ARVIND KEJRIWAL and his TUGHLAK-ISM

Who will pay the SUBSIDIES for the RICH? The POOR TAX PAYERS...? 

Two listed private distribution utilities, Tata Power and Reliance Infrastructure, supply power in the capital city, Delhi. R-Infra has management control of BSES Rajdhani Power and BSES Yamuna Power.

These distribution entities say it is tough to decrease retail power rates. “The cost of power in Delhi has increased by 300 per cent since 2002, while the retail rate has increased by (only) 65-70 per cent. This has created a huge financial burden for all the private discoms in the city,” said a distributor who refused to be named.

Apart from other impacts, experts feel power rates could be reduced over time by reducing power procurement costs.

“The cost of power production has gone up tremendously in the last 2-3 years. It is likely that the power regulatory commission will hike the tariff in the state. However, to give relief to the common people, we have decided to offer Rs.200 crore subsidy in this year,” said Assam Power Minister Pradyut Bordoloi.

“The cost of natural gas has gone up by 165 per cent to Rs.5,091 per 1,000 standard cubic metre now from Rs.1,920 in 2012. Likewise, the coal price has also shot up by 85-150 per cent in this period,” Bordoloi said.

The cost of hydro power generation is less compared to the other modes, but in this case also expenses related to transportation, transmission and other factors have increased by 30 per cent in since 2010, he added.

Meanwhile, According to The Times of India,  Debashish Mishra, senior director, Deloitte India said. "It is unlikely that the utilities can bring down the electricity tariffs by 50 per cent without government providing them with cash subsidy,"

However, he added that there may be scope for further loss reduction in distribution, demand side management measures and cost optimisation in O&M (Operation & Maintenance).

He said that broadly the tariff is determined by four factors - existing operational efficiencies, capital and cost structures, power purchase agreements, and regulatory (assured and authorised) assets in the sector.

"In the longer run i.e. over next 5 years, if annual tariff increases is contained at the existing levels by managing the four outlined factors, then effective reduction can be stated to be around 50 per cent," Mohapatra added.

Electricity tariffs were revised in the Capital in July this year. Delhiites pay a minimum of Rs.3.90 per unit tariff.

States like Maharashtra, West Bengal, Kerala and Andhra Pradesh have posted the high domestic power tariffs in the country. Maharashtra has the highest power tariff of Rs.8.80 per unit followed by West Bengal (Rs.8.per unit), Kerala (Rs.7.50.per unit), Andhra Pradesh (Rs.7.30.per unit) and Madhya Pradesh (Rs.6.80 per unit). 

An analysis of power deficits across all the Indian states suggests that Tripura has posted the highest power deficit (-33.8%) amongst the states while Delhi has lowest power deficit of -0.3%. States like Kerala (18.5%), Uttar Pradesh (17%) and Rajasthan (11%) have depicted moderate power deficits. However, Himachal Pradesh and Odisha have exhibited power surplus of (52.4%) and (12.6%) respectively. This means the power companies have functioned satisfactorily in Delhi. 

Recent hike in domestic power tariff has registered highest growth of 42% in Tamil Nadu followed by Lakshadweep (33.30%), Maharashtra (28%), Goa (23.30%) and Jammu & Kashmir (22.20%).

The three discoms in question — Reliance companies BSES, BSES Rajdhani (BRPL) and BSES Yamuna (BYPL) — have had their accounts described earlier by the Aam Aadmi Party (AAP) as being "fudged and unreliable" and thus untrustworthy regarding their revenues situation. 

Arvind Kejriwal according to media reports, estimated that the revision in electricity tariff would cost the government Rs.200 crore but Rs.140 crore of this would be borne by the power companies against their outstandings.

AAP had also earlier demanded that tariffs should only be increased after the companies' audit by the nation's Comptroller and Auditor General (CAG). But the Delhi Cabinet, headed by the lunatic Arvind Kejriwal, cleared a 50 per cent cut in electricity tariffs for those homes that consume up to 400 units of electricity a month, just on assuming the office. 

Source:
(i) The Business Standard of 24 December, 2014
(ii) The Hindu Business Line, 19 August, 2014.
(iii) The Times of India, 31st December, 2014
(iv) An analysis of power tariffs across India, February 2013 by PHD Chamber of Commerce and Industry. 

Cabinet to decide over Arunachal and Sikkim hydro power projects in next meeting
According to Economic Times, the government is working out a plan to restructure the loans, extend repayment deadlines by three years and waive penalties of POWER COMPANIES. 

New Delhi: Government’s concerns over growth are visibly growing. Cabinet Committee on Investment (CCI) at its next meeting may take up three hydro power projects that have been held up on account of environmental and forest clearances.

The three hydel projects – Tawang (800 MW) and Tato (700 MW) and Teesta (520 MW) – have been awaiting environmental clearances for a very long time.

‘These projects in Arunachal Pradesh (Tawang and Tato) and (Teesta) Sikkim have been sent to CCI from the Power Ministry for clearance’, a source told PTI. He said the CCI may take up the proposals at its next meeting but did not specify a date for that.

Teesta Stage-IV Hydroelectric Project is a run of the river scheme proposed along river Teesta. The project was awarded to NHPC in 2009. At that time the estimated project cost was Rs 3,594.74 crore. The project, which is likely to supply electricity to Sikkim, West Bengal, Bihar, Orissa and Jharkhand, was expected to be commissioned in 2012.

The Tawang Hydroelectric Project is proposed on Tawangchu river. The estimated project cost at the time of award was Rs 6,112.30 crore. The 700 MW Tata hydro power project in Arunchal Pradesh is being set up by Tato Hydro Power Private Ltd, a subsidiary of Reliance Power.

CCI was constituted on January 2, 2013. The main function of the panel is to identify projects in the infrastructure sector worth over Rs 1,000 crore that have been due to regulatory or environmental bottlenecks.

Courtesy: Daily Bhasakar

2nd unit of Sasan UMPP of Reliance Power begins generation

December 13, 2013: Anil Ambani owned Reliance Power on Friday announced that the second 660 MW unit of the 3,960 MW Sasan Ultra Mega Power Project (UMPP) has commenced power generation.

