Reliance Communications, is gearing up to launch videoconferencing services across 1,100 cities in 113 countries, including the US, Europe, Japan and Middle East nations. The company has also initiated talks with global telecom operators to set up backbones and provide bandwidth for the operations.
The company planning its global videoconferencing foray through its 100% subsidiary Reliance Globalcom, which already has Internet protocol-enabled optical fibre network across the globe. The company is looking at hosting over 2 million simultaneous videoconferences across 70 countries covering 6 continents. RCom, which is already providing videoconferencing services in over 105 cities in the country, is also expanding its presence. The group had earlier entered into tie-ups with over 1,000 corporates, who are using the facility from Reliance World Stores. The company is also providing managed videoconferencing services to customers in the country.
The fast growing global potential of videoconference services provides interesting opportunities to expand its service portfolio using the fully-IP enabled 65,000 fibre Kms undersea cable network connecting 40 top business centers of the world. The present size of global videoconferencing industry is estimated to be around $11 billion (Rs 44,000 crore). In India, the videoconferencing market is growing at over 50 per cent on a year-on-year basis.
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Homegrown pharma major Ranbaxy Laboratories Ltd has commenced Yemen operations in collaboration with local Pharma Ltd. With this it has strengthened its presence in the Middle-East. Ranbaxy has now become the first Indian pharma company to have a strong presence in the Middle-East with operations in 11 countries.
The company has a strong productline with over 160 approvals so far in Yemen. It has commenced operation by introducing products to more than 350 doctors in the country. Ranbaxy would focus more on therapeutic areas such as anti-infectives, gastro-intestine, cholesterol lowering and anti-allergic in the country. It has also become the first company to be registered in Saudi Arabia and to receive the centralised GCC registration.
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GMR Infrastructure has posted 129% growth in net profit after tax and minority interest at Rs 50.0 crore for the quarter ended March 31, 2008 as compared to Rs 21.9 crore for the quarter ended March 31, 2007. Net Revenues have increased 43% from Rs 619.6 crore for the quarter ended March 31, 2007 to Rs 885.3 crore for the quarter ended March 31, 2008.
For the year ended March 31, 2008, the company has posted a jump of 20% in net profit after tax and minority interest at Rs 210.1 crore for the year ended March 31, 2008 as compared to Rs 174.4 crore for the year ended March 31, 2007. Net Revenues have increased from Rs 1,696.7 crore for the year ended March 31, 2007 to Rs 2,294.8 crore for the year ended March 31, 2008.
GMR Infrastructure plans to invest Rs 2,400 crore this fiscal in various road projects. The company expects to commission four important road projects - two in Andhra Pradesh, one in Tamil Nadu and one in Ambala, by the end of the year.
Further GMR Infrastructure’s unit GMR Energy Ltd has acquired a 5% stake in South Africa’s Homeland Mining and Energy SA (Pty) Ltd, a unit of Canada’s Homeland Energy Group Ltd. It also has an option to buy additional 45% stake in the company.
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Bharti Airtel has signed a $35 million, three-year outsourcing agreement with BPO services provider Firstsource Solutions, which will offer both voice and backoffice services in areas such as customer accounting, VAS provisioning, fraud and credit monitoring, customer service, collections and customer retention to Airtel. While company officials declined to provide financial details, sources said the deal was valued at around $35 million.
In August 2005, Bharti had announced a Rs 1,000-crore deal with BPO firms IBM Daksh, MphasiS, TeleTech and Hinduja TMT to outsource its call centre operations. The Firstsource deal is another instance of the company's strategy to focus on its core areas of product innovation, marketing, brand building. Airtel has already outsourced its IT requirements to IBM and cellular networking operations of Nokia and Ericsson. However, the contract with Firstsource is more comprehensive as it includes mobile collection, welcome calling, VAS provisioning besides other services.
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Dr Reddy’s Laboratories (DRL) suffered a 68% fall in Q4 net profit ended March 2008, after writing down the intangible value of the products of its buyouts in Mexico and Germany, besides products in Spain. Fall in the revenues from generic drugs and pricing pressures from the US and Germany also pulled down revenues for the quarter by 15% year on year.
Net profit fell to Rs 102.8 crore in Q4FY08 from Rs 325.2 crore in the corresponding period of FY07 when it was aided by 180-day exclusivity for the generic version of a drug Zofran. In the period under review, revenues dropped to Rs 1,325.2 crore from Rs 1,557.3 crore. DRL is targeting a revenue growth of 25% in this fiscal. The focus will be to strengthen its global generics business in US and Europe, to build on the momentum in Active Pharma Ingredients and Organic Custom Pharma Services (CPS) business, and accelerate pipeline development and infrastructure in the innovation business.
