Tata Motors to bring Jaguar, Land Rover to India Tata Motors Monday said it was looking to expand the footprint of Land Rover and Jaguar models and bring them to India. “Land Rovers are present in small numbers in Mumbai currently. Our colleagues at JLR (Jaguar-Land Rover) have chalked out plans for expansion in the country within a one year timeframe, which will be followed by the entry of Jaguar,” Rajeev Dubey, president of passenger cars division of Tata Motors, told reporters here. Tata acquired Jaguar and Land Rover from Ford Motors in an all-cash deal worth $2.3 billion. In May this year, the company said it planned to raise Rs 7200 crore in the capital market to fund the acquisition. In a filing with the Bombay Stock Exchange last week, the company said the financing plan of the deal, which was announced May 2, has been reviewed considering the current situation of the capital market and price changes in the stock market since May 2008.

Pharma ministry asks NPPA to clear price change applications in 30 days. The department of pharmaceuticals has asked the National Pharmaceutical Pricing Authority (NPPA) to clear price revision applications received from drug companies within a period of 30 days, instead of the current norm of 60 days. It is learnt that the decision to expedite the process of clearance of applications has come in the wake of problems faced by the industry due to rising prices of bulk drugs imported from China. China is the largest supplier of raw material for bulk drugs to India and controls over 70% of the Rs 15,000 crore annual market for imported bulk drugs. While the Chinese government had closed down many of its drug manufacturing units due to environmental norms around the Olympics, prices of drugs had gone up exponentially. According to industry sources, many domestic and global pharma majors have approached the price regulator with individual applications to increase prices of some of their key drugs. Several companies have also asked NPPA to revise prices of bulk drugs. Industry associations such as Indian Drug Manufacturing Association (IDMA), Organisation of Pharmaceutical Producers of Indian (OPPI) and SME Pharma Industries Confederation (SPIC) have also urged the government and NPPA to increase the prices of drugs by 20% and bulk drugs (raw materials) by 25%. During the past months, the industry had threatened to stop production of some essential medicines as it was commercially unviable for them due to the steep rise in various input costs. It is learnt that the government has rejected the industry’s demand for any suo moto increase in prices of drugs. Instead, the government is understood to have asked the industry to file individual applications for price revision to NPPA with documentary evidence of increase in input costs. The government is now planning to take measures to revive bulk drug units which have either closed or stopped manufacturing bulk drugs due to short supply of raw material from China. According to industry sources, around 50 bulk drug manufacturing units have closed while others have cut down production of loss-making drugs.

NTPC approaches govt to raise ECBs worth $25 bn Tuesday, August 26, 2008 State-run power company NTPC has approached the government for free access to external capital markets for raising debt of around Rs 1.05 lakh crore (about 25 billion dollar) in order to become a 50,000 MW company by 2012. The ECB would include Rs 60,300 crore in foreign currency and Rs 45,200 crore in rupee term. In a letter written to Power Ministry, Chairman and Managing Director NTPC R S Sharma asked, "Government of India should recommend to the Reserve Bank of India for granting External Commercial Borrowings (ECBs) to meet both the rupee as well as foreign currency expenditure for subject packages." Countries largest power producer NTPC wants to raise money in foreign as well as domestic currency without any ceiling. In the present scenario, the companies can raise up to 500 million dollar per annum through ECBs under the automatic route for import of equipments. Apart from this an additional 250 million dollar can be raised for the said purpose with the approval of RBI. NTPC is pursuing this matter with the power minister to achieve its ultimate objective of becoming a 50,000 MW company by 2012 and a 75,000 MW company by 2017. For achieving these targets, the company is required to invest around Rs 1.6 lakh crore during the XI plan period. The debt requirement is around Rs 1. 05 lakh crore with 70:30 debt equity ratio.

