Friday, July 01, 2016

Millions of voters didn’t want Brexit. Why should they lose EU citizenship?
Anti-Brexit campaigners gather outside
the Houses of Parliament 
Friday 1 July 2016: The EU Council has spoken on Brexit, but what did it decide? Nothing. No compromise, no pick and choose for the UK, and no need to reform. The EU stays as it is and anyone who does not accept this is wrong and thrown out. It’s a huge blow for Nicola Sturgeon and the SNP, who seem to be the only ones passionately defending the European project.

The downgrading of Sturgeon’s attempt to engage negotiations with the EU to an internal “British issue” – Donald Tusk and most heads of states refused to talk to her – is the best example of how deeply the EU’s representatives overlooked the key message of the Brexit vote: that the citizens, and not nation states, are sovereign. The framing of Brexit as a British problem is misleading. The idea of the European Union’s founding fathers was to build a democracy beyond nations.

The Scottish case proves what the French sociologist Pierre Rosanvallon last April dubbed “the lie on which the European Union was built”. Speaking in Warsaw, he argued that we are all paying a high price for that founding lie, anchored in the treaty of Maastricht, that the EU is a union of states and of citizens. Citizens do not have much say in the EU, despite the fact that – no matter how often states claim otherwise – citizens are sovereign. There is no state-independent citizenship of the EU – not for Englanders, not for Scots, not for anybody: the union of citizens is a fallacy. As a result, British voters were hostages of the British government and the Tories’ Eurosceptic wing. Now that the UK is leaving, Brits will lose their citizenship of the EU. The result is not national pride, but a rush for Irish passports.

Brexit is just another example of today’s Animal Farm EU, where some citizens are more equal than others, above all the Germans, who have benefited most from the single market and the euro without sharing. Or even the Dutch, who believe they alone have the right to vote over the EU’s Ukraine policy. A political project can never function like this and politics is what Europe lacks most.

The treaties of the Levellers and the Putney Debates of 1647 elaborated on this concept of equal liberty, insisting that, within a political entity, all citizens must be treated equally in front of the law. The EU does not offer this.

The next European project must make a compelling offer to all European citizens, one that goes beyond nation-state affiliation. It must be based on the principle that all European citizens have political equality: in elections, before the law and in taxes. Cicero called this ius aequum. A government for the people and by the people. A nation state is not the only frame for a democracy.

It is what the EU’s founding fathers had in mind in postwar Europe: a real post-national democracy, with the autochthon, or tribal, European regions – Catalonia, Scotland, Moravia, Bavaria, Auvergne, Silesia or Brabant – as constitutional holders, to prevent the big nation states dominating the others, as Walter Hallstein, the first European president of the European commission, said in his inaugural speech in Rome in 1964.

The challenge is to define this European democracy and its parliamentary institutions, which, in contrast to the current trilogy of European council, commission and parliament, must be built on a real division of power: a legislative body that controls an executive body.

That such ideas sound like heresy in Brussels indicates just how far the EU has strayed from English political thinkers such as John Locke, Edmund Burke or Adam Smith. All were masterminds of modern parliamentary liberalism, and none could have imagined what appears self-evident in today’s EU: that a people can be governed by a single market, that deregulation is the goal and that anyone who proposes social controls of markets is a dangerous Marxist radical.

The question now is how to organise a Schumpeterian “constructive destruction” of the EU. Whenever in history sovereign citizens have embarked together on a political project, they have founded a republic based on that principle of political equality. This should be the vision and mission for Europe in the 21st century.

Courtesy: The Guardian
Buy Coal India Ltd at Rs.311
T: Rs.325 
SL: Rs.306

Triggers:
  • After sluggish demand in April and May, June brought some good news for Coal India Ltd, as power plants started stocking fuel once again increasing coal off-take by 7-8%. According to sources, off-take for April-June period grew by 3% compared to the same period last year.
  • The company recently announced signing two agreements with Solar Energy Corporation of India for implementation of solar power project in Madhya Pradesh. Coal India and Solar Energy Corporation of India (SECI) signed two agreements on 28 June 2016, for implementation of 200 megawatts (MW) solar power projects in Madhya Pradesh for the beneficial utilisation of solar power by Northern Coalfields (NCL) and South Eastern Coalfields (SECL) at an estimated cost of Rs.650 crore. NCL and SECL are subsidiaries of Coal India.
  • There was a block deal of 500000 shares in Coal India at Rs.311.00 per share, valued at Rs.15.55 crore on BSE today. 
  • Citigroup maintains a buy rating on Coal India with a 12-month target price of Rs.380. Round I of linkage auction concluded recently, and Round II to commence soon. Round I for sponge iron saw muted response while Round II for cement is likely to commence in a week.
  • Coal India's consolidated net profit rose 0.2% to Rs 4247.93 crore on 0.1% fall in net sales to Rs 20759.45 crore. Coal India is an organized state-owned coal mining corporate. The Government of India holds 79.65% stake in Coal India (as per the shareholding pattern as on 31 March 2016).
'Our nation is in peril': Tony Blair urges calm in Brexit talks
Photo: The Telegraph UK
Friday 1 July 2016: Tony Blair has called for “serious statesmanship” in the talks with the European Union that will shape the future of the UK after Brexit.

The former prime minister warned “our nation is in peril” after the vote to leave the EU and the negotiations on the UK’s future relationship with the other countries would be of “extraordinary complexity”.

He urged the contenders in the Tory leadership race to act with “genuine patriotic regard” to the country’s future as he accepted his own party was “effectively disabled”.

In an article in the Daily Telegraph, Blair said: “There is going to be a negotiation of extraordinary complexity where there are a thousand devils in every detail. Those we used to call ‘our European partners’ are, unsurprisingly, divided and uncertain themselves.”

He said some countries wanted a quick divorce, while others favoured a delay in commencing the article 50 process, which starts a two-year countdown to Brexit.

“This needs serious statesmanship,” he said. “So before any formal negotiation begins, we need to get a high level sense of where the boundaries are going to be, the things that might be compromised, the things that are red lines.

“The psychology of the other 27 countries is crucial to feel and shape: they could decide that other secessionist movements should be deterred and so be disinclined to flexibility; or they could decide that the British view – especially on immigration – reflects something strong across Europe and have a measured response which tries to accommodate that sentiment.”

