Videocon to roll out telecom services from Chennai on Aug 15

Consumer durables major Videocon Group, which has bagged national
telecom licence through its subsidiary Datacom Ltd, would roll out the
GSM services from Chennai on August 15 this year.

Unveiling the plans, Videocon Chairman Venugopal Dhoot said that GSM
services would be first launched in Chennai on August 15, to be
followed by other metros, Kerala and North India.

"The national rollout plan will be completed in 18 months," Dhoot
added.

Datacom intends to build up a subscriber base of around 10 million in
three-four years of launch.

Datacom had obtained licences for providing GSM services in 22 circles
across the country.

Dhoot said telecommunications would be a focus area for Videocon Group
in the coming years and the group would invest around Rs 6,000 crore
in this business.

The group was also in talks with some companies based in the Middle
East to rope in a foreign partner for the telecom business.

He said that while the group had a strong cash balance, the foreign
partner is also expected to bring in equity in the telecom venture.

Mobile-banking gets RBI okay

MUMBAI: Mobile phone owners in the future will be allowed to transfer
funds from their accounts to other mobile phone owners across networks
and service providers. This is what the Reserve Bank of India's (RBI)
draft operating guidelines for mobile payments aim to achieve.

As per the draft, even those with the most basic mobile phones may be
able to pay for transactions through their mobile in the future. RBI
has permitted the use of SMS-based mobile payments for small
transactions up to Rs 1,500 in its draft.

The central bank has mandated that SMS be used for small-ticket
payments up to Rs 1,500, thus making it possible for even the most
basic mobile phone to be used for m-banking . It has also asked banks
to make their mobile-banking services available across all phone
networks.

Further, RBI has said that the long-term goal of the mobile-payment
framework in India would be to enable funds transfer from and account
in one bank to any other account in any bank on a real time basis,
irrespective of the mobile network the customer has subscribed to.

Banks have evinced considerable interest in the m-payments space over
the past couple of years and the top players have already rolled them
out. However, most of these are restricted to certain mobile-service
providers or to high-end users with GPRS-enabled instruments. The
central bank's move of making the m-payments space operator-agnostic
is being perceived by many as an attempt to broadbase the service.

Meanwhile, payments service providers have applauded RBI for its
proactive stance on the issue. "It is a very positive step from the
regulators, which shows their support for the initiative. They have
clearly spelt out the roles of each of the players, with enough scope
for flexibility ," said mChek CEO Sanjay Swamy. Paymate founder and
managing director Ajay Adiseshann said, "The guidelines come at the
right time for the industry. Also, the fact that small-ticket payments
will be encouraged is a positive."

The central bank has suggested that banks issue a separate mobile-PIN
which will be completely different from the internet banking
passwords. It has also suggested that the possibilities of dual-factor
authentication and one-time passwords be looked into. However, there
is some concern over the SMS channel being used for payments, since it
is often unreliable and prone to tampering.

The guidelines also recommend that banks do not compromise on their
knowyour-customer and anti-money laundering guidelines. It has also
been recommended that banks explicitly state the risks to the customer
and also get them to sign a contract before the service is adopted .

This is a move which m-payments service providers feel will act as a
deterrent to rapid adoption of the service. Banks that have already
started offering mobile banking services to their customers have also
been given three months to comply.

Japanese invent car that runs on water

Friday, June 13: Tired of petrol prices rising daily at the pump? A
Japanese company has invented an electric-powered, and environmentally
friendly, car that it says runs solely on water.

Genepax unveiled the car in the western city of Osaka on Thursday,
saying that a litre of any kind of water -- rain, river or sea -- was
all you needed to get the engine going for about an hour at a speed of
80 km.

"The car will continue to run as long as you have a bottle of water to
top up from time to time," Genepax CEO Kiyoshi Hirasawa told local
broadcaster TV Tokyo.

"It does not require you to build up an infrastructure to recharge
your batteries, which is usually the case for most electric cars," he
added.

Once the water is poured into the tank at the back of the car, a
generator breaks it down and uses it to create electrical power, TV
Tokyo said.

Whether the car makes it into showrooms remains to be seen. Genepax
said it had just applied for a patent and is hoping to collaborate
with Japanese auto manufacturers in the future.

Most big automakers, meanwhile, are working on fuel.

Realty sector to grow 30% in next 10 yrs

New Delhi, June 13: The realty sector is projected to grow at the rate
of 30 per cent annually over the next decade, attracting foreign
investments worth USD 30 billion, with a number of IT parks and
residential townships being constructed across-India, industry body
Assocham said.

Currently, the domestic real estate market is expected to be worth 15
billion dollar in which the FDI is estimated to about 6 billion
dollar, it said.

At present, the foreign developers can undertake construction
activities on a minimum space of 50,000 sq ft, Assocham President
Sajjan Jindal said in a statement.

The ceiling of 50,000 sq ft would be lifted by the government in want
of more FDIs and would go to 2 lakh sq ft in next 10 years, as per
Assocham's estimate.

The sector would grow more as expected requirement by the IT sector
(like IT parks) will be about 200 million sq ft space across the major
and large townships, it added.

It is also estimated that in the residential sector, the housing
shortage is around 20 million units of which nearly 7 million units
are estimated for urban India, it said.

Commenting on the problem faced by the sector, the Assocham said that
the involvement of Center and a number of state agencies in setting up
of townships is needed.

Worst of financial crisis over: IMF

The worst of the financial crisis appears to be over but the major
economies are likely to grow sluggishly for the rest of this year,
International Monetary Fund head Dominique Strauss-Kahn said on
Friday.

"We have good reason to think that the financial crisis is mostly
behind us but it's too soon to say for sure," he told reporters.

The IMF expects "several quarters of soft growth" in developed
countries with a proper recovery unlikely until 2009.

Oil production from Panna-Mukta fields to resume

Reliance Industries, British Gas and Oil and Natural Gas Corp (ONGC)
are likely to resume oil production from Panna-Mukta fields, off
Mumbai coast, in a day or two, but the same for gas from the explosion-
ridden facility may take at least another couple of weeks to
restart.



Crude oil production may resume tomorrow or day after tomorrow. The
output will however be at a lower level since repair at a platform
that witnessed explosion on June 3, may take some time, sources in RIL-
BG-ONGC consortium said.


Oil production may be of the order of 10,000-15,000 barrels a day
against an output of 40,000 bpd before the explosion took place.


Oil cannot be produced at full capacity as at those levels
accompanying gas will have to be flared. Gas flaring is done at a
place which is very close to the equipment that are being repaired and
repairs cannot happen if the temperature goes up, they said.


Gas production is likely to resume in 2-3 weeks.


Reliance-BG-ONGC consortium had stopped producing 40,000 barrels of
oil per day and 5.5 million standard cubic meters per day of gas from
Panna-Mukta field since June 3 after an explosion at a platform killed
a worker with BG.


Panna-Mukta oil and gas field was shut on June 3 morning for
maintenance work to prepare for the forthcoming monsoon season.


However, when the facility was being restarted at 2024 hrs that
evening, an explosion occurred at Panna process platform killing one
person.


Besides shutting oil and gas production, the explosion damaged gas
dehydrating facilities at the platform, sources said

Reliance launches its Jewellery store

The Reliance Retail Limited (RRL) announed the launch of its third
Jewellery specialty store "Reliance Jewels" and the first in North
India, in Ludhiana today.



