HDFC sells 7.15% in life arm to UK ally

Housing Development Finance Corporation (HDFC) has sold 7.15 per cent of its stake in HDFC Standard Life Insurance Company to its joint venture partner, Standard Life (Mauritius Holdings), for Rs 200 crore.

Keki Mistry, vice-chairman and managing director of HDFC, said, “The equity shares of 7.15 per cent were sold for Rs 200 crore at a pre-agreed price. However, any future sale of shares by HDFC to Standard Life, if and when permitted by law, would be at a fair value.”

HDFC Standard Life was establised by HDFC and Standard Life Assurance in 2000. The price for the 7.15 per cent stake was arrived at based on a formula agreed in 2006. After this sale, Standard Life Assurance holds 26 per cent of the equity capital of HDFCSLIC, the maximum that a foreign promoter can hold as per the FDI norms in the country’s legislations.

The two promoters of the insurance company are planning to launch an IPO before the end of 2009. According to HDFC officials, HDFC Standard Life will be able to break even in next two years.

HDFC Standard Life is ranked fourth private life insurance company with a total premium income of Rs 2,856 crore in 2006-07 and market share of 9.2 per cent.

The company offers a range of individual and group insurance solutions. HDFCSLIC has over 12,000 employees and more than 1,00,000 financial consultants covering over 700 cities in India.

UCO Bank eyes merger by Mar `08

In a bid to boost its business, Kolkata-based UCO Bank is looking at the merger route by the end of this financial year.

“We will not acquire any banks, but will merge with some other banks in three months. This move will help us cross the total business figures of Rs 2 trillion,” said SK Goyel, chairman and managing director.

Currently, the bank’s balance-sheet size was Rs 1.23 trillion. Regarding the size of the banks it plans to merge with, he said they might be smaller or equal in size, but not larger than UCO Bank.

The chairman declined to divulge any further details saying that they were in the process of negotiation.

On being asked whether United Bank of India (UBI) is a possible candidate along with a South-based bank for the merger, Goyel refused to comment.

PK Gupta, chairman, UBI, has dismissed any such proposals from any banks. “As of now we haven’t received any such proposals from any banks,” he said.

When inquired, A C Mahajan, chairman and managing director, Allahabad Bank, said, “We have been weighing the merger option for the last 2-3 years, but there are no takers right now. Nothing is available as of now in the market.”

Meanwhile, commenting on the recent downgradig by rating agency Crisil, Goyel said it was only for the Tier I perpetual bonds that the rating had declined, and not for the bank as a whole.

“It does not make any difference to the overall ratings of the bank, and for that matter, we received the best ratings of 9.35 for the Tier II Bonds,” he clarified.

Regarding net interest margin (NIM), the chairman sounded optimistic saying, “NIM will increase to 2.8 per cent by the end of the current financial year compared with 2.52 per cent during the first half of the financial year.”

Cipla maintains No.1 position in Indian mkt

Tops pharma rankings with 5.42% market share, a head of Ranbaxy and GSK.

Cipla Laboratories continues to be the largest pharmaceutical company in the domestic market.

Cipla has topped the ORG-IMS rankings for the month of November with a market share of 5.42 per cent and sales of Rs 146.32 crore, edging out Ranbaxy which stood at second position with 5.09 per cent market share and Rs 137.49 crore sales.

In October, Cipla topped with Rs 152.04 crore sales and a market share of 5.23 per cent, ahead of Ranbaxy, which garnered Rs 148.40 crore sales and 5.11 per cent market share, said sources.

Cipla overtook Ranbaxy and GlaxoSmithKline India (GSK) to become the largest pharmaceutical company in the domestic market for the first time in May 2007.

While GSK has maintained its number three position in November, Zydus Cadila (fourth), Alkem Laboratories (fifth) and Sun Pharma (sixth) have moved one rank up from October.

Nicholas Piramal, which faced raw material shortages for its largest selling codiene based formulations, like Phensydyl, in recent months, slipped three positions to number seven in November.

ORG-IMS, the largest market intelligence company in India focusing on the healthcare sector, tracks sales of Indian pharmas on a monthly basis, through over 3,000 stockists and 6,000 doctors.

“Indian companies are increasing their share in the domestic market mainly due to increased number of high value new introductions, though the number of new introductions have reduced recently,” Shailesh Gadre, managing director, ORG-IMS, said in an interview last week.

Ranbaxy’s growth has been largely driven by new introductions such as Volix, an anti-diabetes drug launched in January, Oframax-Forte and anti-asthmatic drug Synasma, which it in-licensed from Eurodrug Laboratories.

Ranbaxy’s antibiotic Mox (amoxyllin), which was not among the top ten brands a year ago, has grown to become the fourth largest brand in the domestic market with monthly sales at Rs 9.8 crore in November, sources said.

Cipla’s growth was powered by positive growth in their existing portfolio, especially its respiratory products.

However, GSK has lost market share mainly in its main portfolios such as anti- infectives, dermatologicals and pain management drugs which grew slower than the market for these products, ORG-IMS said.

ORG-IMS named Alkem Laboratories as the only company among the top ten for which both older products (10 per cent) and new introductions (12 per cent) have contributed significantly to value growth.

“Our growth in the domestic market is mainly due to the growth of our anti-infective Taxim and other brands such as Taximo, Clavem, A to Z and Gemcal,” explained Vinod Dua, head, domestic business of Alkem Laboratories.

Alkem’s Taxim is now the third largest brand in the domestic market with sales of Rs 10.3 crore, behind Pfizer’s cough syrup Corex (Rs 15.2 crore) and Novartis India’s pain killer Voveron (Rs 11.6 crore).

Market in overbought zone

The selling pressure in key index stocks in the late afternoon may lead to a minor correction tomorrow, the first day of calendar year 2008.

There was buying on the side counters as the market wide advance decline ratio was 5.44:1 compared with the Nifty A/D ratio of 2:1. While the large cap stocks moved sideways, the small and mid cap stocks were in great demand.

Kamlesh Langote of vfmdirect.com expects a marginal correction in the near future. The monthly relative strength index (RSI) at 83 indicates overbought conditions. A monthly RSI above 80 is known to cause a sharp correction. There were corrections in May 2006 and August 2007 when the monthly RSI was 87.

However, there is strong support for Nifty at 6,100 and thereafter, at 6,000. The Nifty Put options added 2.43 lakh shares at 6,100 and 1.13 lakh shares at 6,000 strike prices, indicating these as support levels. Resistance is seen at 6,300 and 6,400, where Call writing was seen.

Reliance Industries was listless on Monday with January futures prices declining marginally by 0.47 per cent. The trading volumes were half that of Friday despite the reduction in the lot size from 150 to 75. The State Bank of India was steady, with trading volumes remaining subdued despite a smaller lot size of 125 shares (250 shares).

Infosys, TCS and Wipro remained weak on account of fresh short positions. The futures contract of TCS closed at discount to spot with open interest increasing by 2.41 lakh shares. But the Infosys Technologies contract closed at a premium.

HOCL rides high on joint venture plans

Hindustan Organic Chemicals (HOCL) rose 4.83 per cent and closed the day at Rs 94.85 after it issued an advertisement in a leading international technical journal inviting expression of interest by various multi-national companies for forming joint venture projects.

The company made this announcement during the market hours on Monday, 31 December 2007. On BSE, 16.50 lakh shares changed hands in the counter. The stock had an average daily volume of 7.65 lakh shares on BSE in past one quarter.

Tata Steel, SAIL to form JV for coal mining

Tata Steel and state-run Steel Authority of India (SAIL) are all set to form a joint venture for coal blocks.

"SAIL and Tata Steel are likely to sign an agreement to form a joint venture company for mining four coking coal blocks, most likely in Jharkhand which has reserves of about 500 million tonne for meeting their production needs," a senior government official told PTI.

He said both companies would seek to put in place a formal JV company and then begin scouting for more coal blocks. The board would have representatives from both the companies. The new entity is likely to have an initial capital of Rs 2 crore to be shared equally by the partners.

While SAIL is planning to increase output to 26 million tonne at a cost of more than Rs 50,000 crore, Tata is executing major brownfield and greenfield expansion projects.

Sebi waives MF entry loads from Jan 4

Securities and Exchange Board of India (Sebi) today barred mutual fund houses from charging entry load from investors who buy the schemes directly from the funds, and not through a distributor, agent or a broker.

The new rule is effective January 4, according to a Sebi circular issued today.

At present, the industry average for entry load is 2.25% of the initial investment. Asset Management Companies (AMCs) selling schemes either through the Internet, mutual fund offices or their collection centres can benefit from the new rules.

"Keeping in mind the interests of investors and to facilitate the growth of the mutual fund industry, with effect from January 4, 2008, investors making applications for investments in mutual fund schemes directly without routing through any distributor/agent/broker i.e. through Internet, submitted to AMC or collection centre/investor service centre would not be subject to entry load," said the circular.

The regulator said the waiver will also apply to additional purchases done directly by the investor under the same folio and switch-in to a scheme from other schemes if such a transaction is done directly by the investor.

A CEO of a mutual fund house said this will make life difficult for fund houses most of whom are dependent on distributors to sell their schemes. Though no figures are available, industry officials reckon only 1-2% of their business come through direct sales. This may be 2-3% for HDFC Mutual Fund and others, which have more branch network.

Sebi said the growth of the mutual fund industry in the past years and the technology available for investments has enabled investors to take informed decisions and to invest in mutual funds through Internet and other modes without availing of services of distributors/ agents/ brokers.

"There was an overwhelming response in favour of the proposal by Sebi on waiver of entry load for investors who do not route their mutual fund applications through a broker/ distributor," the regulator said explaining its decision.

The maximum entry load a fund house can charge is 6% while the maximum exit load is 4%. but AMCs cannot charge over 7% from investors when entry and exit loads are totalled.

Sebi waives MF entry loads from Jan 4

Securities and Exchange Board of India (Sebi) today barred mutual fund houses from charging entry load from investors who buy the schemes directly from the funds, and not through a distributor, agent or a broker.