Oil cos get govt notice for delay in paying royalty The government is taking a tough stand against oil majors ONGC, RIL, Cairn and the BG group (British Gas) for delaying payment of royalties. “Notices have been served to the members of the two consortia operating PMT (Panna-Mukta & Tapti) and Ravva fields for non-payment of government dues,” a source in the oil ministry said. Official sources said an audit by the Comptroller & Auditor General (CAG) found delays in payment of royalty by PMT consortium from 1994-95 to 2001-02. As per the production sharing contract (PSC), the consortium is required to pay royalty on biannual basis and any delay in paying the same would attract a 10% penal interest. While it has imposed penalties against the PMT consortium represented by ONGC, RIL and BG, in the case of Ravva, it has directed Indian Oil Corp to pay a lower price for the crude it buys from the field by adjusting the royalty that is due from this field. Members of Ravva consortium are ONGC, Cairn, Ravva Oil and Videocon Industries. On an earlier occasion also the petroleum ministry had warned PMT joint venture against the late payment. “Delay was found in royalty payment by the consortium in 1995-96 and the ministry had asked it to pay the fine,” a source said. It is understood from official sources that PMT partners did not pay any attention to the ministry’s demand. When contacted, Cairn India spokesperson declined to comment on the issue. Email enquiries to RIL, ONGC and BG group remained unanswered. One of the PMT JV partner, however, said on the condition of anonymity that the consortium has submitted all relevant papers to the authority that rules out the government’s claim. The PSC for PMT was signed in 1994 between the government and consortium. ONGC holds a 40% participating interest in the oil and gas blocks, while balance 60% interest is shared equally between RIL and BG Energy Holdings. The Panna-Mukta fields produced 1.77 million metric tonne (MMT) of crude oil and 1,662 million standard cubic meter per day (mmscmd) of gas in 2005-06. The Tapti field produced 2,228 mmscmd of natural gas during the same year. In the case of Cairn-operated Ravva, petroleum ministry advised Bongaigaon refinery in Assam to deduct the penalty amount (due to late payment of royalty) from the sale proceeds of the contractor in ratio of their respective participating interests. ONGC is 40% stake holder in the field. Participating interests of Cairn in the field is 22.5%, Singapore-based Ravva Oil (12.5%) and Videocon Industries is 25%. The average gross production from the field for 2007 was 60,441 barrels of oil equivalent per day (boepd), comprising average oil production of 48,078 bopd and average gas production of 74.18 million standard cubic feet per day (mmscfd).

Reliance may transfer 80% in KG D-6 to four affiliates Reliance Industries (RIL) is planning to transfer 80% of its participatory interest (PI) in the famous D6 block in the Krishna Godavari (KG) basin to four unlisted subsidiaries. Valued at nearly $50 billion with 14 trillion cubic feet of gas reserves, this is the arguably the most valuable asset held by the company. These four entities — Reliance KG Exploration and Development, Reliance KG D6 E&P, Reliance KG Basin and Reliance E&P KG — have recently become majority-owned subsidiaries of RIL. RIL has sought the petroleum ministry’s approval for this. The ministry, in turn, has asked the upstream regulator, the Directorate General of Hydrocarbons (DGH), to furnish a list of similar cases where more than 50% of PI in blocks have been transferred to affiliates. A source familiar with this development told ET: “This is a usual practice in the global oil and gas business. It will provide greater financial flexibility to these subsidiaries for raising funds.” However, Director General of Hydrocarbons VK Sibal declined to comment, saying he has not seen any such request from the company. The RIL spokesperson too declined to comment on the issue. An email sent to Niko Resources, which holds 10% stake in the block, failed to elicit any response. RIL holds 90% participating interest in the block. The exact value or structure of the transaction by which RIL would transfer its stake to the four subsidiaries could not be ascertained. However, it is learnt that RIL will continue to be operator of the block with at least a 10% stake, post the transaction. An analyst with an international research firm said: “The four affiliates will have strong balance-sheets, with a part of the KG basin assets. This will help them bid for global oil and gas assets. It also means that these companies may raise funds, if required, for their overseas bidding without stretching the RIL balance-sheet.” The analyst cautioned that there may be a perception that the interest of RIL shareholders may be affected by transferring this asset to the subsidiaries if it does not hold very large equity in them after the transaction. RIL’s exact shareholding in these four unlisted firms could be not ascertained.

