Buy: Sintex Industries Ltd

CMP:  Rs.13.60

Face Value: Re.1

Book Value: Rs.68.33

Dividend Yeild: 1.84%

EPS: Rs.2.46

P/E: 5.52

Industry P/E: 21.16

The Sintex Industries Ltd after the demerger houses the textile division of the company. Bharat Vijay Mills (BVM), the Textile Division of SIL was established in 1931. It is is a Composite textile mill, which manufactures products across the supply chain. The Company has grown to a $50 million company with a work force of over 1600.Today, 

BVM is a vertically integrated plant having its own Spinning to finishing facilities. BVM has been the undisputed leader in varied product mix for the last 70 years with a continuous expansion of its product range. Since last 20 years, it has established a name in the global marked with its yarn dyed/piece dyed shirting, corduroy & bottom weight . SIL has set up a marketing and technical joint venture with Italian player Cancilini to tap the European market for shirting fabrics. Our Its manufacturing operations are spread over an area of three lakh sq. meters across strategic locations. 

Sintex is one of the largest producers in India.

Financials: The company reported a rise of 11.5% in the net profit for Q1FY19 at Rs.39.1 crore against Rs.35.1 crore reported during the same quarter of last year. Its revenues for Q1FY19 rose 35% to Rs.925.3 crore against Rs.687.6 crore on year on year basis. On an operating basis, the EBITDA rose 45% to Rs.109.9 crore against Rs.75.6 crore, year on year. Meanwhile, the consolidated EBITDA margin came in at 11.9% in FY19 as against 11% on Y-o-Y basis.
The company has a Debt Equity Ratio of nearly 1 (one), Current Ratio of around Rs.2.2 and Interest Coverage Ratio of 2.5. The debt equity ratio is a little high because of continuous capex during the last few years. However, this will get reduced in the coming months as its new capacity goes on stream.

Key Triggers:

#The demerger has enabled Sintex Industries Ltd to focus on its core businesses by streamlining operations, cutting costs and ensuring more efficient management control.

#The first phase comprising 3.06 lac spindles of the high-tech yarn facility at Pipavav, Gujarat commenced operations in the first half of FY 2016-17 with spinning quality compact yarn for weaving and knitting application. It achieved a capacity utilization of about 98% by the close of the last financial year.

#Sintex Industries Ltd is also implementing a spinning project with 6 lacs spindle in two phases at Amreli, Gujarat. After setting up the project, around 50% of yarn will be used for captive use and balance would be sold in the open market. The expansion will be eligible for getting interest subsidy of 7% as applicable for spinning units under the Textile Policy Scheme of Gujarat Government.

#In last 4-5 years the company has spent around Rs.4000 crore in Textile business. Further, the company is undergoing a capex of Rs.3200 Crore which is expected to get completed by FY19. Hence, after these slew of expansions, the revenue of the textile division is likely to go up significantly.

#In comparison to the series of expansions, the market cap of the company is only around Rs.807.38 crores. This leaves lot of scope for the increase in shareholder value.

##Last week, the government of India, doubled the import duty on over 50 textile products, like jackets, suits and carpets to 20%, a move that is aimed at promoting domestic manufacturing. The imported products which have become expensive include woven fabrics, dresses, trousers, suits and baby garments.
Under the BVM brand, Sintex Industries Ltd supplies fabrics to reputed international and domestic brands like Arrow, Van Heusen, Marks & Spencer, Ann Taylor, and global fashion labels like Armani, Hugo Boss, Diesel, Burberry, S.Oliver, banana republic, Pepe Jeans, Nike, Zodiac, Canali, The Royal Mint, Massimo Dutti, Mexx, Zara, DKNY, Armani, Colour Plus, H&M, Versace and Tommy Hilfiger.

If we look at the candle stick chart, we can see that it has formed an inverted head like pattern on the daily chart with falling volume, indicating that the company has perhaps formed an intermediate bottom. Buy the stock at the CMP of Rs.13.6 for short term targets of Rs.18-19.

BSE Small-Cap index up more than 1%

[Editor: Buy Jindal Saw Ltd at Rs.77--78, for short term targets of Rs.82-84. The price of crude oil has started to inch upwards, as was expected--in such circumstances, the SAW Pipe sector should do well. The scrip has already found a support around Rs.76-77 ranges and from today's movement it seems that this level will hold. During the Q3FY15, the profit of the company rose 23.74% to Rs.619.20 million from Rs.500.40 million  in the same quarter last year. Net sales for the December 2014, quarter  rose marginally by 3.97% to Rs.17,774.30 million, compared with Rs.17,096 million for the prior year period. Meanwhile, the DIIs have increased their stake in the company to 13.13% in the December 2014 quarter as compared to 11.94% in the September, 2014 quarter. Moreover, today recommendation came from a brokerage house to buy Jindal Steel and Power Ltd at Rs.156 for a target of Rs.162] 

February 18, 2015:  After a rangebound movement in mid-morning trade, key benchmark indices trimmed gains in early afternoon trade. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex, was currently up 127.67 points or 0.44% at 29,263.55. The BSE Small-Cap index was up 1.01%, outperforming the Sensex. Asian stocks edged higher amid speculation Greece will resolve its standoff with creditors.

Meanwhile, the yearly SBI Composite Index, a leading indicator for tracking primarily manufacturing activity in Indian economy, inched up to a 2-month high of 52.9 (moderate growth) in February 2015 from 52.1 (moderate growth) in January 2015.

Capital goods stocks rose. Shares of power generation companies were also in demand.

Earlier, Sensex hit its highest level in almost three weeks in mid-morning trade as the two key benchmark indices -- the Sensex and the 50-unit CNX Nifty -- extended initial gains.

Foreign portfolio investors sold shares worth a net Rs 182.80 crore during the previous trading session on Monday, 16 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 280.77 crore on Monday, 16 February 2015, as per provisional data. The stock market was closed yesterday, 17 February 2015, on account of Mahashivratri.

In overseas markets, Asian stocks edged higher amid speculation Greece will resolve its standoff with creditors. In the US, the S&P 500 eked out a small gain yesterday, 17 February 2015, to close at a record level for the second time this year, after reports emerged that Greece may ask for a six-month extension on its debt obligations.

In the foreign exchange market, the rupee edged lower against the dollar.

Brent crude oil futures edged lower amid oil supply glut. Nevertheless, global crude oil prices have bounced back over the past few days after a steep slide in prices over the past few months. The recent rebound in global crude oil prices will raise concerns pertaining to India's fiscal deficit, current account deficit and fuel price inflation. India imports about 80% of its crude oil requirements. On 15 February 2015, Indian Oil Corporation announced increase in petrol price by 82 paise per litre in Delhi (including state levies) and diesel price by 61 paise per litre.

At 12:19 IST, the S&P BSE Sensex was up 127.67 points or 0.44% at 29,263.55. The index jumped 200.20 points at the day's high of 29,336.08 in mid-morning trade, its highest level since 30 January 2015. The index fell 8.97 points at the day's low of 29,126.91 at the onset of trading session.

The CNX Nifty was up 29.90 points or 0.34% at 8,839.25. The index hit a high of 8,862.20 in intraday trade. The index hit a low of 8,808.90 in intraday trade.

The BSE Mid-Cap index was up 61.04 points or 0.57% at 10,799.03. The BSE Small-Cap index was up 113.26 points or 1.01% at 11,359.71. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was positive. On BSE, 1,504 shares advanced and 1,107 shares declined. A total of 93 shares were unchanged.