In a stark assessment of the task, he added: “Our nation is in peril. To allow us to come safely through this we need to be adult in our politics, to proceed with calm, maturity and without bitterness; because our future as a nation in the world and as the UK itself is at stake.”

The former Labour leader said that Britain “should keep all our options open” but went on to insist that “is not an argument for another referendum”.

He warned that Ukip leader Nigel Farage’s performance in the European parliament could damage the country’s ability to secure a favourable deal.

In highly charged exchanges in the wake of the Brexit vote, Farage was booed and barracked by MEPs as he accused them of being “in denial” about the failure of their single currency and their attempt to create political union in Europe.

The Ukip leader said he had been laughed at when he arrived in Brussels 17 years ago with a message that Britain must leave. And he told MEPs: “You’re not laughing now.”

Blair said: “Don’t underestimate the damage having Nigel Farage address the European parliament in that way does to our interests. Remember who has to agree any new deal for Britain: the European parliament.”

With David Cameron set to leave the stage, the next leader of the Conservative party will have the task of negotiating Brexit.

“On the leave side, there are some who are triumphalist and some more inclined to reach out,” said Blair. “Those leave leaders now so powerful within the politics of our nation should demonstrate they are in ‘reach out’ mode fast.

“With the Labour party effectively disabled we need the Conservative party to conduct its leadership battle with genuine patriotic regard for our nation’s interest.”

Courtesy: The Guardian
Unitech Ltd: Is it still a buy... ?
Unitech Ltd is one of India's leading real estate player. It has a diversified product mix in real estate comprising of commercial complexes, IT/ITes parks, special economic zones (SEZs), integrated residential developments, schools, hotels, malls, golf courses and amusement parks.

..........amidst a spew of litigation against Unitech Ltd, stood a company that was a shadow of its former self. From the wrong choice of domain or its misadventure into the telecom sector, to absence of big launches, to slow pace of project construction coupled with a high debt servicing cost, to cash crunch, to customer complaints, to sentencing of the promoters by Courts, et all - -the company has gone through all.... 

This doesn't factor in the absence of any return on the telecom investment the company made. Its biggest problem, though, is a huge liquidity crunch. 

In January 2008, the Unitech Ltd's stock had peaked on the BSE, at Rs.546.80; however, it closed at Rs.6.41 in the BSE, yesterday. 

Few years ago, in 2007-08, the company's net profit stood at Rs.1,669 crore. Today, it has slipped to a loss of Rs.275.62 crore for financial year 2015-16. 

However, the company Q4FY16, numbers were not too bad, as is made out to be......A quick look at the figure on the right will show that, the losses deepened in Q4FY16 primarily due to two reasons: 
(i) The increase in Other Expenses component to Rs.721.74 Cr in Q4FY16 from Rs.239.51 Cr in Q3FY16 and 
(ii) Increase in Interest Charges to Rs.142.70 Cr in Q4FY16, from Rs.84.56 Cr in Q3FY16.

Meanwhile, the company's management is taking all the measures, to decrease the debt on the books, apart from the new RBI measures, which speaks of converting a part of the unviable debt into equity.

At the time of announcement of results, Sanjay Chandra, Managing Director of Unitech said that the company's focus has been primarily on completing the ongoing projects and delivering the finished product to its customers. Balance expected receipts from these ongoing projects combined are sufficient not only to meet the remaining construction expenses but also to service the debt, if any, against these projects. The company has been taking various measures, such as creation of project specific escrow accounts, to boost customer confidence and improve conditions so as to generate liquidity needed for completing the ongoing projects. Apart from improving collections, company is also mobilising funds from banks and financial institutions. With these measures company is hopeful of completing the ongoing projects in the next few quarters in a phased manner, he added.

Over and above the good news for the company is that the problem with anemic results doesn't apply only to Unitech Ltd alone, but applies across the sector; thanks to bleak market conditions.

Another positive point is that the telecom fiasco is now almost over; though the old case is still pending. However, all the liabilities in the erstwhile telecom arm, have been taken care of by the company. 

Also, a source close to says that the management is making frantic efforts to reduce its debt through its operating cash flow. 

Hence, Unitech Ltd is far from being written off. It has the ability to rebound, admit many top industry executives. Its fairly substantial land bank is one of the reasons why these executives bank on its eventual recovery. 

The name of Unitech Ltd still figures among the best developers of India. Just focusing on its core real estate business should see it through. Besides, in India, when a company reaches a certain level, it naturally gets support from the system; despite the telecom mess, the Unitech brand has managed to retain retail confidence.

This is not the first time that Unitech Ltd is in the midst of a crisis. When real estate was down in the dumps in the aftermath of the global economic slowdown of 2008-09, it too, went through a rough patch; only to came out of it, successfully managing all odds. But some critics point out that this time Unitech Ltd's problems are much deeper and it will require a considerable effort to shed the baggage of the past, negotiate the slowdown and revive its business.

Apart from this, there were recent media inputs that the capital market regulator SEBI is likely to consider proposals for relaxed norms for REITs. Among the changes, the regulator’s board is looking to examine a proposal to make Real Estate Investment Trusts (REITs) more attractive to investors by allowing them to invest a large portion of funds in under-construction assets, sources said.

Regarding REITs, SEBI plans to remove the restriction on the SPV (Special Purpose Vehicle) to invest in other SPVs holding the assets, which in turn would allow REITs to invest in a holding company owning stake in SPVs.

Regarding the valuation of its huge pool of land all over India, I would like to say that Unitech Ltd’s 14 lakh sq meter plot of land in Noida had a reserve price of Rs.2,660.56 crore and that too at distress (half rate) rate. 

Now we are talking of whooping 300 million sq. ft of land reserves of Unitech Ltd....

Let us do some rough calculations: 14 lakh sq.meters is approximately equal to 151 lakh sq.ft or 15.1 million sq.ft. Right?

So, this gives the value of 300 million sq.ft of land as Rs.52,858.80 crore and that too at distress rates. Unitech Ltd's debt as of 31st March, 2016 is Rs.7,165.70 crore.

