DLF's $2 bn issue gets off the ground

Real estate firm DLF launched India’s largest IPO of over $2 billion on Tuesday amid rising investor wariness over real estate stocks and regulatory fears of a bubble in this large, but loosely-organised sector.

The Gurgaon, Haryana-based DLF will offer 175 million shares to investors at a price band of Rs 500-550 per share. The issue will open for subscription on June 11, one year after the company first made its plans public. At the lower end of the band, the issue will raise Rs 8,750 crore, while at the upper end it will garner Rs 9,625 crore.

The issue is a landmark event for both DLF and the Indian capital markets. At the upper end of the band of Rs 550, DLF will command a valuation of Rs 93,800 crore, making it the eighth largest company by market value after Reliance Communications but before ICICI Bank.

The move also signals the rapid maturing of the stock markets. In the past two years, the stock markets have seen greater liquidity, stronger FII participation and greater investor confidence, enabling companies with strong financials to raise large amounts of money through IPOs. Reliance Petroleum mopped up Rs 8,100 crore in April last year, a record that DLF is hoping to beat.

But there is salt to this strawberry. Interest rates are rising, property prices are falling and regulators have cracked the whip on loose and risky practices by real estate promoters and banks. The government has tightened lending to the sector, while the Securities and Exchange Board of India (Sebi) has warned companies not to indulge in aggressive methods of land valuation.

Real estate stocks have been extremely volatile in the recent months. For instance, Parsvnath Developers, which was listed in late 2006, was trading at Rs 450 plus levels at the beginning of 2007. It fell to a low of Rs 226.75 by early March — the recent weeks have seen it recover to Rs 320.

Unitech, which is the largest listed real estate player right now, was close to Rs 500 at the beginning of the year, a level from which it dropped 35% by early March. The current market price is Rs 600 — coming on back of strong results and a bonus issue.

The DLF management, however, sounded upbeat and confident. “About two-thirds of the money raised from the issue will go for acquisition of land and development rights and for existing projects. We may use the remainder for repayment of debt,” said Rajiv Singh, vice-chairman. He added that the company has been transparent and open in all its dealings and that all economic interests from its various ventures are being captured in DLF Ltd

DLF has total loans of Rs 9,932 crore. The company has not gone in for an IPO grading. “The process is new, and we will go for it as and when it becomes mandatory. We feel it is premature and not required at this point,” he added.

“We have development rights for 574 million square feet of land, which gives us earnings visibility for 10 years,” Mr Singh added. DLF delivered 10.3 million square feet to customers during FY08 — it needs to scale up operations manifold to justify the valuations it is asking for.

DLF recorded total income of Rs 4,034 crore during FY07, more than three times the figure for previous year. Net profit for the year stood at Rs 1,941 crore, almost ten times the value for the year before. However, 54% of the sales and 60% of the profit before tax were due to sale of assets to promoter group companies. DLF says this is a part of their business model, where instead of selling commercial property, they will be leasing it out, which will generate steady cash flow.

In addition to leasing property, the company is also getting into new business segments like hotels, SEZ and insurance. It plans to be present in all segments of the hotel industry — budget, luxury and business. It has recently tied up with Hilton for setting up a chain of business hotels around the country. Another JV for developing a large township has been entered into with Nakheel, a Dubai-based developer.

DLF had originally filed its draft prospectus with the markets regulator in May 2006, The issue size was pegged at Rs 13,600 crore, though there was no official confirmation from the company. However, the stock market went into a correction almost immediately and fell 30% in the next few weeks.

Stocks of other realty companies like Mahindra Gesco and Ansal fell even sharply, by over 50%. This wasn’t the only setback for the company. The announcement of the offering also resulted in a bitter dispute with the minority shareholders of the company. They filed a complaint with Sebi alleging that they did not receive the letter of offer of the debenture that the company issued in December 2005.

Each debenture entitled the holder to ten shares of the company. That issue has been resolved since. Another problem for the company has been the Reserve Bank tightening the liquidity screws, especially for the real estate sector. Sebi has also come down on real estate companies with regard to disclosures relating to valuation and titles of land holdings. Under the new set of rules, real estate companies have to disclose the exact details of ownership of the land-bank to which they claim development rights.

Economic Times!

$100,000 limit puts hedge funds within reach of Indian investors

The RBI's monetary policy for 2007-2008 has helped bring hedge funds within reach of the Indian market. Till now, hedge funds have been hesitant to register directly with the Indian stock market regulator, preferring to invest in India through FII sub-accounts.

Though the Securities and Exchange Board of India (SEBI) has laid down the guidelines for the direct registration of hedge funds, the latter have not yet come forward to do so.

The alternative investment industry has also not thus far shown any interest in tapping the Indian investors for raising funds.

The money infused in the Indian stock market by the hedge funds has been raised overseas, in the US, Europe and elsewhere.