Capital goods stocks edged higher. Suzlon Energy (up 14.16%), Pipavav Defence and Offshore Engineering Company (up 13.17%), Punj Lloyd (up 7.42%), Bharat Electronics (up 5.34%), BEML (up 4.63%), Lakshmi Machine Works (up 1.93%), ALSTOM India (up 1.84%), SKF India (up 1.61%), Jindal Saw (up 1.44%), Praj Industries (up 1.01%), AIA Engineering (up 0.89%), ABB (up 0.45%), Havells India (up 0.17%) and Crompton Greaves (up 0.09%) edged higher.

Bharat Heavy Electricals (down 0.04%), Alstom T&D India (down 0.16%), Siemens (down 0.59%) and Thermax (down 0.89%) edged lower.

Index heavyweight and engineering and construction major Larsen & Toubro was up 1.33%.

Shares of power generation companies were in demand. GMR Infrastructure (up 2.46%), Tata Power (up 2.14%), Reliance Power (up 2.08%), NTPC (up 2.05%), Adani Power (up 1.68%), JSW Energy (up 1.38%), Reliance Infrastructure (up 1.03%), NHPC (up 0.97%) and Torrent Power (up 0.76%) edged higher.

Jaiprakash Power Ventures rose 8.08%. The company won the Amelia North coal block in Madhya Pradesh for Rs 712 per tonne, according to the results of e-Auction for Schedule II coal mines announced by the Ministry of Coal yesterday, 17 February 2015.

CESC fell 1.79%. The company said on Tuesday, 17 February 2015, that following an e-auction conducted by the Ministry of Coal, Government of India on 15 February 2015 and the results thereof since posted on the Ministry's website, CESC has submitted the closing bid of Rs 470 per metric tonne (MT) for Sarisatolli coal mine in the state of West Bengal. A formal letter to the company from the Ministry allocating the said mine is expected in due course, CESC said.

The coal ministry has started auctioning coal blocks after the Supreme Court in September last year cancelled the allocation of more than 200 coal mines allotted between 1993 and 2010 after ruling that they were arbitrary and illegal.

Sundaram Finance fell 0.13% to Rs 1,545. The company announced during trading hours that Sundaram Finance (SFL) and RSA Group, UK, (RSA) have reached an agreement whereby RSA has agreed to sell its entire 26% equity stake in Royal Sundaram Alliance Insurance Company (RS), to SFL, for a consideration of Rs 450 crore, subject to all regulatory approvals. Sundaram Finance currently holds 49.9% in RS. After the completion of the transaction, Sundaram Finance and its associates would hold 100% of the shareholding of RS.

RS, the first private sector non-life insurance company to be granted a licence, in the year 2000. RS is a leading player in the general insurance sector in India.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.255, compared with its close of 62.1575 during the previous trading session on Monday, 16 February 2015. The foreign exchange market was closed yesterday 17 February 2015, on account of Mahashivratri.

Brent crude oil futures edged lower amid oil supply glut. Brent for April settlement was off 35 cents at $62.18 a barrel. The contract had risen $1.13 a barrel, or 1.84% to settle at $62.53 a barrel during the previous trading session.

Meanwhile, the yearly SBI Composite Index, a leading indicator for tracking primarily manufacturing activity in Indian economy, inched up to a 2-month high of 52.9 (moderate growth) in February 2015 from 52.1 (moderate growth) in January 2015. In contrast, the monthly index slipped to 48.3 (low decline) in February 2015 from 52.1 (moderate growth) in January 2015. The sharp contraction in the month on month index may be attributed to less number of working days in February compared to January, according to Ecowrap which is an economics research publication from State Bank of India (SBI). According to Ecowrap, a revival in automobile sales, capital goods and consumer non-durables productions and possible upturn in the credit offtake by the large corporates segment highlights possible recovery in the economic activity in coming months. Consumer durable sales have not yet bottomed out. Bank credit and deposits continues to remain sluggish. Interestingly, growth in credit card outstanding continues to push up credit growth. The contraction in the in the monthly index could probably drag down the yearly index after a while, according to Ecowrap.

According to Ecowrap, benign wholesale as well as retail inflation accompanied by a lower cost of borrowing is expected to boost positive sentiment in the economy in coming months and possibly drive credit cycle and growth.

The next major event for the financial markets is Union Budget for 2015-16. Finance Minister Arun Jaitley will present Union Budget 2015-16 in Parliament on 28 February 2015. Analysts will scrutinize measures in the Budget for financing infrastructure projects as well as the government's own capital expenditure on infrastructure for the year ahead. This is the first full fledged Budget of the Narendra Modi government and analysts will look for a roadmap for economic growth for the next few years.

Changes in rates of dividend distribution tax, capital gains tax on sale of shares, Securities Transaction Tax (STT) and Minimum Alternate Tax (MAT), if any, will be closely watched. The dividend distribution tax is currently at 15%. The minimum alternate tax is currently at 18.5% of book profits. Short term capital gains tax on sale of shares is currently at 15% while there is zero long capital gains tax on sale of shares held for a period of more than one year.

The upcoming Budget session of the parliament assumes utmost importance as the government intends to replace the ordinances it had promulgated after the conclusion of the winter session of the parliament with Bills and get them cleared by both Houses of Parliament during the budget session. The Narendra Modi government promulgated a slew of ordinances after the last session of Parliament. Some of the key ordinances include raising the FDI in the insurance sector from 26% to 49%, e-auctioning of coal mines and amendment to the Land Acquisition Act.

The government has already started auctioning coal blocks for captive mining. The Coal Mines (Special Provisions) Bill that was moved to replace an ordinance issued earlier was passed by the Lok Sabha in the winter session but it could not be taken up in the Rajya Sabha. The government promulgated the Coal Mines (Special Provisions) Ordinance, 2014, in October to facilitate coal block auctions after the Supreme Court cancelled 204 coal blocks in September.

Through another ordinance, the government has raised the ceiling on foreign investment in the insurance sector to 49% from 26%. The government was unable to get the Insurance Laws (Amendment) Bill, 2008, passed in parliament during the winter session.

Amendments to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 were brought in via an ordinance after the winter session of the parliament.

Analysts are also awaiting further progress on the Goods and Services Tax (GST) in the Budget session after the Constitution Amendment Bill for the introduction of GST was tabled in the Lok Sabha during the winter session of parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.

Asian stocks edged higher today, 18 February 2015, tracking gains in the US as fears eased over Greece leaving the eurozone. Key benchmark indices in Hong Kong, Indonesia, Japan and Singapore were up 0.16% to 1.18%.

The stock market in mainland China is closed for this entire week starting today, 18 February 2015, for the Lunar New Year holiday. The stock market in Hong Kong is open for trading for only half day today, 18 February 2015, and remains shut for the rest of the week for the Lunar New Year holiday.

In Japan, the Bank of Japan (BoJ) today, 18 February 2015, stood pat on its policy and painted a rosier picture of economic conditions, despite recent poor growth data and an inflation rate that is moving away from its 2% target. After the latest policy meeting, the BOJ's policy board voted 8-1 to keep unchanged the size of the bank's annual asset purchases worth 80 trillion yen ($670 billion), its main tool to generate higher inflation.

The central bank signaled that it mostly believes that the Japanese economy has finally overcome a hit from the government's move to raise the sales tax. Specifically, the BOJ removed for the first time its reference to the tax increase from the main language in its monthly economic assessment.

