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Resurgent India Limited Weekly Newsletter Aug 13 2010
Resurgent India Limited Weekly Newsletter Aug 13 2010
BGR Energy, Hitachi form joint ventures to make boilers, turbines INDICES LTP 5 D (%) 1 M (%) 3 M (%) YTD (%) P/E
Sensex 18,167.03 0.13 1.01 5.22 4.02 17.58
BGR Energy and Hitachi (Japan) have planned to setup two joint
Nifty 5,452.10 0.24 0.95 5.28 4.83 18.16
ventures, to make boilers and turbines for thermal power generation.
The two joint ventures will invest Rs 44,000 million in setting up
facilities in Tamil Nadu. BGR Turbines Company Pvt Ltd will invest Rs SECTORS MCap (bn) 5 D (%) 1 M (%) 3 M (%) YTD (%) P/E
30,000 million for 74 percent, while Hitachi (Japan) will invest Rs Automobiles 2,516.23 2.86 4.56 11.25 18.03 13.24
2,340 million for 26 per cent stake in creating the turbine facility. Banking 6,050.17 3.41 8.11 9.86 18.91 17.36
Further, BGR Boilers Pvt Ltd will invest Rs 14,000 million for 70
Capital Goods 3,561.15 0.01 -1.46 9.09 4.06 26.79
percent stake, while Hitachi Power Europe GmbH of Germany will
Cons Durables 355.76 4.44 11.94 22.28 50.73 20.22
invest Rs 1,260 million crore for 30 percent share to set up the boiler
plan. Thus, BGR and the Hitachi group will invest Rs 9,600 million FMCG 2,728.15 -0.16 2.66 13.77 17.48 31.80
and Rs 3,600 million, respectively, in the equity of the two joint Pharmaceutical 2,075.26 -1.36 -3.77 2.94 9.93 28.37
ventures. The remaining Rs 30,800 million will be in the form of debt. IT 5,337.67 -2.29 1.47 3.28 5.13 22.71
Financial closure for the debt is expected in six months. These units Metal 5,142.59 -0.85 1.75 -6.85 -11.85 13.13
will produce boilers and turbines in capacities of 660 MW, 800 MW
Oil & Gas 8,717.21 0.20 -5.45 0.69 -3.18 13.34
and 1,000 MW which are scheduled to commence production in 2012
Power 6,681.41 -0.11 -1.36 2.35 -2.09 25.81
ONGC enters the fray for n-power; looks for tie-up with NPCIL PSU 18,574.12 1.06 1.92 7.11 1.51 14.13
ONGC has initiated preliminary talks to enter atomic power Realty 1,278.14 6.58 5.87 8.94 -4.68 29.22
generation. It is in discussions with the Atomic Energy Commission for
partnering with Nuclear Power Corporation of India Ltd (NPCIL) and VIX Current 5D 1M 3M 1Y
picking up minority stakes in the new 700 MWe pressurised heavy INDIA NSE 16.74 18.00 - - -
water reactor-based projects on the anvil. If the proposal goes CBOE 25.73 25.39 24.56 26.68 24.71
through, ONGC would join the likes of NTPC Ltd, IOC and Nalco,
which are in the fray for partnering with NPCIL for upcoming projects. ENERGY LTP 5 D (%) 1 M (%) 3 M (%) YTD (%)
NPCIL, along with sister concern Bhavini, are the only utilities that are 75.87 -5.99 -2.22 -8.26 -8.50
Crude (USD/bbl)
operating nuclear power stations in the country, at present
Gas (USD/MMBtu) 4.32 -3.40 -1.12 -5.41 -25.54
Alstom bags Rs 1,471-cr order from Chennai Metro
METALS LTP 5 D (%) 1 M (%) 3 M (%) YTD (%)
Alstom Transport S.A and Alstom Projects India Ltd have bagged an
Rs 14,713 million contract for the supply of coaches for the Chennai Gold (USD/oz.) 1,216.60 0.94 -0.07 -1.43 10.19
Metro Rail project. It is estimated that the order is for 42 train sets of Silver (USD/oz.) 18.09 -2.10 -0.94 -7.40 6.96
4-car configuration totaling 168 coaches including the supply of Copper (USD/T) 330.00 -1.90 8.57 0.98 -2.42