But the changes made in the recent Monetary Policy of April 24 might alter the mindset of hedge funds regarding the fund-raising potential in India.

The RBI, in a bid to usher in greater capital and current account convertibility of the rupee, has increased the present limit for individuals for any permitted current or capital account transaction from $50,000 to $100,000 per financial year.

The restriction of capital convertibility to $50,000 was one of the reasons why hedge funds were not interested in marketing their products in India.

The SEBI report on hedge funds states: "As long as there will be restriction on capital account convertibility, foreign hedge funds, by virtue of their investment limit being $1,00,000 or higher, do not seem to be excited to access investment from Indian investors in India."

Decreasing Threshold

Hedge funds typically restrict the number of investors to below 100 or confine membership to qualified purchasers who are high-net-worth individuals with investments above $5 million.

The minimum investment in a hedge fund was, therefore, high, at $1 million and above.

The drive to raise more capital and to expand the assets under management is driving hedge funds to decrease the minimum investment to $200,000, or even $100,000.

Another way hedge funds have been made accessible to retail investors is through the launch of mutual funds that invest in hedge funds. These funds of funds are listed and traded on stock exchanges and are subject to regulations.

Investors with a lower investment threshold, seeking an exposure in these instruments find them a viable option.

We have come a long way from the time when hedge funds were eyed warily.

Governments and regulators across the globe are acknowledging the need for these funds to impart liquidity and to refine the pricing system in stock markets.

Why Hedge Funds

These instruments are gaining popularity, not only among aggressive investors but also among the more conservative lot, such as pension funds, charitable institutions, university trusts, and so on, that are taking advantage of the tax benefits offered by offshore hedge funds to diversify their portfolios and enhance returns.

Hedge funds have many features that differentiate them from other investment avenues.

They seek absolute returns and not relative returns, such as those sought by mutual funds.

That is, they do not benchmark their performance with any equity index, so that the return generated is not correlated with the equity market.

That makes them ideal instruments for diversifying risk. Many hedge funds hedge their purchases by selling options to protect the capital in adverse market conditions.

The managers of these funds typically own a significant portion of the fund, apart from charging management fees and performance fees that are related to the fund's performance. This ensures that the assets under management will be put to optimal use.

Though many of the hedge funds do take a call on the market direction and take positions accordingly, it would be unfair to say they cause market volatility.

Need for regulatory framework

It is, of course, understood that investment in hedge funds should only be undertaken by `sophisticated' investors with deep pockets.

The US Companies Act restricts individuals based on their net worth and monthly income from investing in these instruments.

Plenty of groundwork needs to be done before hedge funds are marketed freely in India.

SEBI will need to formulate detailed guidelines, paying particular attention to the marketing of these products to ensure that investors are adequately appraised of the associated risks.

Valuation of assets held by these funds and mandating periodic disclosures to investors and the regulator are other areas that will need to be addressed.

Sun and Gemini TV to merge

Sun TV has announced that the board of the company and Gemini TV has approved the amalgamation of Gemini with the company.

The boards has approved an issue of 1.78 equity shares of Rs 10 each of the company for every equity share of Rs 10 each of Gemini. This would involve an issue of 178,00,000 shares of the company to Gemini shareholders. The board of directors of the company and Udaya TV has approved the merger of all divisions of Udaya, except the FM radio division, with the company.

The boards have approved an issue of 19.72 equity shares of Rs 10 each of the company for every equity share of Rs 10 each of Udaya. This would involve an issue of 118,32,000 shares of the company to Udaya shareholders.

The board of directors of the company, Gemini and Udaya has approved the scheme of arrangement which governs the above amalgamation and merger.

After the proposed amalgamation and merger, the outstanding equity share capital of the company will increase from 688,89,155 to 985,21,155 equity shares of Rs 10 each. The additional 296,32,000 shares proposed to be issued will constitute 30% of the enlarged equity capital of the company.

The company is proposed to be renamed as Sun TV Network on completion of the proposed merger. Gemini owns and operates five television channels; Gemini TV, Teja TV, Gemini News, Gemini Music and Gemini Cable Vision.

Udaya owns and operates four television channels; Udaya TV, Udaya Movies, Udaya Varthegalu and Udaya TV II.

The company currently operates four television channels; Sun TV, KTV, Sun News and Sun Music in Tamil language, two television channels; Surya TV and Kiran TV in Malayalam language, three FM radio stations, and another three FM radio stations through its subsidiaries.

The two subsidiaries of the company Kal Radio and South Asia FM, jointly hold 41 FM radio licenses for FM radio stations across India. With this proposed amalgamation and merger, the company will increase the number of television channels in its bouquet from 6 to 15 channels. The proposed amalgamation and merger will enable the company to build a dominant presence in entire south India, and emerge as one of the largest and most profitable television broadcasters in India.

