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Thursday, September 06, 2007

Motilal Oswal Allotment

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Forbes Asia 'Fabulous 50' list

China may be the 'world's factory,' but Indian companies, led by software giants TCS and Infosys, continue to outshine and dominate the annual ranking of big-cap, profitable companies in Asia.

A total of 12 Indian companies made it to the third annual Forbes Asia Fabulous 50 List, followed by Taiwan with 10 and China with seven, Forbes Asia said in a press release.

Four of India's IT outsourcing companies made the cut including the biggest, Tata Consultancy Services (TCS) that writes software for leading American firms. Its revenues leapt 45 per cent in the last year and its market capitalisation has doubled since listing three years ago to cross the $27 billion mark, the release said.

Tata earns nearly all of its revenues overseas but will move some of its work back to India, it said.

The 12 Indian companies on the Forbes Asia 'Fabulous 50' list are: Bharat Heavy Electricals, Bharti Airtel, Grasim Industries, HDFC Bank, ICICI Bank, Infosys Technologies, Larsen & Toubro, Reliance Industries, Satyam Computer Services, Tata Consultancy S ervices, Tata Steel and Wipro.

Most of the Indian firms on the list, however, did not have to leave home to find success, the release noted. With a relatively young population of 1.1 billion, India has its own huge market.

Companies such as ICICI Bank, HDFC Bank and Bharti Airtel are growing fast by reaching out to the country's rural customers, not to Western markets.

Others, such as Grasim, Larsen & Toubro and Reliance, are shoring up the country's infrastructure at a furious pace

Voltamp Transformers Ltd (Visit note)

Voltamp Transformers Ltd (Visit note)

Kaveri Seeds Company Limited

Kaveri Seeds Company Limited

Ashok Leyland, Cipla

Ashok Leyland, Cipla

Hotel Leela

Hotel Leela

Market Close: Momentum Comes back..But

Good day of trade in the Indian markets. US worries made Indian indices to start weak. But the buying momentum changed the day and helped to recover the losses. Ranged session till mid session but Midcaps and Smallcaps kept the momentum on. Strong buying in index heavy weights like REL, Grasim, Ranbaxy and ITC fueled the markets to surge up at last hour of trade. All the sectors ended in green. FMCG, Auto, Cement, Banking and Engineering cheered the day. Global markets recovered to trade in green, Asia Trade ranged but in red finally managed to end in green.

Sensex closed up by 170 points at 15616. Weighing on the Sensex gainers were REL (+4.5%), Grasim (+3.97%), Ranbaxy (+3.53%), HDFC (+2.82%) and SBI (+2.35%). The losses were Hindaco (-1.27%) and Bharti Airtel (-0.23%).

Reliance Energy Ltd (REL) is planning to demerge its engineering, procurement and construction (EPC) division into a new company. As per reports REL may also list the EPC arm to raise funds for its future projects. The EPC division has been valued at Rs 3000 cr. It has an order backlog of Rs 7000 cr. If one takes into account REL's business from new projects, including the 4,000 MW Ultra Mega Power Project (UMPP) in Sasan, the order book would jump to Rs 12,000 cr. In FY07, the EPC division had revenue of Rs 2082 cr nearly one third of the company's total turnover of Rs 6575 cr. The division accounted for 8% of REL's net profit of about Rs 800 cr. REL is planning to add 14,960 MW capacities in the next five years, for which the total investment required will be about Rs 60,000 cr. Out of this over 30% is required for EPC activities alone. REL, in tie-up with Chinese equipment supplier Shanghai Electric, has gained competitive advantage in this space as Shanghai Electric?s component costs are 10-15% less than Indian players. EPC earnings of the company is expected to achieve a compound annual growth rate of 29% over 2007-2010. EPC division's 33% order book gets booked annually as sales. EBITDA margin is around 9%-11%. The net profit of EPC is around 8%. The saw huge interest and was the major gainer ended up by 4.5% and Tata Power ended up by 2.6%.

Eveready industries we believe should do well, at least now. Zinc fell to below $ 2900 per tonne and with metal charts not showing the strength, the direction seems down. Though near term its Zinc which will drive the direction for the stock. The company also is asset stripping. It sold its land as indicated in our previous heard and read. There is more property on the books and more than justifies the price. The Management meets tomorrow for a preferential issue to Promoter group. Interesting to note that the company issued about 67 lac warrants for Rs 95 and even converted 9.4 lac warrants at that price. For the balance it had to pay 10% upfront. With the stock falling to half that levels the promoters are probably using this opportunity to average out now that the future looks promising. The Uttaranchal plant has started and ramp up happening. Really we believe that this time around the upsides may be more sustainable. Of course near term jump by Zinc could spoil the party. The stock ended marginally higher for the day.

Technically Speaking: Momentom seen across after a ranged session. Sensex touched intraday high of 15638 and low of 15350. Overall breadth was in favor of Advances, where the Advances to Declines ratio stood at 1.6:1. The turnover was pretty good at Rs 4646 cr. The uptrend is buoyant and above 15650 a new target of 16100 gets opened.

Post Market Commentary

The markets closed the session on a positive note as BSE Sensex closed higher by 170.16 points at 15,616.31 and the Nifty grew by 37.35 points to close at 4,518.60. The BSE mid cap and Small cap closed higher by 75.34 points and 105.77 points at 6,848.68 and 8.395.58 respectively. The market breadth was strong with 1,683 stocks advanced and 1298 stocks declined.

BSE Capital goods index grew by 91.95 points to close at 13,658.66 as Lakshmi machines (9.37%), Praj industries (8.91%), Siemens (2.36%), ABB (1.30%), L&T (0.39)% and BHEL (0.07%) closed in green.

BSE bankex index closed higher by 92.43 points at 8,110.85 as Andhra bank (4.66%), Bank of India (3.31%), Yes bank (3.19%), SBI (2.35%), HDFC bank (0.97%), ICICI bank (0.63%) and PNB (0.59%) closed higher.

BSE Metal index advanced by 88.45 points to close at 11,687.04 as SAIL (4.09%), Hind zinc (2.72%), Nalco (1.55%), JSW Steel (1.39%) and Tata Steel (1.31%) closed in green.