Spread across two floors, the over 5000 sq feet store offers over
20,000 designs of exquisitely crafted jewellery from across the
country to make it a one-stop shopping destination for fine jewellery.
Reliance Jewels offers consumers a wide and unique range in gold and
diamond jewellery.


Commenting on the launch of the first Reliance Jewels store in the
North, Bijou Kurien, President and Chief Executive Lifestyle said, "it
has always been the endeavour of Reliance to provide the consumers
with a wide range of high quality products at competitive prices.
Reliance Jewels is another milestone in our effort f bringing a unique
shopping experience with assured purity of gold and certification of
diamonds. In our store we plan to give our consumers an unparalleled
range of jewellery and an unmatched shopping experience".


The gold jewellery range encompasses Kolkata Filigree, Rajkot Antique,
Kundan from Rajasthan, Jadau from Amritsar and much more.


In Diamond jewellery, Reliance Jewels offers the finest quality of
diamonds and the widest range of designs, ranging from daily wear to
party wear, from diamonds for weddings as well as to celebrate every
special occasion in a woman's life.


One floor of the store is reserved exclusively for bridal collection
sets and diamond jewellery with a private viewing room for added
comfort.

Gail India Board to consider Bonus Issue

Gail India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on June 23, 2008, to discuss the matter relating to bonus shares in the said meeting.
 

 

 

Good rains will help in controlling inflation: Montek

As inflation touched an all time high of 8.75 per cent, Planning
Commission Deputy Chairman Montek Singh Ahluwalia on Friday expressed
hope that a good monsoon would help in controlling the prices of
commodities.

"Today, inflation is on the rise and there is no denying that. It has
become a major challenge for the Government and we are taking all
possible steps to control it," he said.

On the sidelines of a Panchayati Raj convention, Ahluwalia said that a
good monsoon would strengthen the agricultural sector and bring down
prices of commodities.

"Production and procurement of wheat has witnessed a great high in
this season and if we have a good rainfall, then production of rice
will also see an increase, which will in turn bring down the inflation
rate to some extent," he said.

Ahluwalia rejected calls for the resignation of Finance Minister P
Chidambaram on the issue of rising food prices, saying it would not
serve the purpose as prices are high due to international reasons.

He said price rise is a problem that every country is facing and there
are countries where the inflation rate is higher than that in India.

He also backed the government's step to increase Minimum Support Price
(MSP) for foodgrains

US Economic conditions to improve during second half of 2008

At the international Monetary Conference, Barcelona, Spain, the
chairman, US Federal Reserve, Ben S. Bernanke, made the following
remarks on economic outlook, on June 3, 2007.

Highlighting, the plight of financial markets in the United States and
in a number of other industrialized countries, he said they have been
under considerable strain since late last summer. This has adversely
affected economic prospects, most notably by affecting the cost and
availability of new credit.

Analyzing the origin of the financial turmoil, on a long term
perspective, he remarked the severity of the financial stresses became
apparent only in August, several longer-term developments served as
prologue for the recent turmoil and helped bring us to the current
situation.

Looking back, he said the turmoil began with the U.S. housing boom, in
the mid-1990s and picked up steam around 2000. Between 1996 and 2005,
house prices nationwide increased about 90 %.

During the years from 2000 to 2005 alone, house prices increased by
roughly 60 %, far outstripping the increases in incomes and general
prices, and single-family home construction increased by about 40 %.
Starting in 2006, the boom turned to bust. Over the past two years,
building activity has fallen by more than half and now is well below
where it was in 2000. House prices have shown significant declines in
many areas of the country.

Bernake said, a second critical development was an even broader credit
boom, in which lenders and investors aggressively sought out new
opportunities to take credit risk even as market risk premiums
contracted. Aspects of the credit boom included rapid growth in the
volumes of private equity deals and leveraged lending and the
increased use of complex and often opaque investment vehicles,
including structured credit products.

The explosive growth of subprime mortgage lending in recent years was
yet another facet of the broader credit boom. Expanding access to
homeownership is an important social goal, and responsible subprime
lending is beneficial for both borrowers and lenders. But, clearly,
much of the subprime lending that took place during latter stages of
the credit boom in 2005 and 2006 was done very poorly.

A third longer-term factor contributing is the unprecedented growth in
developing and emerging market economies. From the U.S. perspective,
this growth has been a double-edged sword. On the one hand, low-cost
imports from emerging markets for many years increased U.S. living
standards and made the Fed`s job of managing inflation easier, he
added.

Briefly speaking, both global and domestic factors have played
important roles in recent developments in the United States. The
housing and credit booms were driven to some extent by global savings
flows, but they also reflected domestic factors, such as weaknesses in
risk measurement and management and lax standards in subprime lending.
Higher commodity prices are for the most part a global phenomenon, but
U.S. dependence on oil imports makes this country quite vulnerable on
that score.

Broadly speaking, the functioning of financial markets have improved
of late, but conditions remain strained and some key funding and
securitization markets have shown only tentative signs of recovery.
Some borrowers, such as highly-rated corporations, retain good access
to credit, but credit conditions generally remain restrictive in areas
related to residential or commercial real estate, he said.

He further said, residential construction continues to contract, and
the overhang of unsold new homes remain large, although it declined
some in absolute terms. Consumer spending has thus far held up a bit
better than expected, but households continue to face significant
headwinds, including falling house prices, a softer job market,
tighter credit, and higher energy prices, and consumer sentiment
declined sharply since the fall. Businesses are also facing
challenges, including rapidly escalating costs of raw materials and
weaker domestic demand. However, the strength of foreign demand for
U.S. goods and services has offset, to some extent, the slowing of
domestic sales.

Overall economic growth was quite slow but apparently positive in both
the fourth quarter of 2007 and the first quarter of this year.
Activity during the current quarter is also likely to be relatively
weak.

Talking about the present scenario, he said, we may see somewhat
better economic conditions during the second half of 2008, reflecting
the effects of monetary and fiscal stimulus, reduced drag from
residential construction, further progress in the repair of financial
and credit markets, and still solid demand from abroad.

He said, this baseline forecast is consistent with our recently
released projections, which also see growth picking up further in
2009. However, until the housing market, and particularly house
prices, shows clearer signs of stabilization, growth risks will remain
to the downside. Recent increases in oil prices pose additional
downside risks to growth.

Referring to inflation he commented inflation has remained high,
largely reflecting continued sharp increases in the prices of globally
traded commodities. So far, the pass-through of high raw materials
costs to domestic labor costs and the prices of most other products
has been limited, in part because of softening domestic demand.
However, the continuation of this pattern is not guaranteed and will
bear close attention.

Futures markets continue to predict, albeit with a great range of
uncertainty, that commodity prices will level out, a forecast
consistent with our expectation of some overall slowing in the global
economy and thus in the demand for raw materials. A rough
stabilization of commodity prices, even at high levels, would result
in a relatively rapid moderation of inflation, consistent with the
projections of Federal Reserve governors and Reserve Bank presidents
for 2009 and 2010, he added.

Unfortunately, the prices of a number of commodities, most notably
oil, have continued upward recently, even as expectations of future
policy rates and the foreign exchange value of the dollar have
remained generally stable in the past few months. The possibility that
commodity prices will continue to rise is an important risk to the
inflation forecast. Another significant upside risk to inflation is
that high headline inflation, if sustained, might lead the public to
expect higher long-term inflation rates, an expectation that could
ultimately become self-confirming.

