L&T bags Rs 576cr order from HPCL

Larsen & Toubro (L&T) has won a Rs 576 crore order from Hindustan Petroleum Corporation (HPCL).

According to a release issued by L&T to the BSE today, HPCL has awarded L&T a large project order of 200,000 tonnes per annum Lube Oil Base Stock (LOBS) plant consisting of Raffinate Hydrotreating Unit (RHT), Mobil Selective Dewaxing Unit (MSDW) & Hydro Finishing Unit (HF).

HPCL intends to set up this LOBS Plant as a part of their Quality Upgradation project and have awarded the order on Lumpsum Turnkey (LSTK) basis to L&T, the release added. The scope of work for this prestigious LSTK order, valued at Rs 576 crore.

The order was bagged by L&T's E&C division's Refinery Projects Business Unit against keen competition on the strength of its track record of having executed several high operating pressure refinery projects, meeting exacting refinery quality requirements and conforming to stringent delivery schedules.

Suven gets two patents in Mexico, Korea

Suven Life Sciences, a Hyderabad-based biopharmaceutical company, has received two product patents in Mexico and Korea for two of its new chemical entities (NCEs) for the treatment of disorders associated with neurodegenerative diseases. The patents are valid upto 2023.

“Suven's drug candidates, for which these patents are issued, are being developed for CNS (central nervous system) disorders. These candidates target an $18 million (approximately Rs 72 crore) potential market opportunity globally,” Venkat Jasti, chief executive officer of Suven,
stated in a press release on Monday.

These granted patents are exclusive intellectual property of Suven and are achieved through the exclusive internal discovery research efforts.

Products out of these inventories, which are at present in pre-clinical development, may be out-licensed at the stage of clinical phase-I or phase-II stage, the release added.

The granted claims of the patents include the class of selective 5-HT compounds discovered by Suven and are being developed as therapeutic agents and are useful in the treatment of cognitive impairment associated with neurodegenerative disorders like attention deficient hyperactivity, Alzheimer’s, Parkinson, schizophrenia, and Huntington's.

Suven Life has six internally-discovered therapeutic drug candidates currently in pre-clinical stage of development targeting conditions such as ADHD, dementia, depression, Huntington's, Parkinson's and obesity.

So far, Suven has filed nearly 29 product patent applications through the Patent Cooperation Treaty (PCT), covering more than 145 countries. Of these, 5 product patents are granted in various countries.

Bhushan Steel plans Rs 500cr unit in Chennai

Bhushan Steel is planning to set up a value added steel plant in Chennai with a production capacity of 0.5 million tonne per annum and total investment of approximately Rs 500 crore.

The company has also lined up investments of Rs 26,000 crore to build 12 million tonne capacity in West Bengal, Jharkhand and Orissa.

Cairn India FY07 net loss at Rs 25cr

Cairn India, the company which discovered the country’s largest oil field after ONGC’s Bombay High, has reported a net loss of Rs 25.54 crore during the year ended December 31, 2007.

The company, which follows a January-to-December fiscal, had reported a net loss of Rs 21.17 crore in FY 2006.

Total income increased to Rs 1,144.67 crore in FY07 from Rs 44.96 crore in FY06.

The losses were higher in FY07 as the company’s expenditure increased to Rs 1,016.04 crore when compared with Rs 57.70 crore in FY06. The company, which is majority-owned by UK-based Cairn Energy, spent Rs 251.23 crore during the year on exploration when compared with Rs 5.99 crore in FY06. Operating costs during the year were also higher at Rs 194.58 crore as against Rs 5.31 crore in the previous financial year. Employee costs increased over three times to Rs 125.74 crore when compared with Rs 36.11 crore in the previous fiscal.

The company said in a statement that the average price realisation per barrel of oil equivalent during the year was $54.62 while that for the quarter-ended December 2007 was $68.11.

The company added that it would begin production of oil from its Rajasthan field in the second half of 2009 with peak production now estimated at 175,000 barrels per day when compared with the earlier estimate of 150,000 barrels per day. This could boost the country’s oil output by around 25% from the current production of about 680,000 barrels per day.

NTPC signs deal with Hyd-based NGRI

NTPC and Hyderabad-based National Geo-physical Research Institute (NGRI) have signed an agreement for co-operating and sharing knowledge to identify potential sites for setting up geo-thermal power plants in the country.

According to a release issued by NTPC to the BSE today, the two organisations have agreed to associate for formulating a long-term strategy to set up the first geo-thermal based power project in India.

The first such project site has been identifed at Tattapani in Chattisgarh, the release added.

BHEL gets Rs 550cr export order

Bharat Heavy Electricals (BHEL), has won a Rs 550 crore order to supply two 135 Mw boilers to Koniambo Nickel SAS, a company based in New Caledonia, an island in the south-west Pacific Ocean, east of Australia.

Koniambo is a joint venture company between Swiss mining group Xstrata Plc and and a local company.

This is the first-ever overseas order BHEL has won for delivery of circulating fluidised bed combustion (CFBC) boilers for utility application. With this, the company has made an entry in the European market for the environment-friendly product meeting stringent emission norms.

Kampani to buy out ASK from JV

Nimesh Kampani-promoted JM Financial will increase its equity stake in JM Financial ASK Securities from the current 60% to 100%, subject to necessary regulatory approvals. The total consideration JM Financial will pay for the entire holding is Rs 139.14 crore.

JM Financial had, in October 2007, entered into a joint venture with the ASK group by acquiring 60% stake in ASK Securities. The name of the joint venture company will be changed after raising the stake.

Last year, JM Financial sold its 49% equity stake in its institutional equity business to Morgan Stanley for aprroximately Rs 1,767 crore ($ 445 million ).

Nimesh Kampani, chairman, JM Financial Group, said: "This acquisition is part of our strategy to provide clients the entire bouquet of financial services, and to continue to strengthen the JM Financial brand as a leading financial services organisation."

Asit Koticha, chairman, ASK Group, said: "We have recently applied to Sebi for licence to start an asset management company. We have decided to focus on portfolio management and wealth advisory businesses that cater to ultra high net worth individual clients."

The institutional broking business of ASK is a legacy of its former joint venture with its foreign partner and was set up in the mid-nineties.

Power Grid raises Rs 4,000cr

Power Grid Corporation has raised close to $1 billion (Rs 4,000 crore) via loans from Asian Development Bank (ADB) and The World Bank.

According to a release issued by Power Grid to the BSE today, the company has signed a loan agreement with ADB, Manila for $400 million. The loan is part of ADB's newly introduced loan facility called Multi-tranche Financing Facility (MFF), which is based on time-sliced approach.

It has also signed an agreement with The World Bank for $600 million. The loan will be utilised to fund a basket of transmission projects during the 11th Plan.

TCS signs five-year deal with ArvinMeritor

Tata Consultancy Services (TCS) has signed a five-year, multi-million dollar contract with ArvinMeritor -- a gobal supplier of integrated systems, modules and components to the automobile industry.

As part of the agreement, TCS will support the localisation and globalisation efforts of ArvinMeritor’s engineering capabilities including product development and support for specific product lines in the Asia Pacific region. TCS will set up a global engineering center in Pune that will provide a broad range of product engineering services to cater to the global needs of ArvinMeritor with a specific focus on the Asian market.

Regu Ayyaswamy, vice president, engineering and industrial services, TCS, said: "As ArvinMeritor extends its current competencies to new product categories through use of electronics and control technologies, TCS along with its group company INCAT will deliver end-to-end comprehensive solutions to support ArvinMeritor. Our global network delivery model will seamlessly ensure that ArvinMeritor experiences certainty in all aspects of our relationship in any part of the globe."

Alembic plans formulations unit in Sikkim

After Zydus Cadila and Torrent Pharma, Gujarat-based Alembic is planning to set up a formulations unit in Sikkim.

Confirming the development, Chirayu Amin, chairman and managing director, Alembic, said work on the project is on. "The project is likely to cost Rs 40 crore," he added.

The 100-year-old company is also planning to set up a pharma special economic zone (SEZ) near Vadodara. Amin, however, refused to divulge details about the project.

The project will come up on a 200-acre land near Vadodara, sources close to the development said. The company will set up bulk and formulations units in the SEZ.

Hero Honda March sales up 15%

Hero Honda today reported a 15% increase in sales at 320,594 units in March when compared with 277,915 units sold in March 2007.

For the full year ended March 31, 2008, the company sold 33,37,142 units as against 33,36,756 units in FY07.

Pawan Munjal, managing director, Hero Honda, said: "Despite the industry slowdown, we have been able to manage positive growth thereby taking our share in the domestic motorcycle market upward of 52%. We will continue to focus on our customers and they can surely look forward to many more launches and various initiatives in the coming year."

Madras Cements plans Rs 1,524 cr capex

Madras Cements, the Rs 1,500 crore flagship company of the Ramco group, will spend Rs 1,524 crore by the end of this year to boost capacity.

It will expand cement capacity to 10 MTPA (million tonnes per annum) by the second quarter of Financial year '09, from 8 MTPA now. It is also raising grinding capacity by 1 MTPA each at the Kolaghat (West Bengal), Chennai and Salem facilities.

In addition, the Chennai based company will step up wind power capacity from 64 MW to 120 MW by the end of financial year '08. It targets to generate 123 million units per annum from this low-cost source of power.

Wind power is cheaper than grid power and is an attractive option at a time when coal prices are over $135 per tonne.

“The total capital expenditure for the expansion is around Rs 1,524 crore. The grinding units are located near fly-ash sources and consumption centres and the increased capacity will significantly reduce freight costs. On the other hand, the 2 MTPA capacity expansion at Jayanthipuram is nearing completion and the plant should commence operations by the last quarter of financial year 2008,” said an analyst with a local brokerage who can’t be quoted due to compliance reasons.

Analyst J Radhakrishnan of IIFL Research said in a note to clients on March 7 that these expansions should help accelerate volume growth in FY09 and FY10. He estimates a 20% volume growth each in FY09 and FY10.

Given the high effective tax rate of 34% for Madras Cements in FY07, the wind power facility will provide higher depreciation and thus tax benefit, Radhakrishnan added.