Moreover, selling of land by the lenders at distress rates will soon be a thing of past due to RBI's new policy guideline, on distress assets. Also, the pay hikes, lower interest rate trajectory and the recent data on the sector, raised hopes of a swift recovery in demand for the Real Estate sector. 
The Economic Times, wrote on 9 June, 2016: 
There are reports that the authorities in Greater Noida may soon implement an exit policy to allow builders to surrender surplus land. Authorities of Noida, Greater Noida and Yamuna Expressway will soon firm up a proposal on this and send it to the Uttar Pradesh government for approval, said Arun Vir Singh, CEO of Yamuna Expressway Industrial Development Authority (YEIDA), an ETRealty.com report said. 
But one should remember that raising money, in part, requires a reasonably solid reputation, and unfortunately for Unitech Ltd, the ghost of telecom will continue to haunt it for a couple of quarters. So, it remains to be seen how much the company is able to rake in fresh capital through Qualified Institutional placements.

However, Unitech Ltd has recently raised Rs.85 crore from Piramal Group and is in talks with two private equity players to raise more funds for the development of a land parcel in Noida and to repay the LIC loan.

Therefore, you can now take your decision, whether to buy the shares of Unitech Ltd at the dirt cheap price of Rs.6.41.....

Wednesday, June 29, 2016

7th Pay Commission approved by Cabinet; Real estate sector may get a boost, Bengaluru, Pune among best bets
June 29, 2016: Realty experts feel that the 7th Pay Commission will have a positive impact on the sector and provide opportunity to middle class government employee to own a house with increased disposable income.

Photo: Phoenix Real Estate
Wednesday proved to be an important day for central government employees as the Union Cabinet cleared the implementations of 7th Pay Commission recommendations, which is expected to benefit to over 1 crore government employees and pensioners. Realty experts feel that the 7th Pay Commission will have a positive impact on the sector and provide opportunity to middle class government employees to own a house with the increased disposable income. Hike in salary indicates an increased spending power and better economic growth. The government has approved rise in salaries and pension for public sector employees.

The 7th Pay Commission recommendation will be effective from January 1 and the Cabinet will decide if the arrears for the six months have to be paid in one go or in installments.
The real estate sector is already reeling under pressure and revival looks tedious and a long drawn process. Developers are already offering discounts to get buyers back into the market. 7th Pay Commission’s is seen as a step that would boost the demand and home ownership sentiment.

“In 2015, the 7th Pay Commission’s decision to hike the salary of state as well as central government employees by almost 23.6% was seen to have a positive impact on the demand side of residential real estate, as it would boost sentiment for home ownership among a set of buyers who have traditionally been very conservative in matters pertaining to large financial commitments. The increase in demand would be uniformly seen across India’s more affordable cities. Pricier cities would not see much of an impact on this account, as this segment of potential home buyers will be looking primarily for budget homes, ” Ashwinder Raj Singh, CEO – residential services, JLL India said.

Endorsing Ashwinder’s thought, Ankur Dhawan, chief business officer – PropTiger said the 7th Pay Commission implementation will be a positive move and raise the affordability of the government employees. Dhawan further added that the developers would come up with schemes to bring in public sector employees to invest into realty sector after approval to the 7th pay recommendations.

Real estate is under huge stress with high unsold inventory across the country. However, along with 7th pay commission, the discounts being offered by developers is seen as another big step to attract the homebuyers. “With huge inventory lying unsold across the country and developers finding it difficult to offload the existing stock, the road to recovery looks tedious. Knowing that the developer community is focused on liquidating the existing inventory and that they are offering a plethora of discounts to get buyers back to the market, it is a good time to invest in real estate, ” Narasimha Jayakumar, chief business officer, 99acres.com said.
Dhawan said that cities like Noida, Pune – due to its proximity with Mumbai- and Navi Mumbai may attract the public sector employees to look for a house in the affordable sector after 7th pay Commission approval.

Jayakumar added, “One should look out for investing in cities that are witnessing a buoyant commercial and office space market. To this end, cities like Hyderabad, Bengaluru and Pune are the ones to look out for. Riding high on infrastructure wave with a number of connectivity links such as metro, elevated roads and flyovers in the pipeline, these cities are attracting IT/ITeS firms and start-ups to their shores. This, in turn, is befitting the residential landscape by propelling demand. Further, locations such as Noida, Gurgaon and Faridabad in NCR are also touted as investment hotspots, considering the fast-paced infra development, and expansion in retail and commercial sectors. However, anyone investing now should be prepared for a lock-in period of at least 4-5 years to reap healthy returns.”

Amit Modi, Director ABA Corp and V-P CREDAI western UP, said, “the 7th Pay Commission recommendation is an important milestone in the real-estate cycle as an increase in salaries of government employees is likely to boost the demand for home purchases. 

Housing sector is expected to be the biggest beneficiaries of the rise in income and spending capacity of government employees.”

Modi further added that over the last couple of years there has been government focus on “affordable housing”, and a public desire by the Modi government to provide housing for all, hence the affordable segment (sub Rs 50 lakh) continued to command the largest shares of total residential sales and more than 50 per cent of total sales in all four quarters of the financial year came from the segment. The segment is expected to see further traction.
He has listed Bhiwadi, Jaipur, Ghaziabad, Delhi (L-zone) and Faridabad as good real estate investment picks in North India along with Gurgaon, Noida, Jaipur, Neemrana and Lucknow. Thane and Navi Mumbai that gave investors maximum returns in the past four years will continue to give best returns to its investors.

Courtesy: The Financial Express
Retail real estate back in favour with PE investors 
BENGALURU / MUMBAI, Jun 29, 2016: India's retail real estate sector received $149 million or about Rs 1,000 crore of private equity investment in the first five months of 2016, according to a report by JLL India. This accounted for 8% of the total PE investment in India during the period, beating expectations of most analysts and marking a turnaround after the lack of investor interest since 2008 baring the singular exception of 2012. 
To Expand Please Click on it..

With PE investment in the segment exceeding that in 2007, some experts said it might well cross the previous high seen in 2008. 

"India's growing reputation across the globe as an investment destination thanks to Prime Minister Narendra Modi's jaunts, coupled with the slowdown in China's economy, has led to an upswing in private equity investment flowing into the country," said Shobhit Agarwal, managing director, capital markets at JLL India. 

Experts said that the government's efforts to make real estate sector and various sub-segments of it more competitive and organised are yielding results. Infrastructure development around retail hubs will push the growth further and attract more funds inflow, they said. 

"With the simultaneous growth in quality real estate and infrastructure, Indian retail sector can prove to be a game changer, if developed in a planned manner. It is important that the development of organised retail is done in line with the infrastructural developments in that area, in order to maintain the much needed equilibrium, especially in urban areas," said Rubi Arya, executive vice chairman of Milestone Capital Advisors. 

