Sources:GE India to acquire Indo Tech transformers

Indo Tech Transformers, part of the Rs 240 crore Indo Tech group, is soon t be acquired by General Electric India for an undisclosed sum. The buy will help GE, known to acquire to grow in its important markets, strengthen its manufacturing presence in the power sector.

Indo-Tech has a good profit track record. In the first half of this year, it clocked a 43% rise in net profit at Rs 24.63 crore against Rs 17.14 crore in the same period last year. Net sales increased to Rs 119.38 crore ( Rs 90.75 crore). During 2007-08, it reported a net profit of Rs 39 crore on net sales of Rs 189.86 crore.As on March 31, 2008, it has reserves and surplus of Rs 112 crore on a thin equity of Rs 10.62 crore in which the promoters hold 54.34%, institutions 18% and public the rest.

In the last one month, the company's share price soared by 34.69% from Rs 184.95 on November 1st to the current price of Rs 249.10. According to the company's stock archive on the BSE, the total number of trades for the months from July to October 2008 was over 15,000. But in the month of November alone, the stock was traded 15,000times.

Read more in The Economic Times article.

74 cos in BSE 500 have FCCBs outstanding of $10.9 bn

The Economic Times quoted a recent Edelweiss report which highlights that at the end of Sep 30, 2008, 74 companies in the BSE 500 Index had FCCBs outstanding aggregating
$10.9 billion.

The brokerage house estimates that for 61 companies (including Ashok Leyland and India Cements) the probability of FCCBs being converted into equity is low, given the gap between current stock prices and effective conversion price.

Edelweiss also pointed out that currently, most companies do not charge redemption premium to the Profit & Loss account on the assumption that bonds will finally be converted into equity shares. Hence, in the event of non conversion, a significant cost is kept off the P&L and profits are overstated to that extent.

After hefty payout, BSE shareholders to get 12:1 bonus

After pocketing a hefty 3000% dividend in 2007-08, shareholders of the Bombay Stock Exchange (BSE) are being treated to some more largesse — this time in the form of a bonus issue. According to reliable sources, the BSE board at its meeting on Saturday has decided to offer 12 bonus shares for very share held by shareholders.

Though the bonus issue is in line with brokers’ expectations, the move is seen as the first step towards eventual listing of the exchange’s shares. BSE is required to enhance its capital base significantly from the current level for listing purpose.
Post-bonus, the exchange’s equity capital would increase from the current Rs 78 lakh to Rs 10 crore, which is the limit applicable to companies seeking listing on the National Stock Exchange (NSE). The minimum paid-up capital requirement for BSE listing is Rs 3 crore.

Global investors pull out $480 mn from India funds in October

Global investors have pulled out a whopping over $480 million from India-focused funds last month, with as much as $120 million flowing out in the last week, amid the meltdown in the equity markets.

India-focused funds have witnessed the highest outflows among all the Asian funds in the last four weeks, followed by China funds, which saw redemptions of over $286 million, as per data compiled by global fund tracking firm EPFR.

India-focused country funds saw an outflow of $119.7 million in the last week of October, while for the past four weeks the toll has been as much as $482.2 million.
However, so far this year, the total redemptions from India-dedicated funds have been the second highest, of over two billion dollars, while China-focused funds have witnessed the highest outflows of $2.8 billion in 2008 so far.

The Indian benchmark index Sensex dropped over 3,000 points from over 13,000 to below 10,000 in October, while China's Shanghai SE Composite Index had fallen from over 2,100 to below 1,700 in the last month.

Asian equity funds excluding Japan extended their losing streak to the eighth week in a row and recorded net outflows of USD one billion in October. In the last week of October they suffered an outflow of over 386 million dollars.

NTPC to form JV with NPCIL

State-run power producer NTPC today said that it would form a joint venture with Nuclear Power Corporation of India Ltd for setting up a nuclear power project."NTPC board has approved the formation of a joint venture company with Nuclear Power Corporation of India Ltd (NPCIL) to set up a nuclear power project," company said in a statement to the Bombay Stock Exchange.NTPC would hold 49 per cent of the stake in the joint venture company and 51 per cent would be held by NPCIL.

