Mutual Funds News 22 feb 2008

Mutual Funds News 22 feb 2008

ICICI MF declares dividend

ICICI Mutual Fund has announced 27 February 2008 as the record date for declaration of dividend under dividend option of ICICI Prudential Monthly Income Plan Quarterly and Half Yearly Frequencies and ICICI Prudential Gilt Fund- Treasury Plan-Quarterly Frequency.

The quantum of dividend is as follows:

Scheme name	Amount of dividend per unit (Rs)	Rate of dividend	NAV as on 20 February 2008 (Per unit)	Face value
ICICI Prudential Monthly Income Plan Quarterly Frequency	Re. 0.25	2.50%	Rs 12.1520	Rs 10
ICICI Prudential Monthly Income Plan Half Yearly Frequency	Re. 0.50	5%	Rs 12.1651
ICICI Prudential Gilt Fund- Treasury Plan-Quarterly Frequency	Re. 0.15	1.50%	Rs 10.8581

ICICI Prudential Monthly Income Plan Quarterly and Half Yearly Frequencies is an open-ended scheme. The investment objective of the scheme is to seek to generate regular income through investment in fixed income securities.

ICICI Prudential Gilt Fund- Treasury Plan-Quarterly Frequency is also an open-ended short-term gilt fund, with an investment objective of generating regular income through investment made in gilts.

Principal PNB MF declares dividend

The Principle PNB mutual fund has announced the declaration of dividend under dividend option of Principle Personal Tax Saver Fund. The record date for dividend will be 26 February 2008.

The quantum of dividend is 200% i.e. Rs. 20 per unit on the face value of Rs. 10. The NAV of the scheme was recorded at Rs 170.44 as on 20 February 2008.

Principle Personal Tax Saver Fund is an open-ended equity linked savings scheme, whose investment objective is to provide long-term growth of capital. It aims to achieve a return on assets in excess of the performance of BSE 100 Index.

Principal PNB MF unveils FMP Series

Principal PNB MF has announced the launch of Principal Pnb Fixed Maturity Plan 460 Days - Series IV and it is a close-ended scheme. The primary objective of the scheme is to build an income-oriented portfolio and provide returns along with regular liquidity to investors. The fund will invest up to 0%-100% in debt securities (including securitized debt) and money market instruments. It will have investment of 0-100% in government securities. Investment in securitised debt may be up to 100% of the net assets of the scheme.

Reliance MF files an offer document with SEBI

Reliance MF plans to launch Reliance Fixed Horizon Fund - IX and it is a close-ended income scheme. The scheme offers 12 Series with different maturity. The offers under Series 1 to 4 having 15 to 18 months duration, Series 5 to 8 having 18 months 1 day to 21 months and Series 9 to 12 with maturity period 21 months 1 day to 25 months.

The primary investment objective of the scheme is to seek to generate regular returns and growth of capital by investing in a diversified portfolio of central and state government securities and other fixed income/ debt securities normally maturing in line with the time profile of the series with the objective of limiting interest rate volatility. The scheme will invest 0-70% in money market instruments. The scheme will invest 30-100% in government securities issued by central and/or state government & other fixed income/ debt securities including but not limited to corporate bonds and securitised debt. Debt securities will also include securitized debt, which may go up to 100% of the portfolio. The average maturity of the securities will be in line with the maturity profile of the scheme.

JM Financial ML MF declares dividend

The JM Financial ML Financial mutual fund has announced the declaration of dividend under dividend option of the regular and institutional plan of JM ML Fixed Maturity Fund -Series VI- Quarterly Plan 5. The record date for dividend will be 25 February 2008. The AMC plans to distribute realized appreciation in the NAV of the plan / option from 27 December 2007 till the record date as dividend. The NAV of the scheme was recorded at Rs 10.1238 under regular plan and Rs 10.1314 under institutional plan as on 19 February 2008. JM ML Fixed Maturity Plan -Series VI- Quarterly Plan 5 is a close-ended income scheme, whose primary investment objective is to seek to generate regular returns through investment in fixed income securities normally maturing in line with the time profile of the respective plan.

Fund houses woo Aussies to put money in Indian market

Global funds are tapping the large Australian retail investor base to invest in the Indian stock market, which has grown 40%-plus annually in the last three years.

Two funds one from Kotak Mahindra Bank and another from Fidelity have already tapped Australian retail investors. Now, according to Rashmi Hansi Mehrotra, the principal business leader for investment consulting at Mercer, adviser to the worlds largest funds, a third fund will soon tap the Australian retail market for investing in the booming Indian equity markets.

Kotak Mahindra collected $69 million last year through India Equity Fund, which rose by 45% in value $100 million as of December 2007.

The other fund that collected money from Australian retail investors is Fidelitys Fiducian India Fund. There is a big retail investor market waiting to be tapped.

Australia is the fourth largest retail market with 25 million people. The rule that 9% of salaries of Australian investors should be locked in superannuation schemes till 65 years forces them to invest in attractive markets like India.

Fidelitys Fiducian India Fund is a blended portfolio of stocks selected by two Indian fund managers, State Bank of India Funds Management and Sundaram BNP Paribas Asset Management. SBIFM focuses on large-cap stocks, while Sundaram focuses on mid-cap stocks.

Indian stock markets have all kinds of investors, including offshore hedge funds, endowment funds and pension funds.

Wall Street banks such as Citigroup, Merrill Lynch, Fidelity, Goldman Sachs, Morgan Stanley, among others, raise funds for India from their overseas clients. They are also managing funds of their Indian clients through the private banking business.

Birla Sun Life MF declares dividend

The Birla Sun Life mutual fund has announced the declaration of dividend under dividend option of Birla Sun Life Interval Income Fund- Quarterly Plan-Series I for its both retail and institutional plan. The AMC plans to distribute 100% of distributable surplus as on record date on the face value of Rs. 10. The record date for dividend is set as 26 February 2008.

The NAV of the scheme was recorded at Rs 10.2060 under retail plan and Rs 10.2085 under institutional plan as on 20 February 2008.

Birla Sun Life Interval Income Fund- Quarterly Plan-Series I is an interval income scheme with an objective to generate regular income through investments in debt and money market instruments. It may not charge an entry. The scheme may charge 0.50% an exit load for redemption before date of maturity.

ING MF declares dividend

ING India Mutual Fund has announced 27 February 2008 as the record date for declaration of dividend under dividend option of ING Fixed Maturity Fund-Series XXX. The AMC plans to distribute entire appreciation in the NAV of dividend option from the date of allotment to 27 February 2008 as dividend. The NAV under retail plan is Rs 10.1549 as on 20 February 2008.

ING Fixed Maturity Fund-Series XXX is a close-ended scheme offering an investment plan of 92 days maturity, investing in a portfolio of government securities, or highly rated corporate bonds maturing close to the maturity of the scheme so as to generate returns comparable with alternative fixed income instruments of similar maturity.

