Companies & Sectors
Mopeds zoom ahead after demand picks up

Segment sees strong growth, but sales of electronic two-wheelers have stagnated

The domestic sale of mopeds for April-October 2009 grew nearly 27% on the back of availability of finance, lower interest rates and the festive season. TVS Motors, which is the only company to manufacture mopeds, sold 320,207 vehicles compared to last year’s 250,896, according to a report from the Society of Indian Automobile Manufacturers (SIAM).
“TVS Motors is heavily dependent on financing for the sale of (its) vehicles. In 2008-2009, the overall financing had reduced to 40% as compared to 66% in 2005-2006. Now with financing conditions improving, the sale of mopeds has increased,” said Sandeep Patil, an auto analyst from Kisan Ratilal Choksey Shares and Securities.
The sales of mopeds are dominant in semi-urban and rural areas especially in southern states like Andhra Pradesh, Tamil Nadu and Karnataka which account for 85% of the total market share.
Another factor which has boosted the sales of mopeds was the good monsoon in the southern peninsula which had been at 96% of the long-term average, according to the Meteorological Department. Agriculture output, which depends on the rainfall, provided an indirect boost to the sales of mopeds, the analyst added.
Again, the Bharat Stage IV (BS IV) implementation in April 2010 would mean lower levels of vehicular emissions—comprising hydrocarbons, nitrous gases, sulphur, carbon monoxide and particulate matter—which will ensure pre-sales in the months of February and March next year and increase the sales of mopeds to 538,000 units, an increase of 22% over 2008-2009.
These factors might not lead to significant rise in the domestic sales of mopeds in the long-term as there are signs of interest rates tightening, a view which is being maintained by a SIAM official.
However, if mopeds exhibited a stellar performance for the first seven months, Electronic Two- Wheelers (ETWs) put up a disappointing show. The domestic sales of ETWs for April-October 2009 dropped 83.8% to 3,001 units. Electrotherm (India) Ltd, the largest manufacturer of ETWs, did not respond to an email sent to it by Moneylife.
A factor which has affected ETW sales is the good performance put up by non-geared scooters (below 100cc), which are becoming increasingly popular among urban women and younger customers.
“The ETW market is still in the nascent stage, with its usage limited to urban areas only. There are other limitations also like infrastructure problems related to battery charging, total running capacity and maximum speed going to only 50-60 km per hour,” Mr Patil added.
The problem facing ETWs is that the market has not yet stabilised. Further, this segment is dominated by regional players and it is waiting for the entry of big brands like TVS and Hero Honda, the SIAM official said.

- Aaron Rodrigues [email protected]


Hathway Cable plans to acquire local cable TV operators with IPO funds

Hathway Cable & Datacom, a multi-system operator, has filed a draft red herring prospectus for its IPO. Akshay Raheja, non-executive director, spoke to Pallabika Ganguly of Moneylife about his investment plans and growth strategies for the company.

Pallabika Ganguly (ML): How are you going to deploy the funds that you are raising through your IPO (initial public offer)?
Akshay Raheja (AR): We are raising Rs600 crore to Rs625 crore through an issue of 27.75 million shares, including fresh inclusion of 20 million shares and sale of 7 million shares by promoters and investors. Approximately Rs130 crore will be invested in set-top boxes and related infrastructure; around Rs 234 crore will be spent on acquisitions; Rs85 crore will be set aside for broadband (growth) and about Rs96 crore will be utilised for debt reduction. 
ML: What was your net revenue during FY08-09, and what was your EBITDA?
AR: We had net revenue of Rs672 crore and EBITDA of Rs103 crore (for FY08-09). We managed to double our EBITDA margin—from 7.2% in FY07-08 to 15.4% in FY08-09.
ML: What is your market share in the digital cable TV and broadband market?
AR: We hold 48% of the market share in the digital cable TV segment. On the cable broadband side, we enjoy 50% market share. 
ML: How do you plan to compete with DTH (direct-to-home) service providers?
AR: With the entry of DTH services, local cable operators want help from MSOs (multi-system operators) like us. We are always ready to partner with local cable operators and invest in them so that we can stop subscribers from migrating to DTH players. I can also expand my market share by acquiring local players. Our service is as good as that of any other global DTH operator. 
ML: What is your subscriber base? How do you plan to increase it?
AR: We have around 9.7 lakh subscribers, of which around 3.3 lakh are from the metros, in areas like South Mumbai, South Delhi and Kolkata. Most of our other subscribers are from tier-II cities like Hyderabad, Bhopal, Indore and Ahmedabad. Our strategy will be to acquire local cable operators who are facing a threat from DTH players, or to partner with these operators and provide them with our technology and set-top boxes so that they can retain their customers. Our partnership deals differ from client to client. We either acquire these operators or we enter into 50% partnerships with them. 
ML: How much have you grown in the set-top box segment?                                                                       
AR: The number of installed set-top boxes has increased to 9.7 lakh units from around 2.8 lakh at the end of FY07-08. And our broadband subscriber base has increased to 3.34 lakh from 1.24 lakh in March 2008 .
ML: What about your content cost?    
AR: Our content cost was 59% of total revenues in FY07-08, but it dropped to 52% in FY08-09.