Infy buy is largest outbound acquisition by Indian IT co. Infosys' plans to acquire UK-based Axon Group plc may spur high quality Indian corporates to go in for similar moves for offering transformational services, senior industry officials say. Kapil Dev Singh, Country Manager, IDC India said the acquisition signals a trend among Indian IT services firms to enhance their focus from low hanging maintenance kind of services, with a higher bias for top line growth, to high-end domain services that could add more to the bottom line. "It is the first of the many more steps that will ready Indian companies for offering transformational services", he added. Manoj Agarwal, ABN AMRO's Head of Investment Banking for India, said the all cash offer by Infosys is the largest outbound acquisition by an Indian IT company and underscores the continued cross border M&A interest of high quality Indian corporates. "We expect such trend to continue and we believe the transaction by Infosys would act as a catalyst for similar moves by other Indian IT companies", Agarwal said. Industry officials said the proposed acquisition of Axon by Infosys in a $753 million deal is a landmark transaction for the IT industry, as it reflects the tremendous growth of the industry.

Tata and Ambanis among bidders for Worli-Haji Ali sealink The first ever sealink in the country may be taking a long time to be built, but the excitement in the infrastructure industry over the project does not seem to be dying down. The Maharashtra State Road Development Corporation (MSRDC) received a good response with many bidders interested in constructing the next connection from the Bandra-Worli Sealink to Haji Ali. Around 20 bidders have purchased the bid boxes and are keen to build the 3.6 km long connection. At a time when the real estate industry is going through one of the worst recessions, the infrastructure sector seems to be going great guns. Though the construction of the sealink has seen many disputes between the state government and Hindustan Construction Company (HCC), the big-wigs of the infrastructure industry from all over the world have expressed interest in constructing the next phase of the sealink, said a senior MSRDC official. The public works (public undertakings) minister Anil Deshmukh said this second phase of the Western Freeway, connecting Bandra to Haji Ali would not be delayed like the first one. “This freeway with four lanes on each side should not have any trouble as there is no question of any litigation” he said. He added that the sealink would go till National Sports Club of India at Haji Ali. The big names interested in the second phase, costing about Rs 1,100 crore are Anil Ambani’s Reliance Infrastructure, the infrastructure wing of Mukesh Ambani’s Reliance Industries, Hindustan Construction Company with the Korean giant Samsung, Gammon India with a big infrastructure company from Spain, Tata Realty and Infrastructure Ltd., Indian Road Builders (in charge of maintaining the Mumbai-Pune Expressway), India Bulls and Mitas (the infrastructure wing of Satyam). The bids are expected to be received till the mid-October and the construction would commence either from May or October 2009, said a senior MSRDC official. The bridge would take three and a half years to complete. However, the government is still not sure about the third phase of the Western Freeway, which connects Haji Ali to Nariman Point. There is a plan to extend the Worli-Haji Ali Link till Priyadarshani Park at Nepean Sea Road, from where there are two ways of extending it till Nariman Point. One is to build an underground tunnel at Malabar Hill. The other is to build cut and curve tunnels (a method in which there is no disturbance at the surface) under Marine Drive. At present, a team of experts from Arup OBE, a British consultancy and CES, an Indian consultancy, are in the process of submitting a preliminary feasibility report.

