Reliance Power, GMDC, Unitech and Zuari Industries to witness some action today

Reliance Power is in advance stage of tying up debt of Rs 7,000 crore for financing its 2,400 MW gas-based power project at Samalkot in Andhra Pradesh.

Amidst opposition from some quarters on the proposal of the Gujarat Mineral Development Corporation (GMDC) to carry coal from the Naini coal block in Orissa to meet the requirement of Torrent Power and Adani Enterprises, the state steel & mines department has given its go-ahead for the proposal.

Swiss engineering group ABB has clinched a $900 million order -- its largest single order ever -- from the Power Grid Corporation of India to deliver an ultrahigh-voltage transmission system.

Fertiliser-maker Zuari Industries is in the process of acquiring land to set up a Rs 5,000 crore gas-based urea plant in Karnataka with an annual capacity of 1.3 million tonnes a year.

Cairn, whose $9.6-billion stake sale in its Rajasthan oilfields to Vedanta has run into a roadblock, appears to have turned the tables on partner Oil and Natural Gas Corporation in their joint venture in the Krishna Godavari basin

Realty firm Unitech has sold over 300 units worth Rs 200 crore in its mid-income housing project at Gurgaon launched last week.

The Saroj Poddar-led group of companies, which include Zuari Industries and Texmaco unveiled a new group identity, Adventz Industries India.

Texmaco Rail & Engineering is in talks with a Japanese consortium for an equal joint venture to make suburban train coaches.

India's biggest gas transportation firm Gail India has endorsed petroleum sector regulator's proposal allowing pipeline companies to charge tariffs lower than approved rates but the move has been opposed by Reliance Gas Transportation.

Aditya Birla Financial Services Group (ABFSG) has beefed up its investment team at Aditya Birla Private Equity, naming Amitvikram Sharma as additional Investment Director.

Nippon Life’s plan to buy a stake in Reliance Life may be delayed as the deal requires special permission from the government.

The country’s largest power producer National Thermal Power Corporation (NTPC) has commissioned unit 6 of 500 MW of Farakka Super Thermal Power Station.

Agre Developers will be enhancing its presence in the realty sector. The company’s board of directors for this has authorized a committee of directors to consider suitable proposals for strategic acquisitions through such mode, for consolidating the company's presence in real estate development.

Goldman Sachs cut its 12-month target price on Reliance Communications by 26 per cent to Rs 115, citing reduction in the company's core business value.

Global Markets update 24/03/2011

 DJIA Up 67 (0.6%) NSDQ Up 14.4 (0.5%) FTSE 100 Up 33.2 (0.5%) Asian Markets as on 8.45 AM  NIKKEI Down 19 (0.2%) HANG SENG Up 167 (0.73%) SGX NIFTY Up 11

Ind-Swift Laboratories gets USFDA nod for two more DMFs

Ind-Swift Laboratories has received the US Food & Drug Administration (USFDA) nod for two more DMFs - Temozolomide and Telmisartan - filed by it in US. Besides commercially supplying four molecules to the US, the company has hitherto filed 20 DMFs with the USFDA, of which all have been approved. Temozolomide is an anti-neoplastic drug with market size of $700 million and Telmisartan is a drug for hypertension with market size worth $1.6 billion, the company has a strong basket of 40 plus products across 16 therapeutic segments.

The company’s subsidiary in the US, which has been operational since 2005, is playing a significant role in boosting the company’s business in the US market as it has forged key contracts with leading US generic companies.

The company has so far filed 302 DMFs with various regulatory authorities, including 4 DMFs filed in Japan. Also, 124 patents have been filed, of which one has been granted for cardiovascular drug. 

Recently, the company had received PMDA approval (Pharmaceutical & Medical Devices Agency) from Government of Japan for Pioglitazone and Risedronate Sodium to be manufactured at its facilities in Derabassi (Punjab). With this achievement, the company has become the first Indian company to get Japanese Government approval without any observations.

Ind-Swift Laboratories is a part of the Ind-swift Group and is based at Chandigarh, India. The company is engaged in manufacturing of Active Pharmaceutical Ingredients (API). 

Corporate advance tax payments up 22%

In a signal of robust increase in corporate incomes, overall advance tax payments by the India Inc for the current financial year have increased by buoyant 22%. Total advance tax paid by the corporates reached Rs 1.97 lakh crore in the current fiscal compared Rs 1.60 lakh crore in the last fiscal.

Highest tax payer as per the advance tax figures was publically controlled ONGC which paid Rs 8,492 crore, an increase of 35% compared to 2009-10. Another oil sector major, Reliance Industries, saw its overall advance tax payment increase by 38% to Rs 4,244 crore in the current financial year. Insurance major LIC paid Rs 3,599 crore as advance tax, nearly 11% higher than previous year.

