Stock Market Updates

Sensex up 47% in 2006

2006-12-30T07:51:00.000-09:00

The market ended calendar 2006 on a strong note, with the Sensex settling at 13,786.91, less than 200 points off its all time closing high of 13,972.03 of 7 December 2006.

It rose 46.7% for the calendar year.

The S&P CNX Nifty gained 39.8% for the calendar year 2006.

Banking, telecom, IT and cement shares hogged the limelight in 2006.

After a sharp setback witnessed in May-June 2006 due to fears of rise in US interest rates, the market staged a solid rebound and key indices struck lifetime highs in December 2006.

Strong corporate earnings growth remained the key driver of the uptrend in share prices.

FIIs continued to mop up Indian stocks betting that earnings growth of India Inc. will remain strong in a booming Indian economy. The net FII inflow in 2006 totaled $8.2 billion compared to a record inflow of $10.7 billion in 2005. FIIs mopped up Indian equities notwithstanding concerns about stretched valuations of Indian equities.

Mutual funds bought shares worth a net Rs 11453 crore for the 9-months period April-December 2006.

Titan Industries sparkles

2006-12-30T07:50:00.001-09:00

Titan Industries jumped 7% to Rs 860 following reports it is betting big on its precision engineering division.

4.6 lakh shares changed hands in the counter on BSE.

The stock made a strong rebound from lower level recently. From Rs 690.65 on 12 September, the scrip surged 15.6% to Rs 798.95 by 28 December.

Titan reportedly expects revenue from precision engineering division to go up to Rs 400 crore in four years from Rs 50 crore this year. Titan’s precision engineering division makes dashboard clocks and precision components for the aerospace and automotive industries. The company is one of the biggest suppliers of dashboard analog clocks for cars to Ford Motor’s plants in the US, Europe and Canada. In the domestic market, Titan supplies to Tata Motors, among others. Titan has invested over Rs 20 crore in the two-year-old business.

Titan expects to post over Rs 2,000 crore revenue for the current fiscal, against Rs 1,481 crore last year. Of this, the jewellery business is expected to contribute Rs 1,100 crore and the watch business will post revenue of around Rs 900 crore.

Titan is planning to open its first exclusive company-owned outlet of its gold jewellery brand Tanishq in the US. It is currently present only in West Asia with a few shop-in-shops. In India, Tanishq plans to cash in on the retail boom in the country. It plans to expand retail network of branded jewellery stores in the country from the present 87 stores in 64 cities to 100 stores by end of 2007.

Titan Industries posted a 56 per cent increase in net profit for the second quarter ended September 30 to Rs 32.18 crore. The topline rose 47 per cent to Rs 539 crore.

Lanco Infratech gains on signing MoU for large thermal power project

2006-12-30T07:50:00.000-09:00

Lanco Infratech rose 1.6% to Rs 254 after the company on Thursday entered into a memorandum of understanding with Jharkhand government for a 2,640 MW coal based power plant.

With this, the total capacity of Lanco, both in operation and in process will go up to about 11,000 MW.

5.5 lakh shares changed hands in the counter on BSE.

The scrip had debuted at Rs 241.40 on 27 November (closing price on BSE on that day) compared to IPO price of Rs 240. It moved between Rs 229 to Rs 266 since then. The IPO of Lanco Infratech was subscribed nearly 12 times.

Lanco would be set up the thermal power project in Jharkhand in two phases of 1,320 MW each and the Jharkhand Government would assist the company in acquiring land, permit for required water and provide support infrastructure. Jharkhand would have the first right of purchase of up to 25 per cent of the power generated and the rest would be sold to any other state through competitive bidding process.

Recently, a consortium of Lanco Infratech and UK-based Globeleq won the 4,000 megawatt Sasan ultra mega power project in Madhya Pradesh. The Lanco consortium would borrow around Rs 13,000 crore to build in the project. The consortium had the lowest bid of Rs 1.19 per unit for tariff-based competitively bid Sasan project. The Lanco-Globeleq consortium hopes to start the first unit of the power project three years after tying up funding. The contract stipulates that the consortium has to arrange funds within a year from now.

As per reports, Lanco has roped in Chinese and global equipment major DongFeng Electric Corporation for supercritical technologies for the Sasan project.

Lanco Infratech is an infrastructure development company with interests in power, construction and property development. Its construction division had an order book of Rs 1611.83 crore on 30 September 2006. This includes contracts worth Rs 1229.95 crore with affiliates of Lanco Infratech. The entire order book will be executed by 2010.

Lanco Infratech is also obtaining approvals for a large integrated IT park and township on a 100-acre plot on which it proposes to develop 18.5 million square feet of saleable area in Manikonda, Hyderabad. The company also owns land banks, aggregating about 21.8 acres, close to Ocean Park in Hyderabad, where it intends to develop a residential housing project with one million square feet of saleable area. In addition, it has won a bid to develop an IT park and township on a 10.7-acre plot, on which it proposes to develop two million square feet of saleable area, in Vishakhapatnam, Andhra Pradesh.

Due to the nature of the business, Lanco Infratech’s projects typically require a long gestation period and substantial capital outlay before completion.

SBI inches ahead

2006-12-30T07:49:00.000-09:00

State Bank of India rose 0.7% to Rs 1245.45 after its Chairman O.P. Bhatt said the recent lending rate increase would help the bank maintain its profitability.

He also said that the bank plans raise Rs 2000 crore in tier II debts by March 2007.

1.1 lakh shares changed hands in the counter on BSE.

The scrip witnessed a solid surge over the past few months as investors chased banking scrips due to strong lending growth. From Rs 689.50 on 19 July 2006, the stock rose 79% to Rs 1236.05 by 28 December.

Effective 27 December, SBI raised its prime lending rate by 50 basis points to to 11.50 per cent, the third increase in its benchmark rate since May 2006. It raised its PLR in May 2006 by 50 basis points to 10.75 per cent and again in August 2006 by 25 basis points to 11 per cent. SBI's cost of deposits was 4.51 per cent in September 2006 down from 4.64 per cent a year ago.

With the revision in PLR, all advances linked to it, including working capital loans, will be adjusted with immediate effect. About 70 per cent of SBI's existing loans are on floating basis, linked to PLR. Thus, the hike in PLR will help the bank to improve its interest income from its existing loan book. SBI had hiked deposit rates ahead of lending rates earlier this month.

Since a large number of SBI’s branches have migrated to the core banking solution, SBI is moving to a centralised system. For retail lending, it has set up retail asset centralised processing centres. On March 31, 2006, SBI had more than 5,000 ATMs and over 9,000 branches. The SBI group had more than 8,000 ATMs and around 14,000 branches.

On 18 December, Finance Minister P Chidambaram introduced the State Bank of India (amendment) Bill, 2006 that seeks to allow reduction in the Reserve Bank of India's shareholding (statutory minimum) in SBI from 55 per cent to 51 per cent of the issued equity capital. Currently, the RBI holds 59.73 per cent stake in State Bank of India (SBI). The Centre has already agreed in-principle to acquire the RBI's shareholding in SBI and indicated that it would maintain a minimum 51 per cent stake in SBI, as is the case with other public sector banks.

The State Bank of India (amendment) Bill 2006 proposes to allow SBI to issue preference and bonus shares. Although SBI can access the capital market by issuing equity shares or bonds, or by both equity share and bonds, there is currently no express provision under the SBI Act to enable SBI to issue preference shares and bonus shares. Besides increasing the authorised capital of SBI to Rs 5,000 crore, the Bill also proposes to enable the bank to increase issued capital by preferential allotment or private placement of equity or preference shares.

SBI’ consolidated net profit rose 9% in Q2 September 2006 to Rs 1734.45 crore. Consolidated net total income rose 16% to Rs 8288.13 crore (Rs 7157.42 crore).

The current price of Rs 1245.45 discounts its 6 months April- September 2006 annualised EPS of Rs 102.50 (based on consolidated financial performance), by a PE multiple of 12.1

Aurobindo Pharma in the thick of the action

2006-12-30T07:48:00.000-09:00

Drug maker Aurobindo Pharma gained 2% to Rs 707.95 following media reports that the company is likely to announce on Friday acquisition of a Dutch formulations firm for more than $20 million.

So far there is no announcement from Aurobindo Pharma

The target company had several market authorisations and would enable Aurobindo to expand faster in Europe, a newspaper report said.

The scrip witnessed a surge over the past one month. From Rs 589.10 on 23 November, it surged 18% to Rs 695.55 on 15 December. It pared gains later before bouncing back again, to settle at Rs 693.30 on 28 December.

Aurobindo along with two other Indian firms Ranbaxy and Zydus Cadila got US FDA nod to market 5, 10, 20 and 40 mg versions of Simvastatin, the generic name of Merck’s Zocor, the cholesterol drug from December 23. This is expected to unleash fierce competition and lower prices in the US for the drug.

On 22 December, Aurobindo Pharma received tentative approval from the US Food and Drug Administration for anti-AIDS drug efavirenz in capsule forms. Efavirenz is the generic version of Bristol-Myers Squibb’s brand drug Sustiva.

Recently, Aurobindo Pharma also announced marketing authorization from Medicines Control Council (MCC) of South Africa. The council has approved Sertraline tablets in 50mg and 100mg strengths. Sertraline is the generic version of Zoloft marketed by Pfizer. Sertraline hydrochloride is a popular orally administered antidepressant of the selective serotonin reuptake inhibitor (SSRI) type.

Aurobindo Pharma is the largest manufacturer of semi-synthetic penicillin bulk drugs -- ampicillin and amoxycillin. It has integrated facilities to manufacture bulk drugs, bulk drug intermediates and formulations.

Recently, Aurobindo Pharma’s board approved the merger of APL Life Sciences and Senor Organics, the wholly owned subsidiaries of the company, with itself.

Aurobindo Pharma came out with fabulous result with a multifold growth in profits for the quarter ended September 2006. The net profit surged to Rs 54.64 crore in Q2 September 2006 from Rs 3.64 crore in Q2 September 2005. Net sales rose 50% to Rs 480 crore. Aurobindo’s thrust into regulated markets and formulation business contributed to the significantly improved performance. The exports of the company spurted strongly led by growth in Europe and the US.

The current price of Rs 707.95 discounts its 6 months April-September 2006 annualised EPS of Rs 34.10, by a PE multiple of 20.7.

Dr Reddy’s Lab in demand

2006-12-30T07:47:00.000-09:00

Dr. Reddy's Laboratories gained 1.5% to Rs 811.75 after it got final approval from the US Food and Drug Administration for cholesterol-lowering simvastatin tablets.

Simvastatin is the generic equivalent of Merck & Co. Inc.'s blockbuster drug Zocor.

70,433 shares changed hands in the counter on BSE.

Dr Reddy's Laboratories (DRL) is in for a windfall for the next two quarters with the US Food and Drug Administration recently granting final approval for the company's abbreviated new drug application for ondansetron hydrochloride tablets, that are indicated for nausea treatment. The news had lifted the Dr Reddy’s Lab scrip up by 0.6% on Wednesday (27 December) to Rs 807.55. It had eased to Rs 799.55 the next day i.e. on 28 December.

With the approval, Dr Reddy's can exclusively market ondansetron tablets for 180-day period. The company will commence the shipment of this product shortly. Dr Reddy's will begin shipment of these tablets across the dosage spectrum of 4 mg, 8mg, 16 mg and 24 mg. Dr Reddy's ondansetron hydrochloride tablets are the AB-rated generic equivalent of GSK's ZofranR, used for prevention of nausea and vomiting associated with cancer treatment. The brand product has annual IMS sales of approximately $639 million.

In an attempt to combat uncertainties surrounding the product, as well as to lower legal costs, DRL is aggressively pursuing settlement of patent litigations wherever possible, while simultaneously exploring authorised generics opportunities with innovators. Recently, DRL entered into a patent litigation settlement with GSK, for Imitrex (sumatriptan succinate) tablets (25, 50 and 100mg). As part of the settlement, the company will be authorised to launch the generic version of Imitrex in the latter part of 2008.

DRL’s quarterly net profit more than tripled in Q2 September 2006, helped by strong growth in the key US market and gains from drugs exclusivity. Net profit, according to US accounting standards, rose to Rs 280 crore from Rs 89 crore. Total revenue jumped to Rs 2,000 crore from Rs 580 crore, while revenue from its core businesses, excluding the contribution from authorised generics and acquisitions, grew 42%, to Rs 820 crore.

On November 16, the company announced the pricing of the public offering of 1,25,00,000 ADS (excluding the underwriters over-allotment option) at a public offer price of $16 per ADS.

Chinese foray powers Thermax

2006-12-30T07:45:00.000-09:00

Thermax rose 2.6% to Rs 380 after the company said on Thursday it would invest $8 million to set up a plant in China to manufacture absorption chillers.

Thermax also said it would set up a subsidiary in China.

20,531 shares changed hands in the counter on BSE.

After a solid surge in November 2006, the stock moved in a narrow range. The scrip moved between Rs 364 to Rs 393 since late November. Earlier, the stock surged to Rs 391.90 on 23 November from Rs 314.75 on 31 October 2006.

Themax has a robust order-book position with a order backlog of Rs 2,973 crore on a consolidated basis as on 30 September 2006. This is 142% higher from that of last year. The company continues to get major orders from iron & steel, cement, sugar and refining sectors.

On a consolidated basis, Thermax’s net profit jumped 104% to Rs 79.67 crore for the first six months April-September 2006, on a 23% growth in sales to Rs 875.34 crore (Rs 710.09 crore).

Thermax is substantially expanding its manufacturing capacity for boilers & heaters with an investing of Rs 175 crore in a facility at Savli in Gujarat. The plant is expected to be in operation in the next 12 months.

Sadbhav Engineering extends gains on achieving financial closure of a major project

2006-12-30T07:44:00.001-09:00

Sadbhav Engineering gained 2.3% to Rs 513 after the company said it had achieved financial closure of a major road construction project.

20,691 shares changed hands in the counter on BSE.

The stock had bounced back from lower level from early this month. From Rs 401.35 on 12 December, the stock surged almost 25% in a short while to Rs 501.45 by 28 December.

In early August 2006, Sadbhav had bagged a Rs 560-crore road construction project to improve and widen the Sardar Patel Ring Road around Ahmedabad from the city's urban development authority. It has now achieved financial closure of this project.

Within the construction sector, Sadbhav Engineering’s focus areas are irrigation, construction of roads, highways and mining, including excavation of overburden and mining of minerals. In November 2006, Sadbhav Engineering was awarded the projects worth Rs 216.34 crore by the Government of Andhra Pradesh Irrigation and CAD Department.

For Q2 September 2006, Sadbhav reported net profit of Rs 2.55 crore on revenue of Rs 50.54 crore. It had net profit of Rs 5.12 crore on revenue of Rs 94.57 crore in Q1 June 2006.

Recently, Sadbhav’s board had proposed raising up to Rs 100 crore through placement with qualified institutional buyers. Assuming that the institutional placement is made at the current market price, it would result in about 17% equity dilution. The company’s current equity base is Rs 10.90 crore. Face value per share is Rs 10.

Micro Inks makes a mark

2006-12-30T07:44:00.000-09:00

Printing ink maker Micro Inks rose 3% to Rs 330 after the company said on Thursday its US subsidiary had entered into a supply deal worth about $3 million with St. Ives Inc.

The company said the deal for the supply of heatset ink was for one year.

2,096 shares changed hands in the counter on BSE.

The stock edged lower in the past one month. From Rs 359.05 on 27 November, the stock slipped to Rs 320.25 by 28 December.

Mirco Inks is the largest printing ink manufacturing company in India commanding a 30% market share. In March 2004, the company changed its name from Hindustan Inks & Resins to Micro Inks, which also is the name of its 100% subsidiary in the US.

Micro Inks posted a net loss of Rs 7.41 crore for the quarter ended September 30, as compared to net profit of Rs 16.09 crore for the same quarter last year. The total income (net of excise) increased 1.28% to Rs 237.27 crore for the quarter ended September 30, from Rs 234.26 crore a year ago.

Smooth sailing for Varun Shipping

2006-12-30T07:42:00.000-09:00

Varun Shipping Company rose nearly 4% to Rs 66 after the company said on Thursday it was buying a very large gas carrier.

The vessel is expected to join Varun's fleet by July 2007, the company said in a statement. It did not specify the size of the deal. With this, the company said it would have spent half of the $400 million it earmarked for fleet expansion.

53,508 shares changed hands in the counter on BSE.

The stock witnessed a sustained fall since early November 2006. From Rs 76.75 on 10 November, the stock declined to Rs 63.55 by 28 December.

Varun Shipping Company (VSC) is the largest owner of liquefied petroleum gas (LPG) vessels by tonnage in India. It is also among the larger global players in this space. Varun Shipping also plans to strengthen its presence in the offshore sector.

Varun Shipping reported a 68% fall in net profit for the quarter ended September 2006 to Rs 13.77 crore (Rs 43.35 crore). Net sales rose 16.7% to Rs 170.56 crore (Rs 146.11 crore).

Recently, Varun Shipping raised Rs 169 crore from allotting 2.25 crore equity shares at Rs 75 each (Rs 10 on capital account and Rs 65 on premium account) for cash to six entities. The company had earlier planned a Singapore listing to raise $50 million but this was later dropped. Its fund requirements are now being met by these preferential allotments.

The company’s current equity base is Rs 141.50 crore. Face value per share is Rs 10.

SBI hikes benchmark PLR to 11.5%

2006-12-26T09:13:00.000-09:00

State Bank of India (SBI) today hiked its benchmark prime lending rate (referred to as SBAR) by 50 basis points (bps) to 11.50% in response to monetary tightening by the Reserve Bank of India and protect the margins which are under pressure due to recent increase in interest rate on domestic term deposits.

This is third time that SBI has raised its prime rate in this financial year.

The decision by country’s largest commercial bank to jack up its SBAR from tomorrow will set a trend for other public sector banks, who were watching developments, to increase their rates. ICICI Bank, its strong competitor from private sector, has already raised its SBAR by 50 bps to 13.75% and HDFC Bank by 150 bps to 13%.

"The cost of funds have gone up due to increase in deposit rates. Plus hike in the cash reserve ratio (CRR) means bank will have to keep in more funds with the central bank without getting interest on them. The bank has to protect the net interest income and margins," T S Bhattacharya, managing director of SBI, said.

The hike will provide window to effect across board increase in interest rates on SBAR linked loans especially term loans and home advances, he added.

The immediate triggers for the revision have been SBI's 25-75 bps hike in the its domestic term deposit rates and the increase in CRR by 50 bps to 5.5% in contain inflation early this month.

Biocon completes Phase-IV trials of Insugem

2006-12-26T09:12:00.000-09:00

Biotech firm Biocon today said its has completed the Phase-IV clinical trials for its insulin drug Insugem.

In a release issued to the BSE tdoay, the company said its wholly-owned subsidiary, Clinigene International, concluded the post-marketing surveillance study (PMS) on insulin vials involving 507 doctors and 6,164 patients across the country.

"This is the biggest PMS for insulin conducted in India. The number of patients involved were in excess of the regulatory requirement of 500 patients as stipulated by the Drug Controller General of India (DGCI)," the release said.

About 99% of the investigators (doctors) opined that safety with Insugem was at par with the leading marketed brands of insulin in the country, and clinical response to the drug was excellent in around 99% patients in terms of safety, it said.

PMS or Phase-IV studies are done as part of regulatory requirement to know primarily the safety of the drug in addition to the efficacy of the drug.

Nokia rules GSM handset market with 79% share

2006-12-26T09:11:00.000-09:00

Finnish handset major Nokia has retained the top slot in Indian GSM market with 79% share, while US giant Motorola has more than doubled its share to 7% this year, according to a study.

Motorola has been able to significantly improve its share to 7% this year from 3% in 2005, according to the latest annual TNS CellTrack 2006 study.

It said the US company's gain was possibly the loss of South Korean handset maker Samsung, whose market share dropped to 4% in 2006 from 6% a year ago.

In the CDMA market, LG has consolidated its position as the market leader with 49% market share this year against 43% in 2005, the study said.

While Nokia managed to retain its share in CDMA handsets, Samsung and Motorola lost market share from 17% to 8% and 12% to 4% respectively.

According to the study, the TRIM index for the industry, which measures strength of 'subscriber-service provider relationship', increased to 82 this year against 79 in 2005.