Principal Pnb MF extends NFO period for FMP

Principal Pnb mutual fund has extended the new fund-offering (NFO) period of Principal Pnb Fixed Maturity Plan 460 Days - Series IV from 21 February 2008 to 4 March 2008.

Principal Pnb Fixed Maturity Plan 460 Days - Series IV is a close-ended scheme. The NFO price for the fund is Rs 10 per unit. The minimum investment amount under regular plan is Rs 1000 and any amount thereafter. Under institutional plan, the minimum investment amount is Rs 50 lakh and any amount thereafter.

The primary objective of the scheme is to build an income-oriented portfolio and provide returns along with regular liquidity to investors.

No entry load will be charged during the new fund offer of the scheme. The scheme may levy 1% an exit load on redemption of investment from the date allotment to 400 days. The scheme may not charge an exit load for redemption from 401st day to maturity.

Satyam Computer Services loses by 2.44%

Share prices of Satyam Computer Services went down by 2.44% to Rs. 447.00 reported at BSE at 10.54 a.m. on 22 February 2008 against previous day close of Rs 458.20.

Declining share prices may have negative impact on NAV of mutual fund schemes, which holds their stake in the company. Franklin India Taxshield 99 is likely to lose as it has the highest percentage hold of the stocks of the company compared to its peer groups who have invested in the stocks of the company. Franklin India Taxshield 99 has 14.17% of its total portfolio size invested in the stocks of the company as on 31 January 2008. The scheme holds 16280 units of the company in January 2008 compared to its peer groups who have invested in the stocks of the company.

Other schemes, which may affect includes Franklin Infotech Fund - (G) with 3.47 lakh units (10.66% of its portfolio), UTI-Software Fund (D) with holding of 2.00 lakh units (10.27%) as on 31 January 2008.

Mirae Asset MF appoints new CFO

Mirae Asset mutual fund has appointed Mr. Wan Youn Cho as the Chief Financial Officer with effect from 14 February 2008. Mr. Wan Youn Cho has 12 years of work experience in the field of financial services. He is responsible for the overall financial functions of the Company. Prior to this assignment, Mr Cho was Head of Trustee Division with Mirae Asset Securities Company. He has also been associated with organizations like Samsung Securities Company, Seoul and Boram Bank.

He has done Business administration from Seoul.

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Markets on 22nd Feb 2008

Markets on 22^nd Feb 2008

Markets end in red on the back of weak global cues

The markets opened in the negative on the back of weak global cues and remained in a range for the rest of the session. They finally closed near the lows of the day. While the Sensex was down 385.61 points or 2.17% at 17,349.07, the Nifty lost 81.05 points or 1.56% to close at 5110.75. Broadmarket indices also fell but to a smaller extent as the BSE Midcap and Smallcap indices lost 0.97% and 1.01% respectively. The market breadth was negative as A/D ratio was 1:2 on the BSE. NSE cash turnover was Rs.10201.49 cr vs. Rs. 12193.69cr yesterday.

Sectorally, barring the BSE Consumer Durables and Healthcare indices that ended flat, all the other BSE Indices ended lower. The biggest losers were the BSE IT and Bankex which lost 3.06% and 3.14% respectively. Gainers from the index pivotals were Cipla, Hindalco and Maruti Suzuki. Major losers were Bajaj Auto, HDFC Bank, Satyam Comp, ICICI Bank and Infosys.

With the Nifty closing near the 5100 support levels which also correspond to the 200 day EMA, Monday’s trading session would be crucial. A close below these important supports could lead to a sharp fall and a testing of the 5000 and 4800 supports. We continue with our go slow approach on fresh long positions.

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Industry News 22 Feb 2008

Industry News 22 Feb 2008

Bihar's first step in software export

In the news for many a positive change, Bihar is set to add another feather to its cap in the form of its first software technology park (STP). Located in Patna, the park 49th of its kind in the country will have facilities to accommodate around ten small and medium level software firms. Chief minister Nitish Kumar will inaugurate the park on Feb 22 at a function which will also be attended by Union minister of state for communication and information technology Shakeel Ahmed. A team of senior officials of the Software Technology Park of India (STPI), including director (east) P K Das and New Delhi-based senior director Omkar Rai reached Patna on Feb 21 to supervise the preparations for the inauguration. Earlier the state had just one regulatory office of the STPI and software exported from Bihar were routed through the STP located in Bhubaneswar.

The building of the park has already been completed and additional facilities would be in place within a month's time. "Though this park can accommodate only small and medium level software firms, it can provide a launching pad to entrepreneurs for setting up larger firms," Patnaik added. He hoped the park would not face much problem as far as optimum utilisation of the facilities is concerned since Bihar has as many as 11 registered software export firms.

Bank of Baroda cuts prime lending rate by 50 bps

State-run Bank of Baroda said on Friday it had cut its prime lending rate by 50 basis points to 12.75 per cent.

The reduction, to be effective from February 27, is aimed to stimulate demand for consumer and investment credit in a slowing economy, it said in a statement.

SBI and Canara Bank cut their rates by 25 basis points each while Bank of India and Union Bank of India cut rates by 50 basis points each. Ahead of the news, shares in Bank of Baroda ended 0.71 per cent down at Rs 377.50 in a weak Mumbai market.

No hike in power tariff in capital this year

With an eye on the forthcoming assembly polls, Delhi government today decided not to hike power tariff this year.

The government also decided to enforce the proposed subsidy on power to domestic electricity consumers from April one.

The Minister said the proposed subsidy for all domestic consumers of electricity up to 200 units per month during peak winter and summer months declared last year would be enforced from April one.

Fake CVs: Firms increase check points

With candidates of questionable background swamping the job market, enterprises are now beefing up their security thresholds by adding more layers to the hiring process.

A number of players, including big ones like KPMG and Hong Kong-based Quest Research, have stepped in to make the recruitment procedure for companies more stringent with compulsory pre-employment screening, background checks, including criminal record checks and credential validation and verification.

Fed's rate cuts force Asia back to control regime

Ben S Bernanke, the champion of free markets, is driving Asia’s governments back to controlled economies. Under Bernanke’s chairmanship, the Federal Reserve’s steepest interest-rate cuts since 1990 are limiting his Asian counterparts’ options to curb inflation. Instead of raising their own borrowing costs or letting their currencies appreciate faster, governments are resorting to regulating meat and egg prices in China, stockpiling cooking oil in Malaysia and subsidising utility bills in Indonesia and the Philippines.

Such measures may backfire. Artificial price curbs and subsidies only feed more demand for oil and other commodities, and ultimately will make it harder to contain inflationary pressures worldwide, officials from the Group of Seven nations warned at their February 9 meeting in Tokyo.

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Corporate News 22 Feb 2008

Corporate News 22 Feb 2008

Rural Electrification Corporation (REC) IPO subscribed 4.67 times

The initial public offer of Rural Electrification Corporation (REC), a state-run power sector lender, got subscribed 4.67 times at 11:00 IST on last day of its issue today, 22 February 2008. The price band for the IPO is Rs 90 to Rs 105. The book building process, which opened on February 19, is scheduled to close on February 22. The issue would constitute about 18.18% of the fully diluted post-issue capital of REC. It is looking to raise about Rs 16.40 billion through sale of 156 million equity shares in a price band of Rs 90-105 in the IPO.

