WINNING STROKES: THINK DIFFERENT

My recommended HINDALCO Industries Ltd today touched Rs.176.40, before closing at Rs.172.65. The scrip achieved the short term target of Rs.172.

It was a field day for the scrip of Jaiprakash Power Ventures Ltd as it touched Rs.13.51, in the dying moments of trade, as the shorts got trapped. That is why I say, don't listen blindly to TV-analysts, especially the kind of fly-by-night-operators like Jagannadham Thununguntla!! Those who heard him lost their shirts today. If he were so accurate in predicting future stock movements, then he would have had his own company, instead of working in someone's company. When a company comes up with good quarterly results and earnest attempts are being made by the management to reduce debts, then should we buy a share or sell--ask  yourself. By the way, Vishal Malkan is saying to buy Jaiprakash Power for a target Rs 18-20, which is the right approach. The scrip is now looking even more bullish on the charts as it moved up with huge volume. The stock closed at Rs.13.27, near the day's high. 
My recommended JSW Energy Ltd reached the 1st target of Rs.92, as the stock touched Rs.93.70 intra-day. What should you do with the scrip? Buy, Sell or Hold? To know, Join the Premium Service or trade through my recommended brokerage house/s, with a minimum portfolio size of Rs.1.50 lakhs. 

ARSS Infrastructure Projects Ltd today moved up Rs.38.85, before closing at Rs.38.15. Today most  of the Railway related stocks moved up. As per reports, the railway ministry has called for an investor meet on 5 December 2014. Those likely to attend include investment banks, consultants and infrastructure companies and the focus of the meeting will be to increase investments in the railway sector, reports indicated.

My recommended Reliance  Capital Ltd today moved to Rs.529.90, before closing at Rs.528.20. Its short term target is Rs.570 and hence those who are  holding can continue to hold the same. 
Nifty today closed at 8494.20 up 18.45 points, which is just below the immediate resistance of 8500 and much above  the support of 8440. The upward journey which started from the intermediate low of 7724 has already seen a superb run of more than 700 points within six weeks. Profit booking after such a huge gain is imminent and is healthy for the market. The traders are suggested to stick to quality stocks for good returns in future. 

Move to recharge power projects

New Delhi, Nov. 26: Stalled power projects in the country could be recharged with the government’s action plan to increase generating capacity by asking banks to help revive such projects and by providing fuel linkages.

Power minister Piyush Goyal today met oil minister Dharmendra Pradhan to chalk out the rescue package that may involve rescheduling of loans to power companies as well as making available fuel at affordable prices by pooling cheaper domestic gas price with costly imported LNG.

The two ministers did not divulge details of the rescue package finalised today which may need the cabinet’s approval.

“Today’s meeting was a precursor to final decisions which will be taken very fast,” Goyal told reporters after the meeting.

“We are drawing up plans to increase the generation of power, to put national assets to good use and keep the energy cost affordable with a sustained policy framework,” he added.

Pradhan said the government was taking a comprehensive view of the variety of problems plaguing this industry for a long time.

The issues of making power available to the people and addressing peak load shortages were also discussed at the meeting.

When asked about the decision on gas price pooling, Goyal said, “We looked at all options, including problems of gas-based plants ... macro issues have been taken care of,” he said without divulging further details on the subject.

“We have decided to resolve all the problems, from bankers issues to fuel issues,” Goyal said.

“The coal block auction would reduce tariff and help in providing fuel to power plants,” Goyal said.

The coal ministry plans to auction the cancelled blocks within three months.

To help stalled projects, the government may ask banks to reduce interest rates to the base level or even less, extend the loan repayment period to about 25 years from 10 and allow the plants to capitalise losses over a certain period after the start of commercial operations.

A bank chairman said each bank will also separately assess the viability of the projects to be offered last mile financing and see if a special dispensation can be sought from the RBI to give them money even when some of these projects have turned defaulters.