The new rule is effective January 4, according to a Sebi circular issued today.

At present, the industry average for entry load is 2.25% of the initial investment. Asset Management Companies (AMCs) selling schemes either through the Internet, mutual fund offices or their collection centres can benefit from the new rules.

"Keeping in mind the interests of investors and to facilitate the growth of the mutual fund industry, with effect from January 4, 2008, investors making applications for investments in mutual fund schemes directly without routing through any distributor/agent/broker i.e. through Internet, submitted to AMC or collection centre/investor service centre would not be subject to entry load," said the circular.

The regulator said the waiver will also apply to additional purchases done directly by the investor under the same folio and switch-in to a scheme from other schemes if such a transaction is done directly by the investor.

A CEO of a mutual fund house said this will make life difficult for fund houses most of whom are dependent on distributors to sell their schemes. Though no figures are available, industry officials reckon only 1-2% of their business come through direct sales. This may be 2-3% for HDFC Mutual Fund and others, which have more branch network.

Sebi said the growth of the mutual fund industry in the past years and the technology available for investments has enabled investors to take informed decisions and to invest in mutual funds through Internet and other modes without availing of services of distributors/ agents/ brokers.

"There was an overwhelming response in favour of the proposal by Sebi on waiver of entry load for investors who do not route their mutual fund applications through a broker/ distributor," the regulator said explaining its decision.

The maximum entry load a fund house can charge is 6% while the maximum exit load is 4%. but AMCs cannot charge over 7% from investors when entry and exit loads are totalled.

Mastek sees US sales up to 70% in 3 years

Mastek’s business is likely to grow much faster in the US, than its stronghold UK, as the company gears up to cross-sell to customers of recently acquired US technology services provider Vector Insurance Services, Chief Financial Officer R Desikan has said.

Annual revenues from the US are seen growing 60-70 per cent over the next three years, as the base is still small, he said. “Thereafter the growth rate should reduce to around 50 per cent.”

Currently, US business accounts for 30 per cent of Mastek’s revenue, while UK accounts for nearly 65 per cent. Growth in UK is likely to be around 20 per cent per year, Desikan said in an interview.

Rupee impact
The rupee’s appreciation against the British pound is unlikely to hit the company’s October-December earnings, because the rise has been steep only in the last month, Desikan said. During this period Mastek is covered by a foreign exchange hedge, he added.

Since October the rupee has risen 3.6 per cent against the pound.

Over the long haul, the company is ready to bear the impact of this appreciation in the rupee, Desikan said.

“We are going to reduce our sales and general administrative cost, utilise efficiency tools so that fewer man hours are spent on work, increase offshoring of work, and bill clients higher by adding value to the services offered.”

Overall operating margin in 2007-08 is likely to improve 100 basis points, and in 2008-09 it is seen rising 100-150 bps, he said.

Buy line
Mastek is now in the process of conducting knowledge transfer to Vector Insurance, Desikan said. This process should take around three months. Thereafter,

Mastek will offshore some existing work from Vector, and cross-sell its insurance offerings to Vector’s 35 customers, he said.

Mastek acquired US-based Vector Insurance Services in July. The company remains steadfast in its plans to acquire more companies in the US and UK that can complement its existing offerings, Desikan said.

Mastek is in acquisition talks with two-three players and is eyeing companies in property and casualty insurance segment.

“We currently don’t have any offering in the P&C (property and casualty)segment,” Desikan said. Mastek is also seeking a company with intellectual property rights for a product in the health segment, he said. The budget for each acquisition is $10 million-$25 million, Desikan said.

Mastek shares ended at Rs 332.05 on National Stock Exchange on Friday, up 0.7 per cent from the previous close.

Ranbaxy gets nod for Cetirizine Hydrochloride

Ranbaxy Laboratories has received final approval from the US Food and Drug Administration to manufacture and market the generic version of Pfizer's Zyrtec (Cetirizine Hydrochloride tablets).

The total annual sale of Cetirizine Hydrochloride tablets, as a prescription-only product, was $1.3 billion (IMS - MAT: September 2007).

Cetirizine Hydrochloride is indicated for temporary relief of runny nose, sneezing, itching of the nose or throat, and itchy, watery eyes due to hay fever or other upper respiratory allergies.

"We are pleased to receive this final approval for Cetirizine Hydrochloride tablets. This OTC product formulation further expands our portfolio of affordable generic alternatives, and will be launched immediately to all classes of trade," said Jim Meehan, vice president (sales and distribution), Ohm Laboratories Inc, a wholly-owned subsidiary of Ranbaxy.

J&J to get consumer brands from Pfizer India

A year after global drug major Pfizer announced the sale of some of its consumer health brands to Johnson & Johnson, the board of Pfizer India cleared the proposal for the transfer of the brands to J&J in India.

The transfer of Listerine, Benadryl, Caladryl and Benylin has been valued at Rs 214.85 crore.

Kewal Handa, managing director, Pfizer India, said that all other brands and the consumer health team will continue to be an integral part of the company.

"The Pfizer India consumer health portfolio includes key brands such as Gelusil, Nebasulf, Selsun, Ferradol, Neko and Waterbury’s Compound. We believe there is tremendous potential in our brands, and business strategies will be put in place to maximise opportunities and drive growth in the consumer health business," Handa said in a company release issued today.

J&J had acquired Pfizer's consumer healthcare business for $16.6 billion in cash.

Short Term Tips - Buy Orchid Chemicals & Bharati Airtel

Buy Orchid Chemicals at CMP of 294

Target of 325.
Stoploss of 289

Duration - 15 days

Analysis based on 30, 50 and 100 Exponential MA.


Buy Bharati Airtel at CMP of 940

Target of 1020

Duration - 10 days

Analysis based on the current stake sale of Bharati Infratel, a 100% own subsidiary of Bharati Airtel

Bullishness to continue

The trading activity in the final hour on Friday signalled bullishness, going ahead. However, if the past is any indication, the markets tend to have one good week, only to follow it up with weakness in the subsequent week. What happens on Monday will thus be a trend setter.

The markets opened on a weak note on Friday, the first trading day of the new January series, with the bears pulling the benchmark indices close to their support levels.

The reversal came towards the close, with the Nifty moving up from the day’s low of 6,022 to close at 6,080. The late charge should continue on Monday, the last day of the calendar year.

The Nifty is expected to hit its all time high of 6,185 and the Sensex should surpass 20,500. Going ahead, the Nifty is likely to target 6,300 and 6,350 levels and the Sensex should see 21,400 and 21,600.

According to a technical analyst at Motilal Oswal, the uptrend is expected to resume from the January series. The Nifty is expected to move towards the initial target of 6,185 as the undercurrent is still strong.

On a weekly chart, the spot Nifty has already crossed the previous week’s close of 6,040 and is now at the verge of testing the all-time high of 6,185.

An increase in Call options OI was seen at 6,100, 6,200, 6,300 and 6,400 strikes, indicating that operators were buying at-the-money Calls and writing out-of-the-money Call options.

Put options added 5.96 lakh shares at the strike price of 6,000, pointing to this as the support base for the Nifty in the near future.

Among the Nifty stocks, long OI build-up was seen in stocks such as Hindustan Unilever, National Aluminium, Punjab National Bank, Ranbaxy Laboratories, Reliance Energy, Tata Power and Tata Steel. Fresh shorts were seen in Bharti Airtel, Dr Reddy’s Labs, GSK Pharmaceuticals, ICICI Bank, Infosys Technologies, ONGC and Suzlon Energy.

Indian Pharma giants change strategy

Indian pharmaceutical majors, such as Ranbaxy Lab and Dr Reddy's, are changing their tactics to concentrate on brand acquisitions and strategic investments rather than risky big ticket cross-border acquisitions to boost their global business. Year 2007 witnessed only 25 M&As with 15 cross border transactions with an estimated value of about $ 600-700 million in the Indian pharmaceutical sector. (This figure excludes Sun Pharma's unsuccessful attempts so far since March this year to take over Israel's Taro for $ 454 million).

The domestic pharmaceutical companies had executed more than 40 deals with 32 cross-border transactions worth about $2,000 million in 2006, including big ticket deals like Dr Reddy's acquisition of Betapharm of Germany for ¤480 million (Rs 2,550 crore) and Ranbaxy's Terapia buy in Romania for $ 324 million (over Rs 1,250 crore), according to industry observers.

The major pharmaceutical M&A deals in 2007 were Wockhardt's acquisition of the French company Negma Laboratories for $ 265 million (Rs 1,045 crore) and the US-based Morton Grove Pharmaceuticals for $ 38 million (Rs 150 crore), Jubilant Organosys's acquisition of Hollister-Stier Laboratories of the US for $122.5 million (about Rs 500 crore) and Alembic's buyout of the entire domestic non-oncology formulation business of Dabur Pharma for Rs 159 crore.

Industry experts cite relatively small deals like Lupin's acquisition of Rubamin Laboratories, Baroda to enter into the contract research and manufacturing services (CRAMS) business and Zydus Cadila's buyout of Liva Healthcare of Mumbai to strengthen its dermatology product portfolio as glaring examples of an emerging trend of brand and strategic buyouts.

"Focus on brands will be an emerging trend in future, both for domestic companies and overseas firms looking at India. Almost all companies are strategising innovative opportunities that suit them to build brands in India as big deals become more expensive," said Shailesh Gadre, managing director, ORG-IMS, a leading market research based consulting company.

Experts also said that most of the domestic deal activity so far is focused on small asset or brand purchases with the exception of the Liva and Dabur deals and are yet to see domestic consolidation in the mid-cap or large-cap space.

"This can only be driven by farsighted boards that put senior managements through a systematic internal and competitive review, scenario planning and regular review of progress against corporate goals. Rationale for domestic consolidation requires more analysis than cross-border transactions but can have a significant impact if the right parties come together," said Rajiv Shukla, executive director of Avendus Capital and a seasoned pharmaceutical M&A expert in Mumbai.