Most of the bids today came from the institutional investors that made the portion reserved for Qualified Institutional Buyers (QIBs) getting subscribed 4.52 times.

Rural Electrification is offering shares in a price band of 90 rupees to 105 rupees. The 156.1 million shares on offer will account for 18.2% of the lender's post-issue capital. The holding of the government, which fully owns the company, will be reduced to about 81.8%. IL&FS Investsmart Ltd., ICICI Securities Ltd. and SBI Capital Markets Ltd. are managing the share sale.

Rural Electrification Corporation is a public sector enterprise and is engaged in financing and promoting transmission, distribution and generation projects across the country. The company provides financial assistance to public sector power utilities at the central and state levels, private sector power utilities, and joint sector clients. Its financial products include long-term loans, short-term loans, bridge loans and debt refinancing provided through its corporate office in New Delhi and 17 field units across India.

Govt approves securities for SBI rights issue

New Delhi: The government on Feb 21 approved issuing special marketable securities worth Rs 9,995.99 crore to subscribe to State Bank of India's rights offer.The Cabinet, which met in New Delhi on Thursday, gave its approval to modify an earlier decision to give SLR (statutory liquidity ratio) status to the government securities. The issuance of such securities would have allowed SBI to meet a part of its SLR requirement.

Under SLR provisions, banks have to park 25 per cent of their deposits in government bonds. SBI has decided to raise Rs 16,736.31 crore by issuing about 10.5 crore shares on a rights basis. The issue, which opened on February 18 will close on March 18.

ICICI Prudential Life hires retired armed forces personnel to sell policies news

Chennai: Private life insurer ICICI Prudential Life Insurance Company Limited has begun hiring graduate non-commissioned officers of the armed forces or ex-servicemen to sell policies in rural areas. The source said that the retired servicemen with 10 years experience are eligible to become unit manager in rural areas. On successful completion of training, the selected ex-servicemen will be given a Certificate of Insurance Management and absorbed by the life insurer. Till date the company has recruited around 231 retired armed forces personnel across the country and nearly 48 per cent of them belong to South India.This move is expected to boost ICICI Prudential Life's premium income and its agency field force in rural areas, which currently numbers 30,000 rural agents who contribute around 3 per cent of fresh business.

Indiabulls Financial - Application for setting up Mutual Fund

Indiabulls Financial Services Ltd has informed that Securities and Exchange Board of India (SEBI) has approved setting up of an Asset Management Company and a Trustee Company, pursuant to application of the Company for setting up a Mutual Fund.

The Company is in the process of setting up of an Asset Management Company and a Trustee Company in terms of the approval of the SEBI, for setting up the Mutual Fund.

Pidilite Industries - Updates

Pidilite Industries Ltd has informed about the following:

1. The Company has acquired entire issued and Paid-up Capital of following Companies by investing Rs 1,70,000/- each: a. Bhimad Commercial Co. Pvt. Ltd. b. Madhumala Traders Pvt. Ltd. The current business of both these Companies is Investment.

2. Both the above Companies which are now Wholly Owned Subsidiaries of the Company have joined as Partners in the existing firm, M/s. Nitin Enterprises engaged in the business of manufacturing of branded Sealants and Adhesives in the State of Jammu & Kashmir.

3. The Company also acquired assets and business of branded Sealants and Adhesives from M/s. Hardcastle & Waud Manufacturing Co Ltd., and associates.

Dr Reddys - Allotment of equity shares under ESOP

Dr Reddys Laboratories Ltd has informed that pursuant to Dr. Reddy's Employees Stock Option Scheme, 2002, the Compensation Committee of the Board of Directors of the Company has allotted 37,094 equity shares of Rs 5 each of the Company on February 21, 2008, to Employees who have exercised their Stock Options.

Jaiprakash Associates signs shareholders' agreement with Steel Authority of India

Jaiprakash Associates has signed the shareholders' agreement with Steel Authority of India (SAIL) for setting up of 2.1 MTPA capacity slag-based cement plant at Bokaro Steel City, Jharkhand in joint venture through a special purpose vehicle to be incorporated for the purpose.

Jaiprakash Associates shall hold 74% equity in the joint venture company and 26% equity of the same shall be held by SAIL.

The company made this announcement after the trading hours on Thursday, 21 February 2008.

GlaxoSmithKline Pharmaceuticals recommends dividend

The board of GlaxoSmithKline Pharmaceuticals has recommended dividend at the rate of Rs 18 per share for the year ended 31 December 2007.

This was recommended at the board meeting held on 22 February 2008.

Info Edge India's FIIs limit increases to 40%

Info Edge India has announced that the FIIs investment limit under portfolio investment scheme stands increased to 40% of the paid-up equity share capital of the company.

The company made this announcement during the trading hours today, 22 February 2008.

Satyam Computer Services sets-up Life Sciences Center of Excellence

Satyam Computer Services has announced the setting up of the Life Sciences Center of Excellence (CoE). The facility was inaugurated by Satyams founder and chairman, B Ramalinga Raju on the sidelines of RxCellence, the Life Sciences conclave which Satyam hosted at its state-of-art Satyam school of leadership in Hyderabad. The theme for the conference was faster, safer and smarter strategies for Life Sciences Industry. The day was filled with compelling, insightful and thought-provoking speaker sessions and panel discussions on the progressive accomplishments in the pharmaceutical, biomedical and generics industry. Thought Leaders CXOs, business leaders, consultants, analysts, scientists and senior executives from different parts of the world attended the event. Some of the eminent dignitaries were from the Life Sciences advisory board members comprising ex-senior executives / ex-CXOs of leading Life S companies.

The Life Sciences CoE will showcase Satyams domain expertise and thought leadership in the industry. The CoE will house solutions cutting across the value chain, addressing a number of industry pain points. While there are quite a few discrete point solutions attempting to address various industry pain points, they are often incomplete requiring huge amount of customization and complex integration. The CoE solutions will provide the necessary frameworks with flexibility and ease of customization enabling faster implementations and therefore a better Rol. These solutions leverage extensive domain experience that Satyam has built over the years in the industry. The CoE addresses industry needs in the areas of clinical drug accountability, drug counterfeiting, cell line management systems, high throughput analytics, clinical development, bioinformatics, supply chain, CRM, key opinion leader portals etc.

The Satyam CoE solutions are being reviewed and validated regularly by their customers and the life sciences advisory board comprising eminent personalities with decades of experience in the industry. With all the inputs being received and the consequent refinements and enhancements being made, Satyam is confident that the organization will be able to make a step change in the quality and delivered value of services to customers.

The company made this announcement during the trading hours today, 22 February 2008.

Megasoft recommends dividend

The board of Megasoft has recommended dividend at the rate of 12%.

This was recommended at the board meeting held on 22 February 2008.

