RInfra Signs Agreement for Mumbai Metro Line - II

Reliance Infrastructure Ltd has submitted a copy of Media Release being issued in connection with the signing of the Concession Agreement for Mumbai Metro Line - II by the Company led Consortium with the Government of Maharashtra on January 21, 2010.

India Inc raises Rs 42,000 cr via QIPs this fiscal

The fund mobilisation through Qualified Institutional Placements (QIPs) are back on track once again with five companies - Yes Bank, Karnataka Bank, Electrosteel Castings, HDIL and Shriram Transport Finance proposed to mobilise Rs 4,720 crore. Usha Martin closed its QIP issue on Monday, mobilised Rs 468 crore at price of Rs 85.90 per share. The stock is currently trading at Rs 91.30 on BSE. Karnataka Bank, Yes Bank and Shriram Transport Finance opened QIP booths last night. Karnataka Bank fixed floor price of Rs 132.75 for its Rs 500 crore QIP issue in its board meeting held on Wednesday, January 20. The company will use the QIP proceeds to enhance the capital adequacy ratio. The stock is currently trading at Rs 137.45 on BSE. Yes Bank fixed its floor price at Rs 269.46, is currently trading at Rs 264.80 and Shriram Transport Finance is currently trading at Rs 510.95 against its floor price of Rs 501 per share on BSE. HDIL is proposed to raise Rs 2,070 crore, Yes Bank Rs 1,140 crore and Shriram Transport Finance Rs 1,000 crore, collectively they will be raising Rs 4,210 crore through QIP route. Electrosteel Castings proposed to raise Rs 600 crore composite QIP issue consists of placement of equity shares and non-convertible debentures (NCDs) with warrants. All these is happening after a gap of two months i.e Indian companies are raising funds from institutional investors through QIPs. In December 2009, four companies collectively raised Rs 594 crore via this route, as compared to more than Rs 4,500 crore mobilised between July and November 2009. So far in current financial year 2010, fifty-three companies collectively raised Rs 42,045 crore, against just two firms mobilised Rs 189 crore in FY2009 via QIPs. The Bombay Stock Exchange (BSE) Sensex, has appreciated by 80 per cent in current financial year 2010, as compared to 38 per cent fall reported in previous financial year 2009.

NMDC, NTPC to Help India Raise Record $5.5 Bn

India will sell as much as 250 billion rupees ($5.5 billion) of shares in state-run companies this fiscal year, more than half the total raised since privatization efforts began in 1991, the official in charge of the sales said.NMDC Ltd., the nation’s largest iron-ore producer, and NTPC Ltd., the biggest electricity provider, are among companies taking advantage of a 94 percent rally in the benchmark stock index in the past year. The government is planning to reduce its stakes in as many as 68 companies to improve returns, said Sunil Mitra, secretary of the Department of Disinvestment. “There’s enough liquidity in the market and we feel the release of good quality shares of public-sector companies will help stabilize the markets,” Mitra said in an interview in New Delhi yesterday. “The government’s decision to sell small stakes will help unlock shareholder value.”The sales are needed to help plug a budget deficit that may climb to the equivalent of 6.8 percent of gross domestic product in the year ending March 31, a 16-year high. “There is a pressure on the deficit side,” Mitra, 58, said. Net purchases of Indian stocks by overseas funds totaled $17.7 billion last year, matching the record set in 2007, as Asia’s third-biggest economy weathered the global recession. JPMorgan Chase & Co. and India Capital Management Ltd. predict the benchmark Sensitive Index will rise at least 15 percent in 2010, fueled by consumer spending and prospects gross domestic product will increase 8 percent.Record SaleNMDC may sell shares between March 9 and March 12, raising about 174 billion rupees based on yesterday’s closing price, in what would be India’s biggest government offering. The Hyderabad-based company soared 30.6 percent in the past three days on speculation the sale will attract excess demand. NMDC shares rose as much as 8.5 percent to 571.8 rupees, the highest since it began trading in 1997. The shares rose 5.5 percent to 555.9 rupees at 3:30 p.m. close in Mumbai today.Mitra said he is drafting plans for more share sales in the year beginning April 1, including probable offerings by Steel Authority of India Ltd., the nation’s second-biggest steelmaker, Coal India Ltd. and telephone operator Bharat Sanchar Nigam Ltd. Unavailable Stocks There are some “sectors, which until now weren’t available to investors” and the government’s move to sell stakes in diverse industries “will be welcomed by both foreign and Indian investors,” said Harsha Upadhyaya, a fund manager with UTI Asset Management Co., who manages about $1.1 billion in equities.The Bombay Stock Exchange’s BSE-PSU Index of 48 state-owned stocks climbed 81 percent in 2009 after Prime Minister Manmohan Singh’s Congress party won a second five-year term in May without the support of communist parties, which had stalled previous initiatives to sell state-owned assets. “We have 60 unlisted companies and 8 listed ones,” under consideration, Mitra said without giving a timeline. The government raised 396 billion rupees from stake sales since 1991, according to the department’s Web site.NMDC may submit share-sale documents to the market regulator in the last week of January, Mitra said. The government is selling an 8.38 percent stake. Singh in November changed a rule allowing sale proceeds to be used to fund social programs and infrastructure, helping trim the deficit. Previously the government had to invest the money in bonds and stocks.Singh’s cabinet on Nov. 5 approved a plan requiring all profitable state-run companies in which the government holds a more than 90 percent stake, to ensure that 10 percent of the shares are in public hands.