Cement dealers in the south say prices in the region have remained unchanged despite the surge in demand. Over the past three months, cement prices in the south have stayed at Rs 245-250 a bag.

Madras Cements, Penna Cements, Sagar Cements, Deccan Cements, Ultratech Cement (at Tadipatri) and Coramandel Cements, among others are currently executing capacity expansion projects in the south. All this would mean the continuation of the existing demand-supply gap for the next few months.

Madras Cements started its first manufacturing plant with a capacity of 200 tonnes per day in 1962. It is one of the largest manufacturers of Portland cement in India.

The Ramco group operates textiles, software, surgical equipment and biotech apart from cement.

Market wide put-call ratio advances 28%

The market closed on strong note on Monday. The overall market breadth was negative, around 79.0% of shares declined on BSE and 80.4% of shares declined on NSE. Out of the total 2,717 stocks traded at the BSE, 535 advanced, 2,149 declined while 33 remained unchanged. The 30-share index Sensex opened with a positive gap of 98.94 points at 15,093.77 following global cues. The index in the initial hours of trading gained strength on account of sustained buying interest in frontline stocks.

Volumes on BSE and NSE both fell on Monday. The BSE clocked a turnover of Rs 46.8 billion and the total turnover on NSE amounted to Rs 108.0 billion. The BSE Sensex wrapped the day with a gain of 294.57 points, or 1.96%, at 15,289.40; while the broad-based NSE Nifty closed at 4,609.85, up 35.9 points, or 0.78%.

On the derivative side at NSE, the market-wide put call ratio advanced 28% to 0.82.

Nifty open interest put call ratio was 0.86; market wide future open interest adv 0.95%.

Nifty puts added 5 numbers in open interest. Nifty calls added 598 thousand numbers in open interest.

M&M, Infosys and Sun Pharma topped Nifty`s most delivered chart, while REL, Unitech and SBI topped Nifty`s least delivered chart.

Havells plans Rs 400cr expansion

Electrical goods manufacturer Havells India is planning to invest Rs 400 crore for increasing capacities and foraying into a new segment - manufacturing electrical motors.

The company has already spent Rs 200 crore in the current fiscal for expansion, Havells India joint managing director Anil Gupta told PTI.

Havells is setting up a greenfield plant in Rajasthan to manufacture electrical motors ranging from 0.25 HP to 500 HP. The company has already spent Rs 150 crore for setting up the plant, Gupta added.

"Manufacturing industries located in the region provide us an excellent opportunity to sell these motors, and it also provides synergy with our existing products," he said.

The company has also purchased around 17 acre land near its facility in Alwar to expand the manufacturing capacity of high tension cables and domestic cables.

REL bags Rs 1,200cr contracts

Reliance Energy (REL), an Anil Dhirubhai Ambani Group company, has bagged two contracts worth about Rs 1,200 crore for the execution of 400 KV extra high voltage transmission systems. The company said the contracts were bagged by its engineering, procurement and construction (EPC) division.

The contracts were awarded by two independent private transmission companies that are 100% owned by Reliance Power Transmission.

The contracts are for two projects - Western Region System Strengthening Scheme (WRSSS) Project B covering about 1,000 km in Maharashtra and WRSSS Project C spread around 500 km in Gujarat.

The company has also applied for obtaining two separate transmission licences from Central Electricity Regulatory Commission.

Future Group buys 70% stake in Godrej Aadhaar

Kishore Biyani's Future Group has picked up 70% stake in Godrej Aadhaar. The stake has been bought for an undisclosed amount by Future Ventures.

Arvind Choudhury will be handling the business from Future Group, CEO Kishore Biyani told PTI. "Aadhaar Retailing will now have a board for joint management," Godrej Agrovet CEO Balram Yadav said.

Biyani and Balram both declined to divulge the deal amount. "The tie-up is mainly to increase the penetration of our insurance business, micro-finance, credit business and sourcing of agri-products," Biyani said.

Future Ventures' participation in Godrej Aadhaar will result in a stronger rural retailing business by combinig Future Ventures' retailing expertise with Godrej Agrovet's experience in rural marketing, Yadav said.

"We are trying to create more value by combining two big groups. Future has excellent knowledge of retailing while Godrej has good reach of rural consumers. The benefits are mutual for both the companies," Yadav said.

BAG Films launches new TV channel

BAG Films and Media Ltd has announced that the company has unveiled its second channel E24 on March 27, 2008. E24 would be the country's first entertainment news channel, targeted at all Bollywood fans.

Bata India FY07 net up 18% at Rs 47cr

Bata India today reported an 18.15% increase in net profit at Rs 47.40 crore for the year ended December 31, 2007 when compared with Rs 40.1 crore in the previous year. Total income increased to Rs 890.8 crore from Rs 797.3 crore in FY06.

Marcelo Villagran, managing director, Bata India, said that the improved financial performance was a result of sustained efforts. He added that the company was on an aggressive growth path, and had implemented forward-looking initiatives like investments in large format stores.

Bata is planning to open 70 stores every year for the next few years.

The board declared a dividend of 20% inclusive of 5% additional dividend for FY07.

Ispat Inds promoters to hike stake to 51%

The promoters of Ispat Industries are planning to increase their stake to 51% over the next one year, according to Anil Sureka, director, Ispat Industries.

Surekha was speaking on the sidelines of the company’s EGM to approve allotment of equity warrants on a preferential basis to the promoters. Each warrant has been priced at Rs 43.89, and the total consideration works out to Rs 509 crore.

Post-issue, the promoters’ stake in the company would stand at 47.43% from the pre-issue shareholding of 42.44%. It is not known how the promoters plan to increase their holding to 51%.

The holders of the warrants would have an option to be allotted one equity share of the company for each warrant held any time after the date of allotment but on or before the expiry of 18 months from the date of allotment.

The funds being raised would be utilised to part finance various projects and backward integration, namely capacity expansion of the existing hot rolled coil plant from three million tonne to 3.6 million tonne, coke oven and pellet plants. The total cost of expansion would be around Rs 2,300 crore.

Amtek another casualty of forex derivative swaps

Says it may make Rs 72 crore loss.

Auto parts-maker Amtek Auto today joined a growing list of Indian companies that are sitting on notional losses on account of their exposure to foreign exchange derivatives.

Amtek today informed the stock exchanges that it could potentially make a loss of up to $18 million (Rs 72.18 crore) in the next two years on its exposure to currency hedges and swaps.

A Rs 72-crore loss is 30 per cent of Amtek’s standalone net profits of Rs 236 crore on sales of Rs 1,196 crore during the year ended at the end of May 2007 (the company follows a June-to-May financial year).

“The company has taken measures to restrict the same and any improvement in the currency market from here will mitigate the above,” the company said.

Interestingly, the company earned Rs 36 crore from forex fluctuations or through forex derivative products during the last financial year, according to its balance-sheet.

A derivative is an instrument whose value is a function of an underlying commodity, bond, stock or currency and which is used as a risk-management tool.

The promoters of the company have undertaken to bring in the matching amount to meet the obligation, should they arise, in the form of a 10-year, interest-free non-convertible debentures or preference shares, the Amtek statement added.

“If there are any losses, the hit will be taken by promoters. What we have disclosed is a worst-case scenario,” said Amtek’s CFO Santosh Singhi.

He, however, refused to divulge the total exposure of the company to forex derivatives, saying he needs to first inform the stock exchange.

The Amtek Auto scrip was up 3.56 per cent to Rs 260.40 on the Bombay Stock Exchange, though the disclosure came after the market closed for the day.

Earlier, software major Hexaware reported a Rs 81-crore loss for the quarter ended December 2007 after the company took a hit of about Rs 103 crore on account of unauthorised forex derivative deals struck by a company official.

The company had posted a net profit of Rs 110.07 crore in 2007 (the company follows a January to December financial year).

About half a dozen other companies have also taken their banks to court alleging that they were sold exotic derivative contracts for speculative purposes.

Stationery maker Sundaram Multi Pap Ltd has sued ICICI Bank for its losses on forex derivatives.

Coimbatore-based Rajshree Sugars and Chemicals has filed a case against Axis Bank in the Madras High Court alleging that the forex derivative product sold to them by the bank did not take care of their needs.

The next hearing is due on Tuesday. Another company, Sundaram Brake Linings, is also involved in a legal dispute with Kotak Mahindra Bank.

Foreign exchange experts said India Inc’s losses on account of their exposure to foreign exchange derivatives are estimated at Rs 12,000 crore to Rs 20,000 crore. The losses may hog the headlines for the next few quarters as many of the currency swaps are likely to mature after March, said foreign exchange experts.

“This is a big thing brewing. The losses in some cases may be equal to a company’s profit for the whole year,” a senior executive with a Mumbai-based foreign exchange consultant said.

In a separate development, engineering major Larsen & Toubro Ltd had reported on March 10 that one of its subsidiaries in West Asia may incur a loss of Rs 200 crore on commodity-hedging bets.

MIC Electronics secures orders worth Rs 61cr

MIC Electronics, a player in Light Emitting Diode (LED) display systems has received an order and license from Delhi Metro Rail Corporation for installation and maintenance of 25 full colour day and night LED Video display boards at 8 metro stations of line-3.

The installation is worth Rs 45 crore and will be implemented over the next six months. These LED displays will be networked and controlled from a single location and are first of its kind for Indian Railways.

The company also announced that its wholly-owned subsidiary, Maave Electronics has received orders from different zonal divisions of Indian Railways along with the coach factories for the supply of approximately 20,000 coach emergency LED lamps worth over Rs 8 crore.

Also, MIC Electronics, US based wholly-owned subsidiary and LEDSTAR of Canada have entered into a strategic partnership to deploy Intelligent Transportation Systems (ITS) and LED single / full colour Variable Message Signs (VMS). The partnership enables MIC Electronics to address the rapidly growing ITs / VM3 market in India.

MIC Electronics received its first order from GMR Expressways, India for LED Variable Message Signs (VMS) for highway projects in Andhra Pradesh & Tamil Nadu. The order size is Rs 8 crore.