BSE Auto Index grew by 60.58 points to close at 4,937.54 as Hero Honda (2.79%), Tata Motors (1.94%), Ashok Leyland (1.94%), M&M (1.72%), Bajaj Auto (1.14%) and Maruti Udyog (1%) closed in green.

BSE oil & gas index improved by 90.24 points to close at 8,231.83 as ERPL (1.47%), Essar Oil (0.87%), Indian Oil (0.89%), ONGC (0.67%), IPCL (0.62%) and GAIL (0.53%) closed higher.

BSE IT index jumped by 19.17 points to close at 4,665.46 as Wipro (1.09%), Satyam (0.89%), HCL Tech. (0.57%), TCS (0.53%) and Infosys (0.33%) closed higher.

BSE Health Care Index closed up by 18.33 points at 3,717.03 as Ranbaxy (3.53%), Cipla (1.12%), Biocon (0.93%) and Aventis pharma (0.84%) closed higher.

BSE FMCG index grew by 30.88 points to close at 2,032.09 as ITC (2.10%), HUL (1.84%), United spirits (1.82%) and Bata India (1.26%) closed in green.

Indices end higher on SBI, ITC support

Equities ended higher Thursday led by automobile and banking stocks. FMCG majors Hindustan Unilever and ITC also pushed indices higher.

The National Stock Exchange’s Nifty closed at 4518.60, up 43 points or 0.96 per cent from the pervious close.

The Bombay Stock Exchange’s Sensex finished 170 points or 1.1 per cent higher at 15,616.31.

Biggest Sensex gainers were Reliance Energy (up 4.5%), Grasim Industries (3.97%), Ranbaxy Laboratories (3.53%), HDFC (2.82%), State Bank of India (2.35%) and Ambuja Cements (2.10%).

Hindalco Industries (down 1.27%) and Bharti Airtel (0.23%) were the only losers on the 30-share index.

The market breadth on BSE showed 1683 advances and 1015 declines, while on NSE, 730 shares advanced and 433 declined.

Union Bank

Union Bank

Bulls strike back, pulls Sensex above 15,600

The market showed strong optimism today despite witnessing a fall in trades yesterday. The Sensex had a gap-down opening on the back of weak global cues and lacked any triggers. However, buoyancy in heavyweights triggered a major rally and the Sensex entered into the positive territory by the mid-morning trades. Maintaining its upward bias thereafter, extensive buying in auto, cement and banking stocks propelled the index to touch an intra-day high of 15,638, up 192 points for the day. The Sensex finally ended the session with gains of 1.10% and was up 170 points at 15,616. The Nifty moved up by 0.96% and was up 43 points to close at 4,519.

The market breadth was positive, with the gainers outpacing the losers in the ratio of 1.65:1 on the Bombay Stock Exchange (BSE). Of the 2,774 stocks traded on the BSE, 1,683 stocks advanced, 1,015 stocks declined and 76 stocks ended unchanged. All the sectoral indices notched up significant gains. The BSE FMCG index was the biggest gainer and soared 1.54% followed by the BSE Auto index (up 1.24%), the BSE PSU index (up 1.22%), the BSE Bankex index (up 1.15%), the BSE Oil & Gas index (up 1.11%) and the BSE CD index (up 1.09%).

Among the 30 stocks in the Sensex basket, 28 ended at higher levels. Reliance Energy led the upsurge and flared by 4.50% at Rs860. Among the other major gainers Grasim surged 3.97% at Rs3,177, Ranbaxy moved up by 3.53% at Rs414, HDFC advanced 2.82% at Rs2,111, SBI vaulted 2.35% at Rs1,632, Ambuja Cement shot up by 2.29% at Rs141, ITC added 2.10% at Rs175 and Tata Motors rose 1.94% at Rs712. While, Hindalco slipped 1.27% at Rs155 and Bharti Airtel was marginally down at Rs847.

FMCG stocks saw strong buying action during the day. Glaxo surged 2.49% at Rs636, HUL soared 1.84% at Rs216, United Sprits jumped 1.82% at Rs1519 and Bata India added 1.26% at Rs173. Auto stocks also logged significant gains with Hero Honda, Ashaok Layland, M&M, TVS Motors, Hinustan Motors, Bajaj Auto and Maruti Udyog soaring over 1-2% each.

Over 1.76 crore Bella Steels shares changed hands on the BSE followed by IKF Technologies (1.31 crore shares), IFCI (1.26 crore shares), Tata Teleservices (1.14 crore shares) and Manali Petro (1.10 crore shares).

IVRCL Infrastructure was the most actively traded counter on the BSE and registered a turnover of Rs132 crore followed by Reliance Energy (Rs125 crore), SBI (Rs105 crore), India Bulls (Rs104 crore) and GMR Infrastructure (Rs102 crore).

Sensex settles above 15,600

The market scaled higher level as buying continued throughout the day, except for the odd blip in early trade. Asian markets rebounded from initial sluggishness while European stocks were trading mixed.

The BSE 30-share Sensex rose 170.16 points or 1.10% at 15,616.31. It opened lower at 15,383.13 and slipped further to hit a low of 15,350.18 at the onset of the trading session due to the overnight fall in the US stocks caused by weak US housing data.

However, it bounced sharply from that level to hit a high of 15,637.74. At the day’s low of 15,350.18, the Sensex had lost 95.97 points for the day.

Sensex is now just 252.54 points away from its all time high of 15,868.85 hit on 24 July 2007.

The S&P CNX Nifty was up 42.75 points or 0.96% at 4,518.60. The Nifty September 2007 futures settled at 4507, a discount of 11.60 points as compared to spot closing

The market breadth was strong on BSE, with 1,698 shares advancing as compared to 1,050 that declined, while 74 remained unchanged.

The total turnover on BSE amounted to Rs 4646 crore as compared to Rs 5,167.23 crore on Wednesday, 5 September 2007. The NSE F&O turnover was Rs 40927.51 crore as compared to Rs 42642.91 crore on Wednesday, 5 September 2007.