Ranbaxy, which executed five cross-border acquisitions in 2006 (Ethimed of Belgium, GSK's facilities in Spain and Italy, Terapia and Be-Tabs of South Africa) refrained from any acquisitions in 2007. Instead, it made a strategic investment in the Hyderabad-based upcoming company Zenotech Laboratories to hike its equity stake to 45 per cent for Rs 214 crore. The investment was to access Zenotech's pipeline of specialty injectibles, cancer and off-patent biotechnology drugs. Though Ranbaxy was in fray to acquire the generics business of Merck KGaA, it withdrew from the bid mid-way due to the high valuations. Dr Reddy's and Ahmedabad based Torrent were also reported to be in fray for Merck Generics assets, which was eventually taken over by Mylan Laboratories of US for $ 6.6 billion.

Similarly Dr Reddy's Laboratories, which is yet to recover from the Betapharm acquisition due to various reasons and Aurobindo, which acquired a manufacturing unit in the US and Milpharm of the UK in 2006, did not buy any new facilities in 2007.

Suzuki may cut Maruti 800 prices to compete with Tata`s 1 lakh car

Suzuki Motor, facing growing threats to its 50 per cent share of India’s car market, may cut the price of its cheapest car in the country to counter Tata Motors’s proposed Rs 100,000 ($2,500) car.

“We will have to do at least that,” Shinzo Nakanishi, managing director of Suzuki’s local unit, Maruti Suzuki India, said in an interview at the company’s head office in Hamamatsu, Japan, yesterday. Suzuki’s cheapest car in India, the Maruti 800, now costs from Rs 192,124 in New Delhi showrooms, according to Maruti’s website.

Cutting prices may help Suzuki maintain dominance in its biggest market as the company faces greater competition from Tata and foreign rivals including General Motors and Hyundai Motor. Other automakers including Renault have also proposed selling ultra-cheap cars in India, the world’s second-fastest-growing major auto market.

“By cutting prices, the profit margin will drop, and it may also hurt the brand image,” said Koichi Ogawa, who helps oversee $28 billion at Daiwa SB Investments in Tokyo. “Investors care more about profitability than market share.”

Suzuki fell 2.3 per cent to 3,370 yen at the 11 am close on the Tokyo Stock Exchange. The Topix Transportation Equipment Index declined 1.4 per cent. Today is the last trading day of the year, and the exchange closed after the two-hour morning session.

Concern about instability after the assassination of former Pakistani Prime Minister Benazir Bhutto may have contributed to today’s share decline, Ogawa said. Suzuki’s Pakistani unit, Pak Suzuki Motor — the country’s largest automaker — plans to increase production capacity to 250,000 vehicles by 2009, from 120,000 now to meet rising demand.

India sales
In India, automakers are spending $6 billion to increase capacity as economic growth and rising incomes make cars affordable to more people. Vehicle sales may triple by 2015 in the country, where only seven in 1,000 people now own an automobile.

Suzuki, which started selling cars in India in 1983, is relying on growth in the country and in Europe as demand wanes at home. Sales in India of the company’s Swift, Alto and other models rose 18 per cent to 336,758 in the six- months ended September 30, surpassing Suzuki’s sales in Japan for the first time.

The country’s annual passenger-car sales more than doubled in the past five years to 1.08 million in the 12 months ended March 31, according to the Society of Indian Automobile Manufacturers. The total is likely to reach 3 million by 2015, the government estimates.

Renault, Volkswagen
Aiming to tap the growth, Renault and Volkswagen began selling cars in India in the past two years, while Honda Motor — Japan’s second-largest carmaker — plans to unveil its first hatchback model in the country to take on Suzuki.

CSM Worldwide estimates Suzuki’s share in India may drop to 24 per cent in 2013, as cheap cars increase competition. “So far, it’s been easy to maintain a 50 to 55 per cent share, because there weren’t strong competitors,” Nakanishi said yesterday. “But from now on, it won’t be the case.”

Tata Motors, the country’s largest truckmaker, will unveil its $2,500 car in New Delhi on January 10. The yet-to-be-named model would be the nation’s cheapest car and target motorcycle buyers. India is the world’s second-largest motorcycle market behind China.

Suzuki won’t sell a car as cheap as Tata’s because it will be unprofitable, Nakanishi said.

“Demand for both Tata’s car and the Maruti 800, when prices are cut, will be immense,” said Amit Kasat, an analyst at Motilal Oswal Securities in Mumbai, who recommends buying shares in both automakers. “We need to see how much the price will be reduced and how Tata’s cars will be accepted.”

Nissan, Bajaj
Renault and Nissan Motor, Japan’s third-largest automaker, are planning to build a $3,000 model with Bajaj Auto, the country’s second-largest motorcycle maker, to compete in India. Renault, based in Boulogne-Billancourt, France, owns 44 per cent of Nissan.

Spending on expanding factories in India will bring down Maruti’s net income margin, Nakanishi also said. The profit ratio will fall to “7 or 8 per cent” beginning next year, compared with 10 per cent this year, he said.

Suzuki will spend 200 billion yen ($1.75 billion) to expand capacity and to build a research facility in the northern state of Haryana, already home to Maruti’s factories. The research facility will develop cars designed for the Indian market.

The company will invest an additional 200 billion yen by 2010, to raise factory capacity to build the new A-Star car. It will boost output capacity by 300,000 units, increasing total capacity in India to 960,000 by financial year 2009.

Suzuki will start exporting the A-Star to Europe next year. The automaker is counting on the new model to boost annual European sales to 420,000 vehicles from 310,000 last business year.

Maruti Suzuki will use its cash to fully-fund the investments, said Nakanishi. Suzuki will build 1.2 million vehicles in India in financial year 2009 — 1 million for India and the rest for exports, he said.

NTPC plans JV for plant components

NTPC, India’s biggest power producer, is in negotiations with Bharat Forge to set up a joint venture to produce components for power plants.

“There is a shortage of good quality forgings and pipes for the power industry in India and we want to meet the growing demand,’’ NTPC Chairman T Sankaralingam said in a interview. “We are in talks with Bharat Forge. The decision depends on our board of directors.”

Demand for power-plant equipment has surged with Prime Minister Manmohan Singh’s government set to make huge investments in the next five years on boosting generation capacity and upgrading the transmission network.

“Backward integration through the forgings venture can help NTPC increase its revenue by up to Rs 500 crore ($126 million) according to our estimate,” said K D Mehru, vice-president at Mumbai-based stock brokerage Darashaw & Co. “The market needs all the equipment it can get.”

Sankaralingam said the state-run company has informed the power ministry of its plans to enter the business. He didn’t say how much the company plans to invest in the venture.

NTPC, which produces 28,334 mw of power, plans to raise its output to 51,000 mw in the next five years. The company, on October 9, formed a joint venture with power equipment maker Bharat Heavy Electricals to build power projects and help reduce component shortages.

The government estimates peg a two percentage-point loss in annual growth to electricity shortages and plans to add 78,577 mw by 2012 to help beat peak hour shortages of up to 13 per cent.

IOC may review capex plan

Public sector Indian Oil Corporation today said it may have to review its capital expenditure plan if fuel prices are not revised quickly.

“IOC is incurring a loss of Rs 148 crore per day due to under-recoveries in prices of petrol, diesel, LPG and kerosene. If prices are not revised, the capital expenditure plan may get affected and we have to review it,” IOC Chairman and Managing Director Sarthak Behuria told reporters after the company’s first board meeting here.

He said that as per IOC estimates, the under-recovery in petrol is Rs 8.19 per litre, diesel Rs 9.24 per litre, LPG Rs 262.37 per cylinder and kerosene Rs 21.21 per litre.

Out of the Rs 148 crore loss per day, the contribution of IBP that has been merged with IOC is Rs 14 crore.

Asked how long the company would be able to sustain such under-recovery, Behuria said, “we can’t sustain it for long”.

To a question what the IOC had sought from the government to overcome the problem, he said the matter had already been referred to the Group of Ministers (GoM) and the solution could be a combination of price rise, duty cuts and subsidies.

The GoM, headed by External Affairs Minister Pranab Mukherjee, is likely to meet next month to review fuel prices.

Bharti tower co to divest up to 9% for $1 billion

Tower infrastructure company Bharti Infratel, a wholly owned subsidiary of telecom services provider Bharti Airtel Limited, today agreed to divest 7.5 to 9 per cent to a clutch of international investors for $1 billion (Rs 4,000 crore).

While Singapore-based Temasek Holdings will be the largest investor, the other players include the Investment Corporation of Dubai (ICD), Goldman Sachs, Macquarie, AIF Capital, Citigroup and India Equity Partners (IEP).

Temasek also holds a stake in Bharti Airtel.

The deal puts the tower company’s enterprise value at $10 billion to $12.5 billion (Rs 40,000 crore to Rs 50,000 crore), but the final valuation will be determined on the basis of Bharti Infratel’s actual operating performance in FY 2008-09.

Bharti Infratel owns close to 20,000 sites in seven circles and holds approximately a 42 per cent stake in Indus Towers, the recently announced joint venture between Bharti, Vodafone and Idea, which has over 70,000 sites.

As part of the joint venture Bharti Infratel had recently transferred 30,000 towers in 16 circles to Indus recently. Indus plans to scale up to 20,000 towers in the next two to three years.

With the market for mobile services growing at 3 million subscribers a month, tower infrastructure companies have seen their valuations soaring in recent months.

Indus Towers is valued at around Rs 150,000 crore and controls over 70,000 towers. Reliance Communications was able to divest 5 per cent in its tower company to seven investors for Rs 1,400 crore, giving it an enterprise value of Rs 27,000 crore.

The company controlled over 13,000 towers when the deal was struck. It is looking at another divestment of 5 per cent but this time it is looking at an enterprise value of $9 billion on 16,000 towers.

Even the Ruias have got into the business and have floated a separate tower company with 4,000 towers. The Tatas have also set up an independent tower company.

