No lock-in period of 3 years for FDI in construction: Government

Photo: The Financial Express

NEW DELHI, Dec 4, 2014: The government on Wednesday notified easier FDI rules for construction sector, which will allow overseas investors to exit a project even before its completion.

It also said 100% FDI will be permitted under automatic route in completed projects for operation and management of townships, malls and business centres. The government permits 100% FDI in construction for several years but has sought to make the rules more attractive.

A press note issued by the department of industrial policy and promotion has clarified that the three-year lock-in will no longer apply and under normal circumstances, an investor can exit on completion of the project or even after the development of trunk infrastructure, such as construction of roads, water supply and drainage.

Earlier, it had proposed that the exit will be permitted "on completion of the project or after three years from the date of final investment, subject to development of trunk infrastructure". But the rules were tweaked as the exit clause was seen as one of the key deterrents for overseas investors to invest in the Indian construction market. The government was keen to ease the rules for building townships, housing, built-up infrastructure and construction development projects as these are sectors with huge employment potential and boost demand for steel and cement.

As a result, it has done away with the minimum area requirement for development of serviced plots, as against 10 hectares earlier. Similarly, in case of construction of development projects, the minimum built-up area requirement has been cut from 50,000 square metres to 20,000 square metres, a move that real estate consultants say will result in development in central Delhi and South Mumbai where land is scarce and expensive. 

Given the large area requirement, FDI was largely limited to the sub-urban areas. Further, to boost low-cost housing, joint ventures and investors committing at least 30% of total project cost for such ventures will be exempted from minimum area as well as capitalization requirements.

Courtesy: The Times of India

If Anyone Can End India’s Bauxite Mining Nadir, It’s Naidu

~by Sohrab Darabshaw

DECEMBER 3, 2014: It’s, of course, no secret that India’s Eastern Ghats have some of the world’s finest bauxite reserves, a crucial raw material in the making of aluminum.

Experts have been of the opinion that once mining was allowed in full swing, the Indian aluminum industry could attract multibillion dollar investments, opening up not only employment opportunities for thousands but contributing about $25 billion to the Indian exchequer in about 15 years.

Vedanta Resources‘ CEO Tom Albanese was of the view that negative propaganda about bauxite mining was an offshoot of a “vilification campaign,” saying there was a need to counter it by creating awareness of availability of proven environment-friendly practices.

At a recent international seminar organized by the International Bauxite, Alumina and Aluminium Society (IBAAS) in India, Albanese was joined in his pitch by the president of Anrak Aluminium Ltd., Hariharan Mahadevan, who felt there was “misplaced commotion” over red mud and “so-called” ecological issues that had become obstacles in the way of the aluminum projects in the Eastern Ghats region of India. Long-term planning to ensure sustainable safeguards and precautions was the way to go, he added.

Anrak Aluminium is a joint venture between Ras Al Khaimah Investment Authority (of the UAE) and Penna Cements, and had constructed a 1.5 metric ton alumina refinery through an agreement with the Andhra Pradesh Mineral Development Corporation (APMDC) that it would supply bauxite from its 225-metric ton Jerrala deposit. But APMDC was unable to keep its commitment, as the Indian government later froze all earlier clearances for bauxite mining development. With a new government in place, the company has expressed hope of securing permissions to mine bauxite in the next few months.

In approximately one year’s time, the Indian aluminum sector’s capacity will touch 4.36 metric tons. But much of it will hold no meaning because of the lack of raw material security. The opening of new mines has been stalled for various reasons – protests by local citizens and non-governmental organizations, even violence by a break-away faction of the Maoist communists.

Vedanta’s alumina refinery in Odisha at Lanjigarh has been caught up in this, and the company had to procure 3 metric tons of bauxite from different parts of the country, as well as from Guinea, to meet its needs.

But after the third time, Chief Minister of Andhra Pradesh Chandrababu Naidu has now indicated that he would take up the challenge of opening bauxite mines in his Province, despite stiff opposition. For his previous work as CM, Naidu was applauded by world leaders, including Bill Clinton and Tony Blair.

A report in The Business Standard said if anybody could get bauxite mining going, it was Naidu. Of India’s bauxite resources of 3.48 billion tons, Andhra Pradesh accounts for 18%. No wonder aluminum majors now have their hopes pinned on Naidu.

The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.

Courtesy: Metal Miner

Government clears bill to replace coal mining ordinance

Photo: Live Mint

New Delhi, Dec 03, 2014: The government on Tuesday gave its approval to a bill on coal block auctions to replace an ordinance that was promulgated to begin auction of coal mines which were cancelled by the Supreme Court.

The bill to replace the Coal Mines (Special Provisions) Ordinance, 2014 is likely to be brought before Parliament during the ongoing Winter Session of Parliament. “The Union Cabinet has approved the bill,” a source said after the meeting here.

Interestingly, the ordinance has been opposed by central trade unions, including the BJP-affiliated Bharatiya Mazdoor Sangh (BMS). The BMS, as also AITUC, CITU, HMS and INTUC, have jointly opposed the government’s proposal to allow private players to mine coal and sell it in the open market, a right till now reserved with the state-owned Coal India Limited. The ordinance has also come under attack from Left parties.