The BSE Mid-Cap Index rose 1.11% to 6,848.68 while the BSE Small-Cap Index gained 1.28% to 8,395.58. Both these indices outperformed the Sensex by small margin

All the sectoral indices on BSE settled higher. BSE Consumer Durables index (up 1.09% to 4,497.19), BSE FMCG Index (up 1.54% at 2,032.09), BSE PSU index (up 1.22% to 7,287.77), BSE Oil and Gas Index (up 1.11% at 8,231.83), BSE Auto Index (up 1.24% at 4,937.54) and BSE Bankex (up 1.15% at 8,110.85), outperformed the Sensex.

However, BSE Realty index (up 0.37% to 7,547.65), BSE IT Index (up 0.41% at 4,665.46), BSE Metal Index (up 0.76% at 11,687.04), BSE TecK index (up 0.32% to 3,647.37), BSE Health Care Index (up 0.50% at 3,717.03), BSE Capital Goods Index (up 0.68% at 13,658.66 ) were underperformers.

From the 30-member Sensex pack, 27 advanced while the rest declined.

India's largest private sector power utility company by sales Reliance Energy advanced 4.91% to Rs 863.80 on 14.75 lakh shares. The stock surged to an all time high of Rs 864.70. As per reports the firm is planning to hive off its engineering, procurement and construction division into a new company. It was the top gainer from the Sensex pack.

Cement stocks held on to gains after opening firm on healthy dispatches in August 2007. The AV Birla group diversified company Grasim vaulted 4.25% to Rs 3186. It hit an all time high of Rs 3195

Other cement companies ACC (up 1.72% to Rs 1101), Ambuja Cement (up 1.56% to Rs 140), India Cements (up 4.31% to Rs 274.60), UltraTech Cement Company (up 1.68% to Rs 998), and Birla Corporation (up 3.55% to Rs 317.95) also edged higher.

HDFC (up 3.79% to Rs 2131), and ITC (up 3.15% to Rs 176.50), were the other gainers from the Sensex pack.

Ranbaxy Laboratories, India’s top drug maker by sales, climbed 3.76% to Rs 415, on a newspaper report that the drug maker had submitted an initial bid for US-based Bradley Pharmaceuticals Inc

However Dr. Reddy's Laboratories, India’s only drug maker listed in the US, was down 0.05% to Rs 661.95. The company has received approval from the US Food and Drug Administration for ulcer drug ranitidine hydrochloride tablets.

State Bank of India (SBI), the nation’s largest banking entity by net profit advanced 2.60% to Rs 1635.90. As per reports, it will raise about Rs 1,500 crore through a bond issue this week. The issue will be part of SBI's Tier II capital and the size of core issue likely to be set at Rs 1,000 crore with over subscription option of Rs 500 crore.

Auto shares also rose on renewed buying. Tata Motors, India’s top auto firm by revenue, rose 2.06% to Rs 712.60. Hero Honda Motors (up 2.72% to Rs 652), Bajaj Auto (up 1.44% to Rs 2340) and Maruti Udyog (up 0.57% to Rs 878) were the other gainers from auto pack.

Mahindra & Mahindra, the country's top utility vehicle manufacturer by sales edged higher by 1.84% to Rs 723 boosted by reports that it is looking to buy a design firm in Italy as part of its plans to expand presence in the automotive space.

India's largest private sector entity by market capitalisation and oil refiner Reliance Industries rose 1.51% to Rs 1987 on 5.05 lakh shares. It recovered from day’s low of Rs 1948. RIL has completed acquisition of Indian Petrochemicals Corporation (IPCL), a move that could help it control two-thirds of the country's petrochemical market.

India’s largest FMCG firm by sales Hindustan Unilever (HUL) rose 1.91% to Rs 216.50. As per reports, HUL will end a seven-week lockout on Monday, 10 September 2007, at one of its factories at Assam after a dispute with workers was resolved. The factory makes almost a third of the company’s personal care products.

IT pivotals rose on late buying. Wipro (up 1.21% to Rs 478.50), TCS (up 0.35% to Rs 1075), Satyam Computers (up 0.78% to Rs 452) and Infosys (up 0.32% to Rs 1903) edged higher.

India's largest aluminium producer by sales Hindalco Industries was the top loser from the Sensex pack. It lost 1.37% to Rs 154.80 on 9.90 lakh shares.

India’s largest listed cellular services provider in terms of profit, Bharti Airtel slipped 0.28% to Rs 846.60. As per recent reports, in the Karnataka circle, Bharti Airtel cannot acquire any operator as it already has a 39.7% market share. The 40% market share cap suggested by the

IVRCL Infrastructures (Rs 132.64 crore), Reliance Energy (Rs 124.95 crore), State Bank of India (Rs 104.89 crore), Indiabulls Financial Services (Rs 103.93 crore) and GMR Infrastructures (Rs 102.34 crore) were among the turnover toppers on BSE.

A lot of action was seen in 14 stocks that were included in the futures & options segment of NSE effective today, 6 September 2007.

3i Infotech (up 0.34% to Rs 149), Aptech (up 5.99% to Rs 338.10), Bhushan Steel (up 1.13% to Rs 948.70), Biocon (up 0.87% to Rs 471.05), CMC (up 3.06% to Rs 1156.95), Lakshmi Machine Works (up 9.56% to Rs 3205), NIIT Technologies (up 6.62% to Rs 365), Nucleus Software (up 0.63% to Rs 373), Sasken Communications (up 1.21% to Rs 382), Tech Mahindra (up 3.31% to Rs 1329), and Yes Bank (up 3.43% to Rs 189.90) surged.

But Welspun Gujarat Stahl Rhoren (down 5.77% to Rs 241), Tulip IT Services (down 0.75% to Rs 921.10), and Havells India (down 1.56% to Rs 512.10) edged lower.

Textile and apparel company Raymond was down 0.62% to Rs 273.10. It has reportedly entered the Rs 800-crore premium women's western-wear market with the launch of ColorPlus Women. Raymond will open 175 stores in the next three years to retail the range of ColorPlus apparel.