Pallabika Ganguly [email protected]




6 years ago

we used to have hathway cable in our area. from last one month we are provided by siti vision by our cable operatot which we dont can i get hathway cable in my home

raj patel

7 years ago

i want a gtpl setup box

SBI’s home loan customers sent from pillar to post

India’s largest lender offers attractive home loan schemes to generate demand, then loses interest when it comes to processing loan requests. One such complaint against SBI exposes the situation

Customers lining up for home loan offerings better size up the uphill task ahead of them. For, even though SBI is going all out to woo customers with attractive packages, it is making them run from pillar to post before releasing even a penny.
One particular complaint by Mr Kalyan Chakravarthy speaks volumes about the troubles home loan customers go through while dealing with bank officers. His case exposes the bureaucratic practices prevalent at the country’s largest bank, State Bank of India. Between the day that SBI’s representative came to collect all the relevant documents till the loan was actually sanctioned, the complainant has been made to run around in search of various documents (among other things) over and over again, and has been yelled at by the bank officials, for no fault of his.

After waiting for two weeks without any answer since providing the documents, when he met the manager for a preliminary enquiry, the Bank referred him to a separate branch where all the loans get processed. This is where his troubles began. Mr Chakravarthy states, “When I went there to know the status, they yelled at the top of their voice as to why we always keep on following up and they would call us once the application is processed. Again we waited for a week and finally I gave up and went to the branch again. Then ironically they asked me to get an estimate of the construction done by a prescribed engineer (Mr Chakravarthy had earlier submitted a valuation report from his engineer). I had to run to that engineer to get the valuation done again, for which he took four-five days and took a fee for the service.”

After he submitted the valuation report, again nothing moved and Mr Chakravarthy had to approach the branch again. This time they demanded legal advice, again from a prescribed legal advisor. He was also asked to get an encumbrance certificate and a duplicate will of the property. Even after doing all this, and after waiting for ten more days, SBI demanded the details of his previous employment as the Bank wanted a two-year working record. Even though he had already submitted relevant IT returns for three years, his arguments fell on deaf ears.

A week later, the complainant finally got a call from the manager asking him to sign the final documents, to seal the deal. Needless to say, his troubles didn’t end here. The manager asked him to pay stamp fees, which came to a staggering 0.5% of the loan amount! The reason for this absurd demand—the Bank was worried that in case he defaulted, it would have to file a case in the court, where the Bank needs to pay the stamp duty fee. As the complainant puts it, he was already being made out to be a defaulter!

Even after paying the required stamp duty, Mr Chakravarthy was referred to another manager, who made his own new list of requirements, including another encumbrance certificate. To complete all the formalities, when the complainant tried to open a new account, his request was flatly refused, as he had made the abominable mistake of coming on a Saturday! His alacrity won him a further round of abuses. After two days, his loan was finally sanctioned, but not without the customary new list of requirements. Even after going through all this mess, the complainant still remains unsure of getting the loan disbursed!

Mr Chakravarthy has highlighted the following issues:
They (the Bank) are asking the customers to get various documents which are very crucial (like legal advice and an encumbrance certificate). I guess this should be done by them independently as in today's world it’s very easy to get a fake certificate and the possibility of a fraud is not ruled out in these circumstances.
They (the Bank) are advertising 0% processing charges, but asking the customers to bear the expenses of getting a valuation certificate, legal advice, encumbrance certificate and also the stamp duty which in my case came to around 1.2% of the amount of loan. Is this not cheating, had I gone to any private bank wouldn’t I have just paid the 0.5% processing charges and got the loan without any hassles?
With such kind of practices, won’t SBI lose the customer base and business thereby, as many customers would opt to go for private banks and avoid PSUs as far as possible?

What is the reason for taking the stamp duty from all the customers in the beginning; is SBI of the impression that all will default on payments or do they want to increase the revenue for the government from these stamp duties?
This is the response they give to educated professionals—I’m not sure about the plight of a common man who is not aware of financial jargon and procedures, forget about illiterates.
That is the alarming situation currently playing out. After squirming about low credit off-take for the most part of this year, when customers are now slowly lining up for credit, SBI is getting cold feet in expediting the processing of loan requests. Moneylife tried to contact SBI for its comments, but didn’t get any reply.

Sucheta Dalal with Sanket Dhanorkar [email protected]




1 week ago

I want loan of 4.4 lakh to buy a car for Uber services. how can I get?

Agnel Gavali

3 weeks ago

I want home loan upto 8 lacs ..please send me the details on my mailid. ASAP.

Vinod Jadhav

3 months ago

Hi sir. I want to start my own business in fitness sector which I close past sixth months I don't have ITR, my banking is poor also but I want to do smithing new pls help me for Loan


7 years ago

The article seems to assume that things are far better in private bank.My experience is opposit.I first wento HDFC.They took 10000 as processing fee and did almost same things explained above.HDFC sent me a loan sanction letter and then started asking me for many un reasonable document,because they dont want to give me loan.They just want to take processing fee.I finally took loan from SBI(offcourse it took almost 3 months from SBI) .But for me SBI was fair and ethical than HDFC.

So author's assumption that it is only SBI who do this is wrong.Private banks are also doing same .They are also making people to run from pillar to post!!!!..No better than SBI

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