Govt likely to extend shipping subsidy period 

Tuesday, September 23 2014: Extension will benefit shipyards that are still building ships under contracts signed when the scheme was on, and even for some which have already delivered ships but awaiting subsidy.

Bangalore: Uncertainty over the fate of subsidy payments for shipbuilders such as Pipavav Defence and Offshore Engineering Co. Ltd, ABG Shipyard Ltd and Bharati Shipyard Ltd could lift soon, with the government looking to extend the payment timeline for a scheme which ended seven years ago. Under the scheme which ended on 14 August 2007, ships of certain specifications would be eligible for a 30% subsidy. In 2009, the government agreed to extend the timeline for paying subsidies till March 2014. 

An extension now will benefit shipyards which are still building ships under contracts signed when the scheme was on, and even for some which have already delivered the ships but are waiting for the subsidy. If the order comes, this would be the second such extension. 

“A budgetary provision up to 31 March 2014 only was approved by the government (in March 2009). The process of holding inter-ministerial consultations regarding extension of timelines beyond 2013-14 for payment of subsidy to Indian shipyards in respect of shipbuilding contracts signed up to 14th August 2007 has been initiated,” a spokesman for the shipping ministry said. 

The scheme offered Indian firms 30% subsidy on ocean-going merchant vessels over 80m made for the domestic market; export-order ships of all types and capacities were eligible. Public sector yards get the subsidy in instalments; private firms after the ship is built and delivered to the buyer.

“Non-availability of subsidy on confirmed orders signed before 14 August 2014 would have impacted the financials of shipbuilders,” said a spokesman for the Shipyards Association of India, an industry lobby. Bharati Shipyard, for instance, is yet to get Rs.660.6 crore in subsidy. “The receivables have been budgeted as per the subsidy scheme of the government. 

We have been complying with the terms of the scheme,” Prakash Kapoor, MD, Bharati Shipyard said on 8 September. Under the scheme, the CCEA had asked the defence ministry to make budgetary provisions for defence shipyards under the administrative control of ministry, process their cases of subsidy and release funds to them. The cash-strapped centre has resisted demands from shipbuilders for re-introducing the subsidy scheme. Instead, the shipping ministry is working on a comprehensive policy to promote the local shipbuilding industry as announced by finance minister Arun Jaitley in his budget speech on 10 July, including setting up a Rs.15,000 crore corpus for extending cheaper funds to shipbuilders. “Shipbuilding is a big opportunity today,” 

Prime Minister Narendra Modi said on 16 August during the foundation stone ceremony for a special economic zone (SEZ) and road connectivity project at Jawaharlal Nehru Port Trust located near Mumbai. “India’s contribution to global shipbuilding has been very low. South Korea, a very small country, smaller than the state of Maharashtra today alone has a 40% share of global shipbuilding. We want to encourage shipbuilding,” Modi said. Elaborating on his theme of “Come, make in India”, which he mentioned during his Independence Day address, Modi said his government will encourage foreign investment in shipbuilding.

Courtesy: Live Mint

Defence deals: India caught between Russia and US

Monday, September 22, 2014: After his highly successful Japan visit, which saw the two sides signing the Global Partnership Deal, Prime Minister Narendra Modi is set to embark on a big-ticket visit to the United States later this month. The visit holds significance as it not only aims at renewing the not-so-warm Indo-US ties but also comes at a time when India’s decades old ally Russia has been increasingly isolated, forcing New Delhi to look for more reliable global partners for its future military and technological needs.

While in the recent past, top western envoys have been rushing to India to woo PM Modi with the sole objective of bagging billion-dollar contracts with the new government, which has taken a big decision of opening the defence sector to foreign investment, the new NDA regime is also caught between two tough choices.

One - how long can India depend on Russia for its growing military needs to counter threats emanating from two hostile neighbours China and Pakistan, and second - which other country can provide it the cutting-edge technology and meet India’s long term defence equipment requirements.

For over five decades, India has been largely dependent on Russia for its military preparedness. But the warmth and vibrancy in the time-tested and very cordial Indo-Russian ties is somewhat evaporating. India’s growing clout in the international community and the fast changing geopolitical matrix has pressed New Delhi to further cement its relationship with Washington and other Western nations, which are willing to offer what Moscow is increasingly failing to deliver - high precision sophisticated weaponry at relative cost.

The delay in transforming the modified Kiev-class aircraft carrier Admiral Gorshkov into the INS Vikramadtiya and its exceeded cost has badly hurt Russia’s reputation. Though, India had not sought fines from Russia for the inordinate delay in supplying Gorshkov, which was handed over to the Indian Navy last year, this failure has deteriorated the Russia-India military ties.

Russia's recent offer to sell Mi-35 attack helicopters to India's arch-rival Pakistan has further dealt a major blow to the Indo-Russian ties.

Further, series of crashes involving mostly Russia-made MiG 21 and MiG 29 fighter jets, a slew of kickback allegations, procurement delays have marred government’s efforts to upgrade its armed forces. There is a growing urgency in India to upgrade its Soviet-era military weaponry to counter China, which has forced it to look beyond Russia.

Another big factor, which has compelled New Delhi to weigh more options is the willingness shown by the Western countries to offer latest technical know-how along with the clause to co-develop and manufacture hi-tech defence equipments in India to which Moscow never agreed until recently.

Hence, it came as no surprise when the United States piped Russia as India's  top defence supplier earlier this year. This also points to a big shift in India’s defence policy to look at the United States, United Kingdom, France and Israel for major military procurements.

This also implies that Moscow will gradually lose its competitive edge in India and its arms exports to the latter will continue to shrink further, while Moscow’s western rivals may scale up their defence cooperation with India.

According to defence analysts, India - the world's largest arms importer - is poised to spend $250 billion in the next decade to modernise its armed forces by acquiring more lethal weapons and combat jets and son on to keep the “expansionist” China, which spends $120 billion a year on its military preparedness, at bay.

