Articles by Jairaj Kapadia

Jolted by Decontrol?
Jairaj Kapadia SOME insinuations by market men apart, it is necessary to get down to the bottom of the setback in profits which the Tata Iron and Steel Company has reported for the first six months of the current financial year. Profits declined despite both production and sales recording increases in volume and sales income showing further improvement. The setback followed record profits which were reported by the company for the immediate preceding year (see table). Profits suffered even as steel was fully decontrolled in January this year and from the current financial year the company was totally free from the shackles of steel control. Is it as an irony of steel decontrol that profits went down, instead of going up, during the six months, April to May, this year? Or is the setback due to some other factors, and, if so, will the management of TlSCO be throwing light on them?

Rush of New Issues Jairaj Kapadia ARE managements of companies coming now into the capital market declaring closures of the capital issues ahead of the issues being fully subscribed? This appears unlikely. And in any case the object of a capital issue is to raise the required amount in subscription. So why would the management of a company close its capital issue, if it is not fully subscribed, and not keep it going even with a short extension of the closing date if required till the full amount is subscribed?

Mock Beginning Jairaj Kapadia THE Over-the-Counter market in equity shares of companies not listed on the stock exchanges was declared open on September 29 by the OTC Exchange of India, comprising the financial institutions which were authorised some yean back by the government to establish an OTC market in unlisted scrips. But the market was not inaugurated for trading on that day with Vasundhara Rasayans, the first and the only company so far listed with the OTCEI. No trading was done and no deals were struck in the Vasundhara Rasayans scrip. And this was in spite of Vasundhara Rasayans having completed its public issue of share capital further to OTCEI listing on August 28 and having made allotment of shares to 3,172 successful applicants from among the public The situation of the market being declared open but there taking place no trading in the shares of the listed company was due primarily to the fact that Canbank Financial Services as the agency sponsoring Vasundhara Rasayans for listing with the OTCEI had not picked up the mandatory 5 per cent of the share capital issued by the company as it was required to do under the OTCEI rules. Nor did Credit Capital Finance Corporation do that, after it was appointed additional market maker in Vasundhara Rasayans scrip. Both are said to have exercised the waiver, because they were prevailed upon by the management of the company. But the two had faulted in their obligations as market makers.

Corporate Profits Soar Jairaj Kapadia CORPORATE profitability improved during 1991-92 despite near recessionary conditions prevailing in vital segments of the industrial sector, a study made by the Industrial Credit and Investment Cor poralion of India records. The improvement was hefty, amounting to 25.5 per cent in profits after depreciation but before interest and to 17.6 per cent in net profits.

Pathology of Small Industries Jairaj Kapadia THE second all-India census report of registered small-scale industrial units which has been just released by the Development Commissioner (Small Scale Industries) is not up-to-date. It covers small-scale units which were functioning and were registered as on March 31,1988. The census, which was undertaken during the period 1989-91, features highlights of small-scale units, but emphasises also a growing number of sick units and increasing amount of funds outstanding on their part. Industrial sickness pervades small- scale units like it does large-scale units. The number of sick small-scale industrial units increased during the year from September 1989 to September 1990 from 1,86,000 to 224,000, according to the census report. The amount of funds outstan- The Week's Companies ding by them recorded an increase from Rs 2,243 crore in September 1989 to Rs 2,611 crore in September 1990. This was the amount outstanding in a total in- vestment of Rs 9,296 crore in fixed assets in the 5.82 lakh functioning units in regard to which the data was processed in the census report.