The company also announced that it has developed a global digital billboard exchange solution, GLOBIX, in collaboration with its subsidiary, InfoSTEP Inc. The GLOBIX solution facilitates clients to reach out to most optimal Out-of-home (OOH) advertisement locations to target brand advertising. The billboards owners will be able to optimize the utilisation of their advertisement space.

GLOBIX will be launched with an initial database of all MIC's digital billboard locations starting with Delhi Metro Rail stations at New Delhi. The total market potential of OOH advertising is projected to be more than Rs 17.5 billion over next 3 years. GLOBIX will allow MIC to play a key role in this market.

Varun Shipping acquires largest AHTS vessel

Private sector shipping company, Varun Shipping Company has taken delivery of third anchor handling and towing supply vessel (AHTS) with BHP of 16,085. This is a specialised vessel which is used for deep sea oil exploration activity going on in areas like North Sea, KG basin and Atlantic Ocean off the coasts of Nigeria, Brazil and Mexico.

This vessel is said to be the most powerful AHTS vessel under Indian flag.

With this acquisition, the company will own a diversified fleet of 21 vessels comprising of 12 LPG carriers, 3 double hull aframax crude tankers, 5 anchor handling towing and supply vessels and 1 product tanker.

The acquisition was financed partly out of company's internal resources and partly out of long term loans from State Bank of India and Bank of India, London.

Era Infra bags Rs 148cr DMRC order

Era Infra Engineering, (EIL) in consortium with KMB Ukraine, has secured a contract from Delhi Metro Rail Corporation (DMRC) for the construction of underground metro station & underground tunnel. The value of the contract is Rs 148.40 crore, and the project is scheduled to be completed by November 2009.

Commenting on the relationship with KMB, Ukraine, H S Bharana, CMD, Era Infra Engineering said, “I am pleased that our joint venture with KMB, Ukraine has started fetching good results for the group, it has always been our strategic intent of establishing strategic fit with partners which will help us in acquiring new skills. Era's expertise in execution along with KMB's expertise in construction of LRTs/MRTs will help biding for strategic contacts in future as well”.

With this, the order backlog for the Era group is Rs 4,731 crore . This is the total value of unexecuted orders as of December 31, 2007 and new orders received till date.

Indowind completes 9 MW wind farm project

Indowind Energy has completed the implementation process for an additional capacity of 9 MW wind farm project in Chitradurga district, Karnataka.

This along with the earlier acquisition of 1.98 MW wind farm in Koppal district has helped the company increase its total capacity to around 48.48 MW capacity.

“The 9 MW wind farm project at Elekhornahalli in Chitradurga district was completed three months ahead of schedule, as it was slated to be completed by June this year. This project will help in adding revenues of Rs 8 crore per annum, including carbon credits, to the company,” Indowind Energy Director K V Bala said.

The company has funded the project from its Initial Public Offering (IPO) proceedings that concluded in September 2007. The company had raised around Rs 73 crore from the IPO.

ICI India may sell adhesives biz for Rs 260cr

Paints major ICI India is planning to sell its adhesives business to an Indian affiliate of the Henkel Group of Germany. The proposal is subject to shareholders' and other approvals. The total consideration to be received for this sale will be about Rs 260 crore, subject to agreed adjustments for actual working capital and cash balances, a company release said.

Following Akzo Nobel NV ('AKzo') becoming the owner of 100% of the share capital of ICI UK, Akzo has finalised sale of ICI's global adhesives and electronic materials ('adhesives') business to Henkel AG. The adhesives business of ICI India is closely integrated with the global adhesives business of the ICI Group.

ICI India has a manufacturing site at Thane for the adhesives business and the net sales revenue (including excise duty) from the business in the financial year ended March 31, 2007 was Rs 135 crore.

ICI India had also acquired a 67% stake in Polyinks, which has a manufacturing facility at Hyderabad and is in the process of setting up a new plant at Rudrapur, Uttarakhand state.

The business proposed to be transferred to the Henkel group will include its portion of Thane manufacturing facility and about 120 employees currently working with the business and the company's shareholding in its subsidiary Polyinks Ltd. The transaction is likely to be completed in the second half of 2008, after obtaining the approval, of ICI India's shareholders through postal ballot and other statutory approvals as may be required.

Bina refinery to raise Rs 2,900cr through IPO

Bharat Oman Refinery Ltd (BORL), an equal joint venture between Bharat Petroleum Corporation (BPCL) and Oman Oil Company, has filed a draft red herring prospectus with market regulator Securities and Exchange Board of India (Sebi) for raising around Rs 2,900 cr by offering part of its shares to the public.

Before the share sale, BORL, which is constructing a 6-mn tonne per annum crude oil refinery at Bina in Madhya Pradesh, will privately place shares worth around Rs 900 crore with its promoter BPCL and another Rs 26.90 crore worth of shares with the Madhya Pradesh government, a company official said.

The share sale to the public and the private placement is likely to constitute around 48 per cent of the equity capital of BORL. After the share sale Oman Oil’s stake in the company is expected to come down to around 10 per cent while BPCL will hold around 48 per cent.

The company official said the company was going ahead with raising money through a share sale in spite of a volatile market as refinery margins are expected to remain strong in the near- to mid-term.

The money raised from the share sale to the public will be used to fund the refinery at Bina. The Rs 10,400-crore refinery, which is expected to be completed by January 2010, is being funded by a combination of debt and equity in the ratio of 1.6:1, the company said in a statement. BORL has already raised Rs 6,400 crore as debt from a consortium of lenders.

The refinery is being designed with a Nelson complexity index of 9.1, the company said. Reliance Petroleum’s under-construction refinery in Gujarat has a Nelson complexity index of nearly 15, one of the highest in the world. A higher complexity index means higher sulphur crude oil can be processed by the refinery. The higher the sulphur content in the crude oil, the cheaper is the oil.

The BORL project also includes a crude oil importing and storage system in Vadinar in Gujarat. The terminal will be connected to the refinery through a 935-km crude oil supply pipeline.

BORL already has a product off-take agreement with its promoter BPCL. The products will be marketed in India, with no quantity of products being exported. The BORL statement said that BPCL intends to construct a marketing terminal at Bina and a pipeline connecting the marketing terminal to its existing product pipeline between Mumbai in the western part of the country and Bijwasan in the north.

Four Soft, Take Solutions merger on cards

Hyderabad-based Four Soft Ltd and Chennai-headquartered Take Solutions Ltd, providers of IT products and solutions in the supply chain management (SCM) space, announced their intent to merge. The combination will create a global, comprehensive company with one of the largest product offerings in SCM. Both companies have received in-principle approval from their board of directors to consider the merger.

Both boards will appoint independent firms of chartered accountants and financial advisers to reach a fair valuation for the shareholders of both the companies. The boards of Four Soft and Take Solutions expect to meet within six to eight weeks to consider the reports of the advisers. The merger, if approved by the boards, will be subject to shareholders’ approval of both companies and other regulatory approvals.

“Four Soft has full service products and offerings. Take Solutions' product offerings complement this very well on the enterprise side. The combined range of intellectual property (IP) is unmatched globally and will enable both good customer traction and good shareholder value,” Palem Srikanth Reddy, chairman and chief executive officer of Four Soft, stated in a press release today.

Commenting on the proposed merger, Srinivasan HR, vice-chairman and vision holder, Take Solutions, said, “The coming together of two leading first-generation IT companies with similar philosophies and vision will create a significant IP company based out of India with worldwide operations. Four Soft is a perfect foil to Take Solutions. Our strong presence in the US and Asia Pacific complements Four Soft’s dominance in Europe and Japan. The proposed merger of the two companies will leverage Indian innovation and a strong partnering philosophy to become a truly global company in size and capability in the coming years.”

Four Soft, which has over 300 customers across 120 countries and 50,000 users in the supply chain domain, clocked revenues of Rs 150 cr during the last financial year. The company has been registering revenues of Rs 45 cr per quarter and expects to keep the current performance level to touch Rs 180-190 cr by this fiscal end. While 60% of Four Soft’s revenues flow in from Europe, the US and Asia markets account for 25 per cent and 15 per cent respectively.

Prime Sec writes down Rs 23cr as mkts fall

Stock broking company Prime Securities today announced a writedown of Rs 23 crore for the losses they suffered during the recent stock market crash. Prime Securities along with its subsidiary Prime Broking Company is the first broking houses to publicaly announce losses.

In a release issued to the Bombay Stock Exchange (BSE) the company said that the loss in the Futures & Options segment for the current financial year, till date, marginally stood under Rs 3 crore. However, a provisioning of Rs 23 crore was made by the firm for depletion in value of the securities.

The profit of the company in capital market segment for the current financial year, till date, stood at approximately Rs 38 crore.

Tata Motors launches Xenon in Thailand

Tata Motors (Thailand) today pulled the wraps off the Tata Xenon 1-tonne pickup truck at the annual Bangkok International Motor Show. The Xenon would be sold across Thailand through the company's own dealer network.

Commenting on the initiative Ratan Tata, Chairman Tata Motors said, "I am pleased that Tata Motors (Thailand) is launching the Xenon pickup in Thailand. The Xenon pickup has been developed and built in Thailand, specifically keeping the Thai customers in mind. We are hopeful that Thailand and Asean region will become key markets for Tata Motors in the near future."

The Xenon features a 2.2-litre Direct Injection Common Rail (Dicor) engine with Variable Turbine Technology (VTT) and intercooler promising high durability, ease of maintenance and low spare part prices. The 2.2L VTT DICOR common-rail diesel technology offers excellent power delivery and low fuel consumption. The Xenon has been designed with high suspension from origin.

Alembic plans to set up its own SEZ

Alembic, the oldest pharmaceutical company in the country, has decided to set up its own Special Economic Zone (SEZ) dedicated to the pharma sector, its Chairman and Managing Director Chirayu Amin said today.

The land for the proposed SEZ is located at Kavi and Nahar village on the Mahisagar Tidal sanctuary, about 60 kms from here, Amin told PTI.

