4 NOV, 2010,12.04PM IST,ET BUREAU & AGENCIES
Coal India may find it tough to hold on to gains
NEW DELHI: The world's largest coal producer today listed on the bourses with a handsome premium
and zoomed over 32 per cent, over its IPO issue price of Rs 245 per share, to hit a high of Rs 324.75 in
the first hour of trade on the Bombay Stock Exchange. The total m-cap of Coal India was at Rs 2,03,860
crore in the first hour of session.
Partha S. Bhattacharyya, Chairman & MD, Coal India Limited says, "Many records have been broken and
many peaks have been scaled. For the officials intensely involved in the process, the feeling largely
resembles to that of a mother who has just given birth to a child. Indeed it is a moment of birth in the
capital market that brings in huge responsibility on the management to rear the newborn baby into a
strong and mature turnout by living upto the expectations of the investing community consistently."
The very success of Coal India's initial public offering (IPO) may weigh on it. Many say that gains may
trigger a sell-off among speculators who borrowed money for bids, capping gains.
Gopal Ritolia, Research Analyst, IIFL says, "One year target price is Rs 345 on this stock, so at current
levels, the stock looks fairly priced to us."
"I would look at selling on the listing day if the price goes above Rs 280," says Sandeep Jain who got
shares in the high net worth individual category. Coal India's Rs 15,200-crore IPO, the biggest in the
nation, was subscribed 15 times the offer taking total bids to $54 billion.
Prasad Baji, Senior VP, Edelweiss says, "Technically Coal India's valuation is running not just as a coal
company but since its model is different, it is selling in India where there is an assured offtake and its
pricing will never see a price tag, therefore, it is not typically a commodity play as compared to other coal
Investors included Janus Capital, Fidelity, Franklin Templeton and Capital International. Domestic
investors included State Bank of India , ICICI Bank and Life Insurance Corp. Maximum subscription was
in the high net worth category with subscription of around 25 times. Amit Aggrawal, a financial services
executive who borrowed Rs 9 crore to bid for Coal India shares, says that he would take some profits off
the table at Rs 320 a share. "I may hold back some shares and sell them at a later stage," says Mr
About 195 mutual funds, 48 financial institutions and banks, six venture capital funds, 44 insurance
companies, 484 foreign funds and 1935 corporate bodies own the stock, making it the company with the
fifth largest shareholder base. There are 15.17 lakh retail investors holding up to shares worth Rs 1 lakh
and 444 individuals above it.
It is not only the wealthy traders who flip on listing, some of the institutional investors also have done so
with recent listings, increasing the pressure. A Citigroup entity sold 22.2 million shares of Indosolar, a
Goldman fund sold 3.4 million shares of Orient Green, Merrill in Microsec Financial and Morgan Stanley in
Prestige Estates Projects, regulatory filings show.
But none forecast a dip below the issue price, as the company remains a near monopoly with the 80%
market share and potential to raise prices due to persistent shortage of the fuel.
"We have a target of Rs 325 per share," said Motilal Oswal Securities in a recent note. "Given the 'utility'
model in 'commodity' business, coupled with the characteristics of sellers' market, we believe that CIL will
largely have a linear earnings trajectory and impressive return on equity.''
The positive outlook for earnings in the next few quarter may also lure some investors who did not get
their desired quantity. There would be buyers at every fall.
"There are many retail investors who could not get more than 200 shares including myself who will buy if
the price falls below Rs 280 for long term investment," says ST Gerela, CEO, Satco Securities. "We
expected the share price to go above Rs 300, but that may or may not happen on the first day itself due
to the selling pressure."
Business Daily from THE HINDU group of publications
Friday, Nov 05, 2010
Open India for American goods and US for Indian investments
Visits by key heads of states or international events such as the G-20, seldom pass without big-bang policy
announcements by New Delhi. The US President, Mr Barack Obama's visit to India may prove to be no
exception. However, if civilian nuclear and Defence issues were key points of contention during previous
presidential visits to India, the agenda for Mr Obama visit has been spelt out clearly.
