Assocham sees excessive use of monetary policy hurting growth

A recent study by the industry body Assocham has concluded that continued monetary policy tightening by the Reserve Bank of India (RBI) was beginning to have negative impact on Indian businesses as rising cost of funding was not only squeezing profit margins but also rendering some investment plans unviable.

“The country is pursuing a high growth strategy and braving the pains of high inflation. If the economy continues to use monetary policy without fiscal consolidation of appropriate degree, higher interest rates will continue to fuel high cost of production and squeeze profit margins of India Inc,' observed the study conducted to evaluate current economic health of the country.

It advocated that the government should also begin focusing more on the fiscal consolidation and try to focus on improving the efficiency of public spending. The central bank too had pointed out a number of times that a high fiscal deficit was hindrance to effective working of monetary policy. While the government has budgeted the deficit for current fiscal at 4.6%, which sounds reasonably low in current circumstances, experts doubt that there could be upside to the budgeted level in wake of surging crude prices and implied increase in subsidy outgo.  

The study by Assocham also observed that a large part of the inflation problem stemmed from food prices that were rising because of supply shortage. Even though some food article prices were cooling, the food articles index was still hovering at 10% rate from previous year. This could result in a more broad-based inflation in manufactured sector as well, concluded the study.

Further, while inflation was high, industrial growth was slowing down. The Assocham noted that the industrial production dropped to 5.5% in the third quarter of current fiscal year from 9.1% in second quarter and 12% in the first. While there was a slowdown in consumer goods too, greater worry was the slump seen in capital goods sector. The latter reflected that future industrial growth prospects too would be weak until the investment cycle picks up further. This however is unlikely while the central bank is hiking its policy rates in every review.

Essar Oil inks pact with Graphite India for the supply of 55,000 scmd of coal-bed methane

Essar Oil has inked a pact with K K Bangur - controlled Graphite India (GIL) for the supply of 55,000 scmd (standard cubic metre a day) of coal-bed methane (CBM), latest by the fourth quarter of 2011. Gas will be supplied from Essar's CBM block near the industrial city of Durgapur in West Bengal. The Durgapur facility is the largest as well as the oldest of the GIL facilities in India (three) and abroad (one in Germany).

Essar for this has also recently approached the Petroleum and Natural Gas Regulatory Board (PNGRB) to build a 3-km dedicated pipeline connecting the graphite facility in Durgapur. The proposal is reportedly approved by the regulator.

Based on an expression of interest (EoI) submitted by Essar, PNGRB recently invited bids for laying a trunk pipeline from Asansol to Howrah (approximately 200 km) in the State. If implemented, it will be the first common carrier pipeline in the State as well as the Eastern region paving way for monetization of CBM assets in the coal bearing areas of Bengal and Jharkhand.

Essar produces coal-bed methane from 38 production wells. The company further hopes that the production is likely to reach between 40,000 and 60,000 scmd by end of March and would be ramped up to 80,000 - 1,00,000 scmd by July-September.

Essar Oil (EOL) offers a spectrum of products to bulk customers in the industrial and transport sectors. It supplies aviation turbine fuel to Indian Armed Forces. It the first private company in India to enter into petro-retailing sector through franchisee model.

Godrej Properties to jointly develop residential properties

Godrej Properties is in talks with various firms to form a joint venture as quickly as possible, since there is huge demand coming from residential properties. It is negotiating for jointly developing residential properties and expects to announce a couple of them in the first quarter of FY12.
Godrej Properties had earlier entered into joint ventures for construction of commercial properties.
Realty sector is expecting a price correction over the next 3-4 months but Godrej Properties has no plans to cut prices while in most of their project the prices are increasing. The company expects the sales to double in FY11 on strong growth across regions and segments.
Recently, Godrej Properties acquired the entire paid up share capital of Udhay OK-Realty from HDFC Ventures Trustee Company (in its capacity as trustee of HDFC Property Fund). This is pursuant to an approval of the shareholders in the Annual General Meeting (AGM) held on July 17, 2010. Godrej Properties reported a net profit of Rs 13.25 crore for the quarter ended December 31, 2010 against Rs 17.59 crore for the quarter ended December 31, 2009, declined 24.67%.

HCL Infosystems unveils new range of laptops and desktops

HCL Infosystems, India’s premier hardware, services and ICT system Integration Company, has launched its new range of laptops and desktops. The laptop series - HCL ME 1014 and HCL ME 1015 and desktop series - HCL Infiniti M A365 Pro are packed with unique features embedded with latest technologies.

