Corporate Sector News

[Pintu]

RIL sells 1% stake for over Rs 3k cr - India Business - Business - NEWS - The Times of India

RIL sells 1% stake for over Rs 3k cr
Reeba Zachariah, TNN 18 September 2009, 12:55am IST

MUMBAI: Mukesh Ambani-led Reliance Industries (RIL) on Thursday sold its own shares held under Petroleum Trust and raised Rs 3,188 crore. The company plans to use the proceeds to acquire oil blocks abroad, taking advantage of the dip in their valuations.
The trust, a part of RIL, sold nearly 1% stake or 1.5 crore RIL shares at an average Rs 2,125 a piece. The trust was created in 2002 following the merger of Reliance Petroleum, the company that set up the first oil refinery in Jamnagar, Gujarat with RIL.
Considering Reliance Petroleum was an RIL subsidiary and according to Companies Act, it cannot hold shares of its parent. This left RIL with two options--either extinguish the shares resulting out of a share-swap merger or park the stock in a trust. RIL chose the latter.

Interestingly, the second time RIL decided to merge Reliance Petroleum, the outfit that built another refinery in Jamnagar, with itself in 2009, it chose to cancel the shares resulting out of this amalgamation. The Petroleum Trust now owns nine crore RIL shares compared to 10.47 crore or 6.65% stake before the sale. The transaction, is the largest secondary sale of shares since the DLF stake sale in May. The promoters of the realty firm sold 9.9% then, raising Rs 3,860 crore. The RIL scrip closed at Rs 2,086 on BSE on Thursday.

The trust structure or treasury stock provides the flexibility to sell the shares at an appropriate time without the expansion of capital and has voting rights. Several enterprises, from banks to hospitality to liquor to automobiles, had undertaken a similar route.

Suresh Surana of accounting firm RSM Astute Consulting group said, ‘‘The major advantage to hold shares in this fashion (trust format) is the flexibility factor of selling the shares when required rather than going for a fresh issue of shares to which a company has to comply with the preferential allotment guidelines besides the lock-in-period it has.''

Surana adds that Indian rules don't favour a listed company buying its own shares from the market and hold them as treasury stocks compared to the United States where a company can do that.

Recently, Vijay Mallya's United Spirits had raised Rs 1,000 crore through the sale of 10.28 million treasury shares in the market.

One of the first organisations to adopt the trust structure was ICICI Bank (merger of ICICI with ICICI Bank) some seven years ago. In 2008, Mahindra & Mahindra formed the M&M Benefit Trust consequent to the merger of some of its subsidiaries with the tractor major.

 

[NSG_Blackcats]

British govt provides 10m pound loan to Tata Motors​

LONDON: India's Tata Motors has been sanctioned a 10 million pounds loan for its new electric car project in the UK by the British government. With this, Tata has become the first company to secure a loan under the British government's 2.3-billion pounds automotive assistance programme scheme, eight months after its launch. The loan from the government will support 25 million pounds of the Indian company's own investment in plans to develop and manufacture Tata-branded electric cars in the UK. The company is now "considering locations" in Britain to set up a factory. An announcement is expected soon.

Britain's business secretary, Lord Peter Mandelson, said last night: "The government is determined to help the car industry to exploit fully the opportunities offered by green manufacturing. Today we are backing Tata as Tata backs Britain." "This loan will strengthen our electric vehicle manufacturing expertise, securing and creating high-value engineering jobs in the West Midlands." A spokeswoman for the business secretary said the government is in talks with 17 other companies about projects worth 2 billion pounds. Tata said: "It appreciates the state support." The car maker, led by Ratan Tata, has developed a four-seater electric vehicle in partnership with Norwegian group 20Miljo Grenland/Innovation. Production of the vehicle should begin in Norway later this year, The Daily Telegraph reported on Saturday.

Link

 

[NSG_Blackcats]

HCL Tech bags $113 mn deal from US cos​

NEW DELHI: Information technology major HCL Technologies announced that it has entered into two five-year deals for a total value of $113 million (about Rs 544.57 crore) with US-based energy management firms – Oncor and Energy Future Holdings to meet their IT requirements. While HCL will connect and support Oncor's corporate functions, grid management operations and other community-based field service centres, for EFH, the company will manage its IT infrastructure landscape comprising data centre, voice and data networks and end user computing services, HCL Tech said in a statement.