Advance tax payments are often considered as a good barometer of overall performance of the economy and also serve as a lead indicator for growth in overall gross domestic product. However, part of the growth seen this year could also be attributed to the somewhat lower base as growth last year was weaker in many sectors and hence tax outgo also grew at a slower pace.

Nonetheless, the robust growth in tax receipts indicates that overall economy was doing well and if the trend continues, it will help the government meet an ambitious budgeted fiscal deficit target. The finance ministry has pegged fiscal deficit at 4.6% for the next fiscal. But experts have been raising doubts that given the high crude prices and implied increase in subsidy outgo, it would be difficult to adhere to the target deficit, particularly in light of the fact that there will be no one time receipt like the 3G revenue in next fiscal. 

Government panel to meet for pooled pricing of natural gas

The government has constituted a panel for deliberating on pooled pricing of gas irrespective of the source, international or domestic or public or private within the domestic space and the group is likely to meet within a week. The panel will be headed by Planning Commission Advisor on energy and is expected to come up with final recommendations pretty soon.

Demand for natural gas in the country has been increasing sharply, particularly from the power and fertilizer companies for whom there is a major feed stock. Further, overall output of gas in the country has been increasing rapidly and there are prospects of more gas supply from newer discoveries in near term. In this wake the government has been actively looking at a framework for pool pricing of gas in India.

At present, gas is sold at different prices based upon the source of the gas. For instance, domestic gas from public and private sector companies is mostly sold at $4.2 per per million British thermal unit (mmBtu). On the other hand, Australian LNG, which is to be imported by Petronet from its Kochi terminal in Kerala is indexed at 14.5% of crude oil price and will therefore cost over $14 mmBtu.

The terms of reference (ToR) of the committee indicate that the government wants an early alternative to differential pricing and is more inclined to get a pooled pricing solution as soon as possible. This is also reflected in the fact that the ToRs pre-suppose that the decision of a pooled price has already been taken and that the panel will only deliberate on the best method or formula for operating pool prices, without evaluating any other option.

Finance Minister tables Banking Laws (Amendment) Bill in Parliament

Union Finance Minister Pranab Mukherjee on Tuesday tabled the Banking Laws (Amendment) Bill - 2011 in the lower house of the Parliament. The main aim of the Bill is to improve the regulatory powers of the central bank and reform the norms governing voting rights in both the public sector and private sector banks.

In case of the nationalized banks, the Bill proposes to raise the ceiling on voting rights of shareholders from 1% prevailing currently to 10%. It also proposes to enable the nationalized banks to increase or decrease their authorized capital with approval from central government and RBI. Presently, the nationalized banks are subjected to a ceiling of Rs 3,000 crore authorized capital.

In case of private banks it proposes to remove the voting right restriction of 10% for private sector banks in the total voting rights of all the shareholders of the banking company. It is proposed to “remove the existing restriction on voting rights limited to 10% of the total voting rights of all the shareholders of the banking company,” said the statement of objects and reasons of the bill.

The Bill also includes provisions to further empower the central bank. Such a step was felt necessary before new banking licenses were issued so that the central bank is in a better position to regulate the industry. Once the bill is passed, it will be mandatory for anyone to obtain prior approval from RBI to acquire 5% or more of the share capital of a bank and the central bank will have the right to impose whatever conditions it deems fit for such acquisitions.

The bill will also exempt bank mergers and acquisitions from provisions of competition act. This is being done to ensure that bank mergers and acquisitions are exempted from scrutiny of competition commission of India (CCI) and continue to be overseen by the RBI only. This point was request by the central bank itself as bank mergers also often have to be evaluated from point of view of stability of overall banking industry. Many times a bank merger might become necessary to rescue an ailing bank even if it leads to significant increase in market share of acquiring bank.

SEBI grants MF license to Indiabulls, IIFL and UBI

The Securities and Exchange Board of India (SEBI) has given a final approval to Indiabulls Financial Services, India Infoline (IIFL) and Union Bank of India-KBC Asset Management to start their mutual fund business. Indiabulls and India Infoline had applied for a mutual fund license in 2007 and 2008, respectively. Union Bank had applied in 2009.

India Infoline will be launching the products in two months time. The company is looking to launch Index and ETF products. With a GDP of 9%, India Infoline feels that the mutual fund is a long-term business in India and it has a huge growth proposition.

SEBI is not comfortable in granting licenses to financial services companies and has expressed concerns over granting mutual fund licenses to non-serious players. Currently it has around 23 pending mutual fund applications.

The MF industry is witnessing a phenomenal 9% growth with close to asset under management of Rs 6.2 lakh crore. The new entrants in the mutual fund industry feel that India's asset management industry is underpenetrated and doesn't even constitute even 10% of the GDP. At the same time the industry is also witnessing exits by HNIs from mutual funds to other short-term investment opportunities.

The financial crisis in 2008 has seen many new entrants in the mutual fund business burning their fingers.  Also the market regulator has removed the entry load barrier which many fund houses see as a boon to the MF industry.

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.