Friday, November 21, 2014

JSW Energy : buys 300-MW Baspa II, 1,091-MW Karcham Wangtoo hydroelectric plants in India for US$1.8 billion
300-MW Baspa II HEP, HP
20 November, 2014: JSW Energy Ltd. (JSW) and Jaiprakash Power Ventures Ltd. (JPVL) executed an acquisition deal worth about US$1.8 billion for two of three power-generating facilities listed on a Sept. 24, binding Memorandum of Understanding (MoU). The 100% acquisition of two plants was executed in Mumbai, in the district of Maharashtra, India, on Nov. 15.

JSW purchased two facilities located in Himachal Pradesh, in the upper northwest region that borders Indian states Jammu and Kashmir on the north, Punjab on the west, Haryana and Uttarakhand to the south and the country of China to the east. The properties include 300-MW Baspa II Hydro Electric Plant and 1,091-MW Karcham Wangtoo Hydro Electric Plant.

Karcham Wangtoo continues to produce power since coming online in 2011, as does Baspa II, which was commissioned in 2003. Karcham Wangtoo and Baspa II have an estimated life of more than 29 and 37 years respectively and are extendable to 20 more years, according to published reports.

The two hydro plants will be operated under Himachal Baspa Power Co. Ltd. (HBPCL) as a going concern through a scheme of arrangement "subject to mutually agreed adjustments, and the closing is subject fulfillment of conditions precedent by the parties," according to JSW.

The 500-MW Bina Thermal Power Plant in Madhya Pradesh is the remaining project listed on the MoU, but there is no readily available information on its purchase status.

Based in Mumbai on the central east coast of India, JSW is part of the JSW Group. The group is controlled by O.P. Jindal Group out of Haryana, about 500 miles away in north India. O.P. Jindal Group is a global conglomerate worth US$18 billion, according to the company.

Prior to purchasing the two hydro plants, JSW acquired its only hydro project in July 2007 through a competitive bidding process. The company is developing a 240-MW run-of-river hydroelectric project at Kutehr on the upper reaches of the Ravi River in Himachal Pradesh, according to published reports.

The bulk of JSW holdings are in thermal power projects.

JSW said it has an existing operational capacity of 3,140 MW from thermal power and gained 1,391 MW of hydroelectric power from the HBPCL agreement. The combined total will bring its energy portfolio to 4,531 MW. Published reports indicate JSW has projects worth 8,630 MW under implementation and in the development phase throughout several states in India.

The Nov. 15 acquisition allows JSW to advance in achieving its goal of owning plants that have a total of 12,000 MW of power generation capacity by 2025, according to the company.

Courtesy: 4 Traders
Moving towards 24X7 power: Government approves 3 key schemes 
NEW DELHI, 21 November, 2014: Moving towards PM Narendra Modi-led government's objective to provide 24*7 power supply, the Cabinet has approved multiple schemes to improve transmission and distribution networks and begin work on the North Eastern Region Power System Improvement Project. 

The Rs 32,600 crore Integrated Power Development Scheme (IPDS) will strengthen the transmission and distribution networks and metering in urban areas and smarten it with information technology. 

The Cabinet also approved a Rs 43,033 crore scheme, which includes the requirement of budgetary support of Rs 33,453 crore, for rural areas to separate agricultural supply from non-farm supply. 

Cutting transmission losses and improving distribution is a key element for the power sector, and the initiative follows steps to ease coal shortage and discussions to formulate a financial package for the sector, where thousands of megawatts of capacity are idling or operating sub-optimally because of fuel shortage or inadequate distribution network. 

We take a look at the proposed benefits of the three major Cabinet decisions aimed at solving problems of the power sector: 

Integrated Power Development Scheme 

The Integrated Power Development Scheme (IPDS) is aimed at strengthening sub-transmission and distribution network in the urban areas; metering of distribution transformers /feeders / consumers in the urban areas; IT enablement of distribution sector and strengthening of distribution network. 

According to the press release from the government, "The scheme will help in reduction in AT&C losses, establishment of IT enabled energy accounting / auditing system, improvement in billed energy based on metered consumption and improvement in collection efficiency." 

The process of sanction of projects shall commence immediately. After sanction of projects, contracts for execution of projects are to be awarded by States Discoms / Power Departments. The projects shall be completed within 24 months from date of award. 

Deendayal Upadhyaya Gram Jyoti Yojana 

The Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) aims (i) to separate agriculture and non agriculture feeders facilitating judicious rostering of supply to agricultural and non-agricultural consumers in rural areas and (ii) strengthening and augmentation of sub transmission and distribution infrastructure in rural areas, including metering of distribution transformers/feeders/consumers. 

According to the Cabinet, the scheme would help in: 

1) Improvement in hours of power supply in rural areas, 2) Reduction in peak load, 3) Improvement in billed energy based on metered consumption and 4) Providing access to electricity to rural households. 

The process of sanction of projects shall commence immediately. After sanction of projects, contracts for execution of projects will be awarded by States Discoms / Power Departments. The projects shall be completed within 24 months from date of award. 

North Eastern Region Power System Improvement Project 

The North Eastern Region Power System Improvement Project (NERPSlP) for six States ( Assam, Manipur, Meghalaya, Mizoram, Tripura and Nagaland) is meant for strengthening of the Intra State Transmission and Distribution System at an estimated cost of Rs 5111.33 crore. 

The scheme is to be taken up under a new Central Sector Plan Scheme of Ministry of Power (MoP). The scheme is to be implemented with the assistance of World Bank loan and the budget of MoP. 

According to the Cabinet, "Implementation of this project will create a reliable State power grid and improve its connectivity to the upcoming load centres, and thus extend the benefits of the grid connected power to all the consumers." "The project would also provide the required grid connectivity to such villages and towns of the States, where development of distribution system at the downstream level has been taking place under Gol sponsored RGGVY/ APDRP/ R-APDRP schemes." 

The Cabinet said that this project is a major step towards meeting the national objective of "Power to All" through enhancement in access of consumers to grid connected power supply through improving its availability and reliability, thereby facilitating inclusive growth. 

"This shall also increase the per capita power consumption of these States, which is lagging behind the average national consumption and shall contribute to the economic development of the North-Eastern Region," the Cabinet said. 