Meanwhile, within months of the new Companies Act coming into force, the government on Tuesday cleared a slew of changes to this law to make it easier for corporates to do business and to ensure severe punishment for those raising illegal deposits from the public.

This would be among the first major initiatives by the government to make changes in the country’s regulatory framework to improve its global ranking for ease of doing business, where India has been ranked very low at 142nd position in the latest World Bank report.

The 14 proposed amendments, which were approved by the Union Cabinet on Tuesday evening, also include the provision to ensure that frauds beyond a certain threshold would need to be compulsorily reported by the auditors to the government.

Courtesy: The Asian Age

Clarification sought from Jaiprakash Power Ventures Ltd

December 3, 2014:  The Exchange has sought clarification from Jaiprakash Power Ventures Ltd with respect to news article appearing in The Economic Times on December 03, 2014 titled "JSW Energy may buy JP Powers Bina, Nigrie Assets."

The reply is awaited.

Source : BSE - www.bseindia.com

Jindal Saw Ltd: Update

Jindal Saw Ltd which was recommended around Rs.75.95, made a new 52-week high on 28 November, 2014. Today, the scrip closed at Rs.109.55. The traders can book profits in the counter, while the long term investors can hold the scrip for a target of Rs.135.

India eases FDI rules for construction sector

Construction stocks gain on relaxed FDI norms in sector Shares of Hindustan Construction Company (HCC) jumped 8.22 percent while NBCC gained 4.11 percent. Even NCC and IVRCL were up over 6 percent.

Dec 03, 2014: Aimed at attracting foreign investment into the realty sector, the government Wednesday relaxed rules for FDI in the construction sector by reducing minimum built-up area as well as capital requirement and easing the exit norms. 

The news sent all major construction company stocks buzzing with Hindustan Construction Company   (HCC) jumping 8.22 percent and NBCC   gaining 4.11 percent. Even NCC   and IVRCL were up over 6 percent. 

The revised norms relating to construction development sector, which were earlier approved by the Cabinet, have been notified the Department of Industrial Policy and Promotion (DIPP). India allows 100 percent FDI in the sector through automatic route. 

In view of depleting FDI inflow in construction and real estate sector in last couple of years, the government has reduced the minimum floor area to 20,000 sq mt from the earlier 50,000 sq mt. It also brought down the minimum capital requirement to USD 5 million from USD 10 million. 

In case of development of serviced plots, the condition of minimum land of 10 hectares has been completely removed, said the Consolidated FDI Policy Circular 2014. Although 100 percent foreign direct investment was allowed in townships, housing and built-up infrastructure and construction developments since 2005, the government had imposed certain conditions. 

Government expects the new measures would result in enhanced inflows into the construction development sector. The sector is also likely to attract investments in new areas and encourage development of plots for serviced housing given the shortage of land in and around urban agglomerations as well as the high cost of land. 

The measures are also likely to result in creation of much needed low-cost affordable housing in the country and development of smart cities. The revised policy is in line with the Budget 2014-15 announcement.

Courtesy: Moneycontrol.com (except the headline). 

Pipavav Defence and Offshore Engineering Company Limited

Like yesterday, today also we have seen high delivery based buying in the counter of Pipavav Defence and Offshore Engineering Company Limited. This proves that the share is going much higher from here.  


Meanwhile, The Economic Times, November 5, 2014 reported: 

The shipping ministry has asked the central bank to relax rules allowing shipbuilding companies which are sitting on huge losses to go in for a second round of debt restructuring.

The shipbuilding industry in India is in a turmoil. Manufacturers had built up large capacities, often by taking on debt, when growing global trade had driven up demand for ships. But, over the past five years, as the global economy hit an uncertain patch, new orders dried up and existing orders were either postponed or cancelled. To add to the local industry's woes, the government withdrew a programme that offered a 30% subsidy on the cost of building ships. Lack of government support led overseas competitors to outbid Indian manufactures in a market where new contracts had become few and far between. 

Among the top shipbuilding companies, Bharati Shipyard, ABG Shipyard, Hindustan Shipyard and Goa Shipyard are all in some sort of stress. Some public sector shipbuilding companies like Cochin Shipyard have managed to stay afloat because of orders from the navy and air force, where the profit margins are decided in advance. 

Suresh Prabhu in saddle, Railways plans new public-private partnership projects

Photo: Yourarticlelibrary.com

Wednesday, 3 December 2014: In coming days, Railways plan to bring in other type of projects like development of stations to the public-private partnership route.  

In a meeting this week, the Railways officials are also likely to unveil handful of projects identified for development through the PPP route. Foreign financial institutions like HSBC and JP Morgan have also been extended invitations for the meeting.

Railways is meeting private sector players which are currently engaged in various public-private partnership (PPP) projects with it on Friday to discuss the new model concession agreement being developed and also various projects that could be offered as PPP opportunities.

The Railways have also invited consultants like PricewaterhouseCoopers and Deloitte and also financial institutions and is likely to discuss the newly refined and developed model concession agreement, which would be the basis for the renewal of PPP in Railways, sources told dna.

