ICICI Bank updates...

The Foreign Investment Promotion Board (FIPB) has cleared ICICI’s proposal to sell 24% in holding company for its insurance business.

The decision on ICICI Bank’s proposal, which now awaits the finance minister’s approval, is significant for other insurance companies looking to expand foreign equity participation to raise capital for business expansion.

It should be noted that SBI & IDBI too proposes similar arrangement of forming holding cos for insurance biz.

ICICI Bank has been recently re-rated to Rs.1200 plus by CLSA & others.The same goes well for SBI & IDBI too.Above all FM is now moving ordinance for SBI ACT..Therefore now watch SBI's FII Limit...

ICICI can divest 24% in holding co for insurance biz: FIPB

Nearly two months after first rejecting it, the Foreign Investment Promotion Board (FIPB) today recommended for approval ICICI Bank’s proposal to sell 24 per cent sell in its newly-formed wholly-owned subsidiary ICICI Financial Services, the proposed holding company for its insurance and asset management ventures, to foreign investors. “The proposal has been recommended for conditional clearance. ICICI will have to take clearance from the Reserve Bank of India to conform with the conditions and rules of the Banking Regulations Act,” said a government official. The decision on ICICI Bank’s proposal, which now awaits the finance minister’s approval, is significant for other insurance companies looking to expand foreign equity participation to raise capital for business expansion. Most insurance companies are awaiting the passage of the amended Insurance Act, 1938, which is expected to raise foreign equity limit to 49 per cent. The ICICI proposal had been rejected by the board at its meeting on June 23 on the grounds that it did not comply with the 26 per cent foreign direct investment (FDI) cap in insurance ventures. This contradicted the view of the finance ministry’s insurance division and the Insurance Regulatory and Development Authority that FDI in ICICI Bank’s proposed holding company would not violate norms. ICICI Bank, in support of its stance, had written two letters — on June 14 and 27 — referring to the Warburg Pincus investment in Max Healthcare, approved by the FIPB in March 2005.

NIFTY............levels

Break out on a closing basis of 14705 & 15573 volatility will come to an end & decisive move will be seen.

For NIFTY break out of 4267 & 4556 will be decisive.

BSE index: (14868) Consider for this week…15124 a solid resistance on higher levels up to which selling on higher levels will be seen, keep stop loss of 15245 to your sales.Downward side a close below 14705 decisive downtrend will start & it’ll fall down severely to 14366, 14240 & 14147. Consider 14147 a solid support on lower levels. A close below 14147 further heavy panic will drag it down to 14036 & 13842.Upward side a close above 15246 it’ll surge up again to 15573.A close above 15573 it’ll sustain on higher levels & it’ll spurt up to 16162 from where again decisive downtrend will start.

NIFTY: (4333) Consider for this week…4399 a nearest & 4440 a solid resistance up to which selling on higher levels will be seen, keep stop loss of 4440 to your sales.Downward side a close below 4267 decisive downtrend will start & it’ll fall down to 4102 & 4000.Upward side a close above 4440 it’ll surge up again to 4525 & 4557.A close above 4557 it’ll sustain on higher levels & spurt up to 4720 from where again major downtrend will start.

Jai Corp......... Our Favourite from Rs.1100/-

Jai Corp was locked at the 5% upper circuit of Rs 5580.45 after its board approved a 1:1 bonus issue. The scrip surged 71.02% from a recent low of Rs 3107.60 on 25 July 2007 to Rs 5314.75 on 9 August 2007 backed by the company’s decision to split and/or bonus issue.

Jai Corp Board to consider Bonus Issue

Jai Corp Ltd has informed that a meeting of the Board of Directors of the Company will be held on August 09, 2007 inter alia, to consider a proposal for capitalisation of reserves through issue of bonus shares. The issue of bonus shares, if approved by the Board of Directors, would be subject to approval of the shareholders.

Short Term Delivery Call Performance

Scrips	Recomm. Date	Recomm. Rate	As on Date	Rate	%
JHS Sven.	06/05/07	30.25	17/07/07	45.20	+49%
Hydro S & S	06/05/07	35.45	20/07/07	62.90	+77%
Sayaji Hotels	06/05/07	39.05	13/07/07	75.80	+94%
D & H Weld.	13/05/07	25.85	13/07/07	46.80	+81%
Anik Inds.	13/05/07	26.85	31/07/07	39.80	+48%
RPG Trans.(Multibagger)	13/05/07	208.55	13/07/07	309.90	+48%
Entegra Ltd.	20/05/07	16.10	17/07/07	31.05	+92%
Garware poly.	20/05/07	42.40	24/07/07	57.00	+34%
Infomedia (Multibagger)	20/05/07	202.05	20/07/07	319.70	+58%
Prism Cement	27/05/07	33.30	24/07/07	55.80	+67%
Hind Inds.	03/06/07	26.40	30/07/07	34.80	+31%
Sharp India	03/06/07	32.95	24/07/07	79.80	+142%
PAE Ltd.	10/06/07	17.20	17/07/07	26.90	+56%
Pioneer Dist.	10/06/07	21.70	04/07/07	39.90	+83%
SAAG RR	10/06/07	30.85	26/06/07	45.30	+46%
Jai Bharat	10/06/07	41.45	16/07/07	52.45	+26%
La Opala RG	17/06/07	32.90	12/07/07	41.55	+26%
W S Inds.	17/06/07	45.70	12/07/07	65.75	+43%
Raunaq Auto.	24/06/07	23.25	19/07/07	30.45	+30%

State Bank of India announce stock split

India's largest lender may split its stock as it sells shares to raise funds, the Financial Express reported, citing an official at the bank it didn't identify. The announcement on the stock split and a sale of shares may be made in the next few months, the report said. State Bank added 45.85 rupees, or 2.8 percent, to 1,681.85.

