NEWS ANALYSIS
Rajesh Desai
INFRASTRUCTURE
GMR receives Rs 415 cr dues from Air India, co stock up
· With operating performance improving, the national carrier Air India has managed to repay Rs 415 crore to GMR Group. The Group operates the Delhi and Hyderabad airports. According to a statement issued by GMR, “The sum paid includes landing and parking charges
NTPC floor price set at Rs 145, a 4.79% discount
· The government has set a floor price of R145 per share to sell 9.5% of its holding in NTPC, a discount of 4.79% to the current market price. The offer for sale (OFS) proposes to sell 78.32 crore shares. At the given floor price, the government could raise at least Rs11,353 crore — the largest OFS from a state-owned entity in the current fiscal — if the issue is fully-subscribed.
METALS & MINING
CIL against price pooling of domestic and imported coal'
· Coal India feels price pooling of domestic and imported coal would result in an extra burden on state power utilities which already owe over Rs 5,000 crore to the PSU. Coal India Ltd (CIL) has opposed price pooling of domestic and imported coal stating that states would oppose any such decision as this would result in extra burden on their plants, which were so far getting domestic coal on notified prices.
· Power utilities including state-run units in West Bengal, Tamil Nadu, Jharkhand and Madhya Pradesh owe over Rs 5,000 crore to CIL, adding that the Coal Ministry has mentioned the same in its 144-page note on price pooling to Cabinet. Of the Rs 5,000 crore, NTPC, which is yet to sign the fuel supply pact with CIL, has to pay more than Rs 1,000 crore to the coal PSU.
· Independent directors of the PSU are also opposed to any such price pooling mechanism, which according to them might impact the financials of the coal major. The Cabinet Committee on Economic Affairs yesterday had deliberated on averaging of prices of domestic and imported coal to get a uniform feedstock price in the country and had asked coal and power ministries to come back with specifics of the proposal.
· However, the final decision on the issue is pending for long due to differences between the Coal and Power Ministries on how the impact of higher imported coal prices will be shared between CIL and power companies.
BANKING
Axis Bank rolls out 500 cash deposit machines
Axis Bank has deployed 500 cash deposit machines at its branches in over 300 cities. The cash deposit machines will give customers the convenience of depositing cash, with funds getting credited instantly to their accounts for all successful transactions without filling deposit slips, provides mini statement and account balance for all the card-based transactions. The machine segregates the notes as per each denomination, counts and displays them for the customer’s confirmation before crediting the account. This reduces the customers’ time to deposit cash from an average of 30 minutes to less than a minute.
NHB gets applications for raising $1 b via ECB route
The National Housing Bank (NHB) has received applications from about half-a-dozen housing finance companies for raising $1.06 billion through External Commercial Borrowings to support low-cost housing projects. Some of the applicants include LIC Housing Finance, PNB Housing and Dewan Housing Finance. However, developers’ response has been lukewarm, with only two developers approaching the NHB so far.
NHB is the nodal agency for deciding on the entities eligible for tapping ECBs for low cost affordable housing. As per current RBI guidelines, developers and housing finance companies (HFCs) can raise up to $1 billion through the ECB route and this can be used either for developing low-cost housing projects or providing loans up to Rs 25 lakh to individuals for buying units priced Rs 30 lakh or less. Besides developers, NHB too can also raise ECBs for financing prospective owners of low-cost, affordable housing units. Slum rehabilitation projects would also be eligible for raising ECBs to fund affordable housing projects.
Regards,
Team Microsec Research
Microsec Capital Limited
Tel: 91 33 30512100
Fax: 91 33 30512020
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CA. Rajesh Desai
Rajesh Desai
INFRASTRUCTURE
Bharat Electronics, Israel firm in pact for surveillance system
· Bharat Electronics ( BEL) signed a Memorandum of Understanding (MoU) with Elbit Systems Electro optics-Elop of Israel, for the joint production of Compact Multi Purpose Advance Stabilisation System (CoMPASS) for Naval helicopter applications, at Aero India, the 9th international exhibition on aerospace, defence and civil aviation being held at Air Force Station Yelahanka in Bangalore.