Mining law set for change; firms may get to sell mines
Under the law in force at present, a company cannot sell mines it holds to other companies, though leases are transferred whenever a mining company is taken over
New Delhi  November 21, 2014: The central government, after allowing commercial mining in the coal sector, is now planning to permit companies to sell mines of all minerals, except atomic ones, by providing transferability under the mining law. Under the law in force at present, a company cannot sell mines it holds to other companies, though leases are transferred whenever a mining company is taken over.

The government plans to add in the Mines and Mineral Development and Regulation (MMDR) Act a chapter allowing such transferability for all but atomic minerals, after securing permission from the state government concerned. "This will help develop a transparent market for mines in the country and promote investment in the sector," said an official.

At the time of transfer, the seller will be required to pay a transfer fee to the state government. The state will give the necessary approval only after ascertaining that the buying company meets all conditions and liabilities enforceable on the original licensee. At present, ownerships of mines move along with companies. The previous National Democratic Alliance government, for instance, had sold its stake in Balco and Hindustan Zinc to Vedanta Resources, along with the mining leases of these companies.

Sale of a mine could take place in the form of transfer of a mining lease, as well as a prospecting-licence-cum-mining lease granted only through auction. The Union mines ministry wants to table a new Bill in Parliament to amend the MMDR Act. Under the proposed section 12(A), a holder can transfer his mining or prospecting-licence-cum-mining lease to any person eligible to hold such a lease. The seller is required to give a 90-day notice to the state government for permission. The transfer becomes effective only after that. The state government could even disapprove the transfer during this period.

Besides transferability, the government also plans to make changes to the way mines are allocated. The United Progressive Alliance (UPA) government had planned to overhaul the MMDR Act and make the bidding process mandatory for allocation of mining rights. But that Bill lapsed as the Congress-led alliance was voted out of power.

In a major departure from that draft, the present government has given the states the flexibility to levy a charge on minor minerals for sharing of benefits with local people. Under the benefit-sharing clause in the earlier draft, the holder of a mining lease was required to pay 26 per cent of its profit from mining-related operations (for minor minerals) in the previous year, or a sum equivalent to the royalty paid during the previous year, whichever was more, to the district mineral foundation. This money was to be used for the benefit of the local people.

For bulk and surface minerals, iron ore, bauxite, manganese and limestone, to be notified by the central government, the state government can give mining leases directly instead of first issuing prospecting licences. For the deep-seeded minerals, the prospecting and mining licences will be clubbed.

According to Goutam Chakraborty, an analyst at Emkay Global, the government has made the Bill more scientific and "attempted to remove various anomalies".

By fixing timelines and giving more revisionary powers to the Union government, the Bill will give the Centre a greater say in allocation of leases. "The central government is likely to have more control and powers to make the process more transparent and fast, and to intervene if the entrusted authority fails to adhere to the pre-decided timeline. The draft is a step in the right direction and positive for the industry," said Chakraborty.

  • Work in progress: Changes to the mining law have been in the works for over a decade.
  • A hiccup: The Bill placed in the Lok Sabha by UPA lapsed as the Congress-led alliance was voted out of power.
  • Resumption: The NDA govt has unveiled a new draft amendment for public discussion.
  • Sale of leases: Bidding is planned to be introduced for the second and third stage of leases.
  • Selective auctioning: Reconnaissance permits given out for initial exploration not to be auctioned; prospecting and mining leases to be auctioned.

Thursday, November 20, 2014

ARSS Infrastructure Projects Ltd: The Stock which could give multi-bagger returns
Please Click on the Photo to get a Magnified View
Incorporated in 2000, ARSS Infrastructure Projects Ltd is engaged in construction of railway infrastructure, roads, highways, bridges and irrigation projects in India. ARSS have business activities in the zonal jurisdictions of East Coast Railway, South Eastern Railway, South East Central Railway, Southern Railway and North Western Railway. ARSS also engaged in the railway construction projects, which includes earthwork, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc.

ARSS Infrastructure Projects Ltd, has presence in Eastern India, particularly in the state of Orissa. However, in recent years they have pursued opportunities in other parts of India including states of Chhatisgarh, Rajasthan, Jharkhand, Haryana, Kerla, Andhra Pradesh, Assam, Maharastra and Tamil Nadu.

In the Indian Railways Budget, 2014, apart from focusing on the commuters, the government as expected made it clear that it spends 94 paise out of every Re.1 which gives an operating ratio of 94%. This means only 6 paise is left in its pocket to invest into the railways. However, this is going to change now towards the positive side, with Foreign Direct Investment (FDI) in Railways.

Moreover, the government will also look to fund future projects, including high-speed trains, via the public-private-partnership mode. The NDA government earlier spoke about ways to monetize Railways land.

According to the Economic Times, 20 November, 2014, the Debroy Committee has been constituted to suggest ways to fund rail projects and also restructuring of the Railway Board. Facing a serious fund crunch, the national transporter has recently opened more areas in the sector for FDI.

According to the latest decision, new areas like installation of bio-toilets, cleaning of trains and setting up of mechanised laundries are also being opened up for FDI.

Indian Railways, which is facing a severe cash crunch to the tune of Rs.30,000 crore every year, received a major financial boost as 100% Foreign Direct Investment (FDI) is now allowed for developing infrastructure and improving safety features. The Railway Board and a Cabinet Panel has identified 17 key areas where this FDI can be used.

Earlier, 100 per cent FDI was allowed only in high-speed trains, suburban trains and dedicated freight corridors.

Several rail projects are being delayed for indefinite period for lack of resources and there is a huge requirement of funds for capacity enhancement and infrastructure upgradation.

If you remember: the initial public offering (IPO) of ARSS Infrastructure Projects, which closed in February, 2010, received tremendous response and was subscribed 47.62 times. Non-institutional investors were the leading subscribers in this issue. Their reserved portion got subscribed 124.5 times. Qualified institutional and retail investors reserved portion subscribed 49.3 times and 18.55 times, respectively. 

The price band of Rs.103-crore issue was at Rs.410-450 per share. However, this share is now available at almost one tenth (or around 90% lower than the price at which the company had made public issue in early 2010) the IPO price, inspite of a TURNAROUND in the company

ARSS Infrastructure Projects Ltd has a market cap of only Rs.62.64 Cr and Book Value of Rs.239.76 Cr. It has an EPS of Rs.29.17. Moreover, when the Industry P/E is 28.10, it has a P/E of only 1.45. A decent P/E rating of 15- can take the scrip above Rs.300, after suitable discounting. Even today, the percentage of Deliverable Quantity to Traded Quantity, is at 64.32%, indicating that accumulation is going on in the counter. Stay invested and buy on all declines. CMP: Rs.42.20 (BSE) and Rs.42 (NSE).