This will be a single sector SEZ focussing on meeting the requirments of the pharmaceutical industry for the entire spectrum of naturally Derived/Biologically-developed/ Semi-Synthetically-developed/Synthetically-developed drugs and their succeeding formulations and dosage forms and preceding intermediates.

The manufacturing of Penicilin using indigenously developed technology was considered as incredulous until Alembic took up the challenge and proved that it could be done, Amin said.

Manufacturing of high quality glass containers and tableware on automatic lines for the first time in the country was a highly successful venture and subsequent foray into premium quality crystal and cut glass products was so far ahead of its time that the market was not quite ready for it.

The growth of the Indian economy with significantly improved GDP and comsumption levels is good for the domestic pharmaceuticals industry as more customers are entering organised health care as they can afford more medicines, Amin said.

"This is very important and advantageous for a company like Alembic which has its domain strength in acute therapy segment since this would be the first line of defence," he said.

Daimler-Hero JV gets govt approval

Government today gave approval to a Rs 1,650 crore investment by Germany's Dailmer AG on its proposed joint venture with India's Hero Group for manufacturing commercial vehicles.

Daimler's investment of Rs 1650 crore will constitute 60 per cent of the equity capital of the joint venture, an official spokesperson told reporters here after a meeting of the Cabinet Committee on Economic Affairs.

The JV will design, manufacture and sell commercial vehicles of above 2 tonnes for Indian as well as overseas market, the official added.

Moreover, the JV would also source components from India for Daimler's global requirements, besides undertaking research and development activity for new products and variants.

Towards the end of last year, Daimler and Hero Group had announced that they have agreed to form a joint venture for manufacturing light, medium and heavy commercial vehicles.

The joint venture would initially manufacture LCVs and M&HCV's for the domestic market followed by exports at a later stage.

The vehicles produced would be variants of Daimler Trucks' current product portfolio, which would be fine tuned to suit the Indian market conditions.

Daimler Trucks presently operates in India through a commercial vehicles and bus assembly plant in Chakan near Pune, Maharashtra.

It has five truck brands Mercedes-Benz, Freightliner, Sterling, Western Star and Mitsubishi Fuso. The company sold as many as 5,16,000 trucks globally and had revenues of 31.8 billion pounds last year.

Bharat Forge to invest Rs 350cr

Bharat Forge, the leading global manufacturer of forged and machined components, today signed a memorandum of understanding (MoU) with the Maharashtra government for its centre for advanced manufacturing at Baramati, Maharashtra.

The MoU was signed today by V K Jairath, principal secretary (industries), government of Maharashtra and B N Kalyani, chairman and managing director, Bharat Forge, in the presence of Maharashtra chief minister Vilasrao Deshmukh, Ashok Chavan, minister for industries, Johny Joseph, chief secretary.

The company will invest Rs 350 cr for setting up a forging capacity of 30,000 tonne per annum, which will manufacture large crankshafts for marine and power, landing gear, engine and structural parts for aircrafts and helicopters, connecting rods for locomotive and equalizer bars and spindles and other heavy products for construction machines.

United Spirits' winery to start in 2008

The United Spirits winery in Baramati is ready to take up its first ever harvest of the 2008 vintage. The company will be launching six varieties of wines this year with a target of 5 million bottles in five years.

Built over a plot of 300 acre, the crushing at the winery has begun and the bottling will begin by April. The winery will be fully ready by October 2008 and will then release wines made from grape varieties grown in Sahayadri valley of Maharashtra.

The company had recently launched its first Indian made wine - Zinzi, under the banner of Four Seasons Wines - a joint venture between USL (51%) and the Pawar family and the local farmers (49%) of Baramati, near Pune. The oak-barrelled wines will be launched by Four Seasons Wines in November 2008 while the sparkling wines will be launched by 2009. The crushing was officially inaugurated by UB group chairman Vijay Mallya and Union Minister Sharad Pawar yesterday.

Besides 300 hundred acres of its own vineyards, Four Seasons Wines will enter into long term contractual agreements with local farmers for a further 1,000 acres of vineyards for its annual requirement. Besides, the company will also share its technical expertise with local farmers of Baramati and help in their viticulture.

KS Oils buys palm plantations in Indonesia

KS Oils has acquired 20,000 hectares (50,000 acres) of Palm plantation in Indonesia.

With an investment of Rs 230 crore spread over the next three-years, the plantation will yield 80,000 mt annually. This will substantially bring down the raw material costs for KS Oils that is currently importing palm oil to refine and sell along with its main product of mustard oil in Northern and Eastern India.

The investment has been routed through the company's wholly owned subsidiary in Singapore. The plantation yield of 80,000 mt. represents 2.5% of India's current palm oil imports, which today stands at 3.6 mt annually.

According to a release issued by the company to the BSE today, this acquisition would also help the company secure raw material supplies and avoid global price volatility.

"Indonesian palm plantations are among the most efficient and productive plantations across the world and hence our decision to invest, with spiraling commodity and raw material prices, owning raw material source is the right strategy to de-risk in the long term. This is another important step in our global ambitions,” said the company spokesperson.

Simplex Infra bags orders worth Rs 653cr

Simplex Infrastructures today said it has bagged orders worth Rs 653 crore, including one from Bangalore-based Ritz Carlton Hotel for construction related works.

"Simplex Infrastructures has bagged Rs 653 crore new orders from different sectors which includes an order from Ritz Carlton Hotel, for construction of a cement plant, sewerage system and thermal power plant," the company said in a filing to the Bombay Stock Exchange.

Earlier in February 21, the infrastructure solutions provider company had bagged a Rs 302 crore order for construction of six flyovers in Muscat in Sultanate of Oman.

Maruti Suzuki launches Swift DZire

Maruti Suzuki today launched its new entry level sedan Swift DZire, making it the seventh model to be launched by the company in the last three years.

Variants of the DZire will be available in the range of Rs 4.49 lakh to Rs 6.7 lakh (ex-showroom Delhi). The petrol variant is being priced in the range of Rs 4.49 to Rs 5.9 lakh while the diesel one will be available between Rs 5.39 to Rs 6.7 lakh.

Launched as an replacement of the earlier mid size sedan Maruti Esteem, the DZire will have features like including integrated stereo, steering mounted audio controls, automatic climate control, power windows and dual airbags.

Ashok Leyland completes $200 mn ECB

Ashok Leyland, the Indian flagship of the Hinduja Group, has concluded an External Commercial Borrowing (ECB) programme of $200 million. This is the largest ever loan taken by the company in a single transaction till date.

The company has broad based its relationships, with the facility being subscribed to by several banks including the leading foreign banks. The loan will partly fund the requirements of the company to meet its expansion plans and overseas investments.

As per the guidelines of RBI, companies can use the proceeds of ECB only for meeting forex requirements for capital expenditure and other overseas investment purposes. Accordingly, RBI has given a go ahead to the company to proceed with the drawdown.

Said K Sridharan, Chief Financial Officer, Ashok Leyland: “This deal is significant for the company in many ways. Meant to meet the company’s funding requirements, the deal got successfully completed at a time when the global financial markets are in turmoil.”

The funds would be drawn over the permitted period and the company would be taking necessary hedging measures to protect itself from the vagaries of exchange markets.

Federal Bank opens 26 branches in one day

Federal Bank inaugurated 26 new branches across 11 states on Wednesday. This will take its total branch network to 602. The bank plans to add another 100 branches in the coming fiscal.

Speaking to reporters, K S Mohan, deputy general manager of Alwaye-based Federal Bank, said the bank has set a target of Rs 1 lakh crore in business and open 1,000 branches by 2012.

“We want to increase our presence in Gujarat, Uttar Pradesh, Maharashtra, West Bengal and other parts of North India. As for expansion in the coming fiscal, it will be mostly out of Kerala. Currently, around 300 of our branches are in Kerala, while another 300 are spread over the rest of the country,” he said.

The bank presently operates 41 branches in Tamil Nadu, and plans to add 10 to 15 more branches before December this year, he added. Speaking about overseas expansion plans, Mohan said that the bank recently opened its first overseas representative office in Abu Dhabi and plans to open more in the Gulf region.

Federal Bank's total business in the current fiscal has been around Rs 43,000 crore, with deposits crossing Rs 25,000 crore and advances at around Rs 18,000 crore. He added that the bank will close the current fiscal with total business of Rs 48,000 crore.

Tata gets JLR for knock-down price

Ford will pay about $600 million to the Jaguar-Land Rover pension funds.

After nine months of negotiation, Tata Motors finally signed a deal to buy luxury brands Jaguar and Land Rover (JLR) from Ford Motor for $2.3 billion in cash, the largest acquisition by an Indian company in the automobile business.

The purchase price is less than half what Ford paid ($2.5 billion each) to acquire the two brands. Ford bought Jaguar in 1989 and Land Rover from BMW in 2000.

The deal will extend Tata Motors’ product portfolio span from a price point of $2,500 to $170,000 and expand its distribution network more than four times to 2,700 outlets in 138 countries.

Ford will pay about $600 million to the Jaguar Land Rover pension funds, the two companies said in a joint statement today.

Along with the two brands the deal will involve the acquisition of plants and Intellectual Property Rights (IPR) held by the two brands.

The transfer of ownership to Tata Motors is expected to close by the end of the next quarter subject to regulatory approvals.

Tata Motors will raise $3 billion (Rs 12,000 crore) through bridge finance for 15 months from a clutch of banks, including JP Morgan, Citigroup and State Bank of India (SBI) to finance the deal. This will be replaced by a combination of long-term debt and equity.

The company is also planning to raise money through equity divestment in some Tata Motors subsidiaries in the next few months.

R-Power to spend Rs 3,000 cr for mines to fuel Sasan project

Awaits government nod for plan to develop mines in a strategic partnership with North American Coal Corporation.

Reliance Power Limited, the flagship company of the Reliance Anil Dhirubhai Ambani Group(ADAG), plans to invest about Rs 2,500-3,000 crore over a period of three years, to develop three coal mines to fuel its Sasan Ultra Mega Power Project in Madhya Pradesh.

