanley's first investment in the Indian real estate sector. The financial services giant has bought a 10 per cent stake in Mantri for $68 million (Rs 306 crore) This means it has valued Mantri at Rs 3,060 crore.

Mantri, who comes from a well-known business family of Pune, shifted base to Bangalore in 1999 to cash in on the then incipient boom. "When I arrived here, most of the real estate activity was taking place on the northern fringes of the city. Instead of following the herd, I decided to focus on the less crowded south," he says. This meant he had to offer discounts to lure buyers. This gave him lower margins, but he stuck it out. "I wrapped up my first project, which was scheduled to take 36 months, in just 21. This established my credentials," he says. His turnover in his first year: Rs 25 crore. "Since then, we've built over four million square feet of space, and will build six million square feet more over the next few years," adds Mantri, who expects to end 2006-07 with a topline of Rs 1,000 crore; he declines to disclose his bottom line. But industry sources estimate his annual profits at Rs 250 crore.

Profitability apart, industry watchers think Morgan Stanley's interest in Mantri also stems from the large land banks it has in Bangalore, Chennai and Hyderabad. "Mantri represents an opportunity to partner with an outstanding management team and an organisation with strong development capabilities and a recognised brand name," Zain Fancy, Executive Director and Head of Morgan Stanley Real Estate in Asia-Pacific, says in a release.

"We own around 800 acres of unencumbered and free-from-litigation land," says Mantri. Meanwhile, he is already thinking four-five years ahead to an initial public offering and a pan-India presence. "We should be able to go public in that time. There are few truly national realtors today, but there's a huge demand across the country for such players," he adds.

-Rahul Sachitanand