Max Leaves Health Care

While the Bajaj Group is launching new designs and the Hero Group is getting together with Italian company Aprilia, why should Arun Firodia’s Kinetic be left behind? So the he has got together with Italy’s Italjet. A good choice indeed, as Italy is the birthplace of scooters. Firodia has acquired the domestic as well as international rights for seven of Italjet’s best selling scooters which will range from 75 cc to 250 cc, whereas currently, Kinetic’s range is from 75 cc to 115 cc engines. These scooters will have retro, modern, futuristic and maxi scooter designs. The scooters will be launched in phases over the next two years, but three of them will be ready by June this year. The tie-up will help the Kinetic group to compete with Honda, its former partner and gain an edge over its other Indian competitors. It will also shorten the time cycle for new models and lower investment risks. If the tycoon tried to develop such models on his own he would have had to give at least Rs 200 crore ,but with this alliance, he is getting readymade and proven models at a fraction of the cost. Though he will be paying royalty to Italjet for exporting the scooters. Italjet had been contemplating a shift in production lines to China due to its shrinking traditional markets and high manufacturing costs. So this arrangement has solved Italjet’s problem while being extremely beneficial to Firodia too. The tycoon will now export these scooters around the world using both his and Italjet’s distributors. In past few years, the scooters category in the country has been posting high growth hitting 8 lakh a year, the tycoon expects this to grow to 20 lakh a year over the next few years.

Tata turns to Arunachal

Ratan Tata has now decided to head for markets outside Mumbai after the realisation dawned on him that more growth would come from outside. Thus Tata Power is now expanding into a huge range of services from generation to distribution, which will lead to a tremendous growth in its earnings. The look at options outside the city will help increase his focus on new business areas and reduce per unit power costs. Tata has already set up a 120 MW plant at Jharkhand, which will begin operations by the year end and will be entirely funded through internal accruals. Another Rs 1,220 crore, Tata Transmission Project, whose lenders include IFC, IDBI and SBI will be financed with a debt-equity ratio of 70:30 is also on. The tycoon is also getting ready to take part in the North Eastern Electric Power Corporation’s latest power joint venture for Arunachal. As per plans, four plants will be set up with a generation capacity of 2920 MW. While Neepco will hod a majority stake of 51%, the rest will be divided between Tata Power and Reliance among others. Seems like a year for powerful moves by the tycoon ,all over the country.

Dilip Cherian runs Perfect Relations. Send your insider dope to dilipcherian@now-india.net.in