The company plans to raise up to Rs 4,500 crore from domestic as well as international markets for meeting its expansion plans in the current financial year.NTPC posted a net profit of Rs 2,110 crore for the second quarter ended September 30, a jump of 9.60 per cent from Rs 1,925 crore in the second quarter of last fiscal.Total income rose by 18.94 per cent to Rs 10,406 crore for the quarter under review, from Rs 8,749 crore in the same period last fiscal.The company's net sales rose to Rs 19,201 crore in the first half of the current fiscal, from Rs 16,976 crore in the year-ago period.

Nifty ends 5% lower on weak global sentiments

Weakness in global markets and lack of investor confidence saw the Indian stock market benchmarks wipe off gains made in last two trading sessions on Wednesday.Markets opened sharply lower, in line with the Asian peers, on concerns of global economic slowdown. Expectations of further cooling in inflation rate failed to cheer the market. Inflation rate for the week ended Oct 11 is seen at 11.35 per cent, lower from 11.44 per cent previous week.

Bombay Stock Exchange’s Sensex ended at 10,169.90, down 513.49 points or 4.81 per cent from Tuesday’s close. The index touched a low of 10,128.22 and high of 10,484.85. National Stock Exchange’s Nifty closed at 3065.15, down 5.25 per cent or 169.75 points. The broader index touched a low of 3051.80 and a high of 3235.75.

Among frontline stocks, Tata Steel (-12.04%), Sterlite Industries (-10.04%), Reliance Communications (-8.79%), ICICI Bank (10.04%), Jaiprakash Associates (-7.88%) and Tata Motors (-7.87%) were the worst hit.ITC (1.04%) and Hindustan Unilever (0.5%) were the only gainers in the 30-share index.Market breadth remained weak through the day, with 1,733 declines and 778 advances on BSE.

Bajaj Auto listed on BSE; Bajaj FinServ on NSE

Bajaj Group on Monday listed two of its companies on the stock exchanges after it was demerged from Bajaj Holdings and Investments.Group Chairman Rahul Bajaj listed two-wheeler maker Bajaj Auto on the Bombay Stock Exchange, while Group Vice- Chairman Madhur Bajaj listed Bajaj FinServ on the National Stock Exchange.

Bajaj Holdings and Investments has 30 per cent stake each in Bajaj Auto and Bajaj FinServ.

Bajaj Auto would continue to launch new models in association with Kawasaki and KTM. It plans to raise its stake in KTM to 30 per cent from 25 per cent in due course of time, he said.

Bajaj said if the government allows higher FDI in insurance then its German partner Allianz has the call option to raise it from the present 26 per cent to 49 per cent in the insurance joint venture.

However, Bajaj said he doesn't see the FDI hike in insurance cap happening now. It would be taken up by the next government in the Centre, the Rajya Sabha MP said.

Nearly 50 brokers register for SLB

Though securities lending and borrowing (SLB) mechanism is yet to register meaningful volumes, almost 50 brokerages have gone ahead and registered with the stock exchanges to be a part of the new market.

Brokerages that wish to participate in SLB are required to enter into separate agreements with both the stock exchanges (BSE and NSE) and deposit a base capital. Interestingly, domestic brokerages have outnumbered their foreign counterparts in being amongst the first ones to register for SLB.

According to people familiar with the development, domestic entities like Edelweiss Securities, Geojit Financial Services, Prabhudas Lilladher, Sharekhan, BRICS Securities, Nirmal Bang Securities, Networth Stock Broking, JM Financial and Religare Securities are some of the entities that have registered for SLB.

Among the foreign brokerages, DSP Merrill Lynch, HSBC Securities, Deutsche Equities and ABN AMRO Asia Equities have taken the lead. The list also includes many niche brokerages like Marwadi Shares and Finance, BLB and MF Global which are well-known in the arbitrage arena.

It is also believed that on an average around four to five brokerages apply for registration every week with the stock exchanges to participate in SLB. However, if the volumes are an indication, it would be some time before SLB starts generating income for these entities.

As per NSE data, since April 21 (when SLB was introduced) only six trades have been reported in the SLB window. On April 21, there were four trades, while Tuesday and Wednesday witnessed one trade each. There were no trades on Thursday in the SLB window. The volume has also been quite low with no more than hundred odd shares being traded every day.

Read more in The Economic Times article.

Morgan Stanley picks up stake in Orchid for Rs 9 cr

Morgan Stanley and Co International has acquired 3.30 lakh shares of Orchid Chemicals at a price of Rs 269.83 each in a bulk deal at the BSE, information available on the exchange showed.