However, wagon and coach makers and other suppliers to Railways have not been called.

"The meeting is limited to the PPP partners and investors and we are not part of it," Titagarh Wagons chairman J P Chowdhury said when asked if other partners of the Railways, the wagon makers, have been invited to the meeting.

Pipavav Railway Corp, Hassan-Mangalore Rail Development Co, Kutch Railway Co are some of the PPP companies that are developing projects which mostly involve gauge conversion.

In coming days, Railways plan to bring in other type of projects like development of stations to the PPP route.

In the meeting the Railways officials are also likely to unveil handful of projects identified for development through the PPP route, sources said.

Foreign financial institutions like HSBC and JP Morgan have also been extended invitations, sources said, indicating the Railways's seriousness in taking their views on the development of PPPs in the sector which was severely criticised recently by the Comptroller and Auditor General of India (CAG).

CAG said in its report tabled in Parliament in July that Railways lacked a coherent policy on PPP and a specific model concession agreement while pointing out loopholes in contract agreements.

While Railways at that time argued that its model concession pact is dynamic and specific to requirement of the department, it set on the path of reworking its existing model which is now being finalised.

The Railways, which only a year back didn't have money even to buy essentials like wagons, recently got a big boost with the appointment of Suresh Prabhu as the railway minister who has identified restarting work on stalled projects as one of his key priorities.

A roadmap and a guiding policy for the next 10 years is also on the works and is set to be unveiled within the next two months.

Meanwhile, a report on restructuring the Railway Board being prepared by a team headed by economist Bibek Debroy is also being finalised.

Courtesy: DNA India

FIIs were Net Buyers of Indian Equities today

Foreign portfolio managers have pumped in almost $40 billion in Indian stocks and debt this year on expectations that economic growth will quicken and interest rates will be cut from early next year, as lower oil prices cool inflation, making India the most attractive destination among emerging markets and in Asia excluding Japan. Net foreign portfolio investments into debt and equities reached $39.38 billion, according to the latest official data available on lady Friday. National Securities Depository Ltd releases data with a one-day lag. The last time India saw such strong inflows was in 2010 when net investments had added up to $39.38 billion for the full year. Foreign portfolio inflows into India are the second highest in the Asian region after Japan. China does not release exact data of foreign inflows.

Meanwhile, according to DNA India, 3 December, 2014: 

The Reserve Bank of India (RBI) is planning to raise foreign institutional investment (FII) into the government securities market after the FII limit of $30 billion is fully utilised.

RBI governor Raghuram Rajan said in a post policy interaction with analysts that there is an unfulfilled demand for sovereign bonds. "We have in mind a schedule of expansion. Don't despair. We will expand, but not at the rate at which the market want us to expand. But the rate at which we are able to absorb FII investment."

Asia recorded net FII inflows of $5.3 billion in November, of which India attracted $1.4 billion, says a report by HSBC. According to the HSBC, after two consecutive months of sell-offs, FIIs have warmed up to Asian equities and all markets have received positive flows in November, 2014. Among Asian economies, China regained the top position as the ‘most loved’ market, pushing India down to second position in the region, while Thailand was placed at the third spot, it said.

Broader markets outperform; Nifty holds 8,500

In the broader market, the BSE Mid-cap and Small-cap indices were up 1.2% each.

Mumbai  December 3, 2014: Benchmark share indices continued to trade flat after the first hour of trade as investors shifted focus to fundamentally sound stocks in the broader market.

At 10:35AM, the 30-share Sensex was down 23 points at 28,421 and the 50-share Nifty was down 2 points at 8,522.

In the broader market, the BSE Mid-cap and Small-cap indices were up 1.2% each.

HSBC India Services PMI for November 2014 is due on Wednesday. Adjusted for seasonal factors, the headline HSBC India Services PMI Business Activity Index fell to 50 in October, from 51.6 in September.

Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs.107 crore on Tuesday, as per provisional stock exchange data.

Asian markets have gained on a rebound in crude oil prices. Japan's Nikkei share average rose to a more than seven-year high on Wednesday as the dollar hit a fresh seven-year high against the yen. Nikkei trimmed early gains and was up 0.5% while Shanghai Composite was also up nearly 0.5%. Singapore's Straits Times was up 0.3% and Hang Seng slipped 0.4%.

BSE Auto index was the top sectoral gainer on the BSE up nearly 1.1% followed by Capital Goods and Power indices among others. FMCG index was the top loser down 0.7% followed by Healthcare and IT indices.

BHEL extended gains and was the top Sensex gainer up 3.7% after a foreign brokerage upgraded the stock. L&T was up 0.3%.

Tata Motors was up 1.2% on news that its prized acquisition Jaguar Land Rover has started to build a plant in Brazil. Other auto stocks that firmed up include Maruti Suzuki, M&M and Bajaj Auto.

Hero MotoCorp was up 0.3%. The company in a release late Tuesday said that it has appointed world golf champion Tiger Woods as its first global corporate partner.

Other Sensex gainers include, SBI, Axis Bank and Hindustan Unilever.

IT majors extended losses with Infosys and TCS down 0.3-1.3% each.