Select mining, metal stocks up on coal blocks auction draft rules
Photo: The Hindu Business Line
Reuters  November 20, 2014: Select mining and metal stocks gain after government released e-auction rules.

The coal ministry on Wednesday unveiled draft rules for auction of 204 coal blocks cancelled by the Supreme Court earlier - PIB website.

Hindalco Industries gains 0.65 pct while Sarda Energy and Minerals surges 3.4 pct.

Timeframe provided in the draft rules for auction is positive - dealers

Details on pricing, compensation still awaited, dealers add.

Reporting by Abhishek Vishnoi

Hindalco, Sarda Energy Gain on Coal Auction Draft Rules
November 20, 2014: Hindalco Industries, Sarda Energy and Minerals gained on Thursday after government released e-auction rules.

The coal ministry on Wednesday unveiled draft rules for auction of 204 coal blocks cancelled by the Supreme Court earlier.

Hindalco Industries gained 0.65 per cent while Sarda Energy and Minerals surged 3.4 per cent.

Dealers say timeframe provided in the draft rules for auction is positive.

Details on pricing, compensation still awaited, dealers added.

Courtesy: NDTV Ltd
Yesterday, FIIs were NET BUYERS of Indian securities 

Buy Hindalco Industries Ltd: Sudarshan Sukhani
Now another chartist: Sudarshan Sukhani has also given a buy on Hindalco Industries Ltd after Prakash Gaba, according to

Sudarshan Sukhani of told CNBC-TV18, " Hindalco Industries  inspite of the bad news was moving in a trading range and it is actually suggesting that it is willing to go higher, cross that boundary and actually begin an uptrend. I don’t know how that will happen if the Nifty decides to go down. Hindalco independently looks quite attractive as a buy." 

HINDALCO'S operations around the world:

  • Novelis is headquartered in Atlanta, Georgia and operates 25 manufacturing facilities in nine countries on four continents, with nearly 11,000 employees. Novelis is the world’s largest rolled aluminum producer in terms of volume shipped, and the largest purchaser of aluminum as well. 
  • Aditya Birla Minerals is based in Perth, West Australia, and conducts its activities at the Birla Nifty Copper Operation in the Great Sandy Desert, WA and the Mt Gordon Copper Operation located in the Mt Isa Block in Queensland. 
  • Hindalco-Almex operates a first-of-its-kind facility in India, which is exclusively devoted to high-performance aluminium alloys. HAAL is located at Shendra, Aurangabad in western India, around 350 km from Mumbai.
At 10:47 hrs Hindalco Industries was quoting at Rs 156.80, up Rs 1.95, or 1.26 percent. It has touched an intraday high of Rs 157.60 and an intraday low of Rs 154.60.

HINDALCO Industries Ltd: Buy
CMP: Rs.156.30
Goldman Sachs has a buy rating on the stock hoping for it to touch Rs.215 per share in a year. 

Initiating coverage on the stock, Goldman Sachs believes Hindalco will benefit from a change in product mix at Novelis and ramp-up of its domestic Aluminum capacity (by 150 percent to 1.3 metric tonnes currently). 

“While it underperformed Sensex by 25 percent in the past three months due to de-allocation of its Mahan coal block, we think the focus will shift back to growth. If Hindalco were to secure any coal block in the upcoming auctions by 1HCY15E at an attractive price, it could be a potential catalyst,” the brokerage says in a note. However, lower aluminum prices, higher coal costs, delays in capacity ramp-ups may poise risk to the stock. Net profit of the 

Aditya Birla group's flagship company fell 78 percent to Rs 79 crore. The decline was despite a Rs 361 crore forex gain and 36 percent rise in revenue. Revenue of the company rose 35.6 per cent during the quarter to Rs 8,554 crore from Rs 6,304.85 crore a year ago. 

Meanwhile, the Coal Ministry is likely to issue draft rules for e-auction for 74 coal blocks today and these rules will be put up for public consultation as well as stakeholder consultation too. This has also boosted sentiment around the stock as draft rules are expected to provide clarity on compensation for the coal blocks and is being done to be fair to all the parties involved. The draft rules include the point that the assets on coal blocks are to be bilaterally managed by the buyer-seller. The rules further pave way for a cap on tariffs levied and says the revenue maximization is not aimed for regulated sectors like power. 

Wednesday, November 19, 2014

India`s steel demand likely to rise by 4-5%: Indira Sec
According to Indira Securities, India's steel demand is likely to rise by 4-5 per cent this year and will touch a compounded annual growth rate (CAGR) of 15 per cent after FY17, says the report.
Photo: India Writes
Nov 14, 2014: Indira Securities' sector outlook on steel industry "Indian steel industry plays crucial role in development of nation and is considered as the backbone of civilization and the level of per capita consumption of steel is an important determinant of the socio-economic development of the country. 

The Indian steel industry is divided into primary and secondary sectors. The primary sector comprises a few large integrated steel providers producing billets, slabs and hot rolled coils. The secondary sector involves small units focused on the production of value-added products such as cold rolled coils, galvanised coils, angles, columns, beams and other re-rollers, and sponge iron units. Both sectors cater to different market segments. Companies such as Steel Authority of India  (SAIL), Rashtriya Ispat Nigam (RINL) and NMDC  are responsible for the bulk of the production in the public sector, while companies such as Tata Steel, JSW Steel and Essar Steel are some of the big names in the private sector of the Indian steel industry." 


"India's steel demand is likely to rise by 4-5 per cent this year and will touch a compounded annual growth rate (CAGR) of 15 per cent after FY17. With expectations of the new government's thrust on jump starting stalled projects initially followed by pushing large flagship projects, including the freight and industrial corridors, it is expected that India will begin moving back on the path of materials intensive growth by the end of this year. 

However, constraint of domestic iron ore availability, consistently large imports at concessional duty from Japan and Korea under CEPA-FTA, as well as rising imports of boron-added steel from China, and growing imbalance of global steel supply and demand remain major challenges for the Indian steel industry." 

