Posts Tagged ‘ONGC’

Sensex Tumbles 216 Points on Weak Global Cues

Stocks dropped on Wednesday, triggered mainly by weak sentiments in Asian markets  on concern over rising dollar, ahead of the expiry of October series of futures and option contracts.

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European markets saw a gap-down opening, but recovered later, helping the market to gain some ground in the last half-an-hour of trade. The BSE Sensex trimmed 216.02 points, or 1.07 per cent, to close at 20,005.37. Nifty index declined 69.35 points, or 1.14 per cent, to 6,012.65.

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“Strengthening of the dollar against a basket of major world currencies dragged the market on Wednesday. The Dollar Index, which has an inverse relationship with different assets classes, is rebounding these days. Due to which, investors have turned cautious on equities markets,” said Jagannadham Thunuguntla, head of research at SMC Global Securities.

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The Dollar Index on Wednesday rose to 77.92 against 76.64 on October 14. Before this, the index was falling continuously from the middle of July.

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There was also speculation that US Federal Reserve’s asset purchase plan may be a disappointing one, said Alex Mathews of Geojit BNP Paribas.

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“Nifty has a major support at 5,963 while on the upside, it faces resistance at 6,089 level. On Thursday, we are going to see the October F&O expiry. The rollovers at the end of Wednesday’s session was around 45 per cent,” he said.

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Banking stocks continued to weigh heavy while disappointing results of heavyweight NTPC hurt sentiments on the power counter.

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Union Bank, ICICI Bank and HDFC Bank fell 5.85 per cent, 2.23 per cent and 1.93 per cent, respectively. SBI inched up 0.41 per cent to Rs 3,193.45. Union Bank on Wednesday posted 40 per cent decline in September quarter PAT to Rs 303 crore compared with the same period a year ago.

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NTPC fell 3.24 per cent after the company reported 2.07 per cent drop in PAT on 20.46 per cent year-on-year rise in net sales for the September quarter. The results were announced after Tuesday’s trading hours.

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Among other stocks in news, MRPL rose 1.76 to Rs 83.95 after its Q2 net profit jumped 56.70 per cent to Rs 281.57 crore. ONGC and HPCL, the two stakeholders of the company, dipped 1.80 per cent and 1.42 per cent.

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Shriram Transport Finance hit an all-time high and rose 3.94 per cent to Rs 89.45 after its net profit surged 44.11 per cent year-on-year to Rs 298.96 crore.

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Equity News Update

Economy

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•India’s food price index rose 15.53% while the fuel price index climbed 11.14% in the year to October 9. In the prior week, annual food and fuel inflation stood at 16.37% and 11.14%, respectively.

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Pharmaceuticals

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•Wockhardt has received tentative approval from the United States Food & Drug Administration (USFDA) for marketing the Fexofenadine HCI 60 mgplus Pseudoephedrine HCL 120 mg extended release tablets, which is used for treatment of seasonal allergic rhinitis without causing drowsiness.

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Oil & Gas

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•Reliance Industries is planning to take shutdown of the Crude Distillation Unit (CDU) No.1 and coker at Jamnagar refinery for maintenance and inspection for a period of three to four weeks starting from last week of October, 2010.

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•Oil and Natural Gas Corp (ONGC) has kicked off a `8,800-crore redevelopment of the southern part of its Mumbai High fields, using a cost-effective technology to  maintain output from the prime western offshore fields.

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Capital Goods

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•Larsen & Toubro (L&T) has received order worth 1,449 crore from DB Power for the Bhaskar Group company’s Chhattisgarh project. The Balance of Plant is the sum of all equipment for safe operation as well as the technical coordination of all concerned parts of a power plant.

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•BHEL has bagged contracts worth 35 crore to set up grid-interactive solar power plants of 1100 kW capacity at eight locations in the union territory of Lakshadweep. The Lakshadweep administration has also asked the company to renovate existing solar power plants of 800k Wat these islands.

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Realty/ Construction/ Infrastructure

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•Ashoka Buildcon Ltd has announced the completion and start of toll collection on its Bhandara toll road project on National Highway No. 6. The project, with a project cost of 535 crores, is the largest toll road project commissioned till date by Ashoka Buildron. With this commissioning, the company has 18 BOT projects under operation and 5 under construction.

