View from Delhi: Common man reels as some firms hit jackpot

The Ambanis have hit the jackpot. Their company, Reliance Industries, has struck huge reserves of natural gas in the Krishna-Godavari basin off Visakhapatnam in Andhra Pradesh that is said to be the biggest gas find of the year in this part of the world.

The new find should yield enough gas to make up a quarter of current demand of 150 million cubic metres per day, which gives Reliance a tremendous leverage in the energy market.

It is the only major Indian company exploring for gas and oil in India. Earlier, it had found some oil in central India, but the new gas find is a major discovery that may change the country's energy map. The company expects production to start in four to five years.

The announcement came at the annual general meeting of the company in Mumbai conducted for the first time by Dhirubhai's two sons, Mukesh and Anil Ambani. The management had more good news for shareholders.

Net profit for the second quarter crossed Rs10 billion for the first time, an increase of 25 per cent over last year. Sales were up from Rs107 billion to Rs115 billion. They included results of Relia-nce Petroleum for the first time, which has now merged with Reliance Industries.

The huge gas find and the rise in profits lifted the Sensex by 60 points and Reliance by 30 points. The stock market was also buoyed by a cut in the interest rate from 6.50 per cent to 6.25 per cent, which makes it the lowest in 30 years. Businessmen can now borrow money for a little over 10 per cent, a drop of as much as five points since four years ago.

Actually, corporates are not doing too badly, even without the cut in the bank rate. Telco, which makes trucks and a small car, Indica, is in the black once again with a profit of Rs600 million in July-September, against a loss of the same amount last year. Sales of Indica are up by 70 per cent, which is surprising considering that most other models are doing only marginally better than last year.

The other major Tata company, Tata Steel, is also doing much better than expected. Its quarterly profits have shot up from Rs270 million last year to Rs2.03 billion. The big jump is mainly because of higher steel prices.

The company, which used to be happy making rails and run of the mill items, has gone in for special steel used in car manufacture, etc.

But it is Indian Oil, the government-owned marketing giant, that has hit pay-dirt. Although sales are down, profits have increased threefold, from Rs10.2 billion to Rs31.40, billion, during the first half of the year.

Oil prices are now set by the market, not the babus in the oil ministry, which seems to have helped the company. Inci-dentally, it is the only Indian company to figure in the Fortune 500 list.

It may be boom time for some corporates, but the man in the street is still counting his pennies. With interest rates continually sliding, it is rather tough for the small investor, since he receives only a pittance from his bank deposits.

A fixed deposit in a foreign bank for 15 months fetches 5.92 per cent a year, which is almost a third of what you got on funds parked with companies five years ago. With the latest cut in interest rate, you will be lucky if you get 5 per cent on your deposits.

I used to receive scores of Diwali greeting cards. I have got only two so far. They are very costly this year, as much as Rs50 a card for the fancy variety. For that price, you can buy half a kilo of mithai in desi ghee wrapped in silver paper. Happy Diwali.