Current news & Rumours in the mkt

[alroyraj]

Consciously didn't counter Vedanta's Cairn offer: ONGC
Press Trust of India / New Delhi September 23, 2010, 14:21 IST
State-run Oil and Natural Gas Corporation (ONGC) today said that it 'consciously' decided not to make a rival offer to Vedanta Resources' $9.6 billion offer to acquire a majority stake in Cairn India.

"Counter offer date is gone. If ONGC did not make an offer, that was done consciously," ONGC Chairman and MD R S Sharma told reporters here.

London-listed Vedanta Resources is buying 40-51 per cent stake of Cairn India from its parent Cairn Energy Plc of UK, that owns the nation's largest onland oil field for up to $8.48 billion.

It is making a further open offer for another 30 per cent stake which will give billionaire Anil Aggarwal-run group a 60 per cent stake in Cairn India.

"ONGC management is fully conscious of its interest and responsibility and has acted in a responsible manner," Sharma said on not making a rival offer to Vedanta's bid.

ONGC, which is a 30 per cent partner with Cairn India in the giant Rajasthan oil field, had claimed that it had preemption or right of first refusal in Cairn India assets, like the Rajasthan block.

Asked if ONGC had waived that preemption right, Sharma said, "I did not say that. All I have said is that we did not make a rival offer by the close of deadline (on September 7) as per Indian capital market regulator Sebi norm."

"That has been a conscious decision considering all legal aspects, considering all commercial aspects and the interest of the company," he said.

Sharma said ONGC will act on the issue keeping the interest and responsibilities of the company in mind.

 

[alroyraj]

ONGC plans to buy 14 rigs for Rs 4,000 cr
Reuters / New Delhi September 23, 2010, 13:02 IST
Indian state-run explorer Oil and Natural Gas Corp plans to buy 14 rigs for Rs 4,000 crore ($877 million) in two to three years, its director of technical services U N Bose said on Thursday.

 

[alroyraj]

JSW Steel targets 16-mn tonnes capacity by 2014

JSW Steel today said it targets to double its production capacity to 16-million tonnes by 2014.

The steelmaker hopes to expand its capacity to 11-million tonnes from the present 7.8-million tonnes by March 2011.


"We have lined-up a capex of Rs 15,000-crore to have a 16-million tonne capacity from 11-million tonnes by 2014. JSW Steel will continue to expand its capacity in the future," JSW Steel Group's Joint Managing Director and Chief Financial Officer, M V S Seshagiri Rao, told reporters here.
"We will expand the capacity of our Vijaynagar plant to 10-million tonnes from present 6.8-million tonnes by March 2011," Rao said.

The company's plant in Tamil Nadu at present has 1-million tonne capacity.

JSW Steel hopes to begin construction of its 10-million-tonne steel plant at Salboni in West Bengal by 2011. "The work on the boundary wall has already started," he said.

The company sees an over 10 per cent consumption in the domestic market and hopes demand would pick-up in the future.

"We expect demand to pick-up in long products now onwards and consumption would be much better in the next six months," he said.

On pricing, JSW Steel's Director (Commercial & Marketing), Jayant Acharya, said, "Steelmakers are likely consider a price hike in October."

Owing to higher international prices and input costs, steel-makers across the board had raised prices in September and JSW Steel hiked prices by 3-4 per cent with effect from September 1.

"Demand from the auto, infrastructure and real estate sectors will continue in the coming quarters," Acharya said.

On the Mining Bill, Rao said, "It is a welcome step by the government. The Bill will help companies to set up greenfield projects."

Last week, a 10-member ministerial panel headed by Finance Minister Pranab Mukherjee arrived at a consensus on the Mining Bill, which makes it mandatory for companies to share 26 per cent of profits from mining with project-affected people. The Group of Ministers (GoM) will meet soon to clear the final draft of the Bill.

The new Bill has proposed that companies share 26 per cent of the profits from mining with locals whose land will be acquired for the project.

 

[alroyraj]

CCI raps DLF, says abused its dominant position
Atanu Kumar Das / New Delhi September 23, 2010, 0:49 IST
Interim restraining order on two Gurgaon housing projects.