The newly launched HCL laptop and desktop series are amongst the first dual-core computers in India powered by the new latest 2nd Generation Intel Core family of processors. The products are also available on quad-core platform. The new devices from HCL are empowered with powerful configuration along with excellent features like Multi-touch Gesture Touchpad for laptops, HCL Desktop Management Software (HDMS) for desktops, one touch in-built customer service button with HCL Touch, in-built data recovery button with EC2 etc. will ensure a better and more-enhanced experience to the users.

The newly launched HCL computing devices ensure better customer experience with enhanced computer performance and better energy efficiency. This a breakthrough for providing robust media processing, more computing muscle for higher workloads, and a smoother multi-tasking experience without compromising on the style factor. It supports faster encoding and decoding of different media formats, along with smooth HD playback with high visual quality and colour fidelity enhancements.

Kotak Bank’s property investment arm to raise $500 million by the second quarter of this year

In a bet on the long term case for property in Asia's third-largest economy, Kotak Realty Fund, the property investment arm of India's Kotak Mahindra Bank, plans to raise as much as $500 million by the second quarter of this year. The fund intends to raise about $150-$200 million from domestic investors and another $300 million from global markets. Separately, Kotak is raising a $300 million private-equity fund to invest in infrastructure projects in the country.

Kotak Realty Fund had in the last week, sold one of its property assets - Peepul Tree Properties - to Tata Realty Fund for Rs 525 crore or $117 million. The fund had made an initial investment of Rs 95 crore.

Further the fund, which has about $750 million worth of assets under management, plans to invest close to $100 million over the next couple of months in major Indian cities. The investments will mainly be in the residential property assets.

Private equity funds, including four domestic and 10 international funds, have invested a total of $14 billion in Indian property during the last ten years. Of that, private equity firms have sold Indian property holdings worth nearly $2 billion.

Perfect Octave’s album “Silsila Suron Ka” gets GIMA Award 2010

Perfect Octave Media Projects’ album -- Silsila Suron Ka -- has won the prestigious GIMA Award 2010 for Best Classical Music Instrumental Album of the year. The album featured world’s best Indian Music instrumental Jugalbandi by legendry maestros Hariprasad Chaurasia and Shivkumar Sharma.

The company owns the copy rights in the said album. While retaining the copy right in the said valuable IP, the company has recently licensed this album to Times Music and now is available at leading music stores.

Recently, the company had also won an award by prestigious MTV-IMMIS for its one of the best selling album titled “Hari OM Tat Sat” by Jagjit Singh as best devotional album of the year.

Content creation is an ongoing and continuous process. The company’s objective is to create classic, thematic and world class music products in the targeted musical segment.

Godrej Consumer products to hike soap prices

In an effort to battle mounting raw material costs, personal care products maker - Godrej Consumer Products (GCPL) is planning to hike soap prices by 4-5% starting in month of April. The company is hiking the price since vegetable oil prices have rose significantly. Rising crude prices due to unrest in North Africa and West Asia will affect the fuel prices and freight cost.
GCPL has already hiked the prices of soap on two occasions one in September by 5% and other in January by 3-5 %. In the new fiscal year, the company is also planning to launch its own brand of air freshener along with various other new launches.
GCPL in FY12 hopes to continue announcing new buys in domestic and overseas market and expects Rs 30-40 crore in revenue, from recently acquired Naturesse Consumer Care Products and Essence Consumer Care Products which own brands like Swastik and Genteel.
Recently, FMCG major GCPL had announced its plans to boost growth in Rs 7,500 crore soap market through more acquisitions. Godrej Consumer Products has reported a surge of 18.19% in net profit to Rs 66.39 crore for the quarter ended December 31, 2010 against Rs 56.17 crore for the quarter ended December 31, 2009.

BHEL secures Rs 1,590 crore worth of order from Power Grid Corporation of India

State-run power equipment maker Bharat Heavy Electricals (BHEL) in consortium with ABB, Sweden has bagged an order from Power Grid Corporation of India for 800 kV 6,000 MW HVDC Multi-Terminal System Package associated with the NE/ER-N/WR Interconnector-1 project.