Link

 

[NSG_Blackcats]

Maruti begins work on its 'made-in-India' car​

After several decades of manufacturing cars modeled in Japan, the country's largest carmaker, Maruti Suzuki India has finally has started working on the prototype of an all new desi car at its Guragaon plant. Maruti has already sounded off to its ancillary manufacturers for their inputs on the design and engine of the new model. The car is likely to be fitted with latest 1.2 K-series engine and could be built on Ritz's platform. Code named YP8, the company is currently working on its three primary sections – interiors, engine and design. The car may be displayed in the forthcoming auto expo next year in Delhi, but the company hasn't reached on any decision on the pricing front. “This is a step taken by Maruti in right direction. With this car, they will kick start doing A-Z of production of design in India and thereby save royalty cost payable to Suzuki Japan for technology transfers," said Vaishali Jajoo, auto head of Angel broking.

The company will, therefore, save a fortune by not opting for a completely new car platform. Generally, the cost of developing a new platform constitutes a substantial part of the expenditure incurred on a new car's production. "If the new 'made in India car' turns out to be a success for Maruti, it will also help the company to make India the hub for small cars," Jajoo said. Maruti's plan of an indigenous car is in line with Suzuki's strategy to make India its global hub for small cars. The company is already exporting A-Star to Europe and will soon start outsourcing development of small cars completely to Maruti Suzuki.

Link

 

[NSG_Blackcats]

Future Group may hive off Big Bazaar: Biyani​

New Delhi: Future Group chief Kishore Biyani is looking to hive off hypermarket chain Big Bazaar and list it to unlock value as part of ambitious restructuring and growth plans to become a Rs 25,000-crore group in four years. Future Group is looking at adding 18 million sq ft of retail space across various formats by 2013-14 and is looking at various options to raise money for expansion -- listing of the value retail chain Big Bazaar being one of them. "There are opportunities which we are looking at, including whether one should knock-off Big Bazaar into a separate company and probably look at listing or a follow up offer on that," Future Group Chief Executive Officer Kishore Biyani told reporters. "There are possibilities (on hiving off Big Bazaar) but nothing is on the cards at this moment. It depends on the fund raising exercise," he added.

Link

 

[NSG_Blackcats]

Bharti-MTN deal ready to be signed​

Two deadlines and several controversies later, the $23 billion cash-and-share swap deal between Bharti Airtel and South Africa's MTN is ready to be signed, sources close to the negotiations confirmed today. "The deal is all set, agreed and legally ready to be signed," the source said. The deal was first announced in May with a second deadline due to lapse on September 30. The deal, which will be the largest in the global telecom space, will be subject to South African government approval (especially on whether it meets Black affirmative action policies), after which it will be signed and will require sanction from 75 per cent of shareholders present and voting in both companies.

The two companies are also delinking the issue of a merger, which has complex legal implications in both countries, and are creating a collaborative management structure instead, involving mutual board representation. Once the swap deal goes through, Bharti-MTN will have over 200 million subscribers, making it the third largest mobile company in the world behind Vodafone and China Mobile.

Full Story

 

[Pintu]

Nalco achieves 100% capacity utilization in depressed market- Metals & Mining-Ind'l Goods / Svs-News By Industry-News-The Economic Times

Nalco achieves 100% capacity utilization in depressed market
20 Sep 2009, 2007 hrs IST, Nageshwar Patnaik , ET Bureau

BHUBNESWAR: The blue chip Navaratna public sector aluminium giant has achieved 100% capacity utilisation in Alumina Refinery and Smelter and also has met the sales targets in the last fiscal despite the adverse market conditions.

The Company has achieved a record turnover of Rs.5631 crores against Rs.5576 crores during the previous year. The net profit, however, declined to Rs.1272 crores from Rs.1632 crores in the previous year mainly due to lower realization because of global recession.

Addressing the 28th Annual General Meeting here on Saturday, Nalco chairman and managing director, C R Pradahan admitted that the company has taken a beating due to the depressed prices in aluminum.

“The second half of 2008 saw the collapse of aluminium prices which forced many companies to either curtail production or close down smelters. Most of the Indian aluminium producers have been severely affected by the falling LME prices and resultant lower operating margins. The domestic Aluminium consumption, which was to grow at 8% in line with GDP growth, in the year 2008-09, has achieved a meager growth of 3.4%. Some of the domestic producers have cut production due to continuous fall in aluminium prices”.

