NYSE Euronext May Be First To Invest In Idrs

MUMBAI: Indian Depository Receipts, the revised guidelines for which were formulated in mid-2007, have found no takers so far. It may just turn out that NYSE Euronext, the world’s largest exchange group, will be one of the first to make use of this listing window available in India, for overseas companies.

NYSE Euronext chief executive officer Duncan L. Niederauer said he could potentially list the exchange’s stock in other markets where companies listed on his exchange wanted to go.

“It wouldn’t shock me if US or European companies listed on NYSE Euronext have aspirations to list their stock in Asia, one of the hottest markets these days. We, as an exchange, can potentially list our shares in those markets in order to show the way to our companies, but there’s nothing imminent,” said Niederauer.

NYSE Euronext is currently listed on Euronext in Paris and New York Stock Exchange. It in turn has nearly 4,000 companies listed on it, across the six countries in which its family of exchanges is located.

“India, China, Japan and some ASEAN countries could be potential markets for our companies, and if our customers want help there, that can steer us as well,” said Niederauer, who visited Malaysia and Singapore before coming to India. This is Niederauer’s first trip to Asia after taking over as CEO of NYSE Euronext in December, following predecessor John A. Thain’s move as chairman and chief executive officer of troubled US investment bank Merrill Lynch.

“I treat this trip as an opportunity to do due diligence of these markets,” said Niederauer, who also has meetings lined up with National Stock Exchange (NSE) and Multi Commodity Exchange of India (MCX), in which NYSE Euronext has a 5% stake each.

“We’re not here to buy up exchanges. We’re here to forge alliances with them. We run a huge technology platform that could help many exchanges in the region (Asia) tide over their capacity issues. And we are open to only partner in technology initially, and maybe later translate that into an investment,” said Niederauer.

On when the NSE listing will take place, Niederauer said, “That’s Ravi’s decision.” Ravi Narain is the chief executive officer of NSE.

“Historically, stock exchanges were considered nationalistic utilities. However, now that their nature has changed to a dynamic industry, where there is rapid consolidation, it’s best to position them differently. It’s necessary that they have a public currency. If Ravi asked me, I would encourage him to list the exchange,” said Niederauer.

Bharat Forge To Open Manufacturing Facility In Baramati

Mumbai: Forged and machined components manufacturer Bharat Forge inked a memorandum of understanding with the Maharashtra Government on March 27 for opening a centre for advanced manufacturing facility at Baramati. The centre, spread over 100 acres, will be opened at an investment of Rs 350 crore. With a forging capacity of 30,000 tpa, the plant will manufacture crankshafts for marine and power, landing gear, engine and structural parts for aircraft and helicopters, connecting rods for locomotives and equaliser bars, spindles and other heavy components for machines used in construction activity. The company had a strong global presence and any automobile would have at least two components made by it. The facility was the first major project outside Pune and the company was positive of strengthening Baramati''s position as a fast growing industrial centre.

Fiat To Increase Ranjangaon Capacity

Mumbai: Fiat India Automobiles Pvt Ltd, a 50:50 joint venture between Fiat Group of Italy and Tata Motors, has decided to increase its production capacity at its greenfield plant at Ranjangaon near Pune. FIAPL will be infusing an additional Rs 2,341 crore over and above the on-going investment of Rs 1,679 crore. With a total investment of Rs 4,020 crore, the Ranjangaon facility will now manufacture two lakh cars, three lakh engines and three lakh related parts and accessories. FIAPL on March 24 inked a MoU with the Government of Maharashtra to increase the production capacity and for backward integration at its Ranjangaon plant. The joint venture company will be manufacturing cars, engines and transmissions for both the partners.

Fiscal Report: Investors Gaining Only On Half Of Portfolio

Mumbai: If stock market be considered a game of snakes and ladders, there has been almost one snake for every ladder in the current fiscal, which is about to end with just six days of trading left.