This will be world’s first 800 kV, 6,000 MW Ultra High Voltage Multi-terminal DC transmission link. The link comprises three converter terminals and a power transmission system with a built in capacity of up to 8,000 MW which is the largest HVDC transmission system ever built. In financial terms, this is the largest order finalized in T&D sector anywhere in the world and is valued at Rs 1,590 crore. The 800 kV North-East Agra UHVDC link will have a capacity to transmit up to 6,000 MW of clean hydroelectric power from the North-East Region of the country to Agra across a distance of 1,728 kilometers.

BHEL together with its partner ABB, Sweden, will execute the project involving system engineering, design, supply and installation of three HVDC converter stations. The first stage of the system is scheduled to be operational in 2014 and the second stage in 2015.

Lanco Infratech consortium emerges as the lowest bidder for a power project by Maha Tamil Colleries

A consortium of Lanco Infratech and US-based Massey Energy Company emerged as the lowest bidder for a power project by Maha Tamil Colleries. The company informed that the final decision is yet to be announced as the bids were opened today. The developer has to supply 35 per cent of the coal obtained to Maharashtra and can use the rest of the coal to set-up a power project.
Half of the power produced from this project should be supplied to Tamil Nadu state government and the other half can be sold via the merchant route by the company. As per the rules of the bid, any excess coal should be diverted back to the joint venture company.
The 1,980 megawatt power project located in Raigarh, Chhatisgarh includes the development of the coal mine, which has an estimated annual production capacity of 10 million tonnes and reserves to the tune of 650 million tonnes. Maha Tamil Collieries is a joint venture company of the Tamil Nadu Electricity Board and the Maharashtra State Mining Corporation, each an arm of their respective state governments.
The project had six other bidders, all of whom have submitted bids where they charged Maha Tamil to supply coal which is developed from the mine. Reliance Power asked for a price of Rs 380 per tonne, Sterlite’s bid asked for Rs 175 per tonne, GMR put in a bid for asked for Rs 234 per tonne, and GVK’s at Rs 405 per tonne and L&T Power put the highest bid at Rs 819 per tonne, while the Lanco and Massey consortium submitted a negative bid of Rs 112 per tonne where instead of charging Mahatamil, they would pay them for the coal used

IDFC plans to raise 250 crore long-term capital

Infrastructure Development Finance Company (IDFC) is planning to raise 250 crore long-term capital through the private placement subordinated debt market before the end of the current fiscal. IDFC plans to raise funds via private placement as the company did not have enough time to come out with the fourth tranche of tax saving infrastructure bonds.
The company has mobilized around 1,500 crore by selling bonds to tax payers in three tranches, 56% less than what it had targeted to raise via retail bonds.
IDFC fixed the coupon rate at 9.33% a year for the 15-year bond issue. The bonds will carry a call option at the end of 10 years. ICICI Bank and Trust Capital are the lead arrangers to the issue.
Recently, IDFC has extended the closing date of its Rs 3,400 crore bond issue by five days from its scheduled closure date of March 16, 2011 and the issue consequently closed on March 21, 2011.

Reliance Industries’ FCC unit likely to start production from this week

Reliance Industries’ fluid catalytic cracker (FCC) unit is likely to start production from this week. Earlier, the FCC unit of about 2, 00,000 barrels per day (bpd) at reliance‘s older refiner at Jamnagar was closed for maintenance in early February.

The FCC converts vacuum gas oil into light value-added products like liquefied petroleum gas, gasoline-blending components and diesel.

Recently, the company is reported to have paid Rs 1054 crore in the fourth and final installment due on 15 March 2010 against Rs 770 crore in the similar quarter previous year.

The company’s net profit for the quarter ended December 31, 2010 rose by 28.14% to Rs 5136 crore as compared to Rs 4008 crore for the quarter ended December 31, 2009. On the other hand, the company’s net Income rose by 5.52% at Rs 60530 crore for the December quarter for the year 2010 as compared to Rs 57364 crore for the corresponding quarter of the previous year.

Mindtree completes pilot execution of software testing course at RVCE

Mindtree, a global IT Solutions and product Engineering Service Company, has successfully completed the pilot execution of a software testing course at R V College of Engineering (RVCE) in Bangalore as part of the core syllabus for the final year Information Science and Engineering (ISE) students.

The company designed and developed the entire curriculum of this course in association with ISE department faculty with Vishweshwaraya Technological University’s (VTU) guidelines as base line.

MindTree offers IT services across the consumer goods value chain, spanning product development and manufacturing intelligence systems, supply chain execution and optimization solutions and customer and consumer management solutions.