Government raises Rs 11k cr via NTPC offer
· The government said it is satisfied with the response to NTPC’s share sale and expects to garner more than Rs 11,500 crore from the offer —— the biggest disinvestment mop up so far this fiscal. It was the third-biggest equity offering on Dalal Street after Coal India and Reliance Power. Foreign funds such as the Government of Singapore Investment Corporation, HSBC Halbis, Invesco, Janus and Eastspring Investment bought shares, while local institutions that put in bids included LIC, Reliance Mutual Fund, ICICI Prudential, SBI MF and Birla MF. LIC has put in a good amount, about Rs. 3,000 crore.
Power Grid to raise Rs 3,000 cr via bond issue in FY13
· Central transmission utility Power Grid Corporation on Thursday said it would raise close to Rs 3,000 crore, for funding its expansion plans, in this fiscal. “We are looking to raise up to Rs 3,000 crore this fiscal contemplating in a rupee or a dollar bond issue,” Power Grid Corp CMD R N Nayak told reporters on the sidelines of India Energy Congress here.
GMR Said to Weigh $500 Million Singapore IPO of Road Assets
· GMR Infrastructure Ltd., operator of India’s biggest airport in New Delhi, is considering selling some of its toll road assets in an initial public offering in Singapore, five people with knowledge of the matter said. GMR may raise as much as $500 million by listing the assets as a business trust, three of the people said, asking not to be identified as the information is private. GMR has held talks with banks including JPMorgan Chase & Co., Nomura Holdings Inc. and Standard Chartered Plc about the possible listing, the people said.
METALS & MINING
Jindal Steel drops plan to buy Canada’s Afferro Mining
· Jindal Steel and Power Ltd (JSPL) said it was not acquiring Vancouver, Canada-based Afferro Mining. Afferro mines iron ore in Cameroon. Low-grade magnetite and related problems in beneficiation (the process through which the mineral is separated from the raw material), a new mining code in Cameroon, financial unavailability and lack of infrastructure (road, rail, port and power) were the major deterrants.
· The deal with Afferro Mining did not materialise, because much of the proven iron ore reserve at the Afferro site in Cameroon has low-grade magnetite for which beneficiation reports have not been satisfactory. At the same time, initial reports suggest that beneficiation to the desired percentage would be possible at high costs and low yields, thus reducing the overall potential of the deposit.
Sebi saves Nalco offer by changing rule |
· The Securities and Exchange Board of India ( Sebi) has saved the INR1,500crore offer for sale ( OFS) of state-owned National Aluminium (Nalco) from going bust by altering a key criterion in the regulatory framework. Nalco is one of the important candidates identified for the Union governments INR30,000- crore disinvestment programme for 2012- 13. · The Centre plans to sell 12.5 per cent in the Odisha- based mining company and has appointed Enam Securities, SBI Caps and IDFC to conduct the OFS. When the disinvestment plan was cleared by the Union Cabinet, Nalco was the 83rd largest company by market capitalisation and was eligible for an OFS. Between the end of September and early November, however, the stock fell a little over 12 per cent, to around INR45. It remained at these levels till early December before recovering. · For the quarter- ended December, the shares lost around four per cent, when the broader market represented by the Sensex gained 3.5 per cent. This, in turn, dragged down the average market capitalisation and it was no longer a company in the top 100. |
Regards,
Team Microsec Research
Microsec Capital Limited
Tel: 91 33 30512100
Fax: 91 33 30512020
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CA. Rajesh Desai
Rajesh Desai
INFRASTRUCTURE
Rail freight loading up by over 6%
· Indian Railways’ freight loading registered a 6.37 per cent growth in January year-on-year, indicating a pick-up in economic activity after two subdued months. Since transportation is a derived demand, it is an early indicator of economic activity. Key commodities moved by the Railways are coal, steel and iron ore, cement, fertiliser and petroleum products. In January, the Railways moved 92.57 million tonnes (mt) freight, which is 5.54 mt over the actual freight traffic carried by the Railways during the same period last year.