With its own economic recovery faltering, the US is looking to India, one of the fastest growing nations today, to
provide a lucrative market for ‘Made in America' goods and services. It is also looking to create more jobs back
home by pumping up exports to India, or possibly, even by encouraging investments into the US from Indian
investors and companies. This is a dramatic role reversal for India, traditionally the seeker of foreign capital for
its local ventures.
Given the twin objectives of market access and job creation that are likely to dominate this dialogue, what are
the key aspects of financial sector reforms that the US is likely to push for during the visit? Let's consider the
market access aspect first. India has already made considerable headway in allowing foreign investors to make
portfolio investments in its capital market. In recent years, foreign institutional investments into stocks have
been incentivised through simplified procedure, expanded definition of who is allowed to invest, a benign tax
regime, and even a special ‘quota' for foreign investors in primary offers and company placements.
FII funds into debt, too, have been facilitated through manifold expansion in the regulatory cap on such
investments. In just three years — from 2007 to 2010 — the ceiling on cumulative FII investments into
corporate debt has been hiked over tenfold from $1.5 billion to $20 billion, while the limit on Government
securities has been quadrupled to $10 billion.
Seeking consumer markets
With portfolio flows already freed up to a large extent, it is Foreign Direct Investments (FDI) relaxations (along
with removal of trade and tariff barriers) that are likely to be high on the US agenda now, as it seeks greater
access to the Indian market for its home-grown corporations. Though India has relaxed FDI limits in several
sectors over the past three years, it is the infrastructure-related industries that today operate under the most
liberal FDI limits, thanks to their voracious appetite for capital. For instance, current FDI regulations permit 100
per cent foreign investments in power generation, construction, engineering, ports, roads and airports.
However, foreign participation is still subject to tight curbs when it comes to consumer-reliant sectors such as
retail or financial services, which foreign players may see as being even more lucrative. The Government has,
so far, been very cautious on foreign ownership of retail chains (owing to its implications for employment), and
has instead resorted to half-measures such as 51 per cent FDI in single-brand retailing and 100 per cent FDI in
wholesale trade. This effectively prevented large global retail chains such as Wal-Mart, Tesco and Carrefour
from commencing full-fledged operations in India, and grabbing a slice of its ever-buoyant consumer spends.
The proposal to consider 100 per cent FDI in retail was put on back-burner way back in February 2007.
However, this proposal has been revived in the run-up to the Obama visit.
Retailing apart, India's large population of prodigious savers, their huge pool of savings idling in bank deposits
and their expanding affluence makes it one of the most attractive markets for financial service companies in
insurance, wealth management and retail banking. Yet, foreign players enjoy only limited room for manoeuvre
here. Regulations allow wholly foreign-owned mutual funds, but limit foreign investments (under FDI and
portfolio investments put together) in private banks to 74 per cent, and that in insurance companies to 26 per
cent. Foreign ownership of Indian banks is subject to restrictions pertaining to licensing and a cap on voting
Of the three segments, a hike in the FDI limit for insurance, which has been proposed, but not made into law,
appears to the most likely. Given the stringent capital requirements for the business and the recent tightening
of their cost structure, insurance companies are in urgent need of capital infusion to fund their expansion plans.
Higher foreign participation may bring in the required funds. Whether these proposals lead to the inking of a
comprehensive Indo-US bilateral investment treaty, which has been debated on and off for several years now,
remains to be seen.
Along with greater access to Indian consumers, the US is also likely to welcome the rising flow of capital from
India into the overseas markets. Facilitating outbound capital flows is one area on which India has certainly
made significant headway in recent years. In a measure to allow Indian savers to diversify abroad, domestic
mutual funds have been allowed to invest in stocks, mutual funds and exchange traded funds listed overseas,
with the overall limit for these investments raised from $1 billion to $7 billion over the past four years.
