Alstom T&D India bags three contracts worth Rs 168.70 crore

Alstom T&D India has been awarded three contracts approximately worth Rs 168.70 crore (21 million euros) from West Bengal State Electricity Transmission Company (WBSETCL), for projects across the state of West Bengal in India. The state government of West Bengal has planned major investments in the T&D sector. The aim is to build the transmission backbone of the state, through which power will be channelled from the eastern part of the country.

The first two contracts include design, engineering, manufacture, supply, erection, testing and commissioning of 220/132 kV gas-insulated substation (GIS) package for the Vidyasagar Industrial Park at Kharagpur and 220 kV GIS package for Dharampur. The orders are worth approximately Rs 66.56 crore (8.3 million euros) approximately and Rs 33.87 crore (4.3 million euros) approximately respectively.

The Vidyasagar Park Substation is constructed to feed the different industrial units coming up in the adjacent park of the Midnapore District. The Dharampur substation, on the other hand, will connect existing substations at Jeerut and Aramabagh for the development of an Extra High Voltage network in the North 24 Parganas district. Both substations will help strengthen the state's transmission network at 220 kV level.

As part of the third contract, worth Rs 68.30 crore (8.5 million euros) approximately, Alstom will supply a 400 kV substation and a 220 kV transformer bay at Gokarna, and a 220 kV substation and feeder bays at Krishnanagar. The 400 kV AIS substation is constructed to evacuate power from the 2 x 500 MW Sagardighi Power plant (Phase II). It will be directly connected to the 400 kV substation of Power Grid. All products for these three contracts will be delivered from Alstom T&D's world class factories across India.

Alstom T&D India is part of Alstom Grid, a global player in electrical grids. The company’s India operations account for over 13% of overall revenues garnered by Alstom Grid’s global operations. Apart from India business, other major contributors are the operations in France, the US, Germany and China.

ONGC inches up as its overseas arm acquires additional 12% stake in Block BC-10 in Brazil

The promoters holding in the company stood at 69.23% while Institutions and Non-Institutions held 17.13% and 13.65% respectively. Oil and Natural Gas Corporation’s (ONGC) wholly owned subsidiary- ONGC Videsh, through its affiliate has acquired an additional 12% Participating Interest ( PI) in Block BC-10, a deepwater offshore block in Campos Basin, Brazil taking its total PI in the block to 27%. The operator, Shell holds the balance 73% PI in the block.

ONGC Videsh had acquired 15 % PI in Block BC-10 in 2006. The other partners in the block were Shell, Operator with 50% PI and Petrobras with 35% PI. In August 2013, Petrobras entered into an agreement with Sinochem for sale of its 35% PI in the block. This agreement was subject to pre-emption rights of the partners. Shell and ONGC Videsh exercised their pre-emption rights for acquisition of 23% PI and 12% PI respectively. On approval of the Brazilian regulatory authorities for acquisition, the transaction has been completed on 30th December, 2013. ONGC Videsh has paid a purchase consideration of $ 561 million for 12% stake in the block.

ONGC is a premier oil and gas company in India, accounting for 71% of the country’s crude oil production and 54% of its natural gas production in 2011-12. It is also a significant producer of value added products such as liquefied petroleum gas (LPG), superior kerosene oil (SKO), and naphtha. GoI is the majority shareholder in ONGC, with a 69% equity stake as of now.

Asian Paints spurts on plan to hike industrial paint prices by 4%

Asian Paints is currently trading at Rs. 490.20, up by 2.55 points or 0.52% from its previous closing of Rs. 487.65 on the BSE.

The scrip opened at Rs. 488.00 and has touched a high and low of Rs. 492.65 and Rs. 486.50 respectively. So far 39140 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 1 has touched a 52 week high of Rs. 560.00 on 08-Nov-2013 and a 52 week low of Rs. 376.35 on 28-Aug-2013.

Last one week high and low of the scrip stood at Rs. 492.65 and Rs. 482.90 respectively. The current market cap of the company is Rs. 47058.24 crore.

The promoters holding in the company stood at 52.79% while Institutions and Non-Institutions held 27.35% and 19.86% respectively.

