IVRCL eyes selling assets, raising equity

[Editor: The article below says that half its current order book of Rs.20,000 crore is from the lucrative water segment, such as water treatment and irrigation. IVRCL Ltd (Rs.18.10) expects growth of around 15% a year. “If the next two quarters will see consolidation, the next fiscal would be a turnaround year,” said Reddy, Chief Financial Officer of IVRCL. Meanwhile the government on Wednesday, 27 August 2014, took a decision to allow the Ministry of Road Transport and Highways to decide on mode of delivery and amendments in Model Concession Agreement in respect of national highways projects for expediting of implementation of road infrastructure projects in the country. A strong buy is recommended, with a price target of Rs.37-39, for 6-9 months perspective]

Hyderabad/Chennai. August 28:  Infrastructure company IVRCL, once a stock market favourite, is now struggling to script a comeback.

The company had to go for corporate debt restructuring in January this year after debt piled up in the wake of cost overruns and delays in project execution. IVRCL’s total debt stood at Rs.7,680 crore as on March 31.

As part of a turnaround plan, the company is now considering selling operational assets, raising equity, and taking up projects that require lower capital infusion.

“The liquidity position has begun to improve. The next two quarters will be a phase of consolidation,” says R Balarami Reddy, Chief Financial Officer of IVRCL

Execution held up

Stalled execution of some projects due to delays in receiving Government clearances was one of the factors that derailed the company.

Road projects such as Sion-Panvel and Goa-Karnataka, irrigation projects in Andhra Pradesh, rural electrification in Kerala are among those delayed in 2011. The company’s execution rate, which used to be 40 per cent of the order book a year, fell to 26-28 per cent in 2011-12.

IVRCL also had to contend with delayed payments from clients. The debtors’ cycle stretched from 115 days in 2011-12 to 147 days now. Audit reports drew attention towards the receivables worth Rs.157 crore, considered good (even as collection was pending for a prolonged period) in the 2011-12 report, which ballooned to Rs.937 crore by June 2014.

Cost overruns in projects due to higher costs of raw materials such as cement, bitumen, labour, and steel over the years also cut into profitability. This was exacerbated by the lack of price escalation clauses on many contracts. Operating profit margin collapsed, sinking from 11 per cent in 2010-11 to 1 per cent in 2013-14 on a consolidated basis.

The company’s revenue, which grew 14 per cent on a standalone basis in December 2010 quarter, fell by 17 per cent in the June 2014 quarter, though numbers are not strictly comparable due to demergers and reconsolidation.

Restructuring

The debt-equity ratio leaped from 1.6 times (consolidated) in 2011-12 to 3.8 times by 2013-14. In the period, companies also had to contend with an increase in interest rates from 8 per cent to 12-13 per cent, says CFO Reddy. Interest cost as a percentage of sales reached 15.9 per cent in 2013-14, while interest cover slipped below 1 time. Consolidated net losses mounted from Rs.240 crore (adjusted) in 2012-13 to ₹882 crore last fiscal.

“Having a strong order book and a good portfolio, we were able to manage the situation for about 18 months. However, thereafter, we began to feel the heat. Then we had to knock at the CDR (corporate debt restructure) cell as lenders were not extending necessary funds for projects and were also encashing bank guarantees,” adds Reddy.

The CDR process was finalised in July. The package comes with a 28-month moratorium and an interest rate of 11.25 per cent.

Of the company’s total debt, the holding company debt of Rs.3,850 crore has been restructured, saving about Rs.850 crore in interest payments for two years.

IVRCL paid out Rs.789 crore in interest last fiscal. In addition, IVRCL received Rs.215 crore in cash credit and Rs.175 crore of priority debt.

IVRCL has also signed agreements to divest stake in three road projects – Salem Tollways, Kumarapalyam Tollways and Chengapally Tollways – to Tata Realty. This can ease up equity of around Rs.600 crore and free debt worth Rs1,200 crore.

Another road project (Jalandhar to Amritsar) is on the block as is its Chennai desalination plant. All are loss-making projects and contribute less than 10 per cent of consolidated revenue.

The company also has a land bank of around 1,700 acres, which it can monetise if needed. A rights/ QIP issue of Rs.300 crore is also being planned. These moves can eventually bring the debt-equity ratio down to around 2 times.

Turning around

This apart, once its existing five road projects are done, the company will shift entirely into simple construction contracts in roads, instead of taking them on as a developer (projects taken on as a developer call for heavy capital investments).

Plain construction contracts have short execution periods which will generate quicker cash flows and lower funding requirements. With the plain construction route to road expansion being taken up by the highways authorities, IVRCL could find several such projects coming its way.

Half the current order book of Rs.20,000 crore is also from the lucrative water segment, such as water treatment and irrigation.

The thrust now is also on this segment. Indeed, IVRCL has never had trouble securing fresh projects; from the start of this year, for example, it has won Rs.3,657 crore worth of projects.

The company expects growth of around 15 per cent a year.

“If the next two quarters will see consolidation, the next fiscal would be a turnaround year,” said Reddy.

This is part of a series on how companies are managing debt to gear for better times.

Courtesy: The Hindu Business Line

FTIL to 'highlight correct facts' of MCX-SX buyback to CBI

Photo: Business Standard

27 Aug, 2014: MUMBAI: Financial Technologies (India) or FTIL has clarified to the BSE that it would make a representation to CBI "highlighting the correct facts" with regard to the "alleged illegality" of the buyback arrangement between itself and a nationalised bank of MCX Stock Exchange's shares. 