Trading in US index futures indicated that the Dow could gain 11 points at the opening bell today, 18 February 2015. US stocks closed slightly higher Tuesday, 17 February 2015, as investors continued to monitor talks between Greece and its creditors in hopes that a deal will be reached to keep the country from falling out of the eurozone.

In Europe, Greece may reportedly request a six-month extension on its debt obligations. According to reports, the newly elected Greek Prime Minister Alexis Tsipras will today, 18 February 2015, request an extension on the country's loan agreement. Talks are continuing between Greece and its international creditors on the conditions that would be attached to the extension of the loan accord, according to reports. Greece is scrambling to reach a deal with creditors before it runs out of cash. Greece's current bailout plan expires on 28 February 2015.

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Reliance Naval & Engineering Ltd (Rs.3.55) is Now in Safe Hands: NCLT Shouldn't Change its Decision..

Before starting the discussion, let us first look at a few questions, as mentioned below. Photo: Lokmat Times.

Q.1. How is Mukhesh Ambani is related to Nikhil Merchant?

Q. 2. So who exactly is #Nikhil #Vasantlal #Merchant and why he holds so much clout that senior ministers and bureaucrats speak of him as a man who can get things done?

Q. Isn't it true that Naveen Jindal, a former Member of Parliament, Lok Sabha from Kurukshetra, Haryana and is currently the Chairman of Jindal Steel and Power Limited, belongs to Indian National Congress, headed by Rahul Gandhi?

Q. Will NCLT shift to the Congress connected Navin Jindal (of JSPL) from the #Blue #Eyed boy of #Narendra #Modi (Nikhil Merchant)?

Q. Isn't it now apparent that in the deal to takeover, the debt ridden Reliance Naval and Engineering Ltd (Rs.3.65), all the four: Nikhil Merchant, Nikhil Gandhi, Mukhesh Ambani and Anil Ambani are somehow related?

----------------------

The ADA Group owned by Anil Ambani took over the Gujarat-based Pipavav Defence and Offshore Engineering Ltd in 2015 from its erstwhile owner Nikhil Gandhi and later renamed it as Reliance Naval and Engineering Ltd (RNEL).

On March 17, Hazel Mercantile, in partnership with Swan Energy, emerged the winner with 95% of the committee of creditors approving its resolution plan. The lenders later issued a letter of intent terming it the winning bidder.

Swan Energy’s managing director Nikhil Merchant was a director on the board of Navi Mumbai Smart City Infrastructure at the time of submitting the resolution plan for RNEL. 

Navi Mumbai Smart City is a company promoted by Nikhil Gandhi, who was also the promoter of Reliance Naval (formerly Pipavav Shipyard).

-------------------

By the way, Nikhil Merchant, Managing Director of Swan Energy is the father of Vinita Patel who is married to Naman Patel the nephew of Anil Ambani.

Vinita Naman Patel is currently associated with 4 Companies and is director with Swan Lng Private Limited, Dave Impex Private Limited, Storm Soft Technologies Private Limited, Triumph Offshore Private Limited.

----------------------------

Further Saurabh Dalal Patel is the husband of Ila Ambani, the first cousin of Mukesh and Anil Ambani. He is the son-in-law of Ramnikbhai Ambani, the elder brother of late Dhirubhai Ambani.

He is currently a Member of Legislative Assembly in the 14th Gujarat Legislative Assembly or Gujarat Vidhan Sabha (ગુજરાત વિધાન સભા) and has served in the same capacity in the 10th, 11th, 12th and 13th Legislative Assemblies as well. In the Gujarat Legislative Assembly Elections that concluded in 2017, he contested and was directly elected from the constituency of Botad. He has given charge of finance and energy minister of gujarat. [Wikipedia].

Saurabh had held important portfolios such as finance, energy and petrochemicals, and mines and minerals in Gujarat.

News reports suggests Saurabh's "inability" to get along with BJP president Amit Shah. "Saurabh Patel owed his rise to Modi, and Anandiben used him as her main conduit with industry and business. With Amitbhai, his equation is chatis ka aakda (at daggers drawn)," a source said.

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One of the most influential businessmen in Modi’s India is someone you may have never heard of.  Google for Nikhil V. Merchant on the internet and you would be hard pressed to find too many photographs or profile or interview or even a quote of the 50-something entrepreneur whose proximity to Narendra Modi is an open secret in the upper echelons of the Bharatiya Janata Party and its government in Delhi.

Swan Energy, is largely involved in the textile and property business. Swan is headed by Nikhil Merchant and his father-in-law, Navinbhai Dave, who acquired it from the Goenka group in 1991.

Swan Energy has also been a donor to the BJP – making small payments of Rs.2 lakh and Rs 50,000 in 2012-13 – though Merchant now denies this. “I have never ever given any political funding to the BJP,” he told The Wire in an interview.

[The Wire, 08 Feb, 2018].

-------------------

Summary:

This means #Nikhil #Merchant has #Excellent connections with the ruling Bhartiya Janata Party (BJP) at the centre.

#Nikhil #Merchant of Swan 🦢 Energy is the Blue 🔵 eyed 👁️ boy of #Narendra #Modi. He has a clout in India Inc that he can get things done.

----------------------

I'm betting that he'll use his influence in the BJP government to get government of India's contract on building War Ships.

Swan Energy and Hazel Mercantile are in race to buy Reliance Naval and Engineering Ltd (Rs.3.60).

I feel the lenders and the shareholders will not agree to go with Navin Jindal owned JSPL. Navin Jindal is from the Indian National Congress headed by #Rahul #Gandhi.

The NCLT is not likely to give a judgment in favour of Navin Jindal. Or I would rather request NCLT, to go with the ealier verdict (of allowing the consortium of Hazel Merchant - Swan Energy to take over RNAVAL).

-----------------------

However, even of it is taken over by Navin Jindal controlled JSPL, it wouldn't be too bad deal, either.

Because, first of all is the strategic location of RNAVAL, since it is port based and the other is that it can be a good outlet for the consumption of company's steel plates.

I reiterate, for JSPL Reliance Naval can be a captive client for the company's shipbuilding plates --  it is already supplying to other shipbuilding companies and for making military equipments.

After takeover, the JSPL, instead of selling plates, can directly sell ships, which will be a big relief to the lenders and other stakeholders.

Reliance Communications Ltd: Buy

CMP: Rs.75.10

Anil Dhirubhai Ambani-owned company, Reliance Communications Ltd (Rs.75.10) which is India's fourth largest mobile phone operator by subscribers, reported an 85% jump in net profit for Q3FY15, boosted by lower cost of financing debt and as more of its subscribers used the pricier data services.

It posted a net profit of Rs.201 crore for the October-December period. Revenue rose 1.2% on year to Rs.4,799 crore. The company's net finance cost fell to Rs.652 crore from Rs.749.3 crore a year back. In May, Reliance Communications raised Rs 6,000 crore from a share sale to institutional investors to reduce its debt and ready itself for the upcoming airwave auction. It used funds raised from the sale of shares to institutional players to repay loans earlier this financial year.