"On the positive side, basic custom duty on the plants and equipment required for initial setup or expansion of iron ore pellets plants and iron ore beneficiation plants has been reduced to 2.5 per cent from 7.5/5 per cent. Lower coking coal prices may also benefit steel players in the industry. Moreover, domestic players' investments in expanding and upgrading manufacturing facilities are expected to reduce reliance on imports.

In addition, the entry of international players would provide benefits in terms of capital resources, technical know-how and more competitive industry dynamics", says Indira Securities research report.
Jindal Steel and Power Ltd: Buy
CMP: Rs.158.70
In a move to curb needless imports, the finance ministry has directed that Specific Chinese Steel Products must be subjected to stringent quality checks before allowing them to enter the country’s hinterland. The move is aimed at Chinese steel makers exporting steel by adding boron in their product mix to bypass the defined quality standards of the steel ministry’s Quality Control Order 2012 and the commerce ministry’s import duty.

The Indian Express had reported on September 18 that steel ministry had expressed serious concerns over the burgeoning steel imports from China which during the second quarter of 2014-15 exceeded “the historic (quarterly) high” of 90 million tonnes.

Moreover, the Economic Times, on 13 November, 2014 reported: 
Domestic steelmakers threatened by growing volumes of Chinese steel imports are likely to get some relief soon. Steel and mines minister Narendra Singh Tomar on Wednesday said the government is mulling an increase in import duty, days after the finance ministry issued a customs notification banning import of specific steel products like re-bars and reinforcement bars as alloy steel bars without prior certification from Bureau of Indian Standards (BIS).
Also, the company came out with decent set of numbers, for Q2FY15. On a Standalone basis, for the Quarter ended September 30, 2014, the Company posted a net profit of Rs.2872.80 million as compared to Rs.2566.80 million for the quarter ended September 30, 2013. Total Income has decreased marginally from Rs.35296.40 million for the quarter ended September 30, 2013 to Rs.32220.90 million for the quarter ended September 30, 2014. 

The Consolidated Results are as follows: The Group has posted a net profit/(loss) after taxes, minority interest and share in profit/(loss) of associates of Rs.4418.30 million for the quarter ended September 30, 2014 as compared to Rs.4520.70 million for the quarter ended September 30, 2013. Total Income has increased from Rs.48371.30 million for the quarter ended September 30, 2013 to Rs.51831.80 million for the quarter ended September 30, 2014. 

Tuesday, November 18, 2014

Photo: Network2media
ARSS Infrastructure Projects Ltd hit the buyer freeze in BSE at Rs.43.90. The company came out with scintillating set of numbers for the Q2FY15. Also, FDI in Railways, will help the company shore up both its top and bottomlines. 
My recommended J P Associates Ltd at around Rs.29, last month today touched Rs.34.95 before closing at Rs.34.45 up 2.38%. Do, you know the reasons for today's spurt in the share price? Ask the Paid Group members.
Today's recommendation, Reliance Capital Ltd at around Rs.500-505, today touched Rs.528.60, before closing down at Rs.523.25, up 4.20%. The target for the scrip is Rs.570, in the next couple of weeks. The shares of insurance companies will be in focus during the next few days, after Finance Minister Arun Jaitley yesterday, 17 November 2014, said he is expecting that Insurance Amendment Bill will be passed in the forthcoming winter session of parliament. He said that he is in touch with the Parliament Select Committee in this regard and will try to persuade it to give its report at the earliest.
My recommended Jindal Saw Ltd today made a new 52-week high. The scrip if you remember was recommended around Rs.75.95.
Join the Premium Service or trade through my recommended brokerage house/s to get the maximum benefits from the current market momentum--cut your losses and make money, hassle-free. Also, you can allow my firm to trade on  your behalf so that your ROI is maximized--make money as you continue doing your normal duty. This market is only for the experts--novices and amateurs could burn their fingers.
Infrastructure developers gain on govt's efforts to boost sector
[Editor: Yesterday, I asked all to go full-hog in the stocks in the Infrastructure, Railways and especially in those, who are into the roads space. Today, you must have seen that, most of the stocks in the construction sector are doing fine: even ARSS Infrastructure Projects Ltd (Rs.42.50), which fell due to profit book after scintillating, Q2FY15 numbers  is up more than 1% in the NSE]
Photo: Live Mint
Shares of eleven infrastructure developers rose by 0.57% to 3.47% at 10:15 IST on BSE after Finance Minister said that the government has taken and will further take series of measures to tackle various challenges being faced by the sector.

Finance Minister Arun Jaitley made the statement after market hours yesterday, 17 November 2014,

Meanwhile, the S&P BSE Sensex was up 64.16 points or 0.23% at 28,242.04.

Among infra stocks, Jaiprakash Associates (up 0.59%), Hindustan Construction Company (up 0.57%), NCC (up 2.98%), L&T (up 0.64%), IVRCL (up 1.36%), Gammon India (up 1.6%), IRB Infrastructure & Developers (up 2.7%), GVK Power Infrastructure (up 2.1%), Unity Infraprojects (up 1.07%), Lanco Infratech (up 3.47%), and GMR Infrastructure (up 0.74%) gained.

Finance Minister Arun Jaitley yesterday, 17 November 2014, said that he is in discussion with the members of opposition parties to make necessary procedural changes in Land Acquisition Act in order to avoid delay in the implementation of the infrastructure projects. Jaitley said that the government has taken series of measures to tackle various challenges being faced by the infrastructure sector in the country. The Finance Minister said that many more such measures are in offing in near future. 

Meanwhile, a Memorandum of Understanding (MoU) was signed yesterday, 17 November 2014, between Department of Economic Affairs (DEA), Ministry of Finance, Government of India and Department of Commerce, United States of America (USA) on establishing Infrastructure Collaboration Platform. The (MoU) establishes a United States-India Infrastructure Collaboration Platform, under which the governments of the two nations intend to coordinate and cooperate with the goal of facilitating US industry participation in Indian infrastructure projects to improve the bilateral commercial relationship and benefit both the Participants' economies, India's Ministry of Finance said in a statement. 