Enam Financial Consultants and DSP Merrill Lynch acted as advisors to this transaction. The merger is subject to final approval by shareholders, creditors and the high court.

India's growth story just got better

GDP grows 9.2% in Q2, fastest half-year rise since 1991.

India’s economic growth rate accelerated to 9.2 per cent in the July-September quarter from 8.4 per cent in the year-ago quarter on the back of a strong performance by the manufacturing and services sectors, raising the likelihood of interest rates being raised in January 2007.

Taken along with 8.9 per cent growth in the first quarter of the current financial year, this comes to 9.1 per cent growth for the first six months of 2006-07. Finance Minister P Chidambaram said this was the highest first-half GDP growth since 1991-92, when economic reforms were initiated.

He added that the 9.2 per cent growth clocked in the second quarter was among the highest growth rates in recent years.

“Higher growth rates were only seen in the fourth quarter of 2005-06, which saw 9.3 per cent growth and in the third quarter of 2003-04, which saw 11.3 per cent rise. This, however, was on a low base of 1.5 per cent,” he said.

After today’s numbers, economists said they might look at revising their growth forecast for the whole year. “Overall, we are revising up our full-year forecast marginally to about 8.2-8.3 per cent from 8.0 per cent,” JP Morgan Economist Rajiv Malik told agency.

“With GDP growth for the first half at 9.1 per cent, it is certain that there will be an upward revision for the full year. If the growth momentum is maintained, I see full-year GDP growing at close to 9 per cent,” added CRISIL Chief Economist Subir Gokarn.

Asked to comment on the expected annual rate of growth, Chidambaram said, “There is no limit to my expectation on GDP growth.”

He also played down concerns of increased pressure on interest rates on account of the high economic growth rate.

“There is ample liquidity in the system. Only yesterday, the Reserve Bank of India absorbed Rs 2,400 crore through reverse repo.” He endorsed the RBI’s view that it was premature to think of the economy “overheating.”

The finance minister said all sectors had done better in the second quarter than in the first one, barring agriculture and mining and quarrying. Commenting on the 1.7 per cent growth in agriculture, he said this was not unusual.

“The second quarter is always a lean quarter, as only a part of the kharif crop has come in, and the rabi crops come in in the third and the fourth quarters,” he felt.

“One of the worrying factors is the slightly high inflation, which is largely driven by supply side constraints. But with better supply side management and sugar and wheat stocks building up, I am confident that inflation can be tamed,” the minister said.

15 venture funds to invest in real estate

Around 15 venture funds from the US and Southeast Asia will be making investments in the Indian real estate sector through the FII route. The average ticket size of the investments likely to be made by these funds is around $200-250 million.

Funds that are presently making enquiries on investing in the real estate sector in India include the Blackstone Group, Berkshire Hathaway, JP Morgan, CalPERS, Lehman Brothers and GIC, according to a report by real estate consultant Jones Lang La Salle.

Eight to ten venture funds both from India and overseas have already announced plans to foray into the real estate sector.

The funds include big names like ICICI and the US based Tishman Speyers, Ascendas, GE of Singapore and US, HDFC, US based IREO, Fire Capital, an India based fund, Morgan Stanley, Merrill Lynch, New Vernon, and the US based Xander.

With the entry of 15 more funds, the total size of foreign investments in the Indian real estate sector will increase to $5 billion. According to Lang Salle, the objective of the existing funds varies as both investors and developers are setting up these funds.

Ascendas IT Park Fund and ICICI-Tishman Speyers will develop real estate, whereas HDFC Fund and Fire Capital are likely to be pure vanilla investors.

IREO has formed a SPV with a local developer in Pune in which it would hold 25 per cent to 35 per cent equity and finance the balance by extending a loan at 4 per cent per annum for 15 years. It plans to increase its stake in the SPV by converting the soft loan into equity in a phased manner.

Singapore based Keppel Land and Indonesia based Salim Group have entered India after the relaxation in FDI norms in real estate by entering into joint ventures with local developers or corporates.

UAE based Emaar Group has also tied up with MGF Group to develop properties across India. This apart, hotel chains like Accor and Four Seasons have also entered the country through management contracts with real estate developers.