HDFC and HDFC Bank were down 0.5-1.3% each contributing the most to the Sensex losses.

In the pharma space, Dr Reddy's Labs and Sun Pharma were down 0.3-1.7% each.

Among other shares, Shares in defence companies are trading higher by up to 6%, extending their previous day’s rally on BSE, in otherwise subdued market.

Bharat Electronics (up 6% to Rs 2,672), Astra Microwave Products (up 4% at Rs 127), Centrum Electronics (4% at Rs 640), BEML (up 3% at Rs 765) and Pipavav Defence (3% at Rs 36.45) are up 3-6% on BSE. Most of these stocks rallied between 5-10% on Tuesday.

According to Business Standard reports, a total of 41 proposals for an indicative cost of Rs 119,719 crore have been cleared by the Defence Acquisition Council (DAC) since June 2014.

Market breadth was positive with 1,139 advances and 400 declines on the BSE.

Courtesy: Business Standard

Defence related stocks extend rally

Please Click on the Chart to Expand

Mumbai, December 3, 2014: Shares in defence companies are trading higher by up to 6%, extending their previous day’s rally on BSE, in otherwise subdued market.

Bharat Electronics (up 6% to Rs 2,672), Astra Microwave Products (up 4% at Rs 127), Centrum Electronics (4% at Rs 640), BEML (up 3% at Rs 765) and Pipavav Defence (3% at Rs 36.45) are up 3-6% on BSE.  Most of these stocks rallied between 5-10% on Tuesday.

According to Business Standard reports, a total of 41 proposals for an indicative cost of Rs.119,719 crore have been cleared by the Defence Acquisition Council (DAC) since June 2014.

A large number of defence equipment have been/are being manufactured in India using Transfer of Technology (ToT), according to information given by Defence Minister Shri Manohar Parrikar in a written reply to Smt Ambika Soni and Dr. T Subbarami Reddy in Rajya Sabha on Tuesday.

Courtesy: Business Standard

WINNING STROKES: THINK DIFFERENT

Today as expected the Mid-cap Index was on Fire, as compared to the Nifty. On 1 December, 2014, the Business Standard wrote: 

With the investment limit for foreign institutional investors (FIIs) in many large-cap stocks getting exhausted, these are turning their focus to names in the mid-cap and, selectively, the small-cap space. In the past month, five companies — CEAT, Just Dial, Edelweiss Financial, Bajaj Corp and Pennar Industries — got Reserve Bank of India (RBI) approval to raise their FII-investment limits. Power Grid Corporation has been added to the FII-ban list, restricting foreign participation.

While, the Nifty is expected to meander between 8500 and 8600, main action would be concentrated in the mid and small cap space. Today Nifty closed at 8537.45, marginally up by 12.95 points. It touched an intra-day high of 8546.95 and low of  8508.35. 

Yesterdays' recommendation Pipavav Defence and Offshore Eng Ltd at around Rs.35-35.50, today moved up and touched Rs.36.80 in the BSE and Rs.36.90, in the NSE, almost near the Upper Circuits at Rs.37 (BSE). The scrip closed at Rs.36.25 (Up 2.84%) in the BSE and  Rs.36.35 (up 3.27%) in the NSE. I again reiterate, Pipavav Defence and Offshore Engineering Ltd is India's biggest private sector naval shipbuilder. Hence, you should be holding the shares of the company in your portfolio---this is a must, especially at this price.Meanwhile,  Capital Market Wrote today: 

A large number of defence equipment have been / are being manufactured in India using Transfer of Technology (ToT). This information was given by Defence Minister Manohar Parrikar in a written reply to Ambika Soni and Dr. T Subbarami Reddy in Rajya Sabha on Tuesday, 2 December 2014.

ARSS Infrastructure Projects Ltd hit the upper circuits at Rs.40.75. After yesterday's, positive comments from the RBI governor, many construction and banking stocks moved up during the day and closed in the green--Punj Lloyd Ltd (Rs.37.55, up 1.90%), HCC (Rs.32.55, up 7.07%), Allahabad Bank Ltd (Rs.130.15, up 2.20%==>after yesterday's spectacular rally), Indian Bank Ltd (Rs.208, up 6.23%), et. Also, Shares of companies whose fortunes are linked to orders from Indian Railways edged higher on renewed buying. ARSS Infrastructure Projects Ltd is engaged in construction activities in India. It undertakes construction of railway infrastructure, roads, highways, bridges and irrigation projects. It started as a construction company in the field of railway infrastructure development, mainly in the State of Orissa and subsequently expanded its business activities in the zonal jurisdictions of East Coast Railway. It  has developed expertise in railway construction projects, which includes earthworks, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc. Over the years it has diversified its field of activities into other construction segments such as: development and construction of roads, highways, bridges, irrigation projects, EPC activities for railways.