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•IL&FS Transportation Networks Ltd has informed that the consortium comprising of 50:50 Joint Venture between the Company and Ramky Infrastructure Ltd. had been awarded a project by the National Highways Authority of India for Four Laning in the State of Assam & Meghalaya on Design, Build, Finance, Operate and Transfer (DBFOT) pattern. The Projectis on Annuity basis with a concession period of 20 years including construction period of 3 years. The cost of the Project as per loan agreements is 824 Crores and the semi-annual Annuity for the Project is72.51 Crores.

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INTERNATIONAL NEWS

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•US Industrial production was disappointing in September, declining 0.2percent, following a 0.2 percent gain in August. The September decrease came in notably below analysts’ median projection for a 0.2 percent advance. Capacity utilization edged lower to 74.7 percent from 74.8percent in August.

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•US Housing starts surprised on the upside while permits went in the other direction. Importantly, the single-family component is the one showing unexpected modest strength. Housing starts in September rose 0.3 percent after jumping 10.5 percent the prior month. The September annualized pace of 0.610 million units came in significantly above the market forecast for 0.580 million units and is up 4.1 percent on a year-ago basis.

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•Eurozone consumer confidence indicator remained unchanged in October from the previous month. The EC’s consumer confidence indicator for euro area was at minus 11 in October, same as in the previous month. The latest reading came in line with economists’ expectation. The consumer confidence index for the EU nations slightly improved to minus 11.6 inOctober from minus 11.7 in September.

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•UK retail sales volume including automotive fuel decreased 0.2% in September from August, it was smaller than last month’s revised 0.7% fall.Economists were expecting a 0.3% increase in September.

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•China’s gross domestic product grew 9.6% between July and September compared to the same period a year earlier. That is slightly above analyst expectations for a 9.5%, but marks a slowdown from the 10.3% expansion in the June quarter.

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CIL sets IPO record; to list on Nov 4

India’s IPO market created history on Thursday with state-owned Coal India share issuer in the becoming the biggest country, beating Reliance Power’s 2008 initial public offering.

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At the time of going to press, the CIL issue was subscribed 15.26 times, collecting Rs 2,36,113.28 crore. The shares will debut on the market on November 4, a day before Muhurat trading that marks Diwali.

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Responding to late rush from retail investors, the company postponed the close of the issue to 9 pm.

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At the upper end of the band, CIL will be the seventh biggest Indian company by market cap, after ONGC, State Bank of India, TCS, Reliance Industries, Infosys Technologies and NTPC, based on Thursday’s closing price. CIL’s Rs 15,474 crore IPO has overtaken Reliance Power’s Rs 11,700 crore issue.

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Buoyant demand from retail and wealthy investors on the final day added to the strong response from institutional buyers. This also signalled success for the government’s upcoming share sales.

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Retail investors, who often take cues from institutions in IPOs, had put in bids for shares 1.44 times or for 28,60,44,375 shares. Retail investors will get a five per cent discount on the final issue price.

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Wealthy individuals had separately bid for 13.89 times the shares available for them.

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Bidding for the mega IPO closed on Wednesday for qualified institutional buyers, including foreign institutional investors, mutual funds and insurance firms. And for the portion reserved for them, the issue was over subscribed by 24.70 times, lead by FIIs.

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The IPO has generated a demand of 493,38,72,050 shares from FIIs. Calculated at the upper end of the price band, this demand is worth Rs 1,20,879.86 crore and at the lower end worth Rs 1,11,012.12 crore. Even at the low end, the demand surpasses the record Rs 1.08 lakh crore pumped in by FIIs into the capital
market.

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India’s largest new issue came amid a flurry of big deals in Asia.

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At the top of its price range, Coal India would be valued at 15.7 times trailing earnings. The issue also got the highest demand for an Indian issue, helped by qualified institutional buyers.

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The demand from QIBs for CIL was at Rs 1,73,398 crore with 100 per cent application amount, compared with Rs 1,88,923 crore with 10 per cent margin for Reliance Power IPO. In case of Reliance Power, the QIB portion was covered 30.68 times.

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“The response to Coal India IPO, from all classes of investors, has surpassed even the most optimistic predictions. It has caught even the biggest optimists by surprise,” SMC Global Securities strategist Jagannadham Thunuguntla said in a note.

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He said the response puts the government on target to achieve its divestment target of Rs 40,000 crore in fiscal 2011 and even exceed it if other issues like the follow-on offering of Power Grid, Steel Authority of India, ONGC, Shipping Corporation of India, Indian Oil Corporation and IPO of Manganese Ore fall in place.

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The government, which has collected Rs 17,500 crore from public issues, including Coal India, may raise its divestment target and get over Rs 58,500 crore, SMC Capital added.