DLF becomes India's second most valued private sector firm

Real estate giant DLF on Friday pipped Bharti Airtel to become the country's second most valued private sector company after Reliance Industries, following a surge of over five per cent in its share price.

In an overall flat market, shares of DLF rose by 5.31 per cent at the BSE to close at Rs 1,063.70 - more than double its IPO price in less than six months of listing.

The company's market capitalisation surged to Rs 1,81,343 crore at the end of today's trading, marking a gain of about Rs 9,150 crore over the previous day.

This is second highest among private sector companies after country's most valued firm RIL, which has a market cap of over Rs 4,21,000 crore.

This is estimated to have swelled DLF chairman Mr K P Singh's wealth to more than $40 billion (about 1,60,000 crore). Last month, Mr Singh was named as world's richest realtor with a wealth of $35 billion by Forbes magazine.

Forbes had calculated Mr Singh's wealth on the basis of DLF share price on November 2, since when the scrip has gone up by 14.3 per cent. Today's rally, which followed reports that DLF was mulling over listing its various subsidiaries, made it the count ry's fourth most valued firm across both private and public sector companies.

RIL is followed by two public sector companies ONGC and NTPC in the market capitalisation league at over Rs 2,62,000 and Rs 1,99,000 crore respectively.

DLF was followed by telecom major Bharti Airtel as the country's fifth most valued company with a market value of Rs 1,78,530 crore. Earlier in the day, shares of DLF touched a lifetime high of Rs 1,072.

Rollover of Nifty jumps to 74%

The premium on the Nifty January futures with respect to the Nifty spot close widened sharply to 33.35 points on Wednesday, the penultimate day for December futures, due to short covering and also on creation of fresh long positions. The premium of 12.45 points for Nifty December future is quite high considering that it is expiring on Thursday. Nifty January series saw a rollover of about 74 per cent.

The overall rollover of derivatives contracts gained momentum with about 70 per cent of positions being carried forward to the next month. However, CNX Nifty Junior saw sharp rollover of about 93 per cent indicating lot of interest in Nifty Junior stocks. Trading volume also picked up sharply to Rs 91,144 crore, which is the highest so far in this month. Stock future accounted for Rs 67,695 crore while index futures witnessed a turnover of Rs 18,538 crore. e activity was mainly centred around on R-pack counters, thanks to the sharp rally in the last couple of days. Reliance was the most active among them, followed by Reliance Energy, Reliance Capital, Reliance Natural Resources and Reliance Communications.

However, the star performer among them was Reliance Capital, which gained 7.35 per cent. It saw rollover of about 68 per cent to January month contracts.

After remaining on the sell side for quite sometime, foreign institutional investors turned net buyers in the last couple of days. They were net buyers to the tune of Rs 1,986 crore. They were net buyers of Rs 1,760.76 crore in index futures and Rs 275.6 crore on stock futures though they offloaded about Rs 50 crore in index options.
Securities under ban

The NSE has banned six securities – Adlabs Films, Aptech, Arvind Mills, Gitanjali Gems, JP Hydro and Tata Tele Maharashtra – as open interest positions have crossed the maximum 95 per cent of the market wide position limit.

Suven Life Sciences gets US patent for new compound

Suven Life Sciences Ltd announced on Thursday that the US Patent office has granted product patent US 7,297,711 to the company's product. This is Suven's first product patent granted in the US. The granted claims of the patent include the class o f selective Serotonin receptor affinity compounds discovered by the company and are being developed as therapeutic agents.

According to the invention '711 patent disclosure, the compounds are useful in the treatment of neuro-degenerative disorders like Alzheimer's Parkinson, Schizophrenia and Huntington's.

Suven has so far filed 29 product patent applications covering more than 145 countries, out of which 5 patents are granted in various countries.

Suven has filed its first Investigational New Drug (IND) application with DCGI to conduct the clinical Phase-I study on their developmental candidate SUVN-502 and several candidates are in discovery pipeline undergoing GLP pre-clinical studies.

"We are very pleased by the issuance of this patent to Suven by US Patent office for our drug candidates that are being developed for CNS disorders which targets a $18 billion potential market opportunity" said Mr Venkat Jasti, CEO of the company.

Entertainment stocks shine on re-rating hopes

Entertainment stocks such as PVR, Inox Leisure, Tips Industries and Zee Entertainment have been gaining sharply on the bourses of late.

According to market participants, stocks in the media and entertainment segment are attracting investor’s interest because of the strong box-office performance of films such as ‘Taare Zameen Par’ and ‘Welcome’. While Taare Zameen Par is co-produced by PVR, Welcome is being distributed by the Network 18 group.

Zee Entertainment Enterprises is rallying because investors are betting that its newly launched channel Zee Next would increase viewership resulting in additional advertising revenue.

These news apart, stocks in the media and entertainment sector continue to be fancied by fund managers and HNIs because this sector is perceived to be at a nascent stage. Brokerage houses have also started recommending this sector to their clients with revised upward targets, say market sources.

Petrochem consolidations round the bend

The petrochemical industry may see a phase of consolidation in the face of major capacity expansion coming up in West Asia, China and India, and an impending downturn in the industry in the next couple of years, according to analysts.

The industry saw its last slump in 2000-01. That was when India’s largest petrochemical company became larger by acquiring cash-strapped medium-sized companies such as Raymond Synthetics, of the Raymond group, JK Corporation’s Orissa Synthetics, and the RPG group’s India Polyfibres.

“Historically, the industry has been cyclical in nature, and we could see a downturn in 2008-09, which will last till 2013-14,” said Kumar Manish, associate director, KPMG, a global advisory firm. “It is likely to lead to another round of consolidation in the industry with the bigger companies buying out the medium-sized ones.”

Some of the medium-sized companies include Chemplast Sanmar, BASF, Century Textiles and Garware Polyester, among others.

“Smaller companies may prove interesting for the Chinese and West Asian companies as it will give them critical mass,” another Mumbai-based analyst said.

An official at GAIL, another prominent petrochemical company, said it was not yet looking at acquisitions, but at organic growth.

Large capacity for manufacturing petrochemicals, such as purified terephthalic acid (PTA) and polyester staple fibre (PSL), is being added in West Asia, where feedstock such as gas and naphtha are available, and in China and India, where the markets are large and growing.

“Right now margins are certainly above average,” Manish said. High margins are attracting people to set up small petrochemical manufacturing units. During the expected squeeze, margins could decline by as much as 100 per cent.

Haldia Petrochemicals, one of the four large petrochemical companies in the country, is putting off expanding its naphtha cracker plant.

Instead, it is planning to manufacture high-value products such as styrene and butadiene in the short to medium term, to boost its bottomline.

The country, currently, imports most of styrene and butadiene products, and manufacturing these domestically would help Haldia Petrochemicals tide over the impending downturn, Haldia Managing Director Swapan Bhowmik said in Kolkata on Monday.

Haldia Petrochemicals is also strategically located next to Indian Oil Corporation’s (IOC) refinery in the area. It can use feedstock such as naphtha for its plant.

“Only companies which have integrated refineries and petrochemicals units can optimise profits. Standalone smaller companies may not be able to pass on the adverse impact of slack demand to customers,” KPMG’s Manish said.

The government is attempting to integrate petrochemical units with refineries by promoting petroleum, chemicals and petrochemicals investment regions (PCPIRs) in the country. These regions are being planned as investment hubs for the industry.

Himalya in yogurt & milk deal with Rel Retail

Himalya International, an exporter of frozen products, has entered into an agreement with Reliance Retail, the largest retail player in the country, to supply yogurt and flavoured milk.

Reliance has already approved Himalya's cheese facility, and entered into an agreement for buying cheese for its retail stores.

Himalya will extend its dairy processing plant and invest in state-of -art yogurt plant to be imported from the US, an official release said today.

Himalya has plans to launch flavoured and fruit yogurts in various other retail chains besides Reliance in 2008.

Himalya International changed its status from EOU to an exporter of EPCG products to take advantage of the emerging new opportunity in the domestic market.

Time Technoplast buys Bahrain firm for $10 mn

Technology-based polymer products company, Time Technoplast (TTL) has acquired Bahrain-based battery manufacturer Gulf Powerbeat WLL for $10 million. The acquisition was made by the Mumbai-based compnay through its Hyderabad subsidiary NED Energy (NED).

According to a release issued by TTL to the BSE today, GPW has a state of the art production facility for the manufacture of long life batteries. The total investment in the Bahrain project is estimated at $10 million to be made over the next 3 years and to be financed through a mix of equity contribution from NED and raising debt overseas.

The company was owned by a reputed business family of UAE who offered to disinvest in battery business to remain focused on their large size projects in areas like finance and real estate.

The new acquisition of GPW will provide NED 'ready to use' capacity which could be integrated fully with NED's operation in the next 3 months.

TTL entered into the battery business in October through its acquisition of 71% holding in NED for Rs 50.30 crore, which manufactures valve regulated lead acid (VRLA) batteries mainly for the telecom sector.

GPW has installed capacity for telecom and automotive batteries of up to 150 million AM with surplus capacity to produce vital battery components (grids and lead plates) of additional 250 million AH.

NED plans to triple its current capacity to 300 million AH from 100 million AH currently to meet the huge demand of its products and to further bring new products for the fast growing automotive sector.

In the first phase, NED plans to tap the Gulf Co-operation Council (GCC) market for automotive batteries and bring additional components into India to augment the capacity of its Hyderabad plant to 200 million AH.

NED's project expansion in Jammu by the second quarter of the next financial year would also aid further increase in capacity.

TTL had entered into an agreement with NED, a closely-held company engaged in the manufacture of valve regulated lead acid (VRLA) batteries, to purchase 4.289 million shares (71.48%) of the existing share capital from the latter's promoters at a price of Rs 103.33 per share aggregating Rs 44.31 crore, besides subscribing to 0.58 million additional shares at Rs 103.33 per share at an aggregate value of Rs 6 crore.