 Meanwhile Capital Market wrote today: 

Commenting on the India Services PMI survey, Pranjul Bhandari, Chief India Economist at HSBC said: "Service sector activity grew in November, as new business rose for the seventh month running. Despite the uptick in order flows, business sentiment deteriorated, reminding us that continued policy action that addresses investor concerns is needed to sustain growth momentum. Meanwhile, prices dipped on falling commodity prices and increased competition". The Ministry of Finance after trading hours yesterday, 2 December 2014, said that it is encouraging that the Reserve Bank of India (RBI) has taken note of the structural change in the outlook for inflation. Responding to the Monetary Policy Statement issued by the RBI, the finance ministry said that the government looks forward to the RBI supporting the revival of growth and employment. In the weeks ahead, the government and RBI will work towards a monetary policy framework that will help institutionalize the gains achieved on the inflation front, so as to reduce inflationary expectations and further support the revival of investment and growth, the finance ministry said in a statement.  

HINDALCO Industries Ltd today touched the 2nd target of Rs.172, as the scrip hit Rs.173.20, intra-day. The stock if  you remember was recommended last week around Rs.157. 

Allied  Digital Services Ltd today moved to Rs.20.45, before closing at Rs.20.40, up 2%. According to my close sources, the company is expected to post an EPS of Rs.3, in FY15 and Rs.5 in FY16. The book value of the shares of the company is Rs.149.40, while the market cap at the CMP of Rs.20.40, is ONLY, Rs.94.22 Cr against H1FY15 sales of Rs.133.55 Cr. For the full year FY15, it is expected to clock a revenue of around Rs.250 Cr, which is around, 3-times the current market cap of the company. This is a turnaround story and hence accumulate it on all declines. 

Today, my strongly recommended Jaiprakash Power Ventures Ltd moved to Rs.13.50, throwing MUD on the FACES of those who were advising a sell on the counter, without doing adequate research. The scrip which closed today at Rs.13.31, will in all probability touch Rs.18, within this month. The Economic Times, wrote today: 

Barely weeks after buying out two hydro power projects of JP Power for Rs 9700 crores, Sajjan Jindal is closing in to strike yet another large deal with Manoj Gaur's power company and this time its for its coal-based power assets. Sources with direct knowledge share that JSW EnergyBSE -1.29 % is close to acquiring Bina and Nigrie thermal power units of JP Power. The deal is likely to value the assets around Rs 12,000 crores. 

Moreover, when the stocks like SKM Egg Products Ltd (CMP: Rs.105.25; Book Value: Rs.17.11) or MIC Electronics Ltd (Face Value: Rs.2 and with losses in the last two quarters. The net loss in the September, 2014 quarter was Rs.4.85 Cr), can hit upper circuits, why do you bother so much to enter this A-group counter? Do you think the management of Jaipee Group is so stupid that it will allow it to go bust? Unfortunately, in this market, the stocks which are manipulated to the hilt are moving up and up, while others which are genuinely having stories are not going anywhere--probably this is related to negative media publicity. It seems the Indian Financial Media, need some "Tonic" from the J P Group to give it a good coverage. You cannot believe the Indian Media companies, many of whom sell the advertisements, as NEWS.
Reliance Capital Ltd recommended around Rs.500, today touched Rs.545.40, before closing at Rs.540.55. Today, the Shares of insurance companies edge higher on the hopes of passage of Insurance Laws (Amendment) Bill in the ongoing winter session of Parliament, which seeks to up FDI in the sector from 26% to 49%.
The Parliament last week allowed for an extension to a select committee to table its report on the Insurance Laws (Amendment) Bill, which seeks to up FDI in the sector from 26% to 49%. Meanwhile, yesterday, 2 December 2014, the bill got a further shot in the arm after the lead opposition party Congress, which had first initiated the proposal when it was in power, said it would support the legislation even as other parties such as Trinamool Congress (TMC) opposed it. The ruling Bharatiya Janata Party (BJP) does not have a majority in the upper Raj Sabhya house and will need support from opposition to pass the bill through.

'Make in India' to be a reality in defence, says Defence Minister Manohar Parrikar

1 Dec, 2014: Defence holds huge potential for Indian industry and for contributing to industrial production. Of course, there have been problems over the past decades and we have not concentrated on this industry. For customers, it is a disadvantage because unless you are very sure you cannot invest. All those aspects have been considered and we are working on policies where 'Make In India' becomes reality in this sector.

I thank (Arun) Jaitley for helping me get 80% of the work on track so I can complete it in the next couple of months. All my files ultimately land in on his table.

As regards manufacturing of major defence equipment by the private sector, it depends on the quantum, technology and technology transfer. There are many issues, but we will push through this over one or two years. If we are the biggest customer, we should get things done in our country.

We have been developing tanks. With some improvement and tightening of screws we can get it right. We are developing fighters, but a few items we cannot afford to develop because either they are too little in number or the technology involved is too heavy.

Ultimately, political and industrial minds need to go into it. The bureaucratic mind sometimes creates funny situations.

