Larsen & Toubro
Post Grasim's stake acquisition in Larson & Toubro, analysts expect this year to be more eventful for the AV Birla Group company. There are a number of possibilities. The A V Birla Group, for instance, could mull over hiking its stake by another 10 per cent during the year to get full control on the functioning of L&T. This is imperative to justify the premium paid by Grasim for the stake in L&T, say analysts. And if the long awaited de-merger of the cement division does take off, it could elicit some response from some foreign majors who have been waiting in the wings to snatch the stake.
Bharti Tele-Ventures
Bharti Tele-Ventures, the flagship company of Bharti Enterprises in the services business, has created ripples among investors in the past few months. Not only was the company in the news due to its aggressive bidding for the fourth cellular operator licence and acquisition of the Chennai and Kolkata cellular circles, but it was also because of its ability to successfully raise funds for its ambitious expansion plans. Continuing with the excitement, the year 2002 will witness the mega public offer by Bharti Tele-Ventures. The roll-out of its cellular services in newly acquired circles like Mumbai will also keep the company in the news. Another factor is the brutal price war initiated by Bharti in the national long distance services segment. Moreover, Bharti would be seen fiercely competing with another incumbent -- Videsh Sanchar Nigam -- post April 2002. The entry of private players in the international long-distance arena is expected to bring about some structural changes in the domestic telecom sector.
Birla AT&T-Tata BPL combine
The mega-merger involving Birla AT&T-Tata (BATATA) and BPL Communications to form India's biggest cellular services company was one of the most momentous deals of the year. The combined entity valued at $2 billion operates in seven circles across the country and has around 25 per cent of the total market share. In the coming year, the company will launch its services in the recently acquired Delhi cellular circle. It is expected to tap the capital market to raise funds for its expansion plans. Considering the size of the company and its national footprint, the combined entity will emerge as one of the main customers for the private sector national long distance operators during the first phase of competition. Moreover, there still is immense scope for consolidation in the domestic telecom sector.
Maruti Udyog
Maruti Udyog, the country's largest car-maker, could finally see some action on the privatisation front in 2002. The company is expected to announce a rights issue worth around Rs 400 crore during the year. The government is expected to renounce its position in the rights issue in favour of the parent -- Suzuki Motor Corp, Japan. In turn, the government would claim a renunciation premium and a control premium from Suzuki, as the rights issue would make the Japanese auto major the owner of Maruti. Analysts are confident that the company would be privatised in this manner, although the disinvestment minister has denied that the control premium would not be charged in the initial stage.
Coca-Cola
Hindustan Coca-Cola Holdings, the wholly owned subsidiary of the Atlanta-based multinational, would find itself caught in a dilemma if the company has to divest 49 per cent of its shareholding in favour of the public by July 2002. The Foreign Investment Promotion Board, the Department of Economic Affairs and the Department of Food Processing Industries have opposed the company's plea to get a waiver on the condition that required it to make the IPO. Having invested Rs 3,308 crore in its Indian operations so far, Hindustan Coca-Cola Holdings has accumulated losses to the tune of Rs 2,178 crore as on March 31, 2001. Thus, a 66 per cent erosion in the value of its investments has reduced the bookvalue of the Rs 10 share to Rs 3. Thanks to the success in the water business, the company's bottling operations are expected to break-even in the current year, while accumulated losses are expected to be wiped off only by 2005-06.
Having to make a public offer even as the company's balance sheet is awash in red would seriously impair the corporate image and that of its brand -- one of the world's most respected brands. According to reports, there is a possibility that the government would grant a two-years extension to the company. Either way, the company is assured to be in the thick of action.
Cipla
Last year, Cipla's offer to sell versions of its patented anti-AIDS drugs to some African countries at less than half the cost not only captured instant world media attention but also sent shockwaves through the global drugs industry. This year Omeprazole, the generic version of Prilosec, a blockbuster anti-ulcer drug with global sales of $6.3 billion, holds great promise for the company. Cipla has an exclusive tie-up with US generics firm Andrx Corp for the supply of the bulk drug. Though the patent had expired on October 5 this year and Andrx has the 180-day marketing exclusivity for Omeprazole, patent litigations have delayed the launch of the generic version.
Analysts expect the court's ruling to go in Andrx's favour and the drug to be launched early this year. They expect Cipla to rake in Rs 250 crore from this drug alone. The company is also hopeful of getting approvals for the launch of its chloro fluro carbon-(CFC) free asthma inhalers in Europe. The continent accounts for 48 per cent of the $10 billion global market for anti-asthma medicines.
Reliance Lifesciences
Reliance Lifesciences first shot into the limelight when it was one of the two Indian research firms identified by the US-based National Institute of Health to receive US federal funding for its stem cell research. Incorporated in January last year, the firm has already invested around $5 million and is likely to invest another $25 million in the near future. The company's plans include setting up India's first live skin bank in the next few months (as part of its initiative in tissue engineering in the area of cell biology) and one of the largest cord blood repositories in the world.
Out of the 64 colonies of stem cells eligible for funding, seven of them belong to Reliance Lifesciences. Four out of the seven stem cells are in the initial stages of development. Since biotechnology products are seen as the future in the treatment of diseases, Reliance Lifesciences will be one of the companies to look out for.