Courtesy: Capital Market

Monday, November 17, 2014

Rate cut by RBI will give good fillip to economy: Jaitley
[Editor: This time there is nothing much to think for the RBI governor, Dr.Rajan, to go for a 25 bps Repo rate cut. This exercise is necessary just to signal that the battle against inflation has at last been won, in style. Many banks have already cut the rates on their FDs, to push-up the credit off-take. The investors and traders are therefore,  suggested to go full steam on Bank and Construction / Real Estate counters. I am not too bullish on the Auto sector, except some selct pockets; as I feel most of the scrips are overvalued there and a crash cannot be ruled out]
November 17, 2014: Union Finance Minister Arun Jaitley has said that since inflation has moderated “therefore, if RBI [Reserve Bank of India], which is highly professional organisation in its wisdom decides to bring down the cost of capital will give a good fillip to the Indian economy”.

Mr. Jaitley also said that the disinvestment targets for current financial year are quite ambitious but he hopes to achieve them or at least come close to achieving them. He said that road shows for the planned disinvestments were underway in many parts of the world.

The Finance Minister was delivering the keynote address at the Citi’s Investor Summit: ‘India – Poised for Higher Growth’. Also present at the summit were Finance Ministry officials and RBI Deputy Governor S.S. Mundra.

Later, Mr. Mundra told reporters that the recent cooling of retail inflation was a combined outcome of factors, including a favourable statistical effect of a high base last year, a downturn in global commodity prices and easing vegetable prices. Official data released earlier this month showed retail inflation too had slowed in October to 5.5 per cent against 6.5 per cent in the previous month

Mr. Jaitley said that the government had taken series of measures for tackling the infrastructure sector’s challenges and that many more such measures were in offing. He said that he is in discussions with the members of opposition parties for making necessary procedural changes in Land Acquisition Act in order to avoid delays in the implementation of the infrastructure projects. He also said that the government through its budget had laid down a direction in which the economy is likely to proceed to restore investors’ confidence and assured that there will not be any movement of economy in contrary direction.

Giving details of various economic reforms in the pipeline, he said he was expecting the Insurance Amendment Bill to be passed in the forthcoming winter session of Parliament for which he was in touch with the Parliament Select Committee.

On the Goods and Service Tax (GST), the Finance Minister said he is in touch with various State Governments for ironing out the outstanding differences. He said States want to retain taxation authority for liquor and petroleum products. They also want entry tax and octroi to be kept out of the purview of the GST. The Finance Minster said that all these issues will be sorted out soon. He will also apprise the Empowered Committee of State Finance Ministers’ about the draft Constitution Amendment Bill on GST before introducing the same in Parliament.

CourtesyThe Hindu
Today, as was mentioned in the late hours of trade, Allied Digital Services Ltd (Rs.21.45) hit the buyer freezes on the both the exchanges, in the late market trade. The scrip is rising basically on twin reasons: (i) More visibility on the revenue front from the Pune CCTV-Project and (ii) From Q3FY15, it should start showing better results. The book value of the shares of the company is Rs.149.40 and it has a market cap of only Rs.99.07 Cr. The investors are suggested to stay put in the shares of the company, for  a target of Rs.41-42, in the coming months. 
ARSS Infrastructure Projects Ltd today fell with low volumes and closed the day in the NSE at Rs.41.90, just on the support line. The company not only came out with good September, 2014 quarter numbers but is also likely to get benefited from the FDI in Railways sector and easing of rules in the construction sector.  Weak hands are getting out of the stock and is being replaced by long term investors. The book value of the shares of the company is Rs.239.76 and it has a market cap of only Rs.62.12 Cr against the FY14 sales turnover of Rs.908.34 Cr and H1FY15 revenues of Rs.351.46, indicating that the scrip is highly undervalued at the CMP of Rs.41.90. ARSS Infrastructure Projects reported standalone net profit of Rs.2.23 crore in the September 2014 quarter. However, the Sales declined by 12.00% to Rs.164.41 crore. The investors are suggested accumulate the scrip on all declines.
Today Resurgere Mines and Minerals Ltd closed at Rs.1.65 up 4.43%, after touching Rs.1.72 intra-day.  The company has an asset base of Rs.656.87 Cr, against the market cap of Rs.32.81 Cr, indicating that the scrip is undervalued. Moreover, writes on 17 November, 2014:  
Aimed at improving transparency in allocation of mineral resources, government seeks to amend the existing 57-year old Act to introduce competitive bidding through the auction route for iron ore and other minerals. "In order to both improve transparency in allocation as well as to ensure a fair share of the value of minerals for the government, the Bill prescribes competitive bidding by auction as the method to be followed for allocation of Mining Leases (MLs) in respect of notified minerals," said a draft copy of the Bill posted in Mines Ministry's website.
The Paid Members today were asked be long on Nifty, above 8370--I hope most of them made money from this call at the day. A 53 points higher weekly close, showed that the BULLS have again taken control of the things in Dalal Street. Although a range bound market is witnessed last week and in the early hours of today with no major activity Nifty remains strong above  8200. Today also since the morning the bulls guarded the levels of 8370 carefully and Nifty ended the day at 8,430.75 up 40.85 points. What is interesting to note is that Nifty (Spot) closed above the immediate resistance of 8415, giving the bulls further ammunitions to fight. 
Goldman Sachs expects RBI to cut rates by 50 basis points in 2015

Mumbai, November, 17, 2014: The Reserve Bank of India (RBI) will begin cutting interest rates in the first quarter of 2015 and reduce rates by 50 basis points during the course of the year, investment bank Goldman Sachs Group Inc. said in a note released on Monday. 

RBI’s benchmark signalling rate (repo rate) currently stands at 8%. One basis point is one-hundredth of a percentage point. 

“We have changed our rate call to build in 50 bps of rate cuts by RBI in 1H2015 (first half of 2015) from our earlier call of RBI on hold. We expect RBI to cut by 25bps each in February and April,” said Goldman economist Tushar Poddar in the note, explaining that the main driver of this call is the fall in global oil prices. 

“The recent sharper-than-expected fall in headline inflation, contained core prices, and no sharp increase in food prices despite a weak monsoon buttress the change in our rate view,” added the report. 

Goldman also cut its forecast for consumer price inflation in fiscal year 2016 to 5.8% compared with 7% earlier, below RBI’s target of 6% by January 2016.

To be sure, Goldman does not expect RBI to be aggressive in interest rate cuts due to the deeply entrenched inflation expectations.