Bharti Airtel has retained its number one position among national players with the TRIM Index up to 92 in 2006 from 82 in 2005. Hutch captured the second slot with Reliance at the third position. Idea, BSNL and Tata Teleservices maintained performance but were below the industry average, it said.

State-run telecom major MTNL improved its TRIM Index rating to 100, while Aircel continued to top the regional player ratings with a score of 110.

The study covered about 3,000 mobile users and 1,057 multi-brand retail outlets across 17 telecom circles.

SC asks Ray Ban to make open offer

2006-12-26T09:08:00.000-09:00

Luxottica Group S.p.A and Ray Ban Indian Holdings Inc have been directed by the Supreme Court, vide order dated December 12, 2006, to make an open offer to the shareholders of RayBan Sun Optics India under Regulations 10 and 12 of the Sebi takeover regulations within 45 days.

According to a release used by Ray Ban to the BSE today, the referral date for calculation of open offer price is April 28, 1999.

"The Supreme Court has also directed Luxottica Group S.p.A. to pay the offer price with interest at the rate of 10% per annum with effect from August 27, 1999 till the date of payment to all those who were shareholders on August 27, 1999, and continue to be shareholders of RayBan Sun Optics India Ltd on the closure date of the public offer," the release added.

Reliance, ONGC may get $4.50/mBtu for KG gas

2006-12-26T09:04:00.000-09:00

Natural gas from the D6 block of Reliance Industries and the adjoining field of ONGC in Krishna Godavari basin may fetch a minimum price of $4.50 per million British thermal unit (mBtu).

The oil ministry-appointed committee for formulation of transparent guidelines for natural gas pricing has recommended that "valuation of natural gas be done based on most recent competitively determined price in the region."

For the gas from Reliance's KG-DWN-98/3 and ONGC's KG-DWN/98/2, the $4.50 per mBtu price currently charged for gas from Cairn India-operated Ravva Satellite field in the KG basin may become the benchmark, official sources said.

The $4.50 per mBtu price is 92% higher than the $2.34 per mBtu price proposed by Reliance to sell gas to state-run NTPC and an Anil Ambani Group firm through separate contracts. The price for Reliance Natural Resources, a Anil Ambani Group firm, was rejected by the ministry for lack of transparency while the NTPC price is yet to reach the ministry for approval.

Sources said the price of gas from Ravva Satellite field may go up to $5 per mBtu in 2009, when D6 reaches peak output of 80 million standard cubic meters per day and ONGC begins gas production.

For Ravva Satellite gas, the price is to be calculated through a formula where the projected average crude oil price in 2009 is to be divided by average oil price in December 2006 and multiplied by the current price of $4.50.

At the projected average price of $68.83 per barrel in 2009 and average price of $60.36 per barrel in December 2006, the Ravva Satellite price comes to $5.05 per mBtu.

Deccan Aviation raises Rs 29cr from Investec

2006-12-26T08:49:00.000-09:00

The committee of directors of Deccan Aviation, at its meeting on December 23, approved the allotment of 19,63,640 equity shares of Rs 10 each to Investec Bank (UK), London at Rs 150 per share.

According to a release issued by the company to the BSE today, the paid-up capital stands increased to Rs 100.14 crore.

The board of directors of the company, on October 30, 2006, had approved the allotment to Investec Bank.

IndusInd Bank climbs as RBI permits new branches

2006-12-26T08:35:00.001-09:00

IndusInd Bank rose 2.14% to Rs 42.95, after the Reserve Bank of India permitted the private bank to open 19 more branches.

As many as 2.13,117 shares changed hands in the counter on BSE.

IndusInd Bank (IBL) said on Tuesday, it had Reserve Bank of India's approval for opening 19 more branches.

This is in addition to the 21 licences it got earlier in the current financial year, of which it had already opened seven branches, the bank said in a statement. The bank, currently, has 147 branches.

IndusInd Bank (IBL) was incorporated in January 1994. It was promoted by IndusInd Enterprises and Finance (IEFL) and five Mauritius-based companies, IndusInd International Holdings (IIHL), IndusInd (Mauritius) Holdings (IMHL), IndusInd (IL), IndusInd Investments (IIL) & DeFive Mauritius Holdings (DFMHL).

IBL offers an entire gamut of banking services. All branches of the bank are linked via V-SAT allowing customers instant access to all branches. This also helps the bank to offer various products such as IndusReach (Anywhere Banking), IndusInstant (Instantaneous Electronic Transfer of Funds), Access to Money (online access to ATM's countrywide) and Internet Banking. The bank has also set up a retail banking department to give a boost to the retail activities.

Simplex Infra inflates as order-book overflows

2006-12-26T08:35:00.000-09:00

Simplex Infrastructures was up 4.76% to Rs 393 after the company said it had bagged orders worth Rs 825 crore.

As many as 45,874 shares changed hands in the counter on BSE. Simplex Infrastructures disclosed orders with an aggregate worth of Rs 825 crore, over 50% of which are from overseas.
Infrastructure development companies are going through a purple patch. The government has put development on the fast track, providing greater impetus to companies involved in civil works such as roads, water supply and santitation infrastructure, ports, bridges, flyovers etc.

Since the 1930s, Simplex has proved its competence in civil engineering, catering primarily to the core sector. Incorporated in Calcutta in 1924, as a British-owned firm, Simplex Concrete Piles (India) pioneered the introduction and development of the latest foundation engineering practices in India and south-east Asia.

During the year 1999-2000, the activity in the housing and power sector was slow and the company had to take more infrastructure projects like bridges and port works.

Kinetic Engg fired up as group reshuffle likely

2006-12-26T08:33:00.000-09:00

Kinetic Engineering rallied 6.02% to Rs 124.95, on the back of a newspaper report that Kinetic will revamp operations of its group companies.

A total of 100 shares changed hands in the counter on BSE.

As per a report by a leading pink daily, the Kinetic group, in a bid to enhance shareholders’ value, will restructure operations of Kinetic Motor Company and Kinetic Engineering, its umbrella companies.

While Kinetic Motor will continue manufacturing mobikes, scooters and mopeds, Kinetic Engineering will exclusively focus on the emerging auto-components business, the report mentions. Currently, both companies are involved in both product lines. The paper also quotes sources close to the development saying, the companies may woo strategic investors on completion of restructuring.

As a precursor to the proposed restructuring, the group had announced transferring Kinetic Engineering’s moped assembly unit at Supa, Maharashtra, to Kinetic Motor Co. This proposal to transfer the Supa facility will be tabled before shareholders’ at a meeting to be held tomorrow.

Kinetic Engineering was incorporated as a private limited company in October 1970. It became a public limited company with effect from 1 October 1975.

In January 1972, the company started producing the Luna brand of mopeds, designed and developed indigenously at its Chinchwad plant, near Pune. In 1984, along with Honda Motor Company, Japan, the company promoted Kinetic Honda Motors to manufacture scooters based on the latest technology sourced from Honda Motor Company. In 1998, it raised its stake in Kinetic Honda Motor (KHML) to 70% as per an agreement signed with Honda Motor Co, thereby making it a subsidiary.

It introduced the 73-cc Pride in 1994. At present it produces four models -- Luna, Spark, Safari and Pride. It produces auto components commercially. During 1996-97, KEL launched a new version of Pride -- Pride Fx, K4-100 -- a four stroke step through motorcycle and a new look Safari which has been renamed as Safari - V2.

Deccan Aviation flies

2006-12-26T08:32:00.001-09:00

Low cost airline Deccan Aviation surged 3.53% to Rs 129.05 after its board approved allotment of 19,63,640 equity shares of Rs 10 each to Investec Bank (UK), London, at Rs 150 per share.

As many as 2,81,089 shares changed hands in the counter on BSE.

Deccan Aviation’s Committee of Directors (CoD), at a meeting held on 23 December 2006, approved the allotment of 19,63,640 equity shares of Rs 10 each to Investec Bank (UK), London, at Rs 150 per share, a premium of Rs 140 per share.

Accordingly, the paid-up capital of the company has increased to Rs 100,14,56,470.

The allotment is at a premium of Rs 20.95 and Rs 25.35 to the ruling market price and Friday's closing price, respectively.

Media reports indicate that Air Deccan’s market share has been declining despite the low-cost airline offering a large of tickets at nominal prices of Rs 3 and Rs 9. After touching a high of 21.2% in June, the airline’s market share registered an average 19.3% in the second quarter of the current financial year, which further dropped to 18.1% in October 2006.

Air Deccan has the largest network in India covering 60 airports, plying over 300 flights a day. It currently operates a fleet of 16 brand new Airbus A320 aircraft.

Rising costs and tough competition has hit airline companies’ financial performance. Deccan Aviation suffered a net loss of Rs 42.94 crore for Q1 September 2006 on sales of Rs 358.70 crore.

Genus Overseas ecstatic on bagging Rs 75 cr order

2006-12-26T08:32:00.000-09:00

Genus Overseas Electronics sprung 7.37% to Rs 214.10, after it won a Rs 75 crore order for single phase and three phase electronic energy meters.

As many as 20,212 shares changed hands in the counter on BSE.

The Rajasthan State Electricity Board has asked Genus Overseas Electronics to supply single phase and three phase electronic energy meters. The order is valued at Rs 75 crore.

On including the new contract, the company’s order-book is worth Rs 510 crore.

Genus Overseas Electronics manufactures HMCs and SMAs in collaboration (technical and financial) with BMB Band Production Systeme Gmbh, Germany.

The company has prestigious accreditions like ISO 9001, IECQ, CACT, C-DOT, EMC/EMI & ISI (EMC/EMI & ISI mark for single phase and three phase electronic energy meters).

The company exports products to Denmark, UK, Jordon, USA and other countries.

Gateway Distriparks leapfrogs on winning CFS contract

2006-12-26T08:31:00.000-09:00

Gateway Distriparks shot up 4.36% to Rs 204.50 after Punjab State Container & Warehousing Corporation awarded to it a contract for managing its container freight station at Navi Mumbai.

As many as 4,98,672 shares changed hands in the counter on BSE.

Punjab State Container & Warehousing Corporation (CONWARE) has awarded Gateway Distriparks the contract to manage its container freight station (CFS) at Navi Mumbai. Gateway Distriparks will be required to pay a one-time upfront fee of Rs 35 crore and an annual fee, which will be Rs 10 crore for the first year.

The CFS is located about 7 Km from JN Port and is well connected to the Port and National Highways. Besides a large container yard, the CFS also has covered storage area of 52,500 sq meters, consisting of 4 warehouses.

Gateway Distriparks is a world class logistics facilitator fulfilling the needs of the trading community as well as the shipping industry. GDL is an Indo-Singapore joint venture promoted by Windwill International, Parameswara Holdings, Thakral Corporation, and Newsprint Trading & Sales Corporation.

The company has container freight stations (CFSs) at Dronagiri (about 9 kms from the Jawaharlal Nehru Port), Navi Mumbai and New Manali, Chennai, besides an inland container depot (ICD) at Garhi Harsaru (near Delhi), Haryana and a newly commmissioned CFS at Vishakapatam (a joint venture with the Suri group).

ITC strengthens on agro-alliance with Japanese major

2006-12-26T08:30:00.000-09:00

ITC jumped 1.83% to Rs 172.75, after the FMCG major said it had struck an agro-alliance with Japanese trading house Marubeni Corp.

As many as 2,23,562 shares had changed hands in the counter on BSE.

Under the alliance, both companies will consider jointly exporting Indian-made soyabean cake and maize grains for livestock feed, Marubeni said in a statement. Along with ITC, Marubeni will also consider jointly building silos and other grain-related facilities and launching a soyabean protein business. The tie-up is aimed at expanding the trade of food and other agricultural products between India and Japan.

ITC is a leading FMCG cigarette major. Although renowned for its cigarette brands, ITC also has business interests in hotels; paperboards, paper & packaging; agri exports and some other FMCG products like branded packaged foods, safety matches, incense sticks and greeting cards.

Kirloskar Ferrous upbeat on acquiring new facility

2006-12-26T08:29:00.000-09:00

Kirloskar Ferrous Industries gained 1.36% to Rs 33.60 after it signed an agreement to acquire the Solapur unit of Kirloskar Oil Engines for Rs 21 crore.

As many as 2,950 shares changed hands in the counter on BSE.

Kirloskar Ferrous Industries has signed an agreement with Kirloskar Oil Engines (KOEL) for acquiring the latter’s castings’ division at Shivashahi, Solapur, on 1 January 2007, for Rs 21 crore. KOEL's castings division will become the ‘Solapur plant’ of Kirloskar Ferrous Industries.

Kirloskar Ferrous Industries (KFIL), the only company with an integrated blast furnace and foundry, was incorporated in September 1991 to manufacture pig iron and ferrous castings. The foundry, with an installed capacity of 37,500 tpa for pig iron, is equipped with a sand-preparation plant and a moulding-line using an air-impulse moulding-machine from George Fischer Foundry Systems, Switzerland.

Arihant Foundations buoyed on NSE listing

2006-12-26T08:25:00.000-09:00

Arihant Foundations rose 3% to Rs 510 after it was admitted to dealing on National Stock Exchange (NSE) from today

2908 shares were traded on the counter on BSE

Recently Arihant Foundations board approved the conversion of 1.5 lakh convertible warrants in to 1.5 lakh fully paid up equity shares of face value of Rs 10 each, at an exercise price of Rs 201 per share.

In August, the Allied Group had joined hands with Arihant Foundations to develop a 6.1 lakh sq ft mall, including a 160-room business hotel at Navalur on OMR.

The 6.1 lakh sq ft Allied-Arihant mall, coming up at Navalur, will comprise 4.7 lakh sq ft of retail space and 1.4 lakh sq ft of hospitality space. It will have a 8-9 screen multiplex, besides several food courts and retail stores.

Arihant Foundations is Chennai's leading developer of world-class designer buildings.

Dividend bonanza spurs ONGC

2006-12-26T08:24:00.000-09:00

ONGC gained 1.82% to Rs 881 on news that the company has declared an interim dividend of 180%, its highest ever, for the ongoing fiscal.

As many as 61,855 shares had changed hands in the counter on BSE.

Oil & Natural Gas Corporation (ONGC)’s Board of Directors declared an interim dividend of Rs 18 per share (180%) for the financial year 2006-2007. This dividend is on the post-bonus expanded equity capital of the company. In absolute terms, this interim dividend works out to a pay-out of Rs 3,850 crore (on the post-bonus paid-up capital of Rs 2,139 crore), including a Government of India share (74.14%) of Rs 2,854 crore. This is also the highest-ever interim dividend paid by the company.

ONGC has also been awarded a 28% share in one well during the latest exploration round in Libya, a news agency reported.

The media was agog with speculation in mid-December that ONGC Mittal Energy (OMEL), the joint venture between ONGC and Mittal group, is eyeing opportunities in Kazakhstan, Azerbaijan and Indonesia. OMEL has also bagged two blocks in Nigeria and the production-sharing contracts are expected to be signed shortly. The joint venture recently bid for an offshore block in Trinidad & Tobago.

Meanwhile, ONGC’s overseas investment arm ONGC Videsh proposes to undertake joint exploration and production activities in Iraq with Reliance Industries (RIL). ONGC and RIL are likely to rope in Angolan oil firm Sonatrach to take up joint exploration of a discovered block - touted to have a production capacity of 1,50,000 barrels a day - in south Iraq, reports suggest.

Analysts say, ONGC is one of the less expensive frontliners. The current price of Rs 881 discounts its trailing 12-months September 2006 EPS of Rs 69.40, by a PE multiple of 12.69.

Rajesh Exports shines on new order win

2006-12-22T06:18:00.000-09:00

Jewellery maker Rajesh Exports jumped 5% to Rs 338 after the company got an order worth Rs 276 crore from Sharjah-based Excel Goldsmiths.

2.3 lakh shares changed hands in the counter on BSE. Ahead of the news, the scrip had risen 2.5% on Thursday (21 December) to Rs 321.95.

The stock spurted from the beginning of this month. From Rs 231.20 on 30 November, it rose a whopping 49.7% in a short while to a high of Rs 346.30 on 15 December. From that peak, it had cooled off to Rs 314.05 on 20 December.

Recently, Rajesh Exports decided to transfer its property holdings to a new subsidiary, Bangalore Infra. The company already has a property division. It had acquired prime properties in Bangalore, which will now be transferred to Bangalore Infra.

Meanwhile, the company has also decided to transfer its entire retail business to a retail subsidiary, 24K Retail. Rajesh Exports had forayed into retailing jewellery a while back by setting up 'Laabh Jewellers,' a chain of stores which operate in some major Indian cities. The company proposes to have more than 150 retail showrooms in the country by June 2007. Currently, it has 22 Laabh Jewellers retail stores.

Early this month, Rajesh Exports formed an equal joint venture with US-based watch designer Fossil Inc. The JV between will establish an exclusive retail store across India, for retailing jewellery and globally known brands of watches and fashion accessories. Fossil has a retailing presence in over 90 countries across the world. Fossil owns proprietary brands like Fossil, Relic, Mw, Mw Michele, Wrist Net, Wrist Pda and Zodiac. The US-based watchmaker has license agreements with some of the most prestigious brands in the world like Adidas, Emporio Armani, Burberry, Diesel, Dkny, Michael Michael Kors, Marc Jacobs And Marc.

Rajesh Exports had, in March 2006, acquired all 36 retail stores, retailing systems, management systems, software packages, customer database and other assets of OyzterBay, one of the largest chains of branded retail jewellery in India.

Rajesh Exports, headquartered at Bangalore, manufactures and sells gold jewellery. It imports raw gold from mines across the world. The jewellery manufactured, is exported across the world and distributed across the country to retail stores.

Rajesh Exports’ net profit rose 25.1% in Q2 September 2006, to Rs 21.16 crore, on 38.9% growth in sales to Rs 1,712.22 crore.

The company’s current equity base is Rs 7.39 crore, at a face value per share of Rs 2.

US FDA nod for a generics drug boosts Aurobindo Pharma

2006-12-22T06:17:00.001-09:00

Aurobindo Pharma gained nearly 4% to Rs 689 after the company said on Friday it had received tentative approval from the US Food and Drug Administration for anti-AIDS drug efavirenz in capsule forms.

Efavirenz is the generic version of Bristol-Myers Squibb’s brand drug Sustiva.

24,360 shares changed hands in the counter on BSE.

The scrip witnessed a surge over the past one month. From Rs 589.10 on 23 November, it had surged to a high of Rs 695.55 on 15 December. It pared gains later.

On Thursday (21 December), Aurobindo along with two other Indian firms Ranbaxy and Zydus Cadila had got US FDA nod to market 5, 10, 20 and 40 mg versions of the cholesterol drug from December 23. This is expected to unleash fierce competition and lower prices in the US for the drug.

The six-month exclusivity period for marketing Simvastatin for Teva & Dr Reddy’s started on June 23 this year. Total annualised market sales for Simvastatin, the generic name of Merck’s Zocor, were $4.8 billion. Of this, the 5mg, 10mg, 20mg and 40mg tablets accounted for $4.2 billion.

Recently, Aurobindo Pharma also announced marketing authorization from Medicines Control Council (MCC) of South Africa. The council has approved Sertraline tablets in 50mg and 100mg strengths. Sertraline is the generic version of Zoloft marketed by Pfizer. Sertraline hydrochloride is a popular orally administered antidepressant of the selective serotonin reuptake inhibitor (SSRI) type.

Aurobindo Pharma is the largest manufacturer of semi-synthetic penicillin bulk drugs -- ampicillin and amoxycillin. It has integrated facilities to manufacture bulk drugs, bulk drug intermediates and formulations.

Recently, Aurobindo Pharma’s board approved the merger of APL Life Sciences and Senor Organics, the wholly owned subsidiaries of the company, with itself.

Aurobindo Pharma came out with fabulous result with a multifold growth in profits for the quarter ended September 2006. The net profit surged to Rs 54.64 crore in Q2 September 2006 from Rs 3.64 crore in Q2 September 2005. Net sales rose 50% to Rs 480 crore. Aurobindo’s thrust into regulated markets and formulation business contributed to the significantly improved performance. The exports of the company spurted strongly led by growth in Europe and the US.

The current price of Rs 689 discounts its 6 months April-September 2006 annualised EPS of Rs 34.10, by a PE multiple of 20.2.

Fedders Lloyd sizzles as it mulls hike in FII ceiling

2006-12-22T06:17:00.000-09:00

Fedders Lloyd Corporation gained 6.5% to Rs 125.25 after the company said its board will meet on 2 January 2007 to raise FII investment ceiling in the company.