Above all, he concluded saying, we are taking action in our role as
regulators. We have worked with lenders and servicers to encourage
appropriate modifications of distressed mortgage loans, and we have
proposed new rules to improve disclosure and to ban unfair or
deceptive acts and practices in mortgage lending. We are also
collaborating with other regulators, both domestically and abroad, to
put in place changes that will help make the financial system less
vulnerable in the future. Among the changes we expect to see are
strengthening of capital and liquidity rules, greater disclosure
requirements, an increased emphasis on the measurement and management
of firm wide risks, and further steps to increase the transparency and
resilience of the financial infrastructure.

He declared, our goal is to emerge from this difficult period with a
financial system that will be more stable without being less
innovative, with a more effective balance between market discipline
and regulation.

Property prices in Mumbai to fall by up to 15%

MUMBAI: Property prices in Mumbai are likely to fall by 10-15 per cent
over the next six to nine months on the back of lacklusture sales.

Leading real estate sector players attribute the impending fall to
rise in interest rates, escalation of cost, credit squeeze by banks,
bearish capital market and weak sentiments globally leading to poor
offtake of properties.

"These will definitely have a negative impact on the property prices
in Mumbai and other cities in the country. In my view, the price will
go down by 10-15 per cent over the next six to nine months," Indiareit
Fund Advisors' Managing Director and Chief Executive officer Ramesh
Jogani said.

On the positive side, it shows that markets are maturing and the fall
in price will again bring resurgence in customer demand, he added.

Indiareit Fund Advisors manages a total of $450 million domestic and
offshore funds.

His views were echoed by leading real estate firm Orbit Corporation's
Managing Director Pujit Agarwal as he said that there is a total
slowdown in the property market at the moment.

"For the last six months sales were lacklusture. The demand for
property will not go up until general election scheduled for next
year," Agarwal said.

High inflation, increase in cost of capital and widening trade deficit
have led to the fall in the stock market, he said adding that real
estate market of Mumbai has a significant co-relation with the stock
market.

"The wealth which had been created during the bull run of the market
has got diluted. This has led to cash crunch among the developers who
are now fighting to complete their project," Agarwal said.

International real estate consultancy firm C B Richard Ellis said
increasing lending rates, high inflation and unrealistic property
value in Mumbai have led to the fall in prices since the last
quarter.

"People are also prefering now to wait and watch before taking any
decision on buying properties. Oversupply is also there. In my view,
prices will fall by 15-20 per cent in a year or two from now," Rajesh
Prasad, Head, Transaction Management Group, CB Richard Ellis (India)
said.

CB Richard Ellis Group, a Fortune 500 company headquartered in Los
Angeles, is the world's largest commercial real estate services firm
in terms of 2007 revenue.

UTI needs to lower IPO expectations: Bankers

UTI Asset Management, India's fourth-largest mutual fund firm, will
have to lower its IPO expectation by as much as a quarter or delay the
offer, preliminary meetings with investors have showed, bankers said.

The company had intended to raise as much as $500 million by selling
49 percent of the firm. But with financial sector stocks sliding
almost 40 percent this year, hurt by globla markt turmoil, UTI will
have to settle for less.

"If they want to hit the market by July 22, then the offer has to be
very, very attractively priced," a banker with one of the lead
managers said, who declined to be identified while the sale was still
under way.

The offer has to open before July 22, 90 days from when the capital
market regulator approved UTI's offer prospectus, or under Indian
rules it will have to file a revised prospectus.

Citigroup, Enam Securities and JM Financial are the lead managers to
the issue.

"We have already informed the sponsors a haircut is needed. Investors
are baulking at the price we are asking," another banker said, also
declining to be identified.

The bankers expect the investment committees of sponsors to make a
call next week on the listing.

"The dates are not yet frozen ... we will be in a position to answer
this again in the next week," UTI's Chief Marketing Officer Jaideep
Bhattacharya told Reuters.

Top lender State Bank of India, Bank of Baroda, Punjan National Bank
and Life Insurance Corp of India -- all state-run -- each own 25
percent of UTI.

Indian shares have fallen by a quarter so far this year amid global
financial market turmoil, soaring inflation and fears the Economy will
slow along with a global downturn.

Annual inflation raced to 8.75 percent at the end of May, its highest
in more than seven years, while growth is seen slowing this year from
the 8.8 percent average of the last five years.

These factors have crimped demand for loans and hurt the margins of
banks.

It is difficult to gauge a fair value for UTI as there are no listed
mutual funds in the country, bankers said.

However, in March, Standard Chartered sold its Indian asset management
business to Infrastructure Development Finance Co for $205 million,
valuing the firm at about 6 percent of its assets under management.

At a $1 billion valuation, UTI would be valued at 8 percent of its end-
May average assets, far lower than 13 percent Eton...Park paid in
December for a 5 percent stake in top mutual fund firm Reliance
Capital Asset Management.

Indian fund management firms are expensive by global standards though.
Asset management firms Blackrock and Legg Mason are quoting at less
than 2 percent of their assets under management..

BSNL ties up with data provider Contakt

Bharat Sanchar Nigam Ltd (BSNL) has entered into agreement with the
Unstructured Supplementary Service data Provider - Contakt Technical
Solutions - to provide "BSNL Expert alerts", a value added service to
be introduced for the cell one mobile users for the first time in
South India, two officials said.

S E Rajam and V K Sanjeevi, General Managers, Mobile Services and BSNL
Madurai area, said initially alert services would be given in 21
different subjects including cricket, astrology, news, health care and
stock indexes.

Madurai being the base centre for south India, the service would be
available to all the customers in the four States. The service would
be available for mobile users for Rs 30 and Rs 25 respectively,
depending on the subject chosen by the subscribers, i n SMS forms.

It is being introduced on revenue sharing basis.

Paresh Shah, Director, Contakt Technical Solutions, said they were
operating in 13 countries and would be introducing hundreds of
services to various types of customers.

They were in the process of entering into agreement with banks to
guide the mobile users to know about their bank balance or where the
ATM or bank is situated in a new city where they were visiting for the
first time.

Besides they were also planning to enter into agreement with gas
companies to enable the customers know when they would get the refill
and other details.

The Contakt solutions were already sending 1.5crore messages a day.
The time bound location board would automatically refresh the items.
The facility would benefit cell one subscribers in Andhra Pradesh,
Karnatka, Kerala and Tamil Nadu, the officials said.

India needs 2K mn ton oil, 1 mn MW power to sustain 9% growth

India needs about 2,000 million tons of oil and 1 million MW of power
by 2030 to sustain a growth rate of 9 per cent and could fall well-
short of meeting its future energy needs if the Indo-US nuclear deal
failed to happen, Planning Commission member (Energy) Kirit Parikh
said.

"If we project a growth rate of eight to nine per cent per year in the
next 25 years, by 2030, we will be required to have 1700-2000 million
tonnes of oil. For that we need to have huge amount of expansion in
our energy production," Parikh said in Chennai on Thursday at an
international conference.

"If we do not get the nuclear agreement with the US, and we are not
able to import any uranium... from abroad, at the most we can generate
only 48,000 MW of power of the targeted 1 million MW by 2030," he
said.