Arya said the recent relaxations in FDI norms will attract many foreign retail brands, thus increasing the need for quality spaces. Access to public transport, parking facilities and closeness to upcoming residential zones will prove catalysts for retail to flourish, she said. 

Suresh Sunagaravelu, executive director retail, hospitality and new business at Prestige Estates Projects said, "There will be traction from private equity funds once real estate investment trust takes off in the country." 

The company, which operates malls under Forum brand, plans to have 3 million sq ft of mall space ready by 2018. 

One deal accounted for the investment received till May, with Singapore-based GIC investing $149 million in Sheth Developers' Viviana mall at Thane. Another major deal is in progress, with a US private equity fund looking to buy a large retail project in Navi Mumbai. 

The industry expects more investments to come in owing to improvement in consumer sentiment amid faster economic growth. 

"Coupled with economic stability, FDI policy liberalisation by the Modi government and improvement in the consumer sentiment are some of the factors expected to help global brands witness a very conducive environment for investment into Indian retail and retail real estate sectors," Agarwal said. 

Quality mall space coming up with strong pre-commitments indicates that retailers continue to remain bullish about the long-term India consumption story, he said. 

Real estate developers pitch for easier lending norms in meeting with RBI
Realtor lobby CREDAI also reiterates its demand to allow banks to fund land purchase
Mumbai, Wed, Jun 29 2016: In a closed door meeting with Reserve Bank of India (RBI) governor Raghuram Rajan on Tuesday, realtor lobby Confederation of Real Estate Developers’ Associations of India (CREDAI) urged the central bank to ease lending norms for real estate projects, while reiterating its demand to allow banks to fund land purchase, according to two people aware of the development.

The hour-long meeting was attended by a few members of CREDAI, including chairman Irfan Razack and president-elect Jaxay Shah.

CREDAI declined to comment on the meeting, saying it was a private and confidential meeting with the governor.

Some of the key recommendations made by CREDAI to the governor include allowing an increase in bank exposure to the real estate sector, reducing risk weightage as well as allowing external commercial borrowing (ECB), according to the first person mentioned above.

CREDAI also pointed the need for funds at lower interest rates in order to build 20 million urban homes as part of the government’s ambitious “Housing for All” initiative by 2020, said the person.

The group also raised its long-standing demand to allow banks to fund land transactions. Currently, most of the land purchase are funded by non-banking financial companies and private equity firms at high interest rates, according to the second person quoted above.

In a shareholders’ letter on 26 June, Deepak Parekh, chairman of the India’s largest mortgage lender HDFC, said banks and housing finance companies should be allowed to fund land transactions, a move he believed can help lower the cost of land.

Parekh said that “merely reducing interest rates is not sufficient” and that one of the primary factors to improve housing affordability is to bring down the cost of land.

Besides, CREDAI urged the RBI to allow loan restructuring as well as increase priority sector lending to the real estate sector.

India’s real estate market has witnessed one of the longest slowdown that has lasted for more than two years. Slow home sales, rising inventory and long delays in completing projects for lack of funds have pulled down the country’s property market.

Courtesy: Live Mint
Real estate stocks surge; Unitech rallies 8%
Mumbai: June 29, 2016: Real Estate stocks ended higher on back of higher volumes.

DLF Ltd ended at Rs. 143.95, up by Rs. 10.45 or 7.83% from its previous closing of Rs. 133.5 on the BSE.

The scrip opened at Rs. 139.1 and touched a high and low of Rs. 147.7 and Rs. 139.1 respectively. A total of 47348340(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 23813.08 crore.

The BSE group 'A' stock of face value Rs. 2 touched a 52 week high of Rs. 142.9 on 09-Oct-2015 and a 52 week low of Rs. 72.5 on 12-Feb-2016. Last one week high and low of the scrip stood at Rs. 141.2 and Rs. 126.7 respectively.

The promoters holding in the company stood at 74.96 % while Institutions and Non-Institutions held 18.07 % and 6.96 % respectively.

The stock traded above its 50 DMA.

Unitech Ltd ended at Rs. 6.32, up by Rs. 0.46 or 7.85% from its previous closing of Rs. 5.86 on the BSE.

The scrip opened at Rs. 5.91 and touched a high and low of Rs. 6.4 and Rs. 5.9 respectively. A total of 124209451(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 1533.15 crore.

The BSE group 'A' stock of face value Rs. 2 touched a 52 week high of Rs. 8.31 on 02-Jul-2015 and a 52 week low of Rs. 3.43 on 11-Feb-2016. Last one week high and low of the scrip stood at Rs. 6.2 and Rs. 5.05 respectively.

The promoters holding in the company stood at 26.77 % while Institutions and Non-Institutions held 14.9 % and 58.33 % respectively.

The stock traded above its 200 DMA.

Indiabulls Real Estate Ltd ended at Rs. 88.9, up by Rs. 1.3 or 1.48% from its previous closing of Rs. 87.6 on the BSE.

The scrip opened at Rs. 88 and touched a high and low of Rs. 91 and Rs. 88 respectively. A total of 14183347(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 4429.48 crore.

The BSE group 'A' stock of face value Rs. 2 touched a 52 week high of Rs. 105.25 on 30-May-2016 and a 52 week low of Rs. 42.25 on 12-Feb-2016. Last one week high and low of the scrip stood at Rs. 97.4 and Rs. 77 respectively.

The promoters holding in the company stood at 47.63 % while Institutions and Non-Institutions held 19.07 % and 33.22 % respectively.

The stock traded above its 50 DMA.

UK voted for Brexit – but is there a way back?
Several scenarios could see the vote overturned, involving either a Labour or Tory prime minister. But all are speculative
Wednesday 29 June 2016: The British public have voted to leave the EU in an advisory referendum – but there have been voices in business, diplomacy, politics and European polities desperately asking if the issue can be revisited. Is that feasible?

The short answer is yes, just about, but many forces would have to align.

How prepared was the government?
The referendum, for instance, has thrown up big constitutional questions for Britain.

Oliver Letwin, who was appointed by David Cameron, the outgoing prime minister, to oversee the process of withdrawal, is now at the helm of an expanded European secretariat at the Cabinet Office. But it is clear that very little preparatory work has been done. One of the first questions he will face is the future role of the British parliament in Brexit.

The British government has not yet said how parliament should implement the decision to leave. It is not clear, for instance, if and what laws would have to be passed to put the referendum decision to leave the EU into effect.

