NTPC tax-free bond issue opens tomorrow

After a gap of two decades, NTPC has come up with tax-free bonds for Rs 1,000 crore with an option to retain over subscription up to Rs 750 crore.

The issue opens on December 3 and the overall issue size is for Rs 1,750 crore. The issue would close on December 16. However, it can be pre-closed if oversubscribed.

Coupon rate

The interest on refund of bonds is 5 per cent per annum. Qualified institutional buyers (QIBs), corporates and HNIs would have a coupon rate of 8.41 per cent for 10 years; 8.48 per cent for 15 years and 8.66 per cent for 20 years.

For retail investors, the coupon rate will be 8.66 per cent for 10 years; 8.73 per cent for 15 years and 8.91 per cent for 20 years.

The issue is allocated in a ratio of 10 per cent for QIBs, 25 per cent for corporates, 25 per cent for HNIs and 40 per cent for resident retail investors.

Debt-raising

The public sector power producer said that it has opted for raising debt through tax-free bonds because it is at least two per cent cheaper than domestic loans, while foreign borrowings have volatility factor.

Currently, NTPC gets domestic loans at around 10.25 per cent, while bonds have a coupon rate ranging from 8.41 per cent to 8.91 per cent.

Capital expenditure

The power producer has a planned capex of Rs 1.5 lakh crore during the 12th Five-Year Plan period. Of this, it would borrow 75 per cent or about Rs 1 lakh crore. Till now, it has tied up loans for about Rs 15,000 crore.

NTPC, which has 18 per cent of India's installed capacity and generates one-third of electricity, would use the proceeds of the bond issue for capital expenditure programme and service debts.

Installed capacity

In the past three years and three months, NTPC has added more than 10,000 MW and has now an installed capacity of about 42,500 MW.

Currently, 19,500 MW of projects are under execution and the public sector company would soon place an order to procure equipment for 5000 MW, said Arup Roychowdhury, Chairman and Managing Director, NTPC.

Nifty recapture 6200...mid-small caps outperform

Finally, BSE Sensex closed at 20,898 up 106 points, while NSE Nifty closed at 6218 up 42 points over the previous close.

The Indian equity market ended near days high on Monday with the NSE Nifty ending above the 6200 mark for the first time since November 19, 2013. The benchmark indices ended with smart gains as manufacturing PMI read above 50 since July its highest in seven months. The HSBC India Manufacturing PMI climbed from 49.6 in October to 51.3 in November on the back of a rebound in new orders and output.

Today’s rally was led by the defensive sector, the healthcare index gained the most up by 2%. Among the other major gainers were, Capital Goods, Banking, Metals and telecom stocks. Even the Mid-Cap index gained by 0.8% and Small-Cap index rose by 1% outperforming the benchmark indices.

On the other hand, the BSE oil and gas index was the only loser among the BSE sectoral indices.


ONGC slipped 1.5% to close at Rs295 on reports the Gujarat high court on Saturday, 30 November 2013, directed the company to pay royalty dues worth over Rs100bn to the state government. Commenting on the same, Amar Ambani Head of Research at IIFL said, “As per media reports, Gujarat High Court has directed ONGC to pay Rs100bn towards difference in royalty of crude extracted since 2008. The difference is due to ONGC’s practice of paying royalty on post subsidy crude oil price vis-à-vis market value of crude. If the decision stays, ONGC’s FY14 earnings would be severely impacted. Clarity would be sought for future payment mechanism.”

Idea Cellular gains on getting nod to increase FII limit to 49%

Idea Cellular has received an approval for increase in the aggregate investment limit of Foreign Institutional Investors (FIIs) from 24% to 49% of the paid-up equity capital of the company. The board of directors at its meeting held has approved for the same subject to approval of the shareholders.

Further to the above, an Extraordinary General Meeting of the members of the company has been convened on December 26, 2013, for obtaining approval of the members for the proposed increase in the aggregate investment limit of FIIs from 24% to 49% of the paid-up equity capital of the company.

Idea Cellular, an AV Birla group company, provides Global System for Mobile communications (GSM)-based wireless service at the pan-India level, it is present in all 22 telecom circles.

Syndicate Bank rises on the buzz of tying up with Maruti Suzuki

Syndicate Bank, a state-run bank, has reportedly tied up with Maruti Suzuki, country's largest car manufacturer, to extend car loans to its clientele base of over 30 million. The bank has decided to reduce the rate of interest on loans for Maruti Suzuki's cars to base rate plus 0.15%, which at present stands at 10.40%.