Delivering a lecture on 'Renewable Energy for Sustainable Future' at
Green Power 2008 at the conference organised by the Confederation of
Indian Industry, he said: "We need rapid economic growth and for that
we need energy."

On the electricity front, he said the country's power capacity would
increase from the present 1,60,000 MW to 8,00,000 MW in the next 15-20
years.

Pointing out that the country was short of fuel of all kinds, he said
the present oil consumption was around 110 million tons, out of which
domestic production was 33-34 million tons.

"By 2030, this may go up to 50 million tonnes and the demand for oil
from 110 million tonnes to 400 million tonnes. Nuclear (energy) is the
one solution which we are planning to develop and currently we have
around 3900 MW of nuclear power installed capacity, just around two
per cent of the total 1,60,000 MW capacity," he said

RBI injects Rs 122.90 bn via repo auction

The Reserve Bank of India (RBI) injected Rs 122.90 billion in the 3-
day repo auction held on Jun. 13, 2008.

At the auction conducted under the liquidity adjustment facility, the
central bank received 14 bids for the 3-day repo, which were all
accepted.

On the previous working day, i.e. Jun. 12, 2008, RBI absorbed Rs
200.30 billion in the 1-day repo auction via 17 bids.

These repos were traded at a fixed rate of 8.00%.

Did mutual funds get wind of the Ranbaxy deal?

MUMBAI: Mutual fund managers were very active at the Ranbaxy counter
in the run-up to the buyout of the company announced on Wednesday,
data compiled by Bloomberg shows. In the thick of action were not only
a handful of arbitrage funds, who were cashing in on the high
speculative activity in the stock, but many pure equity funds as
well.

Ranbaxy shares are up 20% over the last one month, hitting a 52-week
high on Wednesday, making it one of the best performers among index
stocks in a bearish market. Most active in the counter were five
arbitrage funds who, between them, bought a million of shares in May.
Four schemes under which the purchases were made were SBI Arbitrage
Opportunities Fund, Standard Chartered Arbitrage Fund, two funds owned
by ICICI Prudential and HDFC Arbitrage Fund.

High speculation kept Ranbaxy futures mostly at a premium to the spot
market prices during the month. By buying in the cash market and
selling in the futures, these fund managers were able to lock in a
good risk-free return. They essentially profited from the anomaly
between the cash and the futures price.

Besides, these pure-play equity diversified funds also bought shares
of the company in May. Prominent among them is DSP Merrill MF that
bought over half a million shares through four of its schemes.

Two UTI funds — UTI Opportunities and UTI Dividend Yield — added over
20,00,000 shares to their portfolio in May. Sundaram BNP Paribas and
Reliance Equity Fund also bought 1,70,000 and 1,05,000 shares in the
same period.

On BSE, the stock surged to a fresh 52-week high of Rs 593 intra-day
on Wednesday, fuelled by heavy speculative buying, before slipping
from those highs later in the day. It fell 3% on Thursday to end at Rs
543, both falls being attributed to unwinding of positions built by
informed circles in anticipation of the deal.

However, there were also a few fund houses who took advantage of the
run up in stock price to book profits. These included Reliance Pharma
Fund, Standard Chartered Enterprise Fund and several other index
funds.

DSP Merrill Lynch signs MoU with South Indian Bank

Asset Management Company DSP Merrill Lynch Fund Managers and private
sector bank South Indian Bank has signed a memorandum of understanding
for distribution of various products.

As per the deal, South Indian Bank would distribute DSP Merrill Lynch
Mutual Fund schemes through its select branches across the country, a
company release here said.

"Offering advice on mutual fund investments is an extension of the
value added services that are offered by banks.

We see South Indian Bank as an important partner for providing asset
management products to Indian investors and are very happy to embark
on this long-standing relationship" DSP Merrill Lynch Fund Managers,
Products and Business Development, Head, Pankaj Sharma said.

The initiative is in line with the strategy adopted by DSP Merrill
Lynch Fund managers to expand their retail investor base.

DSP Merrill Lynch Fund Managers began operations in 1997 and as of May
31, 2008 has assets under management, including advisory and offshore
funds, of Rs 29,759 crore.

Retailers to adopt new payment tech at point of sale

Cashing in on the increased usage of plastic money, Indian retail
players are expected to adopt new technology solutions for customer
payment transactions.

Management research and consulting firm Zinnov estimates that the
market for card-based point of sale which is currently around Rs 32
crore ($8 million) is expected to grow at a CAGR of 18 per cent to
touch about Rs 48 crore ($12 million) by 2012.

The increase of card usage at point of sale (POS) would be driven by
increased adoption of information technology by retail stores for
providing better payment gateways, says Mr Animesh Khan, Senior
Consultant, Zinnov Management Consulting Pvt Ltd.

IT spend in the Indian retail sector was around Rs 5,600 crore in 2006
when the total retail market was around Rs 12 lakh crore.

In a study titled 'Indian retail and technology: a Zinnov overview,'
the Bangalore-based research firm estimates that by 2010, the sector
would spend close to Rs 8,600 crore when the country's total retail
market would be valued at Rs 17 lakh crore.

The report also details the point-of-sale scope in the industry: In
2002, the card-based POS terminal penetration stood at 0.3 percent
(i.e., for every 311 retail shops there was one card based POS
terminal).

This penetration is expected to increase to about 4.6 per cent by
2012. This means Indian retail would have as many as 126,000 card-
based terminals by then, which is now around 64,994.

Source: Business Line

We can snoop into Blackberry data

The Communication and IT Minister, Mr A. Raja, on Thursday said that
the Government will deploy technology that will enable the security
agencies to snoop into data being transmitted through Blackberry
devices if the Canadian company did not come up with a solution.

"If they fail to come up with any satisfactory solution, we will
invoke other options, like we have been approached by other companies
with solution to decrypt the data passed over the BlackBerry network,"
Mr Raja said.

Research In Motion has so far refused to give encryption codes to its
network to the Government. Security agencies had told the company that
access to data being transmitted through Blackberry should be provided
if it wanted to continue offering the service.

Source: Business Line

Clean move - Marathon

Shortly after crude prices had scaled a dizzy height of $135, the UK-
headquartered Ultra Motor Co unveiled a project declaring Stuttgart in
Germany as the world's first LEV (Light Electric Vehicle) city. The
occasion was World Environment Day (June 5), and Stuttgart was chosen
as "historically it has been the home of automobile innovations. Some
of the very first automobiles in the world were developed and
commercialised here, and to continue its innovative leg acy we chose
this city," says Joe Bowman, CEO of Ultra Motor Co.

But he is most excited about growth prospects in India, "our fastest
growing market that represents 50 per cent of our business today, and
where we are pioneering some of the leading technologies in the
field."

An LEV has a system of batteries that can be electrically charged, and
the main concern of consumers is the range of the vehicle. Ultra
Motors has just launched in the Indian market its longest-range
scooter called 'Marathon'. "This can travel up to 100 km on a single
charge and India is the first market to get this product. The good
news is that this vehicle can be charged at any electrical outlet; you
can plug it at your home, at the coffee shop or your workplace, and
you can get 80 per cent of the charge in the first two hours," says
Bowman.

The remaining 20 per cent charge requires six hours. So the consumer
has the option to go in for a quick charge or an overnight charge.
And, points out Deba Goshal, Ultra Motor India's Marketing Director,
LEV users in India are getting into the habit of overnight charging of
their vehicles, "just as you now do with your mobile phones".