CBI on Monday lodged an FIR against three serving officials and a former one of Sebi, and Jignesh Shah, promoter of FTIL — the erstwhile promoter of MCXSX — alleging that the promoters of the bourse had entered into a buyback arrangement with a nationalised bank, in violation of relevant rules, and "in connivance with Sebi officials, deliberately suppressed this material fact" while applying for an extension of recognition of MCX-SX, to conduct trade in currency derivatives in 2009. 

The FTIL stock closed down almost 5% at Rs 259 apiece on Tuesday. 

FTIL in its clarification pointed out that the Bombay High Court found "nothing illegal in the said buyback arrangement" while hearing a petition filed by MCX-SX against a Sebi order of 2010 declining to give it permission to operate as a full-fledged stock bourse, other than for offering currency derivatives. 

Further, at the time of the extension of recognition of MCXSX in the year 2009, "we understand that MCX-SX only sought time from Sebi for reducing the shareholding to comply with the applicable Sebi regulations. 

We understand that at that point of time, no statement/representation was made by MCX-SX to Sebi in its application for extension that it was in compliance with all the relevant Sebi regulations. Therefore, the question of concealing certain facts by the promoters of MCX-SX does not arise," said FTIL. 

It further added that as required by law, the application for renewal/extension of recognition was made by MCX-SX and not by its promoters (i.e. FTIL) or Jignesh Shah. 

Courtesy: The Economic Times

NSEL: Jignesh Shah’s fall from grace and why he will weather it

Photo: Live Mint

Aug 5, 2013: One question that has risen ever since troubles at National Spot Exchange emerged is: what will happen to Jignesh Shah and the empire he built on his entrepreneurial spirit?

Jignesh Shah's has been a story of both backward and forward integrations. He started off in the business of exchange technology, went on to set up exchanges, both commodities and equity, and also ventured into many related businesses.

The growth of his flagship company Financial Technologies (FT), which is also the holding company, has been envious.

Initially a technology services provider for stock exchanges, FT set up Multi Commodity Exchange, which went on to dominate the Indian commodity futures trading market.

Under a weak Forward Markets Commission, which did not have much power, commodity futures trading in India was thriving, with turnover running into trillions.

For FT, MCX was a money spinner. The exchange offered lower transaction charges as the technology that it used for trading came from its own parent company.

Shah spotted business opportunity around MCX and was quick to cash in on those.

He set up National Bulk Handling Corporation (NBHC), National Spot Exchange and even a real time market data provider TickerPlant.

Initially, NBHC set up warehouses for those commodities traded on MCX. Later on, it saw a bigger business opportunity by offering warehousing services to farmers and also started facilitating bank credit to farmers.

According to a report in Business Today magazine published in 2009, as a facilitator of farm credit, NBHC got two-way fee - 25 basis points from farmers and 25-75 bps from banks.

With the government allowing trades in warehousing receipts, it is not only NBHC that got a boost, but NSEL too got advantages.

Warehousing receipts are the receipts that farmers got while storing their produce in NBHC warehouses.

(Ironically, these are the very instruments that have come into focus in the present controversy involving NSEL. It has been found that the spot exchange, where short sales are not allowed, had actually permitted warehouse receipts trading, without checking whether the trader had the underlying commodity in the warehouse.)

NSEL thrived in a regulatory vaccum. While FMC regulated the futures market, the spot exchanges came under the state government. There was no clarity as to who regulated the spot markets. It was an exemption from the Union ministry of consumer affairs that enabled the NSEL to launch a product that had characteristics of forwards contract.

After launching NSEL, FT set up the real-time data platform even as plans were on to roll out a stock exchange. The data service had to be scaled down and the equity exchange, MCX SX, was launched after much delay because of Sebi's reservations and the legal battle that ensued.

According to the Business Today report, the vision behind all these moves was financial inclusion.

"FT's strategy is based on driving financial inclusion by reaching out to the bottom of the pyramid as this will drive future business," the report quotes Sanjeev Patkar, Director (Research), Dolat Capital, as saying.

Clearly, Shah aimed higher. As part of his strategy to take his business international, he started the Dubai Gold and Commodity Exchange (DGCX) in partnership with Dubai Multi-Commodities Centre (DMCC).

As the old adage goes, the higher you go, the steeper the fall.

The share prices of Financial Technologies fell a sharp 70 percent, in just two days after the troubles at NSEL emerged.

According to a report in the Business Standard, in the boom year of 2007-08, Financial Technologies was valued over Rs 13,000 crore. Now, it is down to just about Rs 700 crore.

According to an Economic Times report, Shah himself witnessed a wealth erosion of about Rs 1000 crore.

There are many theories-including conspiracy angles-about what resulted in the down fall.

Sudip Bandyopadhyay, managing director and chief executive officer of Destimoney Securities, sums up it all in a report in Mint.

"He (Shah) has probably bitten off more than he can chew."

According to him, Financial Technologies' troubles started with MCX-SX. "The problem started when the group tried to get into the stock exchange business," he has been quoted as saying in the report.

The BS report says trouble may be brewing at DGCX as DMCC has taken technology of Cinnober, another exchange technology provider, instead of FT's. It also says FT may be planning to sell off its 44 percent stake in DGCX.

But is it all over for Financial Technologies and Shah? Many are of the opinion it is not.