New share issues to sustain fund flows into India

Foreign fund flows into India in 2010 could match or exceed a near-record $17 billion in 2009 but will not give the Mumbai stock market the same boost this year, as a flood of new share sales soak up cash and cap overall gains. Initial offerings by the likes of Jindal Power or new shares sales by state-owned firms such as miner NMDC Ltd could be magnets for overseas investors, and would put further upward pressure on the Indian rupee . The long-term case for investing in India, like China, is clear: a billion-plus population driving consumption-led growth. Analysts see 2010 fund inflows easily matching last year's. Indian firms raised about $19 billion in new equity in 2009, and Morgan Stanley figures they could raise $70 billion over the next three years. Overseas investors tend to be the biggest buyers of fresh Indian equity. "Within emerging markets, I would say there is no alternative to India and China," said Vinay Gairola, managing director and portfolio advisor in Mumbai with Atlantis Investment Advisors, a $2.9 billion London-based fund manager. But India has had a tendency to underperform relative to its potential and to China, and its higher valuations may hamper the appeal. Michiel van Voorst, who helps manage a 500 million-plus euro ($714 million) Asia-Pacific portfolio for Dutch fund manager Robeco in Hong Kong, said India valuations look steep in the context of its high interest rates and is underweight India relative to the MSCI Asia Pacific index. "We do see the growth, but we also have a couple of risk factors that we keep in the back of our mind," said van Voorst, whose India weighting has been steady at about 4 to 5 percent.

SBI, ICICI Q3 net seen hit by bond moves

State Bank of India, the country's top lender, and rival ICICI Bank are likely to post lower quarterly net profit on sluggish credit demand and a fall in treasury incomes as bond yields rose.But increasing business and consumer confidence is reinvigorating corporate, housing, auto and retail demand in Asia's third-largest economy, with banks looking to improve their asset quality. Bank credit grew an annual 13.7 percent in early January, having fallen to 9.7 percent in October despite a reduction of 300-350 basis points in lending rates since the global crisis. "There are some signs of improvement in credit growth and it will gradually recover," said Srividhya Rajesh, fund manager at Sundaram BNP Paribas Asset Management, which holds shares of State Bank and ICICI. "As economic growth picks up, we could see a decline in bad debts as well." Indian banks were mostly insulated from the direct impact of the global credit crisis, but the world downturn hit the country harder than expected and led to a sharp slowdown in credit growth in the current financial year. While the Reserve Bank of India has projected 18 percent growth in loans for the year through March, banks say they may fall short and end the fiscal year at 15-16 percent credit growth -- still a far cry from growth rates of more than 30 percent over

Fin min says taking steps to tame inflation

Finance minister Pranab Mukherjee said the government was taking steps to contain inflation. "High inflation is a matter of concern. Steps are being taken to tame inflation," he told reporters. "The situation is constantly under review."

MTNL eyes global acquisitions

t’s not just private telcos like Bharti or Essar but state-run telecom company, Mahanagar Telephone Nigam Ltd (MTNL), is also keen on calling on Africa. MTNL had recently partnered with BSNL to bid for Zain Telecom, which has large operations in Africa. But the deal never happened. So, now MTNL is going solo, but the going may not be easy. MTNL has licence to operate only in Delhi and Mumbai and this has been stifling the company's growth. The telecom officials recently appealed to the prime minister's office to allow them to move into other parts of the country, which at present are under BSNL. A first step towards that would be by entering areas adjoining Delhi and Mumbai. Meanwhile, MTNL is also looking to raise money by hiving off its real estate into a separate subsidiary. It owns real estate worth Rs 4000-5000 crore in Delhi and Mumbai.