39,455 shares changed hands in the counter on BSE.

As on 30 September 2006, FII holding in the company was 14.66%.

The stock had surged in late November 2006 after the company announced its foray into real estate business. But the rally in the scrip had fizzled out shortly. From Rs 142.95 on 27 November, the stock had tumbled to a low of Rs 104.70 on 13 December. It had recovered from lower level later.

Fedders Lloyd Corporation announced in November 2006 that it had acquired about 25 acres of land in Vrindavan for residential and commercial development. The company also said it was in advanced stage of acquiring land in various cities for similar venture.

Fedders Lloyd Corporation manufactures air conditioners and refrigerators. The company markets refrigerators under the Zenith brand and air conditioners under the Lloyd brand.

For Q1 September 2006, Fedders Lloyd reported 74.5% growth in net profit to Rs 3.84 crore, 14.8% growth in net sales Rs 73.39 crore.

Japanese tie up invigorates R Systems International

2006-12-22T06:16:00.000-09:00

Software developer R Systems International rose 5.7% to Rs 186.25 after the company said it will buy 13.51% of Japan's Aisel.

1.04 lakh shares changed hands in the counter on BSE.

The stock had surged in late November 2006 but the rally in the scrip has fizzled out shortly. From Rs 212.95 on 30 November 2006, the scrip tumbled to Rs 162.20 on 12 December. It recovered later. Earlier, the stock had surged 27.5% to Rs 212.95 on 30 November from Rs 167 on 27 November.

In late October 2006, R Systems had signed a letter of intent with Aisel Corporation, an independent systems development and business solutions provider, to pick up 15 per cent stake in the company. Aisel, in turn, would subscribe to 410,000 shares of R Systems at Rs 250 per share, aggregating to Rs 10.25 crore.

The proposed transaction also includes both parties collaborating exclusively for delivery of certain services to each other's customers. R Systems would serve Aisel for all its offshore software development needs and Aisel would serve R Systems with onsite project management and coordination needs.

R Systems International is a New Delhi-based software product development company. It helps companies bring products and services into the market quickly by using its different products and services comprising the pSuite framework, which is an execution framework for PLM (product lifecycle management) services. Other services include building and supporting software products in diverse areas like Internet security, Internet music delivery, Internet IP TV, banking applications, supply chain management, ERP solutions, and knowledge management. These software products and services find application across industry verticals such as banking and finance, government, health-care, high-technology and independent software vendors.

R Systems’s marquee clientele includes GE, Intel, and ABN Amro. Around 34% of the company’s revenue comes from its top 5 clients.

It also has a significant presence in the ASEAN area with its local headquarters in Singapore and seven regional offices. The company has development centres at Pune and Chennai besides the one in Noida. It also has a development centre each in the US and Singapore

In August '06, the company completed the acquisition of US based WebConverse for $10.7 million inclusive of earn-out payments. WebConverse is a technical support company with operations in Salt Lake City serving the high technology sector with special focus on the growing mobile applications market. The company had revenues of $5.1 million in the previous year.

For Q3 September 2006, R Systems International reported 11% growth in net profit to Rs 5.85 crore on 50% growth in sales to Rs 32.30 crore.

Mount Shivalik Industries in high spirits

2006-12-22T06:14:00.001-09:00

Mount Shivalik Industries jumped 11% to Rs 62.40 on reports the world's second-largest brewer SABMiller Plc could buy out or take a 50% stake in Mount Shivalik Group, parent of Mount Shivalik Industries.

1.7 lakh shares changed hands in the counter on BSE.

The stock moved between a low of Rs 43 and high of Rs 58 since early October 2006 in volatile trade.

SABMiller’s deal for Mount Shivalik Group could carry an enterprise value of Rs 300 crore to Rs 350 crore, reports suggest. The Group is known for its strong beer brand Thunderbolt.

Mount Shivalik Industries was incorporated in 1993 and is engaged in the business of manufacturing and marketing beer. The company has a strong presence in strong beer segment. It is the single largest manufacturing unit of beer in Rajasthan.

For Q1 September 2006, Mount Shivalik Industries reported a net profit of Rs 1.07 crore compared to a net profit of Rs 0.03 crore in Q1 September 2005. Net sales jumped 61.2% to Rs 20.67 crore (Rs 12.82 crore).

The company’s equity base is Rs 6.05 crore. Face value per share is Rs 10.

Jindal Drilling relisted following equity reduction

2006-12-22T06:14:00.000-09:00

Jindal Drilling & Industries was trading at Rs 555 on BSE in early afternoon trade.

The stock hit high of Rs 702 and low of Rs 505. 90,141 shares changed hands in the counter on BSE.

The stock was relisted on the bourses today to give effect to a

Jindal Drilling’s restructuring scheme involved amalgamation of two group companies Newsco Newtech and Discovery Hydrocarbons with the company. It also involved demerger of Jindal Drilling’s Casinvest division into Haryana Engineering. Following the restructuring scheme, Jindal’s equity capital was reduced substantially to Rs 4.50 crore from Rs 9 crore. The face value per share remains same at Rs 10.

Trading in the shares of the company was stopped in September 2006 to give effect to the restructuring scheme. The scrip’s last trading was at Rs 319.60 on BSE on 11 September 2006.

Jindal Drilling and Industries provides drilling services by operating leased rigs for ONGC. The company also offers mud-logging services essential in drilling process.

With the existing marine assets falling short of the spurt in demand, all the companies in global exploration & processing (E&P) allied services industry have drawn up plans to augment fleets and have placed orders with various shipyards. Jindal Drilling has also ordered an offshore jack-up rig to be delivered by end-2008 at a cost of $173 million. The company already has one rig deployed with ONGC and has chartered one rig from Noble Drilling of the US, which has been deployed with ONGC at a higher rate. This arrangement will be over by 31 December 2006.

Jindal’s Drilling’s net profit surged 56.5% to Rs 5.51 crore in Q2 September 2006, on 266% growth in sales to Rs 87.05 crore.

M&M revs up

2006-12-22T06:13:00.000-09:00

Mahindra & Mahindra gained nearly 3% to Rs 873.75 after the company said it agreed to buy 90.47% of German auto parts firm Schoneweiss & Co. GmbH for an undisclosed sum.

2.01 lakh shares changed hands in the counter on BSE.

Ahead of the announcement, the scrip had risen 4% on Thursday (21 December ) to Rs 848.40. The stock bounced back in the past few days after a sharp fall early this month. From Rs 769.10 on 12 December, the stock surged to Rs 848.40 on 21 December. Earlier, it had plunged to Rs 769.10 on 12 December from Rs 833.95 on 8 December.

The current price of Rs 873.75 discounts its 6 months April-September 2006 annualised EPS of Rs 37.40, by a PE multiple of 23.3.

Schoneweiss makes axle beams, suspension, powertrain and engine parts. M&M has been waiting for approval from the German Federal Cartel since November 2006 to complete the deal. It had earlier put an enterprise value of $75-$85 million for the German firm.

M&M has been acquiring auto part companies in India and abroad to enhance its supply chain. In September this year, M&M said it would buy a controlling stake in German forging company Jeco Holding AG, which had an enterprise value of about $178 million.

Last month, M&M acquisition of DGP Hinoday Industries, a joint venture between DG Piramal Group and India Private Equity Fund Mauritius and Hitachi Metals, for undisclosed amount. M&M will acquire 66 per cent stake in Hinoday from DG Piramal Group and India Private Equity Fund Mauritius. Hitachi Metals will hold the balance 34 per cent stake.

Hinoday is a market leader in its two business segments namely casting and ferrites. It is the largest, and technologically the most advanced manufacturer of hard and soft ferrites in India, with sales of Rs 250 crore. It specializes in auto and other high end niche applications, with a capacity close to 6,000 tonne per annum. Hinoday exports over 28 per cent of its total sales. The acquisition of the majority stake marks the entry of M&M into the sophisticated SG Iron casting space.

Recently the maker of Scorpio utility vehicle and tractors had entered into a joint venture with French car maker Renault to set up a plant to make 5,00,000 cars a year in India. The plant will be set up under a new joint venture in which both Renault and M&M will have equal equity participation. M&M's another existing 51:49 venture agreement with Renault, over a year old, envisages the manufacture of the Renault Logan, for which an investment of 125 million euros has been made.

Mahindra & Mahindra registered sales of 13,157 utility vehicles for November 2006, up by 11.5 per cent against the corresponding month in the last fiscal. Scorpio (the flagship model) registered a growth of 32 per cent. The company's farm and equipment sector (tractor division) posted a growth of 16 per cent. The total sales volume from this sector for the month stood at 7,987 units including exports, a 12 per cent rise over last fiscal.

Mahindra & Mahindra is also readying itself to drive into North America, the world's largest market for sports utility vehicles (SUV) and pick-ups with its flagship Scorpio and a pick-up based on the same platform. In September, the company had signed a distribution agreement with Global Vehicles of the US for distribution of M&M vehicles and accessories there. M&M will be the first Indian automaker to enter the highly-competitive American passenger vehicle market.

Meanwhile, as per reports, M&M paid advance tax of Rs 100 crore in the third installment of 15 December 2006 compared to Rs 90 crore it paid in the third installment of 2005.

Sesa Goa spurts on probable change of guard

2006-12-22T06:12:00.001-09:00

Iron ore exporter Sesa Goa jumped 8.11% to Rs 1337 on reports that Japan's Mitsui & Co plans to sell its 51% stake in company.

Reports add that Sesa Goa's enterprise value is expected at about Rs 6000 crore. Steel makers such as Arcelor Mittal, Tata Steel, Jindal Steel & Power and Essar Steel, besides iron ore exporter MSPL are said to be in the fray to buy Japanese promoters stake.

A total of 89,871 shares were traded in the counter on BSE. The stock surged to a high of Rs 1375, while its low being at Rs 1255.

The stock witnessed selling pressure in the past few days. It slipped from Rs 1232.25 on 15 December 2006 to Rs 1186.35 by 20 December 2006, as selling continued. Here it found support and rose to Rs 1236.75 on 21 December, as buying resumed.

Sesa Goa is engaged in prospecting, mining, processing and exporting iron ore. It manufactures low-phosphorus foundry-grade pig iron. It exports nearly 55% of its volumes to China and is the largest private sector exporter of iron-ore from India. The company is planning to incur a capital expenditure to the tune of Rs 150 crore during the current financial year.

Sesa Goa reported 18% fall in net profit to Rs 25.66 crore for Q2 September 2006, versus Rs 31.28 crore in Q2 September 2005. Net sales rose 37.6% to Rs 226.24 crore (Rs 164.4 crore).

Large BT deal continues to buoy Tech Mahindra

2006-12-22T06:12:00.000-09:00

Telecom software provider Tech Mahindra jumped 12.6% to Rs 1681.95 extending its recent solid surge after it won a mega $1 billion five-year outsourcing deal from BT.

But the stock came off higher level after it had risen as much as 16.8% to a high of Rs 1744 at 10:08 IST. 11.9 lakh shares changed hands in the counter on BSE.

On Wednesday (20 December), Tech Mahindra won an order worth $1 billion from BT to provide strategic sourcing services. This is the biggest ever outsourcing deal won by an Indian IT vendor. The news which hit the market after trading hours on that day, send the stock surging 20% on Thursday (21 December) to a lifetime high of Rs 1492.55. In fact, the stock had gained 7.6% on Wednesday to Rs 1243.80 ahead of the news.

According to the deal, Tech Mahindra would support BT's planned growth of managed services to business customers around the globe and continue to provide ongoing services related to its internal systems, processes and re-usable platforms.

On the flip side, the deal increases Tech Mahindra’s dependence on BT. Analysts reckon that high dependence on BT is a key risk for the Tech Mahindra stock. Tech Mahindra derives about 60% of its revenue from BT. BT contributed 64% of its revenue in Q2 September 2006.

Tech Mahindra’s consolidated net profit surged 66% on a sequential basis to Rs 177 crore for Q2 September 2006, partly due to a write back of prior period tax of Rs 33.90 crore.

BT owns 33.95% of Tech Mahindra.

The current price of Rs 1,681.95, discounts its 6 months April-September 2006 annualised EPS of Rs 43.30, by a PE multiple of 38.8.

Gammon India hammered following Sebi action regarding rights issue irregularities

2006-12-22T06:11:00.000-09:00

Gammon India plunged 10% to Rs 369.50 after Sebi on Thursday barred Gammon India and its chairman Abhijit Rajan from accessing the capital markets for one year

There were outstanding sell orders for 1.6 lakh shares at the 10% lower limit on BSE in the counter. 17,673 shares changed hands in the counter on BSE

Sebi investigations found that funds of Gammon India were used by Gammon promoters for subscribing to the company’s rights issue in 2001. In effect promoters did not use their own monies to subscribe to the issue. Funds were routed through Reliance Silicones and two-promoter controlled entities.

The regulator has also barred Gammon, Rajan and two other entities from any transaction in the shares of Gammon Infrastructure Projects (GIPL) for three years from the date of allotment in its public issue. GIPL, a subsidiary of Gammon, has filed a draft document for its initial public offering.

Infosys to up headcount by 5,000 in TVM

2006-12-21T19:01:00.000-09:00

Infosys has finalised plans for the next phase of operations in Kerala, with the company poised to develop its own campus near the technopark here.

The state government handed over 50 acres to Infosys to develop its own campus in the state capital, adjacent to the technopark from where Infosys is already operating.

Infosys president and COO S Gopalakrishnan told ET that the company would develop a 50,000-sqft facility, that would seat about 5,000 staffers.

When that phase is complete, the headcount of the company here would rise from the present level of about 1,000.

Explaining the company’s strategy for the near term in Thiruvananthapuram, Mr Gopalakrishnan said the first priority would be to get requisite clearances, including environment and pollution board clearances, after which development of the company’s own premises would begin.

“We expect to complete the first phase within about nine months,” He said.

SAIL eyes 30% in Canadian coal mine

2006-12-21T18:59:00.000-09:00

Public sector steel major SAIL is all set to acquire 30% strategic stake in Canada-based coal mines, Wolverine Coalfield. The company is in an advance stage of negotiations with Western Canadian Coal Corporation (WCCC) to pick up a stake in its mines located in the North-East British Columbia.

The WCCC has offered SAIL a 20-30% stake in the coalfield. The PSU is in the process of conducting due diligence of the property to make an offer, a government source said. The acquisition would help the company reduce its dependence on imported coal. At present, SAIL imports almost 80% of its coking coal requirement of 15 million tonnes annually.

If the deal goes through, SAIL would have to shell out in excess of $100 million for the share purchase, the source said, adding that valuations would, however, be firmed up only after the due diligence is completed.

The WCCC’s Wolverine Coal Project has reserves of over 30 million tonnes of hard coking coal. The annual coal production from the project is three million tonnes.

Although the acquisition of 30% stake in Wolverine would only reduce about one-third of coking coal imports of SAIL, it would give the company foothold in a resource-rich region suited to company’s requirements.

Besides, SAIL is also eying two coal properties in Australia: Millennium Coal Mines (Queensland) and Anglo Coal. The former, which has a total coking coal reserves of 60 million tonnes, has offered 5% stake to SAIL. Anglo Coal is yet to make a definite offer, sources said. SAIL has also offers from Marcarthur Coal and Tiaro Coalfields in Australia. However, these properties would be evaluated only after previous offers are closed.

SAIL is on the hunt for coal properties to reduce its dependence on imported coal. As coal prices have seen a sharp rise in two years, the company’s own sources would play an important role in reducing cost of steel production.

An official source said that if the deals to acquire coal properties abroad get through, the PSUs Corporate Plan, 2012, would be modified to include this investment. SAIL plans to invest over Rs 37,000 crore to increase its steel production to 22 million tonnes by 2010.

Reliance Life to invest $63.2mn in GeneMedix

2006-12-21T07:50:00.000-09:00

Mukesh Ambani’s Reliance Life Sciences is planning to invest £32.2 million ($63.2 million) in UK bio-pharmaceutical company GeneMedix Plc.

According to a release issued by GeneMedix, the intial investment will be made through subscription for 1,16,82,54,570 shares at 1.25 pence to raise £14.6 million, representing a controlling interest of 74% of the enlarged share capital of GeneMedix.

Reliance may also make a further investment up to £17.5 million in the company. The investment proposal is yet to be approved by the shareholders of GeneMedix.

Julian Attfield, chief executive of GeneMedix, said: "The investment will allow GeneMedix to continue to develop its existing portfolio of products at an accelerated pace and also bring new biopharmaceutical products under development. With the expertise within the company and the enhanced infrastructure and support brought by Reliance Life, we are looking forward to an exciting period of integration and expansion over the coming year."

Reliance Life Sciences declined to make any official comment on the GeneMedix announcement.

Govt to exit Maruti, mop up over Rs 2,700cr

2006-12-21T07:47:00.000-09:00

The government today decided to completely exit auto major Maruti through the sale of its residual 10.27% stake, which at current market price is expected to fetch the exchequer over Rs 2,700 crore.

The Cabinet Committee on Economic Affairs (CCEA) gave the go-ahead to the sale of government's remaining 2,96,79,689 shares (as on September 31, 2006) in Maruti, the second such exercise this year.

Japanese car giant Suzuki has a majority 54.2% stake in the company.

The government had in January this year mopped up Rs 1,567 crore from sale of 8% equity in the car major to banks and financial institutions at an average price of Rs 678.24 share.

Maruti shares were trading at Rs 940, up 1.84%, in late afternoon on the BSE today.

Maxis readies bid for Hutch Essar

2006-12-21T07:45:00.000-09:00

After Vodafone, more competition for Anil Ambani.

Posing serious competition to the Anil Dhirubhai Ambani group, Maxis of Malaysia is finalising a bid for Hutchison Essar, the third largest private mobile operator in India.

The Maxis bid has the option of buying Hutchison’s 49 per cent stake in Hutchison Telecommunications International Ltd (Orascom owns another 19 per cent and the remaining stock is widely held) or directly acquiring HTIL’s 67 per cent stake (with its associates) in Hutchison Essar. Maxis representatives have declined to comment.

After the Anil Dhirubhai Ambani Group and European telecom major Vodafone, Maxis is the third serious suitor for Hutchison Essar. An acquisition will give the successful bidder a strong footprint in India, the world’s fastest growing mobile market.

Maxis already has a presence in India after it bought Aircel, which operates mobile services in Tamil Nadu and Chennai, apart from five other circles, and is now looking for a pan-India launch.

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Reliance Life closes in on $1 bn US buy

2006-12-21T07:43:00.000-09:00

Mukesh Ambani-promoted biotech venture Reliance Life Sciences is close to acquiring a US company for nearly $1 billion (Rs 4,500 crore).

Sources in the know said the acquisition, which might be announced in a month or so, was a part of Reliance Life’s global expansion strategy. When contacted, a Reliance spokesperson declined to comment.

Reliance Life is in an advanced stage of negotiations with the company, which operates in the genetics and nanotechnology space. It is also in talks with a few foreign companies for strategic alliances on research.

The aims of the alliances include development of new research tools in the life sciences space.

Incorporated in 2001 as Reliance Industries Chairman Mukesh Ambani’s new millennium initiative, Reliance Life’s cell biology research centre in Mumbai is the first of its kind in Asia.

The company has invested nearly Rs 1,500 crore in its existing facility in Mumbai and plans to set up a second unit for manufacture of plasma proteins. The investment for the expansion plan is pegged at Rs 1,000 crore. The second unit is expected to be commissioned next year.

Reliance Life conducts microbiological and clinical research and is also into areas like plant tissue culture in biotechnology. The company plans to foray into the pharma business for generics and contract manufacturing.

As part of its plan, the company will manufacture off-patent drugs and is tying up with major drug-makers for contract manufacturing.

Moser Baer tops ‘A’ group

2006-12-21T07:40:00.000-09:00

Moser Baer India surged nearly 12% to Rs 299.95 and it was the top gainer from BSE’s A group.
The scrip spurted today after the company announced its foray into Indian home video market.

IT services and BPO firm Mphasis surged 6.6% to Rs 288.20. It was the second biggest gainer from BSE’s A group stock. IT companies are witnessing robust demand environment as offshore outsourcing is gaining strength.

Nicholas Piramal surged 6% to Rs 254.95 and it was the third biggest gainer from BSE’s A group stocks. Last month, there were reports that Nicholas Piramal is planning to acquire a drug company in Europe or the United States. Some time back, Nicholas entered into a scientific partnership agreement with BioSyntech, a Canada-based biotechnology research company.