CESC to double Balagarh thermal power plant capacity: Report

RPG Group Company CESC is reportedly planning to double the earlier planned capacity of its Balagarh thermal power plant in West Bengal from 660 mw to 1,320 mw. The Balagarh project, which is likely to be commissioned by 2016, would be set up for an investment of Rs 6,800 crore, making it the single biggest investment in a power project. CESC’s planned investment in thermal power projects of 4,440 mw capacity now stands at Rs 22,700 crore. The company has already received the terms of reference for the environmental impact assessment report but is awaiting final approval.
Meanwhile, the company is in the process of setting up projects in Orissa, Jharkhand and Maharashtra apart from West Bengal, where all its existing plants are located.
By 2016, CESC is also looking to commission 600 MW each at Chandrapur in Maharastra, Haldia in West Bengal and Dumka in Jharkhand apart from 1,320 mw at Dhenkanal. By 2018, CESC’s 1,000 MW capacity at Pirpainty in Bihar, 1,320 mw in Orissa under second phase and additional 300 mw in Haldia would be executed.

CARE reaffirms the ratings assigned to Amtek India’s bank facilities

Credit rating agency, CARE has reaffirmed AA- rating assigned to Rs 1,815 crore (enhanced from Rs 1,411.90 crore) long term bank facilities of Amtek India. The rating agency has also reaffirmed PR1+ rating assigned to Rs 38 crore short term bank facilities. Further, the rating agency has also reaffirmed PR1+ rating assigned to Rs 200 crore commercial paper of the company.
The rating continues to derive strength from experienced and resourceful promoters, long-standing relationships with a large number of Original Equipment Manufacturers (OEMs) and relatively improved industry scenario resulting in increased sales & profitability.
Amtek Auto manufactures components such as connecting rod assemblies, flywheel ring gears and assembly, steering knuckles, suspension and steering srms, CV joints, crankshaft assemblies and torque links. It is backed by in-house design and development facilities engaged in developing new product and processes.

Tata Steel looking to buy coking coal mines in western Canada: Report

Tata Steel, the world's No. 7 steel-maker, is reportedly in talks to buy coking coal mines in western Canada. The company has initiated talks with the government of British Columbia, a Canadian province, to acquire coking coal mine.
Tatas are keen to acquire coking coal mines for its European operations, which have zero raw material integration. The company needs to find more mines as coking coal prices continue to go up, pressurizing the margins for the company.
On Tata Steel Europe's raw material integration, iron ore from its Canadian DSO project is expected to reach its mills from 2012 onwards. So is coking coal from the Benga project at Mozambique. Tata Steel has 100 per cent off take at the DSO project, which will be producing four million tonnes of iron ore every year from 2012.

Shoppers Stop opens one new store at Durgapur

Shoppers Stop has opened one new store at Durgapur. With the opening of this store, the company has now 37 stores (including two airport stores) under its operation.

Further, the company’s wholly owned subsidiary - Crossword Bookstores - has also opened one franchisee store at Sadashiva Nagar, Bengaluru. With opening of this store, there are now 69 Crossword stores.

Recently the company’s subsidiary - Crossword Bookstores opened one franchise store at Junction Mall, at Durgapur.

Shoppers Stop is engaged in the retailing business. It runs a chain of departmental stores with brands including Shopper’s Stop, Home Stop, Crossword and Cafes and Restaurants etc. The company has reported a surge of 45.03% in net profit to Rs 27.86 crore for the quarter ended December 31, 2010 against Rs 19.21 crore for the quarter ended December 31, 2009. Total income of the quarter stood at Rs 458.68 crore, up 26.50% over Rs 362.60 crore for the year ago period.

Elder Pharmaceuticals plans to raise Rs 105 crore through seven-year bonds

Elder Pharmaceuticals, one of the fastest growing pharmaceutical companies in India, is planning to raise Rs 105 crore through seven-year bonds at 11.25%. The bond features repayments in 10 equal semi-annual installments commencing two years after the issue date.

Meanwhile, proceeds from the secured non-convertible debenture issue will refinance existing higher cost debt. Almondz Global Securities is the sole arranger of the deal.

Elder Pharmaceutical is engaged in the manufacturing and marketing of prescription pharmaceutical brands, surgical and medical devices. It holds market leader position in three therapeutic segments - Women’s Healthcare, Wound Care and Nutraceuticals.