Belief is must... Market has shown enough weakness as the rollover was not happening. It seems arbitrage players are not much interested in giving carrying cost. Yet they have to choice than to rollover in next 2 days come what it may. If they are rolling over in Aug, probably they may not get chance to ride in Sept. Irrespective of all weakness seen I am very firm with my targets. I have no doubt in my mind about OIL and gold behaviour. I have also no doubt in my anticipation of rise in US dollar. Therefore the equity market has to go up. Market is undoubtedly showing great picture of controlled moves and therefore it is solely dependent on few players. This time around they have preferred to hammer stock future which has now become weakness of every player as they have formed major habit of playing in Nifty. This exercise is seems to enter stocks now at lower levels. We had broken EIH and GHCL stories much ahead of market and both these stocks have worked. Now we are breaking another first story though we have no coverage to the said stock. FSL which has recently been shifted to A gr is set to announce buyback at or around Rs 60 which is still upside of 50% from here. This could be 100% buyback where ICICI and Temasek could surrender their holding in the buyback. The main reason for 100% buyback could be to sell the entire co as going concern in due course of time. We broke the story and historical volumes began in this counter. This stock has beaten all previous record by rising 25% in a day and especially when the F & O open interest was just 14000 shares till yesterday. Idevelop’s ability to spot such opportunities is not at stake as it is part of our journalism. Had Reliance shown its power today Sensex could have been 250 plus. Well, it could be for tomorrow. Reliance Capital has crossed its barrier level of Rs 1300 in closing session and set to explode tomorrow. Next great call from Idevelop fold could be I G Petro. The investor in this stock has already promised to convert warrants at Rs 200 per share. Even the first trounce was at Rs 77 and hence at cmp of Rs 45 to 46 this stock gives a good opportunity to investors to cash on its value. We understand from our sources that there could be huge buying in this co very shortly. The only resistance id Rs 58 its 200 DMA. Fundamental investors enter now and sell at 60 plus some part whereas technical experts must wait till the time this counter crosses Rs 58. Coming back to market, wait till Nifty crossing 4400 thereafter you do not have to do anything. Bears will the JOB for us. We always believe in…… Be swift to hear, slow to speak, slow to wrath.

December roses... Market was almost close to 4677 the 50 pc retracement theory as per chartists and most of the traders made up their mind to go short either at 4677 or max of 4700. Market once again did not allow them to catch the exact top and fell below 4600 instantly on IIP nos. There are 3 holidays starting Friday and general consensus is always in favour of no position ahead of holiday. Much is also talked about the SEBI meeting on P note tomorrow though in my opinion there may be anything. Ever since 4620 yesterday we avoided to generate buy call in Nifty because we will buy only when street sells it off. We have a stock specific approach at the moment though our targets of Nifty 4700 4812 and 5000 are intact. If market close on weak note then there is every possibility that it will correct further. We have great chance of re entering Nifty at 4460 to 4470 levels again. Oil, Gold and Silver all collapsed and the way it fell it did not give any chance of covering. Now there could be intermittent rallies in these commodities but my advise could be only actual long users must dare to enter in these three commodities for the next 3 months. The weakness will continue and oil will find its bottom at 72 USD for sure though the buying levels could be anywhere between 90 to 78. There are few fund managers who believe that the rally in RIL counter is over for now and RIL will never test 2600 again. They claim that RIL satta has broken and neither oil nor gases will this counter. In fact, this belief only made their conviction still stronger to the effective conclusion that the rally is bear rally and will not go past 16000. I believe otherwise. The best of RIL is yet to be out in public domain. FII which had 27% stake in this co had started making exit when RIL was at Rs 500 cum split. Now the FII holding is as low as 17% and the share price is already up by 6 times. This stock has habit of beating analyst all along. I am very confident of market breaching 18000 that too before Diwali and this will happen with RIL being out performer. Corrections are here to stay. Only those guys who buy in fall, wait and sell on rise could come out winners. There is no market for intra day trades because of volatility. For sure every dip is a buying opportunity provided you can spot the right stock at the right price. God gave us memory so that we might have roses in December.