The sum that a resident Indian individual is allowed to remit overseas has been raised from a measly $25,000 a
year, to a more generous $200,000 every financial year. Indian companies have been allowed to scale up the
size of their overseas investments or buyouts, too. They are now allowed to deploy up to four times their net
worth in overseas investments, with companies operating in natural resources such as oil, gas, minerals and
ore allowed to venture even beyond these limits. Indian companies have also been allowed to deploy as much
as half of their net worth as portfolio investments in listed foreign companies.
Individual investors have not warmed up to the idea of parking funds overseas in a big way, given that
investments in Indian stocks and bonds have outperformed most other global markets by a long chalk.
However, Corporate India, in contrast, has been quite gung-ho about overseas investments; it has taken
advantage of the easy domestic liquidity and strong cash flows to snap up assets overseas.
A study by Thomson One Banker and E&Y shows that Indian companies sewed up 180 outbound deals worth
a cumulative $8.2 billion with US counterparts over the last four years (leading up to this October). The recent
Reliance buyouts of Atlas Energy and Marcellus Shale, Tata Chemicals' acquisition of soda ash maker General
Chemicals in 2008, are evidence that large Indian companies in the natural resources space are keen to
augment their resources base overseas. The capital that Indian companies can spare for such investments
may not be very large in the context of the American economy or even its corporations. However, India's status
as one of the fastest growing investors in the US, and its ability to create jobs there, may still prove an
important bargaining chip as the two countries sit down to negotiations during Obama's visit.
4 NOV, 2010,01.08AM IST,ET BUREAU
Nigeria willing to raise oil exports to India: Deora
NEW DELHI: Nigeria, Africa’s largest crude oil and gas producer, is expected to increase its oil
exports to India besides supplying liquefied natural gas (LNG), a senior oil ministry official said.
“ Nigeria is our friend and willing to help us in meeting our growing energy requirements,” Oil
Minister Murli Deora said at Petrotech-2010 after a meeting with Nigerian President’s special adviser
Emmanuel O Egbogah. At the bilateral meeting, Mr Deora discussed the possibility of state-
run Gail India and Petronet LNG picking up a stake in the $8-billion LNG project at Brass in the Niger
“We expressed interest in sourcing LNG (on long-term contract) from Nigeria and discussed
possibility of Gail and Petronet joining in a LNG project,” oil secretary S Sundareshan told reporters
on the sidelines of Petrotech-2010, an international oil and gas event held in New Delhi.
State-run Nigeria National Petroleum Corp has a 49% stake in Brass project. French energy major
Total, Eni of Italy and ConocoPhillips hold 17% stake each. India also wants Nigeria to export
additional crude oil to India, Mr Sundareshan said. “Mr Emanuel responded positively and said that
the Indian side should send a formal proposal for government-to-government agreement in this
regard,” he said. The bilateral meet took place on Wednesday, two days after Prime Minister
Manmohan Singh highlighted huge energy demand-supply gap in India at the inaugural session of
India’s energy demand would increase by over 40% in the next 10 years but supply from its ageing
oil-fields was expected to increase around 12%, he had said.
Expressing concerns over the demand-supply mismatch, finance minister Pranab Mukherjee said
the focus of India’s energy policies and bilateral agreements should be on meeting this gap.
India wants to increase its crude oil import from Nigeria, which plans to raise its production to 4
million barrels per day from 2.7 million barrels per day by 2012. India imports around 13 MMT crude
oil from Nigeria annually. According to the US Energy Information Administration January estimates,
Nigeria had 185 trillion cubic feet (tcf) of proven natural gas reserves. The country had exported 500
billion cubic feet (bcf) LNG in 2009. Out of which, the US sourced 13.3 bcf or 3% of its LNG needs
from Nigeria. Main customers of Nigerian LNG were Europe (66%), Asia (15%) and Mexico (16%).