“We have submitted the plan for the pit-head mines, to be developed in a strategic partnership with the North American Coal Corporation (NACC), to the ministry of coal and expect the final clearance within a few months,” a top Reliance Power, official told Business Standard.

NACC, the largest lignite coal producer and among the top ten coal producers in the US, will provide technical assistance, including evaluation of geological data, mine planning and design, supervision of mining operations and training for Reliance professionals, according to the memorandum of understanding (MoU) signed with Reliance Power.

Biggest ever
Sources said the coal mining plans of Reliance Power for the Sasan project would be one of the largest and unprecedented in India, with advanced coal handling equipment.

One of the transportation vehicles (of 240 tonne capacity) that will be used is equivalent to the size of four railway wagons.

The company has placed orders for modern coal handling equipment with four to five leading manufacturers in the US and Europe, said the official.

Sasan Power Limited (SPL), a fully owned subsidiary of Reliance Power, has about 750 million tonnes of coal reserves at Moher (capacity of 402 mt), Chattrasal (150 mt) and Moher-Amlori Extension (198 mt), over an area of about 6,000 acres in and around the proposed power project.

Coal requirement
The Rs 18,300 crore Sasan project is scheduled to go on-stream with the first 660 mw unit of the 3,960 mw project to go on-line ahead of schedule within a few years. The ultra mega power project will require about 15 million tonnes of coal annually.

According to sources, Reliance Power was among the first to submit a coal development plan for captive coal blocks allocated in the past few years.

The Sasan project was awarded to Reliance Power in August 2007 and the coal development plan was developed and submitted within few months, said the official.

First of nine
In the case of some captive coal blocks allocated to power producers such as National Thermal Power Corporation, the development plan has not been submitted even after nearly five years, the sources said.

Sasan is the first of eight or nine such mega power projects planned in the country, and was scheduled to be fully commissioned by April 2016, with six 660 mw units planned.

However, Reliance Power is working to commission the project ahead of schedule by fast tracking the entire process, said the official.

Reliance Power currently has access to coal reserves of about one billion tonnes in India and abroad, including a coal mine in Indonesia, which it acquired recently.

In India, the company has access to another 150 million tonnes of coal, along with five others who were allocated mines in Orissa and Chattisgarh.

Reliance Power is setting up 13 projects with a total capacity of over 28,200 mw. Seven of them are coal fired projects. Coal will be imported for the Krishnapatanam and Shahanpur projects.

HSBC investment arm buys 4.99% in Yes Bank

HSBC Financial Services Middle East has picked up a 4.99 per cent stake in Yes Bank in the secondary market.

The global investment arm of HSBC has been investing in the bank since January. “Like Rabo Bank investments, HSBC Financial Services Middle East’s investment in Yes Bank should be viewed as a financial investment. There is no arrangement for any cooperation with HSBC at this stage,’’ said Yes Bank managing director (MD) and chief executive officer (CEO) Rana Kapoor.

Rabo Bank holds around 18 per cent in Yes Bank.

During a recent interaction with Business Standard, HSBC group general manager and India head Naina Lal Kidwai had said, “HSBC has global investment arms which keep evaluating investment options. They invest in good portfolios.”

While HSBC refused comment on Tuesday, the strategic investment in Yes Bank has set the market abuzz with rumours. This is the second strategic investment made by the HSBC group in a bank after its investment in Axis Bank (earlier called UTI Bank). The group now holds a 4.96 per cent stake in Axis Bank.

HSBC had originally picked up a little over 14 per cent stake in UTI Bank and had to pare it to 4.99 per cent at the behest of the Reserve Bank of India (RBI).

In the recent past, Citigroup had picked up around 12 per cent in HDFC. Analyst saw Citi’s acquisition, and its indirect stake in HDFC Bank, as a strategic move to get ready to buy an Indian bank once the RBI eases the rules for foreign banks to enter India.

On the news of the HSBC investment, Yes Bank shares rose 20.53 per cent on the Bombay Stock Exchange to close at Rs 172.05.

“HSBC also seems to be gearing up for 2009. The bank wants to expand its retail reach by setting up an NBFC. But regulatory approval is pending. Additionally, the branch expansion restrictions on foreign banks may have also forced the group to look at other options in India,’’ said a banking sector analyst at a brokerage.

At present, HSBC has about 47 branches and around 170 ATMs. Yes Bank has 60 operational branches, 75 ATMs and has received RBI approval to set up additional 57 branches and 125 ATMs.

According to the RBI norms, foreign banks are allowed to buy up to 5 per cent stake in a bank. Annually, all foreign banks operating in India receive permission to open around 12 to 14 branches.

According to the RBI road map, the banking sector may be further opened up to foreign competition after the end of March 2009, giving foreign banks more freedom with respect to acquisitions. At present, they can acquire weak banks that are under restructuring. However, the RBI has not made public any such list.

F&O Outlook: Weak rollovers ahead of expiry

The benchmark indices registered gains on Monday. Massive short-covering took place as the global markets are expected to open firm after the Easter holiday.

Despite the Nifty March futures contract expiry merely three days away, the rollovers to April have been weak at 27.6 per cent compared to 35.8 per cent during the same time last month.

In absolute terms, a total of 10.90 million Nifty shares have been rolled over to April three days before this contract expiry compared with rollovers of 15.79 lakh shares three days before the expiry of February contracts.

According to derivative analysts, there were long rollovers on Monday as both Nifty March futures and Nifty April futures traded at a premium during most part of the day.

The March Nifty was trading at a premium of 22 points, suggesting unwinding of short positions. The Nifty April futures closed at a premium of 17 points, indicating long rollovers.

The decline in rollovers shows that derivative players are unwilling to take risks and carry forward their positions, given the extent of fall seen in the last two months.

The bears recently covered their shorts, with the Nifty futures open interest declining from a peak of 44.78 million shares on March 13 to 39.88 million shares on Monday.

The foreign institutional investors have been covering their shorts and building fresh long positions in the last few days. Their overall open interest in index futures has declined by 75,000 contracts to 9.84 lakh contracts.

Jyoti Structures bags 2 orders worth Rs 253cr

Jyoti Structures today said it has bagged two orders worth Rs 253 crore from Uganda Electricity Transmission Company Ltd and Eskom Enterprises (Pty) for construction of transmission lines.

The company has bagged Rs 160 crore order from Uganda Electricity Transmission Company for construction of transmission lines and substations.

Besides, the company's joint venture company Jyoti Structures Africa (Pty) has bagged a contract for Eskom Enterprises (Pty), the electricity utility of South Africa for construction of transmission line.

The scope of the order from Uganda Electricity Transmission Company includes the supply and erection of Bujagali Interconnection Project, the manufacturer of transmission line towers informed the Bombay Stock Exchange.

The contract valued at around $39.64 million (Rs 160 crore) is to be executed in 24 months, the company said, adding the company would construct 220 KV and 132 KV transmission lines and substations.

Meanwhile, Jyoti Structures Africa would execute 114 Km of 765 KV single circuit transmission line construction from Majuba to Umfolozi. The contract valued at about 184 million rands (around Rs 93 crore) is expected to be executed in 13 months.

Corporation Bank to raise Rs 500cr

Corporation Bank, a medium size public sector bank, will raise Rs 500 crore through Tier-II bonds.

According to a release issued by the bank to the BSE today, the board of directors today approved the proposal to raise additional Rs 500 crore. The bank said that the proposal is in addition to already raised Tier II Bonds of Rs 500 crore.

Great Offshore to consider share buy back

Great Offshore, the demerged off shore services arm of GE Shipping, plans to buy back its shares.

According to a release issued by the company to the BSE today, board of directors of the company would meet on 31 March to consider a proposal for buy back of equity shares.

Aurobindo acquires Italian generic company

The Hyderabad-based Aurobindo Pharma has acquired TAD Italy, a generic Italian company with 70 ready to market products. The acquisition will help Aurobindo enter into the Italian generic market, in a big way.

The size of the deal was not disclosed.

"This deal will provide us with a ready local platform and will help us is immediately maximising the potential of our vast internal pipeline which is to follow in the next few months. Aurobindo has already flied 22 products for registration in Italy", commented Ashish Menocha, Aurobindo's
Regional VP, Europe.

During the integration process, Aurobindo expect to derive maximum synergies from the acquisition by shifting the manufacturing of TAD's products to its own facilities in Hyderabad, the company said in a press release.

IVRCL bags Rs 79cr contract

IVRCL Infrastructures & Projects has bagged a Rs 78.85 crore contract from Andhra Pradesh Industrial Infrastructure Corporation for construction of a 5.75 lakh square feet research complex and 2.86 lakh square feet staff quarters for the Indira Gandhi Centre for Advanced Research on Livestock (IGCARL).

The Rs 400 crore IGCARL is coming up over 650 acres of land in Pulivendula of Kadapa district in Andhra Pradesh. The project, to be implemented over a period of three years, is the first-of-its-kind facility for livestock research and vaccine production in the country initiated by the state government.

IVRCL stated in a press release that the project was intended for conservation of indigenous germ plasm, development of feed and fodder resources, improvement of animal reproduction, development of cost-effective vaccines and disease diagnostic tools and on-farm validation and transfer of the developed technologies.

XL Telecom bags Rs 154cr export order

XL Telecom & Energy has bagged an export order worth Rs 153.90 crore for supply of solar panels to a major power utility company in Europe.

The order has to be executed before June 30, 2008 and XL's European subsidiary Saptashva is in the process of establishing the solar farms for power generation in Europe, as per a release issued by the company to the BSE today.

With the new order, the total pending order book for the export of solar panels stands at Rs 675 crore.

Welspun Gujarat wins Rs 1,075cr order

Welspun-Gujarat Stahl Rohren has bagged an order worth Rs 1,075 crore for the supply of spiral pipes in Northern Africa.

According to a release issued by Welspun to the BSE today, this contract was won against competition from players in Europe and the new order has taken the company's order book position to above Rs 5,900 crore.

"Welspun's strong demonstration of engineering excellence and accreditations from top oil and gas companies across the world results in new orders and reinstates our position as one of the largest and premium line pipe company in the world. " said B K Goenka - Vice Chairman & Managing Director of the Welspun Group.