The changing situation has forced the PSU) to make a foray into energy sector and move into other metals as parts of its diversification plan.

The “debt-free” company is in talks with Nuclear Power Corporation of India Limited (NPCIL) to set up a 1000 MW nuclear power plant in Orissa’s Ganjam district in joint venture, as a plan to emerge as an independent power producer, Mr Pradhan told reporters here on Saturday evening.

“Nalco will sign a memorandum of understanding (MoU) with NPCIL in this regard by first week of October this year,” Mr Pradhan said adding that the slump in demand of aluminium metal in the market caused by the global recession has exposed NALCO to vagaries of single commodity operations. “Hence we have decided to diversify into other sectors to insulate the company from similar adversity in future,” he said.

The aluminium metal price had suffered a downslide from US $ 3292 per tonne in September 2008 to US $ 1253 in February this year. The prevailing prices are at US $ 1900. The steep fall in prices of the metal led to decline in profit of the company to Rs 1272 crore in 2008-09 from Rs 1632 crore the previous year.

The company has started seeking mining leases and mineral concessions in South Africa and other African nations like Congo to venture into newer areas of operation through value addition.

Besides diversification, NALCO is also planning to venture into both upstream and downstream fields to leverage its strength in alumina and aluminium business in India and abroad. Accordingly, the company is pursuing an alumina refinery project in Andhra Pradesh and smelter plant in Jharsuguda in Orissa and smelter plants in Indonesia and Iran.

The company, however, has declared a dividend payout of 50% worth of Rs 322.16 crore

 

[Pintu]

National Aluminium plans nuclear power plant - India Business - Business - NEWS - The Times of India

National Aluminium plans nuclear power plant
IANS 20 September 2009, 06:15pm IST

BHUBANESWAR: The state-owned National Aluminium Co (Nalco) is focusing on diversification, including setting up a nuclear power plant and moving into other metals, to meet the economic meltdown.

As part of its plans, the company has begun talks with the Nuclear Power Corp of India Ltd (NPCIL) to set up a nuclear power plant of 1,000 MW capacity, said Nalco chairman and managing director C.R. Pradhan.

"We are in talks with NPCIL. We have plans to become an independent power producer," Pradhan said after the company's 28th annual general meeting here saturday.

Nalco also aspires to be a global player in metal business and is in the process of diversifying into other metals from its core business interest, aluminium.

"We are trying to spread the risk keeping in view the economic meltdown, instead of remaining dependent on one commodity. It is part of our diversification plan," said Nalco finance director B.L. Bagra.

Company officials said it has drawn up an ambitious plan to grow both organically and inorganically, and that the aluminium major is planning to acquire new mineral resources, especially coal, bauxite and copper.

According to them, Nalco has almost completed its second phase of capacity expansion on an investment of Rs.4,402 crore.

This will raise its bauxite mining capacity from 48 lakh tonnes to 63 lakh tonnes and that of alumina manufacturing capacity from 345,000 tonnes to 460,000 tonnes.

Along with diversification, the company is planning to leverage its strength in aluminium and alumina business to set up smelter plants in Indonesia and Iran.

 

[Pintu]

The Telegraph - Calcutta (Kolkata) | Nation | First biz park for aluminium industries

First biz park for aluminium industries

OUR SPECIAL CORRESPONDENT

Bhubaneswar, Sept. 19: Orissa will soon have its first industrial park for downstream and ancillary units in the aluminium sector.

An MoU was signed between the central public sector National Aluminium Company (Nalco) and state-owned Industrial Infrastructure Development Corporation (Idco) here this evening.

“Establishment of this proposed aluminium park is a historic and proactive step towards growth of micro, small and medium industries in aluminium sector in Orissa and development of industrial infrastructure,” said chief minister Naveen Patnaik, who was present at the MoU-signing ceremony.

Stating that his government has recently announced a policy for the development of micro, small and medium enterprises with cluster approach, Naveen said that pursuant to the policy, the government had taken up development of specialised industrial parks.

Development of dedicated functional industrial parks close mother plants would cut down the costs, he said.

The proposed aluminium park, with an estimated cost of Rs 75 crore, will be located at Angul close to the smelter plant of Nalco, said its chairman and managing director C.R. Pradhan.

Nalco and Idco will set up a joint venture on 50:50 basis soon after signing the MoU, he said.

A pre-feasibility study for the aluminium park was conducted by AF Ferguson and 200 acre land has already been earmarked. Electricity, water, road facilities would be developed soon, Pradhan said.

