Jubilant Life Sciences shares plunge after FDA warning for US plant

Indian drugmaker Jubilant Life Sciences Ltd said on Thursday it had received a warning from the U.S. Food and Drug Administration over manufacturing practices at one of its U.S. facilities, sending its shares the limit-down 10 percent.

The FDA said it could withhold approval of new products from Jubilant HollisterStier LLC, a facility located at Spokane, Washington, until the company takes action to comply with the regulator's good manufacturing practices, Jubliant Life Sciences said.
Jubilant HollisterStier will respond to the warning on or before December 12 and will take corrective actions to ensure compliance with the FDA, it added.
The facility accounted for 7 per cent of Jubilant Life Science's consolidated sales in the six months ended September.

Shares of Jubilant Life Sciences plunged 10 percent after the announcement, their steepest one-day fall in nearly six months, while the main Mumbai market was up 1.6 percent.

"We expect that the on-going manufacturing, distribution and sale of products from this facility will not be impacted as the WL (warning letter) will affect new approvals only," the company said in a statement.
Indian medicine makers, which produce nearly 40 percent of generic and over-the-counter drugs for the United States, have recently been battered by a rash of regulatory actions, including a record fine for Ranbaxy Laboratories Ltd and what amounts to a ban by the FDA on a second plant for Wockhardt Ltd.
Jubilant Life Sciences, which makes generics and provides contract manufacturing services, has 10 facilities in India, the United States and Canada.

Cairn India to invest up-to $750 million in KG Basin Block

Cairn India is planning to invest up-to $750 million in KG Basin Block over five years. The investment includes creation of necessary infrastructure and production.

Meanwhile, the company has urged the Director General of Hydrocarbons to declare one of the wells in its onshore KG-ONN-2003/1 block at Nagayalanka on East coast as Commercial Discovery.

Cairn India is primarily engaged in the business of oil and gas exploration, production and transportation. Average daily gross operated production was 205,014 boepd in Q3 FY2012-13. The Company sells its oil to major refineries in India and its gas to both PSU and private buyers.

96-cr loan due, realty major loses 3 properties

Three properties owned by Orbit Corporation, a developer listed on the Bombay Stock Exchange, were attached by Life Insurance Corporation Housing Finance Ltd for nonrepayment of Rs 96- crore loan under the Securitisation Act.

    Through a public notice on Wednesday, LIC Housing Finance said that it took physical possession of one of the three properties, Orbit Residency Park, which is spread over 1.7 lakh sq ft in Andheri. Orbit’s liabilities of Rs 96 crore include repayment of loan availed and the interest on the amount. The orders to attach and take physical possession of the three properties measuring roughly 2.5 lakh sq ft—26,000 sq ft at Orbit Corporation’s Lower Parel project Orbit Grand, 1.7 lakh sq ft at Orbit Residency Park in Andheri and 45,600 sq ft space at Orbit Midtown at Lalbaug—were recently passed by chief metropolitan magistrate M B Bage following an application filed by LIC Housing Finance. The attachment order may create problems for the 171 people flat buyers at the three properties.

    LIC Housing Finance had sanctioned a loan of Rs 325 crore to Orbit. The three properties were mortgaged for securing the loan along with hypothecated receivables from seven of its luxury projects. Orbit had secured loans from LIC Housing Finance through personal guarantees executed by its directors Ravikiran Aggarwal and Pujit Aggarwal.
    Of the Rs 325 crore, Orbit claimed to avail a loan of only Rs 260 crore. A sum of Rs 164 crore from the Rs 260 crore was repaid in 2010. But as the developer failed to repay the balance loan of Rs 96 crore, the housing finance company took action.
    In August, LIC Housing Finance had classified Orbit’s account as a non-performing asset and served a recovery notice to the developer known for its premium south and central Mumbai developments.
    An email query to LIC Housing Finance did not elicit any response.
    “We have repaid Rs 164 crore by 2010-end. Only Rs 96 crore was left unpaid. Following the notice, we met with senior LIC Housing Finance officials and reached an understanding for repaying the loan. I suppose this order is part of the legal process they have to follow,” said Pujit Aggarwal, MD of Orbit. “No flat buyers will get affected as the order excludes almost 75% of the development. We hope to clear the loan at the earliest.”
    “The delay in repayment was because the two projects (Orbit Grand and Orbit Residency Park) for which the term loan secured were stuck in regulatory deadlock since 2011. The deadlock stalled construction as well as sales and cash flow,” he added. The firm had got regulatory approvals for the two projects in May.