"I never quite liked his style. But he has that ability to come out of difficulties," PH Ravikumar, former CEO of NCDEX and once an arch rival of Shah, has been quoted as saying in the ET report.

Courtesy: Firstbiz

Share buyback arrangement was legal, says FTIL 

FTIL clarification in response to FIR registered by CBI

Mumbai, Aug 27 2014 Financial Technologies (India) Ltd. (FTIL) has said that the buyback arrangement for shares with shareholder banks of MCX Stock Exchange (MCX-SX) was declared legal by the Bombay high court while hearing the matter between the exchange and the capital markets regulator. 

The FTIL clarification was in response to the first information report (FIR) registered by the Central Bureau of Investigation (CBI) on Monday for alleged violations while granting extension to MCX-SX. According to CBI, the buyback agreement entered into with the banks was illegal. 

“The Bombay high court, in its order, (Page No. 145 Para VII) had ruled that “the buy-back agreement cannot be held to be illegal as found in the impugned order of the whole timer member of SEBI on the ground that they constitute forward contacts. Hence, the accusation of CBI does not hold ground,” said FTIL.

Courtesy: Live Mint

Financial Tech contests CBI charges

Photo: First Biz

[Editor: Mr.Jignesh Shah, was a non-executive director of NSEL and was not involved in its day-to-day operations. Mr.Shah's lawyer Mahesh Jethmalani has reportedly argued in court that Shah had no knowledge of the crisis, saying it was perpetrated by a clutch of NSEL employees and brokers, including Anjani Sinha, former chief executive of the commodity exchange. FTIL's net profit rose 57.93% to Rs.128.24 crore on 27.43% increase in total income to Rs.216.05 crore in Q1 June 2014 over Q1 June 2013. FTIL is among the global leaders in offering technology IP (Intellectual Property) and domain expertise to create and trade on next generation financial markets. It is a global leader in creating and operating next-generation tech centric financial exchanges]
MUMBAI, AUGUST 26:  Financial Technologies has contested CBI's charges of irregularities in grant of licence last year to its subsidiary MCX Stock Exchange. The CBI had accused Financial Technologies of entering into a buyback agreement with banks while reducing its stake to meet SEBI norms.

FTIL has quoted the Bombay High Court order to clarify that the “buy-back agreement cannot be held illegal as found in the impugned order of the Whole Time Member of SEBI on the ground that they constitute forward contacts.” Hence, the accusation of CBI does not hold ground, said the company.

Promoter not liable

On the CBI indictment for not disclosing the buyback agreement to the regulator at the time of application seeking extension of the MCX-SX licence, FTIL said the application was filed by the exchange and not by the promoter-company. Therefore, the promoter is not liable for the matter, it said.

MCX-SX was set up by FTIL and its commodity exchange arm MCX and began functioning as a full-fledged stock exchange last year after a prolonged battle with SEBI.

On Monday, CBI filed FIRs against three serving SEBI officials Muralidhar Rao, Executive Director; Vishakha More, Assistant General Manager and Rajesh Dangeti, Deputy General Manager. It also filed an FIR against former Executive Director JN Gupta besides FTIL promoter Jignesh Shah for alleged irregularities aimed at obtaining a licence to operate the stock exchange.

Courtesy: The Hindu Businessline

MCX SX cancels Financial Technologies warrants

[Editor: Today the shares of Financial Technologies Ltd were recommended as a buy at Rs.277-278, for a target of Rs.320-325, in the short term. On the other hand the shares of Allied Digital Services Ltd (Rs.19.40) are buzzing, as the company is the hot favourite to win the mega, Rs.1000 Cr (please clarify the exact value of the tenders from your sources), Mumbai-CCTV-project. The project, announced to enhance security in the city after the 26/11 terror attacks, aims at installing 6,000 CCTV cameras in the city (14 cameras per sq km)]

MUMBAI, AUG 25:  MCX Stock Exchange has extinguished warrants held by Financial Technologies and transferred Rs. 56.25 crore non-refundable interest free deposit issued against the warranted to the capital reserve.

The development will increase the exchange networth to Rs. 160 crore from Rs. 110 crore and help meet SEBI minimum networth criteria of Rs. 100 crore.

The decision to cancel the warrants was taken by the board after perusing legal opinion on the SEBI order dated March 19 and Securities Appellate Tribunal order dated July 9 regarding the warrants held by Financial Technologies.

Earlier this year, the exchange shifted MCX and FTIL from “Promoter Category” to “Public Category”.

Meanwhile, the Comptroller and Auditor General of India has informed that it has concluded the supplementary audit of the financial statements of MCX-SX for the year ended March, 2014 and has mentioned that nothing significant had come to their notice which would give rise to any further comment or supplement to the Auditors’ Report, said MCX-SX in a statement.

The Exchange has shifted its corporate office to its new premises at Bandra Kurla Complex in Mumbai.

Saurabh Sarkar, Managing Director, MCX SX stated that “We are poised for a complete turnaround in the next few months. The recent developments will improve the sentiments of potential investors and restore the faith of the market participants on the turnaround of our exchange.”

Courtesy: The Hindu Business Line

WINNING STROKES: THINK DIFFERENT

Pix Transmission Ltd recommended yesterday around Rs.49-49.5 today touched Rs.54, before closing at Rs.52.60. The next targets seems to be Rs.59-60. 