Vesuvius India recommends dividend

The board of Vesuvius India has recommended dividend at the rate of Rs 3.75 per share (37.50%) for the year ended 31 December 2007.

This was recommended at the board meeting held on 22 February 2008.

NPIL Research & Development enters into agreement with department of biotechnology

Nicholas Piramal India has announced that NPIL Research & Development has signed an agreement with the department of biotechnology, New Delhi on screening for bio-molecules from microbial diversity collected from different ecological niches, thereby initiating an industry - university / national institute partnership programme in drug discovery.

The project envisages a mega-scale screening programme for various environmental isolates. This is the first project in the country in which industry and academia will work together to screen such a large number of bacterial isolates. Different academic institutes will isolate organisms specific to diverse ecological niches. For each sample, isolation of bacteria will be carried out on 30 different growth media.

This multi-institutional effort will generate approximately 7000 isolates / month (~1000/institute), which will be regularly sent to NRDL, the industrial partner of the project. Each of these institutes is an expert in niche areas of microbial biodiversity. The microbial isolates have not been tested for potent medicinal properties, if any. The purpose of this study is to exploit the biodiversity of microbes. This will help in identifying specific therapeutic properties that may be further used to identify novel molecules, which may then be passed on to the drug development phase.

At NRDL's facility at Goregaon, Mumbai, a team of scientists have been concerting their skills and have established high-end technologies using High-throughput robotics, which help in identifying specific properties that can be further developed. Most biological assays involve the use of living cells under in vitro conditions to measure the therapeutic potential of the extract. If this is found to be positive and better than the existing controls, a collective decision may be taken to move forward to the various steps involved in the development phase of the drug.

Natural diversity appears to be a novel source for new drugs worldwide. In the pursuit of new drug development, new drugs are needed so that an effective pipeline of molecules is established whose properties can be effectively validated in vitro using modern techniques in proteomics and genomics.

Screening will be carried out for anti-cancer, anti-infective, anti-diabetes and anti-inflammation properties. In addition to the culture-dependent method, the culture-independent approach will also be adopted for a few selected samples.

There are hopes that a bank of novel leads with specific potential will soon be developed. This will aid In the long-drawn process of drug discovery. Natural diversity appears to be a novel source for new drugs worldwide. In the pursuit of new drug development, new drugs are needed so that an effective pipeline of molecules is established whose properties can be effectively validated in vitro using modern techniques in proteomics and genomics.Screening will be carried out for anti-cancer, anti-infective, anti-diabetes and anti-inflammation properties. In addition to the culture-dependent method, the culture-independent approach will also be adopted for a few selected samples.There are hopes that a bank of novel leads with specific potential will soon be developed. This will aid In the long-drawn process of drug discovery. The project will lead to the selection of potential candidate molecules, which will be taken to process scale-up strategies with appropriate partners. The credit-sharing in this project amongst the PI and industry has been mutually worked out.

The company made this announcement during the trading hours today, 22 February 2008.

City Union Bank declares interim dividend

The board of City Union Bank has recommended an interim dividend of 30% on the equity shares for the financial year 2007-2008.

This was recommended at the board meeting held on 22 February 2008.

Jaiprakash Associates appoints director

The board of Jaiprakash Associates has appointed S C Gupta as director in the existing vacancy with effect from February 21, 2008.

He was appointed at the board meeting held on 21 February 2008.

ICICI Bank allots equity shares

ICICI Bank has allotted 8,003 equity shares of face value Rs 10 each under ESOS, 2000.

These shares were allotted by the bank on 18 February 2008.

Power Grid Corporation to consider interim dividend

The board meeting of Power Grid Corporation of India will be held on 05 March 2008 for declaration of interim dividend for the financial year 2007-08.

The company made this announcement during the trading hours today, 22 February 2008.

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Industry News- 20th Feb 2008

Industry News- 20^th Feb 2008

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Insurance workers' association demand

Coimbatore: The Coimbatore Region unit of the General Insurance Employees' Association has demanded the merger of four public sector general insurance companies and condemned the move of the Central Government to increase foreign direct investment in the insurance sector. These were among the resolutions passed at the 14th conference of the women's sub-committee of the regional unit of the association held in the city. The association wanted the Bill for 33 per cent reservation for women passed in Parliament immediately. It also called for the restoration of appointments on compassionate grounds.

India's IT sector confident can ride out global slowdown

India's top technology and outsourcing body said it is confident it can ride out the challenge of a stronger rupee and a global economic slowdown as it wrapped up its annual meeting here. India's flagship outsourcing industry is grappling with a rupee that rose 12 percent last year lowering the local equivalent of every dollar earned and a potential recession in its main market, the United States. The sector expects to meet or even exceed its software export target of 60 billion dollars and overall software and services revenue goal of 73-75 billion dollars by 2010, Mittal said in an interview.

India's IT sector with its skilled, low-cost work force that has planted the country on the global business map, is keeping its fingers crossed that the international slowdown will turn out to be a blessing. It is hoping the financial turmoil in the US and elsewhere could drive businesses to farm out more work to cheaper Indian firms even as they pare overall technology budgets.

IT industry a Public Utility Service only on paper, finds survey

According to a recent survey, an overwhelming majority of IT professionals in West Bengal believe that the 'Public Utility Service' status, accorded to the IT sector by the state government, has not benefited the industry owing to frequent bandhs. The survey was conducted by the Indian Chamber of Commerce (ICC) on the IT and ITeS industry in West Bengal. Almost 75 per cent of the respondents said no when urged whether the sector really enjoys the status of a Public Utility Service, which means that it can operate on a 24x7 model and could not be disrupted by strikes/bandhs. Another interesting finding of the survey was that 78.2 per cent of the respondents felt that having a trade union and the right to strike in the IT and ITeS sector was inappropriate.

Read monthly Equity Report for Feb 2008

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Economy News 20th Feb 2008

Economy News 20^th Feb 2008

Govt asks public banks to provide interest-free loans to sugar mills

Central government in New Delhi asked the public sector banks (PSBs) to implement a sugar package involving the provision of interest-free loans to sugar mills and submit a compliance report in the next 10 days.

Finance Minister Palaniappan Chidambaram pointed out that three banks, namely Punjab National Bank, Indian Bank and Indian Overseas Bank, had already implemented the relief package.

Goverment to offer package to address credit needs of farmers:PM

On 15 February 2008, Prime Minister Manmohan Singh while addresing the annual general meeting of Federation of Indian Chambers of Commerce and Industry (Ficci) in New Delhi, said the government will soon come out with a package to address the indebtedness of farmers.

The minister pointed out that the share of agriculture in the GDP has been declining. He added that the importance of this sector for India's economy cannot be minimised this sector as it supports a significant portion of the country's population and also acts as a social safety net.

The package would look into the credit needs of farmers. The minister explained the goverment could not have a situation where 80% of the agri sector is outside the formal financial system and suffers from excessive indebtedness.