In a statement issued in New Delhi, it said the unit has commenced power generation in shortest time of just about a month from boiler light up. This was made possible by adopting innovative commissioning methods. Balance four units are in advanced stages of construction and will be commissioned over the next few months. 

The Sasan UMPP is the largest integrated power plant and coal mining project in the world. Coal production has already commenced from the 20 million tonnes Moher and Moher-Amlohri coal mines associated with the power project. With this unit, Reliance Power’s generation capacity has increased to 3,205 MW which includes 3,120 MW of thermal capacity and 85 MW of renewable energy based capacity.

Courtesy: The Hindu

WINNING STROKES: THINK DIFFERENT

As expected the Nifty took the support in 6270-6280 ranges and closed above 6300. The markets looks to be in control of the Bulls, but the action will be shifted to stock specific counters. FIIs today, i.e. on 31-Dec-2013 were net buyers to the tune of Rs.309.7 Cr.

Today Rolta Ltd touched Rs.67.85 before closing above the support of Rs.67. 20, on the NSE confirming the end of the downturn. The scrip fell from around Rs.380, to the current price of around Rs.67.20. The company's CMD said, that it has started to get dividends from the investments during the last 5 years. It is only time that the scrip would give stupendous returns. The company's Financial Year starts from September, 2013 and hence any loss in the June, 2013 quarter will have no impact on the FY14 balance sheet. Moreover that was an one time loss, which was shown as an exceptional item in the P&L account. The investors are suggested to buy the scrip on every decline and keep holding. Buy around 5000-10, 000 shares of the company if possible and keep holding like your fixed deposit. 

Today, FRL touched the 2nd target of Rs.77, before closing down a bit. The stock should consolidate at this levels before moving up. However, Future Retail Ltd is mired in debts and the current business is not going too good and hence the investors should not take too deep position in the counter. 
My recently recommended, Essar Oil Ltd reached its first target of Rs.55 as it touched Rs.55.50, intra-day. The stock is expected to consolidate around this range for some time before moving up. 

Reliance Power Ltd (Rs.73.20), has started to look good on the charts. Fundamentally, speaking there are two positives in the counter, basically: (i) The CBI has closed its preliminary enquiry into the alleged irregularities in coal block allocation for the company's ultra mega power project in Sasan, Madhya Pradesh. CBI sources said it has come to light that use of surplus coal from the Sasan UMPP was approved on two separate occasions by two EGoMs. They said since it was a policy decision, CBI was not likely to question it and (ii) Top government sources have told ET NOW that the Power Ministry is reworking a proposal that will exempt Ultra Mega Power Projects (UMPPs) from mandatory afforestation. According to analysts, Reliance Power's Tilaiya UMPP, which mired in land controversy, will be one of the major beneficiaries. The investors should buy large quantities of the counter, say 5000-10, 000 shares and keep holding for a target of Rs.107. CLICK HERE.

Reliance Power may gain as UMPP concerns ease 

Mumbai, 27 Dec, 2013: Shares of Reliance Power today rose by nearly 3 per cent on the possibility of CBI closing its preliminary enquiry to probe coal block allocation to a power project in Sasan in Madhya Pradesh run by Anil Ambani's firm.

The CBI is of the view that the allocation is a policy decision vetted by group of ministers.

CBI sources said it has come to light that use of surplus coal from the Sasan UMPP was approved on two separate occasions by two EGoMs. They said since it was a policy decision, CBI was not likely to question it.

However, they added that any final decision has not been taken over the closure and any such decision can only be taken after taking into consideration the views of the Supreme Court.

The sources said they have informed the Supreme Court about the preliminary enquiry in their status report and agency would proceed according to further directions of the apex court.

After the registration of the preliminary enquiry, ADAG spokesperson had said in a statement that "we welcome the independent time-bound enquiries by the CBI, monitored by the Supreme Court, which will clearly establish our bonafides".

It will "once and for all prove beyond doubt that we have been the unfortunate victims of a mischievous campaign of calumny and vilification conducted at the behest of our unscrupulous corporate rivals over the past 5 years," the statement said.

The allocation of coal mines to the Sasan project was done to a 100 percent government-owned company in the year 2006 when Reliance Power had not even won the project, it said adding the government disinvested its shares to Reliance pursuant to a global tender in the year 2007.

The preliminary enquiry was registered on the directions of the Supreme Court that had asked the CBI to probe 14 issues including supply of low floor buses by Tata motors to Tamil Nadu government, grant of spectrum and alleged market manipulations and hammering of stocks by Unitech.

Courtesy: The Economic Times

Market Mantra

Nifty is continuously getting support around 6270-6280 ranges during the day. It is to be noted that the Nifty has settled 187 points higher in December, expiry. The uptrend remains intact and long positions could be HELD. 

Resistance: 6310 / 6350

Support: 6270 / 6220

Today's Call: 
Buy Reliance Power Ltd at Rs.73.10, T-Rs.81, SL--Rs.69. The CBI has closed its preliminary enquiry into the alleged irregularities in coal block allocation for the company's ultra mega power project in Sasan, Madhya Pradesh. Moreover, the government may separate forest clearance for coal block from the environment nod to the overall project to speed up Odisha ultra mega power project. CLICK HERE. 
Those who have bought Rolta India Ltd yesterday at around Rs.17--17.30, should consider buying more of the scrip on every decline. It will give super and steady returns over a period. Centre plans to allow FDI in e-commerce before March, 2013. CMP: Rs.67.70. 

Rolta India Ltd: Interview with Mr.K K Singh

KK Singh, CMD, Rolta India, says the rationale behind hiking promoter stake holding is on account of the condition that defence sector companies need to have atleast 50 percent promoter stakeholding to be able to participate in manufacturing and in defense make India programmes. Mr.Singh, further said the company has plans to up promoter holding by another 5% next year. 

