RPL-Chevron: A strong partnership in the making

The timing of the announcement was vintage Reliance. Chevron's much-anticipated announcement about acquiring a five per cent stake in Reliance Petroleum Ltd (RPL) for $300 million (Rs 1,350 crore), finally came on April 12, a day before the RPL initial public offering (IPO) was all set to open.

The deal gives Chevron, the fifth largest integrated petroleum company in the world, the flexibility to increase its holding in RPL to 29 per cent. Assuming that Chevron acquires the remaining stake-24 per cent-at the same price at which it has acquired the five per cent stake (Rs 60 per share) the total size of the deal would be a substantial $1.74 billion (Rs 7,830 crore). RPL has already made a private placement of 45 crore shares at Rs 60 per share bringing in another Rs 2,700 crore.

For Mukesh Ambani, Chairman, Reliance Industries Ltd (RIL), the deal with Chevron means he has a partner whose skills he can tap in areas such as exploration, refining and retailing. "The agreement will be the first step in establishing a strong partnership with one of the largest and most respected companies," said Ambani in a statement. RPL's new refinery, located at Jamnagar in Gujarat is primarily an export-oriented project with a total investment of Rs 27,000 crore. The company plans to develop a refinery with a capacity of 5.8 lakh barrels per day that is expected to commence operations towards the end of 2008.

Meanwhile, Chevron's Chairman and CEO, Dave O'Reilly issued a statement claiming that this deal underscores the importance of Asia to Chevron generally and India specifically. For the moment, all eyes will be on RPL's listing-price. Investors have been bullish on any Reliance group stock for a while now and there are huge expectations from RPL stock too.

-Krishna Gopalan

NUMBERS OF NOTE

21: The number of Indian companies in a list of 100 companies (chosen from 12 rapidly developing economies) which are the emerging global challengers, according to a study by Boston Consulting Group and CII (Confederation of Indian Industry)

$1.4 billion (Rs 6,300 crore): The amount private equity and venture capital firms invested in 69 Indian companies in the quarter ended on March, 31, 2006, according to data provider Venture Intelligence India. The amount is over 3.5 times that invested during the same period last year (2005)

$13.3 million (Rs 59.85 crore): The amount Ford Motor Co. Chairman and CEO Bill Ford Jr. was paid as total compensation in 2005, down 40 per cent from 2004 (he made a commitment last May to forego any increase until the auto unit made sustained profits). Ford was awarded a restricted common stock grant totalling $5.3 million (Rs 23.85 crore) and stock options totalling $7.5 million (Rs 33.75 crore). He also received $4,66,755 (Rs 2.10 crore) in other compensation, including $2,97,201 (Rs 1.33 crore) in value for the use of the corporate aircraft. Bill Ford, whose great-grandfather founded Ford 100 years ago, has foregone a cash salary since taking over as CEO in 2001

Rs 10,520 crore: Net investments by domestic mutual funds and FIIs (foreign institutional investors) in equities in March 2006

.0097: Mathematical probability that someone who sits for the Common Admission Test (CAT) will indeed secure admission to an Indian Institute of Management (IIM)

$151.622 billion (Rs 6,82,299 crore): India's foreign exchange reserves in the last week of March. The country's booming reserves have crossed the $150 billion (Rs 6,75,000 crore) mark for the first time

Rs 5,180: Per capita debt of Bihar. The state's overall debt is Rs 42,483 crore (2004-05)

10 million footballs, 500,000 football shirts of the German national team and over 1.5 million Adidas football shirts: Merchandise related to the coming World Cup that Adidas, the German maker of sportswear and equipment, hopes to sell, according to Group Chairman Herbert Hainer

TELECOM'S TALL VALUATIONS

As recent deals (and recent trends in the stock market) have shown, telecom valuations have literally shot through the roof. That could be one reason for the increased activity in the telecom market in terms of acquisitions, and in terms of shareholders wanting their due (see All's Well That Ends... on page 38 and Stalemate on page 56). Here's a quick look at the country's four largest (barring BSNL and MTNL, that is) telcos and what they are worth. Sunil Mittal's (above) Bharti is a clear leader.

-Krishna Gopalan

NOTED

REFUSED: By The Chatterjee Group (TCG) headed by Purnendu Chatterjee (left), a suggestion from the Company Law Board that it sell its shares in Haldia Petrochemicals to the West Bengal Government, a co-promoter, to resolve the impasse over the control of the firm.

ALLOWED: The Department of Posts, to invest in the stock market, by the government of India. This will help the department continue with the above-market returns it offers investors. It will begin by investing around Rs 3,000 crore drawn from the post office insurance fund.

CROSSED: The magic, Rs 1,00,000 crore mark, by the equity assets under management of the Indian mutual fund industry. The total assets under management: Rs 2,32,000 crore.

ENTERED: By India's teledensity, double digits. It now stands at 12.73 per cent as compared to 9.11 per cent last year (2005).

ANNOUNCED: By credit-rating firm Crisil that there had not been a single default by a Crisil-rated company in 2005, something that has not happened for the past 10 years. While the statistic is testimony to the agency's rating skills, it is also a result of the booming economy, which has improved the financial position of almost all Indian companies.

TOUCHED: $2 billion (Rs 9,000 crore), in revenues, by software firm and industry gold standard Infosys Technologies for the year 2005-06. This is Infosys' 25th year, and Chairman N.R. Narayana Murthy (above) is expected to retire from his executive position when he turns 60 later this year.

SOLD: By Life Insurance Corporation (LIC), a record 10 million policies in March 2006, earning a premium income of Rs 6,000 crore. LIC's first premium from new policies rose 48.5 per cent to Rs 18,085 crore, from Rs 12,170 crore last year. The only time that the corporation had surpassed this was in 2000-01 when business grew 65.9 per cent.

GOOGLE: WHAT NEXT?

On April 13, Google launched Google Calendar, an online calendar that could help users keep track of life and work (like other company offerings, this one is free too). Over the past few years, the company has launched several such utilities. A quick recap of a selected few (minus the ones that keep popping up, then disappearing from Google Labs) that were launched in the past year.

March 21, 2006: Google Finance Beta, a search engine for financial information on companies, public and private, and mutual funds.

February 6, 2006: Google Chat, an integrated browser-based e-mail and instant messaging utility.

December 15, 2005: Music Onebox, delivering information on artists, album-links, even details on where-to-buy them.

November 16, 2005: Google Base, a utility that allows structured content (catalogues, recipes, lists) to be uploaded, and which can then be searched for and found by other users.

October 7, 2005: Google Reader, a web-based personalised news, content, blog aggregator service that can handle diverse types of feeds.

September 15, 2005: Google Blogsearch, which does just that, search blogs.

August 24, 2005: Google Talk, a downloadable Windows application that allows Gmail users talk or instant message for free.

June 28, 2005: Google Earth, a satellite imagery-based mapping facility that allows people to even search for local addresses.

April 20, 2005: Google My Search History, an utility that allows users check their past Google searches.