More Than Electronics

THE loquacious Rajeev Chandrashekhar is a striking contrast to his quiet brother-in-law Ajit Nambiar, or AJ as he refers to him. At work too, the chairman of the BPL telecom business group faces a totally different task. No global aspirations for Chandrashekhar. For, the BPL group—like all other players in telecom—is still far from winning the battles at home. BPL Cellular Holdings (BPLCH), the holding company for its four cellular licences in Mumbai (via BPL Mobile), operating losses expected in 1998-99. Chandrashekhar, though, puts up a brave front. "We are losing only as much as we planned," he says.

But can a Rs 2,981 crore group, whose flagship posted losses of Rs 85.57 crore, absorb it? "BPLCH doesn't owe a dime to BPL Ltd. The promoters have made all investments via investment companies. We don't divert funds from one business to another," counters Chandrashekhar.

Indeed, BPL's telecom business, which has required investments of $1 billion (Rs 4,200 crore), is one of the four cellular operations in the country to achieve financial closure. And that's been done primarily via private placements of up to 33 per cent in BPLCH, which has seen investments by the likes of AIG, Commonwealth Development Corporation and Asian Development Bank. All at a hefty premium. Then, there's also the 26 per cent holding of France Telecom in BPL Mobile. Says an investment banker who's been tracking the group's telecom business: "The fundamentals of their business are strong. They have a very clean holding structure." Adds  Chandrashekhar: "We have  kept a transparent structure with the view that this is what we'll take public. I don't think we'll need to raise more money for our existing businesses."

Unless, of course, BPL picks up a company or two. "We are in the acquisition mode," says Chandrashekhar. And the group is targeting cellular operators in south and west India, where the group believes its strengths lie. Industry sources say that BPL has been unsuccessful in buying out JT Mobile (accumulated losses of Rs 500 crore—the highest in the industry), the cellular licencee for Karnataka, and Fascel (Rs 26 crore in accumulated losses), the licencee in Gujarat.

Then there's BPL's other infrastructure push—power. In 1993, the group signed a power purchase agreement with the Andhra Pradesh State Electricity Board for the 520 megawatt Ramagundam thermal power plant. All clearances have been obtained, and financial closure should be achieved soon. But BPL doesn't intend picking up major stakes here. "Our partners will be investing in the operating companies. We will only be bridging the gap," says Chandrashekhar.

Typical caution from a group that intends becoming an Internet service provider, and developing a search engine for the Net?