India’s Punj Lloyd bags QP order for pipeline project

India’s engineering and construction major Punj Lloyd has bagged an engineering, procurement and construction (EPC) order worth Rs8bn (QR650mn) from Qatar Petroleum for the Doha Urban Pipeline Relocations Project (DUPRP).
The DUPRP project involved the installation of 97.2km of new pipeline ranging in diameter from eight to 36 inches, a Punj Lloyd release here said. Punj Lloyd will also build three new booster stations and modify six more as well as decommission the existing pipeline and nine stations, it said.
Commenting on the contract, Punj Lloyd chairman Atul Punj said, “Punj Lloyd has a very strong presence in the Middle East particularly in the civil pipeline and process plants segment. With this order, we will further strengthen our foothold in the Middle East.”
Punj Lloyd is among the largest engineering and construction companies in India providing integrated design, engineering, procurement, construction and project management services for energy and infrastructure projects with operations spread across the Middle East, Asia-Pacific, Africa and South Asia.
Meanwhile, the Middle East Economic Digest (Meed) in its latest issue said Turkey’s Tekfen has won a $45mn contract to build the Umm Bab-Mesaieed main oil line. Tekfen’s contract calls for the laying of 80km of pipeline. Additionally, it involves some demolition work, Meed said. The project completion is set for early 2008.
The journal also said bids have recently been invited for the construction package on the Ras Laffan-Mesaieed ethylene pipeline project. For the ethylene pipeline contract, technical bids are due to be submitted on December 11. The project being handled by Qatar Chemical Company-II on behalf of Ras Laffan Olefins Company (RLOC) involves the construction of a 130-km-long pipeline with a capacity of about 145t/hour of ethylene.
The product will be delivered from the Ras Laffan Ethane Cracker, under construction by RLOC, to new downstream units at Mesaieed planned by Q-Chem II and Qatofin, a Qatar-France joint venture.

Volatility may remain high due to derivatives expiry

The market is likely to open on a firm note taking cue from firm global markets. However, volatility may remain high as investors square off or roll over November 2006 derivatives contracts to December 2006 series. The November derivatives contracts expire today.

Mutual funds may remain active in the market today to support their month-end net asset values (NAVs).

FIIs were net sellers to the tune of Rs 335 crore on Tuesday (28 November). This was their biggest daily inflow this month. As per provisional data, FIIs were net sellers to the tune of Rs 241 crore on 29 November. They were net buyers to the tune of Rs 291 crore in index-based futures on 29 November. They were net sellers to the tune of Rs 730 crore in individual stock futures on that day. Weakness in index heavyweights restricted Sensex’s gain on Wednesday (29 November) to 15 points.

Asian shares rose on Thursday, led by exporters and resource stocks, after upbeat US growth data eased concerns about the health of the economy in Asia's biggest export market. Japanese shares rose to their highest in nearly two weeks, South Korean stocks hit a six-month high and Singapore's benchmark index notched up a record peak.

US stocks jumped on Wednesday after the government raised its estimate for economic growth and a surge in oil prices lifted energy stocks, helping major indexes recover most of the ground they lost from a big sell-off early in the week. The Dow Jones industrial average rose 90.28 points, or 0.74 percent, to finish at 12,226.73, while the Standard & Poor's 500 Index jumped 12.76 points, or 0.92 percent, to close at 1,399.48. The Nasdaq Composite Index advanced 19.62 points, or 0.81 percent, to end at 2,432.23.

US oil futures dipped, but still remained near a two-month high after weekly U.S. inventory data showed a surprise decline in heating fuel stocks in the world's biggest consumer. NYMEX crude for January delivery fell 17 cents to $62.29 a barrel.

Biocon's Shaw looks at acquisitions

Biocon Ltd is going to focus on acquisitions abroad purely for strategic reasons in either intellectual property assets or for marketing and distribution. Speaking to ET.com, Kiran Mazumdar-Shaw, CMD of Biocon, specified that for her company, the M&As will essentially be based on a strategic reason. She pointed out that Indian companies had different reasons for acquiring a global company, but said very few companies today are doing it simply for expanding the footprint.

Shaw agreed that M&A is the new hallmark of Indian multinationals and the one sector that is positioned to grow globally is the pharma sector.

Overseas acquisitions by Indian pharma companies in the 2005-2007 period has been to the tune of $2000 million. Shaw said: “For instance, this year, Biocon acquired a company in the US for reasons other than expanding the footprint. It was an IP company and we had to negotiate a lot, but it was important to pay the right price for the buy-out.

Biocon has acquired all intellectual property assets of its bankrupt US research partner Nobex Corporation early this year. The IP acquisition, unprecedented among Indian companies, has cost Biocon $5 million, including the final bid amount of $4.1 million, royalties and creditor settlements in what could be called a not hotly contested bid.

She said, "This was truly a strategic acquisition which provided us with an immensely valuable IP platform. It also gave us full ownership of our ongoing oral insulin and oral BNP programmes.” She added, “We propose to leverage these proprietary assets through a combination of licensing and co-development partnerships."

Shaw also said that pharma is really big on the M&A scene, but agreed that Dr Reddy’s and Ranbaxy are really driving the trend. However, she said, “Biocon is emerging as a key player in the generic market.”

Commenting on the acquisitions by the Indian corporations, she agreed that M&As are the new hallmark of Indian multinationals. The one sector that is positioned to grow further globally using this approach is the pharma sector.