Apart from this, the bank has also lowered the processing charges on car loans by 50% in order to extend the benefit to the prospective borrowers. The auto loans can be repaid in 84 months. Moreover, the bank is offering an option in which buyers can get a loan on the vehicle of up to 95% of the actual on-road price without having any guarantor. The offer is valid till January 15, 2014.

Syndicate Bank has reported a rise of 1.46% in its net profit at Rs 470.12 crore for the quarter ended September 30, 2013 as compared to Rs 463.37 crore for the same quarter in the previous year. Total income of the bank increased by 6.69% at Rs 4850.35 crore for quarter under review as compared to Rs 4546.33 crore for the quarter ended September 30, 2012.

SBI plans to mop-up Rs 9,576 crore via share sale: Report

State Bank of India (SBI), the country’s largest public sector bank is reportedly planning to mop-up around Rs 9,576 crore through a share sale to institutional investors or a follow-on public offer. The bank is also planning to raise another Rs 2,000 crore through sale of shares to the government on a preferential basis.

The bank posted its steepest quarterly profit fall in more than two years in the three months to September as non-performing loans increased, putting pressure on the lender to raise funds quickly.

The company reported 35.07% fall in its net profit at Rs 2375.01 crore for the quarter as compared to Rs 3658.14 crore for the same quarter in the previous year. However, total income of the company increased by 12.88% at Rs 37199.92 crore for quarter under review as compared to Rs 32953.47 crore for the quarter ended September 30, 2012.

Coal India reports production of 39.20 million tonnes in November 2013

Coal India, the world’s largest coal miner by output has reported provisional production of 39.20 million tonnes in November 2013, as against target of 41.93 million tonnes. The company’s total off-take for the month of November stood at 38.76 million tonnes as against a target of 41.65 million tonnes.

Coal India is the world’s largest coal mining company. It also produces non-coking coal and coking coal of various grades for diverse applications.

RBI likely to allow up to 74% FDI in credit information companies

In a bid to allow credit bureaus in India for raising funds from their foreign promoters and to allow new entrants into the country, the Reserve Bank of India (RBI) is likely to allow up to 74 percent Foreign Direct Investment (FDI) in credit information companies (CICs) having an established track record of running a credit information bureau in a well-regulated environment and well-diversified ownership.

The RBI in its notification has said that FDI of up to 49 percent will be allowed if the ownership is not well diversified, that means the company having one or more shareholders each holding more than 10 per cent voting rights in the company.  Further, the central bank added that if the ownership is not well diversified then at least 50 percent of the directors of the investee CIC in India should be either Indian nationals or NRIs or Persons of Indian Origin, adding that one-third of the directors should be resident Indian nationals. However, the investor company should preferably be a listed company on a recognised stock exchange, it added.

At present, FDI is permitted only up to 49 percent in CICs, but it is limited at 10 percent of their equity capital. Meanwhile, a credit information company collects and maintains records of an individual's payments pertaining to loans and credit cards that are submitted to these companies by banks and other credit institutions, on a monthly basis. Banks use this information in making decisions on granting loans or credit cards to customers.

UBI gains momentum on buzz of reducing NPAs by Rs 800 crore

Public sector lender, United Bank of India has formed recovery hubs and has reduced non-performing assets (NPAs) by Rs 800 crore. Very soon another Rs 600 crore will be recovered. United Bank of India reported a loss of Rs 489.47 crore for second quarter ended September 30, 2013 on account of rise in NPAs. The bank is now focusing to reduce NPAs. For the quarter ending September 2013, the bank’s gross NPAs (till September 2013) increased by Rs 3,868 crore to approximately Rs 6,286 crore, a 160% rise from Rs 2,418 crore in same period previous year.

United Bank of India has reported a net loss of Rs 489.47 crore for the second quarter ended September 30, 2013 as compared to a net profit of Rs 144.63 crore for the same quarter in the previous year. However, total income of the bank has increased by 13.60% at Rs 2876.77 crore for quarter under review as compared to Rs 2532.39 crore for the quarter ended September 30, 2012.

Gayatri Projects redeems NCDs worth Rs 15.60 crore

Gayatri Projects has redeemed SERIES-1, 1560 secured redeemable Non Convertible Debentures (NCDs) aggregating to Rs 15.60 crore at a face value of Rs 100,000 each. IL&FS Trust Company acted as trustee company and the NCDs were redeemed on due date i.e. December 01, 2013.

