UltraTech deal would bring down our standalone debt: Manoj Gaur

The Jaypee Group is a Rs 20,000 crore well-diversified infrastructural industrial conglomerate in India. Initially, the Jaypee Group started as civil engineering contractors. Jaiprakash Associates Ltd., the flagship company of the Group, is a leader in construction of river valley and hydro-power projects on turnkey basis for more than 4 decades. JAL has participated in the development of 27% of India’s installed hydro power capacity.

The stock of the company surges 3% as the board of Ultra Tech has approved a proposal for the acquisition of cement units of Jaiprakash Associates Limited (JAL) located in Madhya Pradesh. According to a report, The enterprise value of this acquisition has been agreed at Rs 5,400 crore. This acquisition will create significant synergies and the surplus clinker will enable UltraTech to augment its cement capacity by a further 1.8- 2.5 MTPA in addition to the 4.9 MTPA mentioned above. This acquisition will enable the Company to increase its presence in Satna cluster of MP. The Board has approved the Memorandum of Understanding setting out the broad terms and conditions of the proposed acquisition. The Enterprise Value of this acquisition has been agreed at Rs. 5,400 crores. The transaction is subject to customary due diligence, definitive agreements, and regulatory approvals as may be required.

In an interview with CNBC TV18, Manoj Gaur, Executive Chairman, Jaiprakash Associates, said that after the acquisition, the company is left with the almost 20 million tonne of cement capacity. Explaining the recent series of sale of entities of JP Group like the hydropower business and cement now, he said, " The real estate, cement, engineering business are very much intact. The company JAL had clocked a revenue at Rs 13,000 crore and this transaction is a statement that when we are fighting the after effect of the sluggish
economy in our country. As 2014 is coming to an end, almost Rs 20,000 crore of disinvestment took place. Rs 9,700 crore in hydro and Rs 1,400 crore of two plants in Madhya Pradesh and other than that was Bokaro and grinding unit at Panipat".

Commenting on whether the company will be able to generate Rs. 12000 crore revenues with the asset left and expectation from the next year, he said, "The fact is that this Memorandum of Understanding (MoU) has been just signed and it will take five to six months to fructify. So the effect will only be visible after June. So after this divestment debt in the main company would come down to around Rs 20,000 crore. But, the point is that Ultratech decided to take these assets after taking our Gujarat cement plant that shows the faith which they have in our assets. As far as JAL topline is concerned, the EPC business has been very sluggish in last three years because there hardly have been contracts. So I am confident that even for FY16, the turnover as a company will not be less than Rs 12,000 crore."

At 2:47PM, the stock of the company is trading up 8% at Rs. 25.40.

Coal Ministry to commence First Batch of E-Auction of 24 Coal Mines

Pursuant to the order of Supreme Court and in line with the provisions of Coal Mines (Special Provisions) Ordinance, 2014 and subsequent Rules, Ministry of Coal will commence the first batch of e-auction process for the 25-1=24 (Marki –Mangli II being in inviolate area as informed by MoEF) Schedule II mines from tomorrow, December 25, 2014.

While briefing the whole process , Anil Swarup, Coal Secretary stated that out of 24 mines proposed to be auctioned, 7 are for the power sector, 16 for other end use plants of iron & steel, cement and CPPs and 1 mine for steel sector (coking coal). 2 Mines each i.e 4 mines shall be auctioned together : Gotitoria East and West and Gare-Palma IV/2 and IV/3 , Shri Swarup added

Shri Swarup further stated that bidders with specified end use plant are only permitted to participate in this auction. After own consumption, if there is any surplus coal, the successful bidder will be permitted to sell the surplus coal only to CIL at respective bid price or notified price of CIL for that specific grade of coal. Registrations will commence on December 25, 2014 and interested bidders with end use plants could visit MSTC website for the purpose .The registration process will be as per KYC norms and will be available on MSTC website.

Explaining the process, Swarup said that entire auction process will be transparent, efficient and conducted online only. However, 2 documents the Bank Guarantee comprising the bid security and an Undertaking stating that all information submitted is true and correct shall be received in hard copy. The auction process will comprise (i) Techno–commercial bid for qualification and (ii) Financial bid (e-auction) for selection of successful bidder. Only 50% of the qualified bidders from technical stage (subject to a minimum of 5 bidders)will be allowed to participate in the e-auction process.

Mines set aside for iron & steel, cement and CPPs will be auctioned through ‘Ascending Forward Auction’, where qualified bidders will quote incremental bids above the pre-determined floor price. Mines to be allocated for power sector will be auctioned through ‘Descending Reverse Auction’ to minimise impact on power tariffs of end use plants. Last date for receiving technical bids will be January 31, 2015 and list of qualified bidders will be placed on MSTC website on February 12, 2015.

E-auction of coal mines for qualified bidders will be held from February14, 2015 to February 22, 2015.The entire mine allocation process for Schedule II coal mines will be completed by March 23, 2015 with the signing of Coal Mine Development & Production Agreement and the Vesting Order, Shri Swarup added.