“India has had an extended period of high and sticky inflation. This has led to deeply entrenched inflation expectations, which were at 13.5% in 3Q2014 for one-year ahead... Therefore, we think a prolonged period of weak inflation would be required for expectations to come down,” writes Poddar in the research note, adding that entrenched inflationary expectations, uncertainty about commodity prices, and the need to establish the credibility of the new inflation targeting framework may prevent steeper rate cuts.

Expectations of interest rate cuts have risen in recent months due to a quicker-than-anticipated fall in retail and wholesale inflation. Wholesale price inflation fell to 1.77% in October, while consumer price inflation fell to 5.52%. 

At 12.28pm, yield on the 10-year government bond was at 8.179%, compared with its Friday’s close of 8.217%. Bond yields and prices move in opposite directions. Since the beginning of October, the 10-year yield has fallen 33.4 bps to 8.179% from 8.514%. Year-to-date, the 10-year bond has dipped 64.50 bps to 8.179% from 8.825%.

Courtesy: Live Mint

Stone India Ltd: Makes a New 52-week high
Photo: Indian Mirror
My recommended Stone India Ltd made a new 52-week high today at Rs.91.55. The scrip was first recommended around Rs.50.50 on 25 February, 2011 and later asked to accumulate after the scrip fell. 

Meanwhile, Mr.A K Bhattacharya wrote the following on 16 November, 2014 on the Business Standard: 

The appointment of a new railways minister has quite understandably generated a lot of hope and some excitement. There is hope because of the commendable track record of Suresh Prabhu, the new railways minister, who had impressed everybody by his ideas and performance as the power minister in the Atal Bihari Vajpayee government. The excitement is even more because of the opportunities that the Indian Railways offers by way of reforms and restructuring to become a potent force to revive India's economic growth.

Therefore, the Indian Railways related scrip is expected to do well in the coming days, not only due to FDI in railways, but also due to new minister taking over the office.  
Roadshows for railway FDI in US, Europe and Japan
Suresh Prabhu plans existing network’s facelift
Sunil Agarwal, President & CEO,
ARSS Infrastructure Ltd
After Prime Minister Narendra Modi appointed Suresh Prabhu railway minister, a move is afoot in the cash-starved Indian Railways to hardsell the recently-allowed FDI to the international market. The Railways will soon rope in private players to hold roadshows in a number of international destinations, including Japan, China, Europe and the United States, to attract FDI in the rail system.

“The Railways have notified the areas wherein FDI will be allowed. With the homework done, the next step is to reach out to interested parties in foreign capitals. The Railways will entrust this responsibility to professional entities from the private sector to convey to foreign invstors that the Railways could be a good investment option,” said a senior official.

Mr Prabhu has indicated he doesn’t believe in sticking to the status quo in the Railways and would rather to scale up investments in a big way. “Besides the high-speed rail system, the minister is of the view that the existing rail networks need a major facelift. He is trying to present a blueprint soon to scale up railway finances via multiple options, that include FDI and securitisation of railway assets,” the official added.

The Railways will seek private partners to tap investment possibilities in Japan, China, Europe and the US to attract FDI. “The immediate concern is not to tie up funds for the high-speed rail corridor, but to significantly ramp up the existing infrastructure so that trains on semi-high speed mode could be cleared. The minister also sought an exhaustive report on the status of ongoing and pending projects before the Winter Session begins. The immediate thrust is to manage funds for the turnaround in existing functions of the Railways so that it can make a significant contribution to the country’s economic growth,” the official added.

The Railways are now seeking FDI in station, track and signalling, besides greenfield projects. The proposed Rail Coach Factory in Palakkad (Kerala) will also be at the top of the new minister’s agenda in seeking FDI.

Courtesy: The Asian Age
Jindal Saw Ltd: Makes New 52-Week High
Jindal Saw Ltd which was recommended on 20 October, 2014, at around Rs.75.95 made a new 52-week high of Rs.103.50 today. Congratulations to all those who made money from this scrip. Meanwhile, today another Jindal Group company, JSW Energy Ltd, flared up to Rs.86 and is now trading at Rs.85.

Rate sensitive Infrastructure (including Steel and Cement) and Bank stocks are expected to do well in future as the RBI, might go in for a 25 basis points cut in the repo rates. Today, Tata Steel Ltd (Rs.480) and Jai Corp Ltd (Rs.90) are already doing well. 

Meanwhile, Allied Digital Services Ltd (Rs.21.10) could start hitting non-stop buyer freezes from here as the revenues from the Pune Project kicks in---stay invested. 

JCB opens 2 factories in Jaipur with Rs.500 cr
~By Michael Gonsalves
Nov 16 2014: JCB India, India’s largest construction equipment manufacturer, which opened two factories in Jaipur with an investment of Rs 500 crore, despite sluggish market for last two—three years, is betting on growth from next year.

“We have invested Rs 500 on our new fourth and fifth factory at Jaipur and it is the single largest manufacturing site in India,” Vipin Sondhi, managing director and CEO at JCB India told Financial Chronicle.

He said despite down turn in the construction equipment industry for the last two-three years, the company continues to invest for the future.

“Due to slowdown in the construction and infrastructure segment of the Indian market, as well as globally, the construction equipment industry de-grew by 20 per cent in India. And JCB India also de-grew lower than the industry,” Sondhi said.

The company’s sales declined for the first time in five years to Rs.5,532 crore in the year ended 31 March from Rs.5,862 crore in the previous year, due to economic slowdown and construction of infrastructure projects grounding to a halt in the past two years.

But in the last three-four months the industry has seen some green shoots with some pickup in sales. “We will even out by the end of this financial year and next year, we expect growth to return,” Sondhi said.

Graeme Macdonald, chief executive officer at JCB group, said except in the UK and North America, where the Staffordshire-UK based JCB, the world’s third-largest construction equipment maker by volume, grew 44 and 10 per cent respectively; sales of its bright yellow diggers had slumped in the rest of the global market.

JCB India, the market leader, which sells one out of every two construction equipments in the country, is the British manufacturer’s largest market by revenue. It accounted for 18 per cent of the total revenue of the parent company.

“We expect sales in India to grow next year after two-three years of declines, aided by higher exports and a new drive to increase infrastructure investment under the newly elected prime minister Narendra Modi,” JC Bamford, chairman at family-owned JCB Bamford Excavators, said.

However, he warned that group-wide revenues and profits were likely to fall during 2014, due to tough trading conditions in countries such as Brazil and Russia, where exports had been badly hit by recent economic sanctions against the Russian government.