He adds that in 2007-08, LEVs got about 10 per cent of the Indian
scooter market share; "1.1 lakh of these vehicles were bought by
Indian consumers, from a total of over 1 million scooters sold last
year." Ultra Motors, which assembles its LEVs in India, hopes to sell
about 60,000 units in 2008-09 in a market projected to be around 2.4
lakh units. In 2009-10, he estimates the Indian market for LEVs at 4.5
lakh.

The pan-Indian average for the daily commuting distance of a scooter
is about 30 km. The obvious reason a consumer chooses an electric
vehicle is to save cost, both upfront and while using it. The cost of
Ultra Motor LEVs in India is about Rs 28,000-34,000. "The upfront
capital cost is always going to be lower than a combustion engine
product. But more important for the consumer is operating cost, which
depending on where you are, can be as low as 10 per cent, as it is in
India," says Bowman.

In the capital cost there is a saving of about 25 per cent, says
Goshal, and the battery configurations are different too in different
markets. "India and Asia being price-sensitive markets, and more
oriented towards "scooter" designs, use SLA (sealed lead acid)
batteries, which are heavier and more voluminous. But they give a good
range, such as the 100 km given by the Marathon launched in India this
June. European and US markets prefer leaner/slimmer designs, hence the
lighter and smaller Lithium Ion batteries are used in these."


Bowman is more interested in the Indian, rather than the Chinese
market, "because China has already grown and it's a local market where
domestic players are fighting it out. So there won't be any further
growth there; but we'll see growth in India, South East Asia, Europe
and the US."

India is exciting because "we're seeing more and more cars on the
road, and thanks to the brilliant engineering of Tata we're going to
see the Nano enter the market and put even more cars on the road."
This would result in a higher fuel bill as well as emission of more
greenhouse gases accelerating climate change.

Upbeat about the new transportation solution his company is offering
and positive that it will catch on, he says, "In the US and Europe
consumers are shocked, paralysed; in the US gas has crossed $4 a
gallon; in India petrol is around Rs 55 and fuel continues to be
subsidised. All these negative trends will have an adverse impact on
economic development and people's lives, and electric personal
mobility is a great way to solve this problem."

He admits that consumers are hesitant to try out a new category of
transport and concerned about the battery running out and no place to
charge it. "So in an effort to drive mass adoption of LEVs across the
world we've developed a solution for cities that helps get cars off
the road, fights climate change, brings down energy cost that
negatively affects the economy and reduces traffic congestion. And we
are calling it LEV city."


Stuttgart is the first, and provides LEV users a charging station
every 200 metres… "Just like a mobile network, this is a network where
people can charge their vehicles, where there will also be a fleet of
public vehicles available for renting. So you have a smart card and
become a member in the same way you become a mobile phone subscriber.
You swipe your card and put your vehicle for charging while you go to
office, for a cup of coffee, or shopping. It's a convenient place for
parking, charging and a new form of public transportation that is cost-
efficient, fast and clean," says Bowman.

He adds, "We're not stopping here and are already in discussion with
over a dozen Western European cities and a few Indian cities because
we are on an international mission to implant charging station
networks for LEVs in every possible city in the world."

Ghosal adds that last year the LEV category got a decent exposure in
south and west India. "Central India and North India still lack that
penetration, but it's a good start and we are very positive the market
for LEVs will only grow here."

Bowman of course is engaged in "very aggressive plans to build a
global brand for his LEVs. "There are 50 cities in Europe, each with a
population above 500,000, which need a solution like this." A few of
the smaller cities in India are interested too "because there are
clear benefits. They are looking not only to cut emissions but also
get cars off the roads to ease traffic congestion and provide clean
transportation.

In Stuttgart, clean transportation two-wheelers enjoy about 8 per cent
of market share of all transportation. "They want to take this to 20
per cent in three years, and that can be done only through an LEV
personal mobility network."

So how long before Ultra Motors looks at a battery-operated car?

"I don't believe that cars — especially personally owned cars — are
going to play a major role in transportation in the 21st century,"
says the man who has been visiting India for eight years and noticing
the explosion in the number of cars. "This is probably going to
continue as you have pent-up demand. As the economy grows, people with
more money have different aspirations including freedom of mobility
and the first step is to go to a car. But you haven't seen what Europe
has seen."

And those are problems associated with the cars on the road and "I
think India has a great opportunity to leapfrog, because there are
only so many roads. Of course, as a company we are always open to
innovations but I believe the LEVs are going to play a more dominant
role in the 21st century."

Bowman gives anecdotal evidence to show that crude above $135 is
really hurting and "people are driving less cause it is costing more
to do so. On the Memorial Day weekend in the US, a big holiday, people
love to go on their motorboats. But this year if you went out on your
motorboat, or your sailboat, as our chairman Joe Santana did, you'd
have seen an amazing thing. There were no boats!"

As it costs $300 an hour to go on an average-size motorboat, "many
people decided it was not worth it. So there were barely 10 per cent
of boats out there. And the same thing happened with driving during
the same weekend, when people normally drive to the countryside. So it
is clearly a crisis.

At such a time, if there is a viable alternative and awareness
increases, the LEV market will explode not only in India but every
country in the world," is his cheerful projection for his business.

Source: Business Line

PE funds lose big in listed companies

MUMBAI: Volatile capital markets coupled with high valuations have
resulted in almost 67% of the private investments in public
enterprises (PIPE) deals in 2007 ending in the red. PIPE deals are
investments made by private equity funds in publicly-listed companies,
usually through preferential allotments.

Industry experts maintain that sustained downtrend and uncertain
market conditions of 2008 have pushed the overall till-date (as on
June 10) return on PIPE deals of 2007 (on volume basis) to -5.81%.

"This can largely be attributed to two things," said Jagannadham
Thunuguntla, equity head of NEXGEN Capitals. "One, entry valuations
were on the higher side and two, under-performance of capital markets
on the backdrop of fast changing global/Indian macro factors. Also let
us keep in mind the fact that the investments happened at the fag end
of a bull market and we are looking at valuations at what seems to be
the beginning of the bear market," he added.

In contrast, a quick review suggests that IPOs/pre-IPOs of 2007
yielded positive returns as of June 10, on volume basis. It were pre-
IPO investments that showed the best returns as compared to IPO and
PIPEs.

Though on volume basis, the return till-date is in positive territory
of +3.73%, more than 50% of the number of IPOs of 2007 are still below
their issue price.

Many high-profile IPOs which attracted heavy over-subscription such as
DLF, Puravankara, IVR Prime, Edelweiss, Brigade, Omaxe, Fortis,
FirstSource, BGR, House of Pearl Fashions and Manaksia couldn't
sustain in the face bear onslaught. "In an economy which is looking at
8%-odd inflation, a 3-4% return would mean that it not covering the
actual growth rate but is reflecting sub-inflation levels," the NEXGEN
equity head adds.

Pre-IPOs are far ahead in terms of till-date-return % in comparison to
IPOs and PIPEs of 2007. According to NEXGEN, in terms of till-date-
volume-based-return, pre-IPO investments yielded an impressive
76.21%.

Industry experts believe, among other reasons, one key reason for this
could be significant pre-IPO discounts offered in pre-IPO deals to the
IPO price band. The pre-IPO investments into Mundra Port, IRB
Infrastructure, Koutons and Religare turned out to be multibaggers,
while Fortis, Shriram EPC and Mudra Lifestyle have disappointed.