JSW Energy for 1,320Mw plant in MP

MP to get 37 per cent of the power produced at the plant.

JSW Energy Ltd (JSWEL) has proposed to set up a 1,320-Mw power plant in Madhya Pradesh. The state government has signed a memorandum of understanding (MoU) with the company last week for the purpose.

JSWEL is a group company of the Jindal South West (JSW) group, headed by Sajjan Jindal.

The company is reported to have proposed a mega investment of Rs 5,500 crore in the project, which will come up in Chhindwara district. The company has already applied for coal allocation and is progressing to identify and acquire land for the thermal power project.

Sanjay Bandopadhyay, energy secretary, told Business Standard, “This plant will be based on super critical technology and will provide 37.5 per cent of the power produced at the plant to MP.”

The state government had last year signed deals with various power companies for a combined capacity of 25,000 Mw. Although the power companies have yet to identify lands or acquire the land identified, small power companies like BLA Power and Today Group have reached an advanced stage to set up their power plants.

“Small companies like Mumbai-based BLA Power have completed their work to an advanced stage while companies like Jindal Photo, which has proposed 1,000 Mw, and Torrent have not started ground work. We have given them a six-month extension so that they can come up with the necessary details,” he added.

Both the companies had signed a deal with the state government last January for 1,000 Mw each but failed to comply with the necessary requirement within the stipulated time of one year. “We will not entertain after the extension,” Bandopadhyay added.

Madhya Pradesh is still facing a huge shortage of 1,100 Mw against the peak demand of 6,100 Mw as the production (thermal and hydro) is still restricted to 5,000 Mw.

State-owned power plants namely the 1,000-Mw Indira Sagar and 520-Mw Omkareshewar are producing 500 Mw and 104 Mw respectively on account of low water availability and a court restriction on reservoir level.

Thermax to go slow but steady in power segment: CEO

Chooses not to undertake big contracts that carry a bigger risk.

Thermax plans to grow slowly but steadily in the booming power industry of India, making money without risking its shareholders, said MD and CEO M S Unnikrishnan in an interview.

Thermax, a leading maker of small capacity boilers for power plants, gets 65 per cent of its revenues from boilers and engineering, procurement and construction orders.

Yet, Unnikrishnan said the company would not go overboard with it, and resist taking EPC orders that are sized more than half its annual turnover.

“Typically, power units take 4-5 years to be commissioned. So, if you put all that you have to execute a big contract, it can boost your order book, but will carry a long-term risk,” Unnikrishnan said.

Thermax currently has an order backlog of Rs 2,700 crore, which comprises boilers, water treatment equipment, air pollution control equipment and speciality chemicals.

Capital expenditure
“Our conservative approach has won the confidence of our shareholders. At the worst of times, our two-rupee face-value shares have traded at about Rs 600,” he said.

Thermax recorded sales of Rs 2,330 crore in 2006-07. He said it is expected to grow 40 per cent this year, while the company will “maintain profitability”. The company’s net profit for 2006-07 was Rs 194 crore.

Thermax made a capital spending of Rs 425 crore during the current financial year, but is likely to incur much lower capital expenditure in 2008-09, he said.

“We will add to our boiler and heater capacity and also enhance our other businesses,” he said, without elaborating.

Thermax shares closed at Rs 525.15 on Wednesday last week, a loss of over 13 per cent over its previous weekend close.

Dena may raise Rs 350 cr in FY09

Dena Bank is likely to raise Rs 300-350 crore capital in the next financial year to maintain a 24 per cent credit growth, according to P L Gairola, the chairman and managing director of the bank.

“However the cost of raising capital is important,” he said.

Dena Bank’s capital adequacy ratio (CAR) would be a little over 11 per cent at the end of March, including the tier-I capital adequacy ratio of 7 per cent, he said.

“You need to have at least 6 per cent tier-I capital adequacy ratio,” Gairola said, hinting at the need for equity capital.

The bank is constrained from raising equity capital as the government stake in the bank is at the minimum threshold of around 51 per cent.

Gairola also hopes that the bank will be able to sustain a net profit growth of 25-30 per cent in the next three to five years.

The bank had posted an extraordinary 176 per cent year-on-year net profit growth in 2006-07 due to a low base.

FOCUS FY09
Dena Bank would continue to focus on retail lending in the next financial year beginning April because of “good yield and risk disbursal,” Gairola said. The bank might also reduce deposit rates in April if liquidity improves, he said.

“We hope to regain 3 per cent net interest margin next year (2008-09),” Gairola said. The bank’s net interest margin is expected at 2.8-2.9 per cent by the March-end.The bank expects to maintain a fee income growth of 22-23 per cent in 2008-09.

Steel price hurts component makers

Rising steel price is becoming a major cause of concern for the $15 billion auto components sector that is already in trouble due to a lower demand in the domestic market, while exports have also suffered because of a stronger rupee.

Automotive Component Manufacturers’ Association (AMCA) members said the rising price of steel has started affecting their profitability and the situation could get worse in the next two to three quarters.

While components makers said that the price of steel used in the component sector has risen by as much as 25 per cent in the last three months, a steel industry source said that prices of cold rolled coil were up from Rs 38,500 a tonne to Rs 44,000 a tonne (inclusive of taxes), while that for hot rolled coil were up from Rs 34,500 a tonne to Rs 40,000 a tonne since April 2007.

A further increase of steel price by Rs 6,000 a tonne is expected by April 1, according to a component industry source.

“Given the continuous push in input cost, we do not rule out a further price hike in the coming months,” said a steel industry source.

Vishnu Mathur, executive director of ACMA said that a survey of 53 of ACMA’s members showed a clear downward trend in profitability. ACMA represents the interest of 558 large and medium sized parts makers in the country.

“There are another 1000 or 1500 small and medium sized component makers who are not members of ACMA but are also affected by the rising steel price,” said Srivats Ram, chairman of ACMA’s southern region.

An estimated 3,00,000 people are directly and indirectly employed in the auto component business in the country, he said.

Parts makers said that export incentive on steel was inappropriate at this point, as the availability in the domestic industry has already been affected due to rising prices and inadequate supply.

“Since there is an incentive for exports, steel makers tend to benchmark the price in the local market after providing for incentives that they would have earned had they exported,” said a Chennai-based component maker.

The rising steel prices could not have been more badly timed given that the demand for automobiles has also been on the decline. The overall automobile industry shrunk by 5.3 per cent between April 2007 and February 2008.

While sales of passenger vehicles grew by 12 per cent during this period, two wheeler sales fell by 9 per cent and medium and heavy commercial vehicles by 4 per cent.

Maruti to invest Rs 9,000 cr more

Plans world class R&D, design facility, regional distribution centres and logistics support.

Maruti Suzuki India Limited (MSIL), the leading car maker in the country, will invest Rs 9,000 crore more in India, most of it in research and development (R&D), warehousing, marketing, logistics and design.

The company has already set aside a corpus of Rs 9,000 crore, which will be used primarily to augment production. Almost every second car sold in India is a Maruti vehicle.

The fresh investment will be made over a longer period, about eight years, as compared with three years for some earlier investments.

Shinzo Nakanishi, managing director and CEO, MSIL, said, “We will invest Rs 9,000 crore in India which will be over and above the earlier investment programme announced by the chairman (Osamu Suzuki) last year.”

“The investment will cover our other round of expenses for setting up a world class R&D and design facility, improving warehousing facilities and marketing channels, upgrading our logistics support and similar ventures, which will improve the company’s overall business presence in India,” he said.

Delivery time
The company is planning to set up giant regional warehouses, which will cater to sectoral markets in each of the distribution zones.

This means that a Maruti dealer in Mumbai would not have to place the order for a particular model to the company’s office at Gurgaon or Manesar, but he would be able to source the car model directly from the regional centre based somewhere in the western region. This will slash delivery time by 70-75 per cent.

Maruti is planning four or five regional centres (warehouses) in the next couple of years, in the eastern, western, southern and central areas of the country.

For example, it takes about a month or two for Swift, the company’s top selling vehicle, to be handed over to the customer today. With regional warehouses in place, the delivery could achieved in less than 10 days.

Capacity constraints
The centralised and timely despatch of vehicles from its facilities in the north will mean faster shipment to overseas markets through the Mundra and Mumbai ports in western India.

“Company dealers cannot be expected to pour large sums of capital into enhancing showroom space to house more vehicles. Hence, we have decided to go ahead with the regional warehousing plan,” a company executive explained.

Apart from launching new models by the end of this financial year, Maruti Suzuki expects to hit a production of 300,000 units from its Manesar plant alone in October, which would take its combined capacity up to 900,000 units. It will add another small car to its line-up, perhaps in 2008-09.

Faced with a production constraint, the company is unable to satisfy the current demand. Even though the Gurgaon plant is stretched beyond its original installed capacity of 500,000 units (it now produces 600,000 units), the Manesar plant produces just 130,000 units.

NMDC in talks with Canadian firm for mega-iron ore project

Bid to be submitted by mid-April.

Government-owned NMDC, India’s single largest iron ore producer and exporter, is in talks with Canada’s New Millennium Capital Corp (NML) for a $3.5 billion (Rs 14,000 crore) project to develop one of the world’s largest undeveloped low-grade (magnetite) iron-ore deposits.

Confirming this, Rana Som, NMDC chairman and managing director, said a bid would be submitted by mid-April. NMDC is one of several companies competing for the project.

The Millennium Iron Ore Range, in which NML holds a majority stake, has over 9 billion tonnes of reserves, more than India’s proven reserves of 6 billion tonnes.

Apart from developing the deposits, the project includes building a pellet plant and a 700-km slurry pipeline.

If the bid is successful, NMDC could partner another company for the project. The company has floated a global tender for a 50:50 joint venture to expand and develop facilities in current or new mineral properties overseas.

Som said NMDC has cash reserves of around Rs 7,000 crore.

The project could help bridge an anticipated shortage in iron ore in the light of India’s target of a steel capacity of 300 million tonnes by 2020, which would require iron ore reserves of approximately 14 billion tonnes over a 30-year period.