In an interim order today, the Competition Commission of India (CCI) said DLF, the country’s largest property developer, had been abusing its dominant position in the market.

It forbade, for the time being, the company from cancelling any allotment of apartments in the two residential complexes in Gurgaon that were the subject of the petition in question before it. Or, from “creating third party rights” by selling, alienating or transferring the apartments and common area and facilities without CCI’s permission.
The order was passed under Section 33 of the Competition Commission Act, saying the developer put “neither fair nor just” clauses in the Gurgaon apartment agreements. An interim order restraining DLF was required, said CCI, as there was likelihood of the allottees suffering “irreparable and irretrievable damage” otherwise.

DLF is under the scanner for alleged abuse of its dominant position by putting “discriminatory and abusive clauses” in the apartment agreement provided to the allottees of the The Belaire and The Park Place luxury apartments in Gurgaon.

The order noted DLF was collecting money from the allottees much before they were provided the apartment agreements. “It is also noted that the agreements were signed by the allottees much after the initial payments to DLF. At that stage, the allottees were not in a position to exercise independent choice in regard to any of the clauses of the agreement, particularly since failure to sign the agreement could lead to loss of significant amounts from the money already paid by them to DLF,” it said.

The petitioners were pleased. “We are happy that all our points were considered by CCI and they have come out with a detailed order, citing how DLF has been abusing their dominant position,” said M L Lahoty, counsel for the petitioners, the apartment allottees. The latter are now planning to file a caveat (a procedure to ensure they are heard before any order is passed) in the Competition Appellate Tribunal, as they expect DLF to seek a review of CCI’s interim order, Lahoty added.

CCI’s own Directorate General, undertaking an independent investigation in the case, is expected to file a report by October 15.

The petition before CCI, filed by Belaire Owners Association, alleged DLF failed to deliver the residential projects on time and put “discriminatory and abusive clauses” in the apartment agreement provided to the allottees. It also says the builder is abusing its dominant position in the market.

Both projects are expected to have a total of 2,072 flats priced between Rs 1.5 crore and Rs 3 crore each, making the apartments worth Rs 4,500 crore to Rs 5,000 crore in all.

 

[alroyraj]

Indian phone networks compliant on BlackBerry: Report

NEW DELHI: Two leading Indian mobile providers have told the government they have upgraded their networks to allow law enforcers to monitor messages sent through BlackBerry smartphones, a report said Thursday.

India last month gave the Canadian makers of the BlackBerry smartphone a 60-day reprieve on a threat to ban its messaging services after the firm agreed to give security forces "lawful access" to data.

Bharti Airtel Ltd. and Tata Teleservices Ltd. have both sent compliance reports to India's Department of Telecommunications confirming they carried out the upgrading work, Dow Jones Newswires reported, quoting unnamed sources.

"The networks were tested by a joint team" consisting of the operator, security agencies and the manufacturer Research In Motion (RIM), one source was quoted as saying.

The sources said the testing reports were considered compliance reports, Dow Jones said.

Under Indian law telecom operators must ensure security agencies can access all services carried on their networks.

The Department of Telecommunications had told mobile operators to give a "compliance report" by Wednesday that their networks had been "upgraded" to allow monitoring of data.

RIM offers its popular BlackBerry services in India through the networks of local mobile phone operators such as Bharti Airtel and Tata Teleservices.

India has been worried the heavily encrypted BlackBerry services such as messenger and corporate email could be used by militants and has asked RIM to come up with tools to allow India's security agencies to monitor those services.

RIM has insisted it is seeking to honour its commitment to be as cooperative as possible with governments "in the spirit" of supporting national security needs while preserving "the lawful needs of citizens and corporations".

 

[alroyraj]

India bribed 72 nations to get Delhi CWG: Report
MELBOURNE: India bribed 72 Commonwealth countries $100,000 each to get the hosting rights for the scandal-hit 19th edition of the Games which will start in Delhi from October 3-14, a media report claimed here on Thursday.

A report in the Daily Telegraph claimed that Delhi pipped Hamilton in the bid after offering huge sums of money to the 72 Commonwealth countries during the final presentation in Jamaica.

The report also said that Australia received a kickback of $125,000 from India.