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Corporate News - 20 Feb 2008

Corporate News - 20 Feb 2008

Pfizer - FY07 results on Feb 25, 2008

Pfizer Ltd has informed that a meeting of the Board of Directors of the Company will be held on February 25, 2008, inter alia, to consider the Audited Statement of Accounts of the Company for the year ended November 30, 2007 and to recommend dividend thereon.

Listing of equity shares of OnMobile Global Ltd

Pfizer Ltd has informed that a meeting of the Board of Directors of the Company will be held on February 25, 2008, inter alia, to consider the Audited Statement of Accounts of the Company for the year ended November 30, 2007 and to recommend dividend thereon.

Reliance Power gains on bonus

Mumbai: Anil Ambani will not be disappointed from markets' immediate reaction to the announcement of the Reliance Powers bonus shares.On opening, it zoomed to Rs 436 in the mornings trade and is now hovering around the Rs 420 mark compared to the Rs 384 mark at which it closed on Friday. Reliance Power announced its decision on Sunday to issue bonus shares to shareholders.For the first time in the history of global capital markets, a company issued free shares to retail and institutional shareholders. This comes after the February 11 listing of the company which saw a less than positive reaction. Reliance sources said that bonus is not a face saving exercise and it will also consider methods other than bonus to compensate investors.

Tata Investment becomes arm of Tata Sons

Mumbai: Tata Investment Corp Ltd (TICL) has become a subsidiary of Tata Sons Ltd. TICL said Tata Sons has acquired five million of its equity shares from Tata Chemicals Ltd. Tata Sons Ltd now holds 54.98 percent of the paid-up capital of the company.

UBS likely to revive its bid for Stan Chart AMC

Mumbai: It seems no one is immune to the pressures of lobbying not even the staunchly independent Reserve Bank of India. Just months after the RBI rejected an application by Swiss bank UBS to acquire the asset management business of Standard Chartered Bank, UBS is now in a position to revive its bid for Stan Chart AMC after the RBI cleared its application for a full banking licence.

The RBI has allowed it to convert its representative office into a branch. For now UBS will be allowed to open one retail banking branch but henceforth, the Swiss bank will be allowed to apply to the RBI for more branches.While UBS declined to officially comment on the development sources indicate that UBS has received official communication from the RBI.

The RBI's volte-face on UBS has raised many questions about its failed bid for Standard Chartered AMC. The RBI had rejected that bid due to questions raised about certain transactions suspected of money laundering, which had led the RBI to say that UBS' proposal was not found to be fit and proper. However, sources say now that the RBI has cleared UBS's proposal for a full banking licence, the Swiss bank has sufficient grounds to re-open that bid. Following that exercise, UBS is likely to re-file its application for an Asset Management Business with SEBI and RBI.The change in UBS's fortunes in India comes a week after a high level delegation from the Swiss Bankers Association met with the RBI and finance ministry officials. The association has assured the RBI that Swiss Banks like UBS have stringent anti-money laundering systems in place and will comply with all rules and regulations set by the RBI. With those assurances in place UBS is now likely to be expand its presence in India substantially with a focus on retail operations.

ICICI Bank - Allotment of equity shares under ESOS

ICICI Bank Ltd has informed that the Bank has allotted 8,431 equity shares of face value of Rs 10/- each on February 11, 2008 under the Employees Stock Option Scheme, 2000 (ESOS).

BHEL to set up Libya power plant

New Delhi: BHEL, India's leading Power equipment maker, announced that it received a major order for setting up a 300 MW gas turbine-based power plant in Libya. According to a statement by BHEL, The order worth Rs 650 crore order to be executed on engineering, procurement and construction basis, has been placed by general electricity company of Libya for expansion of the 600 MW Western Mountain Power Project.

BHEL had recently completed execution of the Rs 1,400 crore project, the largest gas turbine-based power project installed by the company so far. The present contract for extension of western mountain power project envisages setting up two gas-turbine units of 150 MW each. The equipment for the 300 MW order would be supplied from Bhel`s manufacturing facilities at Haridwar, Bhopal, Jhansi, Bangalore, Chennai and Ranipet.

UTV expands alliance with Walt Disney

Mumbai: Hollywood media giant Walt Disney Company is all set to put in Rs 13.14 billion in two UTV group firms. An agreement has recently been reached between the two groups under which Disney, through its subsidiary The Walt Disney Company (Southeast-Asia) Pvt Ltd will invest Rs 13.14 billion in UTV Software Communications Ltd (USCL) and UTV Global Broadcasting Ltd (UGBL).

UGBL is the parent company for its two wholly owned subsidiaries, Genx Entertainment Ltd and UTV Entertainment Television Ltd. Genx has already launched successfully two youth entertainment channels through the Bindass brand while the latter just launched The World Movies channel and is about to start UTV Hindi Movies channel. The company would also keep its shareholders informed by a public announcement. The deal and the open offer of Rs 1.19 billion is subject to regulatory and shareholder approvals. The agreement, once sealed, will help Disney increase its stake in UTV from 13.7 per cent to 32.1 per cent.

3i Infotech - Allotment of equity shares under ESOS

3i Infotech Ltd has informed that the Company has allotted 8,300 equity shares on February 18, 2008, to the applicants under Employee Stock Option Scheme (ESOS), 2000.

Balasore Alloys allots equity shares

Balasore Alloys has announced that 2,00,00,000 equity shares of Rs 5 each at a premium of Rs 7.75 per share issued and allotted to the promoters of the company on preferential basis pursuant to the corporate debt restructuring package of the company have become fully paid up and there is no partly paid shares of the company existed as on date. The necessary corporate action has already been taken for credit of fully paid up shares in their respective accounts.

The company made this announcement during the trading hours today, 19 February 2008.

Jaiprakash Hydro Power's director resigns

The board of Jaiprakash Hydro Power has accepted the resignation of D N Davar from the office of director of the company with effect from 25 January 2008.

The company made this announcement during the trading hours today, 19 February 2008.

Ansal Housing & Construction allots equity shares & warrants

The board of Ansal Housing & Construction has allotted 1,50,000 equity shares at Rs 225 per share after receipt of 100% payment due on the equity shares to the independent parties and 29,50,000 warrants at Rs 225 per warrant, each warrant convertible into one equity share after receipt of 10% payment due on the warrants to the independent parties and promoters of the company.

These shares and warrants were allotted at the board meeting held on 19 February 2008.

Berger Paints India to issue convertible warrants

The board meeting of Berger Paints India will be held on 26 February 2008 to consider issue of convertible warrants to the promoters of the company / promoter group.

The company made this announcement during the trading hours today, 19 February 2008.

ACC allots shares

The committee of ACC has allotted 2,805 shares against exercise of employee stock options under various ESOS.

Consequently, the paid-up share capital of the company has increased from 18,76,30,028 shares to 18,76,32,833 shares of Rs 10 face value, as of date.

The company made this announcement during the trading hours today, 19 February 2008.