India spent nearly $6 billion last year on weapons imports, though its state-run firms cater to some extent to its defence requirements by manufacturing tanks, small helicopters, ballistic missiles and assembly lines for foreign jets. The Modi government’s recent decision to raise cap on FDI from 26% to 49% in the defence sector, allowing foreign manufacturers to build more defence components without licences, will further make it easier for Indian firms to partner foreign firms.

Prime Minister Modi has laid out an ambitious plan to sharpen the country’s combat capabilities and transform India from the world's largest arms importer to a major defence equipments manufacturer - something which has been a distant dream of every prime minister since independence. And for this, New Delhi needs access to the highest technology and know-how, which Moscow lacks.

PM Modi’s military modernisation plan and his desire to see India as a major regional player has thrown indications that the country’s defence sector is set to undergo a vast change in the days to come. India is also likely to bargain hard with the foreign vendors in future to ensure technology is transferred and some components are developed in India by big domestic players in the sector.

In the past few months, French Foreign Minister Laurent Fabius, US Senator John McCain, Britain’s Foreign Secretary William Hague and Finance Minister George Osborne, US Secretary of State John Kerry, Secretary of Commerce Penny Pritzker and Defence Secretary Chuck Hagel visited India to court Modi with lucrative defence deals. All this also points to the growing competition between the top countries to win billion-dollar defence deals with India to absorb the arms and ammunition manufactured by their respective companies.

India also wants to use its “vast arms market” status to its advantage.

When Modi visits United States, President Barack Obama’s team will try to revive Indo-US defence trade, which had dropped sharply during the second term of the Congress-led United Progressive Alliance (UPA) government. US government officials will certainly push hard for $2.8 billion in delayed sales of Boeing's Apache attack and Chinook military transport helicopters to be among the first completed under the new regime. The $1.4 billion order for 22 AH-64D Apaches was first approved in December 2010 and a separate deal for 15 heavy-lift CH-47F Chinook helicopters is valued at $1.4 billion.

If the Defence Ministry sources are to be believed, the government is also determined to acquire Boeing's Chinook and Apache helicopters - a deal that can revamp the strained ties between New Delhi and Washington. Significantly, the Defence Acquisition Council has also cleared the last hurdle for signing of the contract with the US in respect of Apache and Chinook. The deal topped the agenda during Chuck Hagel’s August visit, which laid the ground work for Modi-Obama meet on September 30.

During his stay in India, Hagel met Defence Minister Arun Jaitley, Foreign Minister Sushma Swaraj and PM Modi, besides the top executives of Indian defence companies like Bharat Forge, L&T, Mahindra Group, Tata Sons, Reliance Industries, Pipavav and American defense companies in India like Honeywell, Raytheon, and Textron.

During talks with his Indian interlocutors, Hagel pushed for defence deals worth more than $7 billion, including the stalled mega deals for M-777 ultra-light howitzers and Javelin anti-tank guided missiles (ATGMs). The US bagged Indian defence deals worth $10 billion in the last decade and edged past Russia as India’s number one defense supplier. But the greed is growing among  American arms manufacturers, who want to expand the US defence export to India by including helicopters and UAV’s (unmanned aerial vehicles).

Besides, signing the $2.8 billion deals for Apache and Chinook helicopters, other defence deals, which the two sides are likely to sign is 145 ultra-light M-777 howitzers (worth $885 million).  These howitzers are meant to be deployed by India’s new mountain strike corps which will essentially be China-centric. However, the Indian side is not too inclined to off-the-shelf purchases, and would instead push for arrangements that would galvanise Indian defence industry in partnership with US firms.

However, all depends on circumstances under which Modi and Obama meet and what concessions Washington offers to India.

Courtesy: Zee News

Prajay Engineers Syndicate Ltd: Will it become a dark horse in 2014-15?

According to the Hindu, September 22, 2014:  Potential investors considering investing in the capital region of Andhra Pradesh are in for a shock as the realty market around Vijayawada is competing with that of California, in the U.S. 

Prajay The Nest is a residential development. This is one of the completed projects of Prajay Engineers Syndicate Ltd. The project has a thoughtful design and is well equipped with all the modern day amenities as well as basic facilities. The Nest is located in Vijayawada Highway, Hyderabad. 

Prajay Engineers Syndicate Ltd, has a land bank of almost 738 acres. Prajay has currently, extended its presence to Vishakhapatnam, developing over 35 projects with 18 million square feet under construction.  

Located in Moosapet, Prajay Velocity Mall has 582,000 square feet of saleable space plus almost 322,000 square feet of multi-level car parking space. 

Celebrity Hospitality Services (the hospitality division of Prajay Engineers Syndicate Ltd.), has been providing unparalleled service in the hospitality industry for the past 8 years.

Rs.25,000 Cr Navy tender for pvt sector

Photo: Sagar Sandesh

[Editor: Pipavav Shipyard was the first corporate shipyard to be granted clearance to build warships and other vessels for the Indian Navy, though the initial licence limits, up to 5 ships per year. Moreover, since the  name of ABG Shipyward Ltd is involved, it would definitely have a positive rub-off effect on the share price of Western India Shipyard Ltd (Rs.1.88)]

NEW DELHI, Monday, September 15, 2014: Seeking to build capabilities of Indian private sector warship builders, the Defence Ministry has rejected the plea of a state-owned shipyard to participate in the Rs 25,000 crore project to construct four amphibious warfare vessels for the Indian Navy.

The Defence Ministry has decided that only private sector shipyards, including Pipavav, ABG and L and T, along with their foreign partners, would be allowed to take part in the Rs 25,000 crore project for building the four Landing Platform Docks, Navy sources told PTI here.

The Navy had issued tenders to these three private shipyards last year and decided to keep out Cochin Shipyard Limited (CSL), saying it was building the 40,000-tonne Indigenous Aircraft Carrier and it should focus on that major project only for the moment.

However, CSL approached former Defence Minister A K Antony through the Ministry of Shipping and the deal was put on hold.