According to the Economic Times, 14 February, 2015: 

The telecom industry in India has benefited from reduced competition ever since the Honorable Supreme Court cancelled 122 licences in February 2012, which allowed operators to cut down on promotional offers such as free-call minutes and raise effective call rates. Additionally, a surge in the use of smartphones has pushed up the use of premium high-margin data services. These have helped most telcos improve their key parameters such as average revenue per user (ARPU) and average realisation per minute (ARPM). The carrier's data customer base grew 5.7% to 31.4 million, of which 16.7 million were on its 3G services. Total data traffic increased 16.2% on quarter and 83.3% on year, due to a rise in data subscribers and higher data usage per customer, the company said. Data services offered at a premium and add to the spending per customer, making them more lucrative for telecom companies.

Reliance Communications had net debt of Rs.36,330 crore ($5.9 billion) at the end of September, 30, 2014, down from Rs.40,220 crore three months earlier, according to a company filing. 

The company may also bid in a government auction of wireless spectrum next month, which is expected to raise as much as $15.6 billion from service providers and put at risk their efforts to reduce borrowing, ICRA Ltd said in January. All licenses held by the company in the most popular 900 megahertz frequency band are up for renewal, according to the local arm of Moody’s Investors Service. 

Recently, there were media reports that  Reliance Communications has awarded a contract for technology overhaul of its business process outsourcing centres to US communications systems major Avaya for an undisclosed sum. A person familiar with the matter, however, said the contract may mean an outflow of Rs.400-500 crore for Reliance Communications (RCom) over three months, followed by about 15% of that to service it over the next three years. Under the agreement, Avaya will modernise tools, processes and best practices resulting in operational efficiencies by managing cost through consolidation.

Another person familiar with the deal said the move was in anticipation of work from Reliance Industries' Jio Infocomm. Reliance Communications Ltd (RCom) has a deal with Mukesh Ambani-owned Jio, under which RCom will manage the call centre operations for Jio. The Jio agreement also said RCom would upgrade its technology and fibre for the purpose. At the moment, RCom uses its legacy IVR, or interactive voice response system. Technology today allows more efficient approaches to ensure fewer drops and call back options to maintain continuity of conversation.

Besides, according to The Financial Express, 10 February, 2015:

Facebook has tied up with Reliance Communications to offer free access to subscribers of Anil Ambani-led firm to the social networking site as well as about three-dozen general information websites. Besides accessing Facebook, RCom subscribers can also access 33 websites offering news and information on weather, jobs, government services, and health without incurring data charges.

According to the Deccan Herald, 17 February, 2015:

Reliance Communications Ltd, part of the Anil Ambani-led group, which is the global telecom sponsor of the ICC World Cup 2015, has partnered with Twitter to provide its customers with a platform to follow the global commentary as the world's 14 best cricketing nations compete for the tag of the champion team, with no data charges. Customers who do not have a Twitter account can also access cricket-related Tweets by logging on to www.rcom.co.in/cricket on their mobile phones throughout the duration of this global event -- from Feb 13 to March 31, 2015, a company statement said here Tuesday. 

According to the Reuters, 17 February, 2015: 

India's Reliance Industries  and seven other firms including top mobile phone operator Bharti Airtel  have applied to participate in next month's auction for mobile phone airwaves, several people directly involved in the process said.

All these makes Reliance Communications Ltd as one of the most happening stocks in the telecom sector.. The scrip should cross Rs.100, within the next six months. The investors are strongly suggested to buy the stock at the CMP of Rs.75.10, for a short term target of Rs.84-97. This could be another Pipavav Defense and Offshore Eng Ltd (Rs.69.10), which was recommended on September 28, 2014 at Rs.38.75; after which it made a 52-week high of Rs.74.40 on 12/02/2015.

WINNING STROKES: THINK DIFFERENT:

Today's call to the Paid Groups, Buy Shree Renuka Sugars Ltd (Code: 532670) at Rs.60--60.55, T-Rs.62-64-73, SL--Rs.57 reached the first target of Rs.62, as it touched Rs.62.25 on the BSE Intra-day. I will soon come up with a report on the company on my research report blog. The Sugar stocks are looking good as the festive season is round the corner, apart from other causes mentioned earlier.

Yesterday's buy call on Essar Oil Ltd saw it almost hitting the first target of Rs.67, as it touched Rs.69.90 today intra-day. The stock came down a bit after some profit booking was advised in the counter. 

Meanwhile, the Country Club India Ltd has informed BSE that the Register of Members & Share Transfer Books of the Company will remain closed from September 26, 2011 to September 30, 2011 (both days inclusive) for the purpose of Payment of Final Dividend & 20th Annual General Meeting (AGM) of the Company to be held on September 30, 2011. Hence take your positions in the counter before it is too late, the stock closed flat at Rs.9.67 on the BSE.

Key benchmark indices managed small gains amid high intraday volatility, after the central bank delivered another 25 basis points hike in repo rate--the key short-term policy rate--at its mid-quarter review today, 16 September 2011, to rein in inflationary expectations. The market extended gains for the third straight day and scaled one-week closing high. The barometer index BSE Sensex settled below the psychological 17,000 level, having alternately swung above and below that mark in intraday trade. The BSE Sensex rose 57.29 points or 0.34%, off close to 190 points from the day's high and up about 45 points from the day's low. The market breadth was negative, having alternately swung between positive and negative zone earlier in the day.

From a recent low of 16,467.44 on Tuesday, 13 September 2011, the Sensex has jumped 466.39 points or 2.83% in three trading sessions. Euro-zone debt worries had pulled Indian shares lower before the three-day rebound. From a 5-week closing high of 17,165.54 on Thursday, 8 September 2011, the Sensex had tumbled 698.10 points or 4.06% in three trading sessions to 2-week closing low of 16,467.44 on 13 September 2011. Earlier, the market had staged a strong rebound after a steep setback in August 2011.

With Q2 September 2011 drawing towards a close, focus may shift to expectations of Q2 results of individual firms. Advance tax payments made by the top 100 companies based in the country's financial capital Mumbai reportedly rose 18% in Q2 September 2011. The tax collections are not uniformly good or bad across companies and sectors, except for oil marketing companies, which saw a decline in levies paid.

Coming back to today's trade, state-run ONGC jumped as the latest petrol price hike could help reduce the subsidy sharing burden of the state-run oil exploration major which is required to share under-recoveries at state-run oil marketing companies (PSU OMCs) on selling diesel and cooking fuels at government-set prices. Index heavyweight Reliance Industries (RIL) edged lower in volatile trade. Another index heavyweight Larsen & Toubro rose. Interest rate sensitive banking stocks rose in choppy trade as the rate hike by RBI was on expected lines. Realty stocks, too, gained. Tata Motors soared 7%. Other auto stocks were mixed. Metal shares were mixed.

Key policy decisions by the Indian government on Thursday, 15 September 2011, eased concerns of a policy paralysis, aiding the upmove on the bourses today. Meanwhile, the government's decision to defer the mega Rs 11000 crore follow-on public offer (FPO) of ONGC helped ease concerns of the large issue sucking secondary market liquidity.

The market pared gains soon after a firm opening triggered by a rally in Asian shares. The market regained strength later. The market trimmed gains in morning trade. The Sensex once again regained strength later. A bout of volatility was witnessed in mid-morning trade as key benchmark indices trimmed gains after hitting fresh intraday highs to hit fresh intraday lows. Wild swings in share prices was the order of the day in early afternoon trade after the Reserve Bank of India (RBI) raised repo rate--the key short-term policy rate--by 25 basis points at its mid-quarter review today, 16 September 2011.

Higher opening of European shares ensured firmness on the domestic bourses in early afternoon trade. Intraday volatility continued as key benchmark indices trimmed gains in mid-afternoon trade as US index futures fell. Volatility continued in late trade.