She said Biocon started as a manufacturer and exporter of enzymes. The company gradually shifted focus to a life-science driven generic company with fermentation technology. Biocon is again going through a transition phase from being a generic company to a discovery led life science company. Statins sales to the US and Europe would be a major growth driver in the short term.

Be prepared for an opportunity

It is better to be prepared for an opportunity and not have one than to have an opportunity and not be prepared.

If we said be prepared for a correction, it would sure disappoint many. So call it opportunity for now. India's men in blue may have failed to fire in South Africa last night. But the bulls have been hitting master strokes in all directions sending the bears beyond imaginable boundary lines. The final Sensex score ended above 13,700 while the Nifty is closing in on 4,000. If the current momentum continues unabated, the Nifty may cross the landmark before the weekend break. Strong inflows from FIIs is powering the key indices higher despite repeated talk of overstretched valuations and a possible correction. The trend may continue for a few days if foreign capital inflows remain as robust as they are at present. However, some softening in the main indexes is not ruled out owing to profit booking. The F&O side of the market also looks overheated with the open interest crossing Rs550bn. Next week, we have the monthly expiry of derivative contracts. The market is bound to be volatile. The large caps are running faster than their small- and mid-cap peers. The broader market is still to catch up with their previous all-time high. Buying fresh at this juncture is fraught with a lot of risk though the long-term outlook remains bullish. Investors should keep booking small profits every time the market goes up sharply. Today, we see the market opening higher again, on the back of a positive trend in the Asian markets and overnight gains on Wall Street. Having said that we would still advise investors to remain on guard for any unexpected correction.

Siemens, Thomas Cook and BPL will announce their results for the July to September quarter.

Kinetic Motor and Kinetic Engineering could be in action due to a business restructuring.

FIIs were net buyers to the tune of Rs5.59bn in the cash segment yesterday on a provisional basis. In the F&O segment, they pumped in Rs6.88bn. On Tuesday, foreign funds pumped in Rs6.42bn in the cash segment. With this, their net investment in this month stands at $1.49bn after pouring in over $1bn in the previous three months. Mutual Funds were net sellers to the tune of Rs788.1mn on Tuesday.

In the US market, the Nasdaq surged to its highest level in nearly six years, after Dell's upbeat earnings helped spark a rally in technology shares. The positive momentum came as crude oil dropped.

But the blue-chip benchmarks languished before the Thanksgiving Day. Shares of GM fell on news that Billionaire investor Kirk Kerkorian, who failed to push GM into an alliance with Carlos Ghosn, cut his stake in the world's largest automaker by 25%.

With trading volumes thin ahead of the Thanksgiving holiday, the Dow Jones Industrial Average gained 5 points to 12,326. It earlier reached an all-time intraday high of 12,361. The S&P 500 rose 3 points to close at 1,406 and the Nasdaq advanced 11 points to 2,465.

All financial markets in the US are closed on Thursday for Thanksgiving, and close early on Friday, in what is expected to be a quiet session.

Weekly jobless claims rose by a greater-than-expected 12,000 last week to 321,000. However, the report still showed a healthy labor market. The November consumer sentiment index from the University of Michigan was revised downward to 92.1 from an initial read of 92.3. Economists had forecast that it would rise to 93.

US light crude oil for January delivery slipped 93 cents to settle at $59.24 a barrel on the New York Mercantile Exchange, following the release of the weekly oil inventories report. The front-month contract was quoting 8 cents down at $59.32 a barrel in extended trading in Asia.

Treasury bond prices inched higher, lowering the yield on the 10-year note to 4.56% from 4.57% late on Tuesday. COMEX gold rose 30 cents to settle at $629 an ounce.

Among the Indian ADRs, Infy rose 1.3%, Wipro surged by over 5%, Satyam climbed 4.7%, Tata Motors rose 1.15%, Dr. Reddy's advanced 2.1%, HDFC Bank added 1.7% and MTNL put on 3.3%.

European stock markets closed mixed. The pan-European Dow Jones Stoxx 600, which reached a six-year high early in the session, ended 0.1% lower at 359.55.

The German DAX 30 rose 0.2% at 6,476.13 while the French CAC 40 slipped 0.1% at 5,452.49. The UK's FTSE 100 lost 0.7% at 6,160.30.

In the emerging markets, the Bovespa in Brazil was up 0.8% at 41,912 while the IPC Index in Mexico added 0.4% to 24,674 and the RTS index in Russia put on 0.2% to 1703.

Asian stocks rose for a third day on Thursday, led by Australian financial companies, after Allco Finance Group said it may join Macquarie Bank and Texas Pacific Group to bid for Qantas Airways.

The Morgan Stanley Capital International Asia-Pacific excluding Japan Index gained 0.4% to 378.78 at 10:40 a.m. in Hong Kong. Markets in Japan are closed for a holiday today. The Hang Seng in Hong Kong is up 66 points to 19,316.