Resurgere Mines and Minerals Ltd today hit another buyer freeze at Rs.1.63. The investors were asked to lap up the scrip on all declines. 

IVRCL Ltd today closed flat at Rs.18.85. The company should be doing well in the short to medium term. The investors are suggested to accumulate it on all declines. 

Allied Digital Services Ltd today hit the buyer freeze at Rs.18.50. Yesterday, some positive news regarding the mega-Pune project was revealed in this blog. 

PVP Ventures Ltd today fell by more than 4%. The scrip will not rise till the Potluri Vara Prasad and his family stops looting the company, in broad day light. 

FIIs and DIIs were Net Buyers

India’s Q1 gold jewellery exports up 23%, even as global falls

Photo: Live Chennai

SURAT,  Aug 20, 2014: Gold jewellery exports from India has increased 23% in the first quarter of the current fiscal to nearly $2 billion, even as the global demand for the jewellery saw a decline of 36% in the same period. 

According to a report by the World Gold Council, the demand fell due to a decreased off-take in Asia and the Middle East. However, demand picked up in the US and UK. 

Industry experts also attributed the increase in exports to a decline in gold price. 

Pankaj Parekh, vice-chairman, GJEPC, said, "As compared to 2013, gold prices have softened almost 13%. Also, the economies of the US and the UK are recovering, which has led to the rise in exports." 

Vipul Sutariya of Dharmanandan Diamonds, a DTC sightholder company, said, "The jewellery markets in US and UK are performing well. Since the gold prices have fallen internationally, consumers are looking at gold-studded jewellery." 

Aniruddha Lidbide, gems and jewellery sector analyst, said, "Some jewellery manufacturers are making minimum use of gold in studded jewellery to cut costs. Jewellery with lower gold component has become a major hit in western countries." 

According to the Gems and Jewellery Export Promotion Council (GJEPC), India exported Rs 12,115 crore worth gold jewellery in the quarter, registering an increase of 23.36% compared to the same period last year. 

"The decline in jewellery demand was dramatic, given such high levels of demand one year earlier. Broad weakness for gold jewelry was noted across Asia and the Middle East, while western markets recorded some improvement, except for Italy, where the fabrication sector is benefiting from improved US demand and re-stocking in other key markets," WGC said in its report. 

In India, however, gold jewelry demand fell 25% to $6.4 billion. The WGC stated that an "unofficial flow of gold" into India continued during the second quarter, particularly during the first half as premiums were pushed higher. Such flow of gold will likely build momentum over the coming months as the market moves into the seasonally stronger period of Diwali and the wedding season. 

Courtesy: The Times of India

Market Mantra

Resurgere Mines and Minerals Ltd today hit the buyer freeze in the opening trade. The scrip has fallen, to some abnormal levels, inspite of the management sounding optimistic. 

Todays' call: If you have some Free Cash please buy PIX Transmission Ltd (BSE Code: 500333) at Rs.49---49.50. The company's Q1FY15 results are  not bad and also, its management has expressed confidence in its business. Moreover, you can exit Genera Agri Ltd at Rs..6.50-6.70, either with minimum loss or at no loss no gain; if you have not averaged. If you have bought recently then book profits in Genera Agri Ltd and exit the counter. You can put this money in Pix Transmission Ltd. PIX Transmissions Ltd., is the leading manufacturer of Belts and related mechanical transmissions products in India. The Company has state-of-the-art Belt manufacturing units as well as a completely automated Rubber Mixing facility in Nagpur.
PIX Transmission Ltd enjoys significant brand equity in the Power Transmissions industry, with strong local as well global presence. The company has overseas subsidiary operations in Europe, and Middle-East, in addition to over 250 committed Channel Partners in over 50 countries worldwide.
Product Range: PIX manufactures an extensive range of Industrial V-Belts, Automotive Belts, Agricultural Belts, Special Construction Belts, Taper Lock Pulleys and Bushes to suit a wide array of applications.

Allied Digital Services Ltd (Rs.16.95): The company came out with not so satisfactory numbers for the Q1FY14, as some of their payments got delayed, due to parties asking more time for more time to clear their dues. Their revenues as well as their profit suffered. According to the sources, 2nd quarter is expected to be lackluster too, but from the 3rd quarter, the results are expected to be a little better. Hence we could see the share price start to move up from October, 2014 onward. Till such development takes places, the scrip is likely to trade range bound. Moreover, the company's Pune project is likely to get completed by December, 2014. This will give some push to its revenues. The company has also applied for a similar deal for Mumbai (Bombay), but the things are in the initial stages.
In case of Nifty (7876.10), a decisive rise above 7841 and a close near its new life time high clearly shows resumption of uptrend after an intermediate correction. Market is now in a No Resistance Zone and the Bulls are in full control of the affairs. However, for the time being the Nifty might move sideways, while the action will be concentrated in the small and mid cap space. 