Now it is M 2 M Gains MTM Gains…. The marked-to-market losses incurred by companies on exotic foreign exchange derivatives deals sold by banks. Fitch Ratings has gone on record saying that the total mark to market (MTM) losses of Indian companies on foreign exchange derivative transactions is estimated to be $ 3 billion to $ 3.5 billion. The more vulnerable segment of small and medium size (SME) enterprises accounts 25 per cent of MTM losses. Many firms have also moved court against banks, alleging that exotic forex derivatives were mis-sold. The rating agency further stressed the need to review the risk management strategies of companies and banks. "Banks, in particular, need to further refine their derivatives underwriting policies, including practices for assessing potential future exposures," Fitch said. while also adopting a more conservative approach towards capital allocation," Fitch said. Amtek today informed the stock exchanges that it could potentially make a loss of up to $18 million (Rs 72.18 crore) in the next two years on its exposure to currency hedges and swaps. Mark-to-market (MTM) losses of 46 companies on account of foreign exchange contracts, fluctuation in exchange rate and commodity hedging aggregated to Rs 1,365 crore so far, as per their results for the March 2008 quarter. The losses account for 8.2 per cent of the net profit of the 46 firms, which have reported a net profit growth of 24.3 per cent after provisioning. The information culled from the quarterly results shows 13 firms have made provisioning of Rs 302 crore for MTM losses on account of derivative contracts, 18 firms have provided Rs 800 crore for exchange rate fluctuations, four firms have provided Rs 118 crore for forex hedging and the remaining 11 have provided Rs 143 crore for commodity hedging and interest cost on foreign currency convertible bonds (FCCBs). The MTM losses declared so far appear to be modest if one considers the exposure of Indian firms to overseas loans. The combined figure of derivative exposure by the India firms is not know, but State Bank of India (SBI) has confirmed that its 300-odd clients in the forex derivatives segments have MTM losses of Rs 600-700 crore, while ICICI Bank has preferred not to divulge any details on the probable MTM forex derivatives losses of its clients. The borrowings on account of FCCBs aggregated to $11 billion (Rs 44,000 crore at exchange rate of Rs 40), while the external commercial borrowings (ECBs) amounted to $31.6 billion (Rs 126,400 crore) during the financial years 2005-06 and 2006-07. Among the forex losers, ICICI Bank's treasury income was down 63 per cent as it recorded Rs 400 crore MTM losses on its overseas investments during the fourth quarter. The bank also holds investments worth $5-5.5 billion in its UK and Canada subsidiaries, where it set aside about $60-70 million as MTM provisions in their Profit & Loss account. Finolex Cables reported a forex loss of Rs 3.6 crore on hedge contracts and made provisioning of Rs 9.2 crore on outstanding forex contracts. Infosys Technologies reported hedge revenue worth $760 million in the fourth quarter and posted a forex loss of Rs 45 crore. Maruti Suzuki made MTM loss provisioning of Rs 50.5 crore on its forex derivatives and a one-time expense of Rs 54.5 crore as compensation to dealer. Bharti Airtel made its forex loss as finance cost and JSW Steel charged it to other expenditures. Few other companies such as Alps, Alok Industries, Ranbaxy, Bharati, Bhushan Steel, JSW, Reliance, Arbindo Pharma Jet Airways where there MTM but all the co’s may not have provided for the same. Reliance has not provided MTM losses of Rs 940 crs whereas R Com Rs 1063 crs, Bharati Rs 260 crs Bhushan Rs 25 crs and Jet 625 crs. The turmoil in global financial markets has given Indian companies