Cigarette stocks up on FDI buzz
Cigarette stocks were up Monday on market expectations that the Government may soon review policy on FDI in cigarettes.
The Sensex component ITC, which even after diversification continues to be predominantly a tobacco play, moved up 5.5 per cent to Rs 231. Godfrey Philips shot up over 19 per cent and GTC finished with a gain of 9.64 per cent. Two smaller players, VST Industries and RDB Industries, however, closed lower 4.5 per cent and 5 per cent respectively. Godfrey Philips, jointly promoted by Phillip Morris and family of Mr KK Modi, has moved up most (32 per cent)in the past one week, while ITC, the biggest of the pack, recorded a weekly gain of around 10 per cent. In anticipation of a strong Q 3 results, Credit Suisse has revised ITC price target upwards to Rs 242. Market talk was that Philip Morris, which is currently restructuring its international business into two broad geographical entities – one located in the
UTI, LIC & SBI to gain as govt defines PSU MF
The government today said public sector mutual funds are those where the government along with other Central Public Sector Enterprises (CPSEs) holds 50 per cent or above, clearing the haze over the definition of PSU MF.
Industry players said the definition will help UTI, LIC, SBI and Canara Bank Mutual Funds qualify for the proposed investments by public sector undertakings (PSUs) in mutual fund schemes.
As per clause 619 of the Company Law, only those companies in which government holding is 50 per cent and above are called PSUs.
The government had in August 2007 allowed CPSEs to invest their surplus cash in mutual funds owned by public sector AMCs. However, CPSEs wanted a clarification on the definition of a public sector mutual fund.
Currently, the government has nil or very little holding in MFs promoted by CPSEs, which include asset management companies of LIC, UTI, Punjab National Bank and State Bank of
The current total surplus of CPSEs is estimated at over Rs 3,00,000 crore. Navratna and mini-Navratna CPSEs account for a lion’s share of this money.
LIC, SBI, BoB and PNB hold 25 per cent stake each in UTI Mutual Fund. In CanBank MF, the Canara Bank holds 51 per cent while the remaining is held by Robeco, the Dutch financial services company.
Bajaj Hind forays into infrastructure
Bids for
Bajaj Hindusthan (BHL), the country’s largest sugar producer, is likely to foray into the infrastructure sector in a bid to diversify and secure the company from the cyclical nature of the sugar business.
The company is also toying with the idea of developing real estate projects.
The Shishir Bajaj-owned company has recently bid for two phases of the Uttar Pradesh government’s 1,047-km Ganga Expressway Project in association with DS Construction and the Apollo Group. The consortium has been shortlisted for the two phases and the financial bid is scheduled to open on January 13.
The two phases are Greater Noida to Fatehgarh, including the Farrukhabad Link (253 km), involving an investment of Rs 7,631 crore, and Fatehgarh to Dalmau (Rae Bareli), including the Lucknow link (305 km), at an investment of Rs 8,012 crore.
On December 27, BHL informed the Bombay Stock Exchange that its board had approved the company’s participation in the project.
The company has also diversified into the production of particle-board and medium-density fibre-board from bagasse, a byproduct of sugar. It has also ventured into value-added products such as ethanol and power.
Sugar, the company’s main business, is highly cyclical in nature and the company has posted huge losses in the last few quarters due to a downturn in the sugar sector.
The country saw a record sugar production of 28.4 million tonnes last year, which is expected to be higher this year. Consequently, sugar prices have crashed by 30-35 per cent in the last one year and are expected to remain under pressure in the near future.
“We are the technical partner, while BHL and Apollo are the financial partners. The consortium’s activity is currently limited to this project,” said an official at DS Construction.
The expressway, the biggest road project by a state government in recent times, has attracted big companies such as GMR, Jaiprakash Associates, Punj Lloyd and L&T, because it includes land development and revenue-raising rights through tolls over a 35-year concession period.
The state government, which will oversee the administration of the project, plans to start construction of the expressway from April 2008.
State Bank of
State Bank of
The board will consider the offer at a meeting Jan. 14, when it will also examine whether to sell shares to employees, the bank said in a statement to the Bombay Stock Exchange today. It did not say when the sale may take place or the price of the shares.
The state-owned bank plans to raise 167 billion rupees ($4.2 billion) from stakeholders, a government spokesman said in
The 200-year-old bank has hired six investment banks, including Merrill Lynch & Co. and CLSA Ltd., to manage its share sale, three people familiar with the matter said on Dec. 20.
State Bank's closest rival, ICICI Bank Ltd., led Indian companies in 2007 in a record year for share sales as lenders raised funds to meet accelerating credit demand in the world's fastest-growing major economy after
Indian companies raised almost $20 billion in 2007 in share sales in the Indian market, including rights sales, according to data compiled .
Asian Stocks Gain
Asian stocks rose for the first time in four days, led by
Indian Rupee Exchange Rate
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