Sensex plunges 300 points...Nifty below 8,200 levels

At 3:12PM, the S&P BSE Sensex is trading at 27,161 down 345 points, while NSE Nifty is trading at 8,169 down 97 points.

The BSE Mid-cap Index and BSE Small-cap Index was trading flat.

Auto, Bankex, Realty, Metal indices are the gainers, while Teck, FMCG, Capital Goods, Consumer Durables, Metal, Oil and gas indices are losers.

Coal India, Cipla, HDFC, Tata Power, HDFC Bank are among the gainers, whereas DRREDDY, Tata Steel, Sun Pharma, Wipro, TCS are losing sheen on BSE.

Shares of Spicejet was up 4% at Rs17 after report stated that the airline cleared salary dues for the month of November for all pilots and senior management officials.

Shares of Nandan Denim Ltd surged 12% at Rs63 after report said that Devkinandan Corporation LLP, one of the promoters, increased its stake in the company via open market.

According to reports, Government may surpass FY15 direct tax collection target. Government said that it has reached 15% direct tax revenue growth aim up to Dec 15, says report.

Cabinet approved 100% FDI in medical devices via automatic route. Shares of Opto Circuits spurted over 16% at Rs26, while Poly Medicure stock surged 8% at Rs974..
Cabinet approves ordinance on insurance. Shares of Max India was up 4% at Rs394, while Reliance Capital shares was up 3% at Rs495.

Sensex slips 100 points

At 12:37PM, the S&P BSE Sensex is trading at 27,399 down 107 points, while NSE Nifty is trading at 8,233 down 33 points.

The BSE Mid-cap Index and BSE Small-cap Index was trading flat.

Auto, Realty indices are the gainers, while Teck, FMCG, Capital Goods, Banking, Consumer Durables, Power, Metal, Oil and gas indices are losers.

Coal India, Cipla, HDFC, Tata Power, HDFC Bank are among the gainers, whereas DRREDDY, Tata Steel, Sun Pharma, Wipro, TCS are losing sheen on BSE.


According to the report, SBI management is planning to unlock value by listing one or more of its NBFC.

Shares of Spicejet was up 4% at Rs17 after report stated that the airline cleared salary dues for the month of November for all pilots and senior management officials.

Soliciting cooperation from the public in withdrawing these notes from circulation, the Reserve Bank of India has urged them to deposit the old design notes in their bank accounts or exchange them at a bank branch convenient to them. The Reserve Bank of India has stated that the public can do so till June 30, 2015. Earlier, in March 2014, it had set the last date for public to exchange these notes was January 01, 2015.

Shares of Nandan Denim Ltd surged 12% at Rs63 after report said that Devkinandan Corporation LLP, one of the promoters, increased its stake in the company via open market.

According to reports, Government may surpass FY15 direct tax collection target. Government said that it has reached 15% direct tax revenue growth aim up to Dec 15, says report.

Cabinet approved 100% FDI in medical devices via automatic route. Shares of Opto Circuits spurted over 16% at Rs26, while Poly Medicure stock surged 8% at Rs974..

Cabinet approves ordinance on insurance. Shares of Max India was up 4% at Rs394, while Reliance Capital shares was up 3% at Rs495.

MEP Infrastructure Developers has received Securities and Exchange Board of India’s approval to raise Rs. 360 crore through an initial public offer (IPO), according to reports.

UltraTech, ACC, Ambuja stock hiked cement rates by Rs10-25/bag: Report

Shares of UltraTech, ACC, Ambuja was up  after report stated that the companies hiked cement rates by Rs10-25/bag.

UltraTech Cement shares hit 5% upper circuit at Rs. 2,654.

Ambuja shares was up 1% to Rs229, while ACC stock was up 1% at Rs. 1,400.

DCB Bank at six-year high

DCB Bank continues its dream bull-run in this calendar year.

The stock today registered a fresh six-year high at Rs. 123.75, and is now up 3.5 per cent at the day's high.

The stock has zoomed by 144 per cent or grown almost 1.5 times in value since the start of the calendar year 2014.

This quarter itself the stock has galloped over 46 per cent.

So far today, the counter has seen heavy volume of around 547,000 shares as against the two-week daily average volume of around 421,000 shares on the BSE.

The stock has been in focus, as the bank is a small-cap bank and may be targeted for takeover by one of the larger banks as the banking sector undergoes major reforms in the future.

Meanwhile, the Sensex is down 33 points at 27,473.