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At the upper end of price range, Coal India issue is worth Rs 15,474 crore and at the lower end it would fetch about Rs 14,211.81 crore.

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The upper band would also give it a market capitalisation of Rs 1.54 lakh crore ($34.7 billion).

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Meanwhile, the broader market recovered from a two-day slump and closed up 1.95 per cent at 20,260.58 points. Now all eyes will be on whether it will be a strong listing on the eve of Diwali.

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Equity News Round Up 30th August – 3rd September

DOMESTIC NEWS


Economy

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•The food price index rose to an annual 10.05% in the week ended August 14 as against 10.35% in the previous week.

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Oil & Gas

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•ONGC is set to get permission from the Centre to pay only a third of its total royalty obligation to the Rajasthan government on the revenues earned from the oil blocks owned by Cairn India, removing a possible obstacle to the Vedanta-Cairn deal and saving the oil explorer an annual outgo of $350 million.

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•The Supreme Court refused to restrain Vedanta Group’s bid to acquire Cairn India through an open offer of $3 billion. Billionaire Anil Agarwal-owned Vedanta Group plans to acquire around 60% stake in Cairn India for over $9 billion, including the 20% proposed to be bought by Sesa Goa.

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Telecommunication

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•Reliance Communications’ 3G Innovation Lab has started with hopes of providing the operator with applications that will drive higher data consumption among mobile phone users as the company launches third generation (3G) wireless services.

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Ship Building

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•ABG Shipyard exited Great Offshore by selling its 4.66 per cent stake in the offshore oil and gas service provider for `64.50 crore through open market transactions.

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Information Technologies.

•Tata Consultancy Services (TCS) has signed a 130 crore e-governance contract with the Madhya Pradesh government.

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•EdServ announced that it has tied up with the Canada-headquartered Corel to become its authorised online training partner. EdServ thus have the rights to train and certify students on the Corel Technology, Graphics Design and Desktop Publishing.

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Auto Ancillaries

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•Lumax Industries plans tosetuptwoautomotivelightingplants intwoyears.The first plant isbeing setupat SanandinGujarat tosupplyTataMotors’Nanocar and will become operational inthethirdquarter this fiscal.

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Power

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•Power Grid Corporation is among the three firms shortlisted by the Nigerian Government to manage the country’s electricity grid to be constructed at a cost of $ 3.5 billion.

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Tea.

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•Jayshree Tea & Industries (JTIL), a BK Birla Group company, is eyeing tea estates in Rwanda. It has decided to participate in the auctioning of tea estates that is likely to be kicked off by the Rwanda Tea Authority shortly.

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Pharmaceuticals

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•Cipla has approved the acquisition of Mumbai-based Meditab Specialities for a consideration of 133.35 crore. The acquisition of Meditab will help the company consolidate its business invariouscountries includingChina & Africa.

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INTERNATIONAL NEWS

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•US Existing home sales fell 27.2 percent in July to a 3.83 million annual rate for the lowest level in 15 years. The 3.83 million rate compares with expectations for 4.65 million. Supply at the current sales rate ballooned from June’s already swollen 8.9 months to 12.5 months for the worst reading in 11 years.

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•US New factory orders for durable goods in July rebounded 0.3 percent, following a 0.1 percent decline the prior month. The July rebound came in significantly belowthe consensus forecast for a 2.5 percent comeback.

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•US Jobless claims swung lower in the August 21 week in what should slow the deepening pessimism. Initial claims fell 31,000 for the second biggest decline of the year. Yet the 473,000 level is still on the high side when compared to levels in July, evident in the four-week average of 486,750 which is the worst since November.

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•US Gross domestic product grew at a 2.4 percent annual pace, less than forecast, after a 3.7 percent first-quarter gain that was larger than previously estimated. The U.S. economy slowed in the second quarter as a scarcity of jobs eroded consumer spending, leaving the rebound dependent on a surge in business investment.

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Petrol Prices to be Revised Uniformly

The government owned oil marketing companies – Indian Oil, Hindustan Petroleum, and Bharat Petroleum – will be reviewing petrol prices on a monthly basis, and any decisions regarding changes in prices will be on consensus basis within the public sector. This means that petrol prices will be uniform at the retail pumps of public sector companies. Private companies may however choose to differ.

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However, the government has made it clear that it will not be completely deregulating diesel prices for now. It had hiked diesel prices by Rs 2 last month while petrol prices were made market determined. Earlier it was expected that despite diesel prices still involving a subsidy of around Rs 2, they will too move in tandem with crude oil prices.