Rolta India Ltd promoters gained majority control in the company by hiking their stake from 40 percent to over 50 percent over the last three years through creeping acquisitions. KK Singh, CMD, Rolta India, says this year the promoter holding was raised by 4 percent. He adds the promoters still have the leeway to hike it by another 1 percent this year itself, as per Sebi guidelines. Going forward, the promoters will up their stake by another 5 percent next year in the company, he says. 

Singh says the rationale behind hiking promoter stake holding is on account of the condition that defence sector companies need to have atleast 50 percent promoter stakeholding to be able to participate in manufacturing and in defense make India programmes. 

Apart from that, the company raised about USD 200 million internationally to repay Indian debt in the previous quarter, due to which interest costs were reduced to some extent, which provided a natural hedge, he says. As of now, the debt stands at around USD 600 million, he adds. Though he says the company is now in a better position because it is seeing monetizing of its investments. He says the company will be debt free in the next 4-5 years. Below is the verbatim transcript of KK Singh's interview on CNBC-TV18. 

Q: The promoters of the company have been increasing their stake in the company. So every year via the creeping acquisition the stake has been going up and now above 50 percent mark. Could you tell us in this year how much have the promoters raised and what the plan is. Is that going to continue, what is the target promoter level that you are looking at? 

A: In this year we increased almost about 4 percent and we will continue to do this creeping acquisition as we go forward and this year we still have 1 percent limit because 5 percent is the Sebi guideline and next year again we will have 5 percent. So, we will continue to acquire as we go forward. Therefore, 50-51 percent certainly helps us in defense sector. There is a condition that Indian promoters must have at least 50 percent and above to be able to participate in manufacturing and in defense make India programmes. There is another big make India programme, the requests for proposal (RFP) will be put out in next week, which is a USD 5 billion programme which is for better field management system. So, these programmes mandate these things. We are well placed in that, there are only a handful of companies which have been shortlisted for these and we are one of them. So, this is an important thing for us from that angle also. 

Q: One of the key parameters in your previous quarter was that your finance costs were higher. What is the debt on books at this point and what is the trajectory that we can expect in terms of reduction of debt for the company? 

A: We have been dollarising our balance sheet. We raised USD 200 million in the previous quarter and this was internationally raised. The idea was that it was required to repay the Indian debts and we reduced our cost of interest to some extent and that also provides us a natural hedge. So, overall we have about USD 600 million odd debt and that is because of the fact that in the last five years we have invested almost a billion dollar into our company, into transforming the company from a simple services company to a very IP centric company and this transformation has been complete. We are seeing monetization now, better results, better profit margins and better market shares. So, this is certainly giving us an advantage in what we are doing and these are all long-term loans and as we go forward in next four-five years we should be debt free. 

Q: In the near term what are the key deals that have opened up and where does company’s pipeline stand at? 

A: Overall, the company’s pipeline right now is at Rs 8,500 crore and out of this pipeline we continue to get good orders. We have been getting good orders constantly out of large orders internationally as well as domestically but certainly defense things will make a qualitative and quantitative difference as and when they start happening. We do still get good business from defense. We have 18-20 percent of our business coming out of defense but these large make India programmes are still to take off and once they takeoff there will be a big change. 

Q: Instead of 5 percent creeping acquisition every year, no plan for an open offer or anything? A: No. We will be happy with small creeping acquisition which we do within the Sebi guidelines and that is what we want to do. 

Courtesy: www.moneycontrol.com

Rolta India Ltd's Achievements

[Editor: Rolta India Ltd's consolidated net profit rose 11.1% to Rs.70.26 crore on 33.5% growth in revenue to Rs.627.77 crore in Q1 September 2013 over Q1 September 2012. This gave an EPS of Rs.4.40 (consolidated), in the 1st quarter of Q1FY14. In the full year, FY14, Rolta Ltd is expected to clock an EPS of Rs.11-12. Buy the scrip at Rs.67.20, for a target of Rs.92, in the short term]

MUMBAI, India, December 2, 2013: Rolta OneView™ has been positioned by NASSCOM/Frost & Sullivan in the top right "Exemplars" quadrant in their Product Excellence Matrix ("PEM") for Analytics products in their report published in November 2013.

NASSCOM, in partnership with Frost & Sullivan ("F&S"), has rolled out the PEM initiative to benchmark Indian software products across defined categories. NASSCOM defines Exemplars as: "…vendors that have a well-defined growth strategy and successful execution plan. Exemplars articulate a compelling value proposition aligned to target market needs backed by strong execution and can deliver on enterprise wide implementations that support a broad BI strategy."

After short-listing products for detailed evaluation, numerous products were put through a rigorous benchmarking exercise to determine their placement on the PEM.  Product Development Organizations were evaluated based on "Strategic Excellence" as well as "Execution Excellence", and parameters like their ability to convincingly articulate customer's BI and Big Data Analytics needs, improve decision making, cut costs, innovation, market trends and competitive forces.

Rolta OneView™ merited placement in the Top Right "Exemplar" Quadrant based on an in-depth study of Rolta OneView™ Suite by F&S.  They recognized its key strengths as successful monetization through large deals in strategic verticals; cross-functional analysis for contextual monitoring of business performance and actionable intelligence; interactive Dashboards with drill down to details; cascaded balanced scorecards; strategy maps; and geospatial maps; and prebuilt knowledge data model and over 250 prebuilt industry specific KPIs.  These strengths translate into rapid deployment at customer sites, thereby enabling them to quickly realize returns on their investments in technology.

In a second PEM that reflects the market focus from "narrow" to "wide", and level of maturity in the market from "entry" level to "established", Rolta OneView™ is once again placed in the top right quadrant, implying that it is an established product with wide applicability in many vertical segments.

Rolta has made significant investments in the last few years to develop a large repository of intellectual property comprising a variety of products and solutions for many vertical segments. The Company has inducted several Subject Matter Experts and IT specialists to harness best-of-class technologies to build world-class solutions.  