"Delhi sealed the right to host the Games when their delegates emerged at the final presentation in Jamaica and offered all 72 nations $100,000 (then about $140,000) each for athlete training schemes if they were the successful bidders," the newspaper reported.

"The money, subsequently paid to all nations, was not significant to Australia because it had already decided to vote for India and the payment was not an exceptionally large one.

"But for small nations who have minimal interest in the Games, it clinched their vote and India went on to beat Canadian city Hamilton 46-22 in the final poll. Hamilton had offered the nations about $70,000 each," it said.

Anyway this is the way bids are won in a lovely globalised manner!

 

[alroyraj]

RIL down 3% in 3 days, investors lose Rs 10,856.16 cr

MUMBAI: Extending its losing streak for the third consecutive session, energy major Reliance Industries fell by 1.6 per cent on the Bombay Stock Exchange today, dragging the broader Sensex down by 80.71 points.

Heavy profit-booking caused shares of Reliance Industries (RIL) to fall by 1.6 per cent to Rs 1,002.95 on the BSE, which was the major contributor to the benchmark Sensex's fall.

"The laggardly performance of the stock is driven by heavy profit-booking and dearth of fresh buying by investors," Geojit BNP Paribas Research Head Alex Mathews said.

The Mukesh Ambani-controlled firm had declined by 1.32 per cent to Rs 1,019.25 yesterday. The energy major has shed 3.53 per cent on the BSE in the past three straight sessions, translating into a wealth erosion of Rs 10,856.16 crore and bringing down its market capitalisation to Rs 3,29,200 crore as of the end of trade today.

On the National Stock Exchange, the scrip saw a similar downtrend and closed 2.27 per cent down at Rs 996.90.

However, bucking the overall weak trend in the market, oil and gas major ONGC jumped by 1.82 per cent to Rs 1,426, making it the major gainer in the Sensex pack.

ONGC had yesterday made two discoveries in the Krishna- -Godavari and Cambay basin and notified a gas find in the Vygreswaram Southwest-1 well of the KG onshore to the Directorate General of Hydrocarbons (DGH).

Oil and gas companies ended the day on a mixed note, with BPCL down by 0.13 per cent and Cairn India by 1.83 per cent, while IOC was up by 0.39 per cent and HPCL by 0.41 per cent.

The BSE benchmark Sensex ended today's session on a weak note, shedding 80.71 points to 19,861.01

 

[alroyraj]

Imported gear for mega power projects may attract levy

The Union Cabinet is likely to take up a proposal on Thursday to impose a levy on equipment imports for large power projects. The move is intendedto bridge the duty differential between imported sets, especially gear coming from China, and those manufactured domestically.

The issue was listed twice on the Cabinet agenda in the past couple of months, but a decision has been deferred amid lobbying from user groups in favour of deploying Chinese gear in their projects.

The issue comes at a time when equipment contracts for well over 40,000 MW of upcoming power capacity are estimated to have been placed with Chinese vendors, none of which plans to set up a manufacturing base in the country. Currently, equipment imports attract zero levy under the Centre's Mega Power Policy forthermal projects of 1,000 MW and above.

Panel recommendations

Domestic manufacturers, led by State-owned Bharat Heavy Electricals Ltd (BHEL) and Larsen and Toubro (L&T), have backed a recommendation made by a panel headed by the Planning Commission Member, Mr Arun Maira, that an estimated 14 per cent duty differential faced by domestic firms be bridged for mega and ultra mega power projects .

This was proposed to be done through the levy of a 10 per cent Custom duty and 4 per cent Special Additional Duty.

At a subsequent meeting of the Committee of Secretaries (CoS), the proposal for the levy was diluted in favour of 5 per cent Customs duty, 10 per cent countervailing duty and 4 per cent SAD on import of equipment for mega and ultra mega power projects.

The Power Ministry is pushing for the revised formula , which the domestic manufacturers say would translate into a duty benefit of just the 5 per cent Custom duty alone.

As for CVD and SAD, domestic manufacturer are any way subject to excise duty and sales tax respectively.