Gayatri Projects, an ISO 9001-2000 company, is one of the fastest growing construction companies in India executing major civil works including construction of concrete/masonry dams, earthen dams, national highways, bridges, canals, aqueducts, airports, ports, etc.

J&K Bank gets top rank in the Business Today - KMPG Best Bank 2013 study

Jammu & Kashmir Bank (J&K Bank) has been ranked number one bank in the country in productivity & efficiency in mid-sized category in the Business Today - KMPG Best Bank 2013 study. The jury was highly impressed the way the bank has not just expanded its business in the past few years but also improved its productivity. The No 1 ranking has been awarded to the J&K Bank when Indian banking industry is facing multiple challenges owing to economic slowdown and mounting loan defaults.

Jammu & Kashmir Bank has reported a rise of 12.29% in its net profit at Rs 302.66 crore for the quarter ended September 30, 2013 as compared to Rs 269.53 crore for the same quarter in the previous year. However, total income of the bank increased by 9.91% at Rs 1749.22 crore for quarter under review as compared to Rs 1591.51 crore for the quarter ended September 30, 2012.

Infosys opens new office in Sydney

Infosys, a global leader in consulting, technology and outsourcing, opened a new Sydney branch office to keep pace with the business growth of more than 500 percent in New South Wales (NSW) over the past five years. The new office in NSW, with a capacity of 140 seats, will accommodate both new local staff to be hired and specialists who come to Australia for short-term projects throughout the year.

Infosys expects to hire 85 new employees in NSW alone to keep up with client demands in the coming financial year. The majority of Infosys staff in NSW will continue to work at client sites across the greater Sydney area

Infosys is a global leader in consulting, technology and outsourcing solutions. The company enables clients, in more than 30 countries, to stay a step ahead of emerging business trends and outperform the competition.

Videocon Industries shines on getting nod to raise up to Rs 5,000 crore

Videocon Industries has received an approval to issue equity shares or any other convertible instruments for an amount not exceeding Rs 5,000 crore, at an appropriate time, by way of Follow on Issue, Private Placement basis, Qualified Institutional Placement basis, American Depository Receipts (ADRs), Global Depository Receipts (GDRs), Foreign Currency Convertible Bonds (FCCBs) or any other mode or mechanism, subject to necessary approval and consent. The board of directors at its meeting held on November 29, 2013 has approved for the same.

Videocon Industries, established two decades ago, is a global conglomerate whose business consists of manufacturing, marketing and distribution of consumer electronics products and oil & gas extraction.

The company has reported a rise of 32.50% its net profit at Rs 20.18 crore for the third quarter ended September 30, 2013 as compared to Rs 15.23 crore for the same quarter in the previous year. Total income of the company has increased by 10.24% at Rs 3359.59 crore for quarter under review as compared to Rs 3047.59 crore for the quarter ended September 30, 2012.

Crude oil futures move higher on good Chinese data

Crude oil futures have made a good start of the new week in the early Asian trade after data showed manufacturing growth in the world’s second-biggest oil consumer China, exceeded estimates in last month. The Purchasing Managers’ Index of the country as per the National Bureau of Statistics and China Federation of Logistics and Purchasing stood at 51.4.

Benchmark crude oil futures for January delivery rose by 46 cents to $93.14 in electronic trading on the New York Mercantile Exchange. In London, Brent for January settlement increased by 69 cents to $110.38 a barrel on the ICE.

L&T gains on evaluating alternatives for monetization of certain assets of L&T IDPL

Larsen & Toubro (L&T) is evaluating alternatives for monetization of certain assets of its subsidiary company, L&T Infrastructure Development Projects (L&T IDPL), including a potential initial public offering and listing in Singapore of selected road assets of L&T IDPL, through a business trust in Singapore.

The proposed transactions are subject to various factors including approvals and market conditions and may or may not be completed.

Larsen & Toubro (L&T) is a technology, engineering, construction and manufacturing company. It is one of the largest and most respected companies in India's private sector. More than seven decades of a strong, customer-focused approach and the continuous quest for world-class quality have enabled it to attain and sustain leadership in all its major lines of business.

BHEL commissions 660-MW super critical thermal unit at NTPC power plant

State-owned Bharat Heavy Electricals (BHEL) has set up its first 660-MW super critical thermal unit at a NTPC power plant in Bihar. The company won this order from NTPC through international competitive and the scope of work included design, engineering, manufacture, supply and erection along with auxiliaries.