Nigeria is the largest crude oil producer in Africa. Nigerian crude oil is light and sweet and
commands a premium in the international market due to its quality.
Car sales record new high in Oct
Melvyn Thomas , TNN, Nov 3, 2010, 10.57pm IST
SURAT: The diamond city has witnessed the highest ever sale of passenger cars in October this year.
Driven by booming diamond and textile industry and an increase in the consumer spending ahead of
Diwali festival, the city's automobile dealers have posted their best ever monthly sales of over 5,000 units,
beating the last year's sales.
According to the figures gathered from 18 automobile dealers in the city, the sale of passenger cars in the
month of October grew more than 90 per cent to cross 5,000 units compared to 2,400 units in the same
month previous year.
"Passenger car sales in October have been the best and the highest ever attained in a month. Last year,
we had sold 482 units in October month, this year we have sold about 1,000 units," said Jaapan Dave,
general manager of Kiran Motors limited, the authorised dealer of Maruti Suzuki.
According to Dave, the boom in the passenger car sales is fuelled by the increased consumer spending,
easy availability of finance and the introduction of new models. Out of the total car sales in the city, the
market leader Maruti Suzuki has sold more than 2,000 units in October month.
The sale registered by high-end car makers such as Volkswagen, Mercedes, Skoda and Honda in the
month was also impressive. Mercedes sold eight cars, while Volkswagen sold 75, Skota 65, Honda 96
and Ford sold 200 cars.
A senior sales executive of Navjivan Autosquare, an authorised dealer of Volkswagen, said, "There was a
phenomenal increase in the sale of Volkswagen cars in October, as we sold about 75 cars."
With the addition of the 5,000 cars sold in this month alone, the total number of passenger cars in the city
is now pegged at 1.70 lakh.
"October was the best performing month for the regional transport office. While we earned revenue worth
Rs.67 lakh from the auction of the registration numbers, we have also earned a huge amount of money
by registering a high number of cars and two-wheelers," said J N Vaghela, regional transport officer.
First Chinese-made Fire Trucks to be
Delivered in Early 2011
2010-11-01 14:20:54 Xinhua Web Editor: Zheng Zhi
Chinese automaker China First Automobile Works Group (FAW) is poised to begin delivering China's first
indigenously-developed and -manufactured fire truck. The company, based in Changchun City in northeast
China's Jilin Province, will deliver 106 fire engines to five provinces by the end of Feb. 2011, a FAW official said
FAW and the Department of Public Security of Jilin jointly developed the high-end fire truck, said Zhao
Fangkuan, CPC secretary of FAW. In recent years, Chinese fire brigades have purchased over 1,500 fire
trucks annually, either importing them or buying modified ordinary trucks. "FAW fire truck parts, including the
chassis, are specially designed for the fire-fighting mission, and they are much cheaper than imported fire
engines," said Zhao. FAW expects to expand its annual fire engine production capacity to 1,000 units by 2012.
China makes its first indigenous fire trucks
Beijing, Nov 1 (IANS) China has built its first ever indigenous fire trucks and will release these to
the provinces early next year. The country had earlier either imported or modified ordinary
trucks into fire engines.
Chinese automaker China First Automobile Works Group (CFAWG), based in Changchun city in
Jilin province will deliver 106 indigenously-developed fire engines to five provinces by the end of
February 2011, Xinhua reported Monday.
The automaker and the department of public security of Jilin jointly developed the fire truck, said
an official named Zhao Fangkuan.
Chinese fire brigades earlier purchased over 1,500 fire trucks annually, either importing them or
modifying ordinary trucks.
Suzuki, Changhe in talks for new strategic partnership
By Amanda Zheng From Gasgoo.comOctober 25, 2010
Shanghai October 25 (Gasgoo.com) Jiangxi Changhe Automobile, a Chinese automaker that China
Changan Automobile Group acquired from Aviation Industry Corp of China (AVIC) last year, is getting
prepared for a new strategic partnership with its Japanese partner Suzuki Motor, its General Manger Li Li
said in an interview with Beijing Times recently.