The finance ministry will discuss with the Reserve Bank the viability of offering financial relief to stranded plants that are unable to meet their debt obligations since March 2013 because of lack of domestic gas. Such a measure will benefit firms such as Reliance Power, Essar Power, GMR Energy, Lanco Infratech and GVK Group.

The meeting also looked at strengthening the grid and creating reserve energy to prevent a grid collapse like in 2012, the minister said.

A report released earlier this year by Fitch Group’s India Ratings & Research has cautioned that power project investments worth some Rs 1,75,000 crore could turn into bad assets unless coal and gas supply glitches were resolved.

Coal mining projects, which would feed new power plants have been held up by delayed environmental clearances even as gas pricing issues have held up gas supplies.

The report noted that coal supplies from Coal India could guarantee only 65 per cent of supplies contracted by it so far to power producers. The government targets to add 88,000MW of fresh generation capacity in the 12th Plan.

A tax holiday could act as a catalyst in attracting the much-needed investment in the sector, analysts said. Against the planned 78,000MW, India added only 50,000MW between 2007 and 2012.

Low investment in the power sector can have serious implications as the demand for electricity is likely to rise by a third from the current financial year’s estimates to 1,403 billion units by 2016-17.

Courtesy: The Telegraph

India, Nepal ink $ one billion hydro-power plant deal

Photo: The Yale Globalist

[Editor: The government of India is drawing up an action plan to increase power generation in the country and the supply of the same at affordable price. The Government on Wednesday took stock of the power situation in the country, including the fuel supply and pricing issues affecting the power sector. “We are working proactively and drawing up an action plan to increase power generation. We have looked at all options, including what needs to be done with the stranded gas-based power plants,” said Piyush Goyal, Minister of State (Independent Charge) for Power, Coal and New and Renewable Energy. Hence, stay invested in power and construction companies]
KATHMANDU, Nov 25, 2014: India and Nepal today inked an agreement to construct a $ one billion hydropower plant on Arun river to generate 900-megawatt of electricity in the power starved Himalayan nation.

Under the pact, India's state-owned Satluj Jal Vidyut Nigam will construct the mega power plant which will start generation of power by 2021.

Nepal, which has been grappling with severe power shortage, will receive around 22 per cent of the power generated from the plant free.

Nepal has a huge hydropower resources and India has been showing great interest in exploiting the untapped resources.

Calling for greater cooperation in diverse areas, Prime Minister Narendra Modi, who arrived here to attend the SAARC summit beginning tomorrow, said, "When we trust each other, we can move forward very quickly."

"While earlier, the implementation of decisions used to take 10 years, now it happens in brief time. I feel very satisfied," Modi said, inaugurating a trauma centre.

Courtesy: The Economic Times

WINNING STROKES: THINK DIFFERENT

JSW Energy Ltd recommended a couple of days back around Rs.84-87, reached its first short term target of Rs.92 (intra-day it touched Rs.92.30). 

Jaiprakash Power Ventures Ltd, which came out with excellent set of numbers for the Q2FY15, yesterday closed at Rs.13.08 in the BSE. Jaiprakash Power Ventures Ltd posted a net profit of Rs.299.81 crore for the quarter ended September 2014, helped by higher income. The power producer had a net profit of Rs.251.89 crore in the same period a year ago. In a regulatory filing, the company said its total income climbed to Rs.1,201.41 crore in the second quarter of current fiscal. In the same period a year ago, the total income stood at Rs.969.18 crore. The company’s operational capacity includes 1,791MW hydel and 1,160MW thermal assets, minus those put on sale. Meanwhile, JSW Energy said that it has agreed to acquire from Jaiprakash Power Ventures and other shareholders, 100% stake in Himachal Baspa Power Company Limited for a base Enterprise Value of approximately Rs 9,700 crore, subject to mutually agreed adjustments. Moreover, the board of directors of Jaiprakash Power Ventures, a fully owned subsidiary of the Jaypee group, has approved the 100% transfer of businesses of its operating power plants — the 300-Mw Baspa-II hydroelectric plant (commissioned in 2003) and the 1,091-Mw Karcham Wangtoo plant (commissioned in 2011), in Himachal Pradesh. The scrip would slowly move towards Rs.15, in the coming days. 