The detailed project report of the proposed park would be prepared by a professional agency.

 

[Sridhar]

Godrej to acquire foreign brands

19 September 2009

FMCG major Godrej today announced it would consolidate its business by going for acquisition of foreign brands, especially in haircare and household insecticide business.
"We have done acquisition of some brands outside India in the past few years. We are mainly looking for acquisition in developing countries like China, Brazil, Indonesia among others," said Adi Godrej, chairman of the Godrej Group in a press interaction.
Godrej decided that the company was "open to acquire a number three or number four brand and integrate it with our business," rather than rather than launching a brand of their own and compete with existing market leaders.

domain-b.com : Godrej to acquire foreign brands

 

[Pintu]

Google Sued by Indian Portal for Trademark Infringement - PC World

Google Sued by Indian Portal for Trademark Infringement

John Ribeiro, IDG News Service
Sep 21, 2009 4:00 pm

Google has been sued for trademark infringement by an Indian portal company, Consim Info, which claims that the search company uses its trademarks to drive business to its competitors.

Consim Info runs a number of portals including a popular matrimonial portal called BharatMatrimony.com. The company also targets different communities and castes in India with matrimonial portals designed for each of these groups.

When a user does a search on Google for BharatMatrimony.com or related matrimonial sites of the company, the user is served up advertisements of its competitors, Consim CEO Murugavel Janakiraman said in a telephone interview on Monday.

Consim objects to Google offering Consim trademarks as keywords for bidding in its advertising program, Janakiraman said. "This certainly translates into loss of business for us," he added.

Consim's trademarks also often appear in links from competitors that are served on a Google search, Janakiraman said.

A Google India spokeswoman declined to comment, saying that the matter was before the court.

Consim is also demanding that advertisements of competitors not be displayed when words similar to its trademarks are used in a search on Google. "A lot of people may not enter BharatMatrimony but instead use Bharat Matrimony, with a space between the two words, when doing a search," Janakiraman said. Their intent is to get to BharatMatrimony.com, he added.

Consim has filed a case before the Madras High Court in Chennai in south India. Janakiraman said that the court granted Consim an interim injunction last week, but that information could not be immediately confirmed as it is a public holiday in India on Monday.

Some of Consim's competitors have also been included as respondents in the case, besides Google.

Consim may also be benefiting from the Google program. When an user searches on Google for example for Shaadi.com, a competing matrimonial web site, Google displays sponsored links for BharatMatrimony.com.

Janakiraman said he could not comment on whether his company was also bidding for competitors' trademarks as keywords on Google, though he did not rule out that executives in his company in charge of advertising may be using the program. "As the market leader, we want it to be stopped for everyone", he added.

 

[Pintu]

Dell to get bigger footprint in India with Perot buy

Dell to get bigger footprint in India with Perot buy
BS Reporter / Mumbai September 22, 2009, 0:28 IST

Dell’s acquisition of Perot Systems for $3.9 billion, say analysts, will give the former an enlarged footprint in India, as well as give both the companies a chance to diversify, while making Dell a services’ powerhouse, globally and in the country, too.

Perot Systems is relatively small — $2.7 billion in sales, whereas Dell is a much bigger, $54 billion company. Dell, in a statement, said this would mean a better positioning of the company. For, it can provide a broader range of IT services and solutions, extend the reach of Perot Systems’ capabilities and supply Dell computer systems to even more Perot Systems customers.

Dell’s service globally is largely centred on its (dwindling) hardware/infrastructure sales, while Perot Systems is a leader in infrastructure services and outsourcing. Dell needs to shore up its sagging revenues, while Perot acquires an enviable international client base.

Perot is not new to the Indian market. It first entered India in 1996 through a joint venture with HCL Technologies— HCL Perot Systems (HPS). The joint venture (JV) was formed with a combined capital investment of $4.5 million. For the first nine months of 2003, HPS reported $78.7 million revenue and $9.3 million net income. In 2003, due to some differences, the JV came to an end when Perot Systems bought HCL’s stake for $105 million.

Perot Systems, today, has close to 8,300 employees across six centres in India. The Bangalore, Noida and Pune centres cater to the application development and infrastructure services. Hyderabad, with around 80-100 people, offers engineering services. The company’s BPO operations are run from Chennai and Coimbatore and consists of over 4,000 people.