The BSE Sensex rose 57.29 points or 0.34% to settle at 16,933.83, its highest closing level since 8 September 2011. The index jumped 246 points at the day's high of 17,122.54 in early afternoon trade. The index gained 13.02 points at the day's low of 16,889.58 in early afternoon trade.

The S&P CNX Nifty rose 8.55 points or 0.17% to settle at 5,084.25, its highest level since 8 September 2011. The Nifty hit a high of 5,143.60 in intraday trade. The Nifty hit a low of 5,068.10 in intraday trade, its lowest level since 15 September 2011.

The BSE Mid-Cap index rose 0.38% and outperformed the Sensex. The BSE Small-Cap index fell 0.01% and underperformed the Sensex.

BSE clocked turnover of Rs 2646 crore, higher than Rs 2570.88 crore on Thursday, 15 September 2011.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,473 shares fell and 1,392 shares rose. A total of 131 shares remained unchanged. The breadth swung alternately between positive and negative zone earlier in the day.

Among the 30-share Sensex pack, 17 fell and the rest rose.

IT stock fell on profit taking after a recent rally triggered a recent steep slide in rupee against the dollar. The rupee witnessed a steep fall against the dollar recently as euro-zone debt worries triggered global risk aversion. A weak rupee boosts revenue of IT companies in rupee terms as the sector derives a lion's share of revenue from exports.

India's largest software services exporter Wipro fell 2.37%, reversing initial gains. The company has entered into a strategic alliance with Saab AB to develop and market protective software for the Swedish major's Land Electronic Defence System (LEDS). LEDS provides protection to light and medium combat vehicles and main battle tanks against rocket-propelled grenades, anti-tank missiles, mortars and artillery shells.

India's largest software services exporter TCS declined 1.04%. The company on Thursday said it has signed a multi year contract with Nets, one of largest payment cards, payment solutions and payment exchange information companies in Northern Europe. The contract comprises application, maintenance and development services across Nets' value chain of cards, payments and eSecurity. TCS's advance tax payment reportedly jumped 111.11% to Rs 570 crore in Q2 September 2011 over Q2 September 2010.

India's second largest software services exporter Infosys fell 0.51%, with the stock snapping three-day gains. The company is reportedly close to acquiring the health care business of Thomson Reuters in a $700-750 million deal. If the deal goes through, it will be the largest acquisition by Infosys. Thomson Reuters' health care business provides data, analytics and performance benchmarking solutions and services to companies, government agencies and health care professionals.

Index heavyweight Reliance Industries (RIL) fell 0.92% to Rs 827.45. The stock was volatile. The stock hit high of Rs 849.30 and low of Rs 822.05. The company's advance tax payment reportedly jumped 67% to about Rs 2000 crore in Q2 September 2011 over Q2 September 2010.

BP PLC will be able to start work on jointly developing RIL's oil and gas blocks in India only after a revised production-sharing contract is drafted and signed by the stakeholders, the upstream regulator said on Thursday, 15 September 2011. The amendment to the production-sharing contract is yet to be signed. BP will come in only when the amendment is signed, S.K. Srivastava, Director at the Directorate General of Hydrocarbons, told reporters on the sidelines of an industry conference. In the production-sharing contract, the explorers agree with the government to bear risks, production and development costs in return for a share of production.

Srivastava said that RIL is yet to approach the regulator with a new draft of the contract. RIL on 30 August 2011 closed a deal with BP to sell a 30% stake in its 21 oil and gas exploration blocks in India to the UK-based explorer.

RIL had, last week, denied inflating costs on its D6 gas field in the Krishna-Godavari (KG) basin. RIL made the clarification after CAG said in its final report submitted to the parliament on Thursday, 8 September 2011, that RIL initially estimated capital expenditure of D-1 and D-3 gas discovery at $2.4 billion, which it later revised to $8.8 billion.

Interest rate sensitive banking stocks rose in choppy trade as the rate hike by RBI was on expected lines. The RBI today, 16 September 2011, said the year-on-year non-food credit growth at 20.1% in August 2011 was above the indicative projection of 18% cent set out in the July 2011 policy review. India's largest private sector bank by net profit ICICI Bank rose 0.58%. ICICI Bank's advance tax payment reportedly remained unchanged at Rs 600 crore in Q2 September 2011 over Q2 September 2010.

India's largest bank by branch network and net profit State Bank of India (SBI) rose 2.5% to Rs 1945.55. The stock had hit a 52-week low of Rs 1,812.90 in intraday trade on Wednesday, 14 September 2011. SBI's advance tax payment reportedly fell 10% at Rs 1700 crore in Q2 September 2011 over Q2 September 2010.

India's second largest private sector bank by net profit HDFC Bank fell 0.18% in volatile trade. HDFC Bank's advance tax payment reportedly rose 33% to Rs 800 crore in Q2 September 2011 over Q2 September 2010.

Axis Bank rose 1.56%. The private sector bank today said its board has considered and unanimously approved the transfer of the financial services business of Enam Securities whereby the Enam Financial Services business will be demerged from Enam into the bank under a Scheme of Arrangement. Enam shareholders will get 5.7 equity shares of Axis Bank for every one equity share of Enam. Upon completion aforesaid transaction, the bank will sell the Enam Financial Services business to ASSL, its wholly owned subsidiary. ASSL will pay the bank a cash consideration of approximately Rs 274 crore, which represents the book value of the Enam Financial Services Business, Axis Bank said. A total of 1.37 crore shares of Axis Bank will be issued to Enam shareholders.

Interest rate sensitive auto stocks were mixed after RBI's another rate hike. India's largest car maker by sales Maruti Suzuki India rose 2.16% to Rs 1106.65, up from the day's low of Rs 1060.20. The stock reversed initial losses on reports the company will resume operations at both its factories on Sunday, 18 September 2011, as workers at two parts manufacturing units of its parent Suzuki Motor Corp. have withdrawn a strike.

Maruti decided to shut its factories on Friday, 16 September 2011, after about 1,900 workers went on strike at Suzuki Powertrain India and Suzuki Castings. The strike led to a shortage of critical parts, including diesel engines and transmissions for some gasoline car models, forcing the auto maker to stop operations at the factories at Manesar and Gurgaon in Haryana. Maruti will resume production on Sunday instead of Monday to make up for the production loss on Friday.

Tata Motors, India's biggest auto maker by revenue, jumped 7.02% after company said its global vehicle sales in August rose 3% from a year earlier to 87,459 units. The company said sales at its UK-based luxury car unit, Jaguar Land Rover, jumped 31% to 21,242 vehicles during the month. Sales of Land Rover sport-utility vehicles surged 43% to 17,833 units, but Jaguar sedan sales fell 10% to 3,409 autos. Global sales of all trucks and buses rose 17% to 48,023 units, the company said. The company's advance tax payment reportedly remained unchanged at Rs 90 crore in Q2 September 2011 over Q2 September 2010.

Mahindra & Mahindra fell 0.68%, reversing initial gains. The company announced during market hours on Thursday that the board of directors of the company has approved divestment of up to 8.09% stake in its subsidiary Mahindra Holidays & Resorts India (MHRIL) in one or more tranches at the best available price through a recognised stock exchange by June 2013 to enable increase of MHRIL's public shareholding and free float in the stock market. M&M currently holds 83.09% of the equity of MHRIL. Shares of MHRIL jumped 4.97%. M&M's advance tax payment rose 6.25% to Rs 170 crore in Q2 September 2011 over Q2 September 2010.

