RBI may raise rates tomorrow

RBI is expected to raise its key lending rate by 25 or 50 basis at its policy review to cool inflation from near 12 per cent, and further rises are also expected, a poll showed.Seven out of 11 analysts polled expected the Reserve Bank of India (RBI) to raise the repo rate from 8.50 per cent on July 29.

In June, the central bank raised the repo rate by 75 basis points in two steps and announced a 50 basis point increase in the cash reserve ratio (CRR) to 8.75 per cent. None of the analysts expected any change to the reverse repo rate, at which the central bank absorbs excess funds from the money market. It stands at 6.0 per cent, unchanged since July 2006.

Red more in The Economic Times article.

Rel Infra, China co in $3 bn deal

Anil Ambani-controlled Reliance Infrastructure Ltd is joining hands with Shanghai Electric Power Co, China’s second biggest equipment manufacturer, to build power equipment in India.This will be the first time a domestic power utility is inking a power equipment-manufacturing joint venture with a Chinese company.

Under the JV, a facility with an initial capacity of up to 10,000 mw would be set up. This may be scaled up later. The facility is likely to go on stream by 2010.

The agreement, which is to be signed today, will see an investment of $3 billion. The JV would also offer third-party services, including engineering, procurement and construction work, to power companies. Shanghai Electric will offer technical and design support, operations and maintenance, setting up of power equipment and after-sales service as part of the third-party services.

Both Reliance and Shanghai Electric would hold 50% in the company.It would also cater to orders from abroad, especially from neighbouring countries.

NTPC plans 2,000 mw N-power unit

Joining the growing list of companies trying to tap the opportunity that is bound to arise out of a possible Indo-US nuclear deal, NTPC has drawn up plans to enter nuclear power generation by setting up a 2,000 megawatt (mw) project.
In a report submitted to the Ministry of Power, NTPC, which has one-fourth of India’s installed power capacity, said it would operationalise the project within the next decade in two phases of 1,000 mw each.

The company has initiated discussions with the Atomic Energy Commission (AEC) for identifying nuclear fuel availability. Thereafter, NTPC would locate the nuclear plant.

RJ Corp takes 100% in ice-cream venture Cream Bell

Having acquired part-owner CK Jaipuria’s share in Cream Bell,RJ Corp-owned Devyani Food Industries now control 100% of the entity.

The Cream Bell business is valued at around Rs 450-550 crore.The firm has subsequently multiplied about four-five times with capacity expansion and increase in Cream Bell’s market share.The historical valuation of Cream Bell, carried out by private investment firm International Finance Corporation (IFC) a year ago, was about Rs 120 crore.

The Cream Bell business was originally floated as Universal Dairy Products as a 50:50 venture between Ravi Jaipuria and his brother CK Jaipuria. But after mutual discussions, it was decided that CKJ exit this business. The process of the share transfer was kicked off some months back.

With the new plant set-up in Goa, Cream Bell will cater to the western and southern regions. Cream Bell has been till now largely focused in the northern region. The plant at Goa, the second for Cream Bell, is expected to have a capacity of 6-million litres. The existing plant in Baddi, also with a similar production capacity, caters to the northern markets. RJ Corp is hoping to leverage its bottling network in Goa to establish the ice-cream business in the region.

Read more in The Economic Times article.

India’s first silver ETF in the offing

Benchmark Asset Management plans to launch India’s first exchange-traded fund (ETF) tracking silver as part of a strategy to expand its bouquet of passively managed funds.

Sebi regulations restrict mutual funds from investing in commodities other than gold. But they can invest in global funds tracking any commodity, a path that Benchmark hopes to follow. The fund house filed initial papers with the Sebi to launch Silver Benchmark Exchange-Traded Scheme, which will invest at least 90 per cent of its assets in units of overseas mutual funds tracking silver.

In February, Benchmark sought the regulator’s nod to launch four fund of funds that would mainly invest in foreign exchange-traded funds (ETFs) tracking clean energy, private equity, commodities and water indices.