Modi outlines his vision for inclusive growth

Photo: OECD

[Editor: Narendra Modi and the media often talks of "Inclusive Growth" of India and a large section of Indians cheers; as if it is very easy to achieve. I therefore, wonder how many of these media-men who often speak about "Inclusive Growth" really know the meaning of the term. So, let us get some idea about, one the most misused term, "Inclusive Growth'" from a Planning Commission Document, GOI: "The progress towards inclusiveness is more difficult to assess, because inclusiveness is a multidimensional concept. Inclusive growth should result in lower incidence of poverty, broad-based and significant improvement in health outcomes, universal access for children to school, increased access to higher education and improved standards of education, including skill development. It should also be reflected in better opportunities for both wage employment and livelihood, and in improvement in provision of basic amenities like water, electricity, roads, sanitation and housing. Particular attention needs to be paid to the needs of the SC/ST and OBC population. Women and children constitute a group which accounts for 70% of the population and deserves special attention in terms of the reach of relevant schemes in many sectors. Minorities and other excluded groups also need special programmes to bring them into the mainstream. To achieve inclusiveness in all these dimensions requires multiple interventions, and success depends not only on introducing new policies and government programmes, but on institutional and attitudinal changes brought about, which take time". Therefore, is the Prime Minister of India, Narendra Modi aware, what he is speaking of, in front of poor Indians]

NEW DELHI, AUGUST 15:  Prime Minister Narendra Modi’s maiden Independence Day speech promised a new foundation for a more inclusive India — socially, economically and politically. Sporting a red and green turban and half-sleeved kurta pyjama, Modi said he thought of himself “not as a Prime Minister but pradhan sevak (chief servant) of the people”.

In his speech, which lasted over an hour, Modi harped on his status as an “outsider” among Delhi’s power elite, portraying himself as someone who was working for the common man and who would push a fractious bureaucracy to work in a united and purposeful manner.

The unscripted speech, delivered with only an occasional glance at some notes, was short on big-ticket announcements, barring a financial inclusion plan, the Pradhan Mantri Jan Dhan Yojna. The scheme envisages provision of a bank account, a debit card and insurance cover up to ₹1 lakh for the poor.

Planning Commission to go

Modi also ended speculation about the fate of the Planning Commission, which, he said, would be replaced by another institution that will be more in keeping with India’s federal structure as well as more relevant in today’s domestic and global economic environment.

After announcing a scheme, the Sansad Aadarsh Gram Yojna, under which each MP will create a model village in his or her constituency using MP Local Area Development funds, Modi fixed October 11, the birth anniversary of Jayaprakash Narayan, as the deadline to reveal its blueprint.

Shun communalism

What generated the most debate among talking heads on television as well as on social media was his call for a moratorium on communal and caste violence.

“For centuries, India has been torn by communal violence. The country was partitioned but we still have not learnt from our past. For how long will we allow this to continue? When will we understand that there is nothing to be gained from this…?

Give up communalism, casteism for ten years and embark on a path of development and progress. Experiment with it and you will realise that there is no alternative to peace, brotherhood and harmony if we want to progress as a nation,” said Modi.

Call for consensus

Striking a non-partisan note, he said all governments have played a role in developing India. The Prime Minister also acknowledged the Opposition’s role in the relatively smooth conduct of the just-concluded Parliament session. “We are not for moving forward on the basis of majority…We want to move ahead on the basis of a strong consensus … I salute all political parties; by virtue of their strong support, we could take important decisions to take the nation forward,” he said.

Bureaucracy cautioned

Modi had a word of caution for the bureaucracy, saying that government servants are losing credibility among the people.

“Why is it that the newspapers are saying that after Modi’s arrival, government officials have started coming to office in time? If punctuality among bureaucrats makes news, then imagine how low we have sunk in people’s estimation,” said the PM.

He also said he was “shocked” at the number of disputes among various departments within the government, adding that he was trying to end this so that the government “moves as a dynamic, organic entity”.

‘Make in India’

Besides focusing on the girl child, the skewed sex ratio, the need for hygiene and a toilet in every home, the PM stressed on skill development and poverty eradication.

And he coined a pithy slogan for his pet theme, manufacturing: “Come, ‘make in India’, paper or plastic. Come, make in India, satellite or submarine. As I say to the world ‘Come, Make in India’, I say to the youth of the country: it should be our dream that this message reaches every corner of the world; ‘Made in India’. This should be our dream.”

(This article was published on August 15, 2014)

Courtesy: The Hindu Business Line

PM Narendra Modi stresses on building infrastructure; says take ownership to build a strong nation 

Photo: IDFC

[Editor: The real problem with Narendra Modi is that he talks more but works less. He is seen more, giving high publicity to his works, rather than showing his real achievements. However, he is a quality (good) salesman, who somehow managed to reach the corridors of New Delhi. Now it seems a large section of the media dances to his tune. Anyway, I sincerely hope that, he becomes a man of action instead of living only on his past glory. But then I am more interested with the performance of the NDA. If the NDA does well and our (Indian) economy shines, then it does not become important, whether Narendra Modi continues to remain a Buffoon or not. A  monkey will always climb a tree, whether it is England or India. So let the ape climb a tree as long as it fetches fruits for us]
NEW DELHI, 19 Aug, 2014: Stressing on the importance of building a robust infrastructure, Prime Minister Narendra Modi on Tuesday said, "A nation that gives impetus to infrastructure, be it roads, rail, airport, that is where chances of development increase."

"We have to take ownership to build a strong nation," Modi said. "When the road network increases the avenues of development increase too," he added. "We cannot do with infrastructure of the last century. Any contractor comes makes a road & it gets destroyed in monsoon...this won't do," Modi said.

Modi also said that removing corruption was key to ensuring progress. "Corruption is worse than cancer. We together have to uproot this evil," he said. "'Mera Kya' and 'Mujhe Kya'...this has ruined the nation. We need to free nation from corruption," he reiterated. 