Shares of bike makers fell on fears the latest petrol price hike may adversely impact sales during the festive season. India's largest two-wheeler maker by sales Hero MotoCorp fell 0.26% to Rs 2197. The stock had scaled a record high of Rs 2,231.70 in intraday trade on 9 September 2011. The company's sales rose 19% to 5.03 lakh units in August 2011 over August 2010.

India's second largest two wheeler maker by sales Bajaj Auto fell 0.19% to Rs 1625.55. The stock had hit a record peak of Rs 1694.90 in intraday trade on 6 September 2011. The company's advance tax payment reportedly rose 4.17% to Rs 250 crore in Q2 September 2011 over Q2 September 2010. The company's total sales rose 16% to a record 3.82 lakh units in August 2011 over August 2010. Motorcycle sales jumped 17% to a record 3.38 lakh units in August 2011 over August 2010.

Interest rates sensitive realty stocks rose as today's rate hike by RBI was on expected lines. DLF, HDIL, Indiabulls Real Estate and Unitech gained by between 0.54% to 4.8%.

India's largest power generation firm by capacity NTPC rose 4.75% after the company said that Simhadri Super Thermal Power project's Unit-3 of 500 megawatts capacity has kicked off commercial operation from midnight of 16 September 2011. With commencement of operation of the unit, the commercial capacity of Simhadri Super Thermal Power project is 1,500 megawatts (MW) and that of NTPC is 30,330 MW, NTPC said in a statement.

Metal stocks were mixed as LMEX, a gauge of six metals traded on the London Metal Exchange rose 1.19% on Thursday, 15 September 2011. Sterlite Industries, Sesa Goa, Hindustan Zinc, and NMDC rose by between 0.22% to 6.42%. Bhushan Steel, Sail, Jindal Steel & Power and Nalco shed by between 1.1% to 1.97%.

Tata Steel fell 1.3%, reversing initial gains. The company's advance tax payment reportedly rose 19.23% to Rs 620 crore in Q2 September 2011 over Q2 September 2010.

Tata Steel after on Wednesday announced a major five-year improvement programme at its IJmuiden steelworks in the Netherlands. The five-year programme with investment of euro 800 million is designed to sustain the plant's potential to be a world-class steelmaker, Tata Steel said in a statement. After the investment, the plant's annual capacity will rise to 7.7 million liquid steel by 2015-16, from current 7.2 million.

The total number of full-time jobs will reduce by 1,000 over the next four years. There will also be investment of staff training and development and enable the plant to meet the demand of the current complex market situation, the company statement said. The IJmuiden works enjoys the great advantages of an ideal location with its own port for bringing in raw materials and close proximity to the market, excellent lay-out, an ability to be flexible in the use of raw materials, and a high level of technology and craftsmanship, said Dr Karl-Ulrich Köhler, MD & CEO, Tata Steel Europe.

JSW Steel rose 0.68% in volatile trade. The company said during market hours on Thursday that a cut in its steel production is expected to continue till the resumption of iron ore supplies from e-auction by 'Monitoring Committee' in terms of a Supreme Court order.

Hindalco Industries rose 0.35% in volatile trade. The company's advance tax payment reportedly rose a muted 7.14% to Rs 150 crore in Q2 September 2011 over Q2 September 2010.

Larsen & Toubro rose 1.23%. The company's advance tax payment reportedly rose 16.67% to Rs 350 crore in Q2 September 2011 over Q2 September 2010

State-run ONGC jumped 5.61% as the latest petrol price hike could help reduce the subsidy sharing burden of the state-run oil exploration major which is required to share under-recoveries at state-run oil marketing companies (PSU OMCs) on selling diesel and cooking fuels at government-set prices.

Meanwhile, the government today, 16 September 2011, deferred the about Rs 11000-crore follow-on public offer (FPO) of ONGC. ONGC said in a statement that the government has decided not to proceed with the FPO of ONGC as per the timeline mentioned in the Red Herring Prospectus dated 5 September 2011 and it will evaluate its decision in relation to the FPO in due course. The FPO was scheduled to open on 20 September 2011 and close on 23 September 2011.

HDFC rose 0.85%, extending Thursday's 1.56% gain. The housing finance firm's advance tax payment reportedly rose 9.52% to Rs 460 crore in Q2 September 2011 over Q2 September 2010.

PSU OMCs reversed initial gains triggered by a hike in petrol prices by Rs 3.14 per litre or about 5% from Thursday midnight. BPCL, Indian Oil Corporation and HPCL fell by between 0.48% to 2%. A ministerial panel's meeting to consider limiting the sale of cooking-gas cylinders at subsidized rates which was scheduled today, 16 September 2011, has been reportedly deferred. PSU OMCs sell cooking gas, diesel and kerosene at state-set discounted prices to help the government control inflation. They get cash subsidy from the government to help trim their losses.

PSU OMCs are currently losing Rs 267 a cylinder. The government is considering to restrict the number of subsidized gas cylinders to help retailers cut their losses and reduce the government's subsidy burden. It is also working on a proposal to directly transfer fuel subsidies to the poor.

Airline stocks fell as PSU OMCs hiked aviation turbine fuel prices (ATF) prices on Thursday, 15 September 2011. ATF constitutes more than 50% of operating cost for airliners. Jet Airways (down 0.51%) and SpiceJet (down 2.24%) edged lower. Kingfisher Airlines rose 2.18%.

Prices of jet fuel are directly linked to crude oil prices. State-run oil marketing companies--Indian Oil Corporation, BPCL and HPCL revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight. State-owned oil companies on Thursday hiked jet fuel, or ATF, price by 2.5% in line with firming of international oil rates. Aviation Turbine Fuel (ATF) price at Delhi's T3 airport was hiked by Rs 1,429 per kilolitre (kl), or 2.5%, to Rs 57,689 per kl with effect from Thursday midnight.

SRS clocked highest volume of 3.32 crore shares on BSE. Cals Refineries (1.3 crore shares), Resurgence Mines (1.02 crore shares), Le Waterina (93.73 lakh shares) and Pipavav Defence 48.29 lakh shares) were the other volume toppers in that order.

State Bank of India clocked highest turnover of Rs 266.67 crore on BSE. SRS (Rs 111.86 crore), Tata Steel (Rs 71.55 crore), Tata Motors (Rs 69.39 crore) and RIL (Rs 65.09 crore) were the other turnover toppers in that order.

A recent India investor survey report prepared by J P Morgan Asset Management-ValueNotes expects benchmark Sensex to trade between 20,000 and 22,000 by end of this year. According to the report, the investment sentiment is affected by concerns such as recession, frequent hikes in interest rates and volatility in the domestic investment environment. Despite witnessing a 4.2-point decline from the last quarter, the 'Retail Investor Confidence Index' ranks the highest at 137.5 points. Retail investors' activity in mutual funds has improved 11% since the last quarter, the survey said. The survey was carried out from 22 July to 4 August 2011.

The survey also shows that investors are becoming cautious as preserving capital emerges as a popular investment strategy among retail investors (40%). However, 40% of investors, in comparison to 57% in March 2011, are expected to turn somewhat aggressive about their investment strategy over the coming six months.

At the time of announcing a 25 basis points rate hike, the Reserve Bank of India (RBI) today, 16 September 2011, said that it is imperative to persist with the current anti-inflationary stance because a premature change in the policy stance could harden inflationary expectations, thereby diluting the impact of past policy actions.