Could parliament stop Brexit?
At present, there is not a majority for Britain to leave the EU in either the House of Commons or the House of Lords. Indeed, given a free vote, the unelected Lords would probably reject Brexit by a margin of six to one.

One issue that will arise for the next prime minister – be it Theresa May, Boris Johnson or another – will be what happens when they try to push Brexit through a parliament that can delay the process at every turn. This has been described as a “reverse Maastricht”, a reference to the way in which Eurosceptics caused hell for John Major by blocking passage of the Maastricht treaty into UK law.

Could the referendum be treated as advisory?
The Commons might, for instance, seek to prevent the prime minister from triggering article 50, the clause of the Lisbon treaty that provides the framework of an EU member state’s exit from the union. David Lammy, MP for Tottenham, has had opprobrium heaped upon him for suggesting the referendum should be treated as merely advisory in law, and so ignored. It would seem unlikely that a majority of MPs would be willing to disregard the clear majority of the British people who voted for Brexit. 

More plausibly, the Commons might set conditions on the renegotiation, including access to the single market, membership of the European Free Trade Association or the preservation of the union with Scotland. The opportunities to filibuster and delay are innumerable. It is, for instance, disputed whether triggering article 50 requires the authority of parliament. Most legal opinion suggests not, but political necessity may require the endorsement of parliament. 

It may also be the case that parliament will wish to be more than simply informed of the government’s negotiating objectives. Those objectives will be at the heart of the Conservative leadership election. The foreign secretary, Philip Hammond, has put the choice well: in essence, there is a trade-off to be negotiated between the degree of access to the EU single market (the concern of UK business) and the degree of free movement of labour (the concern of politics). In the leadership contest both Johnson and May will have to say how much they will make free trade or free movement of people their primary objective in negotiations.

The candidates would also have to explain whether they believed the settlement at some point, in outline or detail, should be subject to some further democratic test, possibly in a spring 2017 election. 

Scenarios for a second referendum
There is also pressure to hold a second referendum. Few UK politicians – fearful of challenging the verdict of an already angry electorate – will articulate such an argument in public. But Jeremy Hunt, the health secretary, has boldly made the case for a second referendum or another general election on the negotiated terms of exit. Robin Butler, the former head of the civil service, has suggested the same.

Hammond, the foreign secretary, has said the new prime minister will need to think about the democratic legitimacy of the terms of Brexit. At one point even Johnson, and Dominic Cummings, the director of the Vote Leave campaign, made the case for a second referendum on the terms of a Brexit.

Despite the Fixed-Term Parliament Act requiring a parliament to last five years, it is possible for an early election to be called if enough politicians support this.

For the sake of simplicity, three scenarios could then follow. In the first, Johnson wins the election, negotiates the terms of the UK’s departure, puts them to a referendum and they are endorsed. Some form of access to the single market and some deal on free movement – the two central issues – are agreed. It is a bespoke British deal. Britain remains outside the EU but only just.

The Labour option
The second scenario is that Labour, under a new leader, offers itself as a pro-European party, but promises to seek a new deal on free movement of workers within the EU.

A change on free movement is the chief route back to its evaporating working-class vote, as Yvette Cooper, the former shadow home secretary, pointed out in a speech on Tuesday. For this to happen, the EU would need to offer an “emergency brake”, something Angela Merkel, the German chancellor, has steadfastly refused in her talks with Cameron. But many in the Foreign Office hope she would relent, or would be forced to do by the French and Italians.

In its manifesto for a 2017 election, Labour said it would give the British people a second referendum on the precise terms of the negotiations.

Labour would seek to capitalise on a potential new deal on immigration with the EU, the buyers’ remorse of leave voters regretting their decision, evidence of the real world economic chaos created by the prospect of Brexit, and a Labour leader with appeal on the doorstep.

If an election result then returned a second Commons with a pro-EU majority, this could prevent the UK leaving the union. A mandate for a second referendum on the terms of Brexit, or staying in, would have been provided.

Scottish consent
The third, simpler scenario involves the Scottish Nationalists.

The first minister, Nicola Sturgeon, has already said she would tell her MSPs to refuse “legislative consent” if and when the Scottish parliament was required to ratify the UK’s withdrawal from the EU.

Speaking to the BBC, she said: “If the Scottish parliament was judging this on the basis of what’s right for Scotland then the option of saying ‘look, we’re not to vote for something that’s against Scotland’s interest’, of course that’s got to be on the table.”

The constitutional implications of Scottish politicians withholding consent are only now being explored. 

All these scenarios, however, are inherently speculative – and require an accumulator bet coming good – but if you think it is not being discussed in Whitehall and Westminster, you are mistaken.

Courtesy: The Guardian
Today's Recommendations
(i) Rotla India Ltd seems to have formed a temporary bottom around Rs.63. Its consolidated net profit has grown 64.4 per cent to Rs 59.21 crore for the quarter ended March 31, 2016. The company had posted a net profit of Rs 36.01 crore in the same quarter last year. 

However, Rolta's total income from operations dipped to Rs.846.04 crore in the reported quarter as against Rs 946.14 crore in the year-ago period. 

The stock is slowly moving up after the company gave progress report on the future defence project. Rolta India Ltd had informed the stock exchanges that it has done significant expenses “on a very prestigious and time-bound defence project”, which required considerable ongoing investment. Rolta management is diligently working on addressing the overall situation in a comprehensive manner in consultation with its bankers and strategic advisers. The aim is to arrive at an acceptable solution in the interest of all stakeholders and the Company will be informing all stakeholders at the earliest possible opportunity and is committed to finding a viable resolution. Moreover, since Rolta India Ltd derives most of its operations from the domestic operations, hence it will not get affected much due to Brexit (if any). 

Last month, the company announced that it has won seven year, multi-million pound contract from UK Power Networks to manage and update their spatially-enabled network asset information. UK Power Networks is a major utility company that delivers electricity to London, the South East and the East of England.

The company last year announced that it had won Smart City and 3D Mapping with city modelling projects in the West Asia, for a combined value of around US $ 15 million.

Last year, the exclusive consortium of Bharat Electronics Limited (BEL) and Rolta India Limited were selected as a development agency for a more than Rs 50,000 crore Battlefield Management System (BMS) project by the Defence Ministry.


The BMS project, categorised as a "Make" programme under the Defence Procurement Procedure (DPP), will be one of the largest solutions to be indigenously manufactured for the the country's defence, BEL, a Navaratna PSU, said.