ARSS Infrastructure Projects Ltd closed flat at Rs.37.60, after touching an intra-day high of Rs.38.70.  The company has an order book of more than Rs.2000 Cr as of 31st September, 2014.This scrip is expected to give multi-bagger returns going forward.

Resurgere Mines and Minerals Ltd yesterday closed flat at Rs.1.50 in the BSE, indicating the end of short term downtrend. The Indian Express, October 30, 2014, writes: 

India’s mining output has fallen by 3.5% over the last two years, making the sector among the worst hit by policy impasse. Of the 218 coal blocks allocated since 1993, only 46 are producing coal or close to doing so, while the rest are dogged by clearance and land acquisition issues. As for iron ore, companies are still struggling to resume production after some states banned it in 2012 to curb illegal mining. Last month, Jharkhand ordered the closure of a majority of iron-ore mines operating under “deemed renewal” status after their leases expired. And the recent Supreme Court order deallocating all but four coal blocks allotted since 1993 created downside risks to mining output.

Therefore, the NDA government should do something immediately to revive the sector, apart from bringing the new mining bill.  
Yesterday a BUY call was initiated in Reliance Power Ltd at Rs.67.50. The scrip moved to Rs.68.70, intra-day. The short term target for the stock is Rs.72.
My Recommended HINDALCO Industries Ltd this week, at around Rs.157, yesterday crossed Rs.169, before closing at Rs.169.15. The scrip I am told was recommended by a number of brokerage houses yesterday, with medium term target of Rs.200 and short term target of Rs.172 (which might be achieved in this week). 

Could China Save India's Railways?

November 25, 2014: In line with recent trends, China is examining the possibility of exporting its high-speed rail technology to India. Specifically, according to Reuters, China will carry out and finance a feasibility study in India for a potential high-speed rail project linking the country’s capital New Delhi with the southern city of Chennai. A spokesperson for the Indian Ministry of Railways made the announcement on Tuesday. The move comes at a time when high-level diplomacy between India and China has focused heavily on expanding economic cooperation between the two Asian giants, who cooperate despite looming geopolitical rivalry and mistrust. China is approaching India on the issue of high-speed rail technology after having made similar bids to Malaysia, Thailand, Myanmar, Mexico, Turkey and Saudi Arabia. Only the latter two countries have awarded China contracts; an initial contract in Mexico was withdrawn.

The Indian Ministry of Railways announcement revealed no specifics about a cost estimate for the high-speed rail line, which would be 1,750 km long. The Reuters report notes that a much shorter (500 km) line between Mumbai and Ahmedabad is estimated to cost 600 billion rupees or $9.7 billion according to a similar feasibility study by Japan International Cooperation Agency (JICA). Japan is a major contributor to other Indian infrastructure projects, including the Delhi-Mumbai Industrial Corridor (DMIC). Japan has been pushing for India to adopt its Shinkansen bullet train technology for the Mumbai-Ahmedabad corridor.

Should the Chinese feasibility study prove positive, the Indian government could make good on promises to improve the country’s aging rail infrastructure — Indian Prime Minister Narendra Modi has stated his desire to overhaul India’s lagging railway infrastructure and institute a “diamond quadrilateral” better connecting the country’s four major cities (New Delhi, Mumbai, Chennai, and Kolkata). However, as The Diplomat noted earlier this year, despite the continuing economic relevance of national railways in India, Indian rail networks run at a loss. This drove the government to increase fares for both passengers and freight, causing considerable criticism. Foreign investment into improving the quality of Indian railways could draw the attention of the current government, which is more open to the prospect of privatizing portions of India’s poorly maintained and underdeveloped rail networks.