Asian Paints is all set to increase industrial paint prices by 4% with effect from January 1, 2014. The move came in to offset inflationary pressure on industrial products. Recently, the company hiked industrial paints’ prices by 10%. Prior to that, the company had increased prices in its decorative paint segment by 1.2%.

Asian Paints is India’s largest paint company and Asia’s third largest paint company. The company along with its subsidiaries has operations in 20 countries across the world and 28 paint manufacturing facilities, servicing consumers in 65 countries through Berger International, SCIB Paints-Egypt, Asian Paints, Apco Coatings and Taubmans.

Financial Technologies gains on buzz of UCX's plan for acquiring its stake in MCX

The promoters holding in the company stood at 45.63 % while Institutions and Non-Institutions held 17.61 % and 36.54 % respectively.Universal Commodity Exchange (UCX) is reportedly in talks to acquire Financial Technologies’ stake in Multi Commodity Exchange of India (MCX). In this regard, the UCX is in primary discussion with 2-3 foreign Institutional Investors (FIIs).

The deal size is likely to be pegged around Rs 600 -700 crore. At present, Financial Technologies hold 26% stake in MCX.

Recently, Multi Commodity Exchange of India’s (MCX) board asked promoter Financial Technologies India (FTIL) to reduce its stake to 2%, in accordance with the regulator’s order.

UCX is the sixth commodity exchange opened in April 2013. It is a joint initiative by institutions such as IDBI Bank, Indian Farmers Fertiliser Cooperative (IFFCO), National Bank for Agriculture and Rural Development (NABARD), Rural Electrification Corp. (REC) and COMMEX Technology

RBI allows banks to lend up to Rs 1 lakh against gold jewellery

The Reserve Bank of India (RBI) has allowed banks to sanction loans of up to Rs 1 lakh against pledge of gold ornaments and jewellery. Earlier in May, the central bank had imposed restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs and mutual funds. Meanwhile, the banks were asked to ensure that the amount of loan granted to any customer against gold ornaments, gold jewellery and gold coins weighing up to 50 grams should be within the board-approved limit.

Further, the RBI noted that the period of the loan should not exceed 12 months from the date of sanction and the interest will be charged to the account monthly but will become due for payment along with principal only at the maturity. Further, the RBI has decided to permit bullet repayment of loans extended against pledge of gold ornaments and jewellery for other than agricultural purposes. Bullet repayment refers to the lump sum payment for the entire loan amount paid at the time of maturity.

The central bank further notified that banks will recognize interest income on such loans in their profit and loss account only on collection and prescribed a minimum margin to be maintained for such loans. Banks should fix the loan limit taking into account the market value of the security such as gold ornaments, expected price fluctuations, interest that will accrue during the tenure of the loan etc. The RBI cautioned the banks that the account would be classified as non-performing asset (sub-standard category) even before the due date of repayment, if the prescribed margin is not maintained.

Government plans to allow FDI in e-commerce in current financial year

With an aim to enhance foreign investment into the country, the Department of Industrial Policy and Promotion (DIPP) has started consultations with stakeholders on allowing foreign direct investment in retail e-commerce before the end of this financial year. Currently, 100 percent FDI is allowed in business-to-business (B2B) e-commerce, while business-to-consumer (B2C) is still prohibited.

The DIPP has prepared the discussion paper under the commerce and industry ministry for feedback. After receiving feedback, the cabinet note will be circulated to all ministries for an inter-ministerial discussion. The draft also deals with the issues concerning mandatory sourcing norms, which has been sharply criticised by global retailers. At present, there is a mandatory 30 percent local sourcing norms for foreign players.

The DIPP is considering whether to allow FDI in e-commerce only in goods or to include services as well. Including FDI in e-commerce in services would have larger implications as the ambit is huge. In India, online services such as net-banking, payment of taxes, ticketing and bill payment, matrimonial sites are developing at a brisk pace. On goods selling front, flipkart, jabong and firstcry are major players selling a large variety of goods through online. Furthermore, DIPP is facing another problem as foreign players have already tied up with domestic companies; therefore these players are opposing the government’s decision to allow FDI at this juncture.