spares and special maintenance tools Aluminum (USD/T) 2,155.75 -1.62 10.51 3.12 -1.88
Britannia to expand capacity Zinc (USD/T) 2,064.00 -3.05 10.67 -4.44 -19.38
Dr Reddy's launches biosimilar drug for anaemia treatment Libor USD 3M 0.37625 0.52556 0.43019 0.25000 0.44969
364D T-Bill 6.4232 5.6456 4.9122 4.8791 3.7987
The company has launched Cresp, the first generic darbepoetin alfa
5Y Corp Bond 5.1 5.06 5.34 5.09 5.43
drug in the world for the treatment of anaemia due to chronic kidney
disease and anaemia due to chemotherapy. Darbepoetin alfa was first 10Y G-Sec 7.81 7.84 7.6 7.58 7.05
developed and launched by Amgen in 2001 under the brand of Credit Deposit 73.25 72.4 71.55 70.92 69.19
Aranesp. Each dosage of the drug (which comes in vials and pre-filled Reverse Repo 4.5 3.75 3.75 3.25 3.25
syringes) is priced at around Rs 900. At present, Eprex of Johnson & Repo 5.75 5.25 5.25 4.75 4.75
Johnson and Aranesp are in the market. Further, the company has a CRR 6 6 6 5 5
pipeline of another eight biosimilatrs in the area of oncology and auto-
Bank Rate 6 6 6 6 6
immunity
Nalco to commission second 120 MW unit in Angul soon FUND FLOW (In Millions `) 5D 1M 3M YTD
National Aluminium Company Ltd (Nalco) is likely to commission its FII Investment 741.5 3,465.6 350.9 -641.1
second 120 MW power unit in Angul this month. The first unit (of 120 Mutual Fund Investment - -62,960.0 -1,57,204.0 73,267.0
MW capacity) became operational in October 2009
INDICATORS Current 1M 3M 1Y
GDP 8.6 - 6.5 5.8
IIP 7.1 11.3 14.5 8.3
WPI Inflation 10.55 10.16 11.04 -1.01
th
SKS Microfinance to be listed on Monday, 16 August, 2010
PRIMARY MARKET & DEALS
Forthcoming IPO
SKS Microfinance which came out wit its IPO with a net issue of NA
16.791 million shares wit an offer for sale of 9.346 million shares and
a fresh issue of 7.445 million shares. The company is engaged in the
business of micro finance and the offer by the company received an
over subscription of 13.69 times the stock available for issue
Basix is planning to raise Rs. 3,000 million 13-Aug Nandi Infrastructure JP Morgan Partners - 10.00
Corridor Enterprise Ltd.
Basix is planning to tap the private equity (PE) market to raise about Rs
3000 million in the coming months for its fourth round of funding. Major
shareholders in Basix include Matrix Partners and IFC besides the
promoter group led by Vijay Mahajan. The current loan outstanding of
the company stands at Rs 1,500 crore and the target this year has
been set between Rs 2,500 crore and Rs 3,000 crore M&A
PE firms may acquire a stake in hospital in Mumbai Date Company Investor Size* %
* In ` billions
A clutch of private equity firms and a large Indian corporate house are 09-Aug Ponni Sugars Coromandel Sugars 0.05 4.90
in discussions to buy out Cumballa Hill Hospital & Heart Institute, a 50-
09-Aug Admisi Commodities Pvt ADM Investor Services - 100.00
bed hospital located in South Mumbai. The hospital is valued at around Ltd. International
Rs.2500 million 09-Aug GMP Technical Solutions Vascon Engineers 0.63 90.00
Rayed Holdings to invest Rs. 640 million in Subex
10-Aug Mudra Lifestyle 2.75 51.00
Rayed Holding & Finance SA will invest up to Rs 64 crore in Subex Ltd,
10-Aug SBD Cisco (India) Ltd. Innovative Salary and Pay - 49.00
a provider of operations and business support systems in the telecom Roll Management Ltd.