The existing promoters will continue to hold 26% of the equity capital of NED. The company, enterprise value of which is estimated at Rs 65 crore, registered a turnover of Rs 4.5 crore with a net profit of Rs 3.3 crore for 2006-07. It expects to garner Rs 60 crore revenues with a net profit of Rs 5.5 crore during 2007-08.

The domestic automotive battery market is pegged at Rs 1,600 crore while the telecom battery market is estimated to be Rs 985 crore, in which NED has a five per cent market share. The telecom sector is growing at a rate of 40% and the demand for telecom towers is expected to touch 3.3 lakh by 2010, from the present 1 lakh.

TTL, which posted a net profit of Rs 41.4 crore on a turnover of Rs 456.9 crore in 2006-07, expects its net profit to touch Rs 75 crore and its revenues to exceed Rs 700 crore for the year-ended March 2008.

Sebi allows mini-contracts on Sensex, Nifty

Securities and Exchange Board of India (Sebi) today introduced mini-contracts in the derivatives markets based on the Sensex and the Nifty indices to improve liquidity and increase investor participation for the index-based products.

Mini-contracts are a fraction of normal derivatives contracts, and will help individual investors hedge risks of a smaller portfolio.

Initially, the mini-contracts would be limited to index futures and options on the 30-share BSE index and the 50-share NSE index.

The Bombay Stock Exchange (BSE), in a separate release, said it would launch the mini-contracts on the Sensex from January 1. The mini Sensex contracts will have a market lot of five units.

The small size of the contract would be attractive for retail investors as there would be comparatively lower capital outlay, lower trading costs, more precise hedging and flexible trading, the BSE release said.

The security symbol for the Sensex mini-contracts would be MSX and it would be available for one, two and three months along with weekly options, BSE said.

NSE officials were not available for comments, but it is expected that the exchange would also announce the launch soon.

The recommendation to introduce mini-contracts was made by Professor M. Rammohan Rao, who headed the Derivatives Market Review Committee (DMRC) of Sebi.

The move to introduce mini-contracts follows its increasing popularity globally due to the higher liquidity and the ability to get in and out of a trade quickly with low impact cost.

5yr lock-in for RPL promoters' equity : Sebi

Securities and Exchange Board of India (Sebi) has disposed off a complaint against the initial public offering (IPO) by Anil Ambani-promoted Reliance Power (RPL) by asking the promoters to lock-in the entire 20% of their contribution to the share offer for five years from the date of the IPO.

The regulator, however, said the thrust of the argument by the complainant was with respect to shortchanging the shareholders of Reliance Energy (REL) rather than Reliance Power, and hence, the shareholders of REL could take up the matter with the Ministry of Corporate Affairs under whose jurisdiction most of the allegations fall.

The Sebi order, say merchant bankers, clears the hurdles ahead of the mega IPO of $2.5-3 billion, which is expected to hit the markets early next year.

A complaint filed with the capital markets regulator had alleged serious breach of corporate governance in the case of Reliance Energy, also promoted by Anil Dhirubhai Ambani Group (ADAG), for the transfer of high value projects such as Rosa Power, Sasan Power, Butibori, Shahpur Coal, Dadri etc to a company (RPL), which is owned 50% by Reliance Energy and the remaining 50% by the promoters of REL.

The complaint by Rajkot Saher/Jilla Grahak Surakha Mandal had alleged that the proposed IPO by Reliance Power was used by the promoters of RPL to "subvert the spirit" of the rules to gain "huge benefits using several front companies and by means of merger and amalgamation."

Sebi, which heard both the parties on December 4, said it has no jurisdiction to initiate action or conclude a finding on this front.

While asking the promoters to lock-in their contribution of 20% for a 5-year period, Sebi said: "The objective of mandatory promoters’ contribution and lock-in are to ensure commitment of the promoters of the company making IPO and stability of the issue and to ensure that investors are not deceived by fly by night operators."

Banking, telecom set to ring in robust Q3

But rising rupee threatens to slow down growth in export volumes

The corporate earnings in the second quarter ended September 2007 were driven by the strong performance of banking and financial services, capital goods and telecom sectors.

According to research analysts, the third quarter earnings will be more or less driven by these sectors. The impact of the rupee appreciation will continue to haunt export-oriented units, leading to lower export growth in rupee terms.

The second quarter corporate results showed a significant slowdown in the growth of sales and profits. In spite of a 37 per cent surge in other income, the net profit of manufacturing and services companies rose only 22 per cent.

The slowdown in the growth rate of profits was attributed to the sales growth of 10.2 per cent, the lowest since March 2004.

During the second quarter, the impact of the recession in the automobiles sector was most pronounced in the top line of motorcycle manufacturers, which saw sales fall 4 per cent.

The sales of heavy commercial vehicles rose by a dismal 2.3 per cent. The automobiles sector did not do well during the first two months of the third quarter, with two-wheelers and heavy and commercial vehicles lagging light commercial vehicles and passenger cars.

Sales in the cement sector increased 22.8 per cent, which is healthy at the first glance, but the lowest in the past four quarters. The growth in profits at 45.2 per cent too was the lowest in the last three quarters.

The growth in despatches during the first two months of the third quarter remained depressed, with cement companies posting 9 per cent growth in October 2007 and a dismal 3.4 per cent in November 2007.

Though cement prices were marginally higher, they have failed to match the rise in cost of production. Hence, the profitability of cement companies is likely to decline further in the third quarter.

Ferrous and non-ferrous metal companies underperformed in the second quarter due to a fall in international prices. Sales of integrated steel companies rose 12.3 per cent and their net profit went up 16.1 per cent. Small and medium companies in the sector did better, with their sales and profits growing by over 25 per cent each.

The third quarter is likely to be subdued following a softening of international non-ferrous metal prices. Besides, rising raw material prices will impact the profitability of metal companies, with non-integrated players set to take a knock in the third quarter as well as during the remaining part of the current financial year.

The average realisation for steel companies during the second quarter remained low on a sequential basis as most of the domestic steel price hikes took place in September and October.

An analyst at Kotak Securities is of the opinion that the realisation in the third quarter will improve substantially on a quarter-on-quarter basis as the uptrend in steel pricing continues. moreover, the growth in volumes continues to remain strong during the quarter.

Input costs for steel companies increased substantially during the second quarter. However, leading steel companies were able to safeguard their margins due to previous long-term contracts and captive raw material availability.

However, due to a strong rise in prices of iron ore and coke, non-integrated players will have challenging times, going forward. Leading companies continue to report strong growth in their profits on the back of improved efficiencies and increased focus on high-end steel production.

The performance in the fast moving consumer goods sector was slightly below expectations in the second quarter. The third quarter will be in line with expectations, with the pricing environment remaining buoyant in most categories except for soap and malted-food drinks, according to the India Strategy report by Kotak Securities.

Higher product innovations, improved quality of products, higher disposable incomes and significant cost inflation are likely to be the drivers for price hikes. Higher realisation will be primarily driven by price hikes.

The media and entertainment sector is set for another robust quarter, with most companies likely to outperform analysts' expectations. The second quarter results of most of the companies in the sector as a whole were a mixed bag, with several companies on an investment spree to augment the future growth.

The revenue growth for almost all companies in the sector is likely to be robust for the third quarter and may beat expectations. However, the absolute profitability may be subdued as most of the companies are in the investment phase.

The capital goods companies are also likely to post robust growth in the third quarter on the back of huge order-book position. Order inflows continue to remain strong, even as unexecuted orders reached a new high.

Considering the infrastructure expenditure lined up in the country across oil and gas, metals, roads and transportation sectors, the demand outlook remains buoyant for the capital goods companies. The strong demand will provide the pricing power to capital goods companies, at least in the near future.

The performance of the pharmaceuticals sector too remained a mixed bag. Analysts expect companies such as Cipla, Orchid Chemicals, Aurobindo Pharmaceuticals, Lupin, Nicholas Piramal, Elder Pharmaceuticals and Wockhardt to perform better.

Generics exports continue to be the main growth driver for most of the companies, while Wockhardt and Cadila will benefit from the consolidation of their acquisitions. However, the appreciating rupee has affected export revenues of some of the Indian companies, notable among them being Unichem, Ranbaxy and Torrent Pharmaceuticals.

The information technology sector is likely to be hit by the rupee appreciation, with the growth in rupee revenues set to be in line with the guidance.

The demand continues to be robust with no signs of a slowdown in the business from banking and financial services clients. However, there continues to be uncertainty about the possible fallout of the economic conditions on the overall growth of the companies' IT budgets in 2008.

VSNL sells 10% stake in Sri Lankan arm

Telecom and Internet major Videsh Sanchar Nigam (VSNL) has sold off 10% equity stake in its wholly owned subsidiary VSNL Lanka to Sunshine Holdings for Rs 7.5 crore. The Tata group company has sold 15.17 lakh shares to the Sri Lankan business conglomerate.

Sunshine Holdings has the option to acquire an additional 5% of VSNL Lanka’s share capital in the next 12 months at fair market value, VSNL said in a statement.

“This partnership with Sunshine Holdings will enable VSNL Lanka to capitalise on our partner’s intimate knowledge and experience in the Sri Lankan market. This is also part of our attempt to unlock value for our shareholders in an appropriate manner,” Rajiv Dhar, chief financial officer, VSNL said in a statement today.

Sunshine Holdings has interests in pharmaceuticals, travel and tourism, tea and rubber cultivation and managing portfolio investments. The company’s managing director Vish Govindasamy has been director of VSNL Lanka since its inception.

“We have been working closely with VSNL in Lanka and this investment reiterates our commitment to this partnership. We firmly believe that VSNL Lanka will be able to achieve a strong position in the Sri Lanka telecom market,” Vish Govindasamy said.

VSNL Lanka offers international voice and data services in Sri Lanka through an external gateway operator’s licence, since February 2004. VSNL Lanka would continue to play a leading role in the fast growing Sri Lankan market for international voice and data services.

