Stocks to Watch - Reliance Communications, Satyam

Telecom tribunal TDSAT late Wednesday, 8 July 2009 dismissed a petition by Anil Ambani group firm Reliance Communications (RCom) seeking a clarification on its judgment on allocation of additional spectrum and dual technology regime. In its application, RCom, which has been allocated a start-up spectrum of 4.4 Mhz in all circles for GSM services, sought clarification that the TDSAT order is not a bar on geeting 6.2 MHz of spectrum.

Mahindra Satyam, formerly Satyam Computer Services, has announced that it had received approval from the Company Law Board to issue 19.86 crore shares of Rs 2 at a premium of Rs 56 to Venturbay Consultants Pvt. Ltd., a subsidiary of Tech Mahindra, on a preferential basis.

Tech Mahindra was allotted 31% equity shares of Satyam earlier at Rs 1,756 crore and Venturbay announced a public offer to take the balance 20% from the open market. However, the open offer failed to evoke response from subscribers with only 4.21 lakh shares including 2.69 lakh underlying American Depository Shares were validly tendered, representing less than 0.1% of the outstanding equity shares.

IndusInd Bank will raise around $100 million through a qualified institutional process (QIP) in the current quarter. The bank will dilute around 10-15% of its capital in the process. Post-issue, the promoter shareholding in the bank, currently at 25.63%, will come down by 3.5-4%.

Icra Management Consulting Services Limited (Imacs), an arm of Indian Credit Rating Agency (Icra) has formed a joint venture with Jeddah, Saudi Arabia-based investment firm Exsab International Holding Company for Trading Development, to offer advisory and consulting services in the Middle East and North Africa.

The joint venture will have operations in 21 countries, including Saudi Arabia, Qatar, UAE, Bahrain
, Kuwait, Oman, Iraq, Lebanon, Palestine, and Egypt, and will be headquartered in Riyadh, the companies said in a joint statement on Wednesday.

Net profit of TTK Healthcare declined 80.47% to Rs 2.10 crore in the quarter ended March 2009 as against Rs 10.75 crore during the previous quarter ended March 2008. Sales rose 20.70% to Rs 53.53 crore in the quarter ended March 2009 as against Rs 44.35 crore during the previous quarter ended March 2008.

Stocks to Watch - PSTL, ICICI Bank, SBI

Nagarjuna Construction Company (NCC) announced its plan of issuing equity shares and securities to the qualified institutional buyers (QIBs) through Qualified Institutional Placement (QIP) for an amount not exceeding Rs 5.50 billion. Shares of the company closed up Rs 6.45, or 4.73%, at Rs 142.80**.

Apollo Hospitals Enterprise reported a steady growth in standalone net profit for the quarter ended March 2009. During the quarter, the profit of the company rose 33.06% to Rs 291.40 million from Rs 219 million in the same quarter last year. Shares of the company declined Rs 35.7, or 5.92%, to trade at Rs 566.90.

State Bank of India (SBI) has decided to lower interest rates for this segment by 50 basis points, in a bid to double its market share in dealer financing. Shares of the bank closed up Rs 16.15, or 0.92%, at Rs 1,765.10.

Pyramid Saimira Theatre (PSTL) has put its businesses and assets in the US and Malaysia up for sale a move that aims to decline the losses and generating funds for Indian operations. Shares of the company closed down Rs 0.85, or 3.31%, at Rs 24.85.

ICICI bank and its merchant banking arm, ICICI Securities (I-Sec), have entered into an agreement, whereby all M&A (mergers and acquisitions) deals will be done by ICICI Bank. Shares of I C I C I Bank closed down Rs 5.65, or 0.75%, at Rs 748.70.

Stocks to watch

Pyramid Saimira Theatres is reportedly on the verge of acquiring a theatre chain in UK. The target firm owns 70 screens in the UK. However, the size of the deal is around $100 million, the reports added.

Indus Towers, the joint venture company of Bharti Airtel, Vodafone and Idea, will reportedly tap the capital markets in the next 2-3 years followed by the listing of Bharti Airtel's tower unit. While Bharti Airtel and Vodafone hold 42% stake each in Indus Towers, the remaining 16% stake is held by Idea Cellular, the reports added.

National Mineral Development Corporation (NMDC) is reportedly scouting for iron ore and coal mines for acquisition, both in India and overseas. Domestically also the company intends to acquire iron ore mines in Karnataka, Jharkhand and Chhatisgarh. It is also eyeing coal mines in West Bengal, the reports added. Separately, the reports suggested that NMDC will increase output by 10% in the year starting April to meet rising demand from steelmakers.

Andhra Pradesh Government has cut sales tax on aviation turbine fuel (ATF) from 33% to 4%, a reduction of nearly 90%. Maharashtra Government levies 25% on the fuel. Aviation stocks may see some action based on this report.

Bharat Heavy Electricals (Bhel) is reportedly in discussions with a few Russian construction companies for tapping the power market that is booming on the back of an energy-led growth. It would be for the first time that Bhel would be entering Russia in recent history, the reports added.