Morgan Stanley Asia sells 46.50 lakh shares of Apollo Tyres

Morgan Stanley Asia (Singapore) has sold 4,650,000 shares of Apollo Tyres through an open market transaction. The shares were sold at an average price of Rs 102.06 on the National Stock Exchange (NSE) on December 30, 2013.

Apollo Tyres produces the entire range of automotive tyres for ultra and high speed passenger cars, truck and bus, farm, off-the-road, industrial and specialty applications like mining, retreaded tyres and retreading material. These are produced across Apollo’s eight manufacturing locations in India, Netherlands and Southern Africa.

Vodafone Plc to acquire Piramal Enterprises’ stake in Vodafone India for Rs 8,900 crore

Vodafone Group Plc is planning to buy out Piramal Enterprises’ stake in Vodafone India. The move came in after Foreign Investment Promotion Board (FIPB) approved Vodafone’s proposal to buy out minority shareholders.

Piramal Enterprises hold 10.97% stake in the country’s second-largest telecom company by subscribers. As a part of a proposal, Vodafone Group Plc will pay Rs 8,900 crore to Piramal Enterprises for its stake. Ajay Piramal led company had invested Rs 5,900 crore to take 10.97% in Vodafone India in two tranches.

Piramal Enterprises is one of India’s largest diversified companies, with a presence in pharmaceutical, financial services and information management sectors.

NBFCs better placed than banks to withstand pressure of bad loans: RBI

In its eighth Financial Stability Report (FSR), Reserve Bank of India highlighted that Non Banking Financial Companies (NBFCs) were better placed than banks in terms of capital requirement and ability to withstand the pressure of bad loans. Going by the report, which incorporates the findings of a stress test conducted on the sector, the NBFCs have a higher level of capital adequacy or capital to risk-weighted assets ratio at 23.5% compared with 15% (comprising both tier-I and tier-II capital) mandated by the RBI.

The test, which was carried out for the period ended September, was based on two parameters, i.e. a doubling of gross non-performing assets or bad loans and a five-fold spike from the actual levels. In the first case, the capital ratio fell 1.1 percentage points to 22.4% and in the second, it dropped 4.9 percentage points to 18.6%, but still remained 3.6 percentage points higher than the benchmark. Thus, with this it was concluded that even though NBFCs fell short of provisioning under both scenarios, the impact on CRAR (capital-to-risk asset ratio) was negligible.

As per RBI’s mandate, banks are required to maintain a minimum CRAR of 9%, while the ratio for NBFCs is 15%. Rising pile of bad loans has eroded the capital base of the lenders over the past few years as they are supposed to make provision for bad loans. According to an estimate, gross bad loans of 40 listed banks rose 37% year-on-year to Rs 2.3 lakh crore at the end of September, while gross bad loan ratio for non-deposit taking NBFCs stood at 3.5% on September 30, 2013, against 3.1% a year ago.

High inflation limiting RBI's ability to boost economy’s growth: RBI Governor

Concerned over the deteriorating macro-economic indicators of the economy, RBI Governor Raghuram Rajan has stated that high inflation is limiting the central bank’s ability to boost growth. Rising inflation has become a hurdle for Indian economic growth as it has been eroding consumers and business confidence in the country. Meanwhile, in order to restrain rising inflation, the RBI has been raising the policy rates over the past few months.

The governor has said that high inflation leading to fall in domestic savings and relatively high fiscal deficit are key concerns for the Indian economy and has urged the government to continue with fiscal consolidation to support the economy. Further, general elections due by May is creating uncertainty among the investors, while a stable new government would be positive for the economy, he added. The central bank is likely to resume tightening monetary policy by early next year on account of high inflation even as the economy is growing below the decade low of 5 percent in the current fiscal.

Meanwhile, the RBI has noted that Indian economy is expected to witness modest improvement in growth on the back of good monsoon which has boosted the prospects of summer crops and higher exports. The central bank has expressed the need for long-delayed legislative reforms, stalled infrastructure project clearances and fiscal consolidation to maintain the momentum of economic recovery.

Power Grid surges on getting nod to raise FII cap limit to 30%

Power Grid Corporation of India has received its members’ nod to raise the limit of holdings by foreign institutional investors to 30% from 24% currently. The company's shareholders also approved a proposal to increase the company's borrowing limit to Rs 1,30,000 crore from the current cap of Rs 1,00,000 crore.