On the face of it, this might appear to be an even score, but it means that an investor who entered the the beginning of the fiscal has suffered losses on one stock out of every two purchased.

According to an analysis of market values of close to 2,360 companies that were listed on the bourses at the beginning of the current fiscal and whose shares are still being actively traded, the market value has taken a hit or remain almost unchanged for nearly half of them.

While close to 1,100 companies have seen their market capitalisations actually dropping from the levels at the beginning of the current fiscal, that of more than 150 companies are almost unchanged from those levels.

The analysis does not include companies that were listed on the bourses during the fiscal through IPOs, de-merger or as part of other corporate decisions. There were close to 2,500 stocks being traded actively at the beginning of the current fiscal, while the number has grown past 2,700 at present.

Besides, the list of the prominent losers in the course of the current fiscal includes blue-chips like TCS, Infosys, Wipro, Satyam, Tata Motors, Hindustan Zinc, HCL Technologies, M&M, Cipla, Dr Reddy's Labs and Indian Hotels.

Together, 1,101 companies have lost close to Rs 2,62,000 crore since the beginning of this fiscal. However, the total gains registered by the remaining companies stand at about Rs 14,00,000 crore, mainly due to huge gains recorded by blue-chips like Reliance Industries, ONGC, NTPC, Bharti Airtel and SBI

Maruti Suzuki To Infuse Rs 9,000cr More

Mumbai: Maruti Suzuki India Limited (MSIL), the leading car maker in the country, will pump in Rs 9,000 crore more in India, most of it in research and development (R&D), warehousing, marketing, logistics and design. The company has already set aside a corpus of Rs 9,000 crore, which will be used primarily to enlarge production. MSIL will infuse Rs 9,000 crore in India which will be over and above the earlier investment programme announced by the chairman (Osamu Suzuki) last year. The investment will cover its other round of expenses for opening a world class R&D and design facility, improving warehousing facilities and marketing channels, upgrading our logistics support and similar ventures, which will improve the company''s overall business presence in India. The company is planning to open giant regional warehouses, which will cater to sectoral markets in each of the distribution zones.

Larsen & Toubro To Ramp Up Manufacturing Capacity

Mumbai: Engineering and construction company Larsen & Toubro Ltd said that it is all set to ramp up its manufacturing capacity of super-critical boilers and super-critical turbine generators to 4,000 MW per annum.

Super-critical boilers and turbines are integral components of energy efficient, coal-based power plants. The company will manufacture and market the critical components for large power plants through two separate joint ventures with Mitsubishi Heavy Industries (MHI) of Japan. L&T holds 51 per cent in the JVs with MHI holding 49 per cent. The joint ventures will have an investment of Rs 1,500 crore, an L&T release said.

The project had begun at the existing facilities in Hazira last year and two new workshops have been constructed. To further add capacities by 4,000 MW, the new dedicated facilities will come up at Hazira.

L&T has developed capabilities to become a single-point solution provider for the power sector. The company is engaged in total EPC contracts for power projects as well as manufacture of complete condensing and feed heating systems for power projects.

L&T-MHI will have product configuration catering to super-critical power plants, ranging between 500 MW and 1,000 MW. The engineering design centre for the boilers is based in Faridabad, near New Delhi, and that for steam turbines in Vadodara, Gujarat.

The new fabrication and manufacturing facilities will be an extension of present complex. The foundation stone for the upgraded facility was laid at Hazira on Wednesday in presence of A.M. Naik, Chairman and Managing Director, L&T, and Ichiro Fukue, Representative Director, Mitsubishi Heavy Industries Ltd.

Institutional Investors Must Pay Margins: SEBI

Mumbai: Institutional investors will now have to pay margin on their share transactions in the cash segment from April 21, in the same way as applicable to other investors, the Securities and Exchange Board of India said in a circular issued on Wednesday.

SEBI also operationalised short selling and securities lending and borrowing from the same date, April 21. It had specified the broad framework for this in December 2007 but had not operationalised it, pending clarifications from the tax authorities.