ONGC-Mittal JV bags block in Trinidad

The combine had earlier won two blocks in Nigeria

Steel baron Lakshmi N Mittal’s joint venture with ONGC Videsh (OVL) has won an exploration block with estimated gas reserves of two trillion cubic feet (tcf) in Trinidad and Tobago.

ONGC-Mittal Energy beat UK’s Centrica to bag the offshore block, a company official said.

OMEL, the 51:49 joint venture between Mittal Energy and the overseas investment arm of state-run Oil and Natural Gas Corp (ONGC), made a revised financial commitment of about $204 million to win the block.

In January 2006, Trinidad and Tobago offered eight onshore and three shallow marine blocks for bidding. OMEL made an initial bid of about $175 million, including signature bonus. It later emerged that Centrica and a consortium led by BG of the UK had also submitted bids for the block.

“OMEL was informed that there was a tie in the bids of OMEL and Centrica, and OMEL was asked to submit a revised bid,” the official said.

The bid parameters were reviewed by OVL and OMEL in consultation with technical advisors and a revised bid for the block with increase in the minimum financial exposure to OMEL from about $175 million to about $204 million was submitted.

The Trinidad and Tobago government has informed that OMEL’s revised bid had been successful and it had invited the company to negotiate the production sharing contract for the block.

The official said though it was earlier decided that a part of the equity would be shared with other Indian companies considering the level of investment and risk involved, OMEL decided not to farm-out any equity at this stage.

“OMEL will hold 100 per cent participating interest in the block.”

This is OMEL’s second biggest success after Nigeria where it had acquired two exploration blocks.

Mittal had inked a joint venture agreement with ONGC Videsh in July 2005 for acquisition of oil and gas fields, refinery business and LNG projects in 27 countries.

The July 2005 agreement had classified target countries into Schedule-I and II. Mittal and ONGC had agreed to participate on an exclusive basis through OMEL in Schedule-I countries such as Angola, Azerbaijan, Indonesia, Kazakhstan, Romania, Trinidad and Tobago, Turkmenistan and Uzbekistan.

In Schedule-II, the partners agreed to bid jointly on a case-to-case basis in Bosnia, Canada, China, Czech Republic, France, Germany, Kyrgyzstan, Liberia, Sudan, Macedonia, Mexico, Nigeria, Poland, South Africa, the UK and the US.

“OMEL is looking for various opportunities in Kazakhstan, Turkeministan, Azerbaijan, Indonesia, which are at different stages of progress,” the official said.

Since incorporation, OMEL has been awarded two prosperous blocks in Nigeria – OPL-279 and OPL-285, the production sharing contracts of which are expected to be signed shortly.

OMEL is also in the process of being awarded another exploration block in Nigeria (OPL-246).

OVL’s subsidiary, ONGC Nile Ganga BV acquired interest in a producing property in Syria along with China National Petroleum Corp, a part of which is held by OMEL. OMEL also recently bagged a block in Turkmenistan.

Sail bets Rs 20,000 crore on West Bengal

State-owned Steel Authority of India Ltd (Sail) will invest Rs 20,000 crore in West Bengal, Union Steel Minister Ram Vilas Paswan said today. This is almost two-fifths of the Rs 53,000 crore spread planned by the country’s largest steel maker.

Giving a break-up, Paswan said the company will invest Rs 13,500 crore in the IISCO Steel Plant at Kulti (up from the original plan of Rs 9,600 crore), Rs 5,600 crore in the Durgapur Steel Plant and the balance in the Alloy Steel Plant (also at Durgapur).

This will raise Sail’s annual hot metal production from the current 14.6 million tonnes to 26 million tonnes.

Paswan said this was the largest investment being made by Sail in any state and it could put more money into West Bengal in the months to come.

The announcement came even as violent protests have happened at Nandigram against land acquisition for a special economic zone planned by Indonesia’s Salim group. Protests had also taken place against Tata Motors’ small car facility at Singur and the matter is in the courts.

Addressing a large gathering at the inauguration of the Sail Growth Works (formerly Kulti Works), Paswan said an expert committee would determine the total investment and growth plan for the unit-shut since 2003, while the foundry works would commence operations over the next three months.

Paswan also announced that the Centre was keen on reviving the National Iron and Steel Company, owned by the West Bengal government and closed for the last six years.

Paswan said he had asked the West Bengal government to waive the loans and liabilities to the company so that it could be started on a clean slate. NISCO could be merged into Sail.

The occasion was attended by Foreign Minister Pranab Mukherjee, Information and Broadcasting Minister Priya Ranjan Das Munshi, even as West Bengal Commerce and Industry Minister Nirupam Sen gave it a miss.

However, Mukherjee batted for the state government and spoke in favour of land acquisition for industrialisation.

L&T arm bags Rs 748cr contracts in Oman

Larsen & Toubro (L&T) has received three orders worth over Rs 748 crore ($190 million) from Dhofar Power Company (DPC) and Muscat Electricity Distribution Company for electrical substations and associated works and for executing the Muscat Golf Course in Oman.

The Rs 433.5 crore Muscat Golf Course project includes development of a township which includes 80 luxury villas, 25 three storied apartments and other amenities. The promoters of the project are Muscat Golf Course Project LLC, one of the major developers in Sultanate of Oman. The project site is located near A1 Seeb International Airport. The project, to be executed by Larsen & Toubro (Oman) LLC, has to be completed within 21 months, a release from L&T said.

The contract from DPC is valued $47.16 million (Rs 186.50 crore). The project is to strengthen various transmission and distribution systems in Dhofar Region, in order to meet the growth in demand and new loads. It involves construction of new substation, modernisation and expansion of existing network and construction of associated overhead lines and cabling works.

The Muscat Electricity Distribution Company has placed orders totaling $32.55 million (Rs 128.70 crore) for construction of five 33/11.5 kV primary substations and associated cabling works at Al Hail North, Azaiba North, Al Mawaleh South, Qurum Heights and Al Amret Area. On completion of these substations, the growth demand and new loads within the Muscat area will be met, the release said.

Dhofar Power Company and Muscat Electricity Distribution Company are the major power distribution companies existing in Oman.

These projects will be executed by Power Transmission & Distribution Sector of L&T Oman and are to be completed in a time span of 7-16 months, under the consultancy of Mott MacDonald & Energoprojekt Entel LLC, the release added.

Larsen & Toubro (Oman) LLC is a joint venture of Larsen & Toubro FZE and The Zubair Corporation. Larsen & Toubro (Oman) LLC has been operating in Oman since the last 14 years.

ONGC Videsh wins two exploration blocks in Brazil

Oil & Natural Gas Corporation has announced that OVL bagged two exploration blocks in Brazil, viz. deepwater block 470 in the highly prospective espirito santo basin and shallow water block 1413 in another highly prospective Santos basin, amid stiff competition from International companies on 27 November 2007.

The first development well for coal bed methane (CBM) has been spudded on December 2007 at the drill-site Pad-B in Parbatpur, near Bokaro Steel City of Jharkhand.

ONGC achieved the unique distinction of becoming the first-ever Indian company in the Fortune Magazine's annual (2007) list of the world's most admired companies. This is based on a survey of Fortune Companies across the globe, conducted by the Fortune magazine, in association with Hay Group.

The board has approved the 2nd pipeline replacement project along with necessary modifications, at a cost of Rs 2553.25 crore, to be implemented over a period of 3 years.

The ONGC board approved the phase-III development of PY-3 field at a Capex of US$ 35.9 million (Rs 147.19 crore), which is 40% of the total investment of US$ 89.75 million. ONGC holds 40% stake in the field; other stakeholders are HOEC (21%), Tata Petrodyne (21%) and Hardy Exploration & Production (18%). This phase-III development of the field will enhance the recovery by 10.52 MMSTB.

The company made this announcement during the trading hours today, 24 December 2007.

Rising steel imports may spell crisis for steel industry

The Steel Ministry expressed serious concerns on rising steel imports and warned that unless production of the alloy grew, it could spell a crisis for the domestic steel industry, reports Business Line.

Steel imports have shot up by 4.18 million tons between April to November this year against 2.3 mt in the same period last year, marking an increase of 77%. Though production improved by 6.7% from 31.66 mt to 33.6 mt during the period, consumption too has substantially grown by 12.6%.

In the absence of new capacities and rising input prices, small steel producers are being affected, so they are resorting to imports to meet their domestic requirements.

Iron ore spot prices have shot up by more than USD 50 during the past few months, which have put the small-scale producers at a disadvantage. Besides, steel prices in the international market have been somewhat stable and that was leveraged by the small steel producers to hold on to their clientele.

Steel exports too have risen 6% to 3.38 mt against 3.16 mt during April to November this year.

Tatas bid for Liberian mines, to put in $1.5 bn

Tata Steel is looking for raw material security at a frenetic pace and the world’s sixth largest steelmaker is now eyeing the Western Cluster Iron Ore deposits in Liberia, for which a bid has already been submitted.

The Western Cluster consists of several deposits spread over 207.58 sq km and the investment is likely to be around $1.5 billion.

When asked, a Tata Steel spokesperson refused to comment and said that the company was looking at all opportunities globally in the area of resource security for the group.

Other companies have also evinced interest in these deposits and Tata Steel has responded to a bid put out by the Liberian government. Tata Steel is one of the shortlisted bidders and the only company from India.

The Western Cluster comprises the Mano River Iron Ore, The Western Position of Bomi Hills Iron Ore Deposits and the Mountain Iron Ore Deposits.

Recently, Tata Steel signed a joint venture agreement with Sodemi (a state-owned Ivory Coast mineral development company) for development of Mount Nimba Iron Ore deposits. Liberia is also on the west coast of Africa.

The Mount Nimba initiative was the first iron ore venture outside India for Tata Steel and the investment in the project by the joint venture company, where Tata Steel holds 75 per cent, could be around $1-1.5 billion in 3-4 years. The company has set a target of achieving raw material security of 50-60 per cent in the next 5-6 years.