Dell has close to 12,000 people in India, spread across four segments, R&D, marketing, domestic sales and BPO. The company’s BPO centres are in four cities—Chandigarh, Hyderabad, Bangalore and Gurgaon.

“There will not be an immediate impact on India, as such deals take a lot of time to integrate. HP is a example. But from an India perspective, Perot was trying to get into the healthcare segment. It was trying to get into a much more niche segment than global players like IBM and Accenture that cater to all the verticals. Perot still does not have a huge footprint in India,” said Alok Shende, principal analyst, Ascentius Consulting.

Perot recently signed a Rs 90 crore, 10-year outsourcing deal with Max Healthcare. This agreement marked Perot Systems’ first full IT outsourcing contract in the Indian healthcare industry, as well as the company’s first India-based healthcare client.

 

[Pintu]

Will Dell be able to take on IBM, HP in services?- Software-Infotech-The Economic Times

Will Dell be able to take on IBM, HP in services?
22 Sep 2009, 0027 hrs IST, Mini Joseph Tejaswi, TNN

BANGALORE: Will the $3.9 billion all-cash acquisition of Perot Systems give Dell an entry into the global services space which is currently dominated by strong rivals like by HP and IBM?

Dell has been actively working to build its services capability internationally in recent years. Analysts say the deal is indicative of the changing market landscape and the way deals are happening especially in the large enterprise space.

Dell, so far, has not been in the reckoning for services and has been lagging behind in the space. This buyout makes sense as huge growth is expected in services industry and even hardware deals are led by services.

Kapil Dev Singh, country manager, IDC India, said, ‘‘It is an attempt by Dell to catch up with the services story. But the integration is going to be challenging, as Dell itself is on an internal restructuring exercise globally. If the company wants to create a real impact in the services market, it has to move quickly.’’

The role of services has changed dramatically in the global tech space. The importance of services, IT infrastructure and other software services, has been increasing in the recent past. Enterprises are looking at customised applications for their clients.

“Also convergence is happening between software, hardware and networking,” said Sudin Apte, senior analyst, Forrester Research. ‘‘The deal may not have any immediate implication on the Indian market for Dell or Perot Systems.’’

Texas-based Perot Systems employs over 23,000 people globally. It has 8,500 people in India in different facilities in Noida, Bangalore, Chennai, Coimbatore and Hyderabad.

The company focuses on verticals like healthcare, telecom, manufacturing, government, BFSI, logistics, engineering services and business process outsourcing
. Dell has 12,000 of its 78,900 employees in India, in four divisions, BPO, R&D, domestic sales and manufacturing.

None at Perot, other than the leadership, had any wind of what was happening till the company senior executives got an email just an hour before the public announcement of the deal.

 

[RPK]

fullstory

L&T bags Rs 2,000 cr order from GMR group

Mumbai, Sep 24 (PTI) Engineering firm Larsen & Toubro today said it has received an order worth over Rs 2,000 crore from GMR Energy for setting up a gas-based power plant in Andhra Pradesh.

Under the scope of the order, L&T would set up the gas-based power plant at Vemagiri, near Rajamundry in Andhra Pradesh, Larsen & Toubro said in a filing to the Bombay Stock Exchange.

The project is expected to be completed in the 11th plan.

L&T's subsidiary L&T-Sargent and Lundy would carry out the plant integration and detailed engineering.

The construction, installation, commissioning and project management would be done by L&T.

As part of the order, L&T would design and manufacture critical equipment for the plant like heat recovery steam generators, switchgear and cooling towers among other things.

Shares of the company were trading at Rs 1,645.75, up 0.

 

[Pintu]

GM, Reva tie up for electric vehicles

GM, Reva tie up for electric vehicles
BS Reporter / New Delhi September 25, 2009, 0:35 IST

General Motors’ Indian subsidiary signed an agreement today with Bangalore-based Reva Electric Car Company (RECC) to jointly develop and produce electric vehicles for the Indian market. They hope to be able to produce one for sale by next year.

The two companies said the plan is to make India a hub for environment-friendly vehicles.

RECC is already making and selling electric cars for both the domestic and export markets. And, it says other domestic car makers have approached it for a similar agreement. “Nothing has been finalised,” said Chetan Maini, deputy chairman and chief technology officer of RECC.