Based on current reports, a group of five Indian officials will conclude a deal with their Chinese counterparts this week to initiate the feasibility study. The study itself will be carried out by China National Railway Administration and China Railway Construction. The agreement will follow on the heels of a Memorandum of Understanding (MoU) on railway development signed during Chinese President Xi Jinping’s trip to India in September. In terms of broader India-China diplomacy, this railways agreement represents a step in maturing economic relations between the two countries. The new Indian government under Narendra Modi has shown remarkable pragmatism in expanding economic relations with India’s neighbors. With this deal with China, Modi faces the prospect of a twofold coup: improving India’s railways and developing India’s economic relationship with China.

Courtesy: The Diplomat

India set for ‘Goldilocks’ period; GDP to grow 6.4% in 2015: Nomura 

Photo: Prahar

New Delhi, November 25, 2014: Indian economy is set for a “goldilocks” period—used to describe a timeframe of high growth and low inflation—while it can become Asia’s fastest growing economy in 2016, Japanese financial major Nomura said. 

The global financial services major is also optimistic about “productivity-enhancing reforms” in the country and estimated the gross domestic product (GDP) growth for 2015 at 6.4%. “We are positive on India’s economic outlook in 2015. The key downside risks to our view are weaker global growth, higher commodity prices, a slower pick up in domestic capex cycle and a sharp reversal of capital inflows, especially debt inflows,” Nomura chief economist Robert Subbaraman said. 

“We expect India’s real GDP growth to rise to 6.4% in 2015, from 5.2% in 2014, and further to 6.8% in 2016,” Nomura said. Nomura’s composite leading index for India suggests that the economy has already hit its trough and is in the early stages of a business cycle recovery. 

“A Goldilocks period of lower inflation and higher growth lies ahead, in our view,” Sonal Varma, India economist at Nomura said adding “risks to India’s outlook are more global than domestic.” On reforms, the global financial services major said there would be a continued and steady rollout of reforms but in a “piecemeal” fashion and not big bang. “We expect reforms to focus on creating the groundwork for implementing a goods and services tax by April 2016; changes to the land acquisition Act; a reduction in government stake in public sector banks; a framework for auctions of natural resources; fiscal reforms and a longer-term strategy to improve railways and urban infrastructure,” Nomura said. 

“As productivity and capex improve and reforms forge ahead, we expect India’s potential growth to gradually rise again to above 6.5% in the next three to four years,” Nomura said. Despite our forecast of a solid economic recovery, the Consumer Price Index inflation is likely to average around 5.5% year-on -year in 2015, down from 7.2% in 2014. On rate cuts, the Japanese brokerage firm said that lower inflation would provide some room for policy easing in 2015. 

It expects 25 basis points (bps) rate cut in June and August 2015. “We forecast 25 bps rate cut in only Q2 and Q3 2015, and then the Reserve Bank of India stays on hold until 2017,” Nomura said. Reserve Bank of India (RBI) governor Raghuram Rajan in its September policy review left all key rates unchanged citing continued risks to inflation and difficult external situation especially on the geopolitical front. RBI’s next policy review meet is on 2 December.

Courtesy: Live Mint

Today's Call to the Premium Group Members

Buy JSW Energy Ltd at around Rs.84-87, for a target of Rs.130, in the next 3-6 months. The Hindu Business Line, on 23 November, 2014 wrote:

The stock of power generator JSW Energy has gained 45 per cent since January . This seems to have been driven by the sharp 70 per cent jump in profit in the first half of this fiscal — an outcome of easing global coal prices and a stable rupee. Also, JSW Energy’s recent proposal to acquire JP Power Ventures’ 1,391 MW of operational hydro power projects buoyed the stock.

Meanwhile, two of the TV-chartists gave a buy on the scrip:

(i) Ashwani Gujral:  JSW Energy is a 'BUY' call with a target of Rs.95 and a stop loss of Rs.82. 