Punj Lloyd rose 1.63% to Rs 296. As per reports, the firm is planning a foray into defence equipment. It proposes to produce guns, rockets, missile artillery systems and related defence equipment and has applied for an industrial licence to make these products. The licensing committee of the ministry of commerce is expected to take a decision on this soon.

Color Chips (India) slumped 3.12% to Rs 7.77 after the National Stock Exchange said it had decided to suspend trading in the stock for non-compliance of provisions of listing agreement. The stock will be suspended from NSE after trading hours on 12 September 2007.

Saregama India jumped 10% to Rs 302.60. Sonata Investments acquired 10.58 lakh shares of the company at Rs 260 per share in a block deal on Tuesday, 4 September 2007, on BSE. The stock has risen 21% in the past two trading sessions.

Kernex Microsystem (India) gained 5% to Rs 359.40 on recent rumors that it may bag a six-year long railways contract worth Rs 2,000 crore in joint venture with Konkan Railways.

MSK Projects (India) rose 1.77% to Rs 100.40 after it received order worth of Rs 76.45 crore from Madhya Pradesh Road Development Corporation for execution of the Khandwa-Khargone (SH-26) road project.

Punjab Chemicals and Crop Protection soared 7.24% to Rs 155.50 on reports the firm is eyeing a 30% stake in US-based PSD Chemicals, a privately-held firm in the US. Reportedly, the total deal size could be around Rs 100 crore.

Gujarat Industries Power Company spurted 9.22% to Rs 7.40. Recently, its board approved expansion of its lignite-fired power generating capacity at an investment of Rs 1300 crore by installing two units of 250 mega watts each.

iGate Global Solutions flared up 6.16% to Rs 145.70. Yesterday (5 September 2007), Reliance Long Term Equity Fund bought 6.51 lakh shares of the company via two bulk deals on the BSE.

Hindoostan Spinning & Weaving Mills jumped 5% at Rs 56.10. It has spurted recently on reports that the firm has sold 8 acres of its defunct mill located near the Siddhivinayak temple at Prabhadevi, Mumbai, for Rs 350 crore to Mumbai-based builder Akruti Nirman.

Networth Stock Broking jumped 5% to Rs 99.80. The stock had risen 5% yesterday, 5 September 2007, on rumors that Hinduja Group is buying a majority stake in the company. The company clarified after market on that day, that that the company has been considering & contemplating proposal from investors. However no firm decision has been taken by it, neither has any arrangement was finalized.

Hindustan Dorr Oliver rose 2.22% to Rs 131 bagged a contract of Rs 77 crore from National Aluminium Company (Nalco)

Sical Logistics gained 4.86% to Rs 257 after Old Lane Mauritius IV invested Rs 107 crore for a 26% stake in the company’s new unit, Sical Infra Assets.

Escorts dropped 1.61% to Rs 103.85 after the National Stock Exchange said after trading hours on Wednesday, 5 September 2007, it had barred fresh positions in the company's derivatives contracts as the open interest had crossed the 95% limit

Drug maker Abbott India was up 0.78% to Rs 575. The stock came off the session’s high of Rs 585. It said after trading hours on Wednesday, 5 September 2007, its board had approved buying back shares worth Rs 51.84 crore, at a price not exceeding Rs 650 per share.

KS Oils surged 5.51%to Rs 71.75 after it said during trading hours on Thursday, 6 September 2007, it plans to form a joint venture in Malaysia to invest in palm plantations. The company will hold 49% in the joint venture.

Hindustan Zinc rose 2.96% to Rs 724.10 even it cut zinc prices by 3.7% to Rs 139200 per tonne, with ieffect from 6 September 2007. The company said lead prices were reduced by 6% to Rs 139100 a tonne.

Business directory publisher Infomedia India gained 5% to Rs 256.45 on a newspaper report that said a clutch of private equity firms were vying for ICICI Venture's 63% stake in it.

The European Central Bank kept interest rates unchanged at 4% in a meeting held today, 6 September 2007.

There are hopes that the US Federal Reserve will cut the fed funds rate by at least a quarter percentage point on 18 September 2007.

European markets, which opened after the Indian markets, were trading mixed today. Among key European indices, United Kingdom (down 0.11% to 6,253.50) and France (down 0.23% to 5,538.53) slipped while Germany's DAX rose 0.34% to 7,613.93.

Asian markets rebounded from lower levels today, 6 September 2007. Japan's Nikkei (up 0.61% at 16,257), Taiwan's Taiwan Weighted (up 1.16% at 9,017.08), South Korea's Seoul Composite (up 1.24% at 1,888.81) and Shanghai Composite (up 1.56% at 5,393.56) rose.

Hang Seng index was down marginally by 0.08% at 24,050.40

US markets finished lower yesterday, 5 September 2007, after weak US housing data revived concerns about the health of the world's biggest economy. The Dow Jones Industrial Average slipped 143.39 points, or 1.07%, at 13,305.47. Broader stock indicators also lost ground. The

Standard & Poor's 500 index fell 17.13 points, or 1.15%, to 1,472.29, and the Nasdaq Composite index fell 24.29 points, or 0.92%, to 2,605.95.

Crude oil prices rose to $76 a barrel on Thursday, 6 September 2007 buoyed by expectations that US crude and gasoline inventories fell last week. US crude rose 33 cents to $76.06 a barrel while London Brent crude was up 21 cents at $74.55 a barrel.

The National Stock Exchange said on Thursday, 6 September 2007, it will extend trading timing by 45 minutes from 25 September 2007 to 9 October 2007 due to loss of satellite connectivity during this period. Trading will close at 11:25 IST and re-open at 12:10 IST. The final closing will be at 16:15 IST, instead of 15:30 IST.