Courtesy: The Economic Times 

India 'seriously looking' to co-produce weapon systems with US

[Editor: You can start accumulating, Pipavav Defence and Offshore Eng Ltd at around Rs.35-35.50, for a short term target of around Rs.39-42. Pipavav Dfence and Offshore Eng Ltd has already bid for project worth more than Rs.30, 000 Crores and it is one of the prime contenders to get Rs.50, 000 Cr submarine deal. Pipavav Defence and Offshore Engineering Ltd is India's biggest private sector naval shipbuilder. Hence, you should be holding the shares of the company in your portfolio. 
Meanwhile, Yesterday's recommendation: Jet Airways Ltd, to the Premium (Paid) Group members at around Rs.300 (during intra-day dips) saw it touch Rs.365.25, today. The short term target for the scrip given yesterday was, Rs.410; SL-Rs.270. The company is realigning its network by moving towards more profitable international routes to drive revenue and profitability. CMP: Rs.360.70. My recommended Gitanjali Gems Ltd also touched Rs.68.15, intra-day. As the Nifty is likely to trade range-bound for sometime--the traders are suggested to focus on the small and mid-cap space more; where broader action is expected to be concentrated]

Photo: The Economic Times

Washington, Monday, December 1, 2014: India has shortlisted five of the 17 hi-tech items of military hardware offered by the US for co-production and co-development under a one-of-its kind American offer to boost bilateral defence cooperation.

These items are believed to be - naval guns, mine scattering anti-tank vehicles, unmanned aerial surveillance system, Javelin missiles, and aircraft landing system for carriers, informed defence sources familiar with the development between the two countries, told PTI.

The five are "currently being looked at more seriously" by India's DRDO and Defence Ministry.

It was more than a year ago that the US in consultation with its private sector had offered India a list of 17 hi-tech defence items for co-production and co-development.

The one-of-its kind offer was made under the Defence Trade and Technology Initiative (DTTI) launched under the previous UPA government.

The list of 17 American defence items, which remains classified and has not been made public, was reviewed by the Defence Research and Development Organisation (DRDO) and the Ministry of Defence.

According to informed sources, these five projects are now being reviewed by the Indian army, navy and air force, following which the Indian government would convey its decision to the Pentagon about the projects that it is interested in for co-production and co-development.

Despite India opting for the Israeli "Spike" anti-tank guided missile (ATGM), the US-made Javelin has not been ruled out, sources said.

The US has offered to co-produce the third-generation Javelin ATGMs, and co-develop its fourth-generation version.

It is believed that India had pre-informed the US about its decision to opt for the Israeli missile to meet its immediate and short-term needs.

"We respect the Indian decision making process on this. It is a sovereign decision that India has to make. Obviously we think that American products and American systems have a lot to offer. We would have liked to win that (Javelin) competition.

"But there is a huge amount of possibility, and a number of spheres we want to talk to India about," US Assistant Secretary of State for Political-Military Affairs, Puneet Talwar said on the eve of his visit to New Delhi.  

Courtesy: Zee News

Railways to rope in TCS for e-tendering

NEW DELHI, Nov 29, 2014: : Railways are all set to rope in IT major TCS for streamlining the e-tendering process to infuse transparency. The move comes after railway minister Suresh Prabhu received the interim report from one-man committee headed by former Delhi Metro chief E Sreedharan.

A senior official said the online tendering would help cut red-tape, check corruption and speed up implementation of projects.

The cash-strapped transporter is struggling with huge pendency of projects worth more than Rs 1 lakh crore, which is eating up its resources.

As of now, tenders related to procurement are online and managed through a software developed by state-owned Centre for Railway Information Systems (CRIS), while a large number of tenders for construction are managed manually, leaving scope for manipulation, said a senior railway official.

Soon after getting the report, Prabhu initiated the process for putting in place a proper system and procedure to ensure accountability and transparency.

"The recommendations of the Sreedharan committee are implemented. Now, the minister will not deal with tenders," Prabhu told TOI. "Powers will be delegated to zonal heads (General Managers) and divisional heads (DRMs)," he said.

The minister said Sreedharan himself called the move a 'watershed' in the history of Indian Railways. He praised Sreedharan for adhering to the timeline and submitting the interim report within 15 days.

The Sreedharan panel was tasked to suggest a set of procedures to be followed for the tendering processes to ensure transparency and accountability.

The committee was appointed as the railways planned radical reforms to attract private and foreign investment for its mega projects and infuse transparency. It was also felt by the new dispensation that widespread corruption and manipulation had discouraged private players to invest in rail infrastructure.

The report of another committee, headed by noted economist Bibek Debroy, is awaited. The panel was asked to suggest ways to restructure the board to ensure faster decision-making. It also has to suggest ways to ensure objectivity in decision-making. Additionally, it has to recommend ways to raise finances.

On the human resources front, the committee has to suggest ways to ensure migration of officials between railways and other departments.

Courtesy: The Times of India

Panel suggests speedy green approvals in mining, power sectors

[Editor: This is a very good news for the mining sector. Already, the mining stocks like Resurgere Mines and Minerals Ltd (Rs.1.52 up 2%) are up, while most others are either marginally down or flat]

New Delhi, Nov 30 (PTI) A high-level panel constituted by the government to review various environment laws has recommended speedy green approvals in mining and power sectors as it feels that these sectors play a key role in national development.

In its report, the four-member panel, headed by former Cabinet Secretary TSR Subramanian, has recommended creation of National Environment Management Authority (NEMA) at central level and State Environment Management Authority (SEMA) at the state level as full time processing, clearance and monitoring agencies.