Quality concerns

Apart from the duty issue, the Central Electricity Authority had earlier come up with a report on quality concerns raised against Chinese equipment. Private sector players too had detailed some of the glitches they encountered when using the Chinese equipment; but they continued with imports citing faster delivery and lower upfront costs. The Power Ministry too, citing further slippages in an already whittled-down target for the current Plan, has backed the Chinese equipment imports.

The report of the Maira Committee, which had representations from the Power Ministry, the Department of Heavy Industries and the Department of Revenue, was submitted earlier this year. It recommended a a level playing field to domestic manufacturers. Orders should be awarded after factoring in life-cycle costs of Chinese equipment, and not just upfront costs, it has ruled for future award of equipment contracts. The report also flagged an even more important issue — that the over-reliance on Chinese equipment, without access to adequate and rightly-priced spares, could create a serious crisis for the power sector as a whole.

The report also took note of specific instances of underperformance of the Chinese equipment deployed at various plants. These include Vedanta Group-led Balco requesting renovation and modernisation for improving boiler availability for their 540-MW plant within two years of commissioning.

 

[alroyraj]

SAIL, BHEL to team up for making high-grade steel
Posco front-runner as foreign technical partner.
The Heavy Industries Ministry is floating a tripartite joint venture with two public sector units and a foreign collaborator to manufacture cold-rolled grain-oriented (CRGO) steel.

The high-grade steel used in the manufacture of power equipment is currently imported.

While the MoU between BHEL and SAIL is expected to be signed in a week, the choice of the foreign technical partner is still being finalised. Korean firm Posco is expected to be the front-runner for this position.

‘Urgent need'

“With power equipment manufacturers having huge orders, the need for domestic CRGO steel capacity is urgent. We may build a new plant for this, for which we will use 300-400 acres from SAIL's existing facilities. The investment in a new production facility will be around Rs 8,000 crore,” Mr B. S. Meena, Secretary, Heavy Industries, told Business Line. .

He added that besides Posco, the Ministry is also talking to other global players such as Vizstahl from Russia and an Italian steel maker.

Steel industry sources said that SAIL has land in Maharashtra and Jharkhand where such a plant could come up. SAIL is also considering a CRGO procurement deal from the existing SAIL-Posco venture. Earlier, SAIL and Posco had signed an MoU for a 1.5-million-tonne-per-annum (MTPA) steel plant to come up at SAIL's Bokaro facility. Posco will be bringing in its patented FINEX technology for this.

“CRGO steel technology is closely held by a few global players that quote very high prices of around Rs 2 lakh a tonne,” said Mr Meena.

 

[alroyraj]

RIL puts out annual reports of 82 of 96 subsidiaries, still not unravelled many layers

NEW DELHI: It was big, but secretive. It was clever, but complex. That was Reliance Industries Limited (RIL), Indias largest private sector company, when it came to organising its books of accounts and presenting them to the public. Even as it takes a big leap to become more transparent, all those attributes in shades of black, white and grey remain characteristic of RIL.

Earlier this year, for the first time in its 33-year history as a listed entity, RIL made public accounts of 94 of its 96 subsidiaries, posting their annual reports or key financial statements on its website.

These subsidiaries have been a focal point for the company, as it routes a lot of business and investments through them. For analysts, though, it has been a focal point of ire, as RILs disclosure levels on these subsidiaries and intra-group dealings was poor.

That RIL is now making more information though, not all about these subsidiaries public of its own volition is a tick mark on its attempts to become more transparent. Yet, getting to the core of the financial workings of the Rs 2,00,400-crore company remains a complex exercise and nothing short of a full-time job.

Quips SP Tulsian, an investment advisor and a Reliance tracker: It would take more than a year for a team of two or three analysts to make sense of whats happening.

Three equity research analysts from Credit Suisse Sanjay Mookim, Saurabh Mishra and Prashant Gokhale have tried to make sense of this new information. They have, in turn, produced a 51-page report that sheds light, new and old, on RILs accounts and the companys operations in all its size and secrecy, intricacy and ingenuity.

No info on second layer of arms

RIL: Size

RILs annual report, which doesnt give details about its subsidiaries, runs into 220 pages. The website has 94 subsidiary links, one for each RIL subsidiary, and the total number of pages adds up to an immodest 1,704.

http://economictimes.indiatimes.com...nravelled-many-layers/articleshow/6617094.cms