Courtesy: Afternoon

Will grow order book significantly going forward: Nikhil Gandhi, Pipavav DOC 

[Editor: Pipavav Defence and Offshore Engineering Ltd (CMP: Rs.43.65) was recommended today during the market hours at Rs.44, for a price target of Rs.51-52. According to Business Today, July 27, 2008: One day in the early 1990s, Nikhil Prataprai Gandhi was almost beaten to death by a mob protesting against the development of a port at Pipavav in Gujarat. The port was conceptualised in 1990 by SKIL Infrastructure, a company Gandhi founded with younger brother Bhavesh. Gandhi was badly wounded in that attack. After he came out of hospital, he visited Shirdi in Maharashtra to offer prayers at Saibaba’s shrine. In Shirdi, he befriended a Saibaba follower who, in 1992, introduced Gandhi to the late Dhirubhai Ambani, founder of the Reliance group. That meeting changed his life. “If Dhirubhai uncle had not helped me, I would have been dead,” says Gandhi. Ambani taught Gandhi the virtues of identifying growth-oriented ventures ahead of their time, and executing them on time. The Reliance patriarch would joke that Gandhi was a member of the “zero club”, which meant that he had only one way to go—up.
That’s exactly the direction in which the 48-year-old (now 54 years), self-styled “infrapreneur”—an entrepreneur with a focus on infrastructure—has been headed over the past two decades. Gandhi is stingy with the numbers, preferring to point to a study of the SKIL group’s investments by Ernst & Young, which values them at a little over $10 billion as of December 2007. A section of the market dismisses him as a front for Mukesh Ambani (son of Dhirubhai), but Gandhi is quick to retort: “I am a self-made man.”]
ET Now: How have things changed on the ground with regards to decision-making and order inflows for you as a company? 

Nikhil Gandhi: After taking over, the new government had sent a very strong signal that it believes in action. It made clear that it wants to fire up manufacturing in India, which is extremely critical. India will have to be self-sufficient in defence, for which the local production houses need to be encouraged and supported. This requires technology, which in turn needs FDI. Our long pending demand has been the opening up of FDI in defence and I am glad that the new government has been sensitive and sincere about making India self-sufficient insofar the defence sector is concerned. I believe, no country in the world can become developed unless its national security is firmly in place. 

ET Now: Where does your order book stand right now? 

Nikhil Gandhi: We have been a heavy net importer, both in naval defence and offshore. So the opportunity is humungous. We only required some encouragement by the government and we have been seeing that in the last few months. The critical factor is to build a world class infrastructure, which should be globally competitive. Therefore, the recipe for success is - the Indian entrepreneur will have to be sensitive and sincere in building the infrastructure and the assets on time without any cost overrun. 

ET Now: What is the growth opportunity you see across ship building, offshore as well as defence segments over the next couple of years? 

Nikhil Gandhi: The growth opportunity is large. For example, today the requirement in the oil & gas and defence sectors runs into hundreds of billions of dollars over the next five-six years. But we need to have the infrastructure to cope up with these demand. With the new policy in place by the Government of India, there will be many Indian entrepreneurs who would be setting up these facilities to take advantage of these multibillion dollar opportunities, knocking right on their doors.

ET Now: You have a JV with Mazagon Dock which provides you exposure towards a 20-billion order book. With the government ramping up indigenous capacities, what can we expect from this JV? 

Nikhil Gandhi: The joint venture is an interesting part, because the facilities at Mazagon Dock are probably smaller compared to their order book. Wherever they think important and necessary, they will partner with a company like Pipavav and make sure that the contracts are executed on a fast track basis. However, Pipavav on its own has a good order book and is bidding for some large contracts - both in defence and oil and gas sector assets. We think we will be self-sufficient in bidding for those contracts 

Courtesy: The Economic Times

Indian Navy commissions final Saryu-class OPV

[Editor: Risk taking  investors can buy Pipavav Defence and Offshsore Ltd at Rs.44 for a target of Rs.51--54, in the short term. Last month there were media reports that Government of India has notified an increase in FDI (Foreign Direct Investment) limit to 49% through approval route in the DEFENSE sector. The move is aimed at boosting domestic industry of the country which imports up to 70% of its military hardware. FDI ceiling in the sensitive defence sector was hiked from current 26%, with the condition that the company seeking permission of the government for FDI up to 49% should be an Indian company owned and controlled by Indians. Further, foreign direct investment proposals above 49% will have to seek the approval of the Cabinet Committee on Security on "case to case basis, wherever it is likely to result in access to modern and state-of-the-art technology in the country," according to the press note of the Department of Industrial Policy and Promotion (DIPP)]

Photo: The Economic Times

04 September 2014: The IN claims over 90% of the 105-m long, 2,200 tonne, locally designed OPV is indigenously sourced.

"We have transformed from a buyers navy to a builders navy" IN Chief of Staff Admiral R K Dhowan declared at the commissioning ceremony.

"The blue print for the IN's future is anchored on self-reliance and indigenisation and presently we have 41 ships and submarines under construction in public and private sector shipyards" he added.

Built at a cost of INR7 billion (USD116 million) by Goa Shipyard Limited (GSL) and powered by two licence-built SEMT Pielstick diesel engines, Sumitra has a maximum speed of 25 kt, an endurance of 3,240 n miles and can remain deployed for over eight weeks without replenishment, the IN claims. It is capable of embarking one helicopter.

With a 114-member crew, including nine officers, it is armed with an Oto Melara 76/62 Super Rapid Gun, two Russian-made AK-630M close in weapon systems and six chaff launchers.

Its electronic warfare suite comprises the locally designed Sanket Mk III Electronic Support Measure and Israel Aerospace Industries ELK 7036 Communication Intelligence systems.

GSL is building six similar OPVs for the Indian Coast Guard for INR18 billion, deliveries of which are scheduled to begin in October 2015 and be completed two years later.