“In view of the key role played by the power sector, as also mining of various minerals in national development, NEMA may have a suitable cell, with specialisation, to speedily deal with environmental approvals in these sectors, with due regard to environmental considerations,” says the report submitted to Environment Minister Prakash Javadekar.

The panel has recommended identification and pre- specification of ‘no go’ forest areas, mainly comprising Protected Areas and forest cover over 70 per cent canopy.

“It should be made clear that no activity will be permitted which threatens the environment and biodiversity of these areas.

This will exclude such areas from expressions of interest by user agencies (UA) thus saving valuable time and litigation,” said the panel.

With 2.3 per cent of the world’s land area, India accounts for 7.8 per cent of recorded species, it said.

It noted that India has 668 protected areas, 15 biosphere reserves and 26 Ramsar Convention sites.

There are four biodiversity hotspots — the Western and Eastern Himalayas, northeast India, parts of the Western Ghats and Nicobar.

In addition there are other areas of rich biological diversity along parts of the coastline and elsewhere.

The committee viewed that areas which are rich in biodiversity must be strongly protected and activity allowed in these areas only when there is an overwhelming advantage in terms of economic development.

“It is the committee’s view that looking at the parameters indicated above a list of ‘no go’ areas, comprising ‘protected areas’, in addition to forest with over 70 per cent canopy, along with their geographical co-ordinates should be notified for public information,” it said.

The panel, however, said that where there are considerations of national interest and issues relating to safeguarding the territorial integrity of the country, activities should be permitted in such areas subject to the prior and specific approval of the union Cabinet.

Courtesy: NITI Central

Jewellery stocks rally upto 20% as government eases curb on gold imports 

Photo: Rediff.com

[Editor: My recommended Gitanjali Gems Ltd (Rs.60.10) has hit the upper cricuits in the opening trade. The scrip was repeatedly recommended in this blog]
NEW DELHI, 1 Dec, 2014: Shares of gems and jewellery business rallied as much as 20 per cent in trade on Monday, after the government unexpectedly scrapped a rule imposed in August last year mandating that a fifth of all the precious metal imported should be re-exported.

Reacting to the news, Shree Ganesh Jewellery and Gitanjali Gems rallied as much as 20 per cent, followed by rally in Titan Company, TBZ, Tara Jewels, PC Jeweller etc.

At 09:30 a.m.; Shree Ganesh Jewellery was locked in upper circuit at Rs 27.90, up 20 per cent, followed by Gitanjali Gems which was up 19.96 per cent at Rs 60.10.

Titan Company was trading 6.1 per cent higher at Rs 392.75, TBZ was up 15.12 per cent to Rs 173.40, Tara Jewels was trading 7.3 per cent higher at Rs 96.50 and PC Jeweller was trading 10.2 per cent higher at Rs 266.15. 

Courtesy: The Economic Times 

Govt plans to import technology to boost investment in renewable energy

While about $ 6.1 billion has been invested in renewable energy in India, China has received investments worth about $ 56.3 billion during the year 2013-14.

Photo: Energypedia

New Delhi  November 28, 2014: In order to increase energy generation from renewable resources, the centre is planning to take steps to encourage global companies for investing in this sector. The Government is contemplating to seek international cooperation for importing technology to boost investment in renewable energy sector of the country, said Piyush Goyal, Minister of State for Power, Coal & New and Renewable Energy (Independent Charge), in the Lok Sabha on November 27, 2014.

As per the Global Status Report 2014 of Renewable Energy Policy Network (REN-21), about $ 6.1 billion has been invested in renewable energy in India, whereas China has received investments worth about $ 56.3 billion in renewable energy during the year 2013-14. The investment was mainly for solar and wind power projects, Goyal.

To showcase India’s renewable energy potential globally, the Ministry of New and Renewable Energy (MNRE) is organising the Global Renewable Energy Investment Promotion Meet (RE-INVEST) from 15-17 February, 2015 in New Delhi as a follow up to the ‘Make in India’ initiatives launched by the Prime Minister. “This meet will give an opportunity to all states to showcase their policies to facilitate investment, progressive, initiatives and investor friendly climate to attract investments in renewable energy,” added Goyal.

Courtesy: Business Standard

Jaiprakash Associates gains after receipt of sale consideration

Photo: Moneycontrol.com

Monday, December 01, 2014: Jaiprakash Associates rose 2.43% to Rs 29.55 at 9:53 IST on BSE after the firm said it has received a consideration of Rs 667.56 crore post sale of its 74% stake in Bokaro Jaypee Cement, a JV between Jaiprakash Associates and Steel Authority of India

The announcement was made on Saturday, 29 November 2014.

Shares of Steel Authority of India were down 0.78% at Rs 88.60.

Meanwhile, the S&P BSE Sensex was almost unchanged at 28,692.58.

On BSE, so far 5.45 lakh Jaiprakash Associates' shares exchanged hands against average daily volume of 35.28 lakh shares in the past two weeks.

The stock hit a high of Rs 29.60 and a low of Rs 28.15 so far during the day.