Sensex, Nifty flat; JP Associates gains 5%, UltraTech up 2%

 The market has opened in flat. The Sensex is up 21.47 points at 27527.93 and the Nifty is up 5.05 points at 8272.05. About 326 shares have advanced, 175 shares declined, and 20 shares are unchanged. Cipla, HDFC, BHEL, Sesa Sterlite and Bajaj Auto are top gainers in the Sensex. Among the losers are Dr Reddy's Labs, Tata Steel, GAIL, HUL and ITC. In a win-win deal, Aditya Birla Group company UltraTech Cement on Tuesday announced acquisition of Jaiprakash Associates ' two cement units and associated power plants in Madhya Pradesh for Rs 5,400 crore.  JP Associates rises 5 percent, UltraTech Cement gains 2 percent. The Indian rupee slipped in the early trade. It has opened lower by 15 paise at 63.43 per dollar against 63.28 a dollar Tuesday. The dollar hovered at its highest in nearly nine years against a basket of major currencies after stunningly strong US economic growth spurred markets to bring forward the timing of a likely hike in interest rates. Himanshu Arora of Religare said, "The USD-INR is expected to trade higher today on the back of strength in dollar against a basket of currencies and strong year-end dollar demand from state run banks and importers.” Meanwhile, Wall Street enjoyed a "Santa rally," as investors cheered data showing the US economy expanded in Q3 by the most in 11 years. The Dow closed above 18,000 but the Nasdaq fell, snapping a four-session winning streak, as biotechnology names weighed. European and Asian markets were trading significantly in the green drawn on by a strong US economic engine with Japan’s Nikkei up over a percent. In commodities, Brent Crude rose above USD 61 per barrel.

Top economy news of the day - December 24, 2014

The Government auditor, Comptroller and Auditor General of India (CAG), has questioned the effectiveness of public-private partnership (PPP) projects in the road sector. 
 
The World Bank has approved a Rs4.5bn loan to Telangana to improve incomes and address healthcare needs of farmers. 
 
Power Ministry to resume bidding for UMPPs 
 
Government is likely to get the Union cabinet to take up ordinances to raise the overseas investment limit in insurance and facilitate coal mine auctions. 

Top corporate news of the day – December 24, 2014

Jaiprakash Associates completed its divestment programme aimed at cutting debt with the sale of two cement plants in Madhya Pradesh to UltraTech Cement for Rs54bn.

NTPC, the state-owned thermal power generation giant, might lose the chance to build its first ultra mega power project (UMPPs), as the government is likely to scrap the bidding process for the Cheyyur UMPP in Tamil Nadu. There is also a likelihood that bids for Odisha UMPP would also be shelved as NTPC and NHPC are the only bidders in race for it.

Competition Commission of India (CCI) has approved a multi-billion dollar deal between global pharma giantsGlaxoSmithKline Pharmaceuticals and Novartis.

GIC, Singapore's sovereign wealth fund, is buying about 70% stake in BSE-listed Nirlon for Rs13.9bn.

The appointments committee of the Cabinet has appointed Sutirtha Bhattacharya as chairman & managing director (CMD) of Coal India Ltd (CIL).

The State Bank of India (SBI) management is looking to unlock value by listing one or more of its non-banking financial services companies (NBFC) such as insurance, credit cards, mutual funds and investment banking arms.

The board of directors of NTPC on Tuesday approved a proposal to issue fully paid-up bonus debentures to its shareholders.

As per the management, strengthening dollar is likely to hit HCL Technologies’ revenues during the ongoing October-December quarter.

Reliance Jio Infocomm Ltd has received security clearance to start 4G technology-based broadband services in six circles, but with riders.

L&T Housing Finance, the housing finance arm of L&T Finance Holdings, is looking to grow its loan book by over six times to Rs200bn over the next five years by focussing more on the salaried segment and by financing developers.

Yes Bank raised US$200mn through an unsecured loan facility from the Asian Development Bank.

GMR Holdings to plans to issue NCDs worth Rs3bn.

Allahabad Bank board okays plan to raise funds via QIP. 

Global mkts enjoy Santa rally; flat Nifty opening seen

  The Indian equity market is likely to open on a flat, albeit positive, note today. The SGX Nifty, an indicator of the market opening, was trading at 8272, up 1 point at 7:25 am. The Sensex shed nearly 200 points and the Nifty tumbled below 8,300 in a volatile session on Tuesday. Today's trade is likely to be volatile owing to the Futures and Options expiry. Meanwhile, Wall Street enjoyed a "Santa rally," as investors cheered data showing the US economy expanded in Q3 by the most in 11 years. The Dow closed above 18,000 but the Nasdaq fell, snapping a four-session winning streak, as biotechnology names weighed. European and Asian markets were trading significantly in the green drawn on by a strong US economic engine with Japan’s Nikkei up over a percent. In other asset classes, the dollar hovered at its highest in nine years after stunningly strong US economic growth. The dollar index hit 90 for the first time in nine years, up more than 12 percent in 2014. In commodities, Brent Crude rose above USD 61 per barrel. Back home, the Birlas are on a shopping spree as UltraTech buys JP Group's cement plant in Madhya Pradesh for Rs 5,400 crore. This is the second acquisition by UltraTech from JP Group. And the Coal Mines Bill fails to get the Rajya Sabha nod and the government is gearing up to re-promulgate the Coal Ordinance. Sources say a decision is expected as early as today to facilitate the upcoming coal block auctions.