Therefore, Buy Rolta Ltd at Rs.63.50, T: Rs.71, SL: Rs.61.40 (strict). There is not much downside in the counter. 

(ii) Unitech Ltd (Rs.6.25), should be added on intra-day declines. The stock is on an uptrend and soon we will see it touch Rs.12-13. The scrip recently came to the news more due to wrong reasons, though its fundamentals are improving. The Real Estate sector is also expected to see a turnaround in 2016-17. 

(iii) Today there was a block deal on the the stock of Jaiprakash Associates Ltd (Rs.7.83) at Rs.7.80. Yesterday. there was high delivery based buying (41.40%). The company is hiring a consultant to for a quick turnaround. Also, the company would be a major beneficiary of the RBI's new directive on stressed assets. At present there is not much negative news in the counter. One should accumulate, on intra-day dips.

(iv) Lanco Infratech Ltd (Rs.4.70) is one of the companies, who could also get benefited from the RBI's latest move regarding stressed assets. Besides this, the company itself is taking a lot of measures to streamline its debts. You should buy the scrip for a short term target of Rs.9.5-10. This scrip would make new 52-week high soon.

(v) The stock of Adani Power Ltd (Rs.30.50) is also on an uptrend in tune with my earlier recommended Adani Enterprise Ltd (Rs.83). Hold the scrip for a target of Rs.33-34, in the short term.   

(vi) Vedanta Ltd (Rs.127) has almost doubled from my recommended price of Rs.64.40. The stock is on an uptrend and one can hold the scrip with a SL of Rs.121. 

(vii) Union Bank Ltd (Rs.129), today made an intra-day high of Rs.129.50, and hit my 2nd target. One can book partial profits and hold the rest with a SL of Rs.127, for a target of Rs.131-132. 
Winning Strokes: Think Different
Unitech Ltd (Rs.5.86), continued its upward journey even yesterday, as the stock made an intra-day high of Rs.5.91 in the BSE before closing at Rs.5.86; with a whooping volume of 170.01 lakhs. According to my close sources, the company is taking various measures to bring it back to track. The stock is expected to double in the next 30-45 days. The Wikipedia says: "Unitech Limited is India's second largest real estate investment company, and has recently claimed to be the largest real estate builder in the country". Moreover, there are hopes that the capital market regulator, the SEBI will consider proposals for relaxed norms for the REITs and an easier set of compliance rules for foreign fund managers keen to relocate to India.

The scrip of Jaiprakash Associates Ltd (J P Associates Ltd) today moved to Rs.7.65, before cooling down at Rs.7.51, in the BSE. The stock would have closed near Rs.7.57-7.59 ranges, however, late selling pulled the price down.  The total loans of Jaiprakash Associates, the real estate and infrastructure company, stand at Rs.58,250 crore against a market capitalisation of less than Rs.2,000 crore. The RBI recently came up with Sustainable Structuring of Stressed Assets, a system that allows banks to partly own borrower companies. Most of the analysts have pointed out that many lenders may be forced to opt for a “haircut” or forego part of their principal and interest rates to prevent these loans from turning bad - - this is indeed music to the shareholders of J P Associates Ltd. The promoters holding in the company stood at 39.38 % while Institutions and Non-Institutions held 27.02 % and 33.59 % respectively. All time high of Rs.308.86 on 4 January 2008. Today the percentage of Deliverable Quantity to Traded Quantity was whooping 41.40%, indicating huge accumulation, by the prudent investors. Moreover, the formation of Doji, with a long upper shadow, indicates that bullishness in its share price is likely to continue, for more time. Therefore, the investors are suggested to buy the scrip in every decline; as it is likely to test Rs.10.5 - 14 soon.

Jaiprakash Associates Ltd has withdrawn itself from some of its cement markets in north India as part of streamlining its operations even as lenders continue to prod the firm to shed assets and pare debt.

My another recommended counter, Lanco Infratech Ltd today made an intra-day high of Rs.4.79, before closing at Rs.4.73. The Economic Times, today wrote: "The government is mulling an additional Rs 25,000 crore allocation to roads, railways and power sectors over and above the allocation made to them in the Union Budget, potentially providing a mid-year boost to public spending". This stock will make new highs in this fiscal and hence add it on all declines. 

Meanwhile, the union Finance Minister Arun Jaitley participated in the First Annual General Meeting of Asian Infrastructure Investment Bank (AIIB) held at Beijing in China on last Saturday. Outlining Indias development paradigm, Jaitley said that India has undertaken reforms in FDI and initiated large investments in rural infrastructure, national highway, inland waterways, shipping, power sector and smart cities etc.

Speaking on the role of AIIB, the Finance Minister said: AIIB presents a much needed additional financing window dedicated to infrastructure projects and meeting the financing gap that may be beyond the capacity of the individual countries and the existing MDBs. India has a huge unmet demand for investment in infrastructure and is preparing basket of projects worth US$ 2-3 billion for AIIB funding in the areas of Urban Development (including Smart Cities), Energy, Urban Transport, Railways, Inland Waterways and Water Supply.

India’s infrastructure output grew an annual 8.5% in April, at its fastest pace in 17 months, mainly helped by a favourable base effect, government data showed.

The output expanded 2.7% for the fiscal year 2015/16 that ended on March 31, compared with a 4.5% growth in the previous fiscal year, the data showed on Tuesday.


Electricity production grew 14.7% and fertiliser output jumped 7.8% in March from a year earlier, the data showed.

In another significant development, highlighting that LIC's core focus would be infrastructure investment, the life insurer has decided to be a partner in India's first sovereign wealth fund earmarked for infrastructure sector, reported Press Trust of India. The Rs.40,000-crore National Investment and Infrastructure Fund (NIIF) will be owned by the government and other partners in a 49:51 ratio. 

The NIIF was set up to attract foreign and domestic investments into the infrastructure sector, and is effectively a government-owned investment manager.While an initial budgetary allocation of Rs 4,000 crore has already been made to NIIF, more funds will be allocated going forward, the government said in a release on Monday. The NIIF could soon operationalise initiatives along with the Qatar Investment Fund, the Abu Dhabi Investment Authority and JSC Rusnano of Russia.

The Economic Times, wrote June 29, 2016: The performance of the corporate sector has improved in the past year as the number of leveraged companies has fallen and the amount of debt in companies' books has also declined, Reserve Bank of India (RBI) said in its bi-annual Financial Stability Report (FSR). 

