Monday, September 27, 2010

Market Outlook: Indian markets are expected to open with a gap-up

Market Outlook: Indian markets are expected to open with a gap-up and continue its journey upward. Overall markets are still up and has a crucial support at 5970 and target on the upside is near 6130 for the week.

Global events to watch:

Þ Bill Auctions

Global indices Update @ 8:

Dow Jones : 10860 (+197.8)

NASDAQ : 2381 (+54.14)

Nikkei 225 : 9606 (+134.5)

Hang seng : 22378 (+259.1)

SGX CNX Nifty : 6079 (+49.00)

INR / 1 USD : 45.54

Stocks in action for the day: Mah Satyam, HCC, India Cements, SKS, Hotel Leela, RIL, BPCL, Dabur, SBI...

MAH SATYAM IN FOCUS -Satyam ADR down 23% after co announces intention to delist ADR 1 Satyam ADR represents 2 Indian shares Despite 23% fall, ADR price above last closing price in India ADR price in Indian Rupees at Rs 105.65/sh Last closing price in India at Rs 100.20 Mah Satyam stock had already fallen 6% on Friday ADRs to remain listed on NSE, BSE Co will not be able to publish US GAAP numbers by Oct 15 ADR to delist on Oct 14

India Cements in focus, Chennai Superkings win CLT20, prize money of $2.5 m

Hotel Leela invites corp chiefs to board Hotel Leela venture has invited some corporate heavyweights to join its board in a move that is seen as an attempt to ward off any hostile takeover bids. It follows founder-chairman, CP Krishnan, convincing his sons, Vivek and Dinesh, to reach an understanding that one brother will not sell the shares he controls to an outsider without offering the stock to the other. Better known as Captain Nair in Mumbai corporate circles, the hospitality company`s chairman has requested industry captains like Deepak Parekh, HDFC chairman; Anand Mahindra, vice-chairman and managing director of the Mahindra & Mahindra group and Harsh Goenka, chairman, RPG Enterprises, to join the board as independent, non-executive directors in a month.

BPCL plans Rs 500 bn expansion State-run Bharat Petroleum (BPCL) plans to invest Rs 500 billion in the next five years for expansion of refinery capacity, overseas acquisitions of oil and gas assets and setting up power projects, say two senior officials. ``About Rs 280 billion will be invested for expansion of refinery capacity and upstream activities while the remaining will finance explorations and production activities in foreign markets as well as entry into power business`` the newly appointed chairman, S Radhakrishnan said. Radhakrishnan, who elevated to chairman from marketing director after Ashok Sinha retired last month, said the proposed expansion was aimed at scaling up revenue, which will further propel the company`s growth in new businesses. A detailed five-year plan beginning April next year, will be chalked shortly, he added.

Dabur to take franchise route to expand retail venture Consumer goods firm, Dabur India will start adopting the franchise route for its retail stores `Newu` and explore smaller format stores in order to expedite expansion. The company`s subsidiary, H&B Stores that currently operates 22 `Newu` stores primarily in North India, is also looking to open up to 150 new stores in 2011-12 and enter in the western region. It is also trying express or smaller formats that have quick turnaround time, besides focusing on `beauty` as a category, as it looks to break even in the next two years. ``We are looking to go for the franchise model to expand reach as it is a very simple model to replicate and can offer a good return on investment. By next fiscal we should see action on that,`` H&B stores Chief Operating Officer Parikshit Sharma said.

SBI employees rank bottom among PSBs in bringing business: RBI Country`s largest lender State Bank of India has over 2 lakh employees but when it comes to bringing business, the staff is ranked bottom among the public sector banks, according to the RBI data on profile of banks 2009-10. As per the data, average business brought by each employee of SBI stood at Rs 63.6 million, against the industry average of Rs 87.3 million. However, their wages accounted for 18.86% of the bank`s total expenses, while the industry average was 14.83% last fiscal. The only state-run bank whose business per employee is below SBI is its associate State Bank of Bikaner and Jaipur.

RIL, ONGC to get more time for KG basin exploration Reliance Industries (RIL) and ONGC are likely to get additional time for completing their oil and gas exploration programmed in their KG basin fields. Both the companies have three blocks each in the KG basin field where they would need more time to complete exploration activities. RIL is slated to receive extension till December 2010 for two of its blocks while for the third it will get an extension up to 2013. ONGC, on the other hand, will get the deadline for exploration extended to December 2010, May 2011 and September 2011 for its blocks respectively. However, exploration period may not be extended beyond this year for RIL`s KG-DWN-98/3 block. The director general of hydrocarbons is of the opinion that the exploration period at the KG-D6 block may not be extended beyond this year, since the operator has already completed all minimum work programmed commitments at this block.