Singapore's Straits Times Index was set to close at a record for a second day. Stock indices rose in Asia, except in South Korea and the Philippines.

Major Bulk Deals:
Citigroup has bought Champagne Indage, Donear Industries, SpiceJet and Nitco Tiles; Bear Stearns has picked up Country Club; Merrill Lynch has purchased Donear Industries, Lloyd Electric and IFCI; Fidelity has bought Info Edge while ICICI Venture has sold it; ABN AMRO has sold Jain Irrigation; BNP Paribas AMC has picked up Milkfood; Fidelity has purchased NIIT while Deutsche Securities has sold it; Sundaram MF has bought Prithvi Info; Reliance Capital has picked up Rico Auto; Templeton MF has purchased Simplex Infra; Franklin Templeton MF has bought TRF while ACC has sold it; CLSA has picked up ICICI Bank while Crown Capital has sold it.

Market Volume:
The turnover on NSE was up by 15% to Rs104.63bn compared with yesterday’s trading session. Increase in the turnover was largely on account of huge block deal in ICICI Bank. BSE Capital Good index was the major gainer and gained 2.4%. BSE Auto index (up 1.15%), BSE Technology index (up 1.08%), BSE Pharma index (up 0.84%) and BSE PSU index (up 0.80%) were the other major gainers. However, BSE FMCG index lost 1.10%.

Volume Toppers:
IFCI, DCB, SAIL, Hindustan motors, Deccan Aviation, Satyam Computer, R Com, IVRCL Infrastructure, JP Associates, Zee Telefilms, Ashok Leyland, Bombay Dyeing, HLL, Unitech, Mahindra Gesco, Bank of India and NTPC.

Delivery Delight:
Amtek Auto, BEML, Bharti Airtel, Bombay Dyeing, BRFL, CESC, Crompton Greaves, Cummins India, D S Kulkarni, Dr Reddys Labs, Everest Kanto Cylinder, EXIDE Industries, Gujarat Ambuja Cements, Hindustan Zinc, Indian Hotels, Jaiprakash Associates, Jet Airways, Maharashtra Seamless, NDTV, Punj Lloyd, R Com, Siemens, Tata Motors, Wipro and Tata Power.

Brokers Recommendations:
Goetze India – Buy from Man Financial
Concor – Buy from Kotak

Long Term Investment:
Bharti Airtel

Major News Headlines:

Oracle defers open offer for i-flex by almost a month
Tata Steel & Tata Power agree to set up Captive Power plants
Siemens gets contract worth Rs40bn from Qatar
Engineers India bids jointly with Punj Lloyd for $1.6bn Libyan Refinery project
RIL shuts down Paraxylene unit for maintenance
Megasoft signs $1mn deal with Teletalk Bangladesh

Newspaper Roundup

ECONOMIC TIMES (www.economictimes.com)

* The Indian government may lift restrictions on the supply of indigenously produced liquefied petroleum gas for use in automobiles.

* Mumbai-based Hiranandani group plans to list on London's Alternative Investment Market to raise between $500-750 million to fund real estate projects. * Investment firm Blackrock-Merrill Lynch and Indian electronics firm Videocon Industries Ltd. are believed to have bought shares worth nearly $100 million in a pre-initial public offering placement of Cairn India, an arm of Cairn Energy Plc. .

BUSINESS STANDARD (www.business-standard.com)

* State-run Steel Authority of India Ltd. plans to float an overseas subsidiary to pursue its foreign expansion plans.

* Ashok Leyland Ltd. has lined up investments worth 52.50 billion rupees to increase production capacity over a period of 4-5 years.

FINANCIAL EXPRESS (www.financialexpress.com)

* LSI Logic Corp. has bought Metta Technology Inc. for about $7 million in cash. Metta develops multimedia system-on-chip technology and related software for consumer electronics products.

* China's Sany Heavy Industry Co. Ltd. <600031.ss> plans to invest 3 billion rupees in Maharashtra. The company manufactures and sells engineering construction machinery.

TIMES OF INDIA (www.timesofindia.com)

* The Indian government is planning to buy shares in State Bank of India held by the central bank for 290 billion rupees.

* The Indian government is likely to reduce luxury tax for the hospitality industry and sales tax on aviation turbine fuel. This has been planned to boost the tourism industry.

Glenmark Pharma - batch of crofelemer API

Glenmark Pharmaceuticals has reported the successful production of crofelemer active pharmaceutical ingredient (API). The product is for use in pivotal Phase III trials by Napo Pharmaceuticals, Inc in the USA. The company is manufacturing this API at a dedicated unit at its US FDA approved facility in Ankleshwar.

However, the company is also working on a development plan for the indications of AIDS related diarrhoea and pediatric diarrhoea. The company recently received approval from the Drug Controller General of India (DGCI) to initiate Phase II trials for acute infectious diarrhoea.

