SSTL, Sistema Shyam Teleservices on Monday has confirmed that the Russian Government has decided to purchase 20 percent stake in the company by paying $600 million that is currently present as Indian governmental debts to the Russian federation.

In a release it said ”The issuance of shares to the Russian government is subject to the receipt of necessary regulatory, corporate and shareholders’ approvals”.

Currently operating in India under the brand name of MTS and offering CDMA services to users in India, SSTL plans to use these funds for future expansions.

SSTL president and CEO Vsevolod Rozanov has said ”We plan to use the funds to accelerate our services rollout, increase wireless broadband coverage and expand our branded retail network”.

SSTL currently has a pan India license and 73.71 percent of SSTL is owned by Sistema which is a Russian company and 23.79 percent is owned by Shyam Group and Indian company. Since its launch in India, SSTL has invested close to $1.5 billion in the country.

Out of 22 circles in the country, SSTL currently offers services in 12 circles and has close to 6 million customers. “’We plan to expand our footprint to 15 circles by calendar 2010 end,” Rozanov said. Gujarat, East and west Uttar Pradesh will be the next three circles where the company would be expanding their services to next.

During the first half of 2011-12 fiscal SSTL plans to come up with their initial public offering Atul Joshi, Chief Sales Officer for SSTL commented ”We have not yet worked on the specifics of the IPO. It totally depends on the investment by the Russian government and decisions of our parent company”.

Being one of the largest public diversified groups in Russia and CIS, Sistema in a statement said ”It is expected that the Russian government, represented by the Federal Agency for State Property Management (Rosimushchestvo), will participate in an issuance of additional shares of SSTL, paying the equivalent of $600 million in Indian rupees held in accounts representing Indian governmental debt to the Russian Federation”.

India owes huge amount to Russia and in an agreement to dissolve the debt, both the governments have agreed that Russia could use the rupee debt to finance its investments and joint ventures in India.

No changes are expected in the share holding of the Shyam group, however Sistema’s shares would reduce to 54 percent with the Russian government owning 20 percent of the share.

There will be two members in the million unit club this year when Tata Motors will join Maruti Suzuki there. The entry to the club will be a significant milestone for Tata motors which in spite of being one of the oldest automobile companies in India, has always trailed in terms of volumes when compared to global peers.

Tata motors manufactures cars as diverse as the worlds cheapest car to the some of the most expensive ones like Land Rover and Jaguar while it manufactures trucks and other heavy commercial vehicles also. The anticipated increase in the production of Nano will push Tata Motors to the Million unit club and enable it to garner the benefits of economies of scale.

Tata motors will increase the production of Nano to approximately 25,000 units per month by last quarter of fiscal year 2010. Production of Nano at the Sanand plan in Gujarat started in June 2010 and it should reach the peak by January 2010. Once Nano averages the numbers of 20,000 – 25,000 per month which is almost three times of the current 7,000 – 8,000 than Tata Motors will easily reach the production of one million units a year. This number will be an aggregate of heavy commercial vehicles and passenger vehicles.

A spokesman from Tata Motors responded on e-mail that “The capacity at the Sanand plant is 2,50,000 units, and it will be ramped up as fast as is possible”

“In June 2010, Nano dispatches were over 7,700. Since July 2009, we are delivering to the first lot of allottees selected from among the booking process of 2009.”

Pawan Goenka from Mahindra and Mahindra (M&M) mentioned that, “We have put a volume target for tractors and a revenue figure for auto sector. It’s an internal target for 2013”

Attaining sales of a million units is a commendable achievement in the automobile industry. The path has been paved by Tata Motors and it is likely that M&M will follow suit soon. The market for passenger vehicles that includes SUVs, cars and light trucks is about to grow by four times in next 10 years thus entry of more new players is expected in the million unit club.

Manish Mathur a principal at AT Kearney which is a MNC consultant firm mentioned that,  “The million mark is an important milestone because of the scale game. As Indian companies scale up to hit those levels, they can achieve advantage in two areas — in design costs through commonality of parts and through better strategic leverage over suppliers to negotiate —and demand a better price”

Once Tata Motors crosses the million unit mark that it will find itself close to the market leader Maruti Suzuki in numbers. Maruti Suzuki is the largest carmaker in the country today and is expecting to sell 1.4 million units. Maruti is also spending 1,700 crores in capacity expansion.

