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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (4638)	6/17/1999 11:27:00 AM
From: Nandu	Read Replies (1) \| Respond to of 12475

This exchange is for you it looks like. Why, thanks, Mohan. I am taking my life savings and buying a seat on the exchange right away. <vbg>

To: Mohan Marette who wrote (4638)	6/17/1999 1:14:00 PM
From: Mohan Marette	Respond to of 12475

Crompton Greaves (India) to spin-off divisions. cgl.co.in Equity Watch walletwatch.com India Info Line News Service Date: 6/17/99 10:18:25 AM Crompton Greaves to spin-off its divisions into separate companies The Thapar group is working on restructuring its operations. Mr K K Nohria, Chairman, Crompton Greaves said he will not rule out anything which is as per the demand of the times. Crompton Greaves is planning to spin-off its industrial systems, consumer products and digital divisions into separate companies to facilitate management for Thapar's nephews. As much as 17 subsidiary companies are likely to be sold off. However, power systems division will be retained by the company. ========================== Crompton Greaves (CGL)- Executive Summary Business In FY98, CGL's 4 business groups viz Power systems, Industrial systems, Consumer products and Digital contributed 37%, 32%, 26% and 5% to sales respectively. CGL is India's leading private sector electrical engineering company. It manufactures a wide range of transformers, switchgear, motors, railway signaling equipment and undertakes turnkey engineering projects. Transformers, switchgear, cables etc are used for power transmission & distribution (T&D). As decades of State monopoly over India's power sector led to a rising deficit, the sector was partly privatised in 1991. But, most IPPs1 are delayed by bureaucratic hurdles. T&D is still a stronghold of SEBs2. Entry barriers are primarily in terms of quality established and credibility built with SEBs who are the main customers. Motors are used as a prime mover in many electrical appliances. Technology is fairly simple and entry barriers need to be built up by establishing brand franchise and distribution network. Domestic motors segment has a large number of unorganised sector players, especially in the low Horse Power (HP) range. Demand is linked to industrial growth. Electrical fans and lightings industry is characterised by low margins and severe competition. Fans segment is dominated by unorganised sector and brands give limited price premium. CGL has been adversely affected by economic/ industrial slowdown. Its bottomline is almost entirely supported by power/ industrial products, mainly switchgear/ motors. Delays in implementation of IPPs and lack of funds amongst SEBs have led to declining orders for T&D equipment. For funding restructuring exercise, CGL has an option to sell its stake in JV Skycell Communications, which has cellular licenses for two states in South India (estimated value is around Rs2bn). 1. Independent Power Projects only generate power and sell it to SEBs in their region. 2. State Electricity Boards dominate India's power sector.