Currently, BHEL is executing orders for supply and installation of 27 steam generators and 24 turbines with supercritical parameters of 660 MW, 700 MW and 800 MW ratings. Other supercritical sets under execution include 2x660 MW Mouda Stage-II & 2x800 MW Gadarwara of NTPC; 3x660 MW Nabinagar of NPGCL (Joint Venture of NTPC and Bihar State Electricity Board); 3x660 MW Bara TPP of the Jaypee Group etc.

BHEL has been committed to the nation’s power development programme and has reaffirmed its commitment to the Indian Power Sector by equipping itself by way of contemporary technology, state-of-the-art manufacturing facilities and skilled technical manpower. Significantly, the company has established the capability to deliver power plant equipment of 20,000 MW per annum.

Tata Power to mop-up Rs 5,000 crore in the next three years

The country’s largest private power producer Tata Power is planning to mop-up around Rs 5,000 crore in the next three years through various routes. The fund raising options are likely to include possible sale of equity.

The company, which has an installed generation capacity of over 8,500 MW, has also embarked on ambitious expansion plans, including setting up projects in Vietnam and Georgia.

Tata Power is India's largest integrated power company with a significant international presence. The Company has an installed generation capacity of 8521 MW in India and a presence in all the segments of the power sector viz. Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading.

Markets to make a positive start of the new week

The Indian markets surged in last session, extending their rally mood into the new series. Today, the start of the data heavy week is likely to be in green and traders will be reacting to the better GDP data for the second quarter. The Indian economy grew at a higher-than expected 4.8 percent in the September quarter, on the back of improvement in farm and construction sector output. Traders will also be taking support with the report that foreign investors, continuing their buying spree for the third straight month invested net Rs 8,000 crore in Indian stocks in November. However, going forward trade may also see cautious move ahead of state election results and winter session of the Parliament. There will be buzz in the aviation sector, as the Competition Commission of India (CCI) has advocated the abolition of the minimum eligibility criteria for Indian carriers to launch international services. The sugar stocks based in UP too will be in focus, as the price deadlock has been resolved and millers in Uttar Pradesh have agreed to pay Rs 280 per quintal of sugarcane, they will pay Rs 260 per quintal in 15 days and another Rs 20 by the end of the crushing season. Meanwhile, the Reserve Bank of India (RBI) has increased the foreign direct investment (FDI) limit to 74% in credit information bureaus in the country. At present, investments, directly or indirectly by any person, whether resident or otherwise are limited to 10% of the equity capital of a CIC.

The US markets closed mostly lower in last session and traders preferred to remain on sidelines during the short trading session. The Asian markets have made a mixed start, the regional indices are slowing showing signs of recovery on report that Chinese manufacturing growth beat estimates and came at 51.4 in government’s data.

Back home, extending their last session’s rally, stock markets in India displayed an awe-inspiring performance and bulls looked waiting for significant upside triggers to open fresh positions on first day of the new Futures and Options series. The frontline equity indices rallied by over a percentage point and settled near their important psychological 20,800 (Sensex) and 6,200 (Nifty) levels. Sentiments remained sanguine since start of the trade with investors hoping good Q2 Gross Domestic Product (GDP) data. Experts are estimating the Indian GDP to have expanded by about 4.5 percent in the July-September period on the back of rising exports and a good monsoon. Sentiments also remained up-beat after Planning Commission Deputy Chairman Montek Singh Ahluwalia said India can achieve 6% economic growth next fiscal and that the second half of this fiscal could be better than the first. He also added that India will become the third-biggest economy in the world by 2030. Positive opening in European markets too supported the sentiments; moreover, most of the Asian equity benchmarks ended the session in the green. Back home, PSU banks witnessed some buying interest after the Committee on Economic Affairs cleared a proposal to allow state electricity boards of Jharkhand, Bihar and Andhra Pradesh to convert their outstanding loans till March 2013 into bonds as part of an amendment to the discom debt restructuring package. Shares of select auto companies remained on buyers’ radar ahead of their monthly sales volume data for November 2013, slated to be unveiled on December 1, 2013. Additionally, shares of power generation and power distribution companies rose, led by rally in Reliance Power which rose after commencing pre-commissioning activities for its concentrated solar power project in Rajasthan’s Jaisalmer district. Finally, the BSE Sensex surged by 257.02 points or 1.25%, to settle at 20791.93, while the CNX Nifty gained 84.25 points or 1.38% to settle at 6,176.10.