After a long wait of almost nineteen months, the Sanand plant, near Ahmedabad in Gujarat rolled out its first Nano on Wednesday.

Nano – the answer to the hopes of millions of families belonging to the lower and the middle strata, of owning a four wheeler, was rolled out in an elaborate “flagging off” ceremony held at the Sanand plant. Nine Nano cars were flagged off by Mr. Narendra Modi, the Chief Minister of Gujarat and Mr. Ratan Tata, Chairman of the Tata Group. Though the ceremony started as planned, it had to be stopped mid-way when the plant was hit by rain and storm during the ceremony. This storm was caused by a low pressure belt in the Arabian Sea. The wind and the storm were so strong that the entire temporary structure erected for the ceremony came crashing down soon after the inauguration ceremony started. The winds also caused a part of the plant ceiling and the decorated entrance gate to collapse. Even the electric poles and some trees near the plant were uprooted mercilessly by the winds.

Speaking at the inaugural function, Mr. Tata promised the Gujarat Chief Minister many more “surprises” to come. He appreciated the support that the Gujarat administration had offered him especially after the political upheaval at Singur, West Bengal. He also added that shifting the plant had caused the Nano to roll out mush later than expected. He said that rolling out Nano in just nineteen months after the shifting of the plant from Singur to Sanand would not have been possible without the uncompromising support of the Gujarat administration. He expressed his heart felt gratitude to Mr. Modi for allowing him to set up a Nano manufacturing plant in Sanand. Mr. Tata also hinted at helping the state to progress rapidly by starting many more projects in Gujarat.

Mr. Modi, returning the compliment said that he was really proud that Nano had been produced by Gujarat. He said that today every owner of Nano would remember that the car that he is driving has been made on Gujarat’s soil. He also said that it was a pleasure for him to be able to convince the Tata’s for a “second home coming.” He reminded the people sitting there that the Tatas are originally from Gujarat and had left the state to set up projects all over India. But their decision to return to their native state was appreciated and much needed for the development of Gujarat.

Once the inaugural speeches were over, Mr. Modi and Mr. Tata flagged off the nine cars, along with their owners, for a twelve thousand kilometer trek around the country. During this trek, the Nano would be showcased in more than forty cities and towns. The tour will end on June 28, 2010, when all the nine Nanos would return to the Sanand plant.

Bihar Chief Minister Nitish Kumar was awarded the Economic Times Business Reformer of the Year for 2009 at the award function held yesterday.

Bihar, always considered backward, benighted and hopeless, saw Lady Luck smiling on it when Janata Dal (United)-BJP alliance headed by Mr. Kumar came to power in 2005. Ever since donning the thorny crown, Mr. Kumar started systematically revamping and rebuilding the state, ably supported by a set of sincere officers.

At the time of election, Mr. Kumar was hailed as the last hope for Bihar, ravaged by the 15-year long rule of Lalu Prasad Yadav. Lawlessness was the biggest issue in those days. Mr. Kumar has managed to achieve the impossible – turning around law and order of the state and thereby its economy.

Bihar’s economic growth for the last five years came a close second to Gujarat, touted as India’s economic wonderland. The consistency of growth displayed by the state makes it nothing short of a miracle.

Mr. Kumar has embarked on the right path to bring the state back to its glorious old days. He started with infrastructure – almost 7,000kms of road repaired, above 1,500 bridges (259 major ones) built in four years. This has shortened the traveling time by almost half.

Another coup for Mr. Kumar is the containment of kidnapping ‘industry’ by putting the state’s notorious dons behind bars. The number of reported kidnapping has come down dramatically.

Bihar is attaining an atmosphere of normalcy with more banks, malls, mobile service providers and private educational institutions opening shop. Automobile sales surged at an amazing rate of 45%.

However, despite the astounding growth rate, the social indicators have remained pathetic and unchanged. Four years is too short a period for this to happen. When the basics are set right and strengthened, let us hope that the rest will eventually follow.