From: reddym@Barra.COM (Reddy Mallidi)
Subject: Reserve Bank of India slashes interest rates 
Oraganization: BARRA, INC. Berkeley, CA.
Organization: University of Denver, Dept. of Math & Comp. Sci.
Date: Sat, 10 Oct 92 14:49:16 GMT


From	  : Reddy Mallidi    
Source  : Financial Times, Oct. 9, 1992
Country :  India

Topics
      * Indian Petrochemicals Planning to Go Public
      * More News about Public Sector Disinvestment
      * Honda Increases its Share in Kinetic Honda
      * RBI Cuts Lending Rate by 1 Point

                             * * * * * 
 
    * Indian Petrochemicals Planning to Go Public

        IPCL said yesterday it is to go public on Nov 16, making the India's
    largest petrochemicals company the first government-owned enterprise to
    invite equity participation from the public.
        As part of the government's phased privatisation program, it has 
    already divested 20% of the $918.7m company, which will be listed on the
    Bombay Stock Exchange later this month. 
        The company will offer 20m shares of Rs10 each, at a premium of 
    Rs3.2bn. The sum will fund its third petrochemicals complex at Gandhar.
    This will reduce the government's stake to 72%, and to 51% after further
    public offering next year.
        The company has projected gross profits of Rs3.9bn on turnover of 
    Rs22.12bn for the current year, against Rs2.24bn on Rs19.35bn the year 
    before.

    * Honda Lifts Stake in Indian Moped Maker

        Honda Motor, the Japanese car and motorcycle maker, is raising its
    stake in Kinetic Honda Motor, its Indian moped joint venture, from
    28.56% to 50.92% to broaden its base there and enter neighbouring export
    markets.
        Kinetic Honda, with sales rising 14% to Rs2.76bn in its latest
    financial year, has weathered the worst recession to hit India's 
    Rs20bn motor cycle and scooter industry.
        Other foreign companies which are increasing stakes in their Indian
    joint ventures following the government's recent liberalisation program
    are: Gillette (US based shaving products company), Pepsi (snack-food and
    soft drink maker), Cadbury's (the UK confectioner), and Motorola (US based
    microchip company). All are raising their share to 51% to increase 
    managerial control.

    * India Unveils Lending Rate Cut of 1 Point

        The Reserve Bank of India, yesterday signalled a modest easing of
    monetary policy with a 1% point cut in commercial lending rates and 
    relaxation of liquidity rules for banks.
        But industrialists said that the cut in commercial banks' minimum 
    lending rate from 19% to 18% would not be enough to revive the economy. 
    The Confederation of Engineering Industry had asked for a 4% cut. 
    Nevertheless, a leading government economist said the cuts would be " a 
    modest stimulus" to industry.
        Yesterday's cuts were the first since rates were raised to record 
    levels last year and follow a sharp decline in the annual inflation rate
    from a peak 16.3% to 8.8% at the end of last month.
        However, the RBI is adjusting its policy cautiously. While the 
    commercial banks' minimum lending rate is being reduced, the central
    bank's rate its main indicator rate, will stay unchanged at 12%.
    The RBI also cut its statutory liquidity ratio - the proportion of
    funds which commercial banks are obliged to invest in government 
    securities. In spring this ratio was reduced from 38.5% to 30% for
    new deposits. The figure for existing deposits, will be reduced from 38.5% 
    to 37.75%, in a move which will release funds for commercial loans.

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