"This recognition by NASSCOM/Frost & Sullivan asserts that Rolta OneView™ is a strong BI and Big Data Analytics product suite that offers out-of-the-box real-time and predictive analytics solutions," said Rajesh Ramachandran, President&CTO, Global Products & Technology Solutions, Rolta.  "It is a matter of pride for us that our product suite has emerged so strongly from a rigorous evaluation by a world renowned organization," he added.

About Rolta: Rolta is a leading provider of innovative IT solutions for many vertical segments, including Federal and State Governments, Defense/HLS, Utilities, Process, Power, Financial Services, Manufacturing, Retail, and Healthcare. By uniquely combining its expertise in the IT, Engineering and Geospatial domains, Rolta develops exceptional solutions for these segments. The Company leverages its industry-specific know-how, rich repository of intellectual property that spans photogrammetry, image processing, geospatial applications, business intelligence, analytics, field-proven solution frameworks, and deep expertise in cutting-edge technologies like Geo BI, Cloud computing, Software Defined Infrastructure and Big Data for providing sophisticated enterprise-level integrated solutions. Rolta is a multinational organization headquartered in India. The Company operates from 40 locations worldwide through its subsidiaries, and has executed projects in over 45 countries. The Company benchmarks its quality processes to the world's best standards, like successful assessment for Software Application Development and Maintenance at the highest Level 5 of SEI's CMMI® version 1.3. Rolta is listed on the Bombay Stock Exchange & National Stock Exchange, and forms part of various indices on BSE/NSE in India. The Company's GDRs are listed on the Main Board of London Stock Exchange. The Company's 'Senior Notes' are listed on Singapore Stock Exchange.

Courtesy: P R Newswire

WINNING STROKES: THINK DIFFERENT

Shree Ganesh Jewellery House (I) Ltd hit another buyer Freeze in the opening trade. The scrip was recommended to the Paid Groups some days back. The Book Value of the shares of the company is a whooping Rs.226.03. 

Essar Port Ltd today touched Rs.63, however, it came down after profit booking was suggested in the counter to the Premium Group members, due to certain reasons (to know the reasons you need to join the Premium Services). The scrip was recommended around Rs.56.70, last week. 

Today, a buy call was initiated on Rolta India Ltd at Rs.67-67.30, for a target of Rs.75-77. The company came out with good set of numbers for the September, 2013 quarter, which incidentally is the 1st quarter of the company, for FY14. In September, 2013 quarter, the net profit of the company came out as Rs.70.26 Cr, which gave an EPS of Rs.4.40. However, the company closed the FY13, in June, 2013 quarter, with a loss. Hence any loss in that last quarter of FY13 will not have any impact in the current Financial Year (FY14), which I feel many analysts overlooked. Also, the loss was due to EXCEPTIONAL ITEM, which the company clarified as follows: 

//During the fourth quarter of FY-13, as a matter of prudence & to align depreciation policy with the current replacement cycle taking into consideration various factors such as technology up-gradation and industry best practices, the Company has revised estimated useful life of all assets. Useful life of Computer Systems is now estimated at 2-6 years against 4-10 years earlier, Other Equipment at 10 years against 20 years earlier, Furniture & Fixtures at 10 years against 15 years earlier and Vehicles at 5 years against 10 years earlier. Consequent to above, there is an additional charge for depreciation during the quarter amounting to Rs. 1,152.72 Cr which is shown as an exceptional item. Further consequent to this the profit for the year(after exceptional item)is lower by Rs. 1,152.72 Cr however, this has no impact on operating profits as well as cash flows for the year ended June 30, 2013. Further to disclose the fair value of Freehold & Leasehold Land, the Company has revalued these assets to Rs. 1,057.10 Cr. based on independent valuations and an equivalent amount has been credited to Revaluation Reserve Account. This revaluation has no impact on P&L for the year and the net impact on reserves after considering change in estimate & revaluation of assets is Rs. 95.62 Cr.// Now, going by the current trend we can expect an EPS of Rs.11-12 in FY14, which gives the year end target of Rs.120-130 for the scrip, after giving suitable discounting.  The Board of Directors has recommended a dividend of Rs. 3.0 per share for the FY2012-13. The book value of the shares of the company is Rs.157.74. Rolta  is  a  leading IT  services player  in three  major business segments: Geospatial Services, Engineering Design and eConsulting. It provides integrated solutions for  mapping, mechanical designing and ERPs for defense, government, infrastructure and utilities sector. It has tied‐up with global giants like Thales, Stone & Webster and CA for various technological alliance and offshoring contracts. It has a monopolistic market share in GIS and Infrastructure design business. Its elite clientele includes likes of Indian Defense, Reliance, British Telecom, ONGC, Saudi Telecom, Dubai Municipality, CA and others. The  company  offers  high end services  in  all  its business segment.  It has a technological edge powered by its large rich depository  of  IPRs,  highly  skilled  & experienced  manpower  and domain expertise.  CLICK HERE.
Country Club (India) Ltd which was recommended here in this blog, last week and asked to be accumulated on all declines, today touched Rs.9.50, before closing at Rs.9.41, up more than 7%. The scrip will slowly head towards Rs.17-18 mark. 

A Buy call was initiated in Nifty today, after while, the indices recovered by more than 15 points. The outlook looks positive and the BULLS can carry forward their longs for a target of 6350 on Nifty_Spot. Today, i.e.on 30-Dec-2013, the FIIs have been a net buyer of Rs.116.06 Cr. To get more such calls join the Premium Service or my recommended Brokerage House/ s and stay ahead of others.

Country Club India Ltd: Looking to Break Out

CMP: Rs.8.95

Country Club India Ltd is one of the fastest growing entertainment and leisure conglomerate in India. A Multi-Million dollar entity and a listed company on BSE (Bombay Stock Exchange), Country Club India Ltd is a pioneer in the concept of family clubbing in the country. Country Club India Ltd has established 205 properties of which over 55 are owned and 175 are franchised properties plus a global gateway via Country Vacations and RCI affiliation of 4000 resorts for its esteemed members. 