COMMENT

The IN is also procuring five naval OPVs from Pipavav Shipyard in a deal that has had a tortuous history. Named in June 2010 as preferred vendor to supply the vessels, Pipavav signed a INR29.75 billion (USD553 million) contract with Russia in May 2011 for five naval OPVs. However, the deal ran into problems primarily over price concerns and was terminated some time in 2012.

US firm Alion Science and Technology Corporation said in an investor presentation filed with the US Securities and Exchange Commission on 19 June 2012 that it was pursuing a "firm-fixed-price contract to design an Offshore Patrol Vessel (OPV) for an Indian shipyard". Indian sources said that Pipavav had signed a contract with Alion later in the same year.

While Pipavav refused to comment, with a company official saying that "we do not release such privileged commercial details", IN sources said the first of five vessels is scheduled for commissioning around December 2015/early 2016 for a lesser price than that agreed with Russia.

Courtesy: IHS Jane's Defence Weekly

NCC in talks to sell road project

E Sudhir Reddy,  CMD, IVRCL Ltd
Photo: Stock Explain

Hyderabad, September 19, 2014: With the investor sentiment improving in the country, city-based construction company NCC Ltd is talks to exit one of its four BOT road projects and expects to clinch a deal by the end of this year.“We are planning to exit two out of four BoT road projects. Out of two, we are currently in talks with potential buyers for one project and a deal could happen by the end of this fiscal,” said NCC executive vice-president (finance) Y.D. Murthy here.

The two road projects that the company is planning to exit are Western UP Tollways and Bangalore Elevated Expressway. 

After years of high growth, the Indian construction companies are scrambling to sell their BOT projects as high interest costs and low efficiency of their projects threaten to push parent companies towards severe financial strain.

NCC is not the only construction company that plans to exit its BOT road projects. 

IVRCL had said that it has put all its BOT projects on the block, Ramky Infra is also in talks to exit its road projects. GMR Infra, meanwhile, has terminated its contract to build around Rs.6,000 crore road project.

Apart from the monetisation of its road projects, NCC is going to pare debt from the proceeds of its upcoming rights issue. “We are launching our rights issue, which will open on September 29 and close October 17,” he said. Post rights issue, the company’s standalone debt will come down to Rs.2,000 crore from the current Rs.2,600 crore as the construction major looks at trimming its interest costs. 

Courtesy: Deccan Chronicle

Winning Strokes: Think Different

PVP Ventures Ltd (Rs.9.62) recommended around Rs.8.25 and then again at around Rs.6.50, made a new 52-week High (adjusted) of Rs.11.59 on 12/09/2014. I hope most of you have made money from this call. 

Yesterday, IVRCL Ltd was recommended as a fresh buy at around Rs.17.90, the scrip today touched Rs.18.90, before cooling down at Rs.18.60. The government of India is expected to ease norms for FDI in the construction sector--IVRCL Ltd (Rs.18.60), HCC Ltd (Rs.36.15), Punj Lloyd Ltd (Rs.40.55), etc. could be some of the biggest beneficiaries. Meanwhile, according to the Indian Express, 10 September, 2014: 

A  year after starting the tendering process for the Colaba-Bandra-Seepz Metro, billed to be the country’s longest underground Metro rail corridor, the Mumbai Metro Rail Corporation (MMRC) has now finalised a list of nine consortia eligible for financial bidding after scrutinising pre-qualification tenders. Intending to finalise contracts and start work by the year-end, the MMRC will issue Requests for Proposals (RFP) to the nine pre-qualified firms in the next few days. A total of 14 consortia had submitted pre-qualification bids for the Colaba-Bandra-Seepz Metro. The nine consortia declared eligible are AFCONS Infrastructure Ltd-Kyivmetrobud, DOGUS-SOMA, CEC-ITD Cementation India-Tata Projects Ltd, IL&FS Engineering and Construction-China Railway 25th Bureau Group, J Kumar Infraprojects-China Railway Engineering Group Co, Larsen & Toubro-Shanghai Tunnel Engineering Company, OSJC Moscow Metrostroy-Hindustan Construction Company, Pratibha Industries-Guandong Yuantian Engineering and Unity Infraprojects Ltd-IVRCL Ltd-China Railway Tunnel Group.

Today Kolte-Patil Developers Ltd was recommended to the Paid Groups around Rs.190-193. The scrip today closed flat at Rs.189.80.

Today, Oswal Greentech Ltd (Bindal Agro) touched Rs.34.35, before closing at Rs.33.45. The scrip today moved up with good volume. The real estate and investment related scrips are expected to shine in the coming days, due to obvious reasons. Moreover, the name of the company Oswal Chemicals & Fertilizers Limited did not match the activities of the company. Therefore, the company had changed the name of the company to “OSWAL GREENTECH LIMITED”. The changed name of the company was confirmed and recorded by the Registrar of the Company, Punjab w.e.f. 23rd November 2011.

Western India Shipyard Ltd today moved by more than 6% and closed at Rs.1.89. The company is likely to get benefited from the commencement of mining in Goa. Once the mining starts in Goa, then the whole of mining and shipping sectors, would get tremendous sentimental boost. 

I have already said this a number of times earlier in various platforms, and is again reiterating: The shares from the Indian Auto sector are highly overvalued (Industry P/E is more than 248) according to my estimates, but still most of them are rising, SURPRISINGLY. It reminds me of DOTCOM CRASH in 1999-2000, when also the IT sector valuations were thought to be invincible; before everything crumbled like NINE PINS. 
Yesterday,  HDIL was recommended at Rs.86.25, to the Premium Service members. The scrip today touched Rs.93.90 Intra-day, before closing at Rs.93.40, up 9.24%.