Sugar stocks trade higher on allowing exports to the tune of 5 lakh tonnes

Sugar companies stocks continued their upward journey for yet another session after the government decided to allow sugar exports to the tune of 5 lakh tonnes.

Shree Renuka Sugars is currently trading at Rs 73.80, up by 1.60 points or 2.22% from its previous closing of Rs 72.20 on the BSE. The scrip opened at Rs 73.50 and has touched a high and low of Rs 74.85 and Rs 73.10 respectively. So far 6,12,298 shares were traded on the counter.

Balrampur Chini Mills is currently trading at Rs 72.70, up by 1.15 points or 1.61% from its previous closing of Rs 71.55 on the BSE. The scrip opened at Rs 72.50 and has touched a high and low of Rs 73.75 and Rs 72.50 respectively. So far 1,11,039 shares were traded on the counter.

Bajaj Hindusthan is currently trading at Rs 72.05, up by 1.60 points or 2.27% from its previous closing of Rs. 70.45 on the BSE. The scrip opened at Rs 70.65 and has touched a high and low of Rs 73.15 and Rs 70.65 respectively. So far 2,46,555 shares were traded on the counter.

Rana Sugars is currently trading at Rs 6.06, up by 0.16 points or 2.71% from its previous closing of Rs 5.90 on the BSE. The scrip opened at Rs 6.11 and has touched a high and low of Rs 6.17 and Rs 6.05 respectively. So far 1,29,663 shares were traded on the counter.

Ballarpur Industries trades in green on the BSE

Ballarpur Industries  is currently trading at Rs. 32.85, up by 0.05 points or 0.15% from its previous closing of Rs 32.80 on the BSE.

The scrip opened at Rs. 33.15 and has touched a high and low of Rs. 33.25 and Rs. 32.70 respectively. So far 136218 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 2 has touched a 52 week high of Rs. 43.55 on 11-Nov-2010 and a 52 week low of Rs. 23.45 on 06-Apr-2010.

Last one week high and low of the scrip stood at Rs. 33.90 and Rs. 30.40 respectively. The current market cap of the company is Rs. 2173.06 crore.

The promoters holding in the company stood at 49.40 % while Institutions and Non-Institutions held 35.71 % and 14.89 % respectively.

BILT Paper Plc - unit of Ballarpur Industries is planning to raise at least $330 million from a London listing next month to fund its expansion and to pay its debt. The paper production capacity of BILT Paper has increased by nearly 90 percent over the last two years and it plans to grow it by another 50 percent by the end of 2014.

Ballarpur owns a 79.5 percent stake in the firm, part of the Mumbai-based Avantha group, with the rest held by private equity investors JP Morgan Mauritius and Lathe investment.

The company would be raising $330 million from the sale of new shares while the private equity investors may also sell some secondary shares in the offering, is also expecting to be eligible for inclusion in the FTSE 250 index.

The listing is expected to be completed in mid-April with a price range due during the week of April 4. Citigroup and JP Morgan are joint global co-ordinators and joint book runners of the initial public offering.

Recently, Ballarpur Industries has acquired entire paid up capital of Premier Tissues India (PTIL), a company engaged in business of manufacturing and trading of tissue paper and related products under the Brand names “Premier” and “Royal”.

Most Asian equities trade with marginal gains despite weak global cues

Majority of Asian benchmarks are trading in the green terrain this Wednesday morning session, however, the gains remained capped as weak cues from the Wall Street and towering crude oil prices on concerns that conflicts in Middle East could pinch oil supplies spoiled investors’ mood. The over one and half a percent plunge in Japanese stocks on reports that workers at Japanese nuclear plant were unable to continue work at reactor no 2 due to high radiation levels,that too did no good to the regional sentiments. The Singaporean benchmark, Straits Times remained the top gainer in the space as they climbed around half a percentage point.
Shanghai Composite advanced 12.01 points or 0.41% to 2,931.15, Jakarta Composite added 8.22 points or 0.23% to 3,525.94, KLSE Composite rose 11:41  0.41 points or 0.03% to 1,509.51, Straits Times climbed 14.34 points or 0.48% to 3,017.09, Seoul Composite inched up 1.45 points or 0.07% to 2,015.11 and Taiwan Weighted gained 2.94 points or 0.03% to 8,510.98.
On the other hand Hang Seng fell 57.77 points or 0.25% to 22,800.13 while Nikkei 225 plummeted 153.26 points or 1.60% to 9,455.06.