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A lot of political opposition to the move along with increasing inflation may have been responsible for the retreat by the government. Diesel is used largely by the transport sector as well as the farm sector and a further price hike would therefore push up prices of almost all other products. The government is already struggling to tackle surging food prices and therefore probably wants to wait till the inflation comes down.

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The decision was taken at a meeting called by the petroleum secretary S. Sundareshan to deliberate on price revision frequency and also on how the publicly owned OMCs will coordinate on the matter. “Petrol price will be reviewed monthly after a mutual consultation among the three (government owned) oil marketing companies. There is no need for revision of prices now. We will follow this mechanism for three months from now,” said Indian Oil director S V Narasimhan after the meet.

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There will be no revision however for the current month. Also, the oil companies have not announced any particular date for price revision to prevent any hoarding by the black marketers, who may try to store the petrol in anticipation of a fuel price hike and result in problems for masses.

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With regard to the determination of price of diesel the Petroleum Secretary said, “Right from the beginning we have been saying that the price of petrol will be market-determined and the oil companies will take the decision themselves. The decision of oil companies would be based on factors like what is the competition doing and whether prices will be determined jointly or on individual basis.”

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On issue of whether the private companies like Reliance Industries and Essar too will harmonise their decisions with the government OMCs he said, “We are given to understand that everyone has adopted a wait and watch policy for next few months until the situation stabilises. At present, there is no scope for price revision of petrol.” He also categorically stated that “government was not thinking on revising diesel prices for now.”

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With regard to another crucial aspect of oil sector, the sharing of subsidy burden between companies and government he said that for the first quarter of 2010-11, the upstream companies such as ONGC and Oil India will shoulder a burden of about Rs 6,000 crore. The total under-recovery for the quarter is expected to be about Rs 20,000 crore.

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Equity News Round UP

Economy

•The annual rate of inflation based on the wholesale price index of food articles shot up to 17.70 per cent during the week ended 27 March 2010 from 16.35 per cent during the previous week.

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•India’s automobile industry reported a 26.41 per cent growth in sales in 2009-10 riding on the government’s stimulus packages that perked demand, making it the second fastest growing market in the world after China.

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•India’s first-ever auction of spectrum for third generation (3G) telephony services began on a cautious note. For a pan-India licence, the highest offer was Rs 3,919 crore on the first day, just 12 per cent higher than the base price of Rs 3,500 crore. There are six companies in the race for a pan- India licence, which spans 22 circles. These are Bharti Airtel, Vodafone Essar, Reliance Communications, Idea Cellular, Tata Teleservices and Aircel.

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Capital Goods

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•Bharat Heavy Electricals Limited is setting up a centre of excellence for nanotechnology with an investment of Rs 8.27 crore to explore applications in power systems and products relevant to the company.

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•Suzlon Energy said its subsidiary REpower Systems AG has bagged a contract from an Italian company for supplying 18 wind turbines. RE power has concluded a contract for the supply of 18 wind turbines to Daunia Savignano, a subsidiary of Italian Tozzi Group.

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•Elecon Engineering Company has bagged an order worth Rs 49.90 crore from Sical Logistics for material handling equipment. The scope of the contract includes design, engineering and commissioning of material handling equipments for New Mangalore Iron Ore Terminal.

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•BGR Energy Systems has entered into an agreement with the Orissa government for setting up a 1,320-MW power project at an investment of Rs 6,287 crore. The company has signed a MoU with Orissa government for setting up a 1,320 MW independent power producer at Bhapur in Nayagarh district of the state at an investment of about Rs 6,287 crore.

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Pharmaceutical

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•Aurobindo Pharma announced that it has received final approval for Venlafaxine Hydrochloride Tablets 25 mg, 37.5 mg, 50 mg, 75 mg and 100 mg from the US Food & Drug Administration (USFDA).

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•Cipla Limited, among the largest pharmaceutical companies in the country, is understood to be closing in on a strategic investment in Bangalore-based Stempeutics Research, a stem cell company developing stem cell-based medicinal products. Stem cells are used to replace or initiate the production of other cells that are damaged or missing.

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•Biocon has fully acquired the joint venture Biocon Biopharmaceuticals from its Cuban partner CIMAB. Under the business restructuring plan, Biocon will pick up CIMAB’s 49% stake and will make Biocon Biopharmaceuticals (BBPL) a wholly owned subsidiary of Biocon.