OSWAL GREENTECH LTD (Formerly Oswal Chemicals & Fertilizers Ltd): Update

CMP: Rs.32.50

• Management has decided to convert land and building, Plant and Machinery and Furniture and Fixtures owned by the companyat Tilak Marg of Rs.11,676.43 Lacs (Rs.116.76 Cr) held as inventory into fixed assets and the same is being used for official purposes.
• The company has incurred an expense of Rs.4040.50 Lacs (PY Rs.4,040.50 Lacs) on the development of commercial cum residential project at Chembur land at Mumbai (Bombay) pursuant to agreement with Oswal Agro Mills Limited (OAML). In accordance with the agreement, OAML has to contribute its land and the company is required to incur all development expenses of the project with the understanding to share the ownership of the Chembur project in an agreed ratio. The construction/development of the project was stayed by the Hon’ble Supreme Court of India vide order dated 10.12.2013 stating that the same land can be used for the purpose of Agro Industry or any other permissible industry under the current regulations. The management is exploring the possibilities to use the land in question as per the permissible regulations and accordingly is of the view that the amount spent on the project will be fully recovered from the future projects.
• Oswal Chemicals & Fertilizers Limited (BINDAL AGRO, CMP: Rs.33.35) will have Annual General Meeting on 18 September, 2014. During the year FY14, the Company carried on the activities related to development of Real Estate and Investments. The company is taking up three projects in Ludhiana for development of about 15,00,000 sq.ft. of built up area. The Company expects good demand of residential apartments in this ever growing city. The company has also earned interest income from the funds which are temporarily invested in various financial institutions/securities/fixed deposits. At present, the company is operating in the business of Real Estate, Investment activities, Fertilizer and trading in shares/commodities/Goods as separate Business Segments. According to the management. relative absence of large number of organized players in the Real Estate business segment provides an excellent opportunity to the company, to become a leading player in this industry. The management has extensive experience in setting up large industrial projects in a timely manner and this experience can be leveraged to build a strong and sizable presence in the real estate business. 
• The business segment is the primary segment of the Company consisting of: (i) Investment Activities (ii) Trading Goods and (iii) Real Estate
• Aggregate Market Value of Quoted Investments==> Rs.6,743.03 lakhs.
• Aggregate Cost of Quoted Investments ==>Rs.2,444.33 lakhs.
• Aggregate Cost of Un-quoted Investments==>Rs.6,571 lakhs (Rs.4071.88 lakhs).
• Aggregate provision for diminution in value of Investments Rs.1,418.72 lakhs (Rs.1,403.72 lakhs).

Oswal Chemicals & Fertilizers Limited: Buy

CMP: Rs.35.35

The company is presently known as Oswal Greentech Ltd (NSE Code: BINDALAGRO). At present, the company is operating in the business of Real Estate, Investment activities, Fertilizer and Trading in shares/ commodities/ Goods as separate Business Segments.

The sudden fall in the profitability was due to stoppage of work under the joint development agreement with M/s. Oswal Agro Mills Ltd. for the development of land at Chembur, Mumbai for residential and commercial complexes, as per the order of Hon’ble High Court of Mumbai. 

As the project at Chembur, Mumbai was shelved indefinitely till the decision on the petition of M/s. Oswal Agro Mills Ltd. before the Hon’ble Supreme Court of India is received. The company is informed that the hearing in the case by Hon’ble Supreme Court of India is completed and the judgment is expected soon. The company is seriously considering diversification in the field of power, energy and natural resources and is under discussion with experts of respective fields. The future outlook in the case of Real Estate looks encouraging.

Aruna Oswal of Oswal Chemicals and Fertilizers Ltd last month announced the launch of a health care project for rural women in and around Ludhiana. She said the programme would be conducted by a able team of the Mohan Dai Oswal Cancer Hospital. The family is already running educational institutions to provide education to the underprivileged sections of society. Chief minister Parkash Singh Badal asked Aruna to give a detailed project report so that the state government could join them in this venture. He also requested her to come up with more projects for the state.

Net profit of Oswal Green Tech declined 39.46% to R.10.05 crore in the quarter ended June 2014 as against Rs.16.60 crore during the previous quarter ended June 2013. Sales reported to Rs.0.92 crore in the quarter ended June 2014. There were no Sales reported during the previous quarter ended June 2013.

Oswal Green Tech is holding 14.17% stake in NDTV Ltd (Rs.109.80). The share price of NDTV Ltd hit 20% upper circuits today.  

Oswal Green Tech Ltd, the Delhi-based chemicals and fertilisers company, acquired 14.1% stake in television broadcasting major NDTV Ltd for about Rs.24 crore through open market transactions in 2011. Through bulk deal transactions on the National Stock Exchange, Oswal Green Tech purchased a total of 91,36,894 shares of NDTV at a price of Rs.26.64 a piece, which appreciated by more than 4 (four) times during the last few years. 

Oswal Greentech Limited mainly develops and promotes residential and commercial real estate properties in India. It is also involved in the trading of shares/commodities/goods; and investment activities. The company was formerly known as Oswal Chemicals & Fertilizers Limited and changed its name to Oswal Greentech Limited in November 2011. Oswal Greentech Limited was incorporated in 1981 and is based in New Delhi, India.

Vijayawada, new Andhra Pradesh capital, set to witness real estate boom

[Editor: The Real estate prices are set to skyrocket around Vijayawada following this announcement by Andhra Pradesh government. PVP Ventures Ltd (Rs.7.70) could see a sudden SPURT in its share price.The company possessed a 70-acre land parcel - popularly known as Binny Mills - in the heart of Chennai (Just 3.5 kms from Chennai central railway station)--this project will be fast tracked. The Company also owns 135 acres of land in Shamshabad, Hyderabad, through its subsidiary and affiliate companies. The company targets to line up projects aggregating to USD One billion (~Rs.6100 Cr) in the ensuing five years across South India. Its strategic partnership with Arihant, Unitech in real estate and urban infrastructure areas gives the necessary cutting-edge advantage. The Company has zero external debt--a big asset in a cash intensive business and cash starved-economy. According to a Tehelka report, Potluri purchased stake in Jagan's businesses and was later awarded land by the Andhra Pradesh government. Potluri, reportedly, bought 13,88,888 Jagati shares held through PVP Business Ventures Pvt. Ltd and was allotted disputed land in Nadergul, Ranga Reddy district. Potluri Vara Prasad, the CMD, hails from Vijayawada, Andhra Pradesh and is the co-founder of the Engineering school, Prasad V. Potluri Siddhartha Institute of Technology. He owns, PVP Energy, PVP Cinema and PVP Foundation under PVP Ventures] 

Photo: NDTV Ltd

September 4, 2014: Real estate prices are set to skyrocket around Vijayawada following announcement by Chief Minister N Chandrababu Naidu-led Andhra Pradesh government that the new capital would be located "near" the second largest city of the residuary state.

