Jagdish Khattar, CEO, MUL: 115 reasons to worry

How much is too much for a piece of India's biggest car-maker? For some in Investor India, it is Rs 115-which, not incidentally, is the floor price of Maruti Udyog's maiden float (face value: Rs 5). Here's why: At the offer price, Maruti's price-to-earnings multiple works out to a staggering 22.7 for 2003, according to a report by CLSA Emerging Market. Compare that to the PE of international car-makers: Hyundai Motor's and Kia Motors' is 5.1, and Malaysia's Proton's, 3.8.

Besides, as Arun Kejriwal, a Mumbai-based investment advisor points out, the IPO, whose purchase deadline is June 19, entails a lock in of around 20 days, since the stock doesn't list until the first week of July. According to Kejriwal, the cost of opportunity, given the current uptrend on Dalal Street, may be too high to justify such a lock in. Others like Abhay Aima, Country Head (Private Banking), HDFC Bank, feel Maruti's future earnings may be impacted by the growing competition in domestic and international markets. "I am not bullish on the Maruti IPO," says Aima.

The only parties not complaining, it would appear, are the two partners (Suzuki Motors and the government of India) and institutional investors, who can buy as much as 60 per cent of what's on offer - a quarter is available to retail investors, and the rest to non-institutional investors.

Suzuki is not complaining because it paid Rs 160 apiece (for a Rs 5 share), or Rs 1,000 crore, as a premium to gain control of the company. Ergo, the Rs 115 that it is asking for now, is much less than what it paid. The government of India is smug because the issue has been underwritten by the Japanese parent at Rs 115 a share. Last year was a good year for Maruti. CEO Jagdish Khattar's cost cutting efforts helped it turn in a tidy profit of Rs 146.4 crore. Is that enough?

-Swati Prasad

CONCOCTION
Stimulating Stuff
The importance of Wipro's C-biz

Coffeehouses and reading have always mixed well. No surprises then that Delhi's top afternoon newspaper Today and coffee-chain Barista are stirring things up with a new four-page newspaper, Brew Print, offered at the chain's 49 stores in and around Delhi. "It adds to the Barista experience of re-charge and unwind," says Barista's head of marketing Basav Mukherjee of the weekly newspaper, which comes wrapped with Today and features interactive elements that let readers complete a story, pen a poem, even pick up guitar-playing tips. The newspaper is free to Barista customers, and will eventually be available across its 130-odd outlets. Says Kallie Purie, Today's publisher: "For us it is a perfect brand fit in terms of customer profile." Your favourite cuppa just got a lot more interesting.

-Shailesh Dobhal

SELF WORTH
Banker Without A Bank
Ramesh Gelli doesn't have a bank he can call his own today.

Ramesh Gelli: The consummate banker at rest

At 56, Ramesh Gelli, looks pretty much like he did in his glory-days in the mid-1990s, maybe a few pounds lighter. In 1994, when the gold-medallist from the Asian Institute of Management, Manila founded Global Trust Bank, it seemed the logical next-step for someone counted among the best bankers in the country-Gelli had been chairman of Vysya Bank, the best private bank in India in the early 1990s. Great things were expected of the man and the new bank and until the turn of the century it looked like nothing could go wrong; then, everything that could, did. In 2001, as another stockmarket scam surfaced, the bank's exposure to the markets came under scrutiny; an attempted merger with UTI Bank that would have created the country's largest private bank failed amidst controversy surrounding an alleged price-rigging of GTB shares, in collusion with broker Ketan Parekh, the main accused in the scam; and Gelli's own integrity was questioned over the alleged sale of some the shares.

Like any self-respecting individual would have done, Gelli resigned as the bank's chairman and managing director in April, 2001 and quit the board two months later, but the taint refuses to go away. A Securities and Exchange Board of India investigation remains work-in-progress and just recently, the agency barred Gelli and his co-promoters from any market transactions in GTB shares. And the bank itself has lost much of its sheen: from a peak of Rs 120 in November 2000, its scrip now inhabits the more rational Rs 20 level. Total income for the nine months ended December 31, 2002 fell to Rs 592 crore from Rs 740 crore in the corresponding period in 2001; the Capital Adequacy Ratio (a measure of a bank's health), from 14.68 per cent to 10.54 per cent in the same period. And in September 2002, the central banker stepped in and asked GTB to halve its dividend from 10 per cent. No reasons were given, but the move may have been prompted by the bank's use of some Rs 250 crore of reserves to write off non-performing assets. Today, the bank has estimated NPAs of over Rs 1,000 crore and a clean up is underway. "Every new person at the top (there have been two heads and one interim committee since he quit) wants to begin with a clean up; it's the normal tendency," rationalises the professorial-looking Gelli who believes "GTB still commands a lot of respect ".