Indian monetary policy still loose: Economist

Indian monetary policy is still very accommodative and interest rates
need to rise more to prevent global supply-side shocks from seeping
into the broader economy, a former IMF chief economist said on
Thursday.

Raghuram Rajan said the Reserve Bank of India's (RBI) recent
tightening measures were steps in the right direction, a day after the
central bank raised its key lending rate by 25 basis points to 5-1/2-
year high of 8 percent.

"On most counts real interest rates in India are negative, which means
that monetary policy is still accommodative and it has to be tightened
much more," he told Reuters in an interview on the sidelines of a
banking conference.

The RBI said its move late on Wednesday was to contain inflation
expectations.

Economists have said annual inflation could hit double-digits by mid-
June, which would be its highest in more than 13 years, as last week's
increase in state-set fuel prices cascade through the economy.

Wholesale price inflation, the most widely watched measure in India,
touched 8.24 percent in mid-May, far above the central bank's comfort
zone of 5.5 percent for 2008/09.

The central bank held off outright rate increases for a year, opting
instead to keep cash availability tight, as prices pressures largely
came from supply constraints and record commodity prices rather than
demand.

Rajan said if the supply shocks remained for long it would lead to a
rippling effect and create demand-side pressures.
They (RBI) must accept that it is a supply side issue and focus on
that not spreading out to the other sectors of the economy, something
that happened to the industrialised economies in the 1970s after the
oil shock," Rajan, who was IMF chief economist from September 2003 to
January 2007, said.

Rajan chairs a panel on financial sector reforms in India whose draft
report has said the central bank should have the single objective of
controlling inflation, rather than focus sometimes on the exchange
rate and sometimes on inflation.

The 229-page draft said the RBI should set a target range for
inflation and move to a single instrument such as short-term rates to
achieve that goal. The final report is due in June.

The twin objectives of monetary policy in India have evolved as
maintaining price stability and ensuring adequate flow of credit to
facilitate the growth process.

"The risk of having so many objectives is that you flip-flop between
them and people are not sure what are you focused on," said Rajan, now
a professor of finance at the Graduate School of Business at the
University of Chicago.

Reliance to explore alternative energy segment

Reliance Industries on Thursday said it will explore avenues in
alternative energy, in a bid to further expand its position in the
energy segment.

"The second potential avenue for growth and transformation is in
alternative energy," RIL Chairman Mukesh Ambani said during the
company's annual general meeting here. "This is a natural extension of
our conventional energy portfolio."

He said further details would be shared "once the company has a
concrete value creating plan in place".

Ambani added Reliance would commission two very large projects in the
second half of this financial year, a move that will enable the
company to become major global energy player.

The two projects, new Jamnagar refinery and East-West pipeline
project, are focused on the energy growth platform and would help
transform the country's energy security.

India needs energy security for sustaining its high growth and in the
process Reliance is poised for a historic leap, Ambani said.

"Reliance is all set to become one of the the world's leading energy
giants from India's number one company," he added
 

 

 

AIADMK demands Chidambaram's resignation on P-note issue

Continuing her tirade against Union Finance Minister P Chidambaram on
participatory note issue, AIADMK leader J Jayalalithaa on Thursday
demanded his resignation from the Union Cabinet or his dismissal.

In a statement, she said Union Finance Ministry and market regulator
SEBI were ineffective in regulating investments coming from abroad.

Claiming that she has proof to back her allegation that the P-notes
were being issued to unknown persons, she said SEBI had slapped a fine
of Rs One crore in September 2006 on Mauritius company Goldman Sachs
Investment for its failure to report the issuance of P-notes to
Mauritius based Magnus Capital Corporation, which was a violation.

But Securities Appellate Tribunal set aside the SEBI's order as it
felt SEBI was not justified in asking foreign institutional investors
(FIIs) and their sub accounts to file undertakings in a revised
format.

"The case is not only a loss of face for SEBI, it is also a clear
indication that Union Finance Minister's claim that investments from
abroad are being adequately monitored is a lie," she said.

"Why should the Union Finance Minister lie on a matter concerning
national security? Are we to infer that he has certain vested
interests in doing so? Now that his lie has been publically nailed,
will he quit office? If he refuses to do so on his own, will the Prime
Minister throw him out and direct CBI to investigate what is
happening," she asked.
 

 

 

CESC tariff hike plan may add Rs 212 cr to revenue

RPG Group's power utility CESC is likely to earn an additional around
Rs 212 crore from the proposed hike in average power tariff to be
levied on its 22 lakh consumers for the financial year 2008-09.

CESC has sought the hike through a filing with West Bengal Electricity
Regulatory Commission for determination of tariff for three
consecutive fiscals 2008-09, 2009-10, 2010-11, company sources said.

CESC has sought an average price of Rs 4.13 a unit for 2008-09 a rise
of 38 paisa or 10.1 per cent over last year. The company has cited
steep increase of both primary and secondary fuel prices for the
increase.

WBERC had already allowed an interim raise of 10 paisa in tariff in
March. With this, the CESC is currently charging an average tariff of
Rs 3.86 for a unit.

Once WBERC delivers final order, CESC would adjust the provisional
rise in tariff of 10 paisa for 2008-09. For the fiscal 2007-08, WBERC
had allowed only one paisa raise in tariff. Sources said with each
paisa hike in tariff the revenue effect to CESC is close to Rs 5.6
crore.

While filing with WBERC, CESC has asked a tariff of Rs 4.13 for
2008-09, Rs 4.25 for 2009-10 and Rs 4.22 for 2010-11. The company
proposes to make the tariff for each year effective from the month of
April
 

 

 

Anil Ambani looks to remain major shareholder

Indian billionaire Anil Ambani hopes to remain a major shareholder in
his flagship firm Reliance Communications and South Africa-based MTN
after the two companies merge, a media report on Thursday said.

The Financial Times reported that Ambani hopes to be a major
shareholder in RCom and MTN after the firms combine in a reverse
takeover.

Quoting people familiar with the deal, the newspaper said, "under the
proposals, Ambani will swap about two-thirds of his 66 per cent stake
in Reliance Communications for shares in MTN and retain a stake of
20-25 per cent in the Indian cellular carrier."

Ambani would pay an extra four to five billion dollars in cash to
bring his stake in MTN to his target level of 34.9 per cent, the
ceiling beyond which he would be forced to make a general offer for
MTN, the newspaper said in an article published in its online
edition.

According to Financial Times, the cash amount would be raised through
debt or by enlisting the help of private equity investors or a
combination of both, although the private equity portion would not be
expected to exceed two to three billion dollars.

He continues to remain extremely bullish about Reliance Communications
prospects and would like to remain present there while getting a
bigger piece of the action in MTN," the report said quoting an
insider.

Last month, both companies had entered into "exclusivity talks" for a
period of 45 days to explore the possibility of a merger.

"Both parties are expected to complete due diligence within a week,
with an announcement on any deal expected early next month," the
newspaper said.

The deal between RCom and MTN would create one of the largest mobile
operator in the emerging markets with about 115 million subscribers
spread across India, Africa and the Middle East.

Under the reverse takeover proposal, RCom, would be taken over and
become a subsidiary of MTN, but through the share swap Ambani would
become by far the biggest shareholder in the South African company,
the report added.