Country Club India Ltd's very first leisure infrastructure project is Country Club Coconut Grove which is over much 100 acre and a completely eco friendly project near Tumkur in Bangalore. The multi-million project is the resultant outcome of vibrant synergy between core expertise of the founding organization Amrutha Estates and innovative vision of participatory clubbing that hinges on community living and holiday homes with clubbing pleasures.

Country Club India Ltd is the Country's biggest chain of Family Clubs recognized by the Limca Book of World Records. Besides prominent citizens from all walks of life, we have around 600 Corporate Members, including Microsoft, Brooke Bond Lipton (India) Ltd, CMC Ltd and Dr. Reddy's Labs. 

Country Club India Ltd provides a state-of-the-art Health Club, multi-cuisine restaurants, business centre, swimming pool and other facilities. A unique benefit to members joining the Country Club is the facility of transferability of membership from one city to another, paying the differential membership fee, in case the membership fee at the city to which the transfer is sought is higher.

Also, Country Club India Ltd offers global clubbing and holiday access to 175 franchises and boasts of a massive 5100 RCI affiliated properties along with 4000 Dial-an-Exchange (DAE) ones. Known as the ‘Power House of Entertainment’, Country Club India Ltd regularly organizes various innovative entertainment events and celebrates diverse national and international festivals across every destination. 

During such festivities, celebrities from Indian movie industries are invited to perform for the Country Club India Ltd members and their family and friends. 

Coal India sticks to import plan

[Editor: Good news for the shareholders of MMTC (Face Value: Re.1, CMP: Rs.52.90) and State Trading Corporation Ltd (Face Value: Rs.10, CMP:Rs.172). If we go by the logic the STC should be trading near the price of MMTC which comes around Rs.520, considering Rs.10 as Face Value]

Calcutta, Dec. 29: Coal India will issue another tender for import after the first one floated on November 15 failed to attract a single participant.

A senior official of Coal India said the state-run miner had not scrapped the idea of importing for domestic consumers after the disappointing outcome of the first tender.

“We have not scrapped the idea. The tender will be floated once again shortly,” said the official, adding that the process is likely to be initiated within a month.

Coal India’s first tender was worth Rs 3,000 crore for importing 5 million tonnes.

The imported coal was aimed to bridge the demand-supply gap. Domestic demand is over 600 million tonnes a year, while CIL has set a production target of 482 million tonnes in the current fiscal. CIL produces over 80 per cent of the country’s coal.

However, the miner is likely to fall short of the target as production was affected by cyclone Phailin in October and mining activities in Odisha were disrupted in November.

Overall, in April-November the PSU missed its production target by 5 per cent.

CIL official said the restriction of participants to only public sector companies such as MMTC Ltd and State Trading Corp was one of the primary reasons for the failure of the first tender, besides issues relating to upfront payment to importers.

On whether the fresh tender will allow private players, the official said the option was being considered.

Meanwhile the trade unions of the PSU said they had just deferred and not backed off from a strike against a plan to offload a 5 per cent stake in the miner.

Trade union sources said the divestment was unlikely to take place before the general elections in the first half of 2014.

The preparations to divest a stake have been an ongoing exercise for almost a year, with roadshows held abroad to garner foreign interest in the offering.

Courtesy: The Telegraph

State Trading Corporation of India Ltd (Rs.170.50): Will the scrip be able to touch Rs.400?

[Editor: Pramod Mittal’s Ispat group owes over Rs.630 crore to the State Trading Corporation (STC) which the latter is now trying to recover from JSW Steel of the Sajjan Jindal group (which acquired the beleaguered Ispat Industries in 2010. This is positive for the STC India Ltd, as the company is pretty SURE of recovering this FUND, since Sajjan Jindal Group, unlike the, Ispat Group, has GOOD REPUTATION in the markets. CLICK HERE. Moreover STC India Ltd has an equity of only Rs.60 Cr and about 90% of  its shares are held by the government of India. Public holding is only 10% of which Institutions hold 2.12%.. Besides, the Hindu Business Line on October 3, 2013 writes: The logic goes like this. The Indian lust for gold has caused a tsunami of gold imports. That has dented India’s current account with a huge hole. The current account deficit has brought the rupee to its knees. QED: Gold, which has derailed the rupee, is India’s villain. 
Based on this rationale, the Government has renewed the psychological and fiscal war against gold that had been halted in the early 1990s. But is the perception that gold is the main cause of India’s woes on the external sector, right? Is the fall in rupee value due to the rise in gold imports? Had gold imports not risen, would the rupee value have not fallen? A scrutiny of the numbers reveals that it is the unprecedented capital goods import of $587 billion in nine years of UPA rule, red-carpeted by the UPA with tax cuts and zero-rated tariff structures, which disfigured the current account with a total deficit of $339 billion. The damage to current account from net import of gold ($161 billion) and oil ($515 billion) seems far less. Besides disrupting the current account, capital goods import has sent the nation’s growth into ICU (See ‘The elephant experts didn’t see, Business Line, September 5, 2013). How is it then gold is demonised as the sole villain? Because modern economics brands gold a “barbaric relic”. CLICK HERE & CLICK HERE. 
Also, KITCO NEW on December, 2013 writes: The country’s current-account deficit hit an all-time high of $88.2 billion, or 4.8% of gross domestic product, for the fiscal year that ended in March. This led to the rules on gold imports as authorities sought to bring down the deficit to $60 billion. In mid-November, Reserve Bank of India Governor Raghuram Rajan said the deficit for the current fiscal year could fall to $56 billion, well below an earlier estimate of $70 billion. “If they achieve the target of a $60 billion current account deficit...there should be some relaxation of gold import rules,” Nambiath said. 
This could occur by April or May, he continued, suggesting authorities could at least trim the gold duties, if not other measures such as the 80-20 rule. CLICK HERE. Therefore, it will be more prudent to think that the government of India could bring in some changes in its GOLD IMPORT POLICY in the coming days]

Raj Thackeray says JNPT expansion delays helping Gujarat

Mumbai, Dec 26 2013.: The Raj Thackeray-led political party in Maharashtra has alleged that the country’s largest container port, Jawaharlal Nehru Port Trust (JNPT), near Mumbai, has been deliberately delaying its expansion plan to help ports of Gujarat by diverting cargoes of Mumbai to the neighbouring state.