The latest acquisition of Orchid Chemicals shares come on the heels of speculations of its takeover from a Ranbaxy promoter group firm.

Earlier, Solrex Pharmaceuticals, a privately-held firm, picked 14.7 per cent through a slew of block deals in Orchid Chemicals taking it very close to triggering an open offer and making Orchid, in which promoters have less 16 per cent stake, vulnerable to a hostile takeover bid.For the quarter ended March 31, 2008, the promoters held 15.87 per cent stake in the firm.

Sensex Futures to go live in US from April 4

The BSE Sensex Futures will start trading on the US Futures Exchange (USFE) from April 4.It will be the first Asian index futures to go live on the US exchange.The -dollar denominated futures contracts will trade 23 hours a day on the USFE, and will have a notional value of 40,000 index units and the minimum price change would be $5.

For those wishing to invest in Indian equity, the BSE Sensex Futures will be a second option — the other being the American Depository Receipts (ADRs).While the BSE Sensex comprises top-30 shares on market capitalisation, the ADRs are spread across market capitalisations.

Read more in The DNA Money article.

NYSE eyes more stake in MCX, NSE

The NYSE Euronext is betting big on India. Not only does it intend to raise its stake in the National Stock Exchange (NSE) and the Multi Commodity Exchange (MCX) once foreign ownership rules are eased, but it also has plans to partner the two Indian bourses in developing their business.In the years to come, India could be one of the markets where the NYSE Euronext lists its shares, along with China and Japan, which are alos on the radar.

NYSE, a subsidiary of the NYSE Euronext, owns a 5 per cent stake in NSE, while the parent had earlier this year signed an agreement with MCX to acquire a 5 per cent stake in the commodity exchange (Related Story). The MCX deal is expected to be closed by June this year.

Read more in The Business Standard article.

Tata Chemicals to buy US-based co for USD 1 bn

Tata Chemicals Ltd on Thursday said it will acquire US-based General Chemical Industrial Products Inc (GCIP) for over USD 1 billion.The company said it has entered into definitive agreements for acquiring GCIP for 1.005 billion dollar (approx Rs 4,000 crore).

GCIP is a leading producers of soda ash with a capacity of 2.5 million tonnes per annum with manufacturing facilities located at Wyoming, Tata Chemicals said in a filing to the Bombay Stock Exchange.

The US chemical company supplies essential raw materials used in the process of manufacturing range of familiar everyday products, such as glass, soap, powdered detergent, paper, textiles, and even food.Tata Chemicals also said the transaction is subject to the receipt of stockholder and other regulatory approvals.

Bloodbath on Dalal Street, Sensex ends 1400 pts down

Fears of recession in the US becoming a reality saw global indices tumble. The worst to get affected in this mayhem was the Indian market.The bears went berserk on Dalal Street creating panic to such an extent that trading in Bombay Stock Exchange’s benchmark Sensex was halted briefly.

Sensex saw the biggest absolute fall in history by falling 2062 points intra-day. It closed at 17,605.35, down 1408.35 points or 7.4 per cent. It fell to a low of 16,951.50.National Stock Exchange’s Nifty plummeted 8.7 per cent or 497 points to close at 5208.80. It slumped to a low of 4977.10.

NTPC, down 15.07%, was the worst hit, followed by Reliance Energy (down 14.79%), ACC (14.53%), ACC (14.53%), Reliance Communications (13.84%), Grasim Industries (13.19%) and DLF (9.62%).

Bucking the trend, Satyam Computer posted nearly 5 per cent gains after the IT major reported a 29 per cent rise in consolidated third-quarter net profit on continued growth in sales and said it expects a 45-45.2 per cent increase in revenue growth in 2008 over 2007.

UB group ups stake in Deccan Aviation by 3%

UB group has increased its stake in low-cost airline firm Deccan Aviation by almost 3% through market purchases, stock exchange data showed on Wednesday.UB group firm Kingfisher Radio, that runs Kighfisher Airlines, purchased a total of four million shares (2.95%) on Wednesday on BSE and NSE combined at Rs 275 each.Most of the shares were purchased from Money Matters Advisory and Money Matters (India), according to the BSE and NSE data.

With these purchases, Kingfisher Radio and other group companies of UB group have increased their stake to almost 49%.In September, UB group had made an open offer to the shareholders of Deccan Aviation at Rs 155 a share for a 20% stake.Last week, Deccan Aviation had announced it would merge the airline operations of Kighfisher Airlines with it.

