February 14, 2000

Speeding up the Special Court

The dot-con game

It is time for the most hilarious con games when those rushing into Web-based businesses and others providing them with ad-Venture Capital are clueless about what will lead to sustainable revenues. After all, nothing needs to be real in the dot.com world. For instance, there is this site launched with a lot of fanfare this month. The very next day it claimed live Net coverage of a talk by a Silicon Valley whiz. An industrialist sat on the dais checking the Web action on a notebook computer and lobbed questions to the whiz. Behind him a screen hid the computer which controlled the ‘‘live show’’. The industrialist says ‘‘there is a lady out here who wants your email ID’’ and the tittering audience presumes she is in cyberspace. Nobody notices the dot.com company staffers rushing pieces of paper to feed the show through the nerve centre behind the screen. After all, what does it take to dupe a room full of corporate bigwigs whose email is operated by secretaries? Then there is this new site splurging Rs 1 crore a week on advertising. The new mantra of the dot.com business is that advertising brings in eyeballs. Who cares if that is true, as long as the advertising is paid for by venture capital. All they need is a few people who spend time logging on to a site to ‘‘generate’’ an impressive quota of eyeballs.

IL&FS — this time lucky?

Infrastructure Leasing & Financial Services (IL & FS) has been on the verge of going public for most of the last decade. Some years ago, IL&FS warehoused its shares with UTI to raise funds in anticipation of its public issue. But the primary market went belly up and UTI, its largest shareholder, remained stuck with the shares until it protested. The shares were then de-warehoused and parceled out to other institutional investors, also SBI came in and RBI divested some shares. Now IL&FS has decided that it is finally time to hit the market. The primary market has recovered and several of its business is also the flavour of the season. We hear that IL&FS is looking at a pricing of Rs 150-170 and the issue mandate may go to Kotak Mahindra Finance.

Threatening moves

One has got to hand it to ICICI as the latest entrant into the consumer and housing finance business. Its ferocious aggression is frightening the competition. We don’t know what it will do to ICICI’s bottomline, but at the moment it is certainly earning a lot of goodwill from borrowers. Car finance rates have already dropped a hefty 2 percentage points, but it is in housing finance, dominated by HDFC, that will probably see the fiercest battle. HDFC which rules the home loan business got a taste of things to come at an exhibition that it co-sponsored last month with the Maharashtra Chamber of Housing Industry. ICICI which was just one of the participants announced that it would not only process documents right at its stall, but would do slash processing charges to a nominal Rs 1,000. Our source says that the offer ensures there was no standing room near the ICICI stall while HDFC’s counters looked rather forlorn. Until now, HDFC has remained largely impervious to competition in the housing industry, but an aggressive ICICI with an equally good brand recall may force it to rework its strategies.

Financing a bankrupt state

The Maharashtra government has received some radical suggestions by the All India Manufacturers’ Organisation (AIMO) to raise funds. It suggests that the state’s new administrative building next to Mantralaya can easily be sold for Rs 240 crore or more. AIMO suggests that these should move to the loss-making NTC mills and the entire building be offered to MNCs for a shopping mall. AIMO has also hit out at two protected categories. It says the Chief Ministers’ quota of flats reserved for artists and journalists has been grossly misused and there are several allottees with multiple flats. Also MLA hostels are misused by business associates of politicians. It wants this misuse investigated and exposed and fined to raise revenue. These won’t be able to bridge the state’s Rs 8,000-crore deficit, but the improved transparency will save valuable funds.

 

Updated weekly.

The author's e-mail address is: suchetadalal@yahoo.com

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