one more reason to worry about - mark-to-market losses. Across sectors, several leading companies that have announced the results for the quarter ending June 2008 have taken MTM hits in some form or the other. In some cases, MTM losses pushed some companies into the red on account of such provisions. MindTree Consulting turned into red on account of MTM forex losses of Rs 50 crore, which is nearly quarter of its revenues in June 2008 quarter. Pharma major Biocon's bottom-line was also hit hard on account of MTM losses. Its net profit stood at Rs 15 crore for this quarter against Rs 53 crore last quarter due to MTM losses of nearly Rs 26 crore. High profile victim of this is Power Finance Corporation (PFC), which has reported a net profit of Rs 296 crore in Q1 FY09 versus Rs 309 crore for the same period last year. PFC has provided for forex losses of Rs 58 crore compared with a gain of Rs 28 crore in the previous quarter. Axis Bank made a provision for over Rs 250 crore to cover losses from the decline in the value of their bond and equity holding. Reliance Communications suffered Rs 25.3 crore losses due to exchange rate fluctuations and MTM of derivative instruments. SBI reported a forex loss of Rs 100 crore due to reversal of excess forex income booked till nine months of fiscal 2007-08. The loss was not on account of any forex derivatives. The losses for FCCB and ECB issuers are on account of provisioning for interest cost and, for a few of them, for keeping the money in foreign accounts. Kotak Mahindra Bank today said it has made a provisioning of Rs 86 crore to cover the Mark-to-Market (MTM) losses of its clients on account of forex derivative transactions. Now the bottom line is that when the forex derivative losses hit the desk USD was at low of 94 as against yen. Now USD has climbed back to 110 USD and very close to the level of 114 from where the problem started. Having made huge recovery all the companies which have provided for MTM losses in March quarter are set to gain in Sept quarter as the provision has to be reversed. It should be noted that the MTM were only provision against the fall in the value of USD as per the A S 30 of ICAI and not actual losses. All the companies which have provided such MTM will stand to gain in terms of write back of provision no longer required. Beneficiaries of the stock are Reliance, R Com, Biocon, Bharati, Amtek, Alok, Maruti, Tata Motors, JSW, Jet Airways, Tisco, Yes Bank, Ranbaxy, ICICI Bank, HDFC Bank, Kotak Bank and other PSU banks.

39 new scripts in F & O 1 ABGSHIP ABG SHIPYARD LTD 2 AKRUTI AKRUTI CITY LIMITED 3 ASIANPAINT ASIAN PAINTS LIMITED 4 BALAJITELE BALAJI TELEFILMS LIMITED. 5 CONCOR CONTAINER CORP OF IND LTD 6 COREPROTEC CORE PROJ. & TECH. LTD. 7 DCHL DECCAN CHRONICLE HOLD LTD 8 DISHTV DISH TV INDIA LTD. 9 EVERONN EVERONN SYSTEMS IND. LTD 10 FSL FIRSTSOURCE SOLU. LTD. 11 GSPL GUJARAT STATE PETRO LTD 12 GTLINFRA GTL INFRA.LTD 13 GVKPIL GVK POW. & INFRA LTD. 14 HCL-INSYS HCL INFOSYSTEMS LTD 15 IBREALEST INDIABULLS REAL EST. LTD 16 ICSA ICSA (INDIA) LIMITED 17 KLGSYSTEL KLG SYSTEL LTD. 18 KSOILS K S OILS LIMITED 19 MIC MIC ELECTRONICS LIMITED 20 MINDTREE MINDTREE LIMITED 21 MLL MERCATOR LINES LIMITED 22 MONNETISPA MONNET ISPAT LTD 23 MRF MRF LTD 24 NBVENTURES NAVA BHARAT VENTURES LIMI 25 NOIDATOLL NOIDA TOLL BRIDGE CO LTD 26 OPTOCIRCUI OPTO CIRCUITS (I) LTD. 27 ORBITCORP ORBIT CORP. LTD. 28 PRISMCEM PRISM CEMENTS LTD 29 PTC PTC INDIA LIMITED 30 RIIL RELIANCE INDUSTRIAL INFRASTRUCTU LTD 31 SINTEX SINTEX INDUSTRIES LTD 32 SREINTFIN SREI INFRASTRUCTURE FINAN 33 THERMAX THERMAX LTD 34 TORNTPOWER TORRENT POWER LTD 35 TV-18 TV18 INDIA LIMITED 36 UCOBANK UCO BANK 37 UTVSOF UTV SOFT. COMM. LTD. 38 VOLTAMP VOLTAMP TRANSFORMERS LTD 39 WALCHANNAG WALCHANDNAGAR INDUSTRIES This will be effective 21st Aug 2008.