space. The board of Subex Ltd has approved a preferential allotment of 10-Aug CIAO World SRL Naru Exports India Limited 0.35 90.00
up to 8 million equity shares for a price of Rs 80 per share
11-Aug Telecom Seychelles Ltd. Bharti Airtel Limited 2.85 100.00
GVK Energy may raise Rs 15,000 million through PE funds
11-Aug Intergen Ontario's Teacher's 46.50 50.00
Following the restructure of the power generation assets of GVK Power Pension Plan
and Infrastructure Ltd (GVKPIL) and consolidating them into GVK 13-Aug Leadage Alloys India Ltd. Exide Industries Ltd. - 49.00
Energy Ltd, a sub-holding company, the management is in talks to
raise about Rs 15,000 million through a placement to a private equity. 13-Aug NDTV Lifestyle Holding Astro All Asia Networks 1.80 -
This move is aimed to meet the equity component of the funding
requirement of the company's expansion projects now under way,
including the expansion of GVK Jegrupadu and GVK Gauthami, both
gas-based projects in Andhra Pradesh and another unit at Goindwal
Sahib
ECONOMY
Economy Roundup Analyst Corner
Current Week Discussion paper on new banking licenses
India Reserve Bank of India (RBI) has released its draft for discussion on
Index of industrial production (IIP) for the June’10 decreased to the proposal of granting new banking licenses to companies. The
7.1% compared to the last month’s 11.35% (revised), the primary issue is not new and it is being contemplated after the
reason being the slowdown in the manufacturing and capital goods announcement by the Union Finance Minister in his budget speech
sector that the RBI was considering the issue of new banking licenses to
companies
US
The Fed in a meeting on Aug.10 said that it is planning to exit from Current Structure Expectations
aggressive monetary stimulus and decided to keep its bond Minimum Capital Requirements
holdings at a level to support an economic recovery
No verdict is out yet but the 2001 However it is believed that the
The interest-rate was kept unchanged in a range of 0-0.25% by the Directive prescribed the minimum minimum capital requirement this
central bank as the Fed is cognizant that the country has lost some capital requirement at Rs.3,000 time round could be either Rs.10,000
momentum million million outright or an initial
requirement of Rs.5,000 million and
The Fed has stepped up its inspections of US financial institutions to then gradually scaling it up to Rs.
check for the risky activities of large US banks 10,000 million
Euro Zone
Shareholding Structure
80% of Sweden’s biggest companies reported earnings that
The 2005 Ownership & Governance A higher promoter shareholding up to
exceeded analysts’ estimates last quarter signals that the country
(O&G) guidelines require promoters 30 per cent could be permitted under
can turn out to be the country with the biggest economic rebound in
and other shareholders of the banks exceptional circumstances where the
the EU to dilute their shareholding to a level ownership is well established, well
According to the European Commission, in September, it is of 10 per cent or below of the bank’s regulated, widely held and publicly
share capital within a specified time listed. Beyond that any scope will be
expected to propose ways to finance more of its activities through
frame very difficult to contemplate
various EU-wide taxes as there are concerns
China
Business Model Specification
According to the Chinese Ministry official service outsourcing
The basic model of banks would This would form one of the major
companies to be exempt from business tax from July 1 until the end
require the new banks formed to point in granting the new licenses to
of 2013
have a priority 40 per cent of net the companies as the stance of the
China's banking regulator (CBRC) has issued new rules to increase bank credit as applicable to all other RBI is clear on this that they want to
domestic banks. The banks would support the growth of the whole
oversight of credit cards issuers
also have to open 25 per cent of their system rather than a section of the
UK branches in the rural areas society
The Bank of England said that it will be spending £2.4M on a new
economic forecasting model system after a series of missed targets Conversion of NBFCs to Banks
and large revisions as it will help the government to take better
NBFC's can be considered for It is expected that there should be no
measures
conversion based on fulfilling the change in the requirements
Japan following requirements; not being considering the RBI would not want
promoted by a large industrial house, to compromise on the structure of the
The Bank of Japan in its monetary policy on Aug.10 refrained from
satisfying the minimum net worth existing system
adding measures to expand liquidity as it gauged the risk, the yen’s
requirements, triple AAA credit rating
advance poses to the nation’s export-led rebound in the previous year, Capital
Adequacy Ratio (CAR) of not less
Other Regions
than 12 per cent and Non-Performing
Indonesia and Turkey are beating the world’s biggest emerging Assets (NPA's) of not more than 5
markets with their equity index climbing up by 21% and 13% per cent
respectively, hitting all-time highs
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