Moreover, 75 per cent of India’s magnetite ore reserves is located in the ecologically sensitive Western Ghat region.

Som said though the gestation period for the Canadian project was a five-and-a half to six years, it could help bridge the gap.

“Once our reserves are exhausted, the Millennium Iron Ore Range could last another 40 to 50 years,” he said.

NMDC produces about 30 million tonnes of iron ore annually from its Bailadila deposit in Chhattisgarh and Donimalai in Karnataka. It supplies to most domestic steel companies that do not have captive mines like Essar Steel and Ispat Industries.

The miner also meets the entire requirements of state-owned Vishakhapatnam Steel Plant.

BMW to source chassis and engines from India

German luxury carmaker BMW is evaluating over 100 component manufacturers in India to outsource engines and chassis for its global manufacturing operations, according to a board member.

“We are impressed with the quality of die casts and forgings in India that we use for our global operations. The quality of products from second- and third-tier is impressive. Once our pilot project evaluating 100 ancillaries is completed we will outsource engines and chassis for our cars,” said Ind Herbert Diess, who is on the BMW AG board.

The German car-maker’s international purchasing office in Gurgaon, Haryana, currently sources motorbike handles and die casts from India. The India outfits of multinationals like Mico Bosch and Conti also supply it software solutions.

The car-maker sells the 3 and 5 series assembled from CKD (completely knocked down) kits at its plant in Chennai.

BMW’s Indian operations added 200 people in 2007. “The number of jobs we add in India depends on our market growth,” said Norber Reithofer, chairman of the BMW Board of Management.

“India is an important growth market for us. Our estimate is that by 2015 the market for premium cars will reach 10,000 units a year. We also plan to increase the share of our CKD units in the country,” Reithofer added.

“BMW sports utility vehicles like the X3, X5 and the 7 series could be locally assembled at the Chennai plant if we reach a critical number of 500 units,” said Frank Peter Arndt, head of production.

The company also plans to launch the Mini next year to coincide with the iconic small car’s 50th anniversary. However, Kay Segler, senior vice- president, Brand Management Mini, said the process of homologation (adapting to Indian conditions) is time-consuming and expensive.

“It costs about ¤200,000 and takes six months to complete the homologation in India, which pushes up our cost and delays the launch of this compact car in India,” Segler said.

According to BMW, the small car could cost between Rs 25 lakh and Rs 30 lakh and will be available as a CBU. The company said the Mini’s diesel engine could deliver 25 km to the litre under test conditions.

The Mini engine will be supplied by Fiat. “Mini engines will also be supplied by other vendors. We are in discussions,” said Klaus Draeger, another board member.

Blue Dart to increase warehousing capacity to 2 million square feet

Indian express-courier and distribution company Blue Dart, in which global logistics major DHL holds a majority stake, is to double its warehousing capacity to 2 million square feet in the next two years.

The company is also planning to add 120 facilities — offices and service centres — and has earmarked a capital expenditure of Rs 200 crore for the calendar year.

“We are expecting a substantial increase in business in the next few years and need to have the necessary infrastructure in place. This is part of our ambitious growth plans in the country,” Blue Dart General Manager (marketing) Ketan Kulkarni said.

Kulkarni, however, did not divulge the investments being made for doubling the capacity. He said the company was planning to invest Rs 1,000 crore in five-eight years to ramp up its warehousing capacity from the present 1 million square feet. Currently, Blue Dart has 257 facilities in the country.

The courier major would also look at inducting a new Boeing 757 into its fleet by the end of this year, but this would depend on the growth of business in the country.

The company currently operates seven aircraft — three Boeing 757s and four Boeing 737s — in the country.

The company handled 191,875 tonnes in calendar year 2007 and expects these initiatives to increase its business in the country. It enjoyed revenues of Rs 811.8 crore and had a market share of 41.7 per cent in the country last year.

DHL holds a 81.03 per cent stake in Blue Dart, a listed company in India. Through the alliance with the global logistics major, Blue Dart services over 220 countries.

BHEL to spend Rs 5,000 cr on JVs with NTPC, NPCIL

Power equipment manufacturer Bharat Heavy Electricals Ltd (BHEL) is likely to spend nearly Rs 5,000 crore over the next three years in its yet-to-be-formed joint venture companies with power utility NTPC and Nuclear Power Corporation of India Ltd (NPCIL).

“Some of this money will also be spent on other possible ventures with private sector companies,” said BHEL Chairman and Managing Director K Ravi Kumar.

BHEL and NTPC agreed to form a joint venture in September last year to construct power plants and also manufacture power equipment. Kumar said the new company was likely to be formed by next month. The proposed company will take up projects both in the country and overseas.

A joint venture with NPCIL is also likely to be formed in the “first half of the next financial year,” Kumar said. The joint venture is likely to take up engineering, procurement and construction for nuclear power plants in India and overseas.

NPCIL, which is the only company mandated to set up nuclear plants in India, currently generates about 3,900 Mw of electricity from its 16 power plants. The company plans to more than double its capacity to 10,000 Mw over the next six years.

BHEL has supplied almost 80 per cent of the nuclear power equipment currently used in the country.

The company, in which the government owns 67.72 per cent stake, is also looking to buying a mid- to small-sized company for which it has Rs 1,000 crore.

“We are talking to many companies in India and overseas,” said BHEL finance director CS Verma. BHEL is looking primarily at companies in the US and Europe, another company official said.

He added that the company, which has cash reserves of over Rs 4,000 crore, would fund these investments through its internal accruals. It recorded a net profit of Rs 1,749 crore in the first nine months of the current financial year, up 38 per cent over the same period the previous year.

BHEL today also paid an interim dividend of Rs 298 crore to the government for the current financial year, taking its total interim dividend to Rs 441 crore, which is 90 per cent of its enhanced equity capital post-bonus, Kumar said.

The company has an order-book worth Rs 78,000 crore. It currently has a manufacturing capacity of 10,000 Mw per annum and plans to expand it by another 15,000 Mw over the next two years.

BHEL pays Rs 298cr interim dividend to govt

Power equipment supplier Bharat Heavy Electricals (BHEL) today said it has paid an interim dividend of Rs 298 crore to the government for the year 2007-08.

The company paid a total interim dividend of Rs 441 crore, chairman and manging director K Ravi Kumar told reporters here. He presented a cheque of Rs 298 crore to Heavy Industries Minister Santosh Mohan Deb today. The government owns 67.72% equity in the firm.

BHEL recorded a net profit of Rs 1,749 crore in the first nine months of 2007-08 - a 38% growth over the corresponding period of the previous fiscal.

The company has enhanced its capacity to 10,000 Mw and aims to augment it to 15,000 Mw by December 2012.

Moser Baer unit plans $150 million IPO listing on Nasdaq

Moser Baer Photo Voltaic, the solar cell unit of compact-disc maker Moser Baer India Ltd, is looking to raise about $150 million on the Nasdaq exchange, market sources said today.

Moser Baer Photo Voltaic had in November said it was seeking to invest $150 million on expansion projects and was looking at an overseas listing.

Moser Baer Photo Voltaic, which manufactures solar cells and modules, would become the latest Asian solar energy firm to raise money via a US listing.

The company, which has been working on the plans for a few months, may wait for the volatile market conditions to settle before going ahead with the issue, a source close to the developments said.

Morgan Stanley is among the underwriters appointed by Moser Baer Photo Voltaic for its IPO listing, the sources said.

8 banks may join SBI to raise $3 bn for Tatas` Jaguar bid

Atleast four public sector banks and four foreign lenders are likely to join the State Bank of India-led consortium to raise $3 billion to fund Tata Motors’ foreign acquisitions including the $2 billion Jaguar and Land Rover deal.

The public sector banks that may join the consortium of financiers are Bank of India, Bank of Baroda, Indian Overseas Bank and Syndicate Bank, while the foreign banks are Barclays, HSBC, DBS and the Singapore-based United Overseas Bank, a source close to the development, said.

“SBI is looking at enhancing the number of entities in the consortium to 20 so that the burden of financing such a huge sum can be distributed,” the source added.

The country’s largest lender has already started talks with banks that would be a part of the consortium, including Citi Bank, JP Morgan, Standard Chartered, BNP Paribas, Tokyo Mitsubishi UFJ and Mizuho Financial Group. It will issue an official announcement soon, the source said.

Sources said SBI plans to raise the amount by the second half of April to enable Tata Motors to complete the acquisition soon.

SBI has emerged as the leading merchant banker in the country over the past two years. The bank sealed around 40 deals worth about $27 billion in 2007-08 and this contributed significantly to its revenues.

Tata team seeks ways to keep Nano at Rs 1 lakh

Tata Motors has set up a separate team at its plant in Pune to examine ways to cut manufacturing costs on the Nano, the small car scheduled for an October launch, to bring the ex-showroom price down to the psychological Rs 1 lakh mark, Managing Director Ravi Kant said today.

At present, the Nano’s ex-factory price is Rs 1 lakh, making it the world’s cheapest car. Transport costs and value-added tax, however, put the ex-showroom price at Rs 1.2 lakh to Rs 1.3 lakh.

Kant declined to elaborate how the price reductions would be effected. Experts believe the company will either look at better price negotiations with component suppliers or through very minor re-engineering on the basic model.

Tata Motors has been able to reduce the cost of the car by making things smaller and lighter, doing away with superficial parts and changing material wherever possible.

For instance, the 623 cc petrol engine was made of aluminium instead of cast iron, saving weight and cost. The engine has also been placed at the rear of the car, putting less pressure on steering systems.

“We haven't taken a call on any price cut on the Nano, the launch date of the car is still far away and something might be planned by then,” a company official said.

Kant said the company had received lakhs of enquiries through the internet for the Nano. “The response has been overwhelming so far.”

The surge in pre-launch demand had prompted Chairman Ratan Tata to state that the company is open to licensing the Nano design to other automakers for manufacturing.

This move by the company, analyst believe, will help Tata Motors achieve economies of scale, thereby reducing the time lag of delivery of the car.