In a letter dated 26 November to JNPT’s chairman, Thackeray, president of Maharashtra Navnirman Sena (MNS), said the port volumes have become stagnant for six years and are now shrinking while cargoes are increasing for Gujarat ports. Mint had reviewed the letter.

Maharashtra is ruled by the Congress party while Gujarat is ruled by Narendra Modi, the Bharatiya Janata Party’s prime ministerial candidate and also chairman of the Gujarat Maritime Board (GMB) that focuses on port sector.

JNPT handles nearly 50% of container traffic in the country.

Though the letter was written a month back, MNS released it to media after Modi’s rally on Sunday in Mumbai, where he listed achievements of Gujarat and said because of mis-governance of the Congress and the Nationalist Congress Party (NCP), Maharashtra is lagging behind Gujarat on various counts.

In the past, Thackeray praised the Gujarat model of development from many platforms but it seems that Modi’s criticism of Maharashtra has not gone down well with him.

Sandeep Pradhan, political editor of Marathi newspaper Maharashtra Times, said: “It is a symbolic attempt by Thackeray to tell his supporters that he does not compromise on the state’s interest for the sake of friendship.”

Text messages and phone calls made to JNPT chairman N.N. Kumar remained unanswered.

Incidentally, a month-long go-slow campaign by workers at two of the state-run JNPT’s private container terminals had diverted cargoes to Gujarat in November till the agitation was called off on 22 November.

Experts have pointed out that GMB is wooing private investors and setting up ports fast compared with Maharashtra Maritime Board (MMB).

“We have taken up this issue and through this letter MNS is warning the port to mend its way as well as the ways of their private partners,” Thackeray cautioned JNPT.

The letter also cited delay in starting the 330-metre berth extension allotted to one of the private terminals and awarding of fourth container terminal.

“In this period, millions of TEUs (twenty-foot equivalent units) have been diverted to Gujarat ports depriving Maharashtra of the business that would have naturally come to it,” the letter said.

“If the fourth terminal would have come in to existence then all the private ports that have come up in the last eight to nine years in Gujarat, would have got closed. Is JNPT protecting the interest of these ports by delaying its modernization and expansion projects?” Thackeray asked.

“Thackeray’s letter to JNPT has come too late in the day,” said Atul C. Kulkarni, an independent maritime consultant. Kulkarni said Gujarat is reaping the benefit of geographical advantage coupled with proactive government machinery and Gujarat ports are at least 400-700km shorter in distance for cargo coming from Jalandhar, Ludhiana, Delhi region compared with Maharashtra ports.

“MNS has its representatives in the state assembly and should be raising these issues at that forum rather than writing to JNPT chairman. Actually, the situation is so bad that some of the cargo from Nashik is already diverted to ports in Gujarat,” said Kulkarni, who was till recently chief executive officer at Chowgule Ports and Infrastructure Pvt. Ltd, that runs Angre Port in Maharashtra.

Another senior port consultant, requesting anonymity, said: “Gujarat Maritime Board, set up to administer non-major ports in that state, is quick in decision making and it has been leading non-major ports such as Pipavav, Mundra, Sikha, Bedi and others.”

GMB handles 287.81 million tonnes of cargo during 2012-13. Details of cargo handled by MMB were not immediately available.

Officials of GMB and MMB were not available for comment.

The maritime states in India are directed to have a maritime board for all matters related to coastline development and security. MMB is the second board that came into existence after GMB, set up 1982. While the mandate for both the organizations is similar, there is a huge difference between the performance and achievements of the two, experts said.

Courtesy: Live Mint

WINNING STROKES: THINK DIFFERENT

Shree Ganesh Jewellery House (I) Ltd (BSE Code: 533180), recommended today to the Premium Members and also to those who are trading through my recommended BROKERAGE  HOUSE, hit the buyer freeze.  The stock is moving towards Rs.31-32 in the coming days. Today it got locked in the Upper Circuits at Rs.25.65. According to the media reports nearly 81% of the company’s revenue was derived from exports in 2012-13 and 98 per cent of its raw materials were imported, creating a hedge. Since exports exceeded imports, a weakening rupee tended to benefit the company’s margins. Meanwhile, Shree Ganesh Jewellery House (I) Ltd has approached State Bank of India (SBI) for referring its debt to the corporate debt restructuring (CDR) cell. SBI is the lead bank in a consortium of its lenders. SBI had a meeting with the other members of the consortium last week to discuss Shree Ganesh’s proposal. Under CDR, banks typically increase the repayment period of loans to stressed borrowers, offer a moratorium and reduce lending rates. As on March 31, 2013, the company’s long-term borrowings were at Rs.100.4 crore and short-term debt at Rs.496.84 crore. The interest coverage ratio in 2012-13 was 2.26..The book value of the shares of the company is a whooping, Rs.226.03. Therefore, wait for some more UPPER CIRCUITS in the counter, in the coming days. 

Please Click on the Chart to Expand

Essar Ports Ltd recommended yesterday to the Paid Group members, at around Rs.56.70, today touched Rs.60.80, in the NSE before settling at Rs.59.50. The scrip is expected to cross Rs.100, in the next few trading sessions. On a standalone basis the company came out with good set of numbers for the Q2FY14. Not only that it is taking measures to increase the value of the shareholders. Today the scrip closed above both its 21D and 50D, SMAs and EMAs. Also, the other Essar Group companies, like Essar Oil Ltd (Rs.53.55) and Essar Shipping Ltd (Rs.19.90) did well today. 

Future Retail Ltd which was recommended only some days back at around Rs.67, today touched Rs.76.30 (crossed the 2nd target of Rs.76), before closing at Rs.73.50. 

My recommended Suzlon Ltd today got locked in the Upper Circuits Ltd at Rs.11.03 before closing at Rs.10.94 in the BSE. I have positions in the company in my personal account and is bullish on the scrip.