The land prices started shooting up in the region after media reports indicated that the area is "being considered" for locating the new seat of power of Andhra Pradesh which lost Hyderabad to newly-formed Telangana State.

A Siva Reddy, Vijayawada chapter President of Confederation of Real Estate Developer Associations of India, said property prices within 25km radius of the coastal city in Krishna district have doubled during the past few months.

"Ever since the division of State was announced, land prices started shooting up between Vijayawada and Guntur. Prior to the announcement, the prices used to be around Rs 1 crore per acre and now they have gone up to Rs 4 crore. Rates are expected to rise further," Reddy said.

The rush to buy land in and around Vijayawada had gone to such an extent the Government had to intervene and issue orders banning conversion of agriculture land into residential plots in part of Krishna District, said M Ramakrishna, Proprietor of Sri Gayatri Real Estates.

"With today's announcement, the land prices are set to skyrocket as most of the realty sales had been put on hold pending clarity from the Government on capital city. Now that the air has been clear, Vijayawada will witness real estate boom," Ramakrishna said.

Barring some small residential plots, no major land dealings have taken place "officially" for the past few months, he added.

However, the task of acquiring adequate land for building capital may not be easy for the government given the prices prevailing there, a senior official said.

There is no clarity yet on the quantum of government land available in the area and also the amount of real estate that needs to be acquired to build the necessary infrastructure, he added.

Courtesy: The Financial Express

Ashok Leyland Ltd: Sell

Ashok Leyland Ltd (Rs.37.35) has a whopping market cap of Rs.10,643.58 Cr, which is near the total FY14 earnings of Rs.10,009.95 Cr. Besides it is already trading at 2.38 times its book value of Rs.15.69. The dividend yield at the current price is only 1.60%, which is very poor. 

In fact the whole of the auto sector seems to be overvalued, especially the large cap ones (Tata Motor Ltd's P/E is blinding 6,410.63 while the industry P/E is 248.08).......and therefore a DOTCOM-like CRASH can happen at any time. 

Financial Technologies Ltd: What are its Future Short Term Targets?

Some points need to be highlighted here:

(i) According to NDTV Profit, August 27, 2014: 

Jignesh Shah-led FTIL asserted that promoters of MCX-SX did not conceal facts while seeking extension of recognition of the exchange in 2009 from capital market regulator Sebi.
The Bombay High Court did not find anything illegal in the buyback arrangement.
"...it was expressly held that the said buy back arrangement is not in violation of the Securities Contract Regulation Act (SCRA), 1956, and the Securities Contract (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulation, 2006 (MIMPS)," it said.
This Bombay High Court order was challenged by Sebi in the Supreme Court.
"The Supreme Court passed a consent order. Finally, Sebi granted permission to MCX-SX to undertake the business for all segments in addition to currency derivative segment after being satisfied that MCX-SX has complied with all the legal requirements."
"Thus the matter regarding the alleged violation of SCRA and MIMPS regulations stands adjudicated at the highest judicial level and cannot be re-opened," the statement said.
Regarding alleged irregularities in grant of extension to MCX-SX, FTIL said promoters of the exchange had always believed that the inter-se arrangements amongst the shareholders were legal.
"Further at the time of extension of recognition of MCX-SX in the year 2009, we understand that MCX-SX only sought time from Sebi for reducing the shareholding to comply with 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," FTIL said.
Stating that the application for extension of recognition was made by MCX-SX and not by FTIL or Mr Shah, the company said it was surprising that promoters of MCX-SX and Jignesh Shah are being implicated in the FIR for certain alleged non-disclosures in the application.

(ii) The Bombay High Court recently appointed a three-member committee to audit NSEL and liquidate assets of its defaulting borrowers to facilitate a refund of investors’ money. Authorities claim they have attached properties worth about Rs.5,000 crore of the defaulting borrowers. 

(iii) Justice AM Thipsay of the Bombay High Court, said the transactions in question were being entered through brokers who had knowledge of the commercial market. He said: "Those terming themselves as investors were actually traders". And, so, the judge also questioned whether the Maharashtra Protection of Interests of Depositors (in Financial Establishments) Act was at all valid in this case.

The judge says the fact that transactions in question were not genuine ones of sale or purchase was known to both sides. The so-called investors and their brokers were pursuing high returns without bothering about the legalities of the trades in question. That these trades were fictitious were quite clear to the investors, too, said the judge, and they’d “entered into the transactions purely as financial investments”.

“Going by the broad probabilities of the case, it cannot be accepted that the persons who are now crying foul, were not aware of the fact that their transactions were not genuine. They were looking at these transactions clearly as an investment of their monies yielding safe returns,” the court said.

(iii) Merging NSEL with FTIL, according to the experts would be difficult to undertake, given that FTIL was a publicly-listed company and such a move may be opposed by minority shareholders.