Shri Lakshmi Cotsyn

Research Report

Shri Lakshmi Cotsyn

Gen Atlantic will exit Patni if price is right

Private equity firm General Atlantic, which manages over $15 billion globally entered India in 2002, and has invested nearly $1 billion so far in India. The firm, which was one of the earliest global private investment firms in India, has appointed Ranjit V Pandit, the ex-chairman of McKinsey & Company India, as managing director of its India office. Abhay Havaldar and Ranjit V Pandit, managing directors of General Atlantic LLC India, spoke to Reena Zachariah about their fund's strategy for India.
How important is India as a market for General Atlantic?
AH: India is the largest market that constitutes a significant part of our portfolio. We are basically growth investors. This year of all the total investments we make globally ($1.5-2 billion) we will invest 15-20 per cent of that in India.
Will you be scaling up your Indian team further or the present size it right?
AH: As our portfolio grows, we will recruit more people but at present we have a right team size.
How many companies have you exited from so far? Are you happy with your exit from Sharekhan?
AH: We have invested in ten companies including NSE, Hexaware, NDTV, Genpact, Patni and have exited out of two of them (Daksh and Sharekhan). We just don't invest capital into our companies but we engage with the company.
We buy shares through the primary issuance of the company but we don't buy shares from other investors. We exited Sharekhan as the promoters were very keen on coming out of the business and so we also chose to exit.
Are you looking to exit Patni?
AH: We have no such plans to exit but as a financial investor we will consider it if the price is attractive.
Are you planning to launch any India dedicated fund?
AH: No we have no such plans as our model is to invest out of our capital globally since GA is not a fund structure.
Which are sectors you find attractive?
AH: The outsourcing space, communications & electronics, media & consumer, financial services, trade and logistics are some of the areas we find interesting for investment. We have also being investors in many exchanges (securities market and commodity) globally. The firm's investment size ranges from $50-400 million in equity. We stay invested in our portfolio companies on an average basis 5-7 years.
What is your target for India?
AH: We are very opportunistic as and when good investment opportunities arise we look at it but we don't keep as such any set targets to achieve.
What has prompted you to move out from a consultancy firm?
RP: This is an extension of the that... as many GA investment professionals have consulting backgrounds and also the way GA works is very much similar to the way McKinsey operates.
What will be the portfolio you will be handling?
RP: I'll work across areas such as fund raising, investment strategy and adding value to our portfolio companies and advising the global portfolio.


Take it easy policy

The crisis worldwide is surely impacting you as well. Here's how

Yes, all of us would like to believe that we are insulated from the spiralling subprime crisis. And why not, the economy is likely to grow by a good 8.5 per cent, corporate earnings have been reasonably good and credit growth is at a good 20 per cent.

The latter being a clear indication that consumption has not been drastically impacted. And there will be further credit off take during the buying season comes in October.

But here’s the bad news. The stock markets have been very turbulent and asset prices have been under pressure. Then of course, there has been inflationary pressures forcing the Reserve Bank of India (RBI) to hike indicative rates like cash reserve ratio (CRR) and repo rate to reign in liquidity.

As a result, Equated Monthly Instalments (EMIs) of homes have shot up by over 40 per cent leading to a rise in defaults. In the recent months, there has been slight softening of rates but there are expectations that it will harden again, if the inflation rears its ugly head again.

So what should you be doing now? For the stock market investor, most experts have a clear view. If you have stayed invested for some time, this is the time to raise some cash. That is, you could unwind some of the position that you have built up.

Arun Kejriwal, investment advisor is very clear about it, “If you have not raised cash till now, do it immediately, next week could be too late.” He advises raising almost 25 to 30 per cent and putting it aside now.

And if want to invest afresh, then do not put the entire money right now. Says Hemant Rustagi, Managing Director, Wiseinvest Advisors, “I am advising my client to invest about 30 per cent now and the rest over a time period of six months.”

His reasoning is that though there has been a sharp recovery, the market still looks too stressed. Kejriwal goes a step further with, “If you have been patient till now, continue to be so for some more time.”

As far as making big expenditures go, the plasma television or car you have been planning to buy on a personal or car loan may suddenly seems out of reach. And it is simply because of the fact that the interest cost has got higher. Says Harsh Roongta, CEO,, “Though it is completely dependent on your needs, buying through loans should be completely considered from the end result point of view.”

In other words, you need to ask yourself whether you would purchase that good, if there was cash on hand. “As far as purchasing of white goods on loans go, I am advising my clients against it,” adds Govind Pathak, director, Acorn Wealth. He feels that in high interest market, it is better to liquidate equity holdings for making such purchases.

Also, if you are looking at buying property, a first home, where you are going to stay can never be timed. However, if investing in a second property, you could wait for the asset prices as well as interest rates to cool off. In other words, this is a period when no decision is the best decision for you.

Trading Calls

Buy United Spirits with a stop loss of Rs 1385 for a target of Rs 1800.

Buy DLF with a stop loss of Rs 590 for target of Rs 730.

Grey Market - Dhanus Tech, Allied Computer, Kaveri Seeds

Power Grid Corporation 44 to 52 11 to 12

Dhanush Tech. 280 to 295 130 to 140

Allied Computer 12 2 to 2.50

Kaveri Seeds 150 to 170 16 to 18

Motilal Oswal 825 95 to 100

Indowind Energy 55 to 65 2 to 3

Magnum Venture 27 to 30 1.50 to 2.00

Bumpy ride ahead

The market witnessed a small correction yesterday after a eight day rally. The market saw this fall amid sharp volatile moves which may keep investors cautious in today's trades. The weak Asian indices in current trades and overnight fall in the US market may add to the investors sentiment. However, presence of strong bullish sentiment my release some pressure. Among the local indices, the Nifty could test the 4540 on the upside while on the downside the index may get support at 4360. The Sensex is likely to get support at 15250 and may face resistance at 15700.

US indices slipped on Wednesday on the back of slumping pending home sales, fall in private sector employment and the latest woes for the financial sector. While the Dow Jones declined by 143 points to close at 13305, the Nasdaq also ended 24 points lower at 2606.

Crude oil prices moved up, with the Nymex light crude oil for October series rising by 65 cents at $75.73 a barrel. In the commodity space, the Comex gold fell by 80 cents to settle at $690.70 a troy ounce.

Correction expected

The market may edge lower following overnight fall in US stocks caused by weak US housing data. Asian markets mixed today, 6 September 2007.

Japan's Nikkei (down 0.45% at 16,085.53), and Hang Seng (down 0.79% at 23,880.08), slipped.