Chongqing Changan Automobile, a subsidiary of China Changan Automobile Group, is also planning to
strengthen its cooperation with Suzuki Motor, Li revealed, denying the report that Changhe Suzuki will be
merged into Chongqing Changan Automobile.
Moreover, Li pointed out that restructuring over the past year and utilizing Changan's procurement
platform have helped Changhe achieve cost reductions of 180 million yuan ($27million).
When asked whether Changhe Suzuki tie-up will be ended, Li said the companies talked about the
integration after joining China Changan Automobile Group, but after discussion, executives on both sides
thought the integration conditions are not mature yet, stressing that both joint ventures, namely, Changhe
Suzuki and Changan Suzuki, will in fact coexist on the market.
Executives from the two sides have improved product planning, and will put aside difference, learn from
each other's experience, expand cooperation and enjoy mutual benefits in the future.
29 OCT, 2010,04.58PM IST,PTI
Gems and jewellery exports continue to glitter
NEW DELHI: India's gems and jewellery exports grew by 56 per cent to USD 4 billion in September 2010,
compared to a year-ago period, thanks to the rising demand from markets like the Middle East and US.
The exports stood at $2.6 billion in September 2009, according to the Gems and Jewellery Export
Promotion Council (GJEPC) data. "There is a good demand for gems and jewellery items from the
Middle East and US markets," GJEPC Chairman Rajiv Jain said. Federation of Indian Export
Organisations (FIEO) President A Sakthivel said, gold investment has become more lucrative due to
fluctuating stock markets and lower interest rates.
The UAE is the major market for India's gems and jewellery exports followed by the US and Europe.
Exports of gold jewellery saw a maximum growth of 113 per cent year-on-year followed by non-gold
jewellery 72 per cent and cut and polished diamonds 36 per cent, as per the GJEPC data. However,
coloured gemstones declined by 25 per cent in the period under review.
Besides, there is demand for the Indian products from markets like China and Russia, Jain said.
The exports of the precious items during the April- September period increased by about 46 per cent to
USD 18.8 billion over the same period last fiscal.
Oct 29, 2010 - 8:07 AM
Eight Toronto roads are among the 20 worst in Ontario: CAA
Portion of Steeles Avenue tops this year's Best Roads list, however
Eight Toronto roads are among the 20 worst in the province, according to the Canadian Automobile Association
The CAA released the results of a six-week campaign Thursday, Oct. 28, which named eight city roadways
among the 20 worst in the province.
"For two years running, Toronto streets have dominated CAA's Worst Roads list," Faye Lyons, of CAA South
Central Ontario, said in a release. "Toronto's new city council needs to make fixing these roads a priority."
In a surprise turnaround, Steeles Avenue between Yonge Street and Markham Road was voted the best road
in Ontario. The roadway had the distinction of being the worst for the last two years, though a stretch east of
Markham Road is considered the 11th-worst).
Ontario residents were encouraged to vote online for the worst - and new this year - best roads in the province
during the campaign.
http://economictimes.indiatimes.com/Sun, Oct 24, 2010 | 11.41AM IST
SENSEX 20165.86 -94.72 NIFTY 6066.05 -35.45 INR-USD 45.48 0.94
GOLD (Rs/10g.) 19457.00 44.00
Currency volatility may hit IT cos' profits in
NEW DELHI: Currency fluctuations are likely to dent the profit margins of Indian software
exporters in the coming quarters, as uncertainties persist in the global economy, say
analysts. The country's top three IT players -- Tata Consultancy Services , Infosys
Technologies and Wipro -- were affected by foreign exchange volatility in the September
quarter this fiscal and their profit margins took a hit. During Q2 FY11, July-September
period, the rupee gained over three per cent against the US dollar, to touch about Rs 45.
This year, the rupee has strengthened more than five per cent against the greenback.