Ranbaxy Laboratories' board clears scheme of de-merger of New Drug Discovery Research unit

The board of Ranbaxy Laboratories has cleared a scheme of de-merger of the company's New Drug Discovery Research (NDDR) unit into a subsidiary, Ranbaxy Life Science Research (RLSRL). This is subject to requisite approvals.

Ranbaxy believes that this is a significant step in creating an independent pathway for NDDR with dedicated resources and an enhanced focus for long-term growth. Ranbaxy has state of the art research infrastructure and a highly skilled scientific talent pool. These strengths can be more effectively leveraged through an independent vehicle that better aligns assets with priorities to accelerate the company’s drug discovery programmes. The resulting operational freedom and flexibility will also help to open up new growth opportunities while providing a platform for increased collaboration. The demerger will result in cost savings of approx. US$ 25 million in the current year for Ranbaxy, a recurring expense, likely to increase significantly in the coming years.

Under the scheme, the shareholders of Ranbaxy will be entitled to receive one equity share of Re.1 each of RLSRL, without any payment for every four equity shares of Rs 5 each held in Ranbaxy, as on the Record date, to be fixed for this purpose, after receipt of requisite approvals. All assets, liabilities, research personnel and pipeline related to the NDDR unit will be transferred to RLSRL.

Ranbaxy has subscribed to redeemable preference shares of RLSRL aggregating Rs 200 crore, to meet its business needs. Post the de-merger, the equity capital of RLSRL will be approx. Rs 12.6 crore. Ranbaxy and RLSRL employees welfare fund trust will respectively hold 19.8% and 4.9% of the equity share capital of RLSRL. The balance will be held by the shareholders of Ranbaxy.

This was decided at the board meeting held on 19 February 2008.

CMC's director resigns

CMC has announced that C B Bhave has sent his resignation letter dated 15 February 2008 from the board of directors of the company on being appointed by the Government of India as chairman of Securities Exchange Board of India.

The company made this announcement during the trading hours today, 19 February 2008.

Infosys Technologies signs MoU with Nihon Unisys, Japan

Infosys Technologies has announced that it has signed a MoU for alliance of strategic business deployment and joint development for sales and solution service offering with Nihon Unisys, Japan.

This alliance is the maturing of the June 2007 partnership between Nihon Unisys and Infosys to execute large-scale system upgrades of Oracle e-business suite for Nihon Unisys' customers. The alliance will also explore mutually beneficial areas where the global delivery model can be leveraged to jointly go to market. These include joint solution / product development and application development/ maintenance.

The alliance brings together Nihon Unisys' experience in the Japanese market and Infosys' global delivery model, its experience in open systems, and its cuffing-edge technologies and methodologies to deliver high-quality and high-value solutions to Nihon Unisys’ customers in the Japanese market.

The company made this announcement during the trading hours today, 19 February 2008.

Parsvnath Developers launches Parsvnath Eleganza

Parsvnath Developers has launched the first of its kind mega mall cum multiplex, Parsvnath Eleganza in Dehradun. The company will invest Rs 40 crore in developing the complex.

Parsvnath Eleganza is the first such mall-cum-multiplex being developed in the city. Located at prime location of Rajpur Road, the mall comes with an added advantage of a 4-screen multiplex within the complex, which gives another reason to visit the complex. Having a saleable area of 1.5 lacs square feet, the mall is spread over four floors, will be fully air-conditioned and will have 100% power back-up at all times.

Glass fronted lifts, aesthetic architecture and modern design will provide for complete comfort and a pleasurable shopping experience for its customers. The mall is designed for optimum space utilization for its shop owners. Latest fire alarm, fire fighting systems and round-the-clock security systems will ensure complete safety. The mall also provides a reserved area to accommodate parking needs of visitors.

The mall will boast of premium national and international brands, departmental stores, retail chains and fashion stores and will be a one stop for branded lifestyle products. Food courts in the mall will provide a comfortable venue for the window shoppers and also those who are looking at outlets for meetings and get to-gathers. The entire complex for which the construction has commenced is expected to be completed and operational with in one years.

The company made this announcement during the trading hours today, 19 February 2008.

ABB net profit rises 33.97% in the December 2007 quarter

Net profit of ABB rose 33.97% to Rs 180.79 crore in the quarter ended December 2007 as against Rs 134.95 crore during the previous quarter ended December 2006. Sales rose 28.97% to Rs 1839.45 crore in the quarter ended December 2007 as against Rs 1426.31 crore during the previous quarter ended December 2006.

For the full year, net profit rose 44.48% to Rs 491.67 crore in the year ended December 2007 as against Rs 340.31 crore during the previous year ended December 2006. Sales rose 38.75% to Rs 5930.31 crore in the year ended December 2007 as against Rs 4274.01 crore during the previous year ended December 2006.

Housing Development Finance Corporation allots equity shares

Housing Development Finance Corporation (HDFC) has allotted 78,416 equity shares of Rs 10 each pursuant to conversion of FCCBs by bondholders and exercise of stock options by employees.

Post the above allotment, the paid-up equity share capital of the corporation would stand at Rs 283,50,23,360 consisting of 28,35,02,336 equity shares of Rs 10 each.

These shares were allotted by the corporation on 19 February 2008.

Microsoft and Satyam strengthen strategic relationship with enhanced focus on collaborative growth

Satyam Computer Services has announced various strategic initiatives to further expand the scope and scale of its multi-dimensional relationship with Microsoft Corp., including the selling up of a 350 seater dedicated delivery center in Hyderabad to deliver futuristic solutions using cutting edge Microsoft technologies. The facility was inaugurated by Moorthy Uppaluri, CEO, Microsoft IT-Global, on 16 February 2008.

Satyam is a global strategic service partner to Microsoft's global IT sourcing and product development outsourcing. Satyam's engagement involves building Microsoft IP and solutions in futuristic products and / or yet-to-be-released versions. Satyam's experience in serving Microsoft's global IT sourcing organization (MSIT), the foremost consumer of newly-released / yet-to-be-released products in the world, ensures that Satyam brings the best and most current development, integration and sustenance skills on the MS platform to its customers. Satyam also collaborates with Microsoft to address needs of common enterprise customers and provide enhanced business value.

CRISIL recommends dividend

The board of CRISIL has recommended dividend at the rate of Rs 25 per share. This was recommended at the board meeting held on 18 February 2008.

CRISIL net profit rises 291.74% in the December 2007 quarter

Net profit of CRISIL rose 291.74% to Rs 27.50 crore in the quarter ended December 2007 as against Rs 7.02 crore during the previous quarter ended December 2006. Sales rose 102.54% to Rs 84.68 crore in the quarter ended December 2007 as against Rs 41.81 crore during the previous quarter ended December 2006.

For the full year, net profit rose 89.06% to Rs 70.67 crore in the year ended December 2007 as against Rs 37.38 crore during the previous year ended December 2006. Sales rose 73.99% to Rs 255.32 crore in the year ended December 2007 as against Rs 146.74 crore during the previous year ended December 2006.