However the shares of Glenmark Pharma are down by 3% at Rs526 on volumes of 1,405,000 shares on the BSE.

NTPC to invest $763 mln in hydro project

Indian state-run power generator NTPC Ltd. said on Friday it planned to invest 34.25 billion rupees ($763 million) to set up a 520-megawatt hydro power project. ($1 = 44.9 Indian rupees)

BREAKING NEWS - Welspun Gujarat gets 4.60 bln rupees order

Steel pipes maker Welspun Gujarat Stahl Rohren Ltd. said on Wednesday it had secured an offshore pipeline order worth 4.60 billion rupees from Exxon Mobil Corp. .

A stock exchange notice earlier said the company had secured orders, but Welspun Gujarat said in a statement that it was a single order.

The company expects to execute the order for the 120-kilometre (74.56 miles) pipeline by 2007. Its order book stands at about 25 billion rupees, it said.

Shares in the company rose 0.61 percent to 82.40 rupees in a firm Mumbai market.

Premium News: United Phosphorus to buy Europe co for 100 mln euros

Chemicals and pesticides maker United Phosphorus Ltd. plans to buy a crop protection products maker in western Europe for "slightly higher" than 100 million euros, a top company official said on Tuesday.

He declined to give the name of the firm but said Yes Bank was advisor to the deal.

United Phosphorus has been on an acquisition spree snapping up South Africa's Cropserve (Pty) Ltd. and buying the worldwide

Copper tumbles in Shanghai

Copper prices took another tumble on Monday, with most Shanghai futures contracts falling by their daily downside limits as investors fretted over rising inventories, despite an otherwise robust market outlook.

Shanghai copper futures <0#SCF:> fell by their 4-percent daily limit at the opening and failed to recover as a plunge in London Metal Exchange three-month copper to four-month lows on Friday turned buyers away.

"Copper's starting the week the way it ended last week, in negative territory," a metals trader said.

Most Shanghai copper futures closed limit-down, with the most-active January contract <0#SCF:> dropping to 65,060 yuan ($8,277) a tonne, against 67,450 yuan at last Friday's close.

A weaker U.S. dollar did little to spark interest in London Metal Exchange contracts, with copper for delivery in three months on the LME quoted at $6,850 a tonne.

The contract fell $410, or 5.6 percent to $6,900 in London on Friday after LME stocks leapt 1,625 tonnes to 148,200, up 54 percent from the start of the year.

"Fundamentals for copper still look strong, but the stocks can't be ignored," a second trader said.

China's strong appetite for copper to feed industrial growth has long fuelled copper prices.

Expectations that this trend will continue were underscored by news last week that copper smelters might continue to chase limited supplies of concentrate next year.

Chile's giant Escondida mine, majority owned by BHP Billiton Ltd/Plc , has opened 2007 copper treatment and refining charge talks with Chinese smelters with an offer a third lower than charges for 2006.

"That tells us that at least BHP thinks smelters are desperate for concentrate," the second trader said.

High copper prices, which hit a record $8,800 a tonne in May, had kept China off the world copper market for months. Imports of copper, including semi-finished products, fell 22.4 percent between January and October as it relied on its own stockpiles.

But with copper prices slumping and domestic stockpiles diminished somewhat, some analysts think China may turn buyer.

"There is no visible oversupply in China's copper market. A strong price rise may appear if buying interests of consumers and investors are prompted by a might-be shortage in domestic physical market," Xue Feng, an analyst at Maike Enterprise Group said in a market note.

Three-month nickel, which zoomed to a record $32,625 on Oct. 20, was up $100 at $29,500 a tonne.

Australia's Western Areas NL ,WSA.TO> on Monday joined a growing legion of outback miners looking to increase output in response to nickel's surge.

The miner said it wanted to lift output of nickel in concentrate by 5,000 tonnes a year from 12,000 tonnes at its Flying Fox mine as it sees a strong nickel price going forward.

Nickel miners in the far western Australia outback, including Australian Mines Ltd. , Mincor Resources NL , Fox Resources Ltd. and Jubilee Mines NL are making plans to dig more nickel on expectations that demand for the metal will stay strong.

Metal Last Net Change Pct Move LME Cu 6910.00 10.00 +0.14 SHFE Cu* 65060.00 -2390.00 -3.54 LME Alum 2705.00 10.00 +0.37 SHFE Alu* 20110.00 -390.00 -1.90 COMEX Cu** 307.75 0.00 +0.00 LME Zinc 4335.00 35.00 +0.81 LME Nickel 29500.00 100.00 +0.34 LME Lead 1675.00 0.00 +0.00 LME Tin 9750.00 -100.00 -1.02

Change so far in 2006

Metal Latest bid End prev year Pct Move LME Cu 6910.00 4395.00 +57.22 SHFE Cu* 65060.00 41720.00 +55.94 LME Alum 2705.00 2276.00 +18.85 SHFE Alu* 20110.00 19360.00 +3.87 COMEX Cu** 307.75 204.20 +50.71 LME Zinc 4335.00 1905.00 +127.56 LME Nickel 29500.00 13500.00 +118.52 LME Lead 1675.00 1051.00 +59.37 LME Tin 9750.00 6475.00 +50.58

Indian shares seen slipping on weaker Asia

Indian shares are likely to ease on Monday, tracking weaker Asian markets and as investors consolidate their positions after a record run the previous week.