Last month, the company had said that increasing the limit would provide more headroom for FII investments in the company. FII holdings have been on the rise since the company's first follow-on public offer in 2010.

At the end of September 2013, the promoters holding in the company stood at 69.42% while institutions and non-institutions held 23.69% and 6.88% stake in the company, respectively.

Power Grid is engaged in bulk power transmission and its responsibility include planning, coordination, supervision and control over inter-State transmission system and operation of National and Regional Power Grids.

Cooper Tire terminates proposed $2.5 billion sale to Apollo Tyres

U.S.-based Cooper Tire & Rubber Co has terminated a proposed $2.5 billion sale to Apollo Tyres with both sides swearing to take legal action over a deal beset by obstacles from the start. Cooper Tire decided to call off the deal after being informed by the Indian tyre maker that financing was no longer available for a takeover that could have been India's second biggest in the United States. On the other hand, Apollo Tyres, was disappointed with Cooper for premature closure of the agreement and has decided to pursue legal remedies of its own.

These threats would ensure continuation of a legal stand-off between the two parties, whose relationship descended into hostility soon after Apollo agreed to buy Cooper for $35 a share in June, hoping to transform itself into world's seventh-largest tyre maker and cut its dependence on domestic sales. With this, it remains to be seen if either company is liable to pay a break-up fee. Under the deal terms, Apollo would have been liable to pay a $112.5 million fee, while Cooper could be held responsible for break-up fee of $50 million.

However, despite the company showing the disappointment with premature closure of the deal, its shareholders, which right from the start of the deal had raised concerns over the debt-funded acquisition of a company nearly three times its stock market value at that time, would welcome this news.

GAIL to set up 220 MW gas-based power plant at Raigad

GAIL India is planning to set up 220 MW gas-based power plant at Raigad in Maharashtra at a cost of Rs 1,028 crore. The company has received environmental clearance for the same and also appointed Tractebel Engineering as consultant for preparation of Detail Feasibility Report (DFR). The project is proposed to be located within the company’s existing LPG recovery plant at Raigad.

The state-owned firm plans to use 1 million standard cubic meters per day of natural gas to generate 220 mega-watt of electricity at the proposed combined cycle power plant.

GAIL is India's flagship natural gas company integrating all aspects of the natural gas value chain including exploration and production, processing, transmission, distribution and marketing and related services.

FIPB approves Tesco’s $110 million investment proposal in Trent

Foreign Investment Promotion Board (FIPB) has approved UK-based Tesco Plc’s proposal to invest $110 million to buy 50% stake in Tata Group’s Trent Hypermarket (THL). THL operates the Star Bazaar retail business and is a wholly owned subsidiary of Trent.

Tesco will invest $110 million in the company and the amount could be scaled up later depending on how operations expand in the initial three to four years.

Trent is part of the Tata Group and is engaged in business of retailing. Trent acquired 76% stake in Landmark, one of the largest books and music retail chains in the India.

BHEL enhances output of Obra Thermal Power Station to 216 MW

Bharat Heavy Electricals (BHEL) has achieved a major landmark in its after-market services business by successfully renovating, modernizing and up-rating a 200 MW thermal set at Obra Thermal Power Station in Uttar Pradesh. Following the renovating and modernization (R&M) of the unit by BHEL, the rated output of the machine has been enhanced to 216 MW and the unit has been synchronized with the grid. After successfully being in operation for its life span of 25 years, the working life of the machine has been further extended by another 15-20 years. R&M of Obra was initiated with the original technology provider but was subsequently executed successfully by BHEL’s own in-house engineering capabilities.

BHEL succeeded in loading the machine to 218 MW i.e 2 MW higher than design capacity with all parameters within the acceptable range. Significantly, this is also the first instance of a successful modernization and up-rating of any 200 MW class machine in India and the technical capability demonstrated by BHEL is a very significant credential for future R&M business in India.