There is no stopping of Punjab National Bank and Allahabad Bank Ltd. Punjab National Bank made an intra-day high of Rs.105.50, before closing at Rs.104.20. The stock of Punjab National Bank Ltd, which recommended at Rs.79 and later asked to accumulate on all declines, is looking slightly overbought on the chart. 
Winning Strokes: Think Different
Unitech Ltd (Rs.5.86), continued its upward journey even yesterday, as the stock made an intra-day high of Rs.5.91 in the BSE before closing at Rs.5.86; with a whooping volume of 170.01 lakhs. According to my close sources, the company is taking various measures to bring it back to track. The stock is expected to double in the next 30-45 days. The Wikipedia says: "Unitech Limited is India's second largest real estate investment company, and has recently claimed to be the largest real estate builder in the country".

The scrip of Jaiprakash Associates Ltd (J P Associates Ltd) today moved to Rs.7.65, before cooling down at Rs.7.51, in the BSE. The stock would have closed near Rs.7.57-7.59 ranges, however, late selling pulled the price down.  The total loans of Jaiprakash Associates, the real estate and infrastructure company, stand at Rs.58,250 crore against a market capitalisation of less than Rs.2,000 crore. The RBI recently came up with Sustainable Structuring of Stressed Assets, a system that allows banks to partly own borrower companies. Most of the analysts have pointed out that many lenders may be forced to opt for a “haircut” or forego part of their principal and interest rates to prevent these loans from turning bad - - this is indeed music to the shareholders of J P Associates Ltd. The promoters holding in the company stood at 39.38 % while Institutions and Non-Institutions held 27.02 % and 33.59 % respectively. All time high of Rs.308.86 on 4 January 2008. Today the percentage of Deliverable Quantity to Traded Quantity was whooping 41.40%, indicating huge accumulation, by the prudent investors. Moreover, the formation of Doji, with a long upper shadow, indicates that bullishness in its share price is likely to continue, for more time. Therefore, the investors are suggested to buy the scrip in every decline; as it is likely to test Rs.10.5 - 14 soon.

My another recommended counter, Lanco Infratech Ltd today made an intra-day high of Rs.4.79, before closing at Rs.4.73. The Economic Times, today wrote: "The government is mulling an additional Rs 25,000 crore allocation to roads, railways and power sectors over and above the allocation made to them in the Union Budget, potentially providing a mid-year boost to public spending". This stock will make new highs in this fiscal and hence add it on all declines. 

Meanwhile, the union Finance Minister Arun Jaitley participated in the First Annual General Meeting of Asian Infrastructure Investment Bank (AIIB) held at Beijing in China on last Saturday. Outlining Indias development paradigm, Jaitley said that India has undertaken reforms in FDI and initiated large investments in rural infrastructure, national highway, inland waterways, shipping, power sector and smart cities etc.

Speaking on the role of AIIB, the Finance Minister said: AIIB presents a much needed additional financing window dedicated to infrastructure projects and meeting the financing gap that may be beyond the capacity of the individual countries and the existing MDBs. India has a huge unmet demand for investment in infrastructure and is preparing basket of projects worth US$ 2-3 billion for AIIB funding in the areas of Urban Development (including Smart Cities), Energy, Urban Transport, Railways, Inland Waterways and Water Supply.

When the Smart City mission was launched in June last year, the Prime Minister had set a target of creating 100 Smart Cities by 2022 with an initial government investment of Rs 50,000 crore.


On the first anniversary of the Smart City mission this Saturday, PM Narendra Modi launched a slew of new proposals in Pune. The proposals range from plain slum rehabilitation, sewage treatment plants and plastic bottle recycling to new-age Information and Communications Technology (ICT) solutions such e-pathshalas, intelligent transit management system, intelligent street poles and multi-purpose smart cards across all modes of public transport. 

There is no stopping of Punjab National Bank and Allahabad Bank Ltd. Punjab National Bank made an intra-day high of Rs.105.50, before closing at Rs.104.20. The stock of Punjab National Bank Ltd, which recommended at Rs.79 and later asked to accumulate on all declines, is looking slightly overbought on the chart. 

In a spectacular move, one of my earlier recommended counters, ARSS Infrastructure Ltd (Rs.83.60), hit the upper circuits yesterday, continuing its winning run; after the company's JV won a Rs.44 crore order from the Indian Railways for earthwork in Odisha. The scrip had gained 20% in the previous session too.

Tuesday, June 28, 2016

Today's Calls: 
1. Buy Axis Bank Ltd at Rs.515, T: Rs.540, SL: Rs.507.
2. Buy Jaiprakash Associates Ltd (J P Associates Ltd) at Rs.7.58, T: Rs.10.5-12.40, SL: Rs.6.7 (on closing basis).  
3. Buy JSW Energy Ltd at Rs.80.40, T: Rs.91-97, SL: Rs.76.

The Economic Times, wrote today: 
The government is mulling an additional Rs 25,000 crore allocation to roads, railways and power sectors over and above the allocation made to them in the Union Budget, potentially providing a mid-year boost to public spending. 
All three ministries — road transport and highways, railways and power — are currently in advanced talks with the finance ministry to secure additional allocation. 
This is going to push up the demands for the stocks in the Infrastructure, Banking and Power Sectors. Those who are already holding the shares of J P Associates Ltd should further accumulate, on intra-day declines. 

Moreover, both Unitech Ltd (Rs.5.85) and J P Associates Ltd (Rs.7.58) have good land reserves. Unitech Ltd has a whopping land reserves of 300 mn sq. ft or 30 crore sq. ft. Now if we put Rs.3000 per sq.ft  and then calculate the value of the land bank of Unitech Ltd, how much does it come? Just do it please... :)  
Today's Calls: 
1. Buy Axis Bank Ltd at Rs.515, T: Rs.540, SL: Rs.507.
2. Buy Jaiprakash Associates Ltd (J P Associates Ltd) at Rs.7.58, T: Rs.10.5-12.40, SL: Rs.6.7 (on closing basis).  
3. Buy JSW Energy Ltd at Rs.80.40, T: Rs.91-97, SL: Rs.76.