RPL to start production ahead of schedule

Reliance Petroleum Limited (RPL) on Tuesday said it would commission its refinery ahead of schedule. The company said nearly 94 per cent of the project has been completed.

RPL had raised Rs 8,100 crore from the primary market to part-finance the refinery with an annual capacity of 27 mmtpa (million metric tonnes per annum). The most of the remaining fund was borrowed while Chevron chipped in fund against its acquisition of a 5 per cent stake in the company.

Till June 30, the company has invested Rs 25,515 crore in the refinery. This is higher than the projected investment of Rs 24,125 crore as the company made an advance payment to the contractors in order to ensure speedy implementation of the project, the company informed the stock exchanges.

Tata Power acquires 26 pc in Bhutan hydro project

Tata Power on Monday announced that it has acquired 26 per cent stake in 114 MW hydro-power project and will deliver the generated power at the India-Bhutan border.The company has bought 26 per cent stake in the project, while Tata Power trading has negotiated to purchase all the power generated from the project.

Tata Power has entered into a partnership with the Royal Government of Bhutan through Druk Green Power Corp (DGPC) for developing the said project.The project would be executed by the Special Purpose Vehicle Dagachhu Hydro Power Corp.
However, the financial details and the terms of the partnership were not disclosed.

The power is expected to be evacuated through the Tala Transmission Link into India's Eastern Region Grid.

Tata Comm readies $2bn capex

Tata Communications, a global voice and data telecom provider with annual revenues of $2 billion, has identified ‘20 top emerging markets’ that will drive its next phase of growth. The firm earns two-third of its revenues from overseas businesses. In the last six years, it invested about $1 billion to fund acquisitions (Tele Globe, a stake in Tata Teleservices) and setting up of new submarine cable.

The growth strategy going forward revolves around regions where global multinational companies are setting up operations. That includes countries in Latin America, Africa and South East Asia and Central and Eastern Europe. VSNL will set up infrastructure that will support various telecom enterprise solutions, including tele-presence, manage data services, messaging etc.

Between 2009 and 2011, the company has charted a 12-15% compounded annual growth rate. This means, it will double its revenues to $4 billion and ebitda will grow 20% to about $800 million by 2011-12.Tata Communications, meanwhile, is also investing in a major way in India. It has earmarked a $2 billion capex over three years, its most ambitious plan in its history.For setting up fresh capacities in submarine cable undersea, the company will spend $500 million, Wimax for broadband connectivity for a captive market of 30 million potential subscribers will entail an expenditure of $500 million. Another billion dollars will go for setting up data centres and expansion of its fibre network.

Read more in The DNA Money article.

JP Morgan,Goldman Sachs propose to buy stake in GHC

Private equity firms including J P Morgan and Goldman Sachs and telecom majors Nokia, Ericsson, Huawei and ZTE have proposed to pick up 22 per cent stake in Global Holding Corporation (GHC), which has two listed firms GTL Ltd and GTL Infrastructure and three unlisted entities.GHC has two other wholly-owned subsidiaries, Global Projects and Global Innovsource and 90 per cent stake in tower manufacturing arm Global Towers.

According to sources, in October last year, GHC diluted eight per cent stake for $150million to Technology Infrastructure, an offshore fund. Now it intends to dilute additional 22 per cent stake to raise around $700 million.

The market capitalisation of the two listed entities was $1.7 billion as on June 31, 2008. The Group recorded in excess of $600 million revenue last fiscal. The company had early this year said that promoters intend to dilute anywhere between nine to 30 per cent stake in GHC to raise $150-$500 million for increasing promoters stake in the listed firms.

GHC currently holds 44 per cent in GTL Ltd and 23 per cent in GTL Infrastructure. GTL Ltd in turn owns 41 per cent in GTL Infrastructure. GHC promoters have infused $101.76 million since March 2006 to enhance their stake in GTL Ltd through creeping acquisition from 26 per cent earlier. Promoters intend to increase GHCs stake in GTL Ltd to 69 per cent and to 51 per cent in GTL Infrastructure directly.