Modi laid foundation stone for the Kaithal-Rajasthan border section of National Highway 152/65, at Kaithal in Haryana.

The Rs 1,393 crore project road starts from Kaithal and ends at Haryana-Rajasthan Border and will be completed in 30 months. It passes through Kalayat, Narwana, Barwala, Hisar and Siwani towns, the officials said.

Twenty-three underpasses and 20.90 km service roads are proposed in the project near villages which shall ensure the safety of the pedestrian and the people residing in the vicinity of the road, they said.

(With inputs from PTI)

Courtesy: The Economic Times 

WINNING STROKES: THINK DIFFERENT

My recommended Genera Agri Ltd (Rs.6.510 hit the buyer freeze in the late afternoon trade. The scrip has a book value of Rs.76.02 and EPS of Rs.1.70.

IVRCL Ltd moved up in late afternoon trade, after the following news was sent to the Paid Group members: The government is modifying the way projects are allocated based on assessment of viability, in a bid to fast-track award of highway projects.  

Resurgere Mines and Minerals Ltd hit the buyer freeze on both the exchanges as the Goa government plans to renew the mining leases of those who have paid stamp duty.Goa Chief Minister Manohar Parrikar, in the State Assembly on Monday, said that atleast 27 mining leases on which stamp duty has been paid would be renewed by October 15. Moreover, the company is looking at P.E. funding to revive its business. Also, one of the biggest beneficiaries from the start of mining operations in Goa, would be Western India Shipyard Ltd (Rs.2.08). 

PVP Ventures Ltd (Rs.6.50), fell by more than 5% in BSE today. The scrip will NOT RISE till the promoter family (of Potluri Vara Prasad), stops sucking the company from the top to bottom. Money generated from this firm would obviously be siphoned off to his family entities, showing fictitious balance sheet/s. His hob-nobbing with Sachin Tendulkar and others are only to hide the essential truths----looting the shareholders to the last drop of blood. He is one of the biggest CROOKS of Vijayawada and it is good that Mr.Chandra Babu Naidu has denied him a ticket in the last Parliamentary elections. 

Sesa Sterlite gains as Goa govt to renew mining leases

[Editor: The most burning question now is: will this move usher in good days for the mining and shipping sector (especially ship repairing sector)? Only time will be able to tell, but if statistics are to be believed then those holding the shares of shipping and mining companies have much to cheer now]

Mumbai  August 19, 2014: The Goa government plans to renew the mining leases of those who have paid stamp duty

Shares of Sesa Sterlite were up nearly 4% at Rs 303 after the Goa government decided to follow the order of the Goa bench of the Bombay High Court to renew mining leases.

Goa Chief Minister Manohar Parrikar, in the State Assembly on Monday, said that atleast 27 mining leases on which stamp duty has been paid would be renewed by October 15.

He also announced that the mining operations in the State would be resumed by this year end.

The stock opened at Rs 298 and touched a high of Rs 305 so far on the Bombay Stock Exchange. Over 2.8 million shares were traded on the Bombay Stock Exchange and National Stock Exchange so far.

Courtesy: The Business Standard

Goa government not to challenge HC order on renewal of mining leases

Photo: The Times of India

Saturday, 16 August 2014: In a clear signal that 28 mining leases would soon be operational resuming iron ore extraction in the state, Goa Chief Minister Manohar Parrikar said that the government will not challenge the recent High Court order which has asked the government to renew these leases.

The 28 mining leases in the state had got respite from the Goa Bench of Bombay High Court last week. The lease owners had already paid the duty under Indian Stamp Duty (Goa amendment) Act, 2012 as part of the renewal process.

"The mining lease owners trusted government when no one else did it. I don't need to challenge the High Court judgement as it clearly says that the lease deeds can be executed subject to the conditions laid down by the Apex court in the writ petition," Parrikar told reporters here yesterday. The mine owners had paid the stamp duty to the government despite Apex Court imposing the ban on the activity and industry's future was uncertain, he said.

The chief minister said the government would consider renewing these 28 leases.

"These mine owners paid me money (in the form of stamp duty), from which government generated revenue to the tune of Rs 435 crores. I managed to pay salaries of the government servants from this amount. Hence we would consider them within the framework of our mining policy, which would be discussed in detail on Monday on the floor of the House, next week," Parrikar said.

A division bench comprising Justice U V Bakre and Ranjit More had directed the state to execute the lease deed under Mines and Minerals Development Regulation (MMRD) Act.

Courtesy: DNA India

Hold IVRCL Infra, target price Rs 25: Edelweiss

[Editor: I had earlier asked all to buy IVRCL Ltd (Rs.18.20) on all declines and keep holding for a target of Rs.31-32. But some traders started selling the scrip, post Q1FY15 results, like mad fellows. It is these people I know will not make much money from the markets. The pont is that if you go on buying and selling continuously (at the fall of a hat), then it is only the Brokerage House/s which gain/s and not you. Stick to few companies and track them on regular basis, to make money from the markets. Don't apply strict stop losses in a  bull market, because a scrip could suddenly rebound, taking all of you by surprise. Many traders I know sell a scrip with the hope of buying that at a lesser price---but unfortunately that does not happen all the time and they are left crying as the scrip suddenly starts hitting the UCs]

Photo: IVRCL Ltd

Edelweiss Securities has given a hold recommendation on IVRCL Infrastructure with a target price of Rs 25.