BHEL has already executed R&M/ up-rating of sets up to 120 MW rating with completion of R&M of 4 sets of 120 MW and up-rating of 6 sets of 110 MW units. With the R&M and up-rating of Obra unit 9, BHEL has successfully entered into 200/ 210 MW segment. Presently, R&M of 5 sets of 110 MW units are at different stages of execution by BHEL besides the remaining 4 sets of 200 MW Unit at Obra.

Vijay Mallya buys additional stake in UB Holdings

UB Group Chairman Vijay Mallya has bought additional 0.15% stake in United Breweries Holdings (UB Holdings), the principal holding company of the UB Group, for about Rs 26 lakh. Following the acquisition, stake of Mallya and his various affiliated companies stood at 51.10% in the company.

The shares were purchased by Pharma Trading Company, a Kolkata-based company, in which Mallya is one of the directors. The company now owns a 0.78% stake in UB Holdings.

AS on September 31, 2013, the promoters holding in the company stood at 50.96%, while institutions and non-institutions held 7.36% and 41.67% stake in the company, respectively.

Jain Irrigation Systems gains on bagging world’s largest integrated micro irrigation project

Jain Irrigation Systems, the country’s largest Micro Irrigation company and agriculture conglomerate has bagged an order for the prestigious Ramthal-Marol Integrated Micro Irrigation Project in Karnataka. Krishna Bhagya Jal Nigam (KBJNL), a division of Water Resources Department of Karnataka, has selected the company through National Competitive Bidding.

The project is valued over Rs 385.70 crore and is one of its kind with water saving potential of up to 50%. More than 7000 farmers from 30,381 acre command area comprising of 35 villages of Bagalkot district, Karnataka will benefit from the project.

Jain Irrigation Systems is a manufacturer of a wide variety of PVC pipes, PE pipes, water and gas transportation pipes, ducts for optical fibre cables and drip irrigation pipes. It is also engaged in tissue culture of bananas and pomegranates and is the world’s largest processor of mangoes and is the world’s second largest processor of onions and vegetables.

Finance Minister favours continuation of curbs on gold imports

Regardless of the likelihood of the current account deficit (CAD) narrowing to less than $ 50 billion, Finance Minister P Chidambaram remains in the favour of continuation of some kind of restriction on gold imports. Some experts, including RBI Governor Raghuram Rajan, have recently favoured removing the curbs on gold imports because they lead to smuggling.

According to Finance Minister, the country should attempt to discover gold by itself. Referring to a recent Supreme Court judgement on auction of all closed mines, he said that the Mines Ministry should sell the so-called closed mines because there are persons around the world who have met me and said, 'Give us the mines and we would be able to extract gold’. The minister also reiterated the government's commitment to restrict the fiscal deficit to 4.8 percent of GDP in the year ending March 2014.

No gold has been imported since July 22, after the Indian government hiked the import duty on the yellow metal. The high duty has further increased gold price in India. In order to contain the widening current account deficit, the government last hiked the duty on gold from 8% to 10%. Prior to this, the government had twice hiked import duty from 4% to 6% and then to 8%. The government in August, had also turned the screws on gold buying, banning imports of coins and medallions and making domestic buyers pay cash. Meanwhile, RBI also acted on multiple fronts for curbing gold imports.

GMR to divest its 40% shareholding in Istanbul Sabiha Gokcen International Airport

GMR Infrastructures’ group company - GMR Group had signed a definitive agreement with Malaysian Airports Holding Berhard (MAHB) to divest its 40% equity stake in Istanbul Sabiha Gökçen (ISG) and LGM Tourism, for 225 million euros amounting Rs 1,910 crore, subject to certain adjustments. This definitive agreement has been signed subsequent to the exercise of Right of First Refusal by MAHB under the existing shareholders agreement of ISG, on December 23, 2013. Rothschild (India) and White & Case LLP acted as Financial Advisors and Legal Counsels respectively to GMR Group.

The transaction is subject to customary closing conditions including the approval of the relevant government authorities and the project lenders to ISG. This is the second major divestment of overseas assets by the GMR Group in less than nine months. Earlier in March 2013, the Group had divested its stakes in GMR Energy (Singapore). The divestment of these two assets is estimated to release around Rs 3,500 crore of capital, simultaneously reducing an estimated Rs 5,000 crore of debt.