Tulip Telecom Ltd today hit the Upper Circuits Ltd at Rs.6.11 before cooling down at Rs.6.08. The Book value of the sharers of the company is Rs.45.34 (Forty five rupees and thirty four paise). It is true that the company is facing some financial crunches, however, even if there is any liquidation of the company (say the worst case scenario), then also the present SHAREHOLDERS stands to gain more than 7 (Seven) times of the CMP of Rs.6.08. As, mentioned earlier, I and my family members are holding a stake in the company. 

Country Club Ltd which was recommended only a few days back, here in this blog, today touched Rs.8.73 before cooling down at Rs.8.41. The company stands to gain from the depreciation of the INR against the USD, which is expected to boost both the normal and medical tourism of foreigners (as it makes travel to India cheaper). The company has huge asset base and it is pity how the scrip is trading so low. Even if one invests at the current price of around Rs.8.41, there is a chance to get double returns in the next few months if the market momentum continues. 
IVRCL Ltd (Rs.16.79) today crossed the 1st target of Rs.17.50, and profit booking was suggested in the counter. In the same way, my recommended, HCC today crossed its first target of Rs.15.50, as it touched Rs.16, intra-day. 

Join my Premium Service or my recommended Brokerage Houses to take maximum advantage from this rally. Those who have lost money in earlier cases, can also COVER all their losses just by going through few CORRECT TRADES.  The rally in the small and mid caps have started and it is the best time to enter the equity markets. To join the service/s send me a mail at: 

(i) suman2005s@rediffmail.com

(ii) sumanm2007s@gmail.com.

Essar Group Chairman Shashi Ruia meets Jayalalithaa
Essar Group chairman Shashi Ruia is said to have very good relations with the BJP Prime Ministerial aspirant, Mr.Narendra Modi. Ruia has been a vocal supporter of the CM of Gujarat, and has accompanied him on at-least half a dozen foreign tours in the past few years, most notably to Switzerland, South Korea and China in 2007 and Russia in 2009.

Chennai, Dec 04 2013: Essar Group Chairman Shashi Ruia called on Tamil Nadu Chief Minister Jayalalithaa here.

"The meeting was a courtesy call," official sources said.

Essar Group has operations in more than 25 countries and employs over 73,000 people, the company website said.

Institute of Customer Experience Management, promoted by Aegis, is a wholly owned subsidiary of Essar Group. It has a facility spread across 40,000 sq ft on Amankullam Road in Coimbatore in Tamil Nadu.

Earlier this year, Finance Minister P Chidambaram laid the foundation stone of Aegis Ltd for setting up a 250 seating capacity centre at his home constituency of Sivaganga in Tamil Nadu. Through the facility about 500 direct and 2,000 indirect jobs would be created, it said.

Essar Steel has a processing and distribution facility at Sriperumbudur near Chennai. Besides Chennai, the company has similar centres in Pune, Indore, Bhuj, Gujarat and Bahadurgarh, National Capital Region, it said.

Courtesy: www.mydigitalfc.com 

Essar Ports to invest Rs.1,200 cr in Vizag port

[Vishakhapatnam port handled 12.3 mt of iron ore in financial year 2013. Moreover, in the past couple of weeks we have seen an explosion in many of the shipping related stocks in several of the world markets. The dry bulk index has shot higher and is up over 100% in the past several months, and investors have been piling into shipping stocks]

December 14, 2013: Essar Vizag Terminals, a wholly owned subsidiary of Essar ports, has entered into an agreement with the Visakhapatnam Port Trust for development and operation of three iron ore berths.

The company will invest Rs 1,200 crore in the project, to be developed on a build-own-operate basis over 30 years.,center>

The three berths (two outer harbour berths and one inner) will have a combined capacity of 23 million tonnes a year (mtpa). The concession agreement was signed at a ceremony here in the presence of G K Vasan, the shipping minister. Essar Ports will take over the two outer berths soon to upgrade them. The Vishakhapatnam port handled 12.3 mt of iron ore in financial year 2013.

Rajiv Agarwal, managing director, Essar Ports, said: "We will develop the terminal to create one of the most competitive, modernised facilities. This project will significantly increase our third-party cargo-handling capacity and also boost our presence on the east coast." 

Courtesy: The Business Standard

'Buy' rating on Thermax Ltd, target price Rs 850: Motilal Oswal

[Essar Refinery is the first in India and among a few in Asia to set up coal fired boilers for steam and power requirements. This is expected to result in increasing the refining margins by ~$1 per barrel......this success can be an important trend setter, particularly in the refinery and petchem segment]

We maintain our ‘buy’ rating on Thermax Ltd with an 18-month price target of R850 per share (20x FY16e at R762 per share and R86 per share in subsidiaries). At the current market price of Rs 690, the stock trades at price-to-earnings (P/E) of 27.3x FY14e, 23.4x FY15e and 17.5x FY16e. Our top picks in capital goods segment are Larsen & Toubro, Thermax, Cummins. We recently upgraded Bharat Heavy Electricals Ltd (BHEL) to ‘buy’ and believe the risk-reward is favourable.

Coal-fired boilers installed by Thermax at Essar Oil’s refinery have completed one year of working at rated conditions. This is an important milestone the company given that this is the highest capacity boiler (750 TPH) and first pulverised coal fired system from Thermax, according to Thermax’s in-house magazine “FireSide” highlighting milestones achieved by its business divisions.

Essar Refinery is the first in India and among a few in Asia to set up coal fired boilers for steam and power requirements. This is expected to result in increasing the refining margins by ~$1 per barrel. We believe this success can be an important trend setter, particularly in the refinery and petchem segment.

Thermax has been honored with the ‘Best Innovator Award 2013’ by the Biotechnology Research Assistance Council, Govt of India. Further, as part of the indigenization program for Indian Navy, Thermax has successfully developed “Burners” for the boilers of the fighter aircraft carrier, INS Viraat. This is an important milestone and 1,000 hours of on-board initial sea runs were logged in to get the final approvals.