In a note to clients, the brokerage said IVRCL Infra (IVRCL) reported loss of INR1.6bn (versus estimate of INR812mn loss) in Q1FY15 as falling sales and INR290mn provisioning for bad debts took their toll. Operating de-leverage led to fall in margins which along with surge in interest costs resulted in the large loss for the quarter. 

“Early conclusion of the sale of BOT assets and the CDR* process (currently under way) could provide relief on the funding front (which will help execution) and interest cost. Owing to higher-than-expected losses, we lower our target price to Rs 25 (Rs 28 earlier). We maintain a ‘hold’ rating on the stock,” the brokerage said.

Revenues came in at INR8.3bn (down 17% YoY) as working capital crunch forced the company to slow down execution. This impacted operating margins, which at 1.6% fell by 300bps YoY and 280bps QoQ. The company’s debt remained high at ~INR39bn, which meant that interest costs at INR1.6bn rose 25% YoY despite sluggish top line. As a result, the company posted INR1.6bn loss in the quarter.

During the quarter, the company received approval for its CDR process. The same is currently underway and its implementation will provide the much needed working capital funding post which the company should witness traction in execution. Similarly, it expects the sale of its three BOT projects to get concluded over the next few months which should also ease its fund constraints (can provide ~INR4bn funds). The company also plans to raise funds through a rights issue, which should further alleviate its financial stress.

IVRCL’s return to profitability depends on early resolution of its balance sheet issues, which is the key to get execution back on track. Till such time, revenues will remain muted and profitability will be under pressure. “We revise our target price to INR25 —INR13/share from EPC business (valued at one-year forward price/book multiple of 0.5x), INR11 from BOT projects (DCF valuation) and INR1 from Hindustan Dorr Oliver (market cap basis). We believe the stock will trade at a discount to fair value till concerns on a leveraged balance sheet and profitability get resolved. We maintain hold rating on the stock,” the brokerage said.

IVRCL Ltd: Satisfactory Results on Sequential basis

The south India based construction company IVRCL Ltd (Rs.19.80) came out with comparatively good set of numbers in Q1FY15, speaking sequentially; indicating, that the worst is perhaps over. In these kinds of companies it is futile to compare Y-o-Y figures, due to obvious reasons.

The total income of the company for Q1FY15 came out to be Rs.833.50 crore as against Rs.1217.13 Cr in Q4FY14. The expenses came down drastically from Rs.1185.46 Cr in Q4FY14 to Rs.844.77 Cr in Q1FY15. Moreover the finance cost has nosedived to Rs.2.44 cr in Q1FY15 from Rs.44.83 cr in Q44FY14. The net loss of the company came down to Rs.157.92 Cr as against a loss of Rs.328.11 Cr in Q4FY14.

Moreover, the company has an investment of Rs.65.75 Cr in its subsidiary, Hindustan Dorr--Oliver Ltd. During, Q4FY14, corporate Debt Restructuring Empowered Group, at its meeting held in on June 28, 2014 have approved the CDR proposal submited by the company. The BOD of the company in its meeting held on June 30, 201 accepted the LOA and initiated the implementation of the CDR scheme. 

The investors should accumulate the scrip on all declines and keep holding. This scrip is expected cross Rs.30-31, in the coming days, as the NDA gives more thrusts on Infrastructure Projects. 

Commerce Minister for easing of gold import restrictions

Says restrictions are hurting the industry and has also led to spurt in smuggling of the precious metal

Photo: World Gold Council

New Delhi  August 11, 2014: With restrictions on gold imports leading to rise in smuggling, Commerce and Industry Minister Nirmala Sitharaman has pitched for relaxing gold import duty as it is 'badly' hurting the gems and jewellery industry.

"As a Commerce Minister, I would want the gold restrictions to go away because gems and jewellery industry have been worried that a sector which is potentially so powerful is suffering because of the gold import policy," she told PTI.

The minister said that gems and jewellery industry contributes significantly to the country's total exports.

Gems and jewellery exports contribute about 15% to the country's total outbound shipments. In 2013-14, the exports were to the tune of $39.5 billion while India's total exports aggregated at about $312 billion.

She said that restrictions are not only hurting the industry but has also led to spurt in smuggling of the precious metal.

"Gold policy which was brought in for some other purpose because you want to contain growing CAD (current account deficit) but that hurts industry very badly. We have been telling that to the Finance Minister," she added.

She said that restrictions may have had impact on CAD but "it has also brought back the horrible days of smuggling of gold."

The cases of gold smuggling had gone up in 2013-14 to 2,441. In 2012-13 and 2011-12, the number of such cases stood at 869 and 500 respectively.

Sitharaman expressed hope that once the CAD enters into comfort zone, the Finance Minister may want to reconsider relaxing the import norms.

CAD, which is the excess of foreign exchange outflows over inflows, touched a historic high of $88 billion or 4.7% of GDP in 2012-13, mainly due to rising imports of gold and petroleum products.

In order to check the rising CAD, the government raised import duty on the yellow metal to 10%, while RBI imposed curbs on import of gold and also laid down various pre-conditions for inward shipments of the precious metal.

CAD came down to $32.4 billion or 1.7% of GDP in 2013-14.

The RBI in May had eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports.

Gold imports declined 72% to $2.19 billion in May.