However, Taiwan's Taiwan Weighted (up 0.69% at 8,975.01), South Korea's Seoul Composite (up 0.41% at 1,873.25) and Singapore's Straits Times (up 0.05% at 3,449.75) rose.

US markets finished lower yesterday, 5 September 2007 after weak US housing data revived concerns about the health of the world's biggest economy. The Dow Jones Industrial Average slipped 143.39 points, or 1.07%, at 13,305.47. Broader stock indicators also lost ground. The Standard & Poor's 500 index fell 17.13 points, or 1.15%, to 1,472.29, and the Nasdaq Composite index fell 24.29 points, or 0.92%, to 2,605.95.

Crude oil prices rose to $76 a barrel on Thursday, 6 September 2007 buoyed by expectations that US crude and gasoline inventories fell last week. US crude rose 33 cents to $76.06 a barrel while London Brent crude was up 21 cents at $74.55 a barrel.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 336.99 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 41.40 crore on Wednesday, 5 September 2007.

The BSE 30-share Sensex declined 19.25 points or 0.12% at 15,446.15 on Wednesday, 5 September 2007. The S&P CNX Nifty slipped 3.40 points or 0.08% at 4,475.85, on that day.

The Sensex had surged 1,301 points, or 9.18%, in eight trading sessions, from 14,163.98 on 23 August 2007 to 15,465.40 on 4 September 2007. A fall in inflation and robust economic data along with steady inflow of FIIs helped the market rally in the recent past.

Federal Reserve’s Beige Book slams stocks

Stocks left in the lurch after getting no clue about interest rate cut

US stocks closed considerably lower today, Wednesday, 5 September, 2007 after stocks fell once Federal Reserve’s Beige Book was released. Renewed worries about credit markets and weak data on housing sector also took a toll on the stocks. All the ten economic sectors posted loss today.

A government report showed that pending home sales fell to its lowest level since September 2001 amid persisting weakness in the housing and credit markets. Also, Federal Reserve's Beige Book report reflected mixed economic conditions and did not offer much insight for an interest rate cut at the upcoming 18 September meeting.

The Dow Jones industrial Average closed lower by 143.29 points at 13,305.47. The Nasdaq Composite Index, finished down 24.29 points at 2,605.95. S&P 500 finished down 17.13 points at 1,472.29.

Twenty-seven out of thirty Dow stocks ended in red today. American Express, JP Morgan and Wal-Mart led the group of Dow laggards. Home-Depot was one of the three Dow winners. General Motors, which was one yesterday’s key Dow winners fell almost 3% today.

The Beige Book report today showed that economic activity continued to expand across much of the country, that retail sales remain "generally positive," and that wage increases were moderate or steady.

The report suggested that the weakness in the economy is limited to two areas: residential real estate and motor vehicle sales. The housing slump has dampened sales and construction in many markets and hurt furniture sales.

All Indian ADRs suffer loss

Before the bell, an employment report pointed that there was lackluster jobs growth in the private sector, with August proving to be the slowing month for hiring in four years. The monthly ADP employment report showed that only an estimated 38K new private jobs were created in August.

The National Association of Realtors reported that its index of pending home sales index fell 12.2% in July to a reading of 89.9 - the index's lowest level since September 2001. The index had risen 5% in June.

Among Indian ADRs, all ended in red today. Patni Computers and VSNL headed the list with drop of 4.7% and 4.5% respectively. HDFC Bank and ICIC Bank suffered losses of 2.2% and 2.4% respectively.

Crude almost touches $76

Crude-oil futures climbed close to $76 a barrel today as traders wagered that updated data on U.S. crude and motor gasoline would show declining inventories. Traders also showed concern over the potential for damage to energy facilities in the Gulf of Mexico during the Atlantic hurricane season.

Crude for October delivery climbed 65 cents to close at $75.73 a barrel on the New York Mercantile Exchange after reaching $75.78.

At the New York Stock Exchange, volume neared 1.4 billion shares, with declining stocks outpacing advancing issues 3 to 1. At the Nasdaq, more than 1.9 billion shares traded hands as decliners topped advancers by a ratio of more than 2 to 1.

For tomorrow, traders’ attention will be focused on economic data to help set the tone of trading. At 8:30 ET, the Labor Dept. will report initial jobless claims, as well as a revision to Q2 productivity. That will be followed by Energy Dept.'s weekly inventories report at 10:30 ET.

Nifty September 2007 futures at steep discount

The Nifty September 2007 futures settled at 4416.15, a sharp discount of 59.70 points as compared to spot closing of 4,475.85. In the previous three trading sessions, the Nifty September 2007 futures discount was 45.25 points, 28.75 points, 43.30 points respectively.

The NSE’s F&O turnover was Rs 42,642.91 crore as compared to Rs 39,013.75 crore on Tuesday, 4 September 2007.

Reliance Industries September 2007 futures settled at discount, at 1951, compared to the spot closing of Rs 1952.50. It was the most active contract with turnover of Rs 1765.53 crore.

IDBI September 2007 futures settled at premium, at 133.50, compared to the spot closing of Rs 132.80.

IFCI September 2007 futures settled at premium at 69.50 as compared to spot closing of Rs 69.20 .

State Bank of India September 2007 futures settled at premium, at 1586.20, compared to the spot closing of Rs 1580.50.

In the cash market, the S&P CNX Nifty slipped 3.40 points or 0.08% at 4,475.85.

Pre Open Market Commentary

Indian market is likely to have a negative opening on the back of negative global cues. On Wednesday, the Indian markets ended on a negative note, as BSE Sensex closed lower by 19.25 points at 15,446.15 while Nifty slipped by 3.4 points to close at 4,475.85. We expect the market to face profit booking during the trading session.

On Wednesday, the US market closed in red. The Dow Jones Industrial Average declined by 143.39 points to close at 13,305.47. The Nasdaq Composite Index slipped by 24.29 points to close at 2,605.95. The S&P 500 index decreased by 17.13 points to close at 1,472.29.

Indian ADRs ended in negative territory. In technology sector, Patni computers slipped by (4.71%) along with Wipro by (3.12%), Satyam (1.70%) and Infosys by (1.52%) respectively. In banking sector, HDFC bank and ICICI bank slipped by (2.41%) and (2.21%) respectively. VSNL and MTNL closed lower by (4.46%) and (0.85%) respectively.