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Rcom has announced the roadmap for launching competitively priced direct-to-home (DTH) services in 4,000 towns in the next few weeks. The company has already completed trial runs across 2,400 towns and the service, under the brand name, Big TV DTH. The service is currently available for customers of other DTH operators for just Rs 1,000 as compared to nearly Rs 4,000 being charged by existing DTH operators.
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In what could mark its foray into the real estate and hospitality sectors, Reliance Industries has sealed a $1-billion joint venture with the New York Stock Exchange-listed Vornado Realty Trust to set up a real estate fund that will develop a network of mega malls and highway shopping centres in India, not just for Reliance Retail (RRL) but also others. The joint venture with Vornado is Reliance’s fifth global partnership in three monthsthe other four being with Marks & Spencer, Vision Express, Miss Sixty and Office Depot. However, the latest partnership is important as it would deal with real estate acquisition and management, which is crucial for the viability of any retail company.
Reliance, which was averse to global partnerships in the past, has now adopted a more pragmatic approach to form joint ventures with the world’s best to capitalise on their domain expertise and brand power. Since the group is a green horn in retail and has never dealt with a consumer business on such a large scale, it wants to learn the systems and processes from experienced global companies so that it can apply them on its own retail venture. So, Reliance didn’t think too much when it had to relent majority control to global apparel and food company Marks & Spencer. Even in its JV with Vornado, Reliance may be a minority player, but the shareholding structure could not be confirmed.
Now the real estate assets of Reliance Retail will be parked with this realty fund, thus transferring a high cost base from the retail company’s balance sheet. With this, the fund becomes the official real estate supplier to RRL. Vornado, the $14-billion market cap company, develops and manages retail properties and office spaces in Washington and New York. In India, it is likely to give the much-needed push to RRL’s expansion plans, which have slowed down in recent months. It will also develop seamless malls, which will house global brands with which RRL is signing up joint ventures.
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Rcom may further dilute ~5% of Reliance Infratel through its subsidiary Reliance telecommunications infrastructure Ltd or Reliance telecom infrastructure holdings Ltd. in pre-IPO placement to a clutch of American and European investors, a deal that values the company at nearly Rs 50,000 crore, according to sources. The earlier 5% stake dilution that Reliance Infratel had made, valued the company at nearly Rs 28,000 crore. Earlier last week, Sebi cleared the initial public offering of Reliance Infratel.
Reliance Infratel, the telecom infrastructure division of Reliance Communications, would offer 10% equity to the public valued at Rs 5,000-6,000 crore. The issue proceeds are proposed to be utilised towards funding development of passive infrastructure and general corporate purposes. The re-rating in the valuation of Reliance Infratel should get reflected in the valuation of Reliance Communications going forward.
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In what is seen as one of the most significant milestones in its history, Bartronics India Ltd, a leading provider of solutions based on ATDC technologies in India, has emerged as the lowest bidder in the Bhamashah Financial Empowerment Scheme of Rajasthan Government. The bids for which were opened on May 16.
Under the scheme, the government intends covering about 50 lakh families through biometrically identifiable smart cards, and provides them financial relief. The project valued at about Rs 150 crore is one in a series of financial inclusion initiatives announced by the Finance Minister during his recent budget speech. Similar initiatives are underway in West Bengal, Bihar and some other states across the country.
While the confirmation of this order is awaited, this is seen as a major breakthrough as far as government projects are concerned. Apart from the financial inclusion project, we expect the demand to pick up further with smart cards expected to be used for variety of other applications namely driving licenses; transport application cards e.g. railway cards, PDS cards (Ration cards), MNIC (multi-purpose national ID Cards) & banking cards. With the company having garnered a major market share in the smart cards segment, BIL stands the biggest beneficiary in terms of awarding of these contracts.
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Shipping companies world over are looking to diversify to hedge against the cyclicality of their core business. But Mercator Lines has taken a deeper path into coal mining. The country’s second-largest private sector shipping company has entered the business through its second subsidiary in Singapore. It has secured mining licences for two coal blocks in Indonesia and one in Mozambique.
Mercator has secured 50% rights in two coal blocks in Indonesia, which have reserves of 15 million tonnes of decent to good quality coal. The company would start production of coal in July this year and expects the two mines to contribute one million tonne of coal in the first year. However, the coal block in Mozambique where Mercator Lines has 85% rights is still under development. The coal reserves there have been estimated to be around three billion tonnes and the company anticipates a wait of another two to three years before they can start production.
The operating cost of producing one tonne of coal is $25. This also includes production tax and 9% royalty that the company needs to pay the Indonesian government. Thermal coal, on the other hand is currently sold at $45-50 per tonne. While, doing a forward calculation, one million tonne of coal for Mercator would translate into $50 million of revenue and a $25 million profit. Having 50% rights in the Indonesian mines, Mercator is set to draw a profit of $11-12 per tonne of coal that they produce or about $12 million profit.
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