HDFC AMC hikes stake in Biocon to 5.15%

HDFC Asset Management Company (AMC) has hiked its stake in Biocon, a Bangalore-based biotech company.The company in a release to NSE, said it has hiked its stake to 5.15% from existing 4.97% through market purchase from Edelweiss Securities executed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

The HDFC Mutual Fund comprising of HDFC Capital Builder Fund, HDFC Equity Fund, HDFC Children's Gift Fund - Investment Plan, HDFC Growth Fund, HDFC Top 200 Fund, HDFC Long Term Advantage Fund, HDFC TaxSaver, HDFC Core & Satellite Fund, HDFC Premier Multi-Cap Fund, and HDFC Long Term Equity Fund has made investments in Biocon.

Deutsche Borse to sell BSE indices overseas

Germany’s Deutsche Börse (DB), which owns a 5 per cent equity stake in the Bombay Stock Exchange (BSE), has been made an exclusive worldwide sales partner for all indices of the Indian bourse. The move opens up prospective trading interest for the domestic indices in European and other Asian markets.

The BSE, which is Asia’s oldest stock exchange, is yet to attract investors’ fancy in derivatives trading in its indices, and the move is aimed to attract more investor interest in its indices, especially from among foreign investors.

At a later stage, this would also help the exchange in activating its derivative segment by luring foreign institutional investors (FIIs) to its products, said its officials. Already, Barclays has an ETF (exchange-traded fund) listed on the Singapore exchange (iShares Sensex), which tracks the BSE’s main index.

The BSE would also get to earn a licence fee from the users of its indices through the latest initiative, said senior officials.

Read more in The Business Standard article.

Ranbaxy to up stake in Zenotech Laboratories

Hyderabad based biotechnology firm Zenotech Laboratories informed BSE that its promoters and Ranabaxy laboratories which presently has a 7% stake in the company have agreed upon increasing the equity stake in company to 45%.Ranbaxy will buy 78,78,906 shares of Zenotech Laboratories held by its promoters. Zenotech will also allot 54,89,536 shares to Ranbaxy on a preferential basis.

A few days back Ranbaxy had acquired Zenotech Laboratories to gain access to the $65 bn market for biotechnology treatments. Zenotech has two biotechnology based cancer treatments in India with another eight being developed.

The acquisition gives chief executive officer of Ranbaxy Malvinder Singh control over research and production of drugs based on generic biotechnology, or living cell-based products, that are harder to make than chemical medicines.

iGate to delist from Indian bourses

In order to create a simpler holding structure, the US-headquartered iGate Corp Wednesday said it plans to delist its subsidiary iGate Global Solutions from the Indian bourses.

The parent holds 80.1% stake in iGate Global and under the Indian listing norms, would need to hike its stake past 90% for delisting.iGate Global stock closed 7% up at Rs 340 on the BSE on Wednesday.On Nasdaq, iGate Corp was down 2%.

Read more in The DNA Money article.

Sebi to allow 30 firms to raise funds quickly

In a bid to encourage Indian corporates raise money domestically, the Securities and Exchange Board of India (Sebi) is in the process of rolling out a package.The package, Sebi chief M Damodaran said, will help corporates raise capital at an advantageous cost and within a shorter timeframe.

The first move would be to announce the framework for fast-track issuances, wherein listed companies with proven track records would be able to raise money immediately after filing with Sebi.The draft of the proposal has been approved by the primary market committee, Damodaran said.

This would be on the lines of the Well Known Seasoned Investor or WKSI model in the US. It’s likely to be introduced by the end of this month.Damodaran said that about 30 Indian companies, which comply with the norms set by the committee, will be allowed such issuances.

According to the draft guidelines issued on August 24, 2007, such companies would have to be listed on the BSE or the NSE for at least three years and must have an average free-float market capitalisation of at least Rs 10,000 crore during the past year.

Ansal forays into power sector with 12 MW wind farm

Realty player Ansal Properties and Infrastructure Ltd today announced its foray into the power sector with the establishment of a 12 MW wind energy farm in Gujarat at an investment of over Rs 72 crore.

The company had amended its objects clause to diversify into the power sector after receiving its shareholders' approval, it informed the Bombay Stock Exchange.

The equipment for the wind farm was sourced from Suzlon Energy. The company also expects to earn 25,000 carbon credit points a year through the project.

Read more in The Economic Times article.