In recent weeks, as a result of global risk aversion, the rupee has depreciated, which may have adverse implications for inflation, the RBI said. Inflation remains high, generalised and much above the comfort zone of the Reserve Bank of India, it said. The central bank said that today's (16 September 2011) repo rate hike is expected to reinforce the impact of past policy actions to contain inflation and anchor inflationary expectations. As monetary policy operates with a lag, the cumulative impact of policy actions should now be increasingly felt in further moderation in demand and reversal of the inflation trajectory towards the later part of 2011-12, RBI said.

Going forward, the stance of the monetary will be influenced by signs of downward movement in the inflation trajectory, to which the moderation in demand is expected to contribute, and the implications of global developments, RBI said.

Although India's exports have performed extremely well in the recent period, this trend is unlikely to be sustained in the face of weakening global demand, RBI said. This, combined with the slowing down of domestic demand, to which the monetary policy stance is also contributing, suggests that risks to the growth projection for 2011-12 made in the July 2011 monetary policy review are on the downside, RBI said.

Corporate margins in Q1 June 2011 moderated across several sectors compared to levels in Q4 March 2011. However, barring a few sectors, significant pass-through of rising input costs is still visible, RBI said.

The central government's fiscal imbalances widened during April-July of 2011 reflecting, primarily, the impact of decline in revenue receipts coupled with pressures from non-plan revenue expenditures on account of higher petroleum and fertiliser subsidies. Fiscal deficit at 55.4% of the budget estimates in the first four months of the current fiscal was significantly higher than that of 42.5% during the corresponding period last year (when adjusted for the more than budgeted spectrum proceeds).

Reacting to the RBI's latest rate hike, Navneet Munot, Chief Investment Office (CIO), SBI Mutual Fund said, The lag effect of past actions and global environment would moderate the domestic demand and inflation trajectory going forward, in our view. Our sense is that RBI is likely to take a pause after today's rate action. This should be viewed positively by bond and equity markets. Sentiments in equity markets should improve on evident signs of peaking of rate cycle. Markets would closely watch global developments and movement in commodity prices.

Economic Affairs Secretary R. Gopalan on Thursday, 15 September 2011, said that the government has raised the limit of overseas borrowing for companies to $750 million from $500 million. Indian companies can also now raise loans up to $1 billion in Chinese yuan, Mr. Gopalan added. The relaxation of overseas borrowing rules will help Indian companies tap cheaper cash abroad amid rising credit costs in the local market. US and European countries have near-zero interest rates in a bid to support weak economic growth.

The government on Thursday, 15 September 2011, cleared the ambitious $90-billion Delhi-Mumbai industrial corridor. The Delihi-Mumbai industrial corridor project will set up nine mega industrial zones of about 200-250 square kilometre (km) along with a 1,500 km high speed freight line connecting the two cities. It will include three ports and six airports, as well as a six-lane intersection-free expressway connecting the two cities and a 4,000 megawatts (MW) power plant and also set up seven new cities.

Meanwhile, the public private partnership (PPP) approval committee approved projects worth Rs 18000 crore on Thursday that include a housing project for para-military forces and a road project among others.

Finance Minister Pranab Mukherjee on Tuesday, 13 September 2011, said central banks in emerging economies have been forced to raise interest rates repeatedly as they battle high inflation, exposing them to volatile capital flows. An issue of immediate concern for emerging economies is managing large capital flows, he said. Large and volatile capital flows to emerging markets can be destabilizing as they lead to high exchange rate volatility and in some cases make it incumbent to maintain high levels of foreign exchange reserves as an insurance against sudden and large-scale flight of international capital.

Given the lackluster initial FII response to the government's sharply raising the ceiling of FII investment in long-term corporate bonds issued by the companies in the infrastructure sector in March 2011, the government on Monday, 12 September 2011, further relaxed the norms on FII investment in such bonds. The Finance Ministry said in a statement that FIIs can now invest in long-term infra bonds, subject a ceiling of $5 billion limit, which have an initial maturity of five years or more at the time of issue and residual maturity of one year at the time of first purchase by FIIs. These investments are subject to a lock-in period of one year. FIIs can trade amongst themselves in these bonds but cannot sell to domestic investors during the lock-in period of one year.

FIIs can also now invest, subject to a ceiling of $17 billion, in long-term infra bonds which have an initial maturity of five years or more at the time of issue and residual maturity of three years at the time of first purchase by FIIs. These investments are subject to a lock-in period of three years. During the three-year lock-in period, FIIs can trade amongst themselves but cannot sell to domestic investors. The Securities & Exchange Board of India (Sebi) is expected to issue notifications incorporating these changes in the scheme by 15 October 2011.

Sebi had in early August 2011 allowed Qualified Foreign Investors (QFIs) to subscribe to Mutual Fund Debt Schemes which invest in the infrastructure sector subject to a total overall ceiling of $3 billion within the total ceiling of $25 billion.

Planning Commission deputy chairman Montek Singh Ahluwalia on Monday, 12 September 2011, said at a conference that private funding has to make up half of the infrastructure investment of $1 trillion planned for in the five years during 2012-2017. Prime Minister Manmohan Singh said at the conference that to overcome the fund crunch for infrastructure projects, the government has proposed to set up a $11 billion fund to help finance infrastructure projects. We have also constituted a high-level committee to suggest measures necessary for financing our ambitious program in infrastructure development, Mr. Singh said.

Prolonged rainfall in the latter part of the season has helped ease concerns that this year's monsoon might drop below the long-term average after a brief lull in July, when the country usually receives a third of its monsoon rains. The first advance estimates for the 2011-12 kharif season point to a record production of rice, oilseeds and cotton, while the output of pulses may decline.

A good monsoon season can typically boost rural farm incomes and have an impact on the wider economy through increased spending on consumer goods as well as reduced prices of food items. But food prices may not necessarily fall if delayed and excess rains in some regions affect crop yields.

Moody's Investors Services affirmed its Baa3 rating for India's foreign currency government debt and its Ba1 rating for local currency debt in an annual credit analysis released last week. The ratings firm assigned a positive outlook to India's rupee-denominated bonds, saying it will consider a unified Baa3 rating for all bonds if India improves its fiscal position and its commitment to strengthening the domestic market. The outlook for foreign-currency debt is stable.

The report was upbeat about India's ability to weather a global economic downturn. While it is not immune to an international growth slowdown, the strength of domestic demand and the diversity of the economy provides a buffer against a deceleration in globally exposed sectors, the report said. It noted that India's foreign currency reserves equal four times its foreign debt obligations.

A debt-to-GDP ratio of 71% is cause for concern, as interest on this debt eats up 25% of India's revenues annually. However, Moody's expects that continued GDP growth and incremental fiscal consolidation efforts will continue to lower the government debt/GDP ratio, the report said.

India's merchandise exports grew 44.2% in August 2011 from a year earlier, totaling $24.3 billion, sharply slowing from the previous month's pace, Commerce Secretary Rahul Khullar said last week. Imports in the just-ended month rose 41.8% from a year earlier to $38.4 billion, which widened the trade deficit to $14.1 billion from $11.1 billion in July.

European stocks rose on Friday, 16 September 2011, as the region's finance ministers convened in Poland to consider new measures to fight the deepening euro-zone sovereign debt crisis. Key benchmark indices in UK, France and Germany were up by 0.84% to 1.78%.