Castrol India net profit rises 49.05% in the December 2007 quarter

Net profit of Castrol India rose 49.05% to Rs 56.76 crore in the quarter ended December 2007 as against Rs 38.08 crore during the previous quarter ended December 2006. Sales declined 1.15% to Rs 474.99 crore in the quarter ended December 2007 as against Rs 480.53 crore during the previous quarter ended December 2006.

For the full year, net profit rose 41.39% to Rs 218.43 crore in the year ended December 2007 as against Rs 154.49 crore during the previous year ended December 2006. Sales rose 7.75% to Rs 1888.26 crore in the year ended December 2007 as against Rs 1752.41 crore during the previous year ended December 2006.

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Markets on 19th Feb 2008

Markets on 19^th Feb 2008

Markets end on a flat note for the second consecutive session The markets opened in the positive and traded at higher levels until noon.

Thereafter, they witnessed selling pressure and marginally dipped in the red. They finally closed on a flat note. While the Sensex was up 27 points or 0.15% at 18,075.66, the Nifty gained 3.9 points or 0.07% to close at 5280.80. Broad market indices outperformed the frontline indices as the BSE Midcap and Smallcap indices were up 0.57% and 0.41% respectively. Market breadth was positive, as A/D ratio was 1.2:1 on the BSE.

Sectorally, it was a mixed bag. While the top gainers were the BSE Consumer Durables, Auto and Healthcare indices, the top losers were BSE Realty and Power. Gainers from the index pivotals include Bajaj Auto, Ranbaxy Labs, ACC and TCS. Losers were Rel Energy, Hindalco, DLF and ITC.

With the main indices continuing to trade in a narrow range for the second consecutive session, markets seem to lack direction for the moment. We recommend a go slow approach on fresh long positions.

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Markets on 19th Feb 2008

Markets on 19^th Feb 2008

Markets end on a flat note for the second consecutive session The markets opened in the positive and traded at higher levels until noon.

Thereafter, they witnessed selling pressure and marginally dipped in the red. They finally closed on a flat note. While the Sensex was up 27 points or 0.15% at 18,075.66, the Nifty gained 3.9 points or 0.07% to close at 5280.80. Broad market indices outperformed the frontline indices as the BSE Midcap and Smallcap indices were up 0.57% and 0.41% respectively. Market breadth was positive, as A/D ratio was 1.2:1 on the BSE.

Sectorally, it was a mixed bag. While the top gainers were the BSE Consumer Durables, Auto and Healthcare indices, the top losers were BSE Realty and Power. Gainers from the index pivotals include Bajaj Auto, Ranbaxy Labs, ACC and TCS. Losers were Rel Energy, Hindalco, DLF and ITC.

With the main indices continuing to trade in a narrow range for the second consecutive session, markets seem to lack direction for the moment. We recommend a go slow approach on fresh long positions.

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Market on 18th Feb 2008

Markets end marginally in red

After opening in the positive, markets witnessed selling pressure and slipped into the red. The markets then traded in red for most part of the day but managed to close off the lows of the day. While the Sensex was down 67.20 points or 0.37% at 18,048.05, the Nifty lost 26.0 points or 0.49% to close at 5276.90. Broadmarket indices outperformed the frontline indices as the BSE Midcap and Smallcap indices were up 0.65% and 1.40% respectively. This explains the positive market breadth as A/D ratio was 2:1 on the BSE. NSE cash turnover was Rs.10,920.95cr Vs. Rs.14,206.78cr on Friday.

Sectorally, it was a mixed bag. While IT, Oil, Metal and Realty were the underperforming sectors, strength was seen in select Banking, Sugar and Fertiliser stocks. Gainers amongst the index pivotals were M&M, ITC, Hindalco, HUL and ICICI Bank. Losers were Satyam Comp, Tata Motors, TCS, DLF and BHEL.

With the main indices yet to confirm that they are in a fresh uptrend and also due to continued global uncertainties, we continue with our strategy of taking a small exposure with respect to fresh positions in order to get your legs into the door. Aggressive positions can be built up once the markets enter a confirmed uptrend.

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R-Power gains over 5 per cent; outperforms Sensex

R-Power gains over 5 per cent; outperforms Sensex

Reliance Power, the Anil Ambani group's latest entry to bourses, today clocked a 5.3 per cent rise in its share price, snapping a three-day losing streak and outperforming the market benchmark Sensex in the process.

In a bullish market where the Sensex rose by 817 points or 4.82 per cent, shares of Reliance Power on Thursday closed for the first time in a positive territory. After hitting an intra-day peak of Rs 374.80, the stock settled 5.31 per cent up at Rs 370.05 at the BSE.

The stock had debuted on the bourses on Monday when it settled nearly 17 per cent below the issue price of Rs 450. The stock fell further by about five per cent on Tuesday and by about one per cent again on Thursday.

However, despite a recovery seen on the counter, today's closing price was still about Rs 80 below the price at which investors were alloted the shares in the country's biggest- ever IPO last month.

The company had scaled a lifetime peak of Rs 599.90 on February 11, while it hit a low of Rs 332.50 on Wednesday at the BSE.

Buying was seen across the Reliance pack of shares in today's trade. Among Anil Ambani group stocks, Reliance Communications rose 9.26 per cent, Reliance Energy gained 9.63 per cent, and Reliance Capital appreciated by 9.41 per cent, Reliance Natural Resources Ltd soared 12.91 per cent, while Adlabs Films saw its share price adding 8.58 per cent.

In elder brother Mukesh Ambani-led group, Reliance Industries rose 5.35 per cent, Reliance Petroleum gained 13.56 per cent, whereas Reliance Industrial Infrastructure Ltd slipped 1.30 per cent.

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Bharti Airtel crosses the 60 million customer mark

Bharti Airtel Ltd on February 13, 2008 has announced that it has achieved the 60 million customer mark. This landmark has catapulted Bharti Airtel into the club of top mobile operators in the world in terms of subscriber base. The 60 million customer base covers mobile as well as fixed line and broadband customers.

Commenting on this major global landmark, Mr. Sunil Bharti Mittal, Chairman and Managing Director, of the Company said, "To be amongst the top global telcos is a significant achievement not only for us but also for the Indian telecom industry. This landmark once again underlines the strength of India's telecom story and Bharti Airtel is proud to have played a pioneering role in providing affordable telecom services to millions of people across every corner of the country."

Added Mr. Manoj Kohli, President & CEO, of the Company, "This is a major milestone in our journey towards the 100 million customers mark and gives the company a truly global scale. Over the last few months, we have recorded phenomenal customer growth and this is a testimony to the depth and width of our network as well as our focus on providing affordable services to all. We are fully committed to taking our network deeper into rural India."

Bharti Airtel is amongst the fastest growing telecom Companies in the world. The Company crossed the 50 million customer mark in October 2007. The Company added the next 10 million customers across mobile, fixed line and broadband in just over 4 months. The Company had crossed the 10 million customer mark in January 2005 and in July 2006 it crossed the 25 million customer mark.