Aban gets nod to raise USD 400 mn Oil rig company Aban Offshore has received shareholders` nod to raise around USD 400 million (Rs 18.4 billion) by way of foreign currency convertible bonds, global depositary receipts (GDRs), American depository receipts/shares and others. It also got nod to raise around Rs 25 billion through qualified institutional buyers (QIBs). The company is planning to use the money mainly to repay the debt, which is around Rs 150 billion, said Aban managing director Reji Abraham on the sidelines of the annual general meeting. ``This is just an enabling resolution, we will raise the money at the appropriate time,`` said Abraham.

Strides raise USD 100 mn via QIP Strides Arcolab, the Bangalore-headquartered Rs 18 billion publicly-held mid-size pharmaceutical company, has raised USD 100 million (Rs 4.5 billion) through a qualified institutional placement (QIP) issue. ``We have successfully raised USD 100 million through the QIP route, which will be used to part-repay the debt incurred for our recent acquisitions,`` TS Rangan, group chief financial officer of Strides Arcolab, said. The drug firm had fixed the floor price of the issue at Rs 423.55 and mandated Daiwa Capital Markets, IDFC, Kotak Mahindra Capital and RBS Equities as the lead managers. Qualified institutional placement is a route, which many Indian companies are tapping into as it’s a relatively quick process of raising money through a private placement of shares or convertible securities with institutional buyers.


keen to set up IPP in Orissa In line with its proposed restructuring plan, which prescribes foray into power generation business as an independent power producer (IPP), the National Aluminium Company (Nalco) has proposed to the Orissa government for setting up of a power station in association with a couple of state PSUs. However, the company is yet to decide the size of the project and the investment to be made on it. Nalco`s chairman-cum-managing director, A K Srivastava had preliminary discussion on it with state chief minister Naveen Patnaik here yesterday.

Man Industries order book at Rs 25 bn Leading SAW pipes-maker, Man Industries, hopes to cross the Rs 20 billion turnover mark this fiscal (FY 11) and the Rs 30 billion mark by FY 13 on the back of a robust demand for pipes in the oil and gas and hydrocarbons segments, a top company official said. ``There is a healthy demand coming from the oil and gas sector, especially in the Middle East which is our major market. We are also buoyant on Africa where the initial response to our offerings has been encouraging,`` Man Industries` Chairman, Ramesh M ansukhani said here. The company is set to achieve a 20% growth which should see it cross the Rs 20 billion mark this fiscal. ``In the next two years, we aim to take our turnover to Rs 30 billion,`` he said.

Kalpataru to raise Rs 10 bn via IPO Realty firm Kalpataru has joined the bandwagon of property developers that are planning to cash in the rising stock market and has filed the draft papers with the market regulator SEBI for the Rs 10.08 billion initial public offer (IPO). Kalpataru, the flagship real estate company of the Kalpataru Group, has filed the draft red herring prospectus with the Securities and Exchange Board of India, merchant banking sources said. The Mumbai based realtor would be raising Rs 10.08 billion through its initial public offering, sources said. The company is considering to raise about Rs 2 billion as pre-IPO placement, a source said.

IPO Corner

Sea TV IPO opens today; Raising Rs 50.2 cr, Price Band Rs 90 to Rs 100

Cantabil retail (closes today): Total subscription at 0.59X, QIB at 0.5X, HNI at 1.34X, retail at 0.34X

Electrosteel Steels closed on Friday Total at 8.23X QIB at 5.86X, HNI at 28.6X, retail at 6.2X

Orient Green closed on Friday total at 1.07X QIB at 2.09X, HNI at 0.64X, retail at 0.18X

VA tech Wabag (QIB closed 24th) Total at 15.2X QIB at 36.1X, HNI at 0.84X, retail at 0.27X

Ashoka Buildcon (closes tom) Total at 0.9X QIB at 0.58X, HNI at 4.52X, retail at 0.14X, Employee at 0.7X

Berger Paints India to invest Rs 350 cr in AP; Investment to be made in 5 years;

HCC awarded two new contracts worth Rs 660 Crore from GMR (Badrinath) Hydro Power Generation

Shilpa medicare board allots 20 lakh shares to Barings India PE, 5 lakh warrants to promoters at Rs 350

Board meet todays: KPIT Cummins - to consider, acquisition of a Company based in US geography. SKS Micro - results

Ex-dates Infoedge India - ex bonus 1:1 Nissan Copper - Ex slpit 10:1

Textiles Secy Update: Cotton security policy to be unveiled next week 265-270 lakh cotton bales for domestic use, 55 lakh cotton bales to be earmarked for exports Exports of cotton to continue

Navin Flourine board approves buyback at Rs 400/sh ((CMP: 292))

Magnum ventures (CMP at 11), board meet on 27th to approve the draft letter of offer for the proposed rights Issue

Kingfisher Withdraws SLP Against CCI At SC

MTNL ADR up 9.5%


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