Syndicate Bank surges on plan to raise Rs 200 crore via issue of preference share

Public sector lender Syndicate Bank is planning to raise Rs 200 crore by issuing preferential shares to government of India. In this regard, the bank has constituted a committee of directors to create, offer, issue and allot equity shares for cash at a price to be determined in accordance with Regulation 76 (1) of Sebi ICDR Regulations.

The committee will also take steps to convene an extraordinary general meeting of shareholders for obtaining their consent for the proposed issue of preferential shares.

Earlier, the company received board’s approval for issue of equity shares of the bank with a face alue of Rs 10 each aggregating Rs 200 crore.

Jyothy Laboratories raises Rs. 263 crore via preferential allotment

Post allotment the paid up equity share capital of Jyothy Laboratories has increased to Rs. 18.10 crore from Rs. 16.60 crore.

Home grown FMCG company, Jyothy Laboratories (JLL) has raised Rs. 263 crore via preferential allotment of shares to Sahayadri Agencies limited, a promoter group company. JLL has allotted 1.5 crore equity shares of Re 1/- each at a price of Rs. 175.15 per equity share.

Post allotment the paid up equity share capital of Jyothy Laboratories has increased to Rs. 18.10 crore from Rs. 16.60 crore. With this the promoter holding has gone up from 63.69% to 66.7%

Commenting on the occasion, Mr. Ullas Kamath, Joint Managing Director, Jyothy Laboratories said:

“Post successful integration with Henkel India it was the right time to invest in existing brands and also expand JLL’s portfolio. The preferential allotment of shares along with NCDs to a clutch of investors will help JLL to save the yearly interest burden of about Rs. 60 crore leaving a cash balance of about Rs. 250 crore. The fund will be utilized for the organic and inorganic growth of the company”.

The company in November had raised Rs. 400 crore through zero coupon Non–convertible Debentures (NCDs) payable after three years. The company has now raised Rs. 263 crore through preferential allotment to the promoter. This amount has been used to repay the term loan of approximately Rs. 400 crore.

RBS, S&P sued by European investors for $250 mn losses

The group of 16 European institutional investors filed the claim in Amsterdam on Wednesday for damages of up to USD 250 million suffered on investments in CPDOs - or constant proportion debt obligations - that were rated AAA by S&P.

Royal Bank of Scotland and rating agency Standard & Poor's have been sued by a group of European institutional investors for damages of up to USD 250 million suffered on complex financial products in the lead-up to the global financial crisis. The claim is the first group action of its kind to be launched in Europe against an investment bank and rating agency for their conducts prior to the crisis, litigation finance company Bentham IMF Ltd said in a statement to the Australian stock exchange on Thursday.

 The group of 16 European institutional investors filed the claim in Amsterdam on Wednesday for damages of up to USD 250 million suffered on investments in CPDOs - or constant proportion debt obligations - that were rated AAA by S&P. "This claim has no merit and we will oppose it vigorously," said S&P in a statement. "The ratings on these securities, which date back to 2005-6, were assigned in good faith based on the information available to us at the time." The case also follows the landmark judgement issued by Australia's Federal Court in November 2012, which found S&P had deceived 12 local government councils that bought the CPDOs.

 "Many of the facts, legal arguments and evidence successfully established in the Australian claim will be deployed in the Dutch action," Bentham IMF said. The Australian judgment said a reasonably competent ratings agency could not have rated the CPDOs at issue AAA, and that the rating was misleading, deceptive and a negligent misrepresentation to investors. "Following the Australian Federal Court proceedings we have a comprehensive dossier of information and evidence that we believe is compelling to put before the Dutch judiciary," said Gidget Brugman, the lawyer who is handing the case in the Netherlands. S&P said it was appealing the Australian ruling and meanwhile it had filed an action in London in May, challenging the jurisdiction of the Netherlands. "S&P has never had a presence in the Netherlands and its CPDO ratings were assigned in the UK," it said. Benthan IMF said it would oppose S&P's UK application. RBS was not immediately available for comment.

Sensex, Nifty rally continues

At 12:46 pm (IST), the BSE Sensex was trading at 21,012, up 303 points over the previous close, while NSE Nifty was quoting at 6,254, up 93 points over the previous close.