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Brokerage stocks under fire

Brokerage stocks under fire - Shrinking turnover spells trouble

BL Research Bureau

Nearly a month after the crash of January 2008, many small town brokers and even metro based brokers with retail operations in B and C class cities have still to open up for business. This when there are massive whispered amounts of client level defaults at big brokers like Motilal and Kotak..which will either go for litigation to recover or plain and simply written off.

Stocks of brokerage houses have been bearing the brunt of the selling pressure in the recent correction. This is despite most brokerages staging an impressive third quarter performance.

Stock prices of most broking companies, on an average, have fallen by about 41 per cent in the last one-month vis-À-vis a 20 per cent fall in Sensex.

The fall, however, has been more pronounced (about 30-44 per cent) for companies with pure broking exposure such as Religare, Geojit Financial Services, Emkay Share and Stock Brokers and India Infoline. The fall in prices of banks such as ICICI Bank and Kotak Mahindra with broking exposure got arrested at about 20-33 per cent.

With their revenues pegged directly to the fortunes of the equity markets, companies in the broking space may be up for tough times ahead, with dwindling intra-day volumes and a general loss in risk-appetite among retail investors. Fading investor interest in the IPO market may also add to their woes.

Volumes shrink

The average daily turnover in the cash segment in the NSE has fallen by about 30 per cent from its peak levels. After recording volumes of about Rs 20,709 crore in October 2007, the average per day turnover has shrunk to about Rs 14,393 crore in February. This fall in volumes spell trouble for broking outfits since most of them had in the last one-year reduced commissions hoping to attract increased participation from clients.

While the bigger ones such as Kotak Mahindra, ICICI Bank and HDFC Bank, with unlisted broking entities and other core business activities may survive this market onslaught, broking houses with complete dependence on retail participation may find the going tough.

Performance of companies such as Edelweiss and Motilal Oswal Financial Services with exposure to investment banking operations may also remain sedate, given the fading sheen of the primary market.

Margins and risk

With stock markets increasingly testing newer support levels, brokers' default risk on loans against shares may also increase. This may put to test the efficacy of most brokers' risk control measures

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

Nothing in this article is, or should be construed as, investment advice.

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Reliance Power- got listed on Stock Exchange - The Big Day

Reliance Power listing failed to light up the stock today. The country's biggest IPO fell flat on its face. Millions investing in the stock have had their hopes and dreams shattered. Reliance Power listed at Rs 430 versus its issue price of Rs 450; it showed a disappointing and unexpected opening. Investors sold off the stock in desperation as it ran even lower to almost Rs 390 before coming back to Rs 420.

SP Tulsian of sptulsian.com said, "I had never imagined that this would get listed below offer price, because of the kind of interest that we had seen, that the exuberance in the grey market could be wiped off. However, it will not bring it down below the offer price - which could be Rs 450, or in the worst-case scenario, it could be Rs 430. It has touched Rs 390, though that maybe a knee-jerk reaction or desperation on the part of investors to get out of the counter. But still that was never imagined. I don't think any fundamental analyst would have imagined that kind of price."

In a CNBC-TV18 poll, none of the brokers polled expected Reliance Power to list below its issue price. A staggering 53% expected it to list at Rs 550-600, 33% between Rs 500-550. Only 7% thought it would list at Rs 650-700.

As a sign of the euphoria it created earlier, SP Tulsian commented on how many new demat accounts were opened before the issue opened.

Is it a total disappointment?

Amitabh Chakraborty of Religare Securities does not think so. Chakraborty feels that it is too early to declare the listing a disappointment and the current discussions around REPL price are, at best, theoretical. Cues from global markets suggested that it expected the stock to stay between Rs 430-435, for the time being.

He is quite positive on the stock and would advise F&O investors to enter the stock at these levels.

According to CNBC-TV18's Udayan Mukherjee, "Just work with a ballpark number of Rs 300. At Rs 300, the company would have a market-cap of something like Rs 68,000 crore - that would be 40%-42% of NTPC's current market-cap. I think that is fair, the company does not have any power in the ground. NTPC has the entire capacity that Reliance Power wants to put up over eight years functioning, on ground today - not eight years forward. Give it 40% of that value today. At Rs 300, assuming Rs 80 of value, you are paying almost four times book for potential five years forward. You are paying 40% of a company's value, which has already got the capacity in ground; which you want to achieve over eight years and I think that is fair enough. So for my money, Rs 300 is fair value for Reliance Power, Rs 450 is expensive and overvalued; Rs 550 is certainly pushing it."

Retail Vs FII

SP Tulsian said that if the QIBs are eager to get out of the stock, then the situation could be bad. This is because the QIBs are more qualified and better informed about the fundamentals of the stock, than the retail investors. He expressed concern about the shortsightedness of the QIBs, the FIIs, since they were the ones who got the issues over-subscribed by almost 82 times.

Will retail investors get out now?

Technical Analyst Sudarshan Sukhani advises investors to go stock by stock. He said one should become long-term investors with a two-three year view. There is no short-term revenue generating opportunities in the power sector now, he said. Investors cannot expect to make money in a month in the power sector.

But retail investors are not selling the stock, he observes.

On the other hand, SP Tulsian believes, retail investors probably are in a mood to get out of the stock. They reckon that they will have a better opportunity to do that now. He expects around 15-20 lakh investors to get out.

Amitabh Chakraborty of Religare Securities said he heard that the price has come down to Rs 410 and that it is a good entry point from the F&O point of view. According to him, the price fall is not due to FIIs and retail investors as they form just a small portion of the investors, but more because of global problems.

According to Chakraborty, it is impossible to say who has sold and at what point, they sold at. He added that it was mostly the FIIs who sold, as they are very scared, both in the US and our markets too.

Ambareesh Baliga, Karvy Stock Broking feels that long-term retail investors will hold on to the Reliance Power stocks. From the retail side, I do not think there will be too much of selling happening at this point of time. Those who had to sell off - basically those who had bought only from listing gains point of view, were surely disappointed. They may have already exited and those who bought for long-term, will actually hold on because after all they have not bought a Reliance Power, they have bought Ambani Group Company," he said.

What should an HNIs do now?

Tulsian said, "I don't think that HNIs have any option. Their interest cost is close to Rs 125. And now since the issue is ruling at around the issue price, which is Rs 450, they have the option to book the losses and get out of the counter."

He added, "A majority of them (HNIs) would be cutting their losses and get out of the counter. However, I do not equally see the prices bouncing back beyond Rs 500 at least in the next 15 days or so; because on every rise, you will see investors getting out of the counter. There are over 41 lakh investors, of which closer to 40% have gone purely from the listing gain. And since they got the allotment at Rs 430, it would always be tempting for them to get out of the counter even at Rs 450-460."

Few brokers think there are value picks still available from a poll carried out by CNBC-TV18. Out of the 15 brokers polled, 20% fell in the above group. 40% were willing to bet long term on power stocks. Although, 7% still thought Reliance Power is not overvalued and 33% think there are better picks outside of power.

Most comfortable price of Reliance Power would be Rs 350-400, 33% thought.

Source: moneycontrol

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