Courtesy: The Business Standard

Want gold import duty gone, hurts jewellery industry: Comm Minister Sitharaman

Photo: The Times of India

New Delhi: With the restrictions on gold imports leading to rise in smuggling, commerce and industry minister Nirmala Sitharaman has pitched for relaxing gold import duty as it is ‘badly´ hurting the gems and jewellery industry.

“As a commerce minister, I would want the gold restrictions to go away because gems and jewellery industry have been worried that a sector which is potentially so powerful is suffering because of the gold import policy,” she told PTI.

The minister said that gems and jewellery industry contributes significantly to the country’s total exports. Gems and jewellery exports contribute about 15 percent to the country’s total outbound shipments. In 2013-14, the exports were to the tune of $39.5 billion while India’s total exports aggregated at about $312 billion.

She said that restrictions are not only hurting the industry but has also led to spurt in smuggling of the precious metal.

“Gold policy which was brought in for some other purpose because you want to contain growing CAD (current account deficit) but that hurts industry very badly. We have been telling that to the Finance Minister,” she added.

She said that restrictions may have had an impact on current account deficit (CAD) but “it has also brought back the horrible days of smuggling of gold.”

The cases of gold smuggling had gone up in 2013-14 to 2,441. In 2012-13 and 2011-12, the number of such cases stood at 869 and 500 respectively.

Sitharaman expressed hope that once the CAD enters into comfort zone, the finance minister may want to reconsider relaxing the import norms.

CAD, which is the excess of foreign exchange outflows over inflows, touched a historic high of $88 billion or 4.7 percent of gross domestic product (GDP) in 2012-13, mainly due to rising imports of gold and petroleum products.

In order to check the rising CAD, the government raised import duty on the gold to 10 percent, while Reserve Bank of India (RBI) imposed curbs on import of gold and also laid down various pre-conditions for inward shipments of the precious metal. CAD came down to $32.4 billion or 1.7 percent of GDP in 2013-14.

The RBI in May had eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports. Gold imports declined 72 percent to $2.19 billion in May.

Courtesy: First Post

WINNING STROKES: THINK DIFFERENT

Photo: Pearl Potluri
Can you recognize the woman in the photo ?

Yesterday, a buy call was initiated on Nifty ('Therefore, LIGHT long term positions may be taken, with a target of 7750 on the upside'), after it moved above 7600 and was threatening to break the immediate resistance of 7630. Today also the buy call was continued on the Paid Blog ('There are lot of shorts in the market and the market is expected to move up further on short covering alone'). I  hope those Premium Members who play on the Nifty Futures must have made good money, in the two days (Yesterday and today).

Western India Shipyard Ltd (Rs.2.08), which came up with comparatively good results in Q1FY15, on sequential basis, surprisingly came down today also. Also, both the net and operating profit margins improved sequentially, which indicates that good days are ahead for the company. In turnaround companies, we should always look at sequential results instead of Y-o-Y view. 

PVP Ventures Ltd (Rs.6.54), came out with slightly better results on sequential basis in Q1FY15, but what is surprising is the net profit, which is only Rs.57 lakhs, inspite of having the wife of Potluri Vara Prasad, who is one of the promoters of PVP Square Mall in Vijayawada, as one of the promoters of PVP Ventures Ltd!! Where is the money of PVP Ventures Ltd going? Moreover, when Sureddi Jhansi (the wife of Potluri Vara Prasad) and Potluri Sai Padma, could not bring any good to, PVP Ventures Ltd during the last 4-5 years, then on what basis the banks gave loans to them, to open PVP Square Mall? So, are the banks aware that the money is being siphoned off from the PVP Ventures Ltd by balance sheet mismanagement? The management has sucked up the company in such a way that even when the Nifty is near 7000, the share of PVP Ventures Ltd (CMP: Rs.6.54, Face Value: Rs.10) is still trading not only below its book value but also its face value. Meanwhile both Sureddi Jhansi and Potluri Sai Padma were able to come up with a mega-enterprise in Vijayawada, as Potluri Vara Prasad, dabbled with politics. In between, Potluri Vara Prasad was able to create a personal fortune worth crores, while the shareholders of PVP Ventures Ltd were left with a begging pan, like what is happening in SEL Manufacturing Company Ltd (Rs.4.43). How strange!! Now they might talk of buying the PVP Square mall, with whatever money is left in the kitty of PVP Ventures Ltd--this time the money going directly to the accounts of Sureddi Jhansi and Potluri Sai Padma. The moot point is that, the condition of the shareholders remains the same whether it is the UPA or NDA rule. Unfortunate!! Another point which I would like to stress is the gradual transformation of the Hyderabad (Erstwhile Andhra Pradesh) based companies to "Ahmedabadi Companies" (earlier the companies based in Gujarat had a very bad reputation of balance sheet manipulation) 

Allied Digital Services Ltd (Rs.18.65), having a Gujarati Promoter is coming up with Q1FY15 results on 14th August, 2014. It would be interesting to see if the company, comes up with dividend or not. It is to be noted that the company's fundamentals' have improved slightly during the last few quarters. 
It seems the correction in IVRCL Ltd (Rs.19.50) is over. The sock could move up in the near term as the SEBI on Sunday approved Real Estate Investment Trust norms. The company has an order book of around Rs.20, 000 crores and got its loans restructured, through a CDR package. 
My recommended A2Z Maintenance and Engineering Services Ltd hit another buyer freeze today at Rs.17.75. I received lot of flak when the scrip was recommended in this blog at around Rs.11-12.