Financial Times pointed out that Ambani is reluctant to surrender all
of his exposure to RCom and is seeking to keep the 20-25 per cent
stake to ensure that he would remain the biggest individual
shareholder in the company after MTN.

"If Ambani's proposal to hold large stakes in both companies is
accepted by MTN, the South African operator would end up with a stake
of about 51 per cent in Reliance," the report said.

The newspaper further added that Ambani has appointed HSBC and
Barclays to lead the debt financing for his proposal to use cash to
top up his stake in MTN beyond that achieved by the share swap to his
target of 34.9 per cent.

"The move comes amid speculation that Mr Ambani is angling to retain a
senior position in Reliance Communications, where he is currently
chairman, while also becoming the chairman or co-chairman of MTN," the
newspaper added.

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Ambani is also being advised by Deutsche Bank on raising private
equity financing for his bid. Further, Lehman Brothers and Lazard are
also advising Ambani.

MTN is being advised by Merrill Lynch and Deutsche Bank

RIL's new refinery to go on stream this year

Mukesh Ambani led Reliance Industries (RIL) will commission its new
refinery at Jamnagar this year. The new refinery will process 580,000
barrels of crude every day.

With the new facility, the total refining capacity at its Jamnagar
complex will go up from 0.66 million barrels to 1.24 million barrels.
Jamnagar will acount for 2 per cent of global petroleum refining
capacity.

"Of late there have been many announcements about setting up new
refineries in various part of the world. They are yet to see fruition.
Ours is the first large refinery added in recent times to meet global
demand,'' Mukesh Ambani, chairman of Reliance Industries, said.

Reliance would also be commissioning 900,000 tonne polypropylene
capacity this year. "This would make Reliance the third largest
polypropylene producer in the world,'' Ambani said.
RIL shares were trading at Rs 2218.90, 1.82 per cent down from
Wednesday's closure.

Highlights of changes in govt's fertiliser subsidy scheme

Thursday, Jun 12

NEW DELHI - Following are highlights of changes made in the
fertiliser subsidy scheme of the government, announced by Finance
Minister P. Chidambaram after a Cabinet meeting today.

* Cabinet approves shift to nutrient-based fertiliser subsidy
* Government approves uniform freight subsidy regime for fertilisers
* Freight subsidy change to widen reach of fertilisers
* Prices of complex fertilisers to fall on change in subsidy plan

* Complex fertiliser price seen dn 1,416 rupee/tn; or up to 70 rupee/bag
* Urea, DAP, MoP prices seen unchanged
* Government says no shortage of fertilisers in India

 

Inflation throws education budget out of gear

The re-opening of schools has not been good news for many middle-class
parents. For, they see a daunting task ahead to bear the additional
expenses for their wards in the face of rising costs of everything.

Be it school fees, books and notebooks, uniforms or conveyance - the
costs have gone up by an average 12% this year. Parents say this rise
is over what the costs were during the last academic session.

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This year, the price of digest has risen by 12 to 13% compared to last
year's, while in case of notebooks the rise is more than 10%. In
school uniforms, the rise has been anywhere between Rs 50 and Rs 100.
To add to the woes of the parents, the rise in coaching class fees has
been very frequent.

The hike in petrol prices has affected the costs of conveyance, too.
Autorickshaw drivers are charging Rs 100 to Rs 150 more than what they
charged last year.

Milan Patel, a shop-owner in Usmanpura, had to break his year-long
savings to bear the educational expenses of his two daughters.
"Bearing the educational expenses of my daughters, Simoli (class 7th)
and Trisha (class 5th), has become a daunting task for me and my wife.
The school has already taken an undertaking from us to the effect that
we don't have any objection with increase in fees. Due to hike in
prices of study material, uniform and school fees, I am finding myself
helpless in setting a normal household budget," he said.

Avani Bhatt, a homemaker living at CG Road, says it is very difficult
to meet the rising expenses. "My son Ayush is studying in class 8th
and with the re-opening of his school, the tuition fee has increased
by Rs 2,000 a year. Earlier, I used to pay Rs 12,000 a year as tuition
fee but now I will have to pay Rs 14,000. The school also charges
extra fees on different heads like computer, activity and project. It
is really difficult to meet the expenses," she said.

In addition to these expenses, there is also another hurdle. Coaching
classes have become sort of compulsory. And the fees in case of
coaching classes have also gone up.

According to Kaushik Patel, a businessman living in Vadodara,
education these days has become a business. "The fees of my children
Varun (class10th) and Dhruti (class 8th) include coaching class fees
Rs 26,000 a year and school fees Rs 12,000 a year. Apart from fees,
one has to bear the costs of books, digests, uniforms, conveyance,
etc," he said.

Another thing that troubles many parents is that the earnings are not
increasing in proportion to the rising expenses. Ravji Chauhan, an
employee in a private firm in Rajkot, said: "I don't have that much
earning which can bear my children's educational expenses and that is
why my son works part-time to support his educational expenses. This
year due to rise in prices of study material and coaching fees, we are
finding it difficult to cope up with educational expenses of our
children."

Highlights of Reliance Industries head Ambani comments at co's AGM

Thursday, Jun 12
 

 

MUMBAI - Highlights of Chairman and Managing Director Mukesh
Ambani's comments to shareholders at Reliance Industries Ltd's annual general
meeting today:

* Two very large energy projects to be commissioned Oct-Mar.
* Refinery, gas production to start in Oct-Mar.
* Continue to focus on speciality polyester.
* Pursuing greenfield investment, acquisition in polyester business.
* Petrochemicals business to be driven by new capacities.
* Exports have grown 49%, compounded over last five years.
* Committed to petroleum retailing in long-term.
* Gas exploration success ratio 63%.
* To accelerate exploration in KG basin.
* Six additional deep-water rigs contracted.
* Have gross contingent reserves of 5 bln barrels of oil equivalent.
* Gross reserves accretive target 10 bln barrels of oil equivalent.
* Organised retailing is a major growth platform.
* Completion of east-west gas pipeline from KG-D6 year-end.
* Got regulatory nod for Gurgaon, Jhajjar, Jamnagar SEZs.
* Allotted two blocks in Yemen, three blocks in Peru.
* To sell gas at price equal to $25.2/bbl of crude oil.
* To add 900,000 tn a year polypropylene capacity in Jamnagar FY09.
* Reliance Retail to generate 500,000 jobs in next five years.  End

 