Titan Industries rose 5% to Rs 783.05 and it was the fourth biggest gainer from BSE’s A group stocks.

Lube oil major Castrol India surged nearly 5% to Rs 221.05 and it was the fifth top gainer from BSE’s A group stocks.

Glenmark Pharma makes a mark

2006-12-21T07:39:00.000-09:00

Glenmark Pharma surged 10% to Rs 631 on renewed buying after the company recently announced the receipt of euro 25 million from German drug major Merck as upfront payment for a new drug research collaboration in the area of diabetes.

6.2 lakh shares changed hands in the counter on BSE.

The stock had spurted in the past few months. From Rs 297.35 on 5 October, it surged 91.8% to Rs 570.35 on 20 December.

On 18 December, Glenmark Pharmaceuticals SA (GPSA), the wholly owned Swiss subsidiary of Glenmark Pharmaceuticals Ltd. (India) (Glenmark) has, after the anti-trust clearance in the US, received €25 million (approximately Rs148 crore) towards a diabetes drug under development from Merck KGaA, Darmstadt, Germany. The payment constitutes the upfront amount under the recently concluded collaboration agreement for Glenmark's DPP-IV inhibitor GRC 8200, an oral drug used in the management of diabetes, between the two drug firms.

GRC 8200 is a novel, oral DPP-IV inhibitor and Glenmark's lead molecule for Type II diabetes. It is currently in Phase II clinical trials in South Africa and India. Under the agreement, Merck KGaA will develop, register and commercialise GRC 8200 for markets in North America, Europe and Japan, while Glenmark will retain commercialisation rights for India.

The value of all payments to Glenmark could total up to €190 million, including the up-front payment received now and various milestone payments upon successful development and launch of mono-therapy and combination products based on GRC 8200. Upon commercial launch, Glenmark will supply the active ingredient to Merck and will receive royalties on net sales of the product

Recently, Glenmark Pharmaceuticals had announced that it is seeking permission to start clinical trials in Europe of a drug it is developing for treating pain.

Early last month, Glenmark’s management said it expects strong growth in bottomline and topline in the next two years (FY 2007 and FY 2008). The company expects a net profit of $62 million (Rs 280 crore) translating into an EPS of Rs 23.60 for FY 2007. It expects the net profit to surge to $115 million (Rs 510 crore), an EPS of Rs 43.80 for FY 2008. The company expects topline to drive bottomline growth over the next two years.

Glenmark came out with excellent results for the quarter ended September 2006, posting a fabulous 131% spurt in its bottomline to Rs 32.05 crore. The growth was supported by 56% jump in net sales to Rs 196.35 crore. Entry in new markets and new product launches in existing markets, helped the company in this spirited performance.

Moser Baer firmly in the picture

2006-12-21T07:38:00.000-09:00

Moser Baer rose nearly 9% to Rs 292 following reports it is set to enter Indian home video segment and it will also aggressively look at exploiting the regional movie content in a big way

The stock rose on high volume of 10.9 lakh shares on BSE.

The Indian legitimate home video segment is estimated at Rs 200 crore, while the pirated market is believed to be 100 times bigger.

Moser Baer scrip had bounced back from lower level recently after sharp declined during late November to early December. From Rs 230.45 on 12 December, the stock had surged to Rs 268.25 by 20 December. Earlier, it had tumbled to Rs 230.45 on 12 December from Rs 278 on 23 November.

Moser Baer is the lowest cost optical media manufacturer in the world. Its strength lies in its focus on R&D.

The company is now concentrating on HD DVD-R (recordable), a next generation format. Since July 2006, the company has stared exporting HD DVD-R (recordable to its global original equipment manufacturer (OEM) customers. Recently, Moser Baer introduced a range of USB flash drives in the Indian market. With capacities ranging from 512 MB to four GB, the drives claim data retention feature up to 10 years. According to a Dataquest survey, the market for flash drives has grown from one lakh units in 2004-05 to over 9 lakh in 2005-06.

Moser Baer is setting up an export-oriented solar photovoltaic (PV) cells and module manufacturing project. The global photo voltaic market is on a high growth curve and a lowering of PV electricity costs could exponentially expand the market, according to Moser Baer. Electricity can be produced from sunlight through a process called photovoltaics (PV).

In November 2006, Moser Baer Photo Voltaic (MBPV), a wholly owned subsidiary of Moser Baer India, acquired minority stake in Stion Corporation, a nanostructures technology company based in California, formerly NStructures.

Moser Baer’s net profit jumped 743% in Q2 September 2006 to Rs 25.97 crore, on 30% growth in net sales to Rs 500.86 crore.

Bulls throng Indiabulls Financial Services

2006-12-21T07:36:00.000-09:00

Indiabulls Financial Services jumped nearly 12% to Rs 603.65 after the company today set 9 January 2007 as the record date for its demerged real estate business, now brought under Indiabulls Real Estate (IREL).

The scrip rose on massive volume of 46.7 lakh shares on BSE.

The stock moved in the range of a low of Rs 500 and a high of Rs 582 since mid-November 2006. Last few months saw a solid surge in the scrip. From Rs 197.95 on 24 July, the stock surged to a high of Rs 581.75 on 1 December. It had pared gains later.

International consultancy firm Knight Frank has estimated the value of Indiabulls' real estate projects, including the development potential, at Rs 21570 crore, of which IREL's stake is put at Rs 15130 crore. As per the scheme of restructuring, each shareholder of Indiabulls Financial Services will be entitled to one share in IREL.

Recently, Indiabulls Financial Services had acquired 100% equity of Noble Realtors, a company involved in construction and development of real estate projects.

Indiabulls Financial Services is transforming into a financial services power house. The company, earlier focussed on stock broking, has warmed up to consumer finance and realty businesses.

For Q2 September 2006, the company reported 59.20% rise in net profit to Rs 30.63 crore (Rs 19.24 crore). Revenue advanced 21% to Rs 65.87 crore (Rs 54.42 crore).

Sell-off grips i-flex

2006-12-21T07:33:00.000-09:00

i-flex plunged 10% to Rs 1763.95 on concerns that market players may offload the scrip in the open market to the extent the shares tendered in the ongoing open offer by Oracle are rejected.

57307 shares changed hands in the counter on BSE.

i-flex December 2006 futures were trading at Rs 1719, a discount over the cash price of Rs 1763.95. The discount was huge on Wednesday when the December futures had settle at Rs 1644.45 compared to its spot closing price of Rs 1964.30.

As per reports, market players had build up positions in the I-flex scrip to tender them in the open offer which was at a substantial premium to the offer price. The offer opened on 4 December and it closes on 23 December. On 7 December, soon after the offer had opened for subscription, Oracle had revised upwards the offer price to Rs 2100 from Rs 1475. It had also raised the targeted stake through the open offer to 34% from 20%. The revised open offer price of Rs 2100 was at 20% premium over I-flex’s then ruling market price of Rs 1751 on BSE.

Oracle had indicated that shares tendered in the open offer above 34% would not be accepted and that it will accept the shares on pro-rata basis if it received more than 34% stake in the open offer. At the time of the revision of the open offer Oracle had also said that this is the highest it will pay for i-flex and that there will not be another open offer. Oracle’s current holding in i-flex is 55%.

The price of Rs 2100 that Oracle is acquiring impounds a significant premium for corporate control, which is evident from the 40% per cent price revision put through by Oracle.

The Orcale open offer follows the preferential allotment of equity at Rs 1,307.5 made by i-flex to Oracle to part-finance the acquisition of the US-based Mantas Inc., apart from open market purchases made at prices up to Rs 1,475.

i-flex posted a topline growth of 43% with revenue (consolidated Indian GAAP) for the quarter ended 30 September 2006, standing at Rs 499 crore, compared with Rs 350 crore for the corresponding quarter of the previous year. The company's net income for the quarter stood at Rs 93.5 crore, representing 144% growth compared with the figures of Rs 38.4 crore during the corresponding quarter in the previous year.

Matrix Labs offloaded

2006-12-21T07:32:00.000-09:00

Matrix Laboratories dropped 4% to Rs 207 extending its recent fall after the open offer to acquire additional 20% stake by US-based Mylan Laboratories got over recently.

But the scrip came off lower level after it had plunged as much as 9.6% to a low of Rs 195.50 at 10:58 IST. 2.2 lakh shares changed hands in the counter on BSE.

From Rs 273.30 on 5 December, the stock has declined sharply to current Rs 207. The open offer for acquiring additional 20% stake in Matrix by Mylan Laboratories got over on 11 December. The offer that was originally scheduled for mid-October to early November period was postponed to early-November to early-December.

The offer was for mopping up about 3.1 crore fully paid-up and 4,700 partly paid-up shares at Rs 306 and Rs 294 respectively.

It is not known how much Mylan has been able to mop up from the open offer. In August 2006, Mylan decided to acquire a 51.5 per cent stake in Matrix from the promoter, N. Prasad, and a couple of investment outfits. This in turn had triggered open offer.

Matrix Laboratories saw a steep fall of 69 per cent in net profit to Rs 9.6 crore for the quarter ended September 2006 compared with Rs 30.65 crore in the corresponding quarter last year. The company's net sales, too, dipped 18 per cent to Rs 142.5 crore, from Rs 174.37 crore in the same period last year.

Dishman Pharma gains on forming overseas joint venture

2006-12-21T07:31:00.000-09:00

Dishman Pharmaceuticals & Chemicals rose 3.30% to Rs 232.50 after it announced joint venture in Saudi Arabia with Takamul Investments Holding Company (Takamul), a group company of Capital Advisory Group

This joint venture is for manufacturing hospital disinfectant formulations, anti-cancer drug formulations and dry powder inhaler (DPI). The technology for the disinfectant and DPI will be provided by the company (Dishman) and technology for anticancer formulations will be provided by Carbogen-Amcis AG, Switzerland, its step-down subsidiary.

The scrip clocked volume of 1.36 lakh shares on BSE

On 20 December, the stock surged 7.68% to Rs 225.05 on volumes of 2.86 lakh shares.

On 19 December, the company allotted 1.26 lakh equity shares of Rs 2 each at a premium of Rs 170 per equity share upon exercise of option of conversion of 0.50% Foreign Currency Convertible Bonds (FCCB).

In October, Dishman Pharmaceuticals announced that Dishman Infrastructure has obtained 'in principle' approval from the Ministry of Commerce and Industry, Government of India for setting up one engineering SEZ and one pharmaceuticals and Fine Chemicals SEZ in Gujarat. The total investment will be around Rs 650 crore for both the SEZs, to be made over next three to five years and will be funded through a combination of debt/equity and internal accruals.

Dishman Pharmaceuticals had acquired Carbogen Amcis AG, a Swiss research-based company with its three production facilities, for manufacturing highly potent high-value products from Solutia Europe SA/NV (SESA) for over $ 75 million in August. The acquisition was done through Dishman Pharma Solutions AG (DPS), its wholly-owned subsidiary in Brussels on 22 August 2006.

Dishman Pharmaceuticals is a Gujarat-based pharmaceutical company focussing on contract manufacturing for MNCs.

The company registered a marginal 0.20% rise in net profit for Q2 September 2006 to Rs 12.31 crore compared to Rs 12.29 crore in Q2 September 2005. Net sales rose 14.90% to Rs 60.59 crore (Rs 52.74 crore).

New order win powers KEC International

2006-12-21T07:30:00.000-09:00

Power transmission equipment firm KEC International rose 3% to Rs 357 a day after it said it had secured orders worth Rs 151 crore.

7,816 shares changed hands in the counter on BSE.

The stock moved between a relatively wide range of Rs 337 to Rs 393 since early November 2006.

In late August 2006, KEC had bagged orders worth Rs 150 crore from international and domestic markets, taking its order-book to a record Rs 3,000 crore level. This is 1.7 times its FY 2006 sales of Rs 1,727.25 crore.

The recent fall in copper and steel prices augurs well for power transmission equipment makers such as KEC. Copper fell to a fresh six-month low on the London Metal Exchange on Wednesday (20 December), after a rise in inventories reinforced expectations that falling prices are likely to dominate the picture next year.

KEC International’s net profit for the quarter ended Sep ’06 doubled to Rs 21.68 crore. Sales rose 13% to Rs 467.66 crore.

KEC International is the largest power transmission, engineering, procurement and construction companies in the world, with a presence in more than 15 countries.

Tech Mahindra goes berserk

2006-12-21T07:27:00.000-09:00

Tech Mahindra jumped 10.79% to Rs 1,378.05, on news that it has been offered a $ 1 billion strategic outsourcing services deal by British Telecom.

The stock also spurted to Rs 1,391, its lifetime high. The scrip had spurted nearly 8% to Rs 1,245, on Wednesday itself, as the market probably got wind of the contract beforehand.

As many as 6.14 lakh shares changed hands in the counter on BSE. The stock underwent consolidation at the higher level following a solid surge during October 2006. The scrip fluctuated between Rs 1,042 and Rs 1,194 since mid-November 2006. Earlier, it had spurted to Rs 1,182.50 on 21 November from Rs 616.20 on 10 October 2006, on the back of robust Q2 results.

The current price of Rs 1,378.05, discounts its April-September 2006 annualised EPS of Rs 47.51, by a PE multiple of 29.

British Telecom (BT) has asked Tech Mahindra to provide it with strategic sourcing services for five years. This contract is expected to generate a revenue in excess of $1 Billion within the stipulated period. Tech Mahindra will support BT’s planned growth of managed services to business customers around the globe, while continuing to provide ongoing services related to BT’s internal systems, processes and re-usable platforms.

Tech Mahindra (formerly Mahindra-British Telecom) is a global leader in providing end-to-end IT services and solutions to the telecom industry. Over 15,000 professionals service clients across various telecom segments, from multiple offshore development centers across 7 cities in India, the UK and 13 sales offices across Americas, Europe and the Asia-Pacific.

The company is a joint venture of M&M and British Telecom Plc, one of Europe’s largest providers of telecommunication services. The company entered into the capital market by issuing 1,27,46,000 equity shares of Rs.10 each to the public, at Rs.365 per equity share, in August 2006

Tech Mahindra’s consolidated net profit surged 66% on a sequential basis to Rs 177 crore for Q2 September 2006.

Vodafone caught in Bharti deal web

2006-12-20T18:47:00.000-09:00

VODAFONE is aiming for a bigger share of the world’s fastest growing telecom market with a possible bid for Hutch-Essar, but the UK-based giant has a crucial hurdle to cross.
The world’s largest wireless operator has begun exploring the possibility of selling its 10% stake in Bharti Airtel and Bharti Enterprises. It had bought the stake in 2005 for about Rs 6,500 crore. But one year later, after realising that a minority position is not helping it secure any meaningful share of the market, Vodafone is believed to be thinking of exiting the deal. UBS is advising the group on the ways of doing so.
But the problem for the UK company is that there is a non-compete agreement with Bharti. This was agreed upon last year at the time of the stake purchase. This clause prohibits Vodafone from competing in the same market for one year after selling its shares in Bharti. If Vodafone sells its Bharti holding, its bid for Hutch could become problematic. It will find it difficult to convince the sellers that it is the right buyer despite a specific legally-binding prohibition. Vodafone can convince Sunil Mittal to grant it a waiver from the non-compete agreement, but then its bid for Hutch could become conditional.
On the other hand, Vodafone could retain its current Bharti holding and bid for Hutch, without violating DoT guidelines. But the question is whether Mr Mittal will agree. Unlike Vodafone, Mr Mittal is not so keen on bidding for Hutch-Essar. He told ET a few days ago that Bharti is not interested in Hutch-Essar and that the speculation should stop. His reaction to Vodafone buying a big competitor to Bharti is unlikely to be pleasant.
On the other hand, Vodafone holds one advantage. The Essar group’s first right of refusal is a narrow, limited right. As ET had reported last week, it only comes into force if the buyer of Hutch’s stake is either Reliance, the Tatas or Bharti. Hutch is under no obligation to allow Essar to exercise its right if the offer is from a foreign company.
Essar group vice-chairman Ravi Ruia and Essar TeleHoldings chief Vikas Saraf are currently in London and are believed to be holding talks with Vodafone, sources told ET. On the speculation that ‘Vodafone was already in touch with Essar’, both the companies refused to comment.
However, the move by Vodafone is fraught with policy implications, ranging from FDI rules to DoT guidelines. Vodafone can never buy 100% of Hutchison Essar because FDI norms limit foreign holding in a telecom company to 74%.

Tech Mahindra wins $1-billion BT deal

2006-12-20T18:45:00.000-09:00

IT SEEMS to be raining deals in the Indian software services industry space. In the latest such deal, the Pune-based telecom software services company Tech Mahindra has bagged a $1-billion contract from British Telecom (BT). This is the largest deal to be bagged by an Indian software services firm. To deliver this contract Tech Mahindra will be hiring additional manpower (over its current strength of 17,000 plus) in India and its global delivery centres. The company will be setting up new shared services delivery centres in China, Eastern Europe and Latin America to service BT customers.
The deal, which was in discussion for about three months, gives Tech Mahindra a “minimum volume commitment” with a “preferred vendor” relationship with BT. When asked about the contract, Sanjay Kalra, president, Tech Mahindra, said, “We expect revenues from this contract to exceed $1 billion over five years. We have been working with BT for a long time, and now we will be servicing their customers, managing various services including IT and BPO related tasks.”
Tech-Mahindra was earlier called Mahindra-British Telecom (MBT), being a joint venture between BT and Mahindra & Mahindra. MBT was renamed Tech Mahindra before it went public earlier this year. BT reduced its stake in the company from 46% to 36% post IPO. Mahindra group holds 51%, while the remaining is with public.
Among previous large deals bagged by Indian software services firms are Tata Consultancy Services’ $850-million contract with UK insurance major Pearl Group and HCL’s $330-million deal with the US electronics major DSG group.
Tech Mahindra’s contract with BT is spread over five years. The company can garner revenues up to $200 million every year from the deal. Tech-Mahindra’s current revenues are $280 million a year. BT is already the largest customer for Tech-Mahindra and contributes about 60% of its total revenues. With the new contract, its contribution to the company’s total revenues will go up further. About two years back 85% of Tech Mahindra’s work came from BT. It now has about 75 clients, with BT being the largest.
“The company will support BT’s planned growth of managed services to business customers around the globe and continue to provide ongoing services related to BT’s internal systems, processes and reusable platforms,” a Tech Mahindra statement said. “The company and BT group have worked together for 20 years on a range of projects, which have proved to be successful for both the parties. This deal builds upon and strengthens the productive working relationship,” it added.
Most long-term contracts of this nature are primarily in the systems integration and maintenance space, and are relatively low-margin businesses. However, the current contract is likely to be at higher billing rates because it is for strategic outsourcing services. In the last quarter, the company posted a sharp 373% growth in net profit and a 183% growth in revenue at Rs 1,41.1 crore and Rs 6,41.4 crore respectively.

Planning to invest overseas? RBI makes it easier for you

2006-12-20T18:40:00.000-09:00

YOU now have the option of investing serious money overseas — the kind that would buy 100 shares of Google in Nasdaq. You can also invest in foreign mutual funds or park foreign currency deposits in international banks with no Indian presence. Resident individuals can also gift or donate up to $50,000 in a financial year.
The Reserve Bank of India (RBI) on Wednesday issued a notification that will formalise the liberalised remittance scheme of $50,000 for resident individuals.
Till date, a resident individual could invest in overseas companies that are listed on a recognised stock exchange and hold at least 10% stake in a listed Indian enterprise. This meant while Indian investors could buy Unilever shares, they could not invest in stocks like Google or Bank of New York.
Now, a resident individual can invest up to $50,000 in any listed foreign company. RBI has also scrapped sub-limits that restricted remittances towards gifts or donations at $5,000.
For all remittances, individuals will have to disclose their PAN number and source of funds along with the beneficiary’s name, address and account number.
The notification says foreign banks — even those with no branches in India — can sell deposits and other financial services products to residents while Indian banks can act as agents. However, all this is subject to RBI approval.
However, not many high net worth Indian investors have been using the $50,000 remittance window to play the overseas stock market. Even transactions like buying properties overseas, which captured common imagination, did not materialise in a big way. Possibly, the only set of investors who have been smartly using this facility are arbitrageurs in commodity futures, who used some international brokers to take positions in global exchanges like Nymex and CBOT.
Significantly, even RBI had inhibitions on the move. Every time a new scheme was launched, even if it was a variant of the previous one, banks were required to take fresh permission from the regulator. Besides, there was not much appetite for overseas deposits, which not only fetch a lower return but also carry a currency risk for the Indian investor.
Even in the new notification, RBI has retained the scheme-wise approval requirement. However, with this, the central bank has implemented in full the recommendations of the recent report on capital account convertibility for individual remittances in the first phase.