But the downside is likely to be limited by strong foreign fund flows, which have topped $7 billion so far this year.

Tokyo stocks fell to their lowest level in 1- months on Monday, while weakness in major miners dragged Australian shares lower.

In India, cautious retail investors could depress shares.

"The indices have closed at the upper end of the intraday band and the market breadth and traded volumes indicate strength in the undertone," said Vijay Bhambwani, chief executive of BSPLindia.com.

"But a large portion of the retail segment lacks clarity and conviction in the markets."

India's benchmark BSE index <.BSESN> climbed to a new record close on Friday, off a new peak of 13,303.85 points. The index gained 1.2 percent last week and is up 41 percent so far this year, making it the best-performing index in Asia-Pacific.

Templeton Asset Management's Mark Mobius says the Indian stock market looks expensive in comparison to others, but there are still some bargains to be had for long-term investors. For details, double-click on [ID:nBOM35965].

STOCKS TO WATCH

* Usha Martin Ltd., after the wire rope maker said its joint venture with Germany's Gustav Wolf will start manufacturing tyre beads and expand its steel cord capacity.

* Grasim Industries Ltd., after its plans to invest 12 billion rupees to set up a cement plant with a capacity of 3.5 million tonnes a year in the eastern state of Orissa. For details, double-click on [ID:nBOM150736].

* Binani Industries Ltd., after it said its subsidiary Binani Cement Ltd. has filed initial papers with the securities market regulator for a public offer of shares.

* Suit and apparel maker Raymond Ltd. , after said it would form a 500 million rupee joint venture with Grotto S.p.A. to sell the Italian firm's "Gas" brand in India. For details, double-click on [ID:nBOM133625].

FACTORS TO WATCH

* Indian federal bond report [IN/]
* Indian rupee report [INR/]
* FOREX-Dollar falls again on forex diversification talk [FRX/]
* Oil slips towards $59, traders look to winter,

* GLOBAL MARKETS-Asian stocks, dollar, oil pressured

Premium News - Punj LLoyd

India's Punj Lloyd Ltd. said on Friday it had won a contract worth 8.03 billion rupees ($180.9 million) from Qatar Petroleum.

The firm has been awarded an engineering and construction deal for the Doha Urban Pipeline Relocations project, a statement said.

Its shares were up 4 percent in afternoon trade in a firm Mumbai market.

Breaking Premium News - Moser Baer - Margins Improve

Digital disc maker Moser Baer India Ltd. expects core earnings to move towards the 35-45 percent range by the fourth quarter of the year to March 2007, as prices improve and input costs fall, a top official said.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) stood at 26.5 percent in the July-September quarter, showing a rise of 7 percentage points from the preceding quarter, Executive Director Ratul Puri told Reuters on Thursday.

"We will continue to see firm pricing environment, continue to see stable or weak polycarbornate (raw material) prices and see improvement in overall efficiency," Puri said.

Breaking Premium News - Petron Engineering Construction Ltd.

Petron Engineering Construction Ltd. said on Thursday it received the Letter of Intent for a contract worth 500 million rupees from Grasim Industries Ltd. .

The contract involved civil and mechanical work for refractories at Grasim's cement project in the north-western state of Rajasthan, Petron said in a statement

Breaking Premium News - TCS, Satyam Deal

India's top software exporter, Tata Consultancy Services Ltd. , and number four Satyam Computer Services Ltd. said on Thursday a new order from Qantas Airways Ltd. was worth about US$145 million.

The contracts to outsource IT support services, which were announced last month, are both for seven years.

TCS said its part of the order was worth A$120 million, or US$90 million, while Satyam said its portion of the contract was worth A$71 million (US$55 million).

TCS and Satyam said they would provide a range of IT application development, transformation and maintenance services to Australia's top airline.

Indian software services firms have been thriving on an outsourcing boom as companies worldwide look to cut costs at home to stay competitive.

A large English-speaking engineering workforce and wages at nearly one-fifth of western salaries have helped Indian companies attract outsourcing deals over the past decade.

At 0610 GMT shares in Satyam, whose customers include General Electric , were up 3.32 percent at 429 rupees, while TCS was 0.24 percent higher at 1,064.80 rupees in a firm Mumbai market.