(ii) Sudarshan Sukhani:  "JSW Energy  has been underperforming but a large base is now almost visible and on the verge of a breakout. It is not just a trade for today, a BTST or trade just for the afternoon, it is also a position trade if you want to build a position. A lot of stocks have run up and this one seems ready to do that run up. There is a lot of potential here." 

SKM Egg Products Exports (I) Ltd: The Promoters continue to FOOL the Gullible Investors!!

Please Click on the Photo to Expand

There was an announcement in a Blog regarding purchase of shares by the Promoters of SKM Egg Products Exports (I) Ltd (BSE Code: 532143) from the open market. But do you know the number of shares purchased? Yes, it is indeed HILARIOUS and shows how the Unscrupulous Operators can go to any length in connivance with the Dirty Promoters of companies, to jack up the price of shares. 

After this news of promoters' purchase of shares were spread, SKM Egg Products Exports (I) Ltd hit the Upper Circuits at Rs.102.20, in the NSE (It was suspended in BSE long back). This announcement in the said blog came after my adverse write up about this company, in this blog yesterday. 

The gullible investors do not even think for a moment as why they are going for such a scrip whose book value is only Rs.17.11 and has EPS of only Rs.5.01. Now you would probably see a series of good (manipulated) results quarter after quarter like what another scrip V2Retail Ltd (Rs.46.10) has been doing. Do you know the accumulated loss of V2Retail Ltd? Just do a little bit of internet search!! This scrip was also recommended by the gentleman in his blog. 

Ministry may end 3-year lock-in for foreign investors in construction

NEW DELHI, 25 Nov, 2014: Overseas investors could get a free run in the construction and development sector with the government considering removal of the three-year lock-in for the overseas investments. The housing ministry's latest proposal is now being examined by stakeholder ministries, including the Department of Industrial Policy and Promotion (DIPP). 

The government is keen to quickly get funds flowing to the troubled sector that is a big contributor to jobs and also hasten development of smart cities, one of the thrust areas identified by the new government." There is a proposal... It's being discussed," said a government official privy to the development. 

The Union Cabinet had on October 29 eased norms for foreign direct investment (FDI) in the construction sector by reducing minimum built-up area, capital requirement and exit norms to boost the cashstarved real estate sector. 

The new rules allow foreign investors to exit on completion of the project or after three years from the date of final investment, subject to development of trunk infrastructure. They also reduced the minimum floor area to 20,000 sq m from 50,000 sq m and brought down the minimum capital requirement to $5 million (about Rs 30 crore) from $10 million. 

However, the ministry of housing and urban poverty alleviation has now pitched for further relaxation for the sector and suggested fresh changes before the DIPP notifies the Cabinet decision. Its fresh proposals were flagged at an inter-ministerial meeting called to discuss the contours of the press note to be issued to give effect to the Cabinet's decision. 

This is not the first time that an attempt to remove this condition is being made. The DIPP had earlier tried to get this condition dropped but it did not succeed. The housing ministry is keen to ensure flow of funds to the sector in keeping with the huge requirement for building 100 smart cities, especially as banking credit flow to the sector remains thin. Overseas flow of funds to the sector has slowed—it attracted $1.2 billion of FDI in 2013-14, down 8% from 2012-13. 

Construction and development is the only sector that now has such a condition after it was scrapped for the defence sector as part of the new government's liberalisation drive. India had thrown open construction sector to 100% FDI in 2005 with stiff conditions, including a three-year lock-in to prevent buildup of asset price bubbles. The condition was introduced to address the RBI and the finance ministry's concerns on large flow of capital fueling speculation in the sector. The North Block and RBI may oppose the move this time around as well over similar concerns. 