Jaiprakash Associates (JAL) said it has received of consideration of Rs 667.56 crore upon transfer of 9.89 crore equity shares of Bokaro Jaypee Cement (BoJCL) (a joint venture between JAL and Steel Authority of India) to Shri. Rangam Securities & Holdings (SRSHL), an associate/affiliate of Dalmia Cement (Bharat).

It may be recalled that JAL had on 24 March 2014, intimated the signing of share purchase agreement (SPA) for sale of its 74% stake (9.89 crore equity shares owned by JAL) in the paid-up equity share capital of BoJCL to Dalmia Cement (Bharat) or any of its associates/affiliates.

Meanwhile, Steel Authority of India (SAIL) on Saturday, 29 November 2014 said it has received a sum of Rs 234.56 crore as consideration for sale of its 26% stake in BOJCL to SRSHL.

SRSHL is an indirect wholly-owned subsidiary of Dalmia Cement (Bharat), a subsidiary of Dalmia Bharat.

Jaiprakash Associates reported a net loss of Rs 106.48 crore in Q2 September 2014 compared with net profit of Rs 67.67 crore in Q2 September 2013. Net sales declined 15.4% to Rs 2664.12 crore in Q2 September 2014 over Q2 September 2013.

Jaiprakash Associates is a diversified infrastructure conglomerate with business interests in engineering & construction, cement, power, real estate, expressways, fertilizer, hospitality, healthcare, sports, information technology and education (not-for-profit).

Courtesy: Capital Market

JSW acquires 100% stake in Baspa and Karcham Wangtoo hydro power plant

The Stocks with High P/E ratio

[Editor: This deal marks the synergies between the two leading infrastructure (power, steel, construction, mining, etc) companies in India. Some of the chartists have spoken about Rs.15, as a strong resistance, for the scrip. But in practical there is nothing called valuation of a scrip. In the same way Resistances or Supports are just mental set ups or mental boundaries--they really do not exist anywhere. The point is that if the traders want, they can take a scrip to any level, without bothering much about the fundamentals, like Eicher Motors Ltd (Rs.14505), CCL International Ltd (Rs.(Rs.615), Intellivate Cap (Rs.69.30), Creative Merch (Rs.383.15), Risa International Ltd (Rs.398), etc, etc. We have seen many such examples in earlier Bulls Runs. Therefore, as long as a group of people will come in fr0nt of Television cameras as say these have such and such points as resistance, the stock would find difficulty in crossing those levels, because stock market is more of SENTIMENTAL PLAY, rather than valuations. These people have already implanted in your minds that so and so stock cannot cross certain levels, hence you act not because of what your conscience says but because certain group of individuals are saying something. Isn't it? This is one of the greatest manipulations done using various media channels; while the share market regulator  looks at the other side. Have you ever thought why many of those marketmen, who reject J P Power Ltd (Rs.13.20) are recommending Eicher Motor Ltd (a company whose earnings are basically based only on one product) in front of cameras? The Book Value of Eicher Motors Ltd is only Rs.303.07, while P/E is 77.20. Have you ever analysed what this mean? While a high P/E ratio may make a stock look like a good buy, factoring in the company's future growth rate to get the stock's PEG ratio can tell a different story. The lower the PEG ratio, the more the stock may be undervalued given its earnings performance. Have they analysed the PEG of Eicher Motors Ltd Vis-a-vis, J P Power Ltd? I do not think so....Anyway, some of the stocks in the renewable energy sector are down because of low crude oil prices. However, J P Power Ltd also has thermal power plant (Bina Thermal Power plant – 500 MW), whose cost would go down if the price of coal comes down. Hence, it would be better if you continue to accumulate the shares of Jaiprakash Power Ltd, at the CMP of Rs.13.20, for a target of Rs.18-22. These people will again come on TV, and ask all to buy, when they themselves have recommend it first to their clients]

Mumbai | November 17, 2014: After the deal with Reliance CleanGen failed to take off, JSW Energy has now successfully acquired two of Jaiprakash Power Ventures' hydro power plants. The combined capacity of these two power plants is 1,391 MW and comes at a price tag of Rs 9,700 crore.

Jaiprakash Power Ventures, a fully owned subsidiary of the Jaypee group, earlier this year had put up its entire hydro power portfolio for sale. The plants included the 300-Mw Baspa-II hydroelectric plant, 1,091-Mw Karcham Wangtoo plant and 400 MW Vishnuprayag.

Although JSW is acquiring the Baspa and Karcham Wangtoo plant , acquisition of these two assets will make JSW Energy the largest hydroelectric power producer in the country with an operating portfolio of 1,300 MW. The new entity will be called Himachal Baspa power.

The proposed acquisition in the state of Himachal Pradesh is a strategic fit to the company and will enable it to establish its presence in the state where it is also setting up 240 MW hydro electric project at Kutehr. The Baspa and Karcham project have a estimated life of over 29 and 37 years respectively and are extendable to 20 more years.

Axis Capital Limited & SBI Capital Markets Ltd. Were the financial advisors to JSW for the transaction. Amarchand & Mangaldas & Suresh & Co. Were the legal advisors to the company. PWC carried out the financial and tax due diligence and Lahmeyer International Private Ltd. Carried out the technical due diligence.

Courtesy: Indiainfoline