The major stock markets in Asia are trading mixed. Japan''s Nikkei trading lower by 72.92 points to trade at 16,085.53. Hang Seng dipped by 189.09 points to trade at 23,880.08. Taiwan weighted advanced by 61.16 points to trade at 8,975.01. Singapore Strait times trading flat at 3,444.75.

Today, Nifty has support at 4,385 and resistance at 4,500 and BSE Sensex has support at 15,160 and resistance at 15,510.

Morning Call - Sep 6 2007

Market Grape Wine :

In House :

Nifty at a supp of 4437 and 4298 levels with resistance at 4490 and 4527 levels .

Weak opening .

Sell : intraday : SBIN below 1594 target 1577

Buy : intraday : Tisco above 670 target 687 s/l of 662

Sell : Intraday : VSNL below 394 target 382

Sell : Intraday : AbirNuvo below 1360 target 1330 s/l of 1373

Out House :

Markets at a support of 15051 & 15115 levels with resistance at 155551 & 15595 levels .

Markets facing huge resistance at 15550 to 15600 levels take fresh above 15600 closing .

Buy : REL at dips

Buy : RIL at dips

Buy : Siemens & Titan at dips

Buy : Centextile & JpAsso at dips

Buy : Maruti and Telco at dips

Buy : JpHydro & TTML at dips

Buy : Tisco at dips

Buy : Kotak & Aban at dips

Dark Horse : REL, Aban ,LT,IOlBroad,Tisco , NTPC , Kotak & Centextile

Monnet Ispat

Monnet Ispat

XL Telecom, Hindustan Tin Works

XL Telecom, Hindustan Tin Works


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Daily Call - Sep 6 2007

Daily Call - Sep 6 2007

Market Outlook, Technical Futures, Technicals

Market Outlook, Technical Futures, Technicals

Daily Technical Note - Sep 6 2007

Daily Technical Note - Sep 6 2007

Intraday Stock Ideas

Nifty (4476) S4435 R4501
Sell Bharti (849) SL 855 Target 838, 834
Sell Hero Honda (634) SL 640 Target 624, 620
Buy Bharat Forge (273) SL 268 Target 280, 283
Buy HLL (212) SL 208
Target 219, 221
Buy Renuka Sugars (530) SL 524 Target 540, 544

US jitters may hurt on opening

Fidelity to commitment in the face of doubts and fears is a very spiritual thing.

If the bulls were not willing to commit themselves on the front foot yesterday they could have a slightly tough time tackling the bears early in the morning following the sharp fall in US shares overnight. However, after a lower opening, things could recover as key Asian markets in Japan and Hong Kong have staged a smart come back after slipping in opening trades. Still, one should be careful as globally, concerns remain about the gravity of the downturn in the US housing market, and its impact on the global economy. In fact, the OECD, the body representing the rich nations, has already cut its forecast for world economic growth.

The Federal Reserve thinks otherwise though. Its latest assessment of the US economy found the effects of the August credit-market rout on the broader economy to be limited beyond the housing industry. The big event to watch out for is the Fed meeting on September 18, where the American central bank is expected to cut its key interest rate. The market is betting on a few more cuts further down the line. Even if the Bernanke & Co. does indeed relent and lowers borrowing costs, there are worries if that will be enough to avoid a recession in the US.

Coming to the local market, we expect a negative opening, but thereafter the key indices could return into the green zone as the outlook for the Indian economy and corporate earnings growth is strong. A big, sharp fall may not take place, but the upside too may be capped for the moment. Some more consolidation is in the offing before the bulls resume their shopping spree.

Watch out for LMW, which will start trading in F&O series from Thursday. Reliance Capital and BNP Paribas has acquired 2.2 lakh and 1.2 lakh shares, respectively at Rs2925. Other F&O entrants, to watch out for are Tech Mahindra, Sasken, Tulip IT, Biocon and 3i Infotech.

Shares of Vedanta Resources, the London-listed holding company of Sterlite Industries and Hindustan Zinc, closed up 3.1%. They reached an all-time high of 1,898 pence earlier in the session after Merrill Lynch added the firm to its Europe 1 list of conviction investments. The Wall Street firm also raised its price target to 2,450 pence from 2,000 pence.

US stocks tumbled on Wednesday, after reports showed slumping pending home sales and sluggish private sector employment. Also, the release of the Federal Reserve's 'beige book' added to confusion about whether the central bank will cut short-term interest rates in the near future.

Signs of more problems for the credit and mortgage markets also weighed on the sentiment.

Lehman Brothers and Morgan Stanley pushed financial shares to their biggest drop in six days on concern that their profits will decline because of losses tied to subprime mortgages. Every homebuilder in S &P indexes retreated. Apple shares slipped after the iPod maker cut prices of iPhones.

The S&P 500 Index lost 17.13 points, or 1.2%, to 1,472.29. The Dow Jones Industrial Average decreased 143.39 points, or 1.1%, to 13,305.47. The Nasdaq Composite Index fell 24.29 points, or 0.9%, to 2,605.95.

The pending home sales index, a measure of contracts to buy existing homes, fell to its lowest level since the month that included the Sept. 11, 2001 terrorist attacks, a trade group reported.

The ADP employment report showed surprisingly weak growth in private sector jobs in August. The report could be a negative indication for the broader August employment report, expected on Friday.

Treasury prices rose in a classic 'flight-to-quality' move, lowering the yield on the 10-year note to 4.46% from 4.54% late on Tuesday. In currency trading, the dollar fell versus the euro and the yen. COMEX gold for December delivery fell 80 cents to settle at $690.70 an ounce.

US light crude oil for October delivery rose 65 cents to settle at $75.73 a barrel on the New York Mercantile Exchange. The front-month contract was trading 20 cents higher at $75.93 a barrel in extended trading in Asia.

European stocks declined for the first time in a week after the London interbank offered rate (LIBOR) climbed to its highest since January 2001. The Bank of England responded by offering extra cash to financial institutions and the European Central Bank said it's prepared to do the same.