Courtesy: The Economic Times

Jaiprakash Power Ventures Ltd: Accumulate on declines

CMP: Rs.13.85

Jaiprakash Power Venture Ltd might utilize around Rs.8000 Cr, from the sale proceeds of its assets, for retiring debts; the rest would probably be used for fulfilling the commitments towards the upcoming projects. Earlier, there were media reports that JSW Energy had agreed to acquire 100 percent stake in Himachal Baspa Power Company from Jaiprakash Power Ventures for a base enterprise value of approximately Rs.9,700 crore. The board of directors of JP Power Ventures has approved the transfer of the 300 MW Baspa II hydro electric project located at Himachal Pradesh, and the 1091 MW Karcham Wangtoo hydro electric project located at Himachal Pradesh into a separate company. 

Therefore, the worst seems to be over for the Jaiprakash Group and with the interest rate cut on the offing, the stocks are likely to give good returns in the short term. 

Meanwhile, HINDALCO Industries Ltd recommended some days back around Rs.157, reached its first short term target of Rs.163--intra-day it touched Rs.167.80 and is now trading at Rs.166.90. The traders are suggested to book profits in HINDALCO Industries Ltd. 

On the other hand today Marg Ltd (Rs.16.56) came out of the Upper Circuits Ltd at Rs.17.86 and is now trading near the Lower Circuits. The investors are suggested to get out of the scrip, after the company came out with dismal Q2FY15 results. Moreover, I am no longer taking interest in the scrip and is out of my research basket, as of now. If you want to  hold the scrip of Marg Ltd for the long term, then you should do that at your own risk.

ARSS Infrastructure Ltd (Rs.40.80) is consolidating around the current ranges of Rs.40.70-43 and is preparing for the next round of upmoves. The company has been coming up with good set of the numbers since the last few quarters. The investors should accumulate the counter in every decline. 

Today, Jindal Steel and Power Ltd is on fire as the scrip touched Rs.151.50, intra-day and is now trading at Rs.149.90, up 4.90%. Incidentally, most of the chartists, including Hitendra Vasudeo and a well known Gujarat based weekly gave a SELL call on the scrip on their recent weekly updates.....Huh!!

In another development, the scrip of SKM Egg Products Ltd which was being repeatedly recommended by a blog, hit another lower circuits today in the NSE at Rs.97.35. I have been very vocal about the scrip since it started hitting upper circuits, with very little fundamental backing. The share touched Rs.80, plus hitting UCs and then when the said gentlemen wrote something in the blog, it again started hitting UCs, till it crossed Rs.120. However, it has been hitting lower  circuits since around Rs.120, after my inputs in some forums regarding share price manipulation. I would therefore, suggest you to not to touch it, even with a stick as it is still a good SELL. Also, kindly don't invest in these kinds of operators driven counters--stay in the front-line stocks or at best in Nifty--500 scrips. The irony is that in this market, only the counters, like Ashok Leyland Ltd (Rs.53), Eicher Motors Ltd (Rs.14571.90), Rico Auto Ltd (Rs.41.60) etc which are being rigged by the TV (and Print Media)-Analysts are moving up without much fundamentals, while the good companies are remaining stagnant. Ashok Leyland Ltd (Bool value-Rs.15.69) has a P/E of 55.59 and is now trading at Rs.53-does it make any sense? In fact the whole of Auto and Breweries (P/E--52.90) sector is over-valued, but surprisingly still investors put their funds into it. If you do not understand what is the hidden meaning of P/E of a share, kindly speak with a Financial Expert--then you will probably understand what I am trying to say!! 

JSW Energy : buys 300-MW Baspa II, 1,091-MW Karcham Wangtoo hydroelectric plants in India for US$1.8 billion

300-MW Baspa II HEP, HP

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

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

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

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

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

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

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

The bulk of JSW holdings are in thermal power projects.