At 12:46 pm (IST), the BSE Sensex was trading at 21,012, up 303 points over the previous close, while NSE Nifty was quoting at 6,254, up 93 points over the previous close.
The BSE Small-Cap index and BSE Mid- Cap index was trading up at 1%.

RIL,  Infosys, TCS, Wipro, ONGC, Coal India, Gail India, Bajaj Auto, HDFC Bank, Tata Power, Cipla,  Tata Motors, ICICI Bank, HDFC, Hero MotoCorp, Maruti,  Jindal Steel, Tata Steel, Mahindra & Mahindra, are among gainers in Sensex and Nifty.
Strides Arco, Wockhardt are among losers in Sensex and Nifty.

Teck, FMCG, Metal,  PSU, IT, Teck, Bankex,  PSU, Capital Goods and Consumer Durables, Realty, Oil and gas, Power indices are the gainers.
Healthcare and IT indices was the losers.
Moody's Investors Service says that its outlook for Indian non-financial corporates is negative, reflecting macroeconomic challenges over the next 12 months.
Moody's expects India's GDP growth to remain weak at 5.5% in the fiscal year ending March 2015, as elections in mid-2014 will delay reforms needed to revive the economy.
British telecom giant Vodafone is planning to invest $3 billion (Rs 18,605 crore) in India over the next two years to expand its network,, group chief executive Vittorio Colao reportedly said.
Shares of Jubilant Life Sciences hit 10% lower circuit at Rs 126 after the company said that US drug regulator has issued a warning letter with regards to its facility in the US.

Low Valuations May Work in Favour of Cadila Health

The recent run-up in the stock of Cadila Healthcare is likely to be sustained due to indications of imminent improvement in the company’s performance. The Ahmedabadbased drugs manufacturer reported a revenue growth of 12% in the quarter to September that was largely driven by its performance in the United States and Brazil. Its revenues from the domestic market, which accounts for nearly 40% of its consolidated sales, grew just 5% during the three-month period because of the standoff between the distributors and manufacturers over implementation of the new drug pricing policy. This also adversely impacted its operating margin, which, at a little over 15%, remained almost the same as the year-ago level.

Cadila has 20 abbreviated new drug application (ANDA) approvals lined up in the US over the next 12-15 months. It is set to launch products in niche segments that will boost its top line growth as well as margins. The company commands a 4.5% share in the domestic market, where it has a strong presence in therapeutic areas of cardiovascular, gastrointestinal, respiratory and female healthcare. The company’s domestic business is also likely to improve as a result of general recovery in the Indian healthcare sector.
The company’s consumer goods business, housed under Zydus Wellness, which has been underperforming over the past few quarters, is expected to grow at a faster pace as it has pumped considerable funds into brands such as Sugarfree and Everyuth. According to the management’s guidance, this business will post a double-digit growth.

Cadila’s weak performance in the past few quarters had led to the stock’s underperformance on the bourses. Consequently, the stock is trading at a price-to-earnings multiple of 20 – much lower than ET Pharma Index’s PE of 31.5. It is valued at a market cap, which is just 2.3 times of its revenues of trailing four quarters. Most leading pharma companies are trading at a valuation of three to fives times their revenues. The low valuation makes Cadila an attractive pick in the defensive sector where most stocks are trading at stretched valuations. Little wonder then that there has been 50% increase in the ‘buy’ recommendations by analysts on the company’s stock in the past three months, along with a slight increase in the foreign institutional investors’ holding in the past two quarters. 

M&M to Develop Hybrid Tech to Boost Vehicles’ Fuel Efficiency

Mahindra & Mahindra, the country’s largest utility vehicle maker, is developing the world’s first hybrid technology that can be deployed in vehicles with manual transmission and enhance fuel efficiency by almost 20%. The company, which may debut its hybrids at February’s Indian Motor Show, has established a place for itself in green technologies with close to 4 lakh so-called micro-hybrid vehicles on Indian roads.

It also owns the world’s largest electric car company, by production capacity, Mahindra Reva, which sells the E2O hatchback, the world’s most affordable four-seater car that only uses battery power to run. The company is now moving to the next level of sustainable green mobility by focusing on full-scale hybrids and has roped in technology partners that have the expertise. “We have signed up with Samsung SDI, which is the global leader in lithium ion batteries for development and supply of these batteries for our hybrid range of vehicles,” Rajan Wadhera, chief executive - technology and product development, told ET from Cape Town in South Africa where he was attending a company meeting. “We are perfecting the hybrid technology to deploy it in various platforms and vehicles across the Mahindra range.”