Currently, the company’s iron ore security with Corus is 20 per cent, while on a standalone basis, Tata Steel has a 100 per cent security.

Industry analysts said galloping raw material prices were propelling steel companies to run for security cover.

Iron ore prices might jump as much as 50 per cent in 2008. Contract prices for iron ore have tripled in the past five years, and back home, allocation of captive mines has become a time-consuming exercise.

The Tata group consists of Corus and Tata Steel (including Tata Steel Thailand and NatSteel Asia) and the captive iron ore resources would help in bringing down the cost of production at the Corus facilities. Corus requires 28-30 million tonnes of iron ore per annum.

Earlier this month, Tata Steel signed a joint venture agreement with Australia’s Riversdale Mining to set up a special purpose vehicle to develop a hard coking coal and thermal coal project at Riversdale’s key exploration tenements in Mozambique.

On the coal front, Tata Steel has a security of around 15 per cent from a standalone of 60 per cent security.

Peninsula Land to raise Rs 525cr

Peninsula Land has approved the issue of 43,750,000 equity shares of Rs 2 each at Rs 120 per share aggregating to an issue size of Rs 525 crore.

According to a release issued by Peninsula Land to the BSE today, the issue price is above the floor price calculated in accordance with Clause 13A.3 of SEBI (DIP) Guidelines.

The bid closing date, pursuant to the proposed issue of equity shares under Chapter XIII-A of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000, is December 20, 2007, the release added.

UBS Securities India and Enam Securities acted as joint global book runners for the issue.

IOC to venture alone for small onland blocks in seventh round

Indian Oil Corporation Ltd is gearing up to venture out alone in the domestic oil and gas exploration & production (E&P) activities. The company plans to aggressively bid as an operator for the new category of acreages — small blocks — put on offer under the seventh New Exploration Licensing Policy (NELP) round.

However, for the deepwater blocks offered in the latest licensing round, the company will scout for a foreign partner.

Mr B.M. Bansal, Director-Planning and Business Development, said: “The small blocks give IOC an opportunity to participate on our own as an operator. Till now IOC has not been able to acquire assets as an operator due to the technical criterion prescribed.”

Special dispensation

In NELP VII, the Government has introduced a new type of onland blocks called Type-S, covering small areas up to 200 km. For these blocks, the Government has provided special dispensation in the form of waiver of technical capability criteria.

Under NELP VII, 57 oil and gas blocks, comprising 19 deepwater blocks, nine shallow water blocks, and 29 onland blocks have been put on offer. Of the 29 onland blocks, the Type-S category has nine blocks, mainly in Cambay Basin.

“Participation in this category will give us the desired experience of an operator. However, for deepwater exploration, we will have to rope in a partner with technical expertise,” he said.

Most of the 19 deepwater blocks offered under NELP-VII are in less explored basins. Therefore, it would require operators having experience in deepwater activities.
Upstream portfolio

At home, IOC currently has 12 oil and gas assets. IOC and its consortium partners have been awarded two exploration blocks in Mumbai offshore in Round-VI of bidding under NELP. With this, IOC has an upstream portfolio consisting of participatory interest in eight blocks under NELP and two blocks under coal-bed methane, in addition to two farm-in blocks in northeast India. The company has seven blocks overseas.

Expenditure may ease crunch; Re set to dip

Liquidity: Set to ease
Liquidity is expected to improve this week following the budgeted government expenditure taking off in full swing at the end of the third quarter.

There is no pressure on liquidity, except for a stray demand from banks to meet the requirement towards the third quarter-end of the financial year.

Since foreign funds and banks are buying dollars to repartriate in the calendar year-end, it will add to the rupee liquidity, says a dealer.

The sentiment on liquidity will remain bullish since the market is of the view that most of the FIIs have lined up funds to participate in the ensuing initial public offers (IPOs) of companies in the new calendar year.

The Reserve Bank of India has also been selling dollars in the market to infuse liquidity besides the usual repo route, where banks borrow funds against the collateral of government securities.

Call rates: Likely to head south
Call rates are expected to ease from the highs of 7-8 per cent to a low of 5-5.5 per cent. This will be on the back of improvement in liquidity. Moreover, there will be no pressure on liquidity since outflows from the system are moderate.

Dealers also see most of the banks not preferring to fund the cost of arranging excess liquidity towards the end of the quarter.

Mutual funds, on the other hand, may not be aggressive in lending in the collateralised lending and borrowing (CLBO) market as they expect redemption. The pressure on redemption will be from foreign banks, which operate as custodians for foreign institutional investors (FIIs).

Treasury bills: MSS deferred
RBI will auction the 91- and 364-day treasury bills for a notified amount of Rs 500 crore each.

The central bank has postponed the auction of T-bills towards the Market Stabilisation Scheme (MSS) as the liquidity situation is yet to ease. The postponement of the MSS auction will add to the positive sentiment on liquidity.

Corporate bonds: Issues galore
A host of banks, including subsidiaries of State Bank of India, has lines up certificates of deposit (CDs) to raise funds in the short term for third quarter results.

If the liquidity improves, it may push the yields down in the shorter end of the curve, which, in turn, will prompt a string of CD issues and commercial papers. In the long term, banks, financial institutions and public sector undertakings are expected to come up with bond issues to raise funds.

G-sec: RBI mop-up on
RBI is expected to continue buying government securities to build up the stock of papers for conducting open market operations.

Open market operations require RBI to absorb or infuse liquidity into the market in exchange for the sale or purchase of securities respectively. This had started last week and, for the week ended December 14, RBI purchased government securities worth Rs 2,230 crore.

Rupee: May drop
The spot rupee is expected to rule with a bias towards depreciation. The primary trigger for the rupee to depreciate will be the global strength of the dollar against all other currencies.

The dollar has been gaining following robust economic data as regards retail sales and inflation. Inflows from FIIs will take a while as they will wait for the market to correct and some new IPOs to come to the market.

Cement shortage to continue

Prices may remain firm in the coming months.

The cement industry is likely to add around 15 million tonnes of fresh capacity in 2007-08 – a little over half of the 27 million tonnes it had talked about at the beginning of the financial year.

As a result, the cement capacity in the country will be 182 million tonnes by March 2008, 8.5 per cent short of the target set by the working group on cement industry for the Eleventh Five Year Plan (2007-12).

Analysts felt this could keep cement prices buoyant in the months to come.

The industry and the government have been locked in a confrontation for several months now over high cement prices, prompting the Centre to allow duty-free imports. Some quantities of imported cement have already reached the Indian markets from Pakistan.

Nine months after promising to put up additional capacities of 27 million tonnes, cement companies have added a mere 11.50 million tonnes till date. While the Cement Manufacturers' Association says the industry has so far added 6.35 million tonnes, the figure does not include the capacity expansion of two companies – ACC and Binani Cement. ACC added 1.4 million tonnes at its two plants and Binani added 4.1 million tonnes recently.

Market players said the industry may add another 3.5 million tonnes in the next three months, taking the total tally to 15 million tonnes.

Market players said that the delay in projects was mainly on account of supply constraints on the plant and machinery front and environment clearances from the government. H M Bangur, president, CMA, and the managing director of Shree Cement, said, "We will not be able to meet the target as project delays are taking place. There will be at least one quarter’s delay."

"As most of the projects are greenfield ventures, unlike the earlier expansions which were through modernisations, debottlenecking and brownfield projects, the time being taken for operationalisation is more,” said A K Saraogi, chief financial officer, JK Cement, adding: “Additional land requirement and delay in delivery of equipment are adding to the problems."

Market players said that the gestation period for the newer plants had increased by around 6-8 months. Normally it should have been 20-22 months, but now it was reaching 26-28 months, they added.

K C Jain, managing director, Mangalam Cement, said, "My assessment is that by March, 2008, industry will add another 6-7 million tonnes."

Non-ferrous metals: Losing sheen

The non-ferrous metal players have had a tough quarter due to declining prices of aluminium and zinc.

The December 2007 quarter has been difficult for the non-ferrous metal players, including Hindalco, Nalco and Sterlite, as the prices of metals such as aluminium and zinc have declined on a yearly basis.

Moreover, the copper divisions at Hindalco and Sterlite are grappling with reduced treatment and refining charges in Q3 FY08 due to the global shortage of copper concentrates.

To add to the woes of non-ferrous companies, the rupee’s 11-12 per cent rise against the dollar since the beginning of the calendar year would reduce their realisations in the local currency.

Meanwhile, the average price of aluminium on the LME has been $2,453 a tonne this quarter compared with $2,719 a tonne in the December 2006 quarter.

The demand for aluminium has been undoubtedly strong in the Asian region as a result of the construction boom. But the sluggish demand, especially in North America, has led to lower prices.

The price decline was even more pronounced in the case of zinc, as it hovered around $2,669 a tonne since the beginning of Q3 FY08 against an average price of $4,193 a tonne in the December 2006 quarter.

To counter this weakness, the domestic non-ferrous players have initiated cost-reduction measures and finalized long term contracts with clients.

The estimated spot realisations from copper treatment and refining charges are 12-16 cents a pound compared with 30 cents a year earlier, due to a global deficit of copper concentrates.

The Sensex has gained 10.8 per cent since the beginning of this quarter, whereas Nalco is up 41.8 per cent, Hindalco is up 15.7 per cent and Hindustan Zinc is down 6.4 per cent.

ONGC to invest Rs 1,200 cr for wind energy

Suzlon to help set up one of the facilities in Gujarat

Oil and Natural Gas Corporation (ONGC), the country’s leading oil and gas exploration and production company, is entering the alternative energy segment with a Rs 1,200 crore-plus investment to generate 200 mw of wind power for captive use, within two years.

The company has already placed orders with the Pune-based Suzlon Energy, the world’s fifth-largest producer of wind mills, for 50 mw of wind turbine capacity to be installed in Gujarat’s Kutch region.

“We have placed orders for 50 mw and will soon install another 50 mw in Karnataka. Within the next year, ONGC will add another 100 mw and is exploring options in Maharashtra and other states,” said Anoop Kumar Mathur, general manager (technical), ONGC.