The Economic Times, wrote today: 
The government is mulling an additional Rs 25,000 crore allocation to roads, railways and power sectors over and above the allocation made to them in the Union Budget, potentially providing a mid-year boost to public spending. 
All three ministries — road transport and highways, railways and power — are currently in advanced talks with the finance ministry to secure additional allocation. 
This is going to push up the demands for the stocks in the Infrastructure, Banking and Power Sectors. Those who are already holding the shares of J P Associates Ltd should further accumulate, on intra-day declines. 

Moreover, both Unitech Ltd (Rs.5.85) and J P Associates Ltd (Rs.7.58) have good land reserves. Unitech Ltd has a whopping land reserves of 300 mn sq. ft or 30 crore sq. ft. Now if we put Rs.3000 per sq.ft  and then calculate the value of the land bank of Unitech Ltd, how much does it come? Just do it please... :)  
Axis Bank Ltd: Buy
CMP: Rs.515
Edelweiss maintains a buy rating on Axis Bank Ltd with a 12-month target price of Rs.585. 

The brokerage house says, even in a tough scenario, the bank will deliver a return on equity of 16-17%. The strong operating metrics and strengthened liability franchise also lend comfort.

Meanwhile, Axis Bank has sought approval of shareholders to raise Rs.35,000 crore through multiple instruments including green bonds and from overseas markets. The approval would be sought at Axis Bank’s 22nd Annual General Meeting of shareholders on 22 July. The funds, which would be within the overall borrowing limits of the bank, will be raised in one or more tranches on a private placement basis. 

The Reserve Bank of India (RBI) on 31 May 2016, notified that Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 62% of the paid-up capital of Axis Bank, from existing 49% under the Portfolio Investment Scheme (PIS). 

The central bank further notified that the total foreign investment from all sources i.e. Foreign Institutional Investors (FII)/Registered Foreign Portfolios Investors (RFPIs)/Foreign Direct Investment (FDI)/Non-Resident Indians (NRI)/ Persons of Indian Origin (PIO)/American Depository Receipts (ADR)/Global Depository Receipts (GDR) in the bank shall not exceed 62% of paid-up capital. The central bank has stated that Axis Bank has passed resolutions at its board of directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges, RBI said. 

Axis Bank is a high beta stock (1.16) and is trading well above its 50-day, 100-day and 200-day moving average of Rs.500.17, Rs.456.33 and Rs.460.02, respectively, as per data collated by ETMarkets.com. The stock is trading with a P/E of 14.89 and P/B of 2.29.
 

Monday, June 27, 2016

Reliance Power Eyes Rs 714 Crore From Tilaiya Procurers
[Editor: Buy the shares of Reliance Power Ltd at the CMP of Rs.48.80, for a short term target of Rs.53, SL: Rs.47.60.

Reliance Power reported 15.8% rise in consolidated net profit at Rs..20.16 crore for the fourth quarter ended March 31, 2015-16 on the back of higher power generation. It had posted net profit of Rs.276.47 crore in the January-March quarter of 2014-15.

The promoters holding in the company stood at 74.98 % while Institutions and Non-Institutions held 10.48 % and 14.21 % respectively. At Rs.48.80, the stock traded above its 200 DSMA.]
New Delhi. June 27, 2016: After pulling out of Tilaiya UMPP on a host of issues, Reliance Power is looking to secure a total of Rs 714 crore as bank guarantees and compensation from 18 procurers of the electricity project.

Of this, Rs 600 crore will be in the form of bank guarantees the procurers had offered to buy electricity and another Rs 114 crore as compensation for various expenses incurred by the Anil-Ambani led company.

The formalities with the 18 procurers in 10 states for the release of money are at final stage and the company hopes to achieve closure very soon, a person familiar with the matter said.

The power producer had in April last year given up the project, saying the host state, Jharkhand, had not co-operated in land acquisition, captive blocks and related infrastructure over the previous five years.

If it can get the bank guarantees of the procurers encashed, it would be a big relief for Reliance Power, which on June 21 was served a show-case by the Coal Ministry asking it to explain the reasons for delays in developing coal mines allocated for the Tilaiya project.

"You are called upon to show cause... as to why the delay in the development of the coal block should not be held as violation of the terms and conditions of the allocation of Kerandari B&C coal block and why the bank guarantee should not be deducted for non-achievement of milestones," the ministry said in the notice.

The Coal Ministry has a bank guarantee of Rs 208 crore for Kerandari B&C coal blocks allocated for the Tilaiya project.

Responding to the notice, Reliance Power has said it "terminated PPA for Tilaiya UMPP entered into with 18 procurers nearly 14 months ago. The PPA termination was due to prolonged delay in fulfilment of the procurers' development period obligations in respect of land for the power plant and coal mine for more than 5 years".

"The procurers led by the Lead Procurer, Jharkhand, Urja Vikas Nigam (JUVNL) have already accepted the termination in November 2015," it added.

The company further said the Power Finance Corporation (PFC), the nodal agency for ultra mega power projects (UMPPs), has also recommended PPA termination due to procurers' event of default and communicated the same to the Ministry of Power and the Ministry of Coal.

The company also added that it had replied to a similar notice from the Coal Ministry in January 2014 and there was no communication from the ministry on this thereafter.

A person involved in the settlement process said the procurers are in the last lap to acquire Jharkhand Integrated Power, the special purpose vehicle for Tilaiya UMPP, from Reliance Power.

In November 2015, the offtakers of Reliance Power's 4,000-mw Tilaiya UMPP in Jharkhand had agreed to terminate their power purchase agreements (PPAs) and compensate Reliance Power for costs and bank guarantees aggregating Rs 714 crore.

Reliance Power had bagged the project in 2009 through competitive bidding by quoting a tariff of Rs 1.77 per unit.

The company in April 2015 announced its exit from the project, citing a five-and-a-half-year delay in handing over of land for the project.

The project, which required 17,000 acres, was offered the Kerendari B&C coal block as a captive mine. The company had also said the project, which was to come up by 2015-17, would not be completed before 2023-24, given the prevailing status of land acquisition.

The termination of the PPAs will reduce Reliance Power's future capital expenditure burden by nearly Rs 36,000 crore, thereby avoiding an additional debt burden of nearly Rs 27,000 crore as well as an equity commitment of Rs 9,000 crore.

This fits in well with the parent Reliance Group's larger business architecture for future as it focuses on the capital-intensive defence manufacturing.

The group is also making efforts to lighten its financial load in telecom and other sectors. Reliance Power too has shifted its focus to renewable energy.

CourtesyNDTV Ltd