Q3 results expectations boost Tech Mahindra

2006-12-20T06:27:00.001-09:00

Telecom software provider Tech Mahindra jumped nearly 8% to Rs 1245 on renewed buying in anticipation of strong financial performance for Q3 December 2006.

The scrip hit a high of Rs 1285 which is a lifetime high for the counter. 18 lakh shares changed hands in the counter on BSE.

The stock witnessed a consolidation at higher level that followed a solid surge in the scrip in October 2006. It moved between Rs 1042 to Rs 1194 since mid-November 2006. Earlier, the stock had spurted to Rs 1182.50 on 21 November from Rs 616.20 on 10 October 2006, following robust Q2 results.

Tech Mahindra’s consolidated net profit surged 66% on a sequential basis to Rs 177 crore for Q2 September 2006, partly due to a write back of prior period tax of Rs 33.90 crore.

Tech Mahindra derives a large part of its revenue from a single client, BT. BT contributed to a whopping 64% of revenue in Q2 September 2006.

BT Global services- a BT group company is yet to do substantial offshoring to India. Tech Mahindra stands to benefit as BT Global services has plans to offshore and an announcement on this front could be expected in the next couple of months, according to a report by a foreign brokerage.

The current price of Rs 1,245, discounts its April-September 2006 annualised EPS of Rs 43.30, by a PE multiple of 28.7.

iGate Global Solutions soars

2006-12-20T06:27:00.000-09:00

iGate Global Solutions jumped nearly 18% to Rs 308 after the company announced the date of its Q3 results.

77,940 shares changed hands in the counter on BSE.

iGate said its board will meet on 10 January 2007 to take on record Q3 December 2006 results.

The stock has witnessed a sustained rise over the past one month. From Rs 220.95 on 20 November, it rose 18.3% to Rs 261.45 by 19 December.

Last month, iGate bagged a three-year deal from US-based mortgage insurance provider Radian Group Inc. As per the deal, iGate will be a strategic partner for managing Radian's application portfolio and technology infrastructure needs.

iGate has higher reliance on its top client GE, which contributes around 40% of revenue.

iGate registered a net profit growth of 80%, to Rs 10.10 crore for Q2 September 2006, compared to Rs 5.60 crore in Q2 September 2005. Operating revenue during the period surged to Rs 203 crore from Rs 155.80 crore.

The company will be doubling its headcount of its testing services and is aiming at 10% of its topline to come from this segment in the next fiscal. Currently, iGate derives about six per cent of its IT services revenues from the testing practice.

F&O entry spurs JSW Steel

2006-12-20T06:26:00.001-09:00

JSW Steel surged nearly 6% to Rs 351 after NSE included the scrip to the futures & options segment.

NSE has decided to add 26 additional stocks to the futures & options (F&O) segment from 29 December and JSW Steel is one of new entrants.

3.1 lakh shares changed hands in the JSW counter on BSE

The stock moved in a range of between Rs 313 to Rs 340 since November 2006 after a solid surge in the counter in October 2006 that was triggered by its strong Q2 September 2006 results.

As per reports, JSW Steel is looking at acquiring a small value-added facility in Western Europe for around $2 million.

JSW Steel is expanding the capacity of its Bellary plant in Karnataka to 10 million tonne per annum by 2010 from 3.6 million tonne at present. For this, the company has earmarked Rs 5,000 crore. The Karnataka government and the company have reached an agreement for an allotment of 4,000 acre of land for the expansion of the project.

In October 2006, JSW Steel decided to form a wholly owned subsidiary for the purpose of investing in overseas coal assets. JSW Steel has already signed an agreement with a local player in Mozambique to conduct due diligence study on a 6,900-hectare site that could be later mined for coal. Based on the study's findings, the company has the option to carry out detailed exploration studies and prepare mining plans.

The company's net profit saw a 226% jump at Rs 346 crore for the quarter ended September 30, '06. The net sales stood at Rs 2,194.5 crore with growth of 42%.

In November 2006, JSW Steel raised galvanized steel prices by Rs 1,000 per tonne, following a surge in zinc prices in international markets. Zinc is key input in manufacture of galvanized steel. The company is one largest manufacturers of galvanized steel. About 70 per cent of the 9,00,000 tonne of galvanised coils manufactured from the company's facilities in Tarapur and Vasind in Maharashtra are exported.

Four Soft gains on European acquisition

2006-12-20T06:26:00.000-09:00

Software firm Four Soft jumped 7% to Rs 73 after the company’s board approved the acquisition of Denmark's Transaxiom Holdings A/S for $10 million in a cash and stock deal.

The stock rose on high volume of 11.5 lakh shares on BSE.

The Danish company, which provides software services for transportation and logistics services providers, would help expand Four Soft's presence in Scandinavia, Australia and Hong Kong, Four Soft said. The integration of the acquired company would begin next month. Transaxiom's annualised revenues of its current operations would be around $8 million, it said.

The company said it would issue 1.77 million shares at Rs 75 each to the sellers Winning Alliance ApS, FH Holdings ApS and Paul Rene Larsen.

The payout would be made over the next three years based on the target company's performance.

Four Soft also announced winning of a Rs 3.40 crore order from Matsushita Electric Industrial Company (Panasonic), Japan.

Four Soft scrip had spurted 20% to Rs 69.70 in a single trading session on 14 December after the company said it was considering an acquisition in Europe. The stock had eased to Rs 68.15 by 18 December.

Four Soft focuses on the development of software products and consultancy services for supply chain process management globally. The company focuses on enterprise applications for logistics, transportation and supply chain management. In addition, the company provides services built around its core products.

Four Soft had registered turnaround results for the Q2 September 2006. It reported net profit of Rs 3.51 crore in Q2 September 2006 as compared to a net loss of Rs 0.47 crore during Q2 September 2005. Net sales surged 310.30% to Rs 13.54 crore (Rs 3.30 crore).

Peninsula Land drops after institutional placement

2006-12-20T06:25:00.000-09:00

Real estate firm Peninsula Land dropped nearly 5% to Rs 650 after the company priced placement of shares with qualified institutional buyers at Rs 600 a share, a discount of 12% to Tuesday's closing price of Rs 683.05.

2.7 lakh shares changed hands in the counter on BSE.

The stock had surged since early this month. From Rs 597 on 30 November, it rose to a high of Rs 740.10 on 15 December. It had declined to Rs 683.05 by 19 December.

Peninsula Land will issue 2.6 million shares to qualified institutional buyers at Rs 600 per share. The issue would result in equity dilution of 6.5%. The company’s current equity is Rs 39.49 crore. Face value per share is Rs 10.

Peninsula Land was formed after the parent company Morarjee Gokuldas Spinning and Weaving was split to form Morarjee Textiles and Morarjee Realties. Morarjee Realities then merged with Piramal Holdings to form Peninsula Land.

Peninsula is engaged in the development of commercial and IT office space and residential complexes. It is also getting into SEZs and integrated townships. The company is setting up SEZs in Goa and Pune for biotech and gems and jewellery sectors, apart from an IT park at Pune. An integrated township will be also set up at the land, which has come along with its recent acquisition of Dawn Mills.

Peninsula would also be holding equity in the real estate development fund.

For Q1 September 2006, the company reported net profit of Rs 80.77 crore on revenue of Rs 136.82 crore.

Essar Oil in demand

2006-12-20T06:24:00.001-09:00

Essar Oil rose 3.6% to Rs 47.50 after the refiner said it had begun exporting oil products from its refinery in Gujarat

3.8 lakh shares changed hands in the counter on BSE.

The stock had witnessed a sustained fall since early October 2006. From Rs 59.10 on 6 October, the stock slipped to Rs 45.85 by 19 December.

Recently, promoters of the company raised their stake by 4.7% by subscription to its Global Depository Shares (GDSs). The company’s current equity base is Rs 1201.45 crore. Face value per share is Rs 10.

Essar owns a 2,10,000 barrels a day (7.5 million tonne per annum) refinery at Vadinar in Gujarat which started operations on 24 November 2006. The Vadinar refinery's dedicated oil terminal can handle 32 million tonnes of crude oil a year, and has the potential to export 14 million tonnes of oil products a year.

Essar plans to raise the refinery's capacity to 12 million tones per annum (Mtpa) in a year and to 16 Mtpa subsequently.

The company is planning to export about 30 to 40 per cent of the production over a period of time, the rest being for the domestic market.

The Essar group has invested Rs 10,826 crore in the oil refinery with another Rs 2,857 crore invested in building the crude oil receiving terminal at Vadinar, an all-weather deep-draft natural port.

Essar has already set up a network of 900 petrol pumps, which will be scaled up to 1,500 by the end of this fiscal. The company is going slow on retail sales as margins are negative due to rise in petroleum prices and a price freeze on them.

Pioneer Embroideries surges on retail expansion plan

2006-12-20T06:24:00.000-09:00

Pioneer Embroideries rose to its daily maximum limit of 5% to Rs 229.35 after the company said it would invest Rs 100 crore over the next three years to widen its retail presence in the country

3.4 lakh shares changed hands in the counter on BSE.

The stock witnessed a solid upmove over the past few weeks. The sharp and swift surge has surprised market men. From Rs 86 on 24 November, the stock has risen 166.6% in a span of less than a month. Pioneer would add 200 stores -- including 65 by March 2007 -- to take the total number of stores to 250. Pioneer said it expected these stores to generate revenue of Rs 170 crore to Rs 175 crore by 2009. Pioneer’s Hakoba, the branded store chain is well known for embroidery wear

Around 30 percent of these stores would be company owned and the balance through franchisees. For this year alone, the company would derive a revenue of Rs 45 crore and a core earnings margin of 10 percent.

The company said it also planned to open stores abroad.

Hakoba offers ready-to-stitch Salwar Kameez & Dupatta (SKD) sets, Sarees, ranging from daily wear to bridal wear, fashion fabrics, etc. It has recently launched a ready-to-wear garment range for both men and women, which includes, formal and designer shirts, ladies tops, shirts, long skirts, middies, capris, denims, etc. Currently, Hakoba has 45 stores spread across 26 cities in India.

Pioneer Embroideries is one of Asia's largest embroidery manufacturers and among the world's largest crochet lace producers.

Recently, Pioneer’s board approved preferential issue of equity shares/warrants/other financial instruments that would be converted into or exchanged with equity shares, at a later date, to promoters as well as to non-promoters.

In late November 2006, Pioneer Embroideries had approved raising of funds for future capital expenditure and expansion plan of the company by way of issue of FCCB/ADR/ GDR/or any other financial instruments convertible into equity shares.

Pioneer’s net profit rose 16.2% to Rs 3.38 crore in Q2 September 2006 on 10.4% growth in net sales to Rs 36.46 crore.

Gitanjali Gems adds glitter on US acquisition

2006-12-19T20:38:00.000-09:00

Gitanjali Gems jumped 7% to Rs 229.75 after the company announced on Tuesday that it has acquired a majority ownership interest in Samuels Jewelers Inc. from funds managed by DDJ Capital Management.

The stock rose on high early volume of 9.6 lakh shares on BSE.

The scrip had witnessed wild moves off late. After a solid surge late last month, it had declined sharply early this month which was followed by a recovery from lower level later. From Rs 189.15 on 13 December, the stock surged to Rs 213.95 by 19 December.

Earlier, the stock had declined to Rs 189.15 on 13 December from a recent high of Rs 244.35 on 30 November 2006. Before that sharp fall, the scrip had surged 19.4% in a short while to Rs 244.35 on 30 November from Rs 204.55 on 24 November.

Samuels operates 97 retail jewelry stores in 18 states throughout the United States. The company sells fine jewelry items in a wide range of styles and prices, with a principal emphasis on diamond and gemstone jewelry. Measured by the number of retail locations, Samuels is the tenth largest specialty retailer of fine jewelry in the United States.

Recently, Gitanjali Gems issued $110 million of FCCBs, the proceeds of which will be utilized to meet its company's capital expenditure requirements and acquisitions. The FCCBs will have a maturity of 5 years and 1 day and will be convertible into equity shares at a conversion price of Rs 275 per share on maturity, ie, on 25 November 2011.

In September, Gitanjali Gems had received approval from the Central Government for setting up of a sector specific special economic zone (SEZ) for gems and jewellery spread over 25.23 acres at Panvel, Maharashtra

Gitanjali Gems owns a number of jewellery brands, including D'damas, Nakshatra, Sangini and Asmi.

Gitanjali Gems reported a net profit growth of 53.80% to Rs 22.25 crore (Rs 14.47 crore) for Q2 September 2006. Net sales rose to Rs 3.50% to Rs 499.55 crore (Rs 482.82 crore).

BPCL to pick up 25% in North Sea blocks

2006-12-19T20:24:00.000-09:00

BHARAT Petroleum (BPCL) will pick up a 25% participating interest in blocks 48 1B and 2C in the Southern gas basin of the North Sea. The company joins a consortium led by Australian firm Encore Oil and UK company Norwest for a consideration of about Rs 55 crore, sources close to developments said. The move will give the Indian oil major exposure to near term drilling opportunities in the region, which is among the most explored in the world.
The blocks are in close proximity to a number of producing gas fields and their associated infrastructure makes even moderate gas reserves very commercial, the sources said. The North Sea contains the majority of Europe’s oil reserves and is one of the largest non-OPEC producing regions in the world. While most reserves lie beneath waters belonging to the UK and Norway, some fields belong to Denmark, the Netherlands and Germany.
To take forward its interest in prospecting for oil and gas, BPCL has recently formed an upstream subsidiary Bharat Petro Resources with an authorised capital of Rs 1,000 crore. Speaking to the media after the annual general meeting, BPCL chairman Ashok Sinha said the company has committed to spend Rs 600 crore in four blocks in India and two abroad. It is willing to increase this exposure to Rs 4,000 crore, if and when there is a discovery. In India, the company has five blocks, of which two are in deep waters and three onland. Most were acquired in NELP 4 and are in partnership with ONGC and OIL.
Prospecting for oil and gas, once the exclusive domain of ONGC and OIL, is now being tried by all three oil refining and marketing companies —IOC, HPCL and BPCL.
Apart from the North Sea interest, BPCL also recently took up a 20% stake in the Australian northwest shelf in the Timor sea. It is now part of a consortium operated by Coogee (30.8%), Nortwest (24.1%), Bounty Oil (12.8%) and Adelphi oil (18.4%). Drilling is likely to begin in both the blocks in 2007.
Exploration in the North Sea, a declining field, is now a story of pushing the edges of the technology in terms of maximising production, oil industry sources said. Production fell 12.8% in 2005 leading to Britain becoming a net importer of crude for the first time in decades.
The two blocks 48/1b and 48/2c were awarded in the 22nd Licensing Round as a promoter licence. They contain contain the 48/2-1 gas discovery which was drilled in 1984 and tested 2.7 million cubic feet per day.

Essar, Reliance to share fuel products, facilities

2006-12-19T20:23:00.000-09:00

PRIVATE sector integrated oil majors and arch rivals, Essar and Reliance, have come together to lift themselves out of the loss-making oil retailing business. The two companies have entered into a product exchange agreement that allows them to exchange petroleum products like petrol and diesel without direct selling or buying. The agreement will also enable the two companies to share infrastructure and maximise returns, sources said. Recently, Reliance curbed its petroleum retail business to dodge losses on account of spiralling crude prices and subsidised public sector sales while Essar was forced to open up pumps ahead of its new refinery going full stream next March.
“The basic standards in the domestic market are the same. Hence it makes sound economic sense in not duplicating infrastructure, more so when the private players are making losses in the retail business,” Essar Oil managing director AN Sinha said. The company, which has hired eight product facilities at JNPT, Mundra, Goa, Visakhapatnam, Ennore, Kakinada and Haldia, will be able to use Reliance’s storage facilities in other parts of India while allowing Reliance to use its own.
For the western India retail market, EOL has inked product exchange agreement with MRPL refinery which will supply petrol and diesel to JNPT and Mundra. For the rest of India, the company will use Reliance’s infrastructure. This also means that the companies will discuss plans on the location of new storage facility to avoid duplicity.
The public sector undertakings, who together market close to 80% of the total domestic demand, have not tied up with any private player for any product exchange or hospitality agreement.

Essar Oil begins export of vacuum gas oil

VADINAR: Essar Oil (EOL), part of the diversified Essar group, exported its first consignment of 35,000 tonnes vacuum gas oil (VGO) from its refinery at Vadinar to British Petroleum, reports Our Bureau. The company is now preparing to export second consignment of 30,000 tonnes of naphtha to Glencore. The company has also outlined an additional investment of Rs 2,500 to Rs 3,000 crore over the next two years for expanding the capacity of the refinery to 16 million tonnes per annum (MTPA). EOL also has plans to set up 2,500 retail outlets which will be largely served by the company’s refinery.

DoT wants to ring in single-levy regime for telcos

2006-12-19T20:20:00.000-09:00

DEPARTMENT of telecommunications (DoT) is likely to recommend a single levy regime for the telecom service providers for its Budget recommendations to the finance ministry. Presently, the operators pay licence fee, spectrum charges, universal service obligation (USO) charges and other levies separately. The industry has also demanded a reduction in the licence fee to 6% from up to 10%. The licence fee goes to the finance ministry.
Today, the telecom service providers have to pay a large number of levies imposed by both the central and state governments. The levies include licence fee, spectrum charges, access deficit charge (ADC), service tax, octroi and stamp duties. Moreover, some state governments levy stamp duty on installation of towers.
DoT officials feel the tax structure should be simple and should be transparent. This will save the telecom industry from unnecessary red tapism and will reduce administrative burden on the government.
The department is also considering a proposal by the operators on reduction of licence fee. Presently, telcos have to pay up to 10% of their annual adjusted gross revenue (AGR) to the government as licence fee. The operators have to pay a licence fee of 10% for category A circles, 8% for category B circles and 6% for category C circles.
The operators want the licence fee for category B and C circles be brought down to 6%. DoT had earlier brought down licence fee on national long distance (NLD) and international long distance (ILD) to 6%.
Telcos have to pay service tax on interconnect usage charge (IUC), that one operator pays to another when a call transmits from one network to another.
Similarly, there is a tax deduction at source levied on the IUC. Even though these are technology-neutral, this increases paperwork and are an administrative burden. The telecom service providers want that they should not be subject to TDS on the IUC.
Also, the operators have to pay a service tax on roaming subscribers as they are considered temporary subscribers. The operators want that there should not be additional service tax on the roaming subscribers.