Banks and auto shares ranked among the biggest decliners in Europe. The pan-European Dow Jones Stoxx 600 index lost 1.8% to 372.66. The French CAC-40 closed down 2.1% at 5,551.55, the German DAX 30 slipped 2.1% to 7,588.03 and the UK's FTSE 100 declined 1.7% to 6,270.70.

Latin American equity markets dropped. Brazil's Bovespa fell 1.5% to 54,407.83 from Tuesday's close at 55,250.47 and Mexico's IPC index ended down 0.4% at 30,809.55. Chile's IPSA fell 1.2% with declines across the board, though the country's central bank raised its view for gross GDP growth to a range of 5.75% to 6.25%. Argentina's Merval index pared losses to close down 0.4% at 2,061.01.

In other emerging markets, the RTS index in Russia ended flat at 1905 while the ISE National-30 index in Turkey was down 1.3% at 62,115.

Asian markets were trading marginally lower this morning. The Nikkei in Japan was down 72 points to 16,085 while the Hang Seng in Hong Kong fell 100 points to 23,965. The Straits Times in Singapore was flat at 3444 and the Kospi in Seoul added 4 points to 1870.

Seven day winning streak finally came to an end as bulls faced stiff resistance at higher levels. Traders preferred to book some profits as index heavyweights like Bharti Airtel, RIL and L&T were the major laggards among the Sensex stocks. Finally, the BSE 30-share Sensex closed at 15,446 losing 20 points. NSE Nifty slipped 4 points to close at 4475.

ONGC marginally slipped by 0.4% to Rs831. The state-run explorer's subsidiary ONGC Videsh Ltd. is seeking to establish Sokol crude oil from Russia's Sakhalin Island as an Asian benchmark. The scrip touched an intra-day high of Rs846 and a low of Rs825 and recorded volumes of over 7,00,000 shares on NSE.

Reliance Industries edged lower by 0.5% to Rs1964. The company bought fuel retailer Gulf Africa Petroleum Corp. to enter the African market. The scrip touched an intra-day high of Rs1994 and a low of Rs1951 and recorded volumes of over 24,00,000 shares on NSE.

Bombay Burmah was frozen at 5% upper circuit to Rs488.50 following reports that the company may use its cash reserves to buy Groupe Danone SA's stake in joint venture Associated Biscuits International Holdings. The scrip touched an intra-day high of Rs488.50 and a low of Rs467.50 and recorded volumes of over 11,000 shares on NSE.

Shreyas Shipping rallied by over 17% to Rs106 after the company acquires 51% stake in Haytrans. The scrip touched an intra-day high of Rs106 and a low of Rs90 and recorded volumes of over 2,00,000 shares on NSE.

Akruti Nirman advanced by 4.5% to Rs567 as the company is reportedly planning to bid for the Dharavi project with a Dubai firm. The scrip touched an intra-day high of Rs574 and a low of Rs545 and recorded volumes of over 2,00,000 shares on NSE.

Ambuja Cement gained by 2% to Rs139 after the company’s August sales rose 3.6% to 1.15mn tons and production at 1.13mn tons (up 4.6%). The scrip touched an intra-day high of Rs139 and a low of Rs136 and recorded volumes of over 37,00,000 shares on NSE.

IT stocks ended higher led by gains in the index heavyweights like Infosys, the scrip gained by 0.5% to Rs1895, Wipro was up by 1% to Rs471, TCS was up by 0.6% to Rs1072 and Mphasis added 3.5% to Rs310.

FMCG stocks were a mixed bag. ITC was down by 0.5% to Rs172, Tata Tea slipped 0.5% to Rs758, Britannia declined by 1.5% to Rs1584. However, McDowell was surged by over 4.5% to Rs1496 and Colgate added 1.5% to Rs399.

Telecom stocks ended lower led by fall in heavyweight Bharti Airtel, the scrip was down by 1.1% to Rs848, R Com was down by 0.6% to Rs539 and VSNL declined by 2.9% to Rs402.

Capital Good stocks also were on the receiving end led by fall in the index heavyweight BHEL was down 1% to Rs1898, L&T declined 1.3% to Rs2589, BEL slipped by 1.4% to Rs1746 and Crompton Greaves lost 2% to Rs306.

Realty stocks recorded smart gains in a volatile market. DLF advanced by 2.5% to Rs639, Akruti surged by 4.7% to Rs570, Ansal Infrastructure added 0.5% to Rs259.

Fund Activity:

FIIs were net buyers of Rs3.37bn (provisional) in the cash segment on Wednesday and the local institutions were net sellers at Rs414mn. In the F&O segment, foreign funds were net buyers of Rs4.07bn.

On Tuesday, FIIs were net buyers to the tune of Rs6.3bn in the cash segment. Mutual Funds were net buyers of Rs988mn on the same day.

Major Bulk Deals:

Bear Stearns has sold Aptech; Reliance Capital has purchased iGate Global while Macquarie Bank and HSBC Financial have sold the stock; BNP Paribas and Reliance Capital have picked up LMW but HSBC Financial has sold it; UBS Securities has bought Mascon Global.

Lower Circuit:

BF Utilities, Yashraj Securities

Upper Circuit:

Shree Precoated, Tripex Overseas, Morepen Labs, Saregama Industries, Raj Tele, Zuari Industries, Omnitech, Bombay Burmah, Bank of Rajasthan, Crew BOS, Diamond Cables, Assam Company, IID Forgings.

Delivery Delight (Rising Price & Rising Delivery):

Cummins India, GNFC, ICICI Bank, IDBI and IVRCL Infrastructure.

Abnormal Delivery:

Satyam, Century Textiles, Grasim, Federal Bank and Siemens.

Major News & Announcements:

Govt approves Rs22.8bn of Foreign Investment proposals

L&T consortium bags Rs1.2bn order from Bhushan Steels

Gayatri Projects secures Rs3.11bn order in Orissa

Ambuja Cement August sales 1.15mn tons (up 3.6%)

NIIT signs agreement with China’s Chongqing Information

Dr Reddys enters the dermatology topical anti-fungal market with launch of Ebernet