Gelli considers himself retired now-still, his mobile phone rang incessantly during this writer's meeting with him-and moves about, not in the blue Mercedes sedan he used in his GTB days, but in a modest Opel Astra. Although reluctant to discuss the past, he denies that the promoters sold 1.31 crore shares to entities owned or controlled by Ketan Parekh, and defends the bank's capital-markets-funding business. "Why all this happened is a good question to ask, and seems logical when the going is bad," he philosophises. "At times, similar attributes and actions are judged as smart behaviour if you are successful." Gelli has had time to refine his philosophy: on a typical day he is up at six, takes a long walk, does some yoga exercises, feeds the birds, prays for anything between 20 minutes and 45 minutes, reads (he has just finished Welch's Straight From the Gut), and meets with some old friends. He isn't interested in heading a bank anymore and says "I am leading a retired life and trying to help friends in need," but Gelli does plan to return to the mainstream with a "turnaround fund" for companies that have good projects, but suffer from lack of money. Gelli Redux?

-E. Kumar Sharma

A+
He won't say, but our guess is one reason for Bharti Chairman Sunil Mittal to eye a listing in the US is the poor performance of the Bharti Televentures scrip in India. Telecom may be a long-term play and Bharti's fundamentals, strong, but try telling that to people worried about earnings per share. As a purely "I'll show them" gesture this merits an A+

B-
This should have actually been a C, but his superior sense of balance fetches Union Labour Minister Sahib Singh Verma a higher grade. Face it, how many people can answer calls to reduce Employee Provident Fund rates, by doing so, yet not doing so? Go ahead, work that out for yourself.

The Beauty Parade
Quality is an underground industry in India.

Another beauty pageant: Quality certifications are as easy

Psssst, want an ISO certificate? It's easy to get one certifying that your company complies with the standards laid down in ISO 9000 or ISO 14001 without lifting a finger to change any of its processes, even creating reams of false documentation. How? Simply pay Rs 5,000 to Rs 25,000 to any of the 30-odd certifying bodies. None of these is accredited with global certifiers such as DNV or with the Quality Council of India (QCI), but that shouldn't matter to you. "If you wish to, you too can start an ISO 9000/14001 certifying agency, start issuing certificates, and earn anything between Rs 10,000 and Rs 50,000 depending on your negotiating skills," says Captain N.S. Singhal, a "real' auditor of quality and environmental management who has, by his own admission, now embarked on a "save ISO mission". As former Commerce Minister Rajiv Pratap Rudy recently stated in parliament, "activities of Indian and foreign certifying agencies aren't being monitored because ISO certification is voluntary, not mandatory". And so, some unscrupulous certifying agencies continue to vend paper and even some of the regular ones "forget" to carry out annual re-audits. Worse, with the government reimbursing small-scale units with ISO certifications Rs 75,000 or 75 per cent of total expenses incurred while obtaining the certificate, some Rs 23 crore has been burnt. If this continues, warns Singhal India-issued ISO certificates will soon be discounted in the international market. Much like Venezuelan beauty queens.

-Ashish Gupta

FACELIFT
MJ's Nose?

It isn't really in the same league, but Hindustan Motors has embarked on an exercise to change its identity. Fortunately, this effort doesn't take the route of merely giving the 50-year old Ambassador yet another facelift. Instead, HM got Bangalore-based design firm Ray+Keshavan to create a new logo for it-not that its existing one was dated; it was introduced as recently as 1994. Accompanying the image overhaul are free service checks and a programme that is targeted at informing existing Ambassador owners about the changes the car has undergone. For the record, the car is now available with power steering, moulded roof, a new gear-box, and in attractive colours. The logo will be unveiled in July-as a sideshow, the company will launch a new edition of the Ambassador to mark the occasion. "We thought the HM logo was slightly dated. The new logo is more contemporary and we feel customers will like it," says a company spokesperson. Now, if only logos could sell cars.

-Swati Prasad