(iv) According to Forbes India, 4 September, 2014:

As in some financial market scams, investors entered into these contracts through registered brokers, lured by expectations of capital growth. 
How much did (Jinesh) Shah know about this and what could he have done? His closest friends and business associates told Forbes India that while he expanded operations to Southeast Asia, the Middle East and Africa, he began losing the plot. Shah had spent years battling with regulator Securities and Exchange Board of India (Sebi) to acquire a stock licence for his newest exchange, MCX-SX. He won that mandate, but probably did not bother to monitor what was unfolding at NSEL. 
The imbroglio also revealed more about Shah’s personality. Some friends and associates, seen as part of Shah’s “inner circle”, revealed that he could have actually walked out of the mess with his head held high. There were at least two possible corporate suitors, who were in talks for a potential bailout of FTIL, if Shah had agreed to move out. But ego and the need for control perhaps prevented him from going ahead with the deal. 
Also, unlike most previous cases, several investors who lost money in the NSEL scam were well-off. As an investment consultant told us he had “no sympathy” for investors who–keen on making quick bucks and higher returns-lost money. They did not do their due diligence. 

Shipping ministry in talks with firms to set up fund of up to Rs.15,000 Cr to extend low-cost loans

Bangalore, September 02 2014.: The shipping ministry has initiated discussions with financial institutions such as IFCI and IDBI to establish a fund of as much as Rs.15,000 crore to extend low-cost loans to shipbuilders. The shipbuilding development fund will form a key part of a policy being drafted by the shipping ministry to promote local shipbuilding as announced by finance minister Arun Jaitley in his budget speech on 10 July. 

“We are discussing the finer details of the shipbuilding development fund with IFCI and IDBI,” a shipping ministry spokesman said. Other features of the policy could include granting special economic zone (SEZ) status to shipyards and declaring it as a strategic sector with attendant fiscal incentives. 

“Shipbuilding is a big opportunity today,” Prime Minister Narendra Modi said on 16 August during the foundation stone laying ceremony for a special economic zone (SEZ) and road connectivity project at Jawaharlal Nehru Port Trust located near Mumbai. “India’s contribution to global shipbuilding has been very low. South Korea, a very small country, smaller than the state of Maharashtra today alone has a 40% share of global shipbuilding,” Modi said. 

“We want to encourage shipbuilding.” Elaborating on his theme of “come, make in India”, which he mentioned during his Independence Day speech, Modi said his government will encourage foreign investment in shipbuilding. India, Modi said, has a large army of youngsters which was as long as the country’s vast coastline. “We have young people, skilled manpower who can be easily mobilized. Shipbuilding is also not about technology. 

Turner, fitter, welder also are involved in shipbuilding. The poorest of the poor gets employment,” Modi added. Local shipbuilders have been struggling to get orders for constructing merchant ships after the global recession of 2008. Indian shipyards are outbid by Chinese and Korean shipyards due to cost differentials arising from lack of support for the industry in India, said a spokesperson for the Shipyards Association of India, an industry lobby. 

“On the other hand, foreign shipyards benefit from direct fiscal and non-fiscal support from their respective governments,” he said. Indian shipyards pay an interest of 13-14% on capital expenditure and working capital loans for purchasing raw materials and other inputs as against around 4-6% in countries such as China and South Korea. 

“The differential interest cost imposes a significant cost burden on Indian built ships,” the Shipyards Association spokesman added. China’s EXIM bank gives preferential loans to its domestic shipyards at rates as low as 2.7% which provides a huge cost advantage to Chinese shipyards, especially when a ship is financed at debt-to-equity ratios which are as high as 90:10 and the working capital requirements for building a ship can be as much as 35% of the cost of a ship, on an average, during its construction period, the ministry spokesman said. 

“Korea, China and Japan have pursued a mix of fiscal and non-fiscal incentives for encouraging growth and development of their shipbuilding industry. Shipbuilding is a capital intensive industry with a sell first, build later model where buyers pay a small percentage of the price of the ship upfront. This requires shipbuilders to invest substantial capital in executing orders,” the spokesman said. “Availability of loans at a low cost is a significant support provided by most shipbuilding countries to their yards.”

Courtesy: Live Mint

Financial  Technologies Ltd

CMP: Rs.254.80

24 August 2014: Jignesh Shah, founder and promoter of Financial Technologies Group, who was out of action following the Rs 5,500- crore National Spot Exchange scam, has secured bail. 

Shah's high-profile friends may have deserted him, but his core team-his friend and cofounder of Financial Technologies Dewang Neralla, brother Manjay Shah and cousin Paras Ajmera-is said to be conducting business in his absence.

In fact, insiders say it is Ajmera, who is carrying out all crucial behind-the-scene operations. Some in the market believe that Ajmera is a master strategist and close to the broking fraternity. 

Such is Ajmera's hold that he is said to have even controlled the salary of every employee in the company. Last November, Ajmera resigned as a director from the Board of MCX, but sources say he was the architect in signing the deal with Kotak Mahindra Bank for selling Financial Technologies' 15-per cent stake in the Exchange for Rs 459 crore.

Courtesy: Mail Online

The great Indian financial inclusion circus 

To be fair to Narendra Modi, he has resorted to inclusion at gunpoint out of sheer frustration as lazy bankers have been refusing to expand their services writes, Tamal Bandyopadhyay

According to a 2012 working paper of the 
World Bank, only 35% of India’s adult 
population has access to formal banking

AUG 31, 2014: For about a million public sector bank employees, the past fortnight has been extremely hectic. Senior executives could hardly sleep; they were busy video conferencing with colleagues in every state and even district while junior employees were literally on the street, chasing prospective depositors—something never seen in the history of Indian banking. 

They were put on notice on Independence Day, when Prime Minister Narendra Modi announced the Pradhan Mantri Jan Dhan Yojana as a national mission on financial inclusion and fixed 28 August as the launch date. In his address, Modi spoke about the ambitious project to offer banking facilities to all households in India to complement the Bharatiya Janata Party-led National Democratic Alliance government’s development philosophy of Sab Ka Sath Sab Ka Vikas; he followed it up with a personal letter to all senior bankers. 