Focus...............FED Effact

When everything was good then why did market lost almost all grounds…..? We had yesterday given a buy call on Nifty and all stocks such as RIL, SBI, IDBI Bombay Dyeing and IFCI all were there in huge profits. Yet we will not claim the credit as these calls were optional.

We will stick with our focus of 14880 on closing basis and 14100 as the worst case and above 16000 if every thing goes well. Today and tomorrow FED is meeting which will be used for creating more volatility. In fact, I feel really nervous when GUJU and MARU traders talk of FED effect on Indian markets. If analysts discuss then I can understand but when trader I really wonder how can they step into the shoes of analysts…?

We did not ask investors to carry positions except in cash stocks today neither we have reduced any calls . IDBI from a low of Rs 105 flared to Rs 113 crossing our call initiating price simply because IFCI is rising. In fact, the fair price if IDBI is above Rs 124 only but since the stock was in overbought condition in the last vallan it failed to move up. Now there will be a fair run on this stock. In fact, next 4 quarters there could be stunning add back in the bottom-line due to written off NPA settlement. Secondly so far I had not discussed the valuation of its subsidiary of life insurance. If SBI subsidiary is valued at 2 bn USD then IDBI’s could not less than 1 bn USD which is a cool Rs 67 per share. It has asset management co too and Govt has gone on record the allow FII to hold stake in holding co formed for this purpose. This one point programme has brought SBI from Rs 1400 to Rs 1700 then believe it or not again this point will take IDBI to Rs 250 plus……This is the beginning of value unlocking let it cross Rs 250 I will discuss some thing more which will then take IDBI to Rs 600 in next 18 months. If you believe that I am one of the architects of SBI rising to this level and after 18 months I will take again credit from you for IDBI. We hold positions in both SBI and IDBI.

Coming back to the issue of why our S C team did not give buy call today for tomorrow….? Are we bearish for tomorrow….no way but at the same time not even bullish till Thursday? After that there is no much looking back and you will seeing the markets in good nick like DADA at its best….

The reason that sub prime is still a concern though yesterday’s rise was Govt assurance to resolve the issue…There are 370 cos considering their results on 9th Aug for Q1 out of which lot of cos are covered by sub prime. The same is also after the event of FED rate issue. Chances are that FED will keep it untouched because if it reduces at this point in time then it will impact USD and rupee will gain smartly post Rs 40. Now having said this, if analysts find that no major impact is seen on Q1 nos out of the most affected issue of sub prime which is nothing less than bird flue….then re rating is on cards and Dow will recover all its lost grounds and will enter in a new orbit only on short covering.

The same goes well with Indian stocks….As reported earlier almost all the operators are running books full in their respective stocks whereas retail is deprived of ownership in stocks and punters are fully connivanced that market is already topped out and therefore only in mood of selling. They will realize their trapping only after 4600 and therefore till that time supply should not be an issue and volatility should persist.

"It is an ironic habit of human beings to run faster when we have lost our way."

IFCI to invite expression of interest for 26% stake

The IFCI Board on Saturday decided to invite expression of interest (EoI) for shortlisting a strategic investor. A large number of financial big-wigs like Barclays, Citigroup, Lehman Brothers, BNP Paribas, Deutsche Bank and other Indian banks are understood to be interested in picking up 26% equity in the company. The process of receiving EoIs would begin on August 13 and the last date for submitting EoIs would be September 14. The company expects the process of selection of a strategic investor to be over by January, a company official said. The lender has appointed Ernst & Young to look for the strategic investor. E&Y has been asked to suggest names of strategic investors and will help IFCI in carrying out modalities related with stake sale. As per the proposal, strategic investors will have to make bids within month of the calling of EOIs. Following this, IFCI will shortlist some investors. These investors will then be allowed to do a detailed due diligence and submit a fresh bid indicating the price they are willing to pay for the stake.Based on the second round of bids, the IFCI board will decide on the new stakeholder. As a precursor to stake sale, IFCI had in May passed an enabling resolution to increase foreign holding in the company up to 74% of its share capital. Request for proposals will be called by IFCI by October 1. IFCI’s accumulated losses stood at Rs 800 crore as on March 31, 2007 and it now has a positive net worth of Rs 446 crore.

SBI yet to decide on rights issue

Country’s largest commercial bank, State Bank of India (SBI) Wednesday said it will take a decision on whether to go for a rights issue or public offer in a month or two. “It is still taking shape. The decision would be take in a month or two,” SBI Chairman O P Bhatt said. The bank is planning to raise around Rs 15,000 crore during this fiscal through a mix of Tier I and Tier II bonds to meet credit requirements. SBI is also planning to set up a holding company for its asset management and insurance venture. The proposed company would be formed in 2-3 months, he said. When asked about revision of lending and deposit rates, he said the decision would be taken by the bank’s asset liability committee, which is scheduled to meet next week.