"The appreciation of the rupee against the US dollar is likely to hit the profitability of IT
companies in the coming quarters. Many players have raised this concern while coming out
with their September quarter numbers," CNI Research CMD Kishore P Ostwal said.
Country's top software exporter TCS, which posted a better-than expected 32 per cent
growth in the September quarter with a net profit at Rs 2,169 crore, raised concerned over
the appreciating rupee. The company recorded Rs 47-crore foreign exchange loss in Q2. It
would be a "big headwind" in the next quarter for the company, TCS said.
Similarly, the country's third-largest software exporter Wipro incurred forex loss of Rs 41.4
crore during Q2 and raised concerns about the macro-economic environment. Although
Infosys did not report a forex loss in Q2, its Chief Financial Officer V Balakrishnan cautioned
that the rising rupee would "kill exporters" unless the Reserve Bank of India steps into the
Balakrishnan said the company was facing uncertainties related to economic situation,
currency and labour market. Overall, software exporters saw a significant spurt in Q2
revenues, mainly because of new clients. Some analysts said, however, that currency
fluctuations would remain until there is significant recovery in the global economy.
Against the backdrop of sluggish economic conditions, and availability of cheap money in the
US, the dollar has in fact taken a beating in the recent times, said one analyst. He said a
stable exchange value for the domestic currency is vital for software exporters, as many of
them earn a big chunk of their revenues from the US.
ADAG plans Rs 75,000-cr investment
Shashikant Trivedi / Khajuraho October 24, 2010,0:51 IST
The Reliance Anil Dhirubhai Ambani Group (ADAG) today said it would scale up its quantum of investment in
Madhya Pradesh to Rs 75,000 crore from Rs 50,000 crore over the next five years in sectors like power and
“If it is translated in terms of per hour investment, within the last two hours, we have invested Rs 5 crore. This is
our commitment. We are investing Rs 60 crore per working day,” Group Chairman and Chief Executive Officer
Anil Ambani said while delivering the keynote address at the concluding ceremony of the two-day Khajuraho
Global Investors Meet –II here. These investments would create 0.1 million jobs in the state, claimed Ambani.
Giving details about the slew of projects the group had chalked out, he said the group’s two power plants in the
state would have a combined capacity of 12,000 megawatt (Mw).
Reliance Power, an ADAG arm, is developing a 4,000-Mw coal-based ultra mega power projects at Sasan and
another plant of similar capacity at Chitrangi in Singrauli district.
The group would develop India’s largest private sector mine in the state, with a production capacity of 25 million
tonnes of coal per annum.
Ambani said they had decided to increase the capacity of their proposed cement plant in Chitrangi to 20 million
tonnes from 10 million tonnes. “Considering the large coal fly ash to be generated from these power plants, we
will convert limestone and fly ash into high-class cement, and with the support of the state we are ready to
double the capacity of our proposed cement plant from 10 million tonnes to 20 million tonnes,” Ambani said.
Bangladesh wants 'quota' in Indian cotton export
Dhaka, Oct 22 (IANS) Bangladesh will demand a separate quota in India's
export of raw cotton to ensure adequate supply for its garment sector, the
prime foreign exchange earner of the country, in view of rising prices.
'We'll demand a separate quota for raw cotton during the bilateral trade
talks with India,' the Daily Star newspaper Friday quoted Commerce
Minister Faruk Khan as saying.
Khan is currently in New Delhi leading a 23-member business delegation.
The cotton price has reached its all-time high up to $1.19 a pound in the
international market this month, which troubles Bangladesh and China --
the two countries that depend on cotton imports for their textile industries.
Bangladesh textile industry experts say that crop damage by floods in
Pakistan, the world's fourth largest cotton producing country, and a
restriction put by the Indian government on its cotton exports have led to
the price spiral.
Khan said Bangladesh wants to settle the cotton supply issue with India so
that the country remains 'immune' to any Indian ban on the commodity's
export, the newspaper said.