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Media & Entertainment

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•PVR Ltd, a retail entertainment company, has earmarked around Rs 120 crore for setting up 60 multiplex screens across the country. Of this, 14 are already operational and the remaining will be opened by the end of this fiscal.

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Realty & Construction

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•IVR Prime Urban Developers has raised Rs 63 crore by selling land near Pune and Chennai. The company has sold 87.52 acres of land near Loanavala and 28 acres of land near Chennai.

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Oil & Gas

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•Reliance Industries (RIL) has announced that its subsidiary, Reliance Marcellus LLC has executed definitive agreements to enter into a joint venture with United Sates based Atlas Energy, Inc, of Pittsburgh, Pennsylvania under which Reliance will acquire a 40% interest in Atlas’ Core Marcellus Shale acreage position.

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•Aban Offshore has bagged a contract valued at $159 million (about Rs 716 crore) from Brunel Shell Petroleum Sendirian Berhad for the deployment of the jack-up rigs.

NEWS ROUND UP 29th March – 02nd April

Economy

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·India’s annual food price index stood at 16.22% as on week ended March 13, slower than the 16.30% growth recorded last week. A year ago, food prices were up 7.46%. At the same time, primary articles inflation rose to 13.88% from 4.91% last year, while fuel, power, light & lubricants prices climbed to 12.68%.

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Power

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·NTPC, the state owned power generator, has evinced interest to set up solar and wind projects in Orissa with aggregate generation capacity of 500 Mw.

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The company has sent a draft MoU for approval of the Orissa government in this regard.

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·GMR Energy will soon raise over Rs 1,600 crore from a group of private equity players led by Singapore-based Temasek Holdings and banks to fund its expansion. The company is a subsidiary of the G M Rao-led GMR Infrastructure that has interests in highways, airports, agri-business and urban infrastructure.

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Oil & Gas

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·ONGC has approved investing Rs 3,240 crore ($712 million) for the first phase development of three marginal fields located in Mumbai offshore on the western coast.

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Capital Goods

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·L&T has been awarded a contract by the Ministry of Defense for the design and construction of 36 high speed interceptor boats for the Indian Coast Guard. The contract is valued at Rs 977 crore. The design is being carried out in house by the Company and its ship design center, that is a part of the Company’s Heavy Engineering division. The boats are planned to be constructed at the Company’s existing shipyard at Hazira and at its new shipyard coming up at Katupalli near Ennore.

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·L&T bagged six orders worth Rs 1,181 crore for construction of power transmission line and sub-station works. Three of these six orders worth Rs 741 crore have been secured from the Gulf markets and the other orders worth Rs 440 crore are for domestic projects. These orders will be executed by electrical and gulf projects operating company, a part of L&T’s construction division.

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Automobile

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·Tata Motors, India’s largest vehicle manufacturer by revenue, is selling a third of its stake in the construction equipment-making subsidiary, Telcon, to its joint venture partner, Hitachi, for Rs 1,000 crore.

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·Tata Motors had signed an agreement with the Myanmarese government for setting up a heavy truck plant in the South-East Asian nation, with an installed capacity of up to 5,000 units annually.

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·TVS Motor Company has announced the launch of its new model TVS Jive, India’s first auto-clutch motorcycle, in Chandigarh. With this launch, the company expects that it sales in Punjab will grow significantly from 2,000 motorcycles to 3,600 motorcycles per month.

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Realty/ Construction

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·Patel Engineering has been awarded the contract to develop the largest waterfront project in the southern hemisphere. The project, an integrated township in Port Louis, the capital of Mauritius, is valued at $1 billion.

Spread over more than 24 hectares, the project involves residential, commercial, entertainment and real estate.

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·Punj Lloyd plans to sell its 19.4 per cent stake in Pipavav Shipyard to co-promoter Skil Infrastructure through an inter se promoter transfer. The stake is valued at Rs 825 crore at the company’s current market
capitalisation of Rs 4,251 crore. The Nikhil Gandhi-promoted Skil Infrastructure has an 18.27 per cent stake in Pipavav Shipyard.

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Telecommunication

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·Kuwait-based Zain Telecom’s board cleared Bharti Airtel’s proposal to buy its African assets for $10.7 billion (around Rs 48,600 crore), marking the Indian company’s first successful attempt to acquire operations in Africa after two failures.

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Cement

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·Shree Cement has got the Central Electricity Regulatory Commission’s (CERC) approval to start inter-state trading business in power it produces at its merchant plant. The company has 260 MW installed captive power generation capacity and is in the process of putting up additional 300 MW merchant capacity, which is set to go on stream in a few days.