PYT Multi bagger recommendation - C&C Constructions

PowerYourTrade.com also for investors Not everyone in the market "trades" everyday. Some people invest for the long term and they are constantly sniffing around for those potential multi baggers. Ask an Infosys investor, he will tell you that ONE stock can change a person's life!!! We believe that enduring wealth can be built only by investments that gain steadily and safely. MULTI BAGGERS is where our top market experts give you ONE solid investment idea EVERY WEEK. Each a potential multi bagger according to them. Who knows which one will make you a millionaire?? Multi Bagger: C&C Constructions Ltd Recommended Price Rs 183.95 K.R Choksey Picks Report Dated: June 09, 2008 C&C Constructions Ltd (C&C) is an infrastructure project development company providing engineering, procurement and construction (EPC) services for infrastructure projects in India and abroad (Afghanistan). Their project expertise is primarily in transportation engineering projects including roads, bridges flyovers and airport runways especially in inhospitable environments. We Initiate coverage on C&C with a BUY recommendation based on SOTP valuations giving a 12 months price target of Rs 276, an upside of around 46% from the current levels. Investment Rationale: Robust Order Book: C&C has a robust order book of Rs 1,668 crore (5.05x FY2007 and 3.87x TTM net sales) which has swollen by about 58.7% since FY2007. Road segment constitutes approximately 96% of the total order backlog.   Past Multi Baggers Recommendations Stock Reco Price Peak after reco %Gain Balasore Alloys 6 78 1203 Reliance Infra 330 3202 870 TRF 240 2100 775 Opto Circuits 119 581 390 Usha Martin 32 154 380 Genus Power 246 1050 328 IDFC 55 235 327 Indo Tech Trans 200 808 304 Hind Zinc 288 1119 289 Thermax 255 968 280 Strong operating margins compared to peers: C&C enjoys operating margins in the range 18-20%, inspite of 96% of the order backlog in road segment. The high margin is attributable to operations in areas which has geographical and political constraints. Operations from Afghanistan fetch margins in the range of 22-25%. We believe C&C is well placed to enjoy higher operating margins due to expertise in executing these projects. Expertise in executing projects in inhospitable conditions: C&C have been successful in executing projects in difficult operating terrains and adverse weather conditions which helps them in commanding higher operating margins. In addition unavailability of key resources like machinery, material and personnel along with security challenges also poses execution risk for the company. Impressive financial performance: C&C reported revenue CAGR of 38.6% from FY2005 to FY2007. On operating margin front also, it enjoyed industry highest margins of 29.7% in FY2006 and 23.4% in FY2007. The company plans to diversify its areas of operations into Urban Infra, Irrigation and Power Transmission business with approximately 30% contribution by FY2010. We believe operating margin to take marginal hit, however will continue to enjoy margins above 17% going forward. Foray into BOT space: C&C has recently won BOT project from Kurali to Kiratpur on NH-21. We believe this project to be value accretive on the basis of IRR and is expected to contribute Rs 42 to the target price. Valuations & Financials: At the CMP of Rs 183.95, C&C is trading at a trailing P/E of around 8.2x and at a forward P/E of around 7.46x FY08E EPS and 5.63x FY10E EPS. Particulars FY2007 FY2008E FY2009E Net Sales 330.47 573.3 789.5 Growth (%) 0.5605 0.735 0.377 EBITDA 71.6 99.4 137.6 Growth (%) 0.344 0.388 0.384 Net Profit 33.2 46.3 61.4 Growth (%) 0.073 0.396 0.326 EPS (Rs.) 20.57 25.36 33.61 EBIDTM(%) 0.217 0.173 0.174 NPM (%) 0.1 0.081 0.078 P/E (x) 9.2 7.46 5.63 Share Holding (%) as at 31-03-2008: Promoters 69.25 FIIs 9.09 Mutual Funds/ Banks 9.93 Other Corp 1.99 Public and Others 9.74 Subscription Rates   3 years        Rs. 5999      1 years        Rs. 2999     6 months        Rs. 1999     3 months        Rs. 1349     1 month       Rs. 599   Disclaimer: This publication has been prepared solely for information purpose and does not constitute a solicitation to any person to buy or sell a security. While the information contained therein has been obtained from sources believed to be reliable, investors are advised to satisfy themselves before making any investments. Kisan Ratilal Choksey Shares & Sec Pvt Ltd., does not bear any responsibility for the authentication of the information contained in the reports and consequently, is not liable for any decisions taken based on the same. Further, KRC Research Reports only provide information updates and analysis. All opinion for buying and selling are available to investors when they are registered clients of KRC Investment Advisory Services. As per SEBI requirements it is stated that, Kisan Ratilal Choksey Shares & Sec Pvt Ltd., and/or individuals thereof may have positions in securities referred herein and may make purchases or sale thereof while this report is in circulation.

PowerYourTrade Trading Calls - 10 jun

Trading Calls for 10 Jun 2008

		Mathew Easow Buy Rain Commodities with a stoploss of Rs 181 for a short term target of Rs 234 Buy Rain Commodities with a stoploss of Rs 181 for a short term target of Rs 234. Disclaimer: - At the time of writing this article, I, my family members and my group companies do not have any position in RAIN COMMODITIES LTD. This stock has been recommended to our clients and they may be holding long or short positions in this stock. Mathew Easow and matheweasow.com gives an unbiased and competent picture of trading opportunities and it does that to the best of its abilities. The information contained herein is not a complete analysis of every material fact representing the company, industry or security. The views expressed may change. However, prices can move up as well as down due to a number of factors, all of which are impossible for anyone to foresee. THEREFORE, Mathew Easow and matheweasow.com cannot accept any responsibility (or liability) for the accuracy of the above contents and also any investment decision or trading decision taken by readers and clients on the basis of information contained herein. Short Term Target Means – Approximately 3 –4 weeks. If the target is not met within 3-4 weeks then please exit the positions. Please follow stop losses very strictly and do not take positions where one is uncomfortable with the stop loss level. Above all Buy or Sell the stock only when the risk - reward ratio vis–a–vis the stop loss is favourable for taking a position. Individual traders /investors should book profit depending on their risk bearing capacity and need not wait for the targets.

 

Top banks not to take hasty decision on rates post repo hike

Top banks not to take hasty decision on rates post repo hike
Thursday, Jun 12

MUMBAI - The country's two largest banks did not hint at any
strong measures like hiking prime lending rate that could be taken
after Reserve Bank of India's repo rate hike.
On Wednesday, RBI hiked repo rate by 25 basis points to 8.00% from
7.75%.

"We can't have a knee-jerk reaction (to the repo rate hike),"
State Bank of India Chairman O.P. Bhatt said today.
The country's largest bank will meet Friday to examine the impact
of the repo rate hike on its lending and deposit rates.

"Yesterday (Wednesday) also I said the same thing. Maybe a little
rationalisation of interest rates or maybe we need to raise PLR. The
rate of growth (credit) actually this year has not been bad compared
to last year so far," Bhatt said.

Banks have been able to manage the pressure on liquidity, interest
rates, net interest margin by better efficiency, changing product mix,
and reducing transaction costs, Bhatt said.

"Whether we can do more of this is what remains to be seen. This
is a huge challenge for the banking industry. How to become more
efficient, how not to pass on increasing cost...will have to be seen,"
Bhatt said.

ICICI Bank, the country's second largest lender, also hinted at
not taking any hasty decision towards interest rate hike.
"Liquidity is comfortable. We will have to wait and watch how the
market reacts. Bond market has already reacted. We have to see deposit
and borrowing rates," ICICI Bank Managing Director and Chief Executive
Officer K.V. Kamath said.

Kamath asserted that there was no slowdown in corporate lending
and the investment pipeline remains strong even after the repo rate
hike.

He also said that there was no risk of higher slippages going
ahead.

The bank heads were speaking on the sidelines of a seminar on
financial sector reforms organised by SBI.

The other major lender, Housing Development Finance Corp, however,
indicated that they may have to increase their home loan rates.
"We will review our lending rate at the end of the month. There is
upward pressure on interest rates. We will see how liquidity remains
and how short-term rates behave," HDFC Chairman Deepak Parekh said.
Banks will have to protect their margins, and spreads. If margins
are eroded, we will have to do something, Parekh said. End

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