The department of telecom (DoT) has reportedly informed the Central Vigilance Commission and lawmakers separately that it has not allocated excess spectrum to any GSM operator and dismissed allegations that the operators were hoarding spectrum.

Stocks In News

her oil prices lifted energy companies' shares, Asian markets were trading mixed.

Reports suggest NIIT Technologies is in preliminary discussions with private equity players Carlyle and TPG to sell a majority stake. Promoters currently hold 40 per cent stake in the company. According to reports, they may sell anywhere between 25 per cent and 40 per cent in the company. This would trigger an open offer, where investors can buy an additional 20 per cent in NIIT Technologies. The stock closed 0.85 per cent lower at Rs 333.

The Bajaj family feud could see some impact on its group companies’ shares. The tussle took a new twist with Shishir Bajaj strengthening his control over Bajaj Hindusthan. The brothers at war, Rahul and Shishir, had Thursday decided to terminate a family settlement agreement after prolonged peace talks. Bajaj Hindusthan shares closed 10.3 per cent lower at Rs 170.

BHEL has projected that their sales will rise by 20 per cent in this financial year. BHEL expects to win most of the power equipment orders likely to be placed by the government in the Eleventh five year plan (2007-2012). This could augur well for the company’s shares. The stock ended 2.6 per cent higher at Rs 2040.70.

Stocks to watch

Equities are likely to remain volatile Thursday on the day of the September series derivatives expiry. Global cues being positive, it is probable that Nifty futures is likely to test the 5000-mark today.

EIH Ltd, a member of the Oberoi Group, has decided to terminate its strategic alliance with Hilton International for marketing and co-branding the Trident Hilton brand in the country. This could see some action in EIH shares. The stock closed 0.91 per cent higher at Rs 116 on Wednesday.

The promoter of Kingfisher Airlines, Vijay Mallya, has acquired a 50 per cent stake in an US-based aircraft manufacturing company, Epic Aircraft Manufacturing Company, for an estimated $120 million. This could give a sentimental push to its holding company – UB Holdings’ shares. The stock ended 0.62 per cent lower at Rs 807

DLF plans to build and run its own metro rail to provide mass transport to its townships. According to reports, the developer is now in discussions with global railway equipment vendors to source automatic metro rail systems, which it claims will be more sophisticated than the current system being used by the Delhi Metro Rail Corporation. This augurs well for the realty major’s shares. The stock finished 3.5 per cent down at Rs 738.

Videocon Industries plans to enter the mobile telephony business. The company has applied for mobile licences in all 22 telecom circles in the country. Reports suggest that US communications giant Verizon is likely to partner Videocon for this foray.

In another development, Videocon Industries is planning to set up a semiconductor and LCD complex near Mumbai. The company has sought 200 hectares from the Maharashtra Government for the project, which is estimated to entail an investment of Rs 8,000 crore. This could spur the company’s shares. The stock closed 0.96 per cent lower at Rs 365.

Tata Sons has bought 14.7 per cent in engineering company Praj Industries, in an open-market transaction totalling Rs 338 crore, which signals the Tatas’ intention to enter the distillery and waste water treatment industry. Praj Industries’ shares were down 4.11 per cent at Rs 238.05.

Lumax group has formed an equal joint venture with the Turin-based Cornaglia Group, for the manufacture of vehicle emission systems. Lumax Auto shares are likely to benefit from the news. The stock was down 1.03 per cent at Rs 91.05.

Event packed week for stocks

The week began with the public sector banking giant State Bank of India coming out with better-than-expected fourth quarter numbers. The Lok Sabha passed SBI Amendment Bill 2006 allowing the bank to reduce its stake in seven subsidiary banks to 51 per cent. It will now be able to raise additional capital to meet the new risk provisioning norms and growth plans. Other bank stocks took a cue from SBI to follow suit.

Technology stocks witnessed subdued action on continued appreciation of the rupee against the dollar. Reports from two US lawmakers that some Indian IT firms were misusing the H1B visa programme may also have triggered caution.

The stock of Raj TV was conspicuous during the first half of the past week for a sudden spurt in volumes. On Tuesday, over 27.36 lakh shares were traded in the NSE and the stock gained 20 per cent. The stock surged 19 per cent on the same day to close at Rs 226.4. The company attributed the heightened interest in the stock to expansion plans by the channel.

Suzlon Energy's stock lost about nine per cent after the company reported a 3.4 per cent decline in consolidated net profits in the fourth quarter.

Alfa Laval and United Spirits were the news on Wednesday. United Spirits, after the company clocked handsome gains after it agreed to buy Scottish Liquor maker White and Mackay for $1.18 billion (Rs 4800 crore).

Bajaj Auto witnessed a steep fall in the latter part of the week as it announced its demerger plans

Market heavyweight Reliance Industries witnessed buying interest after reports that the company had made two natural gas discoveries. The stock touched a record high of Rs 1,705 before settling just below Rs 1,700 on Friday.