Euronext gets nod for $14-b NYSE merger

2006-12-19T20:14:00.000-09:00

EURONEXT shareholders approved overwhelmingly on Tuesday a $14-billion plan to merge the multinational European exchange operator with the New York Stock Exchange and form the first transatlantic bourse. Around 98.2% of shareholders present or represented at the meeting backed the merger deal.
“We have together made an important step towards our final goal but we are not there yet” Euronext Chairman Jan-Michiel Hessels told shareholders, pointing to the regulatory approval that is still pending.
NYSE spokesman Rich Adamonis said the group welcomed the approval of the merger by Euronext shareholders. NYSE shareholders will vote on Wednesday, and a date for the tender offer still needs to be set.
Euronext chief executive Jean-Francois Theodore told shareholders before the vote that both companies were confident they could meet revenue and savings synergies of $375 million, mainly by rationalising information and technology systems and platforms.
“These numbers are conservative,” he said. “We are very confident about achieving this.”
Theodore said the door was ‘still open’ for Milan stock exchange operator Borsa Italiana to join the Euronext-NYSE combine. Euronext and Borsa Italian held talks about a possible alliance earlier this year, but Borsa turned to Deutsche Boerse to promote an all-European alliance with Euronext.
At Tuesday’s meeting 64.9% of Euronext shareholders were present, represented or voted by proxy.
Approval removes one of the final hurdles to the creation of a global exchange after a two-year industry battle to consolidate to cut costs and increase execution speed.
US exchange Nasdaq last week launched a $5.3-billion hostile bid for the London Stock Exchange.
Dutch fund manager Robeco, which holds around 1% of Euronext, joined other key shareholders in saying on Tuesday it would back the deal. U.S. hedge fund Atticus, Euronext’s largest shareholder, said on Monday the deal would reward investors.
Some shareholders voiced concerns, asking for more guarantees to avoid a possible spillover of US laws and regulations, but the meeting went quietly, contrary to some expectations. Some critics spoke out, however. “We have herewhat looks like the end of shareholder democracy,” said a representative of Proxinvest.
Paris-based Euronext committed to merge with New York Stock Exchange operator NYSE Group in June after rebuffing a rival takeover offer from Deutsche Boerse, incurring the wrath of some shareholders as well as top European politicians who favoured a pan-European combination. In the absence of new Franco-German talks, key shareholders such as Atticus and French bank Societe Generale voiced support for the NYSE plan. Atticus and SocGen respectively own about 10% and 3% of Euronext.
The deal offers Euronext shareholders 0.98 new NYSE Euronext shares and 21.32 euros in cash for every existing share, valuing the bid at 95.53 euros per Euronext share.
Euronext, includes the Paris, Amsterdam, Lisbon and Brussels bourses as well as London’s Euronext.Liffe derivates market. — Reuters

Novartis may route new drugs through subsidiary

2006-12-19T20:12:00.000-09:00

CONTRARY to investor expectations, Novartis may launch some of its new-patented drugs in India through its wholly-owned subsidiary, Novartis Healthcare, instead of listed entity Novartis India. “This is a policy shift for Novartis regarding its listed Indian company which has always enjoyed access to several launches over the years,” analysts said. This could be a dampener for minority shareholders as the listed company will be deprived of new launches from the parent’s pipeline — a major growth driver especially in the new patent regime scenario.
The recall on Novartis’ exclusive marketing rights (EMR) in India for cancer drug Glivec, and delay in the government’s announcement of the Drug Price Control Order (DPCO) and data exclusivity may explain the company’s shift, analysts said. About plans to introduce products through its unlisted entity, company officials said, “Novartis periodically evaluates the India scenario regarding the regulatory environment and market potential for its products. The decision to launch products is based on internal evaluation of a composite set of factors.”
There is no clarity on when the new products will be introduced in India through the subsidiary. “Timing of product launches are strategic decisions which cannot be shared in advance as this could result in loss of competitive advantage in the market,” the Novartis spokesperson said.
However, Novartis is expected to launch Lucentis, a drug for age related mascular degeneration (AMD), a leading case of blindness in people over 55, through the arm soon . Lucentis is expected to garner significant sales globally as the drug may be worth $1.84 billion by 2010. Lucentis could also rake up significant sales in India. “The prevalence of AMD was found to be 1.1% in south India and 4.7% in North India,” Mahesh Sawant, programme manager, Healthcare Practice, Frost & Sullivan, told ET.
Novartis recently unveiled plans for new product approvals and global launches over the next two years. “Many of these are for best-in-class medicines that would advance treatment standards for patients with hypertension, diabetes, cancer and other diseases,” a statement said. The products include a new treatment for chronic myeloid leukaemia, Tasigna; an osteoporosis drug, Reclast (Aclasta); two hypertension drugs, Tekurna and Exforge’ and an anti-diabetic drug Glavus. Glavus is being touted as Novartis’ next $1-billion drug blockbuster. “In India, the oral anti-diabetic market is valued at Rs 750 crore growing at around 14%,” said Mr Sawant. As a result, if Novartis launches Glavus through its subsidiary, the impact on its listed company’s sales growth could be considerable.

DOSE CHANGE

Novartis may launch newpatented drugs through Novartis Healthcare instead of listed entity Novartis India
This could be a dampener for minority stakeholders
Recall on Novartis’ exclusive marketing rights for cancer drug Glivec in India may be a cause for the strategy shift

Ambani pitches for Ruia`s Hutch stake

2006-12-19T07:37:00.000-09:00

RelComm wants all of Hutch Essar at one go.

The Reliance-Anil Dhirubhai Ambani group (R-ADAG) has approached the Ruias through merchant bankers to buy their 33 per cent stake in Hutchison Essar Ltd.

Nimesh Kampani of JM Morgan Stanley, who represents the Ruias, is believed to have had meetings with R-ADAG Chairman Anil Ambani on the issue.

Merchant banking source s said the Ruias were veering to the view of cashing out but a final decision would be taken only after the valuation was decided. Both Reliance and the Ruias refused to comment on the issue. A Hutchison spokesperson from Hong Kong said they did not comment on speculation.

Sources said Ambani had approached Morgan Stanley and Hutchison’s adviser Goldman Sachs with a clear direction that he would pick up 100 per cent stake in the company and was not interested in negotiating separately with the Ruias later.

“If the deal happens, it has to be 100 per cent and the Ruias and Hutchison both have to be out. There is no question of having negotiations later on with the Ruias after buying Hutchison,” said a source.

At an enterprise value of $12-14 billion, the Ruias’ 33 per cent stake is already worth an attractive $4-5 billion. Sources said the Mittals of Bharti had also informally sounded out the Ruias, though Sunil Mittal said nothing was happening at the moment.

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Thai currency control measures to have limited impact on domestic bourses

2006-12-19T07:34:00.000-09:00

The market plunged today in a broad based decline in Asian markets after Thai central bank's currency controls heightened concern about emerging markets but market men see limited impact of the development for the domestic bourses.

The Thai situation is very localized and all the Asian markets would recover to levels that their fundamentals command individually and this shouldn’t take a long time, said Shaheena Mukadamm, head of research, IDBI Capital Market.

The Thai development came at a time when the market sentiment was cautious after the provisional data showed substantial FII sales of Rs 369 crore on Monday (18 December), the day when Sensex had risen 116 points in volatile trade.

The current fall, in fact, offers a buying opportunity for medium term and long term investors, Mukadamm reckons. Sensex plunged 349 points or 2.5% today to settle at 13,382.01. Thailand’s central bank said international investors will have to pay a 10% penalty on funds withdrawn out of the country within a year.

The near term trigger for domestic bourses is Q3 December 2006 results. Market men expect December 2006 quarter to be another strong quarter in terms of earnings growth. The Q3 results would start trickling in from about 12 January 2007.

But volatility may remain high in the next few days ahead of expiry of December 2006 derivatives contracts next Thursday (28 January). At the beginning of today’s trading session, the market wide open interest in derivatives was about Rs 52500 crore.

FII activity is likely to be muted till the end of this month, as foreign fund managers will be on vacation for Christmas and New Year.

Technical analysts feel that the Nifty has a strong support at 3,700 and Sensex at 12,800-12,900.

Ramco Systems tops ‘A’ group

2006-12-19T07:33:00.000-09:00

Ramco Systems surged 4% to Rs 191.60 and it was the top gainer from BSE’s A group.

Software shares are attracting renewed buying after Oracle Corporation recently raised the open offer price for i-flex substantially, from Rs 1,475 per share to Rs 2,100 per share.

On 17 November, Ramco bagged an order from Competent Software (CSW), a BPO company. As part of the deal, Ramco HRMS (human resources management solution) will address CSW's requirements in the areas of planning and scheduling, performance management, employee self-service and incentive calculations. Ramco Systems reported reduced net loss of Rs 3.59 crore for second quarter ended September 30, compared with a net loss of Rs 7.11 crore for the corresponding quarter in the previous year.

J&K Bank rose 3.5% to Rs 636.45 and it was the second biggest gainer from BSE’s A group. The stock rose for the second day in a row today. It had risen 7.7% to Rs 619 on Monday (18 December). Expectations that FIIs may mop up the scrip have boosted the counter. Recently RBI had raised FII investment ceiling in this private sector bank to 40% from 33%.

Nestle rose 2.6% to Rs 1070. It was the third biggest gainer from BSE’s A group. The buying interest in the scrip is due to a number of brokerages coming out with a buy recommendation in the scrip.

iGate Global Solutions rose 2.2% to Rs 263. It was the fourth biggest gainer from BSE’s A group.

State run Fertilisers & Chemicals Travancore rose 2.2% to Rs 22.80. It was the fifth biggest gainer from BSE’s A group. Late last month, the company’s board had cleared a proposal to set up a food park, a high tech park and a defence ancillary park. But it is yet to get government’s final approval for this.

Early this month, the company said it has formulated certain proposals aimed at establishing own facilities for production of intermediates, which are at present being outsourced. It has also proposed expansion of production capacities of end products and diversification into other areas.

Unichem Labs survives market fall

2006-12-19T07:32:00.001-09:00

Unichem Labs surged 4% to Rs 274.60 extending its recent upmove after the company said late last week it had acquired the balance 40% stake in its UK subsidiary.

72,811 shares changed hands in the counter on BSE.

Unichem Laboratories has acquired the balance 40% stake in Niche Generics from a group of managers of Niche Generics. Prior to this acquisition, Unichem held a 60% majority stake in the said Niche Generics.

Niche Generics, UK, is engaged in the business of product development, dossier filing and manufacturing pharmaceutical formulations for the European markets. Niche recorded revenues of GBP 12.3 million (approximately Rs108.2 crore) in FY 2006, with profits of GBP 0.1 million (approximately Rs 0.9 crore). The performance of the company has been poor largely due to the severe pricing pressures in the UK generics market.

Analysts feel that the acquisition of full control over Niche Generics will help Unichem exploit its strengths like product development, dossier filing and manufacturing and it may help accelerate its fillings in the European region, leading to an expansion of its footprint across Europe. Following the announcement of the acquisition of full control over Niche Generics on 15 December, the Unichem stock rose 3.1% in two trading sessions to Rs 263.05 on 18 December from Rs 255 on 14 December.

Unichem has set out plans to set up formulation manufacturing facilities at one of the SEZs in Indore. It also plans to launch new products from its Brazilian and South African subsidiaries, expand its manufacturing capacities for both formulations as well as bulk drug plants located at Goa, Ghaziabad, Baddi (Himachal Pradesh), Roha and production of active pharma ingredients from Pithampur. It has plans to invest approximately Rs 175 crore over the next two years for expansion.

For Q2 September 2006, Unichem Labs reported 47% growth in net profit to Rs 25.69 crore (Rs 17.45 crore). Sales rose 17% to Rs 143.29 crore (Rs 122.44 crore).

The current price of Rs 274.60 discounts its 6-months April-September 2006 annualised EPS of Rs 28.30, by a PE multiple of 9.7.

In mid-October 2006, RBI had raised FII investment ceiling in the company to 39 per cent of its paid up capital.

Rana Sugar gains on capacity expansion

2006-12-19T07:32:00.000-09:00

Rana Sugars jumped 5% to Rs 24.90 after the company said it expected its new sugar unit and power plant in northern India to add Rs 200 crore in revenue this year.

A broad based recovery in sugar scrips following government’s decision to allow export of sugar under advance license scheme also aided the scrip’s surge.

4.3 lakh shares changed hands in the counter on BSE.

Rana Sugars’s had a turnover of Rs 114.06 crore in FY 2006 (year ended 31 March 2006) on which it earned a net profit of Rs 18.92 crore.

The stock had tumbled since late October 2006. From Rs 30.05 on 23 October, the scrip had declined to Rs 23.65 by 18 December.

In September 2006, the company had said announced that it is venturing into production of ethanol at its distillery plant in Punjab. With the implementation of the ethanol project, the profitability of the company will be improved, the company had said at that time.

Rana Sugars manufactures white crystal sugar for domestic use as well as for confectionery and pharmaceutical purposes.

The company has a large equity base of Rs 74.42 crore.

Sensex tumbles in a sell-off across Asian emerging markets following Thai move

2006-12-19T07:30:00.000-09:00

The market tumbled today in a sell-off across Asian emerging markets after the central bank in Thailand said international investors must pay a 10 percent penalty to take funds out of the country within a year.

The Thai central bank's currency controls heightened concern about emerging markets.

At 14:15 IST, Sensex was down 417 points at 13,313.

Among other Asian emerging markets, Indonesia’s Jakarta Composite Index was down 3.3% at 1,727.84, Malaysia’s KLSE Composite Index was down 1.8% at 1,061.11, and Singapore’s Straits Times Index was down 1.6% at 2,913.62.

Asian currencies weakened on jitters that other central banks may also implement stiff measures to cap currency strength. The new rules, announced yesterday by Thailand’s central bank Governor Tarisa Watanagase, are aimed at stemming a 16 percent gain in the baht this year. The Thai currency had its biggest two-day decline since April 2005.

Thailand's benchmark SET Index fell as much as 100.39, or 13.7 percent, to 630.16, led by PTT Pcl and Bangkok Bank. The magnitude of the slump triggered a 30-minute trading halt at the Thai stock exchange. The new regulations require investors to lock up 30 percent of foreign exchange deposits for a year to deter speculation, leaving 70 percent free to buy assets. Starting with funds transferred to Thailand today, overseas investors will be penalized 33 percent of that 30 percent portion to withdraw funds within one year. The can freely move investments between asset classes within the country.

Asian markets fell despite a possibility that other Asian markets could gain at the expense of Thailand. This is because of a possible reduction in weightage of Thailand.

Back home, the market sentiment was also hit by the data showing heavy FII sales in the cash market on Monday (18 December). As per provisional data, FIIs were net sellers to the tune of Rs 369 crore on Monday (18 December), the day when Sensex had risen 116 points in volatile trade. Their net outflow was Rs 46 crore on Friday 15 December, the day when Sensex had risen 127 points.

FIIs were net buyers to the tune of Rs 307 crore in index-based futures on Monday. They were net sellers to the tune of Rs 26 crore in individual stock futures on that day.

Meanwhile, the Bank of Japan Governor Toshihiko Fukui said Japanese consumption and consumer prices had softened, raising doubts about whether the central bank will raise interest rates in January 2007. It held rates steady on Tuesday.

Bhel trips

2006-12-19T07:29:00.000-09:00

PSU power equipment major Bhel lost 4.4% to Rs 2285 due to likely loss of equipment orders for the upcoming ultra mega power projects the bids for which were opened on Monday.

3.4 lakh shares changed hands in the counter on BSE.

According a report by domestic brokerage, Bhel’s cost competitiveness for supercritical equipment comes under question given the large disparity in bid prices between the lowest bidder, Lanco (at Rs 1.19 per unit) and NTPC (at Rs 2.1/unit) Sasan ultra mega power project. Reports suggest that Lanco had tied up with Chinese equipment supplier Dongfang, while NTPC had tied up with Bhel for ultra mega power project.

Lanco Power has won the financial bid through the international competitive bid (ICB) route for the Sasan Ultra Mega Power Project of 4000 MW capacity. In the fray were Tata Power, L&T, Reliance Energy, Essar Power and Sterlite Industries, NTPC, Torrent Power, Jindal Steel & Power, Jaiprakash Associates and Lanco.

Bhel scrip had lost 4.2% to Rs 2391.25 on Monday (18 December) following the news of NTPC not getting the Sasan ultra mega power projects order.

Analysts also feel that Chinese equipment suppliers will become a stronger force to reckon with in Indian market following Lanco’s winning of the bid for one of the ultra mega power projects.

Bhel is a market leader in co-generation and captive power plants. As per recent reports, Bhel has readied Rs 10000 crore for takeovers in the US and Europe.

Bhel reported a 38.3% growth in net profit for Q2 September 2006 to Rs 360.01 crore (Rs 260.16 crore). Total income (net of excise) rose 34% to Rs 3,511.04 crore (Rs 2,615.95 crore).

Lupin gains on US FDA nod for blood pressure drug

2006-12-19T07:28:00.000-09:00

Lupin rose 2.4% to Rs 595 after the drug maker said it had received tentative approval from the US Food and Drug Administration for trandolapril, used in treating high blood pressure.

16,897 shares changed hands in the counter on BSE.

The stock had surged over the past few days. From a recent low of Rs 530.80 on 12 December, it gained 9.3% in just 4 trading sessions to Rs 580.65 on 18 December.

The current price of Rs 595 discounts its Q2 September 2006 annualized EPS of Rs 29, by a PE multiple of 20.5.

The company reported strong Q2 September 2006 results. It clocked 29% growth in net profit to Rs 58.30 crore for the quarter ended September 30, 2006, compared with Rs 45.19 crore in the corresponding period for the previous year. Net sales rose 21% to Rs 491.07 crore.

In late-2005, Lupin had forged a spate of alliances with Ranbaxy, GlaxoSmithKline (Philippines) and Aspen Pharma, respectively, to market its tuberculosis drugs

Lupin, which has established direct presence in the US with a wholly-owned subsidiary and a number of marketing alliances, has so far not explored the European markets in a big way.

A few months back, Lupin decided not to pursue a memorandum of understanding (MoU) with Belgium's Artifex Finance CVA, to acquire a 51% stake in the latter.

Lupin is a leading player in anti-TB, cephalosporins (anti-infectives) and cardiovascular drugs (prils and statins), and has a strong presence in diabetology and asthma. It has a programme for developing NCEs (new chemical entities) at its research and development centre in Pune.

ABG Shipyard extends gain on new order win

2006-12-19T07:27:00.000-09:00

Private shipyard ABG Shipyard rose 3.5% to Rs 238.25 as the stock rose for the second day in a row after it secured an order for construction of a vessel at a price of euro 16.54 million (about Rs 100 crore) from Vroon Offshore, The Netherlands.

1.09 lakh shares changed hands in the counter on BSE

The announcement of the order win from the Dutch firm had lifted the scrip 2.6% on Monday (18 December) to Rs 230.10. Earlier, the scrip had witnessed a sustained fall since mid-November 2006. From Rs 272.35 on 13 November, the stock had declined to a low of Rs 211.15 on 12 December. From that low, it had recovered to Rs 224.25 by 15 December.

With the latest order win, the company’s total order book has risen to about Rs 2400 crore. This is the highest amongst the private sector shipyards in India. These orders are expected to be executed by the end of FY 2009.

ABG Shipyard’s new facility at Dahej is expected to be commissioned in FY 2009. The facility will consist of two dry docks capable of accommodating eight bulk carriers up to a maximum weight of 1,20,000 Dead Weight Tonne (DWT). The company is also expected to leverage this facility to build jack up rigs as there is demand in E&P activities worldwide, reports suggest.

ABG Shipyard’s net profit rose 42.8% to Rs 27.1 crore in Q2 September 2006 compared to Rs 18.9 crore in the corresponding period a year ago. During the quarter, the company's income was Rs 167.9 crore, against Rs 113.9 crore in the same period last fiscal, representing an increase of 47.45 per cent.

Crew BOS Products gains on preferential issue

2006-12-19T07:25:00.000-09:00

Crew BOS Products gained 3.74% to Rs 238.50, as buying continued for the second day in a row today.

2.03 lakh shares changed hands on the counter on BSE.

The stock had surged 10% to Rs 229.90 on Monday (18 December) after it scheduled an extraordinary general meeting (EGM) on 8 January 2007, to consider allotment of up to 12.50 lakh convertible warrants, on a preferential basis, to promoters and investors, with an option to convert them into equity shares of Rs 10 each against one warrant at the exercise price of Rs 178.

The board will also seek shareholders’ consent for raising $ 25 million in domestic/international markets through various routes.

The stock witnessed a steady rise over the past few days - from Rs 197.70 on 12 December to Rs 229.90 on 18 December, ahead of the announcement.

Recently, RBI raised FII-ceiling to 49% in Crew BOS Products. FII-holding in the company was 21.4% at end September 2006.

Crew BOS Products manufactures and exports fashion accessories and home decoration products made from fabrics, leather, metal, wood. It exports mainly to Europe and the US. The company had also started production and exports of fashion footwear to increase its product portfolio.

The company has been supplying its products to well known labels like GAP, Banana Republic, Chico's, NEXT, ESPRIT etc. The company derives over 90% of its revenues from exports. Almost 80% of its exports are meant for the US and European markets.

In the recent past, the company has gone for backward integration and now has a leather finishing capacity of 15,000 square feet per day.

The company reported 49.90% rise in net profit for the Q2 September 2006 to Rs 6.01 crore as compared to Rs 4.01 crore for Q2 September 2005. Net sales increased 35.90% to Rs 45.66 crore (Rs 33.59 crore).

Tata Steel strengthens

2006-12-19T07:23:00.000-09:00

Tata Steel rose 1.4% to Rs 473.95 following reports the UK Takeover Panel is putting the Corus deal on the fast track by planning to auction Anglo-Dutch steel company to the two rival suitors Tata Steel and Brazil’s CSN.