Currently, margin payment in cash transactions is applicable to retail investors and to those who do proprietary trading. It is a percentage of the value of the stocks that investors have to pay upfront upon placing their order with their brokers.

This is being done “in order to provide a level playing field to all the investors in the cash market as in the case of the derivatives market,” said SEBI.

While some market players thought that this margin prescription for institutions was done keeping in mind the current fragile health of several financial institutions worldwide, sources close to SEBI said that the measure was thought about a long time ago.

This must be seen in the context of short selling and securities borrowing and lending being made operable from April 21, said a source close to SEBI.

“This has been done for greater balance and integrity in the markets,” he said. “With short selling we are encouraging a converse view of the market, and we feel that margins for cash trades provide a balance.”

“There is a fear that people may go berserk with short selling and exceed their limits,” he added.

All institutional trades in the cash market would be margined on a T+1 basis with margin being collected from the custodian upon confirmation of the trade, said the SEBI circular: “Subsequently, with effect from June 16, 2008, the collection of margins would move to an upfront basis.”

The stock exchanges shall issue the necessary guidelines in this regard and shall put in place the necessary systems said SEBI.

“Institutional investors will now have to make arrangements to pay margins. From a broker’s perspective it would be like handling retail trades and paying margin money to the exchanges. If brokers can collect money from custodians there is no extra cost, it is only an increase of administrative work,” said Anita Gandhi, head of institutional business at Arihant Capital Markets.

There could be a slight decrease in volumes, but in any case the margin money will be released on the T+2 date, said an official at a mutual fund.

Short selling by institutions resuming next month will help deepen and broaden the market, said analysts. Short selling had been banned by the regulator in the wake of the Ketan Parekh scam in 2001.

Short selling refers to the sale of stocks which the seller does not own at the time of selling.

Maharashtra Inks Agreement With Cummins For Unit In Satara

Mumbai: The Maharashtra Government has tapped Rs 1,776 crore in the latest round of investments. On March 15, seven memorandum of understanding were signed by the Industries Department for opening diverse manufacturing facilities in the State, which will come up in the next three years. Over last the three years, the State Government, which has attracted an investment of Rs 1.14 lakh crore, has cleared 93 mega projects. The Maharashtra Chief Minister, Mr Vilasrao Deshmukh, said that the majority of investments were coming up in relatively backward districts such as Aurangabad, Nagpur and Satara. Cummins group inked three MoUs with a total investment of Rs 900 crore. The group would be setting factories in 150-acre area near Phaltan, Satara for producing engines for trucks and buses and generator sets.

Jindal Stainless To Make Investments In Proposed Units

Mumbai: Jindal Stainless Ltd said on Thursday it would invest up to Rs 500 crore over two-three years in a wholly-owned unit it would set up in India.

The company would also invest up to $100 million in another wholly-owned unit planned in Singapore, it said in a statement.

Mastek Acquires US-Based Systems Task

Mumbai: IT solutions vendor Mastek Ltd has bought Systems Task Group (STG) International a provider of enterprise solutions for the property and casualty (P&C) insurance industry in an all-cash consideration of $29 million (Rs 116 crore). The take over will enable Mastek, which has a strong presence in the life and annuity segment of the insurance business, to gain a foothold in the P&C insurance space. As per Celent Research, IT spending by P&C insurers is expected to cross $20 billion by 2010 from $16 billion in 2007. STG''s contribution will be reflected in Mastek''s consolidated performance partly in fiscal 2007-08 and fully in fiscal 2008-09.

SCI To Put In $800 M In Shipyards

Mumbai: Shipping Corporation of India may put in $600 million to $800 million in shipyards, the source said. As per the National Maritime Development Programme, the Government had indicated construction of two shipyards on the east and west coasts. While Ennore Port is responsible for the east coast, Mumbai Port has been entrusted with the responsibility of the west coast shipyard. Looking at a joint venture set-up, SCI is likely to finalise its partner in the next few months.