Istanbul Sabiha Gökçen International Airport is located on the Anatolian side of Istanbul and is one of the world’s fastest-growing airports. The airport currently hosts more than 58 different carriers covering over 125 destinations. The consortium of Limak Holding, GMR Group and MAHB was selected as the preferred bidder for upgrading and maintaining the airport in July 2007. 

IG Petrochemicals restarts production of PA-1 plant at Taloja

IG Petrochemicals has restarted production and has stabilized operations at one of its Phthalic Anhydride Plant (PA-1) situated at Taloja in state of Maharashtra. The company had taken a planned shutdown of PA-1 plant for change of Catalyst.

IG Petrochemicals is a dominant player in the domestic Phthalic Anhydride (PAN) industry. IGPL has its manufacturing facilities located at Taloja, Maharashtra.

Paper Products sells office property for Rs 7.23 crore

Paper Products has sold a small office property located at Nariman Point, Mumbai in state of Maharashtra for a consideration of Rs 7.23 crore.

Paper Products is a leading consumer packaging company in India. The company offers a wide portfolio of packaging solutions that includes flexible packaging, labeling technologies and specialized cartons.

Markets to get a cautious start of the last trading session of 2013

The mood across the region is cautious and the Indian markets after declining marginally in last session, are likely to get a similar start of the last trading day of the year. Traders will be concerned with Reserve Bank of India (RBI) Governor Raghuram Rajan’s statement that the challenge of containing inflation is limiting the central bank’s ability to boost economic growth. The banking sector stocks are likely to remain under pressure, as the RBI has said that risks to the banking sector have increased during the past six months due to rising bad loans and has proposed tightening banks' exposure limit for single borrower and single groups. There will be some buzz among the retail stocks as the government cleared proposals by UK-based retail giant Tesco’s proposal to invest around Rs 680 crore. Tesco has sought permission to pick up 50% stake in Trent Hypermarket, a wholly owned subsidiary of Trent, a Tata Group company. Tesco becomes the first MNC to enter multi-brand retail in India. Meanwhile, the RBI has extended the time for issuance of inflation indexed bonds to March 31, 2014 from earlier date of Dec 31, 2013.

The US markets made a mixed closing after trading choppy throughout the day, as many traders remained away from their desks ahead of the upcoming New Year's Day holiday. Lots of the Asian markets are closed today, while some will be trading half day.

Back home, Indian equity markets snapped the lackluster day of trade, slightly in the red with frontline gauges ending below their crucial 21,150 (Sensex) and 6,300 (Nifty) levels in absence of any major trigger. Markets, after a positive opening, entered into red terrain as traders opted to unwind their position approaching the end of the turbulent year. Afterwards, both the bourses traded in tight band throughout the session as investors remained on sidelines ahead of April-November fiscal deficit reading, due on December 31, and the manufacturing Purchasing Managers’ Index (PMI) for December, due on January 2, which will help them gain insights into the extent of the economic slowdown. However, losses remained capped with the CII Business Confidence Index (BCI) rising sharply to 54.9 during the October-December period of 2013-14 fiscal, from 45.7 in the previous quarter. Some support also came in after Reserve Bank of India (RBI), painting an optimistic picture on the external front, underscored that the country was ready for the US Federal Reserve’s tapering, while pegging the current account deficit at below 3% for this fiscal in its eighth Financial Stability Report. Global cues remained mixed with most of the European markets opening in the red terrain, while Asian markets shut shop mostly in the green. Back home, public sector oil marketing companies (OMCs) like BPCL, HPCL and IOC remained under pressure on talks of increasing the subsidized cylinder cap for households. Selling in banking counter too dampened the sentiments after RBI in its ‘Financial Stability Report-December 2013’, highlighted that risks to the banking sector have increased during the past half-year and that all the risks dimensions captured in the banking stability indicator show increase in vulnerabilities in the banking sector. Additionally, telecom stocks witnessed mixed trend after the government delayed the planned mobile phone spectrum auction in the 900 and 1800 megahertz frequency bands by 10 days from the original schedule, it will now start on February 3. Finally, the BSE Sensex declined by 50.57 points or 0.24%, to settle at 21143.01, while the CNX Nifty lost 22.70 points or 0.36% to settle at 6,291.10.