“We expect export volumes from India to grow as well as domestic Indian volumes,” Bambord said.

Sondhi said out of the total Rs 5,532 crore sales revenues clocked last financial year, 20 per cent came from exports to about 50 countries.

He said the one million sq ft of new factory space on the 115-acre campus, would be utilised to make components, telescopic handlers and skid steer loaders for the Indian market.

“The new facility will also provide additional backhoe loader capacity from 2015,” Sondhi said. He, however, declined to give details on capacities of the two factories, saying that the capacity would be scaled up as per the market demand.

JCB has 11 factories in the UK, five in India and other factories in Brazil, China and North America.

JCB India manufactures 25 different machines in seven product lines such as backhoe loaders, wheeled loading shovels, tracked excavators, vibratory compactors, telehandlers, skid steer loaders and pick and carry cranes.

Since the company was founded in 1945, JCB has manufactured more than 1 million machines and 200,000 of those have been made in India.

(The reporter’s trip to Jaipur was hosted by the company)

Odisha targets Rs 5,000 cr investment in infrastructure sector
Bhubaneswar, Nov 15 (PTI) Setting an investment target of Rs.5,000 crore in public infrastructure in Odisha, Chief Minister Naveen Patnaik today said Public Private Partnerships (PPP) would play a key role in achievement of this vision.

"We realise that infrastructure development alone would  make our multi-faceted schemes and programmes in different socio­economic sectors sustainable, leading to greater growth  multipliers," Patnaik said inaugurating a round table meet organised by an English daily here.

Speaking on the "State's Growth Path and Opportunities Ahead", the chief minister said the state government targets to attract investment of at least Rs.5,000 crore in public infrastructure through PPPs during the 12th Plan period.

Courtesy: NITI Central
Govt outlines areas open for FDI in railways Railway ministry identifies 38 specific projects which could attract FDI worth Rs.90,000 crore.
[Editor: I believe the market has ignored at least two vital points in case of ARSS Infrastructure Projects Ltd (Rs.42): (i) ARSS Infrastructure Projects  Ltd commenced its operation as a construction company specialised in the field of railway infrastructure development. Over the  years, ARSS Infrastruture Project Ltd has developed an expertise in this space, which include earthwork, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc. The news about FDI in the Railways sector should help the company (ii) The net profit garnered by the company in Q2FY15 is more than double that of Q1FY15. But surprisingly the scrip is falling since the last couple of days. According to my assessment, the scrip should cross Rs.50, within a short time; as the market takes note such hidden positives]
New Delhi, 12 November, 2014: The Union railway ministry on Tuesday outlined areas open for private and foreign direct investment (FDI) and specified guidelines for the same, besides identifying 38 specific projects which could attract FDI worth Rs.90,000 crore. 

The notification on the railway ministry website comes a day after Suresh Prabhu took charge as Union railway minister. 

Some of the key projects open for FDI include a Rs.63,180-crore Mumbai-Ahmedabad high-speed corridor, a Rs.14,000-crore Mumbai CST-Panvel suburban corridor and a Rs.1,200 crore coach manufacturing factory at Kanchrapara in West Bengal. 

The ministry listed 17 areas for private and foreign investment, including suburban corridor projects, high-speed train projects, freight lines, rolling stock manufacture, electrification, signalling, freight terminals and logistics parks, passenger terminals, training institutes, testing facilities, branch lines and hill railways, non-conventional energy, mechanized laundry, rolling stock procurement, bio-toilets, level crossings solutions and safety solutions. 

Soon after assuming office, Prabhu told the members of the railway board that expediting projects would be his focus. 

The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government allowed 100% FDI in railway infrastructure via the so-called automatic route on 6 August. Investment channelled through this route doesn’t require prior government approvals. 

“During the time between the cabinet decision and this notification, new areas have been identified for FDI. So, from 10 areas earlier, now we have listed 17 areas,” said a government official, who did not want to be identified. 

A press release issued by the government after the 6 August cabinet decision said that FDI would be barred in core railway operations. Tuesday’s guidelines clarified that developers would be allowed to operate stand-alone projects under identified areas where there is no interference with the existing indian railways network. 

The guidelines also do away with the administrative approvals previously required for railways manufacturing. “No administrative approval of MoR (ministry of railways) required in cases where no procurement commitment is made by MoR and no land lease from IR (indian railways) is involved,” the guidelines said. 

India has struggled to encourage private investment in its railways. The government revised its policy for private investment by issuing five participative models for rail-connectivity and capacity augmentation in a bid to attract investors in December 2012. Experts say even these models have seen limited success and attracting foreign investment could be equally challenging. 

“The guidelines give a long list of avenues where FDI can come in. These are just possibilities. However, railways will have to create suitable projects with robust returns and risk-adjusted frameworks that are acceptable to investors,” said Abhaya Agarwal, a partner at EY, who oversees the infrastructure practice at the audit and consulting firm.

Courtesy:  Live Mint
Slicing off 1,000 km, to bring Mizoram closer to the world
AIZAWL, November 16: The road is layered with fresh mud from last night’s downpour. An earthmover has removed the small landslip that blocked it, paving the way for construction to continue, but machines trying to lay the tarmac are struggling against the mud. A steadily growing line of vehicles waits to cross the muddied patch. A worker, overseeing the construction, frantically waves at the vans and cars, trying to clear the track.

Passengers have their eyes set on a steep cliff, apparently worried it might crumble any moment and deposit more mud on the road. It’s a grind that the construction workers and engineers go through every day, for five years, building a 12-metre-wide, 90-km road from Lawngtlai in southern Mizoram to Zochachhuah village on the Indo-Myanmar border, running parallel to the Kaladan river. They are now in the process of cutting out the final 5 km of road from the hills.

By the time the final touches, including laying the tarmac, on the road to be called NH 502A are over, it will be mid-2016, two years beyond schedule. But it will shorten the current time taken to transport goods from Kolkata to Mizoram by three-four days, and the distance by more than 950 km. It will also change the face of Mizoram which, like other north-eastern states, is poorly connected to the rest of the country. The benefit may extend to the rest of the Northeast as well, as NH 502A joins NH 54 to Assam. With eight-odd bridges, NH 502A will be like no other road in Mizoram. As it moves from Mizoram’s hills to Myanmar’s relatively plain topography, it becomes more levelled, wider and straighter than any other road in the state and with gradual rather than steep curves. That’s what’s uppermost on Lalthanzuala Ralte’s mind. “I keep browsing the Internet for the length of the longest container trucks and then, when I’m on site, try to imagine if they will be able to negotiate the curves comfortably,” says the PWD Executive Engineer, making a wide, winding gesture from his vantage point at Circuit House in Lawngtlai.

