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Sunday, June 20, 2010

Technofab Engineering IPO opens on June 29

Technofab Engineering Ltd. (TEL) has decided to open its Initial Public Offering (IPO) for subscription on June 29, and to close on July 2. Technofab Engineering has filed the Red Hearing Prospectus with the Registrar of Companies, NCT of Delhi and Haryana (RoC) to enter the capital markets with an IPO of 29,90,000 equity shares of face value of Rs.10 each for cash at a price to be decided through a 100% book-building process. The Issue comprises of a reservation of 50,000 Equity shares of Rs.10 each for eligible employees. The issue will constitute 28.50% of the post issue paid-up equity capital of the company. The net issue will constitute 28.03% of the post issue paid-up equity capital of the company.

The company is proposing the IPO to meet long term working capital requirements of Rs300mn, finance procurement of construction equipment for Rs162.38mn, finance setting up of maintenance and storage facility for construction equipment for Rs49.95mn, setting up training centre for employees for Rs54.07mn and balance for general corporate purposes. Fitch Ratings India has assigned a grade of ‘3 (ind)’ out of a maximum of ‘5 (ind)’ to the proposed IPO of TEL. The grade indicates the average fundamentals of the issue relative to other listed equity securities in India. TEL is engaged in the business of providing Engineering Procurement and Construction (EPC) services, and executing a wide range of Balance-of-Plant (BoP) and electro-mechanical projects on a complete turnkey basis.

ITC announces 1:1 centenary bonus

ITC will complete a 100 years in August. Acknowledging the unstinted support of shareholders, the Board of Directors proposed a centenary issue of Bonus shares in the ratio of 1:1, subject to shareholders’ approval at the Annual General Meeting scheduled for 23rd July. ITC has evolved into a multi-business conglomerate and is today the leading FMCG marketer in India, the second largest hotel chain, the clear market leader in the Indian Paperboard & Packaging industry and the country’s foremost Agri-business player. Additionally, its wholly owned subsidiary is one of India’s fastest growing IT companies in the mid-tier segment.

Over the last 15 years, ITC has created multiple drivers of growth by developing a portfolio of world-class businesses. During this period, the company’s post-tax profits recorded an impressive compound growth of 21.7% per annum respectively. Total Shareholder Returns, measured in terms of increase in market capitalisation and dividends, grew at a compound rate of 24.3% during this period, placing the company amongst the foremost in the country in terms of efficiency of servicing financial capital. ITC today is one of India’s most admired and valuable corporations with a market capitalisation in excess of Rs100,000 crores.

Advance tax collections from Top 100 companies up 19%

The Government has netted Rs126.62bn in the form of advance tax from the country’s top 100 corporates during the first quarter of the current fiscal year. ONGC, SBI and RIL lead the league table of the country’s top 100 tax payers for the first quarter. The Q1 FY11 advance tax numbers reflect a jump of nearly 19% over the year-earlier levels. ONGC and SBI paid Rs10.93bn and Rs8.69bn, respectively, while RIL paid Rs6.53bn. ONGC and RIL’s payments are up 24.2% and 108% respectively, whereas in the case of SBI, the country’s top lender, it was down 18%. The country’s second-largest lender ICICI Bank’s tax payments were flat at Rs3.5bn for the quarter, while Punjab National Bank showed an increase of 34.32%, paying RS3.17bn. Indian Oil Corp. (IOC) paid 73% more advance tax at Rs2.25bn as against Rs1.3bn paid during the corresponding period a year ago. Similarly, telecom giant Bharti Airtel paid Rs1.79bn as against Rs1bn paid during the same period last year, the sources said. Overall, the advance tax collections for the April-June quarter point to a healthy performance.

Inflation above 10%; sparks fears of rate hike

The annual rate of inflation, based on monthly WPI, stood at 10.16% for the month of May 2010 as compared to 9.59% for the previous month and 1.38% during the corresponding month of the previous year. Build up inflation in the financial year so far was 1.85% compared to a build up of 2.67% in the corresponding period of the previous year. The official Wholesale Price Index for 'All Commodities' for May 2010 rose by 1.7% to 258.1 from 253.7 for the previous month. The provisional number for March was scaled up to a 17-month high of 11.04% from 9.9%.

Revised DTC draft unveiled for public scrutiny

The Finance Ministry unveiled the second draft of the proposed Direct Taxes Code (DTC). The first draft tax code was released in August 2009 and received 1,600 comments. The first draft had proposed a uniform corporate tax rate of 25%. The revised discussion paper addresses 11 issues which includes the issue of wealth tax and general anti-avoidance rule (GAAR). The final draft is set to take into account issues such as minimum alternate tax (MAT), special economic zones (SEZ), transfer pricing, GAAR, IT exemption on savings and taxation of charitable organisations. Under the Direct Tax Code, the current distinction between short-term investment asset and long-term investment asset on the basis of the length of holding of the asset will be eliminated.

Weekly Stock Picks - June 10 2010


Buy IVRCL Infra

Buy Tata Elxsi

Buy Swaraj Engines

Buy Onmobile

Weekly Newsletter - June 20 2010

The Indian key indices failed to extend the recent winning streak, as Reliance group stocks declined after the much-awaited Reliance Industries AGM failed to live up to expectations. Other world markets were also struggling at the end of another positive week, calling into question the sustainability of the current rally. Meanwhile, gold broke through a key level in early Friday trading in New York. It rose as high as $1,260 an ounce. At the same time, the euro was headed for its best week since Sept. 2009. What is interesting is that despite Friday's losses, FIIs were net buyers of Rs7.79bn in the cash segment while local funds remained cautious, being net sellers at ~ Rs5bn.

Spain soothes debt worries...stocks, euro extend gains

Global markets managed to sustain last week's strength as the euro climbed after a reasonably successful Spanish bond auction eased some trepidation about the financial health of the southern European nations. Also boosting the confidence about the region's ability to tide over the sovereign debt crisis were tough new austerity measures announced by the likes of Spain and France. Worries about sovereign debt in Europe also retreated after European Council President Herman Van Rompuy said that stress tests on the region's banks will be published in July. That announcement helped assuage fears over European banks' loan books and their exposure to euro-zone sovereign debt as it came amid stiff opposition, particularly from regional banks in Germany. Earlier, the yield on ten-year Spanish government bonds rose amid speculation of a Greek-style bail-out for Spain and more worries about the financial health of the country’s banks. But those reports were dismissed by both the IMF as well as the Spanish government.

Mukesh Ambani seeks harmonious ties with ADAG

The legal dispute over gas supply with RNRL is over and Reliance Industries is now looking forward to "harmonious" and "constructive" relations with the Anil Dhirubhai Ambani Group (ADAG). This was stated by none other than Mukesh Ambani, the chairman of RIL at the company's 36th AGM in Mumbai on Friday. The Supreme Court (SC) verdict in May this year largely upheld RIL's stand in the gas dispute with RNRL, Mukesh Ambani told shareholders. Natural gas from the KG Basin would be supplied to ADAG power plants according to the Government-fixed formula as and when they are ready, he added.

Weekly Report - June 19 2010

Weekly Report - June 19 2010