The oil and gas exploration major is in talks with respective state governments for wheeling the electricity for captive consumption. “In Gujarat, the electricity generated will be used to power the sucker road pumps, used in enhanced oil recovery from our old oil fields in Kutch,” said Mathur.

The company has approved the 50 mw unit in Karnataka and is in the process of finalising the location. Andhra Pradesh and Maharashtra were the other two states where ONGC was considering wind energy units, he said.

Initiated by the ONGC Energy Centre Trust, the company is working on three projects - a thermo-chemical reactor for hydrogen, geo-bio reactors and fuel cells - to develop renewable energy resources.

ONGC is also developing a 740 mw plant at Palathana in Tripura, primarily to utilise its idle gas reserves. The project is scheduled to be commissioned only by 2010.

Meanwhile, a Suzlon statement said the company would supply 34 units of Suzlon’s S82 - 1.5 mw turbines to ONGC for the project in Kutch. The order also covers operation and maintenance for the project for a period of ten years.

L&T floats power generation arm

To invest Rs 20,000 cr to produce 5,000 mw in five years

Engineering firm Larsen and Toubro (L&T) today said it has floated a power generation arm, called L&T Power Development.

“The overall investment in the company would be Rs 20,000 crore. L&T would invest Rs 5,000 crore and the rest would come through debt,” L&T Chairman and Managing Director A M Naik told reporters. The new firm would generate 5,000 mw of power in the next five years.

In November, L&T entered into a joint venture agreement with Japan’s Mitsubishi Heavy Industries for setting up a manufacturing unit in India for super-critical steam turbine and generator equipment.

The JV will invest about Rs 880 crore and have a product range catering to plant capacities ranging 500-1,000 mw.

Earlier, speaking at a function to celebrate 70 years of L&T and the centenary of its co-founder Henning Holck-Larsen, Finance Minister P Chidambaram hailed the company as India’s only national sector company.

“L&T is unique, it does not belong to the public sector, or the private sector, it belongs to the national sector. It is the company of the people of India.”

Chidambaram spoke at length about L&T making the impossible possible and held it out as an example of a company capable of dreaming big and making it happen.

Naik spoke about the history of the company and its abiding commitment to the cause of building a strong India. He said, “L&T is only one of its kind between Europe and Japan, right from manufacturing nuclear reactors, steam generators, off-shore platforms to sub-sea pipelines, cross-country pipelines, refineries, petrochemical projects, IT parks and naval bases.”

Tata Motors unveils range of tough CVs

In a bid to align its products with global trends and preparing itself for the huge strides expected to be witnessed in infrastructure, Tata Motors today unveiled a new range of commercial vehicles that promise to deliver greater return on investment and higher user satisfaction.

The vehicles include multi-axle trucks, heavy-duty trucks, tractor trailors and tippers. The new products will largely cater to sectors such as mining, construction, road building, logistics and petrochemicals.

Prakash Telang, executive director, commercial vehicles business, told mediapersons that the introduction of the vehicles is part of the company’s programme to redefine its products to bring in customised solutions with latest technologies.

The company unveiled Tata LPS 4923 TC, which is a 49-tonne Novus tractor customised to offer optimum performance under Indian conditions.

The vehicle has an air-conditioner fitted driver cabin and has a GPS / data logger solution. The product is pitted to be the right solution for transporting containers, steel, cement and petroleum loads.

The Tata LPS 4923 TC tractor has a Cummins engine and Eaton gear-box, and offers 25 per cent higher gradeability for use in tough terrains. The vehicle would be ideal for carrying steel coils, cement or over-dimensional cargo, company sources said.

The company also launched a 3118 truck which is India’s first multi-axle truck with a lift axle fitted with automatic load sensing value for optimum lift axle function.

The other products launched were 2516 Super Turbo multi-axle truck, 2518 tipper and 1618 tipper.

Thailand plant to begin production in mid-2008

Manufacturing activities at Thonbury Assembly Plant Company of Thailand, with which the Tatas have set up a joint venture some time ago, would begin around the middle of the next year, Telang informed.

The plant will make two vehicles – Xenon and SpaceCab – which will be versions built on the same platform meant to build products for composite use of goods and passengers, he said.

The initial production would be 25,000 units and the company could expand the numbers as and when necessary, he added.

Govt may extend sugar export subsidies

The government may consider extending export subsidies given to the sugar industry by another year as the country is on its way to another record production of over 30 million tonne in the 2007-08 season.

"Let us see the total export in the sugar season. It looks like we have already crossed 1.5 million tonne. If this trend continues, we will definitely give serious thought to a one-year extension," Agriculture and Food Minister Sharad Pawar told reporters here.

He was speaking on the sidelines of the 73rd annual general meeting of Indian Sugar Mills' Association (ISMA).

The export sops announced by the government early this year is valid till April 2008. The government is defraying internal transport, handling and marketing charges and ocean freight on sugar exports at Rs 1,350 per tonne for mills located in coastal area and Rs 1,450 for non-coastal states.

IFCI stock plunge hits investors

The shares of Industrial Finance Corporation of India (IFCI) plunged by 23.41 per cent on Thursday after the stake sale of 26 per cent to strategic investors collapsed.

Thursday’s decline was the biggest in a single day in the past 13 years, bleeding small investors and margin traders the most.

Several small investors had bought the IFCI shares at higher levels of Rs 100-plus, hoping that the stock would further run up to new highs following a turnaround in the company’s fortunes after the entry of strategic investors.

The stock closed at Rs 76.70 on Thursday against its previous close of Rs 100.15, forcing several brokerage houses to ask clients to pay the mark-to-market losses or wind up their positions at the counter in the derivatives segment.

The general expectation in the market was that strategic investors might be bidding close to Rs 140 or Rs 135, which tempted investors to buy the stock at Rs 100-plus levels.

On Tuesday’s stock price of Rs 100, the trader would have had to pay a 25 per cent margin on one market lot of 7,875 shares, which works out to around Rs 2.5 lakh.

Therefore, when the stock fell to Rs 77.05, nearly 80 per cent or over Rs 2 lakh of traders’ margin money got wiped out, said dealers.

According to the data available on the National Stock Exchange (NSE) website, the standing market-wide position is over six crore shares currently.

“If the stock does not bounce back to Rs 90 or Rs 95 in the next three trading sessions before the F&O expiry, it is then likely that the stock may see a further downside,” said a dealer.

In the cash segment, over 210 million shares were transacted on both BSE and NSE.

Top News - 20th Dec

IFCI invites bids to sell shares in 100 firms

A day after cancelling the stake sale process, IFCI today invited bids from merchant bankers to value and buy shares in unlisted firms to enable the company to sell them.

"We have identified 100 companies wherein IFCI would like to sell off its stake," an IFCI official told PTI.

Merchant bankers and other interested parties are requested to submit bids before January 10, 2008 in this regard, he added.

IFCI has over time acquired stake in many companies either directly or in lieu of debt, he said.

Atul Rai, CEO and managing director, IFCI, had said yesterday: "We need the capital."

IFCI sold its stake in National Stock Exchange and rating agency ICRA this year.

Share of IFCI closed at Rs 76.40 - down 23.6% on the BSE today after the institution aborted the process for equity sale as the highest bidder - the Sterlite-Morgan Stanley consortium - put conditions with its bid.

TVS can sell Flame, says Madras HC

A division bench of the Madras High Court today suspended the interim order restraining TVS Motor Company from booking or selling its recently launched 125-cc bike Flame.

After hearing the arguments of both parties for about two hours on Thursday, the bench suspended the interim order of the single judge and posted the case to January 4 and 5, 2008, for further hearing all petitions. Bajaj Auto had accused TVS of copying its patented DTSi technology in its 125-cc motorbike TVS Flame.

However, TVS responded that the Flame was fitted with a three-valve engine based on CCVTi (Controlled Combustion Variable Timing Intelligent) technology, which is different from the technology used by Bajaj Auto.


Tatas world's 3rd most accountable group

The Tata Group, easily India's most respected business house, has been named the world's third most accountable and transparent company by Britain's One World Trust although US hotel chain Orient-Express has not found it worthy of an alliance.

According to Rob Lloyd, the report's lead author, the assessment is a measure of the extent to which organisations have the policies and systems in place to enhance consistent and coherent accountability to the people they affect." The report ranked GE number 1 and GlaxoSmithKline number 2 among the most transparent and accountable companies.

Tata Group, was however, considered ahead of Coca-Cola, Petrobras, HSBC Holdings, PriceWaterCooopers International and Google, when measured on the parameters of transparency and accountable leadership among global companies.

The annual Global Accountability Report considered the Tata Group at number 10, among the world's 30 most powerful organisations from the inter-governmental, non-governmental and corporate sector, to be accountable to civil society, affected communities and wider public.

Orient-Express Hotels had recently rejected an offer of alliance from Tatas, saying tying up with the "predominantly Indian" hospitality firm will erode the US hospitality chain's brand image. Tata Group's interests range from hotels to steel to salt and software and auto.

One World Trust rated UN Development Programme followed by Asian Development Bank and Christian Aid the most transparent and accountable organisations among world's top 30 organisations.

Stop cartelisation, MRTPC tells cement firms

Anti-monopoly watchdog Monopolies and Restrictive Trade Practices Commission (MRTPC) today held major cement manufacturers, including L&T Cement, Birla Cement, Grasim and ACC, guilty of cartelisation under the aegis of Cement Manufacturers' Association.

Announcing its order after 17 years of judicial investigation, the commission warned cement producers and Cement Manufacturers' Association not to repeat unfair trade practices.

"We issue a cease-and-desist order... And direct them not to indulge in any such arrangement directly or working through CMA," said a three-member bench consisting Justice O P Dwivedi, M M K Sardana and D C Gupta.

Passing the order, MRTPC also directed the cement companies, including Century, Dalmia, Jaypee and Mysore, to file a compliance report within eight weeks.