Tata Power, Green Infra Ltd may merge renewable energy assets
· Tata Power is in early stage talks with IDFC PE Fund-owned Green Infra Ltd to merge their renewable energy assets, a person with direct knowledge of the development said. The transaction, if consummated, will create India’s largest renewable power producer.
MEDIA
Reality television serial Fear Factor-Khatron Ke Khiladi and Bollywood film English Vinglish could be swapping screens by the end of the year, thanks to a first-of-its-kind deal to share intellectual property between Dutch entertainment firm Endemol and motion pictures maker Eros International.
Endemol India, producer of reality shows such as Bigg Boss, Khatron Ke Khiladi and The Great India Laughter Challenge, and Eros InternationalBSE -0.87 %, producer of films such as English Vinglish, Vicky Donor, Housefull and older films such as Saajan, have decided to pool together and extend their intellectual properties into new formats.
The two companies will equally share investments and revenues, Deepak Dhar, managing director and CEO of Endemol India, said. "It is a 50:50 film and TV collaboration and no new company has been formed," he said.
Eros and Endemol have also signed a three-film co-production deal, where they will equally share total investments of more than Rs 100 crore, intellectual property rights (IPR) and revenues.
Endemol owns more than 7,000 hours of format IP, including reality shows, game shows and chat shows, besides other fiction shows, while Eros has a library of 2,000 Hindi films and 1,000 Tamil films.
The deal to share IPR for TV and films, probably the first of its kind in India, may prove a game-changer for the Rs 40,000-crore Indian TV industry.
BANKING
UCO Banks cuts base rate by 30 bps
UCO Bank has reduced its base rate by 30 basis points to 10.20 per cent from the existing 10.50 per cent. The benchmark prime lending rate has also been reduced by 50 basis points to 14.5 per cent. The revised rates come into effect from February 11.
Punjab & Sind Bank to get Rs 140-cr capital infusion
State-owned Punjab & Sind Bank will get Rs 140-crore fund infusion through preferential issue of shares to the Government by end of next month. The bank proposes preferential allotment of 1.98 crore shares to the Government aggregating about Rs 140 crore. The proposed price for preferential issue is Rs 70.66 a share including premium of Rs 60.66 per unit, it said
Following the infusion, the Government holding in the bank will go up to 79.86 per cent against the existing 78.16 per cent. With the issuance of about 1.98 crore preference shares, the total number of shares with Government will go up to about 20.28 crore. This fund infusion is subject to shareholders’ approval, which will be sought on March 11 in an extraordinary general meeting.
Syndicate Bank gets board nod to raise Rs 1,500 cr equity capital
Syndicate Bank’s board has cleared the proposal to raise Rs 1,500 crore equity capital from the market and Rs 2,000 crore via tier-II bonds. The fund raising is depend on the market condition. Bank is expecting the Government to infuse some capital.
KVB cuts base rate by 25 bps
Karur Vysya Bank has reduced the base rate by 25 bps and hiked the one to two-year term deposit rate by 50 bps with effect from February 3. Post this reduction, the base rate now stands at 10.75 per cent and the benchmark prime lending rate (BPLR) at 15.75 per cent.
The rate offered on its domestic and NRE term deposits has been increased by 50 bps to 9.5 per cent for the one to two-year period. Senior citizens would get an additional half-per cent.
Bajaj Allianz plans to increase retail healthcare portfolio by 50%
Bajaj Allianz General Insurance Co Ltd plans to increase its retail healthcare portfolio by nearly 50 per cent during 2013-14. The company will use its distribution network to ramp up its presence in the healthcare portfolio.
Retail health insurance currently accounts for 33 per cent of its healthcare portfolio.
Regards,
Team Microsec Research
Microsec Capital Limited
Tel: 91 33 30512100
Fax: 91 33 30512020
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CA. Rajesh Desai