Courtesy: The Financial Express

Essar Port Ltd: Breaking out of its current trends

Essar Ports Limited (EPL) develops and operates ports and terminals and is one of the largest private sector port companies in India by capacity and throughput. 

Essar Ports is part of the multinational Essar Group, and holds the Group's entire ports business. Essar Ports develops and operates ports and terminals for handling liquid, dry bulk, break bulk and general cargo, with an existing aggregate capacity of 104 MTPA across two facilities located at Vadinar and Hazira in the state of Gujarat on the west coast of India and one iron ore terminal at Paradip in the state of Orissa on the east coast of India.

The facilities at Vadinar and Hazira are used primarily by affiliated customers for the receipt of raw materials such as crude oil, iron ore / pellets, limestone, dolomite and coal, and for the despatch of finished goods such as petroleum products and steel products.

Financials: 

• H1 FY14 Net Profit up 33% to Rs 198.90 Cr
• Q2 FY14 Net profit up 21% at Rs 97.5 cr
• H1 FY14 Earnings per Share at Rs 4.65 

Highlights of consolidated results:

1. Net Profit for Q2 FY14 increased by 21% to Rs. 97.5 crore from Rs.80.5 crore in Q2 FY13. For H1 FY14, the Net Profit increased by 33% to Rs.198.9 crore from       Rs 149.1 crore in H1 FY13.

2. Earnings Per Share as at H1 FY14 were at Rs 4.65 as against Rs 3.53 for H1 FY13.

3. Revenue for Q2 FY14 excluding trade revenues to fulfill export obligations increased by 14% to Rs 398.1 crore from Rs 348.3 crore in Q2 FY13. For H1 FY14, the Revenue excluding trade revenues to fulfill export obligations increased by 18% to Rs 801.8 crore from Rs 677.8 crore in H1 FY13.

4. EBITDA for Q2 FY14 increased by 13% to Rs 324.2 crore from Rs 287.1 crore in Q2 FY13. For H1 FY14, EBITDA increased by 17% to Rs 652.1 crore from Rs 558.4 crore in H1 FY13.

5. 13.01 million tonnes of cargo handled during Q2 FY14 as against 12.70 million tonnes of cargo handled during Q2  FY13.

Speaking on the key highlights for the quarter, Mr. Rajiv Agarwal, Managing Director, Essar Ports Ltd. said: "Our performance is consistent with the growth targets we have set for ourselves and we are confident of delivering good performance in the coming quarters. We will further strengthen our performance once we execute the projects in hand and third party terminals at Paradip and Vizag."

Eventful First Half:

• Company achieved 25% minimum public shareholding requirements of SEBI by successfully completing dilution through Offer for Sale.
• Won the bid for 23 MMTPA Iron Ore terminal at Vizag. Project will significantly enhance third party mix of the Company and gives strategic presence on the east coast after Paradip.
• The Company declared dividend of 5% for FY 2012-13.
• Salaya Jetty construction completed.

Operations on track:

• 13.01 million tonnes of cargo handled during Q2 FY14 as against 12.70 million tonnes of cargo handled during Q2 FY13..
• 27.08 million tonnes of cargo handled during H1 FY14 as against 25.36 million tonnes of cargo handled during H1 FY13.
• Company has earned trade revenues and incurred purchase expenses of Rs 301.92 cr each during the quarter on account of fulfilling export obligations under EPCG.
• Vadinar terminal completed 2500 Loss Time Injury free days during the quarter and also completed over 1 million accident free man hours reflecting the QHSE of the terminal operations.
• Vadinar terminal won the safety Award in Lloyds List Middle East and Indian Subcontinent Awards 2013.
• Hazira expansion project obtained Consent to Establish (CTE) from GPCB for the Expansion Project.
• Hazira Terminal received Gold Award in the Greentech Safety Awards 2013.

About Essar Ports (in brief):

Essar Ports Ltd is one of the largest port companies of India, with a current capacity of 104 MMTPA. The capacity is being expanded to 181 MMTPA over the next few years.

Essar Ports has three operational terminals at Hazira, Vadinar and Paradip. The Hazira port is an all-weather, deep-draft port with 30 MMTPA of dry bulk and break bulk cargo handling capacity. Vadinar is also an all-weather, deep-draft port with 58 MMTPA of liquid cargo handling capacity. Paradip dry bulk terminal was commissioned in December 2012 and is an all-weather, deep-draft port with 16 MMTPA of dry bulk cargo handling capacity.

Essar Ports is currently developing one terminal at Paradip, which will be a coal berth of 14 MMTPA. The company is also setting up a dry bulk terminal at Salaya with a capacity of 20 MMTPA. Additionally, the company plans to expand its Hazira port capacity by 20 MMTPA – taking its capacity to 50 MMTPA. Essar Ports has won the bid for the development of three iron ore berths totaling 23 MMTPA at Visakhapatnam port. 

Essar Oil Ltd: Breaks Out

CMP: Rs.52.20

Essar Oil is a fully integrated oil and gas company of international scale with strong presence across the hydrocarbon value chain from exploration and production to refining and oil retail.

Essar Oil said it will allot 3.88 crore equity shares at Rs.138 per share on conversion of 1,150 foreign currency convertible bonds (FCCBs) of $100,000 each aggregating to $115 million which were issued on 15 June 2010 to Essar Energy Holdings. The company will also allot 4.50 crore equity shares at Rs.153 per share on conversion of 1,470 FCCBs of $100,000 each aggregating to $147 million which were issued on 9 July 2010 to Essar Energy Holdings.

The promoter group company Essar Energy Holdings held 19.83% stake in Essar Oil (as per the shareholding pattern as on 30 September 2013).

Lalit Kumar Gupta, chief executive officer, Essar Oil Ltd, in a very recent interview with a Business Channel, says the company’s promoters are converting the Foreign Currency Convertible Bond (FCCB) in order to boost the company’s networth. Additionally, Gupta said that the company has high interest costs of Rs.3000 crore per annum, but it is likely to be reduced substantially by USD 150-200 million (Rs.15-20 crore).