3.3 lakh shares changed hands in the counter on BSE.

After witnessing a heavy battering due to concerns arising from the bidding war for Corus, the Tata Steel scrip had staged a rebound from lower level on market talks it may pull out of the bid for Corus. From Rs 435.65 on 13 December 2006, the stock surged to Rs 467.40 by 18 December. Earlier, the scrip had tumble to Rs 435.65 on 13 December from a recent high of Rs 492.90 on 5 December.

The reason why the UK Takeover Panel is mulling an early end to the Corus battle is because it reckons that a long drawn battle will impact Corus’ business and shareholders, reports suggest. Recently, Brazil's CSN offered 515 pence-a-share cash-bid to counter Tata Steel's revised bid of 500 pence per share. At the time of revising the Corus bid, Tata Steel had said that Standard Chartered Bank and Standard Chartered First Bank Korea would provide for additional funding for its new offer of 500 pence

Tata Steel produced more than five million tonne in 2005-06, while Corus produced around 18 million tonne. Tata Steel is already one of the lowest cost producers of steel in the world.

Ranbaxy makes most of research grant

2006-12-18T18:27:00.000-09:00

IN A bid to boost pharmaceutical research in the country, the government has started several grants and funding schemes. Ranbaxy Labs has been largely receptive to such schemes. The company entered into yet another collaborative research agreement with the science and technology department to develop two new molecules in the therapeutic areas of anti-infective and inflammation. This collaboration will enable Ranbaxy Labs to conduct pre-clinical toxicity and safety studies and to eventually take the two new molecules to Phase-I of clinical trials. This agreement comes under “Drugs and Pharmaceuticals Research Programme” (DPRP), a government scheme that provides loans to in-house R&D labs and scientific and industrial research organisations (SIROs). This scheme supports R&D projects and a fund of Rs 130 crore has been earmarked for the purpose. There is a 50:50 sharing of financial requirement between industry and institution.
The government incurs 100% capital expenditure and 70% recurring expenditure and the remaining is chipped in by the industry. The second scheme provides soft loans for pharma industrial R&D projects for up to 70% of the cost. The loan amount is unsecured, carrying an interest of 3% on a reducing amount, and the repayment can be done in 10 annual equal installments after the project period. The science and technology department is also subsidising two others. Ranbaxy Labs projects are aimed at developing antibiotics for respiratory disorders, for which soft loan has been granted. The drug major receives funds for developing an asthma drug. In 2005-06, Rs 110 crore was used up, and 22 companies benefited from the scheme.

Essar Shipping to buy two oil rigs for $400m

2006-12-18T18:24:00.001-09:00

CYPRUS-BASED Essar Shipping & Logistics (ESLL) is set to acquire onshore and offshore oil drilling rigs from two companies in Norway and the US for $400 million.
The company has also lined up around $1 billion for acquiring crude oil and bulk carriers.
ESLL chief executive officer (CEO) Sanjay Mehta said the deal for offshore/onshore oil drilling rigs is expected to be around $400 million and is likely to be closed in a fortnight. Mr Mehta said the deals would be done through ESLL’s wholly-owned subsidiary Essar Oilfields Services (EOSL).
“We see a lot of prospects for oil exploration and production (E&P) activities as crude prices remain high. All E&P players will need offshore assets,” said Mr Mehta.
ESLL is now on a wait-n-watch mode to invest in the shipping sector. “Freight rates are down, especially in crude transportation. We are looking at all available opportunities to buy shipping assets,” said Mr Mehta.
“We hope the asset prices to taper off, before we finalise the deals,” he said, adding that their plan is to buy large crude carriers, capesize bulk carriers and super handimax carriers. EOSL has been formed to focus on international and Indian onshore and offshore oil and gas drilling businesses.
Its investment plan includes acquisition of a diversified fleet of rigs for in land as well as offshore drilling rigs. EOSL, which operates out of its office in Dubai, will be employing the rigs for Essar’s E&P activity as well as contract drilling for third parties.
Essar was the first Indian company to offer contract drilling services in 1985, both for onshore as well as offshore E&P activity. Essar had sold off the division, then part of Essar Oil, to Abu Dhabi-based Al-Jabbar.
Essar Shipping & Logistics (ESLL) is part of Essar Global, an international conglomerate operating in six business areas — steel, oil & gas, power, telecom and BPO, shipping and construction, with an asset base of $6 billion.
ESLL has four operating companies under its umbrella, including EOSL and the publicly-listed Essar Shipping (ESL), which ESLL has proposed to delist by early 2007. ESL owns and operates 26 ships including very large crude carriers (VLCCs), product tankers and bulk carriers. The other subsidiaries are Vadinar Oil Terminal (VOTL), a wholly-owned subsidiary with a focus on investments in crude and product terminals, and Essar Logistics (ELL).

ENERGY EXPEDITIONS

Rigs to be bought from cos in Norway and the US

$1 billion set aside to buy bulk oil carriers

Investment plan includes acquisition of diversified fleet of rigs for inland and offshore drilling rigs

Tatas eye $1-b coal assets in Indonesia

2006-12-18T18:24:00.000-09:00

EVEN as the fate of the mega steel acquisition by Tata Steel hangs in balance, Tata Group is in the process of striking yet another global deal. It is in negotiations to acquire a ‘strategic’ stake in two coal companies in Indonesia— PT Arutmin Indonesia and PT Kaltim Prima Coal in what could turn out to be $1 billion deal, making it India Inc’s biggest international merger & acquisition(M&A) transaction.
Tata Power on Monday managed to win the bid for the 4,000mw Mundra power project which is to be developed on imported coal.
Both companies are owned by an Indonesian company PT Bumi Resources, which is listed on the Jakarta stock exchange. PT Bumi Resources had early this year indicated its intention to sell coal assets including the two entities along with IndoCoal Resources to PT Borneo Lumbung Energi, which is an affiliate of Renaissance Capital. This deal was valued in the region of $3.2 billion.
However, it was called off in August this year. According to agency reports, this was due to issues faced by Renaissance Capital to raise funds for the deal. As per the reports the international lenders who were to fund the acquisition were concerned with the recent performance of one of the entities.
Moreover, Renaissance was trying to bring down the price of the acquisition but Bumi Resources did not agree to it, according to agency reports.
It is learnt that now Tatas are in negotiations to strike a deal for a 30-35% stake in the coal assets. Given the valuations struck for the previous deal which didn’t go through, Tatas could be looking at a transaction worth about $1 billion, now. The move by Tatas comes close on the heels of the company’s securing the contract to build the world’s largest greenfield power capacity at Mundra (Gujarat). Sources said that its bid to acquire a strategic stake in the Indonesian coal companies will ensure long term supplies for its power project. The company is also in talks with some African coal and mining companies to acquire strategic stakes. “The idea is to take a stake in the coal blocks to ensure regular supplies. The company is also open to making some investments in building power plants in countries like Africa as part of the swap deal.”
When contacted by ET, a Tata group spokesperson said, “We do not wish to comment on speculation.”
PT Arutmin Indonesia is a coal mining company, which supplies coal products for power and industrial plants in Asia and other markets. It manages four mines, Senakin, Satui, Mulia and Batulicin apart from an international coal export terminal. Senakin, Satui and Batulicin hold bituminous deposits while Mulia holds sub bituminous deposits.
PT Kaltim Prima Coal which has reserves in the Sengatta and Bangalon areas had marketable reserves of 786 million metric tonnes(MMT) as of December 2005. It’s measured and indicated resources stood at 3726 MMT.

POWER HUNGRY

Tata group is in talks to buy a strategic stake in Arutmin Indonesia, Kaltim Prima
Around 30-35% of coal assets of the two companies on the block
Deal size pegged at $1 billion making it largest acquisition by India Inc
Acquisition will ensure long term resource supply for Mundra project

REL, French co to team up for Mumbai Metro

2006-12-18T18:23:00.000-09:00

IN WHAT would be the first major global transport company to commence public transport operations in India, € 4.3 billion French giant Veolia would form a 70:30 JV with Reliance Energy (REL) for the Mumbai Metro One Project, which would operate the metro.
The French company would be a minority partner in the consortium which would be involved in the execution of the first phase of the metro project as announced earlier.
Veolia is setting up a whollyowned subsidiary in India, Veolia Transport India, which would serve as its operating-cum-holding company in the country.
An REL spokesperson told ET, “We are in discussions with Veolia for an O&M arrangement. However, the final detailed modalities and terms and conditions of the JV are yet to be finalised. Thus, it is pre-mature to offer a comment at this stage.”
In May, a consortium led by Anil Dhirubhai Ambani Group’s Reliance Energy bagged the contract for the construction of the first phase of the Mumbai metro project. REL led the consortium with a 69% stake along with Mumbai Metropolitan Regional Development Authority which holds 26% with the remaining 5% with Veolia Transport.
Veolia Transport India’s activities will include infrastructure transportation services, consultancy services in the transport sector, and downstream investments in companies executing Veolia Transport’s projects in India.
Veolia Transport, a part of the € 25-billion diversified French giant Veolia Environnement, is Europe’s leading private operator in public transportation. It operates various public transport systems including bus lines, commuter rail, metro, light rail, coach, trolleybus and boat. While it has extensive presence in Europe, US, Australia and parts of Latin America, this would be its first major move in Asia.

After a dry spell, ONGC strikes big at Sagar Samriddhi

2006-12-18T18:21:00.000-09:00

THREE years after ONGC launched its aggressive multi-million dollar quest for oil through its deepwater exploration campaign Sagar Samriddhi, the company seems to have finally struck pay dirt.
Two of the drillships - Belford Dolphin and Discoverer Seven Seas - have struck gas in the Krishna Godavari (KG) and Mahanadi basins. The KG gas is estimated to be about 21-22 trillion cubic feet, but a confirmation is expected only in early January after further drilling.
The well is being dug almost at the fag end of a frustrating Rs 3,200-crore campaign in deep and ultradeep waters off the Indian coast. The project itself was championed and pushed through by the then ONGC chairman Subir Raha. When it was launched in September 2003, Sagar Samriddhi was not only the most ambitious project in the history of Indian oil and gas industry, it was also the biggest deep-water campaign by a single operator anywhere in the world.
To be executed with three drill ships - Belford Dolphin, Discoverer Seven Seas and ONGC’s Sagar Vijay - the drilling was in water depths of 1,000 to 3,000-metre zone, taking the quest for oil deeper than ever before. Unfortunately for the company, there was poor success except for minor discoveries on the east-coast. In the past three years, the two foreign ships have drilled 33 wells of which 25 were dry. An expensive run considering that every well at those water depths costs about $20 million (about Rs 90 crore).
The dry run began in the west coast where all eight wells did not yield hydrocarbons. The company was pilloried by everyone including the director general of hydrocarbons for the dry spell. Of the 25 wells on the east-coast, the company had small successes with about five wells yielding some oil and gas. All hopes now ride on the well, UD-1, being drilled by Bedford Dolphin, whose contract ends in February 2007.
The drillship costs ONGC about $150,000 per day. ONGC director technical and field services UN Bose said: “Well UD-1 is at a water depth of 2,865 metres and the company has increased the target depth to 6,500 metres.”Company officials also cite the example of Saudi Arabia’s largest oilfield at Ghawar, where they say 16 dry holes were dug and just when the operator was getting ready to pack up, oil was found in the 17th well. Optimism and hope have kept ONGC’s quest for oil alive so far.
Its deep water strategy is based on integrated well completion where the contractors, apart from providing the rig, also arranges the services required for drilling and completing a well. This involves functions like well-logging, wire-line logging services, mud engineering and mud-logging, casing and cementation, air and marine logistics, and well-testing.

RIL, Niko discover oil in D6 block

NEW DELHI: Reliance Industries and its Canadian partner Niko Resources have discovered oil reserves in the D6 block of Krishna-Godavari (KG) basin off the east coast. “The MA-2 well has encountered the thickest hydrocarbon column discovered to date in D6,” Niko Resources said. Niko Resources has 10% interest in the block KG-DWN-98/3, also known as D6. Reliance is the operator of the block with 90% interest. MA-2 reached a target depth of 3,581 metres and penetrated a gross hydrocarbon column of 194 metres consisting of 170 metres of gas/condensate and 24 metres of oil in the Cretaceous section, the release said. MA-2 is located about 2-km from the previous MA-1 oil discovery well.

Lightspeed invests $29.5m in B’lore net cos

2006-12-18T18:16:00.000-09:00

US-BASED venture capital fund Lightspeed Venture Partners has announced that it has invested a total of $29.5 million in two internet companies, primarily operating out of Bangalore — Mercantila and TutorVista.
Lightspeed has invested $22.5 million in Mercantila, which is a collection of hundreds of online speciality stores catering to the US and Canadian markets, with a captive Bangalore operation with over 100 people. The VC firm has invested $7 million in TutorVista, an online tutoring and test preparation company.
Ravi Mhatre, general partner, Lightspeed Venture Partners, said: “Internet technology companies across a spectrum of sectors, including retail and education, are in the key focus set of global VCs. We are scouting for Indian entrepreneurial ventures which could be candidates for early and growth stage equity investments.”
The VC firm, which is betting on India as a strategic market, is also planning to set up an office in the next 12 months. Lightspeed recently raised a $475 million fund of which one third is allocated for investments outside the US. This means the company has set aside about $158 million for the three countries it is active in — Israel, China and India — outside the US. Market sources say that the investment basket for India could be in the range of $50-100 million.

Sequoia Capital lines up $7m investment for Apnaloan.com

THE US-based venture capital firm Sequoia Capital is investing $5-7 million in Mumbai-based financial advisory portal — Apnaloan.com, reports Gaurie Mishra from New Delhi. The VC will invest for around 15% stake in the portal. Apnaloan.com is planning to increase its head count from the present 12 to 50 over the next 12 months. The portal, which currently offers services for home and personal loans, is also planning to roll out educational loans and auto loans in the next three-four months. When contacted by ET, Sequoia Capital India managing director Sandeep Singhal declined to comment.
Harsh Vardhan Roongta CEO, Apnaloan.com, confirmed that the company has been in talks with a few venture capitalists for raising funds but declined to give any more details. Sources close to the company say VC player Canaan Partners was also in talks with the company for picking up stake. An online marketplace for loans Apnaloan.com, by way of its network provides the options of getting loans through all the leading financial institutions including HDFC Bank, ICICI, StanChart, Citibank at the best possible price and suitability of the client. The portal has over 3 lakh customers. To help shop for the best deal, the portal offers loan comparison services that searches the market for loans to match the specific needs of the customer.

Aricent on prowl for buyouts in US, Europe

2006-12-18T18:15:00.000-09:00

ARICENT (formerly Flextronics Software Systems) is actively looking for acquisition of companies in the US and western Europe which offer software services to communications service providers. The company expects the acquisition to be in the range of $15-30 million.
With an internal team exploring acquisition opportunities, Aricent (previously the software development and solutions business of Flextronics International, which underwent a name change following the acquisition of 85% of the business by KKR and Sequoia Capital) said it has moved beyond the early stages of negotiation with one such takeover target in the US.
“Most of the large service providers in the US have already defined their outsourcing strategy and their partners, and hence will be relatively difficult for a new company to make inroads. Through the acquisition, we intend to leverage on the existing relationships that these companies have already signed up,” Aricent president and COO Manoranjan Mohapatra told ET. Both inorganic and organic growth in the service provider space will be key to future strategy of Aricent, which hopes to become a billion dollar company by 2011-12. “When our revenues touch $1 billion, we expect the contribution of the service provider practice to be about $200 million,” Mr Mohapatra said.
The company currently has development centre in Paulo Alto and sales set-up in Washington, Dallas, Boston and Denver. The company hopes that an acquisition in the service provider space will not only offer it lead-time for customer wins, but also allow it to leapfrog in terms of its business growth.
“We have a set of people in the US who are currently selling products and services to OEMs, a business that they understand well. But migrating them to a service provider practice will take longer and customer wins will take time without reference,” Mr Mohapatra added.
Another area where the company is activity looking for acquisition opportunity is Scandinavia.

Maruti to hold its own for touch-ups

2006-12-18T18:12:00.000-09:00

INDIA’S largest car maker Maruti Udyog will increasingly work independently on model upgrades and collaborate with parent company Suzuki Motor on all new model launches, reports Parvathy Ullatil in Mumbai. Maruti intends to launch a new car and two model upgrades every year, which means Maruti’s R&D team will work independently on the facelifts and collaborate with Suzuki on designing and developing new models right from scratch.
This follows a recent communication from its Japanese parent to step up its local R&D efforts. “We received a message from Suzuki saying Maruti should ‘grow up’ and help Suzuki’s other global subsidiaries. Suzuki says it is short of manpower in Japan and it has to divide its attention between Hungary, China and India. They are pushing us to do our own work now as making major changes in cars is a time-consuming process,” said Mr Jagdish Khattar, MD, Maruti Udyog.
About 20-30 Indian engineers had worked with their Japanese counterparts for two years to help design the Swift, a hatch-back car and make it suitable for Indian conditions. Maruti is expected to play an incremental role in all future product launches, said Mr Khattar.
What started with a chance meeting between Mr Khattar and the senior MD(Engineering) of Suzuki Motor on the stairway in Suzuki’s headquarters six years ago has grown into an operation with three divisions employing over 250 engineers. Nearly 90 of these have been trained in Japan by SMC and Suzuki has committed to station four senior engineers from Japan in India to train and guide the team here.

Tata Motors inks JV with Thai co

2006-12-18T18:08:00.000-09:00

TATA motors has entered into a joint venture with Thonburi Automotive Assembly Plant, a Thailand-based independent assembler of automobiles to manufacture, assemble and market pickup trucks in the South East Asian country, reports Our Bureau in Mumbai.
The joint venture, in which Tata Motors will hold 70% of equity and Thonburi 30%, will see an initial investment of Rs 120 crore and manufacture pick-up vehicles at Thonburi’s facility. The activity is expected to go on stream in a year and both partners will jointly manage the operation in Thailand.
The vehicle will be modified to suit Thai conditions will come fitted with 50% local components initially. This will then be scaled up to to 70-80%. Besides Thailand, Tata Motors is exploring opportunities in Australia but no decision has been taken on the nature of the venture.
The new joint venture will help Tata Motors enter the second largest pickup market in the world after the US.

Polaris Software tops 'A' group

2006-12-18T08:05:00.000-09:00

Polaris Software surged 8% to Rs 159.10 and it was the top gainer from BSE’s A group.

Software shares are attracting renewed buying after Oracle Corporation recently raised the open offer price for i-flex from Rs 1,475 per share to Rs 2,100 per share.

In October 2006, Polaris had reported strong Q2 September 2006 results. The company also has a strong order book. The company has transformed itself from being a pure software services provider to a hybrid model focussed on product-cum-services catering to the banking, financial services and insurance (BFSI) industry. Polaris Software’s consolidated net profit for quarter ended September 2006 jumped 104.3% to Rs 27.10 crore from Rs 13.26 crore during quarter ended September 2005. Total income rose 17.7% to Rs 253.95 crore (Rs 215.62 crore).

J&K Bank surged 7.7% to Rs 619 and it was the second biggest gainer from BSE’s A group. Recently RBI had raised FII investment ceiling in this private sector bank to 40% from 33%.

Lanco Infratech added nearly 7% to Rs 261.70 following reports it had won the bid for a 4,000-megawatt power plant at Sasan in central India. It was third biggest gainer from BSE’s A group.

Private sector utility Tata Power Company rose nearly 6% to Rs 591 following reports it had won a bid for building a 4,000 megawatts coal-fired plant at Mundra in western India. It was the fourth top gainer from A group.

ONGC rose 4.6% to Rs 854.60 following reports that it has made a huge gas find in the Bay of Bengal, with initial estimates suggesting reserves of about 21 trillion cubic feet.

Higher advance tax payment boosts RIL

2006-12-18T08:03:00.000-09:00

Reliance Industries rose 3.2% to Rs 1294.80 following reports that it paid advance tax of Rs 444 crore for the third installment taking its total remittance this fiscal to Rs 1102 crore compared to Rs 848 crore paid in the same period last year.

The higher advance tax payment raised expectations regarding its financial performance in for Q3 December 2006.

8.1 lakh shares changed hands in the counter on BSE.

Reliance Industries (RIL) has a huge 11% weightage in Sensex. The barometer index rose 116.57 points today.

The stock is now within striking distance of its lifetime closing high of Rs 1306.05 of 6 November 2006.

