Thus given that MUL now looks to be on a firm wicket, it is a shame that the company is not listed. Especially, since investors are unable to take any exposure in what is undoubtedly India's dominant automotive company.

However, there is a way out of this dilemma for the investing public and that is an exposure in the ancillary companies that supply spare parts to MUL. Such an investment strategy should pay rich dividends especially, since the fortunes of many of these companies are closely linked to MUL.

Consider some of the following investment options listed below - Subros, is the sole OEM supplier of air-conditioning systems to MUL and hence, scrip price has moved almost in tandem from the Rs 29 levels in March 1999 to a 52-week high of Rs 95.75 in October, before settling at the Rs 76.45 currently.

Sona Steering another supplier of steering systems and column assemblies to MUL has also seen stock valuations improve from the Rs 30 levels in March 1999 to the Rs 81 levels currently. Exide, the OEM supplier for automotive batteries to MUL, has seen the scrip appreciate from the Rs 191 levels to a 52-week high of Rs 307 before settling at the current levels of Rs 244.

These companies aside, companies like Ceekay Daikin which supplies clutch plates and clutch covers, IP Rings, Gabriel and Ucal Fuels have all seen sharp improvements in their stock valuations, not to mention their bottomlines. Largely due to the resurgence of demand in the automotive sector and improving offtakes in MUL in particular. Thus until such time as the Government decides to take the country's leading automaker public, investors will simply have to rely on ancillary players like the ones mentioned above to partake of the MUL pie.

IOC-GDR
Newsreports say that the Government is planning to disinvest 10 per cent of its equity in the refining major IOC in the GDR market with a greenshoe option for picking up 5 per cent more. If the entire issue is subscribed, the Government holding in the company will come down from 82 per cent to 67 per cent. The issue will be done through the book-building route.

Considering the manner in which the GDR issue of GAIL was handled, there is little scope for the company getting a good price. One of the main reasons supporting this argument is that investors abroad know that the Indian Government is desperate to divest its stake in order to bridge its fiscal deficit. Plus the timing of the issue, January, is one month before the announcement of Budget, a period in which the Government will be desperate to divest to show a better report card. It may be remembered that the Government last year, in order to meet its divestment target, sold its stake in oil PSUs like ONGC, IOC and GAIL through an equity swap route.

Apart from this, IOC has said that it would not like any corporate investors to participate in the issue. If the finance minister is to be believed in the GAIL case, when he said that pricing of GAIL would have been lower if British Gas and Enron were not allowed to participate in the issue, then by the same logic pricing of IOC could be affected of corporates are not allowed. Further, IOC also has plans for an IPO to improve its leveraging power in order to meet its huge capex. This too is expected to weigh heavily in the minds of investors subscribing to the issue.

All these factors will have an affect on the pricing of the company which is currently ruling at Rs 300, which could be further affected if the Government does not take appropriate measures to curb the oil pool deficit by increasing the prices of kerosene and LPG.

BFL Software
Although BFL Software has lowered its profit growth estimate for the current year to 21-22 per cent from the earlier 40 per cent, there is little reason to believe that the bearish trend in the stock will continue. True, not all has been well at the company since the loss of its valued client, Compaq. Yet, it needs to be recognised that the company appears to have weathered the storm and the current quarter should see a turn in its fortunes. Both profits and profitability should improve during the quarter.

Of course, it will take considerable time and effort before the company is able to achieve the kind of profitability it used to until last year. For the last two quarters of 1998-99, BFL achieved operating margins of over 30 per cent which fell to below 20 per cent in the first two quarters of the current year. The company has been making consistent efforts to broadbase its revenues and has added nine new clients during the quarter ended September and has opened new offices in Tokyo, Toronto, Sydney and Amsterdam this year. It has placed special emphasis on areas such as e-commerce, web enabling of applications and object-oriented systems.

The acquisition of the German company Complex Software Systems is complete and the company has launched its Internet products Kio and Netkiosk.

Besides, it has begun to get contracts from the ING group for insurance services, which could open up a new opportunity window for the company. It is currently implementing an Internet-based employee recruitment software solution for a large Australian media group and an Internet software project for Compaq Computer Corp to handle global business proposals and sourcing. An e-commerce project management system for a large retail store in the US and a bill presentation and payment system for a Malaysian client are also being carried out. The increased focus on emerging business areas should stand the company in good stead.

With contributions from Percy Dubash, Shishir Asthana and Sarad Saraf)