Hybrids generally pair electric motors and regular engines and use batteries to store energy from motion and braking. They also use aerodynamic design to reduce drag and new materials to lower weight. Mahindra’s micro-hybrids reduce fuel wastage by shutting off the engine when it’s not needed. Hybrids — such as the Toyota Prius, with sales of more than three million units worldwide — come with automatic transmission. Otherhybrid variants include the Honda Jazz, Ford Fusion and Chevrolet Volt, all automatics.
Elon Musk’s Tesla makes all-electric cars that have gained a significant market share in the US in the last few years thanks to their sleek design and performance , although the company recently had to defend itself over some vehicles catching fire. Automatic cars, although they have gained ground of late in India, still aren’t as popular in the country as they cost more and are less fuel-efficient. That’s why Mahindra is going the manualtransmission route. “We are keen to develop a manual transmission mode compatible with the hybrid technology,” Wadhera said. “It is expected to be more efficient and also more adaptable to the range of vehicles sold across various markets.”

Other technology partners include Germany’s largest auto component maker ZF and tyre maker Continental. The fullscale hybrids are likely to be available as the top-end variants of sports utility vehicles such as the XUV500 and Scorpio. Both these models have micro-hybrid variants that enhance mileage up to 5% by switching off the engine when not required.
Various automakers in India have been trying to take fuel efficiency to the next level by developing different technologies to partially offset the spiralling cost of fuel. Maruti Suzuki, Tata Motors, Honda and Toyota Kirloskar are working on microhybrids, electric assists and start-stop technologies to decrease fuel consumption and increase the efficiency of petrol and diesel engines. Maruti has introduced start-stop technology, which increases fuel efficiency by 5-7%, in some of the models that it exports. The company plans to offer this option in top-end variants in the local market as well. Mahindra officials expect that the initial success of its hybrid vehicles will establish new yardsticks for fuel efficiency in the Indian market.
“A hybrid electric vehicle combines conventional internal combustion engine propulsion system with an electric propulsion system leading to improved fuel economy and efficiency,” said a person close to the development. “Mahindra’s commitment to bring about a cleaner and greener future is exemplified through the partnerships entered with leading global technology conglomerates and pioneering consultants.”

At WTO, India bats for least developed countries in cotton subsidies row

By lambasting developed nations on trade facilitation and cotton subsidies, India on Wednesday edged closer to eliciting the support of least developed countries (LDCs) on the contentious issue at the ongoing ministerial of the World trade Organisation at Bali in Indonesia.

India is trying to garner support for exemption on public stock-holding of food grains. By espousing the cause of LDCs, India has strategically guarded against any collaboration among developed nations at the WTO.

Accusing developed nations of paying only lip service to the interests of the developing economies as well as  LDCs, India’s commerce minister Anand Sharma said, “None of these texts (WTO proposals) require the developed countries to make binding commitments for the benefit of developing countries. In contrast, developing countries would be required to undertake significant commitments in trade facilitation.”

“Most of the texts that are before us are ostensibly for the benefit of developing countries. In reality, on issues including cotton subsidies, export competition, monitoring mechanism and DFQF (duty-free, quota-free), the draft texts contain mere statements of intent with best endeavour provisions,” said Sharma.

India, along with the cotton-4 (C4) countries (Benin, Burkina Faso, Chad and Mali) and African countries, has been demanding reduction of subsidies on cotton by the European Union and the US.

The commitment on cotton subsidy reduction was taken during the run-up to the Cancun meet in 2003 after which it was formally accepted for discussion in the Hong Kong ministerial in 2005. So far, the issue has not reached any consensus.

In the draft for trade facilitation, initially, developed nations had kept financial support for LDCs and some developing countries as a core element. However, the final draft has diluted such requirements by mentioning them as non-binding in the footnotes.

Pitching in for the interest of LDCs, Sharma said, “In DFQF, what is being offered is less than what was mandated in the Hong Kong Ministerial Declaration of 2005.”

In November this year, India decided to give DFQF market access to 96.2% of the India’s tariff lines to LDCs. Earlier, it was allowed on 85% of Indian products.