Tata Motors intends to open bookings for the car three months from now.

The company plans to produce 2,50,000 Nanos in the first phase and add 1,00,000 in the second phase, taking production capacity to 3,50,000 cars probably by the end of the next financial year.

GMR signs deal to upgrade Istanbul airport

Having already built a new airport at Hyderabad, infrastructure major GMR Group, along with other consortium partners, today signed an agreement with the Turkish government to expand an airport at Istanbul, the commercial hub of the country.

The GMR-led consortium will be developing facilities for trebling the passenger capacity of the Sabiha Gokcen International Airport (SGAI) at Istanbul with an investment of euro 250 million (about Rs 1,600 crore).

According to a release issued by GMR today, in addition to making an initial investment to increase the capacity of the airport to 10 million passengers per annum in 30 months, the consortium will pay euro 1.92 billion concession fee spread over 20 years to the Turkish government.

It will recover the money through various aviation and related activities, upgradation of the Sabiha Gocken Airport, named after a woman combat pilot and adopted daughter of the father of modern Turkey, Mustafa Kemal Ataturk.

"This project will increase the international exposure of the GMR Group...It will also serve as the ideal reference for entering into other European countries," GMR international division chief executive officer Ranjit Murugason said.

Country Club plans pan India expansion

Entertainment and leisure conglomerate, Country Club India Ltd has acquired properties worth Rs 96.04 crores in key cities such as Chennai, Pune, Delhi, Cochin, Kolkatta, Ahmedabad, Vadodara and Surat during the past two months.

According to the company's chairman V Rajeev Reddy, most of the acquisitions in the aforesaid destinations have been of existing clubs or properties conducive for creating clubs. The company would spend a considerable amount to refurbish these properties and bring them up to the Country Club standards.

The acquisitions are a part of the strategic expansion plan undertaken by the company to consolidate and strengthen its pan-India footprint. The company currently owns/operates 33 properties across the country.The expansion has initiated on account of the fact that clubbing has become more or less a way of life in metros, Reddy said.

The company also launched its first Spa in Hyderabad recently and proposes to set up such spa’s near Mumbai, Bangalore and Chennai.

The company plans to undertake the expansion on the back of war chest of Rs 486 crores through a recently completed GDR/QIP issue, the company aims . The GDR/QIP issue, priced at Rs 770 per share, evinced tremendous response. Leading global investment institutions such as Fidelity Investment International picked up 9.88 per cent equity in the company, while Goldman Sachs International and New Vernon picked up 6.59per cent and 4.94 per cent equity respectively.

Strides gets third ANDA nod for Fosphenytoin

Pharmaceutical company Strides Arcolab today announced its third ANDA approval for Fosphenytoin Injection 50mg/mL in 2 ml and 10 ml vials. The product is licensed to Akom-Strides, LLC, which is a joint venture that was formed in 2004 by Akom and Strides Arcolab.

Fosphenytoin is the third approval amongst 22 sterile submissions the company has submitted with US FDA. Fosphenytoin helps to control seizures (convulsions) in certain types of epilepsy and can help to prevent seizures occurring during or after surgery.

"We are excited with our third sterile injectable approval and are delighted having achieved a key milestone in creating a global sterile injectable business," Arun Kumar,Vice Chairman and Group CEO of Strides Arcolab said.

The company plans to establish other areas of drug development including API research, non-infringing process development, bio-technology research and establish clinical research capability in-house.

Maruti's new Swift 'DZire' by month end

India's leading car maker Maruti Suzuki said that it will launch the much-awaited mid-sized sedan, Swift 'DZire' by the end of this month. The car is based on the highly successful platform of the Swift and will eventually take the place of the phased out Esteem.

Price of the car was not divulged by the company however industry sources say that it should be priced in the Rs 5-6 lakh range.

Maruti claims that the DZire will sport class-leading features that have never been offered in any entry-level sedans in India. For instance, the dash board will house a fully integrated stereo on with steering mounted audio controls. It will also have a fully automatic climate control system, dual front airbags and anti-lock braking system (ABS).

The Esteem was the company's offering in the entry level mid-sized segment and was in production for more than 17 years. The car was phased out in the later half on last year on account of poor demand.

Sical announces fin closure for terminal

Chennai-based logistics company Sical Logistics today announced that it has achieved financial closure for its greenfield iron ore terminal project at Ennore Port.

The project is being executed by a special purpose vehicle (SPV), Sical Iron Ore Terminals, promoted by Sical Logistics with 89% stake and L&T Infrastructure Development Projects.

Yes Bank is the lead arranger and sole underwriter for Rs 340 crore loan. The other members of the loan syndicate include United Bank of India, UCO Bank and India Infrastructure Finance Company.

The terminal is being developed on a build-operate-transfer (BOT) revenue-sharing contract with Ennore Port for 30 years including the construction period. The terminal will have a capacity for 12 million tonne cargo per year.

"We are impressed with the dedication and professionalism of the team at Yes Bank - taking up and delivering on the responsibility of underwriting and arranging a Rs 340 crore loan in a single shot is no doubt a proud achievement for Yes Bank," said Ashwin Muthiah, chairman, Sical Logistics.

NTPC to build 750 Mw plant in Assam

National Thermal Power Corporation (NTPC) will invest Rs 4,375.35 crore for setting up a coal- based thermal power project of 750 Mw (3x250 Mw) at Salakati in Kokrajhar district of Assam.

The project would come up at the site of the existing non-operational Bongaigaon thermal power station (4x60 Mw).

According to an official release issued today, an agreement has been executed between NTPC, the government of Assam and Assam Power Generation Corporation (APGCL) for transferring the existing infrastructure of the Bongaigaon power station to NTPC.

L&T, Mitsubishi JV plans 4,000 Mw capacity

Larsen & Toubro (L&T) is planning to ramp up the manufacturing capacity of super-critical boilers and super-critical turbine generators to 4,000 Mw per annum.

The foundation stone for the upgraded facility was laid at Hazira today in the presence of A M Naik, chairman and managing director, L&T, and Ichiro Fukue, representative director, Mitsubishi Heavy Industries.

L&T is the only private sector company in India to enter the space of super-critical boilers and turbine generators. The company will be manufacturing and marketing these critical components through two separate joint ventures with Mitsubishi Heavy Industries (MHI) of Japan. L&T will hold 51% stake in both the JVs with MHI holding the remaining 49%. The JVs will have an investment of Rs 1,500 crore.

Institutional trade to have margins too

The Securities and Exchange Board of India (Sebi) on Wednesday said broking houses will have to provide for margining for all institutional trades in the cash markets with effect from April 21. The move brings institutional business on par with the retail segment.

At present, there is no margin system for institutional trades while brokers charge margins from retail customers for their trades.

“In order to provide level playing field to all the investors in the cash market as in the case of derivatives market, all institutional trades in the cash market would be subject to payment of margins as applicable to transactions of other investors,” said a Sebi circular issued on Wednesday

In the futures & options segment, there is margining system for both retail and institutional trades.

The margining decision coincides with Sebi’s decision to allow short selling, and securities lending and borrowing with effect from April 21. Brokers said the move was necessary as at present all the trades in the cash market by the institutional investors are delivery-based trades.

Following the implementation of short selling from April 21, brokers, as part of their risk mitigation exercise, need to provide for margins as the institutional trades may also be short selling in nature. Hence, the extra precaution.

The decision to impose margins for institutional trades will have a major impact on the trading volumes of small and mid-rung broking houses.

“We will have to provide for the margins ourselves to attract institutional trades,” said a head of a brokerage house. “Only big brokerage houses, which have big money, will survive in the new environment,” he said.

Sebi said to begin with, all institutional trades in the cash market would be margined on a T+1 basis with margin being collected from the custodian upon confirmation of the trade. Subsequently, with effect from June 16, 2008, the collection of margins would move to an upfront basis.

The market regulator asked stock exchanges to test the software and remove any glitches in its operation well before the commencement date to avoid any problems in the live environment.

Also, stock exchanges are required to make necessary amendments to relevant bye-laws, rules and regulations for the implementation of the new rules.

Court allows Cipla to market disputed drug

The Delhi High Court today passed an interim order allowing domestic drug firm Cipla to market its version of a lung cancer treatment drug for which Swiss multinational Roche Scientific holds the India patent, pending another hearing scheduled for August 6.

The interim order was passed by the court today on a plea filed by Roche Scientific on January 19 this year. The generic name of the drug is Erlotnib, which Roche markets as Tarceva and Cipla as Erlocip.

Ahead of the next hearing, the court has asked Cipla to maintain records of sales of Erlocip.

It has also admitted the counter-claim filed by Cipla that questions the validity of the Roche patent and asked the latter to respond within four weeks from today.

The case, which is being keenly watched by global and Indian drug firms and consumer interest groups, is the first test case of India’s new patent regime.

The new patent law came into effect on January 1, 2005, and offers firms product patent protection against the earlier practice of process patent protection, which effectively allowed firms to make the same drug through a different process.

Days before Roche sought legal redress, Cipla started marketing the drug for Rs 1,600 a tablet, one-third the price Roche charges (Rs 4,800 a tablet). Roche has been selling Erlotinib under the brand name Tarceva in India since 2006.

The crux of Roche’s argument is that the product patent right it has for Tarceva prevents competition from manufacturing a copy-cat version of the drug.

In response, Cipla has claimed that the Indian patent is not valid and argued that it was well within its rights to manufacture and market the medicine in the country.

The counsel for Cipla said the high court’s order today made special mention of the life-threatening nature of cancer and the life-saving properties of this drug.

“Given the price difference, the court did not want patients to be deprived of a low-cost alternative by staying sales of the generic product,” the counsel claimed.

Today’s decision will ensure uninterrupted supply of a low-cost medicine for treating lung cancer. Nearly 160,000 people in the country are estimated to be suffering from the disease, which has a high fatality rate.

Welcoming the interim verdict, the Cancer Patients Aid Association (CPAI) Chairman Y K Sapru said he was glad to note “the judiciary has given preference to the right of a human being to live over all other rights enshrined under the Constitution of India”.