US Treasury Secretary Timothy Geithner has also flown in for the two-day European Union finance ministers' meeting.

Investors will be looking for signs that policy makers are ready to take steps to ensure the implementation of the 21 July 2011 agreement by heads of state to enhance the power of the European Financial Stability Facility (EFSF) and provide a second bailout for Greece. A spat triggered by Finland's demand for collateral from Greece in return for Helsinki's participation in a second bailout program has raised tensions. Moreover, uncertainty over Greece's ability to meet deficit criteria needed to secure its next round of funding under its bailout has stoked fears of a potential near-term default.

Ministers are expected to further discuss the possibility of developing a euro bond that would be issued collectively by the euro zone. Such a move would lower borrowing costs for weaker euro members, but would likely raise borrowing costs for stronger members. Such an effort remains opposed by Germany.

Ministers are also expected to focus on efforts to prevent the spread of the crisis to Italy, the region's third-largest economy, and Spain, its fourth largest. The European Central Bank (ECB) has reluctantly but aggressively bought bonds since early August 2011 in an effort to drag down bond yields in both countries. The measures are widely seen as a temporary measure to keep borrowing costs from rising to unsustainable levels until national parliaments approve the proposed changes to the EFSF, which will allow the fund to buy bonds in the secondary market.

On Thursday, 15 September 2011, the ECB, in coordination with the US Federal Reserve, Bank of England, Bank of Japan and Swiss National Bank, announced it would provide additional dollar liquidity to banks. The move was seen as pre-emptive effort to head off growing tensions in the interbank lending market tied to worries abut the exposure of banks, particularly in France, to Greek debt.

The decision followed a pledge made earlier in the week by Germany and France to support Greece as it struggles to cut its debt pile.

Asian stocks surged on Friday, 16 September 2011, with news of global central banks' plan to boost dollar liquidity in Europe, helping to alleviate concerns there about the prospect of another funding crisis. The key benchmark indices in China, Hong Kong, Indonesia, Singapore, Japan, South Korea and Taiwan rose by between 0.13% to 3.72%.

Trading in US index futures indicated that the Dow could fall 25 points at the opening of US stocks on Friday, 16 September 2011. US stocks rose for a fourth day on Thursday as coordinated central bank action calmed fears that Europe's financial sector was headed for a credit freeze due to the region's sovereign debt crisis. On the macro front, weekly US jobless claims hit their highest level since late June and a gauge of New York state factory activity contracted in September. Another report showed manufacturing activity in the Mid-Atlantic region contracted for a second month in a row.

The Federal Open Market Committee (FOMC) is scheduled to undertake a two-day policy review on US interest rates on 20 and 21 September 2011. It remains to be seen if the Federal Reserve announces further measures to revive the US economy. Among the options that the Fed may consider include another round of quantitative easing or QE3, the Operation Twist which is the purchase of long-term verses selling short-term bonds so as to lower long-term yields, and lowering the rate on excess reserves held by banks at the Fed in order to increase the monetary aggregates.



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Reliance Infrastructure Ltd’s (Rs.546.35) Mumbai power distribution business (known as Reliance Energy Ltd) distributes power to nearly three million residential, industrial and commercial consumers in Mumbai’s suburbs, covering an area of 400 sq km, and catering to a peak demand of over 1,800 MW, with revenues of Rs.7,700 crore in FY2014-15. The Mumbai power distribution business is R-Infra’s biggest, in terms of topline, and accounts for 44% of the company’s consolidated turnover, which stood at Rs.17,198 crore in 2014-15.

Photo: The Economic Tmies

The Reliance Infrastructure earlier signed a non-binding term sheet with Canadian pension fund Public Sector Pension Investment Board (PSP Investments) to sell 49% stake in the company’s Mumbai power generation, transmission and distribution business. While the proposed transaction is subject due diligence and regulatory approvals, the deal is likely to fetch the company Rs.3,500 crore, if concluded by H1FY16.

Moreover, though the company is yet to conclude the acquisition of Pipavav Defence and Offshore Engineering, the stake sale of Mumbai power business would boost Reliance Infra’s valuation. 

In other words, successful completion of the deal will help the Anil Ambani-led company substantially de-leverage its balance sheet while retaining control of the business with a 51% stake.

There were earlier media reports that at least half the debt on the company’s books is on account of the Mumbai power transmission and distribution assets, which will be transferred into the new SPV to be formed (along with these assets).

With the cash component that R-Infra will receive as part of the deal, it may further pare debt at the level of the parent company.

The equity research firm, Edelweiss however last year commented: “After the proposed deal the listed entity will be left with the engineering procurement construction (EPC) business, the Mumbai metro and Delhi distribution businesses all which have limited growth visibility.”

Besides, Reliance Infrastructure few months back announced its intention to exit cement, road and other non-core businesses. This, coupled with the PSP deal points to the company’s increasing focus on the defence business. The company is expected to get Rs.8000 crore to Rs.9000 crore from its 11 roads. Analysts believe the firm is transitioning itself from a services-based entity to a manufacturing entity focusing on defence. 

According to an Economic Times news briefing: These days, the ADA Group boss, Anil Ambani spends more than 70% of his working hours on what is seen as a sunrise sector for Indian industry. In the past year, he visited at least two global defence equipment manufacturers every month and signed partnerships with several of them. In between, from Paris to Dubai, Moscow and Abu Dhabi, he hasn't missed any major defence and aerospace shows.

A country that spends more than $40 billion every year in defence, India is still largely dependent on imports to meet military requirements.

The government's Make in India campaign to boost domestic manufacturing has opened up opportunities for Ambani's Reliance Infrastructure, but he will also have to compete with more established players like the Mahindra and Tata groups and Larsen & Toubro. 

Under its Reliance Defence unit, Reliance Infra floated a cluster of companies and made a host of high-profile hiring, from the former India head of US defence contractor Lockheed Martin to top-ranked retired officers of the armed forces. It is seeking to rapidly set up manufacturing infrastructure — primarily two defence parks to make aircraft to armoured vehicles and air defence systems, and a shipyard on the east coast. 

In another significant development, The Economic Times today wrote: "Global headwinds are likely to keep the domestic stock market volatile, but cement is one sector which analysts feel could outperform the broader market in the near term supported by improvement in demand, capacity expansion as well as better realisation. 

In February this year, Reliance Infrastructure, sold its cement business to Birla Corp. The deal valued 5.08 mtpa cement business at Rs.4800 crore, at USD 140 per tonne.

Reliance Infra said the proceeds from the sale will be utilised for debt reduction. Total debt on the books of Reliance Infra stands at around Rs.20000-25000 crore. The deal is EPS accretive for shareholders, according to the analysts.

After this deal is through, Reliance Infrastructure will be able to focus on its core business of infrastructure, while the debt in the cement subsidiary will be transferred to the acquirer -- Reliance Infra’s highly leveraged balance sheet will get some relief.

Last month Reliance Infrastructure brought in Braj Kishore from SBI Life to Head Corporate Communication fot taking the perception of Reliance Infrastructure to newer heights through optimally harnessing various communication tools – traditional and new age.

Meanwhile, Reliance Capital, Reliance Industries, Reliance Infrastructure and Reliance Power along with 70 other stocks have seen no change in their market lot size for derivative contracts; according to a recent NSE filing.

Therefore, buy the shares of Reliance Infrastructure Ltd at Rs.546.35, for a short term target of Rs.600-plus. SL- Rs.537.