Prakash Inds To Spend Rs 2,400 Cr To Commission Plant

Mumbai: Prakash Industries, steel manufacturer, has decided to commission a 600 mw thermal power station in Chhattisgarh with an investment of about Rs 2,400 crore. The company has signed a memorandum of understanding with the state government in this regard. The project will be operational within four years and will be financed through a mix of equity and debt. Prakash Industries would benefit from this project as the state government would facilitate in the allotment of captive coal block for the project and Prakash Industries would be entitled to distribute the power through Power Grid Corp, any other grid lines or its own dedicated lines.

Deutsche Bank Arm Acquires Stake In Golden Gat

Mumbai: Deutsche Bank''s global alternative investment management business RREEF has made its first real estate investment in India. RREEF has almost concluded the purchase of an undisclosed stake in Bangalore and Hyderabad-based real estate development company, Golden Gate Properties, for $70 million (Rs 273.5 crore). Golden Gate Properties is an integrated real estate development company and it has to date a portfolio of 10 completed projects - 8 residential apartment developments and 2 commercial projects in established neighbourhoods within Bangalore and Hyderabad.

The company was advised by Fortune Financial in this transaction. Golden Gate is also in the process of building 20,000 units across 9 projects with a built-up area totalling 23 million square feet. It also has plans to build mixed-use developments and Special Economic Zones (SEZ) across south India.

FDI In Metlife Likely To Cross 26%

Mumbai: GS Strategic Investments, a subsidiary of Goldman Sachs, is purchasing a 39.36 per cent stake in M Pallonji Enterprises Ltd (MPEL), which owns a 10 per cent stake in Metlife India Insurance Company. Metlife India is 74 per cent owned by Indian companies and 26 per cent by US-based Metlife. One of the promoters of Metlife India, the M Pallonji group, has accorded to divest a 39.36 per cent stake in its subsidiary MPEL to the Goldman Sachs unit, which indirectly gains a 3.9 per cent interest in Metlife India Insurance Company. Though FDI in insurance companies is capped at 26 per cent, the Insurance Regulatory and Development Authority (IRDA) does not take into account stakes held by foreign entities in the Indian promoter of an insurance company as long as the stakes are not held by the foreign partner in the insurance company itself. The decision to sell a stake by the M Pallonji group to Goldman Sachs was taken to augment capital flow to Metlife India Insurance Company. The promoters about a month ago invested Rs 350 crore of capital in Metlife India to take its total paid up capital to Rs 1,230 crore.

Vedanta Resources Plans To Invest $12.5bn

Mumbai: The metals and mining company Vedanta Resources to infuse about $12.5 billion to speed up its business growth. It is targeting at increasing production capacity for each of its primary metals such as aluminium, copper, zinc and lead to one million tonne per annum. Apart from this, it also intends to increase its iron ore production to 20 million tonnes. On the power generation front, the company plans to set up commercial power generation capacity of close to 10,000 MW in the next few years. The Vedanta Group''s business partnership summit brought together its vendor partners, entrepreneurs and industry experts in the metals and mining sector on a single platform. An aluminium technology park in Chhattisgarh has been conceived with the support of the Chhattisgarh government, where entrepreneurs will establish downstream product units such as extrusions, castings and PP caps.

Great Offshore Near To Rs 2,000cr Overseas Acquisition

Mumbai: Great Offshore Ltd (GOL), the Mumbai-based integrated offshore oilfield services company, has made an offer to buy a controlling stake in an unnamed overseas company. The deal size is hoped to be over $500 million (around Rs 2,000 crore). The overseas company will own two semi-submersible drilling rigs that are estimated to cost around $1.40 billion. Motilal Oswal Investment Advisors was the advisor and Luthra & Luthra the legal advisor for the transaction. GOL was looking at taking over oil rigs and stakes in oil rig companies for sometime. GOL is eyeing at supplying rigs to these firms.