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

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

Courtesy: 4 Traders

Moving towards 24X7 power: Government approves 3 key schemes 

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

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

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

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

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

Integrated Power Development Scheme 

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

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

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

Deendayal Upadhyaya Gram Jyoti Yojana 

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

According to the Cabinet, the scheme would help in: 

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

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

North Eastern Region Power System Improvement Project 

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

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

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

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

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

Courtesy: The Economic Times

Mining law set for change; firms may get to sell mines

Under the law in force at present, a company cannot sell mines it holds to other companies, though leases are transferred whenever a mining company is taken over

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

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

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

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

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

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

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

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

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

BACK ON TABLE

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

Courtesy: Business Standard

ARSS Infrastructure Projects Ltd: The Stock which could give multi-bagger returns

Please Click on the Photo to get a Magnified View

Incorporated in 2000, ARSS Infrastructure Projects Ltd is engaged in construction of railway infrastructure, roads, highways, bridges and irrigation projects in India. ARSS have business activities in the zonal jurisdictions of East Coast Railway, South Eastern Railway, South East Central Railway, Southern Railway and North Western Railway. ARSS also engaged in the railway construction projects, which includes earthwork, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc.

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

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

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

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

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

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

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

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

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

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

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

Select mining, metal stocks up on coal blocks auction draft rules

Photo: The Hindu Business Line

Reuters  November 20, 2014: Select mining and metal stocks gain after government released e-auction rules.

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

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

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

Details on pricing, compensation still awaited, dealers add.

Reporting by Abhishek Vishnoi

Courtesy: The Business Standard

Hindalco, Sarda Energy Gain on Coal Auction Draft Rules

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

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

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

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

Details on pricing, compensation still awaited, dealers added.

Courtesy: NDTV Ltd

Yesterday, FIIs were NET BUYERS of Indian securities 

Buy Hindalco Industries Ltd: Sudarshan Sukhani

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

Sudarshan Sukhani of s2analytics.com told CNBC-TV18, " Hindalco Industries  inspite of the bad news was moving in a trading range and it is actually suggesting that it is willing to go higher, cross that boundary and actually begin an uptrend. I don’t know how that will happen if the Nifty decides to go down. Hindalco independently looks quite attractive as a buy." 

HINDALCO'S operations around the world:

• Novelis is headquartered in Atlanta, Georgia and operates 25 manufacturing facilities in nine countries on four continents, with nearly 11,000 employees. Novelis is the world’s largest rolled aluminum producer in terms of volume shipped, and the largest purchaser of aluminum as well. 
• Aditya Birla Minerals is based in Perth, West Australia, and conducts its activities at the Birla Nifty Copper Operation in the Great Sandy Desert, WA and the Mt Gordon Copper Operation located in the Mt Isa Block in Queensland. 
• Hindalco-Almex operates a first-of-its-kind facility in India, which is exclusively devoted to high-performance aluminium alloys. HAAL is located at Shendra, Aurangabad in western India, around 350 km from Mumbai.

At 10:47 hrs Hindalco Industries was quoting at Rs 156.80, up Rs 1.95, or 1.26 percent. It has touched an intraday high of Rs 157.60 and an intraday low of Rs 154.60.

HINDALCO Industries Ltd: Buy

CMP: Rs.156.30

Goldman Sachs has a buy rating on the stock hoping for it to touch Rs.215 per share in a year. 

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

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

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

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

Courtesy: www.moneycontrol.com

India`s steel demand likely to rise by 4-5%: Indira Sec

According to Indira Securities, India's steel demand is likely to rise by 4-5 per cent this year and will touch a compounded annual growth rate (CAGR) of 15 per cent after FY17, says the report.

Photo: India Writes

Nov 14, 2014: Indira Securities' sector outlook on steel industry "Indian steel industry plays crucial role in development of nation and is considered as the backbone of civilization and the level of per capita consumption of steel is an important determinant of the socio-economic development of the country. 

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

Outlook 

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

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

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

In addition, the entry of international players would provide benefits in terms of capital resources, technical know-how and more competitive industry dynamics", says Indira Securities research report.

Courtesy: www.moneycontrol.com