The number of curves on the road are down from the original planned 1,081 to 764, although that’s still more than eight twists and turns every kilometre. NH 502A is part of the much larger, grander Kaladan Multi-Modal Transport Transit Project (KMMTTP). Launched in 2009 by the UPA as part of its ‘Look East’ policy and now being pushed under the NDA’s ‘Act East’ programme, the overall KMMTTP project entails precisely the following: building the 90-km NH 502A to the Indo-Myanmar border; constructing a 140-km highway from there to Paletwa town in Myanmar; developing a river port at Paletwa on the Kaladan river, and connecting it via a 160-km waterway to Sittwe; and constructing a deepwater port at Sittwe to facilitate a sea route to Kolkata’s Haldia port, roughly 540 km away.

Though the Kaladan river runs through Mizoram as well, it is too narrow within the state for barges to travel. A total of 30 bridges will be built over the total 230 km of road route. The Myanmar end has been progressing slowly. Work on the highway to Paletwa is yet to begin, though building of the waterway to Sittwe and the development of ports at Paletwa and Sittwe is underway. Officials in Mizoram call the KMMTTP the “future gateway to South East Asia”. During Prime Minister Narendra Modi’s visit to Myanmar this week, MEA Joint Secretary Sripriya Ranganathan called the KMMTTP a “totally win-win kind of a project in which we get the access that we seek to ensure to our Northeast, while Myanmar gets an asset which it will be able to use and that will benefit the people of a fairly backward and under-developed state”.

At a camp of RDS Project Limited, one of the two contractors building NH 502A, Joint Managing Director Rahul Garg is poring over a drawing board. Outside the camp are trucks, an assortment of machinery, workmen from Jharkhand and a temporary diesel pump.   Wiping sweat off his forehead, Garg says, “NH 502A’s starting point — the lone fuel station at Lawngtlai — is roughly 800 metres above sea level. Where I am right now is about 350 metres above sea level. That’s a drop of 450 metres in 70-odd km. Zochachhuah, the border village nearly 30 km away, is about 80 metres above sea level. From there, it’s all small hills.” Geographical challenges apart, there are bureaucratic hurdles too. 

Ranjan, project manager for ARSS, hopes his workforce of 360 men can begin laying bitumen in a few weeks. He is confident of finishing the 26 km of road allotted to his company by the revised deadline of mid-2016, but for one hiccup: a tribal farmer on the bank of the small Ngengpui stream is refusing to accept the government compensation. Till he does, ARSS will not be able to build a 100-foot-long bridge over the stream. “The bitumen is already stocked, I have my stone crushers and other machinery in place. But I can only wait now,” he says.

The Mizoram PWD, the nodal agency, has asked for more funds and a second revision of project estimates. The difficulty can be gauged from the numbers: A workforce of 1,010 (including 51 cooks and 305 drivers and various machine operators) and 154 heavy machinery (including 33 excavators, 10 earthmovers and nine bulldozers) are permanently stationed at various points on the stretch, while contractors have set up four fuel pumps to power their operations. By the time NH 502A is complete, the PWD estimates 9 million litres of diesel would have been guzzled, 3,100 trees felled, 1,80,000 cubic metres of stones papered over with 60,000 barrels of bitumen, and 18 million cubic metres of soil removed. There have been 19 deaths since the project began — 13 due to malaria, six because of on-site accidents. Heavy monsoons here also mean that the annual work season is just eight months long. Mir Thakur, a mechanical engineer with RDS, says he sat at home in Chandigarh for four months during this year’s rains. In Myanmar, the story is the same. At Sittwe, more than 1.2 million cubic metres of soil, pebbles and rocks have to be dredged for the deepwater port, while an estimated 1,09,000 cubic metres of sand and pebbles have to be dredged to make the Kaladan river between Paletwa and Sittwe navigable for barges.

Sometimes the challenges have been big enough to force a change in course. For example, the initial plan was to link Sittwe with Kaletwa, a town north of Paletwa. Like in Mizoram, power is erratic in Myanmar, mostly three to five hours a day. And the work season is just five months a year due to flooding of the Kaladan during monsoons, when its water level rises by up to 8 metres. The Indian contractors insist they can do the job even across the border. Garg of RDS talks animatedly of a night he and his colleagues spent at Kaletwa during a reconnaissance some months ago. Unable to find a hotel, they stayed with a family in a bamboo hut. However, he adds ruefully, a joint venture between RDS and POSCO lost the bid to build the ports at Sittwe and Paletwa and the dredging contract to Essar. “We will be bidding for constructing a part of the road till Paletwa,” Garg says. Post-KMMTTP, other roads are being considered to upgrade Mizoram’s infrastructure. Last year, Chief Minister Lal Thanhawla laid the foundation stone for a 120-km road from Laki in Mara-tribe-dominated Saiha district, east of Lawngtlai, to Paletwa. Most tribes in Mizoram, including major ones like Lusei, Mara, Lai, Chakma and Bru, have relatives in either Myanmar or Bangladesh. In the meantime, some families have already started settling around NH 502A. In fact, 60 Bru families from Darnamtlang village have moved down from the surrounding hills to just the level of the road in spite of objections by the PWD, and even started building a school. Apart from the local tribes, businessmen can hardly hide their excitement. Expecting that one of the goods to move along the route would be narcotics, and fearing attacks from militants, the Home Department is planning to set up more police stations and check-posts along the stretch. One “illegality” is already under investigation.

Residents in Lai Autonomous District (within Lawngtlai district) have been demanding compensation for “private land”. As per an initial report by the Anti-Corruption Bureau, 1,024 of these “landowners” have made compensation claims for a total of 25,940 sq km of private land. That is 4,859 sq km more than the total area of Mizoram. Lalrinliana Sailo, chairman of a five-member Estimates Committee, says compensation-related issues are partly behind the PWD asking for a revision of finances by more than Rs 100 crore.

Courtesy:  The Morung Express