He wrote, “We need to enrol over seven crore households and open their accounts. This is a national priority and we must rise to meet this challenge. There is an urgency to this exercise as all other development activities are hindered by this single disability.... I will myself recognize the achievements of the best-performing branches.” One cannot find fault with Modi’s earnestness. People in remote villages drink American fizzy drinks like Coke and Pepsi and carry mobile telephones in their pockets but they are pariahs when it comes to banking; India’s banks do not find doing business with them profitable. 

According to a 2012 working paper of the World Bank, only 35% of India’s adult population has access to formal banking. So, what’s the Pradhan Mantri Jan Dhan Yojana all about? It’s aimed at bringing at least 75 million un-banked families into India’s banking system by opening two bank accounts per household in rural and urban pockets. All such accounts are being linked to the RuPay debit card, a domestic card network. Every individual who opens a bank account becomes eligible to receive an accident insurance cover of up to Rs.1 lakh and once the bank account has been active for six months and linked to the account holder’s Aadhaar identity number, he or she would become eligible for an overdraft of up to Rs.5,000. 

Last Thursday, the government rolled out the programme, claiming about 15 million accounts were opened, exceeding the first day’s target of 10 million. An excited Modi shortened the deadline for achieving the target of 75 million new accounts to 26 January from 15 August 2015. He also topped up each account with life insurance cover of Rs.30,000, adding to the Rs.1 lakh accidental insurance benefit. “Never before in economic history were 15 million bank accounts opened on a single day,” Modi said. Many Union ministers and at least 20 chief ministers simultaneously launched the scheme in states. Information and broadcasting minister Prakash Javadekar launched it in Pune, law minister Ravi Shankar Prasad in Chennai, external affairs minister Sushma Swaraj in Bhopal, home minister Rajnath Singh in Lucknow and human resource development minister Smriti Irani in Surat. Nirmala Sitharaman, minister of state for finance, even cancelled a visit to Myanmar to be part of the launch. I happened to be present at minority affairs minister Najma Heptulla’s launch function in Kolkata. 

Forty-odd financially included persons, who opened accounts on that day, walked into a five-star hotel for the first time in their lives and were treated to tea and cookies after Heptulla handed over to them a RuPay debit card and a passbook which says, Mera Khata–Bhagya Vidhaata. It didn’t take much time to find out that for all of them, it was not their first bank account. Clearly, the banks wanted to meet the target at any cost. A retired banker even compared this programme with the late Sanjay Gandhi’s compulsory sterilization programme in 1975. 

At that time, the health department in various states forced many to undergo sterilization more than once to meet their targets. Bankers followed the same path—beg, borrow or steal, get a human being to open a bank account; it doesn’t matter whether the person is already financially included. Should we blame Modi for the great Indian financial inclusion circus? 

To be fair to him, he has resorted to inclusion at gunpoint out of sheer frustration. Lazy bankers have been refusing to expand their services, citing high transaction and technology cost for going rural, while they are sanguine about thousands of crores in loans, given to corporate borrowers, turning bad. For the first time, in January 2006, the Reserve Bank of India had allowed banks to appoint business correspondents and address the so-called last mile problem in providing banking services to the masses, but nothing much has happened except for opening millions of so-called no-frills accounts. 

By December 2013, banking connectivity had been extended to 328,679 villages from 67,694 in March 2010 and 229 million basic accounts have been opened, but how many of them are operational? Financial inclusion is the process of ensuring access to financial services and timely and adequate credit to weaker sections and low income groups at an affordable cost. Merely opening a bank account doesn’t ensure that. 

Unlike Sanjay Gandhi’s sterilization programme or the government’s Pulse Polio immunization initiative, financial inclusion cannot be achieved only by meeting the target numbers. Pushed to the wall, banks will hit the target by doling out passbooks indiscriminately to anybody and everybody, including those who already have bank accounts. 

The government must make the bankers accountable and, at the same time, ensure that financial inclusion is supported by inclusion in infrastructure, education and other socio-economic areas. Finally, we need many more banks. Until now, licences for new domestic banks have been a once-a-decade affair. 

Tamal Bandyopadhyay, consulting editor of Mint, is adviser to Bandhan Financial Services Pvt. Ltd, India’s newest bank in the making. He is also the author of Sahara: The Untold Story and A Bank for the Buck.

Courtesy: Live Mint

Abhishek Bachchan, John Abraham photobomb Sachin Tendulkar’s selfie at ISL launch! 

Please Click on the Photo to Expand

New Delhi, Aug 28, 2014: Master Blaster Sachin Tendulkar’s modest attempts of clicking a selfie were photobombed by Bollywood celebs Abhishek Bachchan and John Abraham in Mumbai on Thursday. The trio also doubles up as team owners in the ambitious Indian Super League (ISL), a franchise-based football league set to start on October 12. The inaugural edition will conclude on December 20.

Modelled around the cash-rich Indian Premier League (IPL), the ISL stipulates two games for each team against every team in home and away format. Depending upon their respective ranks and points, top four teams will qualify for the knock out round, ie the semi finals.

Semi finals will also be played in home and away format, making it a total of four semi-final matches. 

With base price of each team set at Rs 12 crore, the most expensive franchise is the Kolkata team, which was won by a group that had former skipper Sourav Ganguly, alongside businessmen Harshavardhan Neotia, Sanjiv Goenka, Utsav Parekh, and Spanish La Liga side Atlético Madrid, for approximately Rs 18 crores.

Master Blaster Sachin Tendulkar, alongside PVP Ventures, owns Kerala Blasters.

Among B-town celebs, John Abraham, partnering with Shillong Lajong, owns the Guwahati team.

Ranbir Kapoor, alongside Bimal Parekh, won the bidding of the Mumbai team while Salman Khan won the Pune team with the Wadhawan Group. The Delhi team was won by DEN Networks while the Chennai team was won by a consortium headed by Abhishek Bachchan. The Goa team was won by a three-way partnership between Videocon, Dempo, and Salgaocar.

Apart from the 14 Indian players, seven international players and one marquee player each that the teams have contracted, franchises can independently contract up to five more players.

Courtesy: Daily Bhaskar