Last week, the government approved RIL’s plan for a $5.2 billion deep-sea gas field, which will pump 80 million cubic metres per day. The development plan envisages commencement of delivery of gas by second half of 2008/09. RIL had earlier planned to produce only 40 million cubic metres a day, but in November doubled the estimated output saying new discoveries and expectations of a surge in demand had encouraged the revision.

Reliance is the operator of the KG-D6 block in the Bay of Bengal, where it discovered vast reserves of natural gas in 2002 along with its partner, Canada's Niko Resources, which holds 10% in the project. RIL had said on 1 December, that its hydrotreater plant at Jamnagar refinery, which was partially damaged in a fire on 25 October, has been refurbished and has started functioning.

As per recent reports, RIL had won two oil exploration blocks in Yemen. The two blocks won by RIL in Yemen are onshore blocks each measuring around 7,500 sq km. RIL is expected to sign a production sharing contract for these two bocks next month.

Meanwhile, ONGC’s overseas investment arm ONGC Videsh proposes to undertake joint exploration and production activities in Iraq with Reliance Industries (RIL). ONGC and RIL are likely to rope in Angolan oil firm Sonatrach to take up joint exploration of a discovered block - touted to have a production capacity of 1,50,000 barrels a day - in south Iraq, reports suggest.

Lanco Infratech powers ahead on winning bid for 4000 MW power plant

2006-12-18T08:02:00.000-09:00

Lanco Infratech surged 6% to Rs 260.70 following reports it had won the bid for a 4,000-megawatt power plant at Sasan in central India.

This is one of the two ultra-mega power plants, the financial bids for which were opened today.

The stock rose on heavy volume of 24.6 lakh shares on BSE.

The scrip had debuted at Rs 241.40 on 27 November (closing price on BSE on that day) compared to IPO price of Rs 240. It moved between Rs 229 to Rs 266 since then. The IPO of Lanco Infratech was subscribed nearly 12 times.

Lanco Infratech is an infrastructure development company with interests in power, construction and property development. The company currently owns 11 power projects, of which five are in operation and six are under development. Its construction division had an order book of Rs 1611.83 crore on 30 September 2006. This includes contracts worth Rs 1229.95 crore with affiliates of Lanco Infratech. The entire order book will be executed by 2010.

Lanco Infratech is also obtaining approvals for a large integrated IT park and township on a 100-acre plot on which it proposes to develop 18.5 million square feet of saleable area in Manikonda, Hyderabad. The company also owns land banks, aggregating about 21.8 acres, close to Ocean Park in Hyderabad, where it intends to develop a residential housing project with one million square feet of saleable area. In addition, it has won a bid to develop an IT park and township on a 10.7-acre plot, on which it proposes to develop two million square feet of saleable area, in Vishakhapatnam, Andhra Pradesh.

Due to the nature of the business, Lanco Infratech’s projects typically require a long gestation period and substantial capital outlay before completion. It may be months or years before positive cash flows can be generated. Further, power, property development, and infrastructure and construction projects are capital intensive and will require high levels of debt financing. They will also lead to continuous dilution of equity.

Contingent liabilities of Lanco Infratech amounted to Rs 755.92 crore on 30 September 2006. Apart from these, the offtake of the Kodapalli power plant has resulted in court proceeding related to Rs 224-crore charges paid by the offtaker to Lanco Kodapalli Power (LKPPL). Lanco Infratech is in the process of raising its stake in LKPPL to 59% from current 33.9%.

UltraTech Cement cements gains

2006-12-18T08:01:00.000-09:00

UltraTech Cement jumped 5% to Rs 1075.50 on reports it had paid advance tax of Rs 96 crore for the third installment of 15 December 2006

The company’s tax provision in Q3 December 2005 was just Rs 20.35 crore.

50,839 shares changed hands in the counter on BSE.

The news of large advance tax payment by the company which hit the market during trading hours on Friday (15 December) had lifted the scrip nearly 3% on that day.

For about two months between late September to late November, the stock was quite range bound. It moved between Rs 865 to Rs 919 during that period. It had firmed up to Rs 958.30 on 7 December from Rs 887.45 on 28 November. It had slipped to a low of Rs 923.60 on 13 December, before bouncing back to Rs 1021.95 by 15 December.

UltraTech Cement's strategies in captive power investment and various efficiency improvement programmes including de-bottlenecking and ready mix concrete plants could drive operating profit margins by the end of this financial year, analysts reckon.

The company has marked capital expenditure of Rs.2698 crore to be spent over the next three years. This includes setting up of captive power plants aggregating to 192 MW at its units in Gujarat, Chhattisgarh, Andhra Pradesh and a brownfield expansion of four million tones per annum at Andhra Pradesh.

UltraTech Cement’s net profit jumped to Rs 127.44 crore in Q2 September 2006 from Rs 0.08 crore in Q2 September 2005. Sales jumped 57% to Rs 1004.54 crore (Rs 639.98 crore).

The current price of Rs 1075.50 discounts its trailing 6-months April-September 2006 annualised EPS of Rs 54.30, by a PE multiple of 19.8.

US FDA nod for a generics drug boosts Ranbaxy

2006-12-18T07:55:00.000-09:00

Ranbaxy gained 4.5% to Rs 392 after the company got the US Food and Drug Administration approved to sell Cefprozil in 250 mg and 500 mg tablets

5.5 lakh shares changed hands in the counter on BSE. The news had lifted the scrip 1.1% on Friday (15 December) to Rs 375.10.

Ranbaxy had drifted lower since late September 2006. From Rs 439.85 on 29 September, the stock had slipped to a low of Rs 359.65 on 12 December. It had recovered to Rs 375.10 by 15 December.

Earlier, the stock had staged a rebound from lower level between mid-July 2006 to late September 2006. From Rs 320.40 on 17 July, the stock had surged to Rs 439.85 on 29 September 2006. Ranbaxy Pharmaceuticals will manufacture and market the tablet form of a drug used to treat infections associated with bronchitis and tonsillitis. The Food and Drug Administration approved Ranbaxy's plans to sell Cefprozil in 250 mg and 500 mg tablets. In June, the FDA approved Ranbaxy's plans to manufacture and market Cefprozil in liquid form.

The drug is the equivalent of Bristol Myers Squibb's Cefzil. The market for Cefzil and Cefprozil tablets is estimated at $77 million annually. The tablets will be manufactured at Ranbaxy's plant in Dewas, India. "Our plans are to bring this product to the market in early 2007 during the height of the respiratory season," said Jim Meehan, vice president of sales and marketing for Ranbaxy.

In November, Ranbaxy Laboratories received tentative US Food and Drug Administration approval for the manufacture of Cetirizine Hydrochloride Syrup. The annual sales for the syrup, prescribed for seasonal allergic rhinitis, is $146.3 million.

In October, Ranbaxy Laboratories’ Canadian unit, Ranbaxy Pharmaceuticals (RPCI), and Janssen-Ortho (JOI) signed a licensing and supply agreement for a generic fentanyl patch. It is sold as Ran Fentanyl Transdermal System, and is used to treat severe pain. This is the second product to be commercialized by RPCI as part of a licensing arrangement between the companies. The market for generic fentanyl patch is expected to reach Canadian $ 50 million.

On 2 December, Ranbaxy Laboratories acquired South Africa's fifth-largest generics player Be-Tabs Pharmaceuticals, for $70 million (Rs 315 crore). The acquisition, subject to requisite approvals from South African authorities, is slated for completion in the first quarter of 2007.

Ranbaxy Laboratories today said it has entered into a collaborative agreement with the Department of Science & Technology (DST), Government of India, in the area of New Drug Discovery Research (NDDR). Under the agreement, DST will provide financial support by way of soft loans to the company, to undertake NDDR activity, Ranbaxy said in a statement.

Ranbaxy’s consolidated net profit surged 657% in Q3 September 2006 to Rs 139.30 crore, on 27% growth in net sales to Rs 1627.10 crore.

The current price of Rs 392 discounts its 9 months January-September 2006 annualised EPS of Rs 12.50 (based on consolidated financial performance), by a PE multiple of 31.3.

Zee Telefilms begins new inning

2006-12-18T07:54:00.000-09:00

Demerged Zee Telefilms was trading at Rs 271.50 in afternoon trade, under a new name Zee Entertainment Enterprises, compared to Friday’s closing price of the combined entity at Rs 341.
29.9 lakh shares changed hands in the counter on BSE.

The stock had surged ahead of the demerger. From Rs 292.05 on 16 October 2006, the scrip had surged to Rs 378.30 on 1 December. It had slipped to Rs 341 by 15 December – the last day of trading of the combined entity.

Zee Telefilms (ZTL) has formally demerged the company into three entities effective December 18, after it received Bombay High Court approval for the split. ZTL demerged its cable distribution subsidiary into Wire & Wireless India (WWIL) and its regional and news broadcasting undertaking into Zee News (ZNL). The company is also demerging its direct consumer business undertaking. Shareholders of ZTL would receive 45 shares of ZNL and 50 shares of WWIL for every 100 shares they hold in ZTL. Both companies would be listed independently. The listing is likely to take place in January 2007.

The company had earlier announced the book closure date from December 24 to 28, 2006, for determining eligibility for issuance of equity shares of demerged entities ZNL and WWIL. The company will announce a separate record date for the demerger of its direct consumer business into ASC Enterprises, which will be renamed as Dish TV India.

Zee’s demerger scheme is aimed at unlocking shareholders’ value

Tata Motors revs up

2006-12-18T07:52:00.000-09:00

Tata Motors rose 1.6% to Rs 871.80 after the company said on Monday it had entered a joint venture with Thailand's Thonburi to make pick-up trucks.

1.6 lakh shares changed hands in the counter on BSE

The stock had recovered from lower level in the past three days following a broad market recovery. From Rs 820.50 on 12 December, the scrip had surged 4.5% to Rs 857.80 by 15 December. Earlier, the stock had lost 8% in three days when Sensex had plunged 977 points.

Tata Motors will hold 70 percent of the venture with Thonburi, which assembles automobiles. The pick-up trucks will be made at Thonburi's facility in Thailand and will be sold locally and exported to other markets in the region. Production will start in a year's time, Tata Motors said in a statement. No financial details were disclosed. "The joint venture will enable the company to address the Thailand market, the second-largest pick-up market in the world after the US," Tata Motors said.

Last week Tata Motors said its joint venture with Fiat will invest Rs 4,000 crore in a car and engine making facility at Ranjangaon, Pune. The Tata Motors-Fiat JV will have an annual capacity in excess of 1,00,000 cars and 200,000 engines and transmissions, and production will start from the beginning of 2008.

Tata Motors also said it will continue discussions with Fiat for cooperation in Latin America. Fiat in November said, it would make Tata Motors' new 1-tonne pick-up truck at its plant in Argentina, from the second half of fiscal 2008.

Early this month, Tata Motors reported strong sales growth. Tata Motors’ vehicle sales rose 43% in November 2006 to 49,061 units compared with the same month a year ago. Sales of commercial vehicles rose 46% to 25,793, while sales of cars rose 48% to 19,475, helped by a surge in sales of its Indica model. Exports rose 9.6% to 3,793 units.

At the current market price of Rs 871.80, Tata Motors trades at 20.8 times its trailing 12-months September 2006 EPS of Rs 41.80.

Smooth sailing for ABG Shipyard on new order win

2006-12-18T07:51:00.000-09:00

ABG Shipyard gained 2.5% to Rs 229.85 after the company bagged a Rs 100 crore order from Vroon Offshore.

1.9 lakh shares changed hands in the counter on BSE.

The stock had witnessed a sustained fall since mid-November 2006. From Rs 272.35 on 13 November, the stock had declined to a low of Rs 211.15 on 12 December. From that low, it had recovered to Rs 224.25 by 15 December.

ABG Shipyard has secured an order worth about Rs 100 crore for construction of a diving support vessel from Vroon Offshore B.V., The Netherlands. The company said it already building two vessels for Vroon Offshore.

With the latest order win, the company’s total order book has risen to about Rs 2400 crore, the company said.

ABG Shipyard’s net profit rose 42.8% to Rs 27.1 crore in Q2 September 2006 compared to Rs 18.9 crore in the corresponding period a year ago. During the quarter, the company's income was Rs 167.9 crore, against Rs 113.9 crore in the same period last fiscal, representing an increase of 47.45 per cent.

Yokogawa India hits the roof on delisting proposal

2006-12-18T07:50:00.000-09:00

Yokogawa India surged 10% to Rs 418.45 even as its Japanese parent said it is ready to offer a maximum Rs 380 per shares for its delisting.

15,799 shares changed hands in the counter on BSE.

Yokogawa Electric Corp. Japan has 83.19% stake in Yokogawa India.

On 16 December 2006, the board of Yokogawa India agreed the proposal received from the Japanese parent to delist its shares from the stock exchanges.

The Japanese parent is ready to offer a maximum Rs 380 per share. The floor price for reverse book building is set at Rs 320 which is the average price of past 26 weeks.

On 6 December, the parent had announced setting up a 100% subsidiary in India for supporting its R&D activities.

Yokogawa India is one of leading provider of process control equipment and other industrial automation products in the country. Its business includes erection, commissioning, integration and servicing of such control systems and instruments. In its 2005-2006 annual report, the company had stated that it plans to increase its export of engineering services and has already commenced ramping up operations.

Started as JV between Yokogawa Electric Corp, Blue Star and Karnataka State Electronics Corp, the company became the subsidiary of the former with Blue Star selling its stake to its Japanese JV partner.

For Q2 September 2006, Yokogawa India reported a surge in net profit to Rs 3.20 crore (Rs 1.87 crore). Sales rose 44% to Rs 79.54 crore (Rs 55.29 crore).

The current price of Rs 418.45 discounts its FY 2006 EPS of Rs 14.90 by a PE multiple 28

Huge gas find fuels rally in ONGC

2006-12-17T20:16:00.000-09:00

Oil exploration major ONGC surged rose 5.4% to Rs 861 following reports that it has made a huge gas find in the Bay of Bengal, with initial estimates suggesting reserves of about 21 trillion cubic feet.

Last week, reports suggested that ONGC Mittal Energy (OMEL), the joint venture between ONGC and Mittal group, is eyeing opportunities in Kazakhstan, Azerbaijan and Indonesia. OMEL has also bagged two blocks in Nigeria and the production-sharing contracts are expected to be signed shortly. The joint venture recently bid for an offshore block in Trinidad & Tobago.

Meanwhile, ONGC’s overseas investment arm ONGC Videsh proposes to undertake joint exploration and production activities in Iraq with Reliance Industries (RIL). ONGC and RIL are likely to rope in Angolan oil firm Sonatrach to take up joint exploration of a discovered block - touted to have a production capacity of 1,50,000 barrels a day - in south Iraq, reports suggest.

Analysts say, ONGC is one of the less expensive frontliners. The current price of Rs 861 discounts its trailing 12-months September 2006 EPS of Rs 69.40, by a PE multiple of 12.4.

The company has also set up a board meeting on 23 December 2006, to consider an interim dividend.

Tata Motors to set up two plants, eyes 1m units by ’11

2006-12-17T19:10:00.000-09:00

TATA Motors will set up two new greenfield plants in the country as part of its Rs 10,000-crore expansion programme to meet the target of more than doubling annual sales to one million units over the next five years.
“In five years time we expect to more than double our overall sales. Last year we sold four lakh vehicles. We are looking at close to a million vehicles in the next five years,” Tata Motors managing director Ravi Kant said.
He said Tata Motors would set up new manufacturing units besides expanding capacity of its existing facilities. “We are in the process of expansion of our plants in Pune, Jamshedpur and Lucknow. But it won’t be sufficient and thus we would be going in for one or two more greenfield plants,” Mr Kant said, adding the that company was setting up new plants in Uttaranchal and West Bengal.
The company is banking on the success of its small truck, Ace and the yetto-be launched Rs 1 lakh car (to be out by mid-2008) for the push in sales.
Mr Kant said Tata Motors will also increase the capacity of its overseas assembly units, including those in Korea and Casablanca. On Ace, he said the company was targeting to sell about one lakh units next fiscal. “We will sell 65,000 units of Ace this year and next year, when we start selling the vehicle across the country, we hope to sell over one lakh units,” Mr Kant said, adding the company’s new plant in Uttaranchal would start production by March 2007. The plant would have a capacity of 2.5 lakh units of Ace, Mr Kant said, adding that Tata Motors was working on the passenger vehicle version of Ace as well, though declining to divulge the timeframe for its market launch.

Sterling Biotech to invest Rs 600 cr for expansion

2006-12-17T19:05:00.000-09:00

SANDESARA group’s Sterling Biotech plans to invest about Rs 600 crore to ramp up the manufacturing capacities of gelatin and coenzyme (Q10) at its facilities in Vadodara. The company is also considering increasing the manufacturing capacity of its recently acquired unit in China.
A Sterling Biotech executive told ET the company is open to setting up greenfield facilities both in India and overseas.
Sterling Biotech, which already enjoys an 8% share of the global pharmaceutical gelatin market, is targeting a 12-15% share over the next three years. Q10 is an important healthcare supplement for heart ailments, hypertension, AIDS, asthma, Parkinson’s and Huntington’s disease and is an element in the body to generate energy from food.
“We will have capacity to produce 45 tonnes of Q10 by 2008 at our Masar facility which we acquired from the Torrent group in 2005. We plan to invest about Rs 300 crore in phases to ramp up the facility that is producing less than 10 tonnes of Q10,” the official says. According to him, work on the first phase with an investment of Rs 120 crore is already on.
The market for Q10 is growing rapidly with healthcare majors, food and FMCG manufacturers increasing its usage. The market size for high value Q10 that costs in the range of $2 lakh to $2.50 lakh a tonne is being estimated at $2 billion per annum globally.
Sterling Biotech plans to increase the gelatin manufacturing capacity from 15,000 tonnes per annum to 22,000 tonnes pa in next couple of years at its Vadodara facility. “We would also consider capacity expansion at our unit in China and replacement of plant and machinery at Ooty in south India subsequently. The capacity expansions would be funded with the recently issued FCCBs,” the official said.
Pharmaceutical gelatin is used for making capsules, tablets, vitamins and blood plasma expander for applications in treatment of arthritis, bleeding disorders and cartilagerelated disease.

TCS targets Wal-Mart for new retail tech

2006-12-17T19:03:00.000-09:00

WAL-MART and Target, the largest retailer in the world and the sixth-largest retailer in the US respectively, have shown interest in a retail product -Personal Shopping Assistant (PSA) developed by Tata Consultancy Services (TCS). PSA is a software product out of the retail innovation lab of TCS. The technology, is currently at a prototype stage and will see a mass rollout within a year.
According to chief technology officer K Ananth Krishnan: “TCS has worked with some of the largest retailers, including 30 of the 50 largest in the world, and retail contributes more than $200 million in revenues for the company.”
The PSA is, in essence, a scanning device with a LCD screen mounted on a regular shopping trolley. The scanning device has been developed by IBM while TCS has developed the embedded software to make it work.
Once a customer scans the retail chain’s loyalty card, the screen guide him towards all the offers and discounts available in the store that day. The scanner also recognises bar codes and RFID tags on products in the stores. Once the shopping is complete the screen ask for the mode of payment, cash, credit card or loyalty points.
The only involvement store employees have in the entire process is to tally the number of items registered in the swipe to carried out. For Wal-Mart and Target, this smart device would mean a reduction in checkout time, and they need not invest in a large number of checkout counters.
The PSA will also be completely integrated with the back-end software of the store and inventory management will take place in real-time. The PSA will also collect data on every customer, not only in terms of what they buy but also where they go in the store. This data can be used for micro-segmentation by retailers, like Wal-Mart and Target, which can then customise specific offers for every customer. TCS has also developed solutions for those that don’t want to use or do not have loyalty cards.
The challenges to execute and roll PSA on a mass scales is still very large. What will finally drive this retail revolution is if the price of RFID tags comes down to below the current level of 5-7 cents. Sivakumar Balasubramaniam, from the retail practice of TCS, says: “RFID is still not a viable technology for many big retailers internationally and they adapted it too early in the learning curve.” As a few stores in the US found out, a few ingenious shoppers ripped off barcodes on cheaper items that they bought, and put it later on the more expensive items.

WATCH OVER

PSA is currently at the prototype stage & will be rolled out within a year
Software to collect data on every customer, including where they go in the store
Move to help retailers in micro-segmentation of data
Retailers will be able to customise specific offers for every customer