Maini was speaking on the sidelines of the signing event. The partnership will help GM, India build Chevrolet-badged electric cars for the domestic market. Its entry compact car, Spark, will be the first Chevy model to use the electric drive train of Reva. Officials say even the other small car models like the U-VA and the soon-to-be-launched Beat will benefit from this collaboration.

“Electric car technology is fast growing in the domestic market, primarily due to government support. By this agreement signed today, we hope to get the first mover advantage in the consumer’s minds,” said Karl Slym, president and managing director of GM India.

GM sells around 40,000 units of the Spark every year. Company officials say an additional 10-15 per cent of Spark units would be manufactured as electric cars sporting both the older lead acid battery and the new lithium battery technology. “Further, we would offer a third version of battery technology which is an advanced derivative of the lithium battery ,” says Maini. Electric Spark cars will be available in a year’s time and will be manufactured in GM’s Halol and Talegaon facilities.

A lead acid battery offers a driving range of around 80 km on a single charge, while the advanced lithium battery pack enables the car to travel over 120 km. The price of the electric Spark was not announced today. Generally, electric cars powered by lithium batteries are twice the cost of a petrol model. That is because the lithium battery fitted in the car would have to be imported and costs over Rs 3 lakh.

The agreement signed today will broadly entail GM paying Reva a royalty fee for each electric car it manufactures. Company officials from both sides said the details were still not final.

“We are going to work closely with the central and state governments in India to develop infrastructure for electric vehicles’ charging and providing specific financial benefits to consumers who make the choice to adopt an environment-friendly mode of personal transport,” Slym said.

 

[Pintu]

L&T bags Rs 2-k cr power plant order

L&T bags Rs 2-k cr power plant order
fe Bureau
Posted: Friday, Sep 25, 2009 at 0427 hrs IST
Updated: Friday, Sep 25, 2009 at 0427 hrs IST

Mumbai: Soon after bagging over Rs 5,000 crore worth of orders from the Oil and Natural Gas Corporation (ONGC) for the Mumbai High North (MHN) process platform and living quarter's project, Larsen & Toubro (L&T) on Thursday said it has received a Rs 2,000-crore order from GMR Energy Limited, a GMR Group company, for setting up a 2x384 mw gas-based power plant at Vemagiri, near Rajamundry in Andhra Pradesh, on a lumpsum turnkey basis.

"L&T has a long relationship with GMR Group and has built the Hyderabad and Delhi airports for them. GMR has the confidence that L&T can complete the projects within the tight schedule," an L&T spokesman said. L&T is focusing on growth in the power sector and at present has an order backlog of over Rs 8,000 crore in this sector. This is expected to grow further by the end of the financial year, he added.

As part of GMR's new order strategy, L&T-Sargent and Lundy, a subsidiary of L&T, will carry out the plant integration and detailed engineering, using propriety technology of Sargent & Lundy LLC, USA. L&T will design and manufacture critical equipment for the plant. While the ONGC project is expected to be completed in 33 months, the new GMR order project will be executed on fast track and completed in the 11th Plan.

 

[Pintu]

L&T expects to improve 25% order growth forecast - Corporate News - livemint.com

L&T expects to improve 25% order growth forecast
L&T also expects to win orders in the oil and gas sector in the Gulf region as oil prices have risen

Debarati Roy / Bloomberg

New Delhi: Larsen and Toubro Ltd (L&T) India’s biggest engineering firm, expects to improve its 25% order growth forecast for this year mainly on new contracts from oil and gas and power sectors, chairman A.M. Naik said.

“Power business is growing for us,” Naik said on Thursday. The company expects to end the year with an order backlog of Rs20,000 crore from about Rs1,050 crore last year, he said.

Positive outlook: Larsen and
Toubro’s chairman A.M. Naik.
Ashesh Shah/Mint

Indian companies are adding generating capacity to tap expanding demand in the world’s second fastest growing major economy which faces peak-hour shortages of 12.6% this year, according to the Central Electricity Authority. Prime Minister Manmohan Singh has pledged to spend Rs56,960 crore to add power plants and transmission lines in the year to 31 March.

The government plans to add 78,700MW of generation capacity in the country in the five years to March 2012 and 100,000MW in the following five years. L&T also expects to win orders in the oil and gas sector in the Gulf region as oil prices have risen, Naik said.

Crude oil, which has gained 53% this year, will average $70 (Rs3,367) to $75 a barrel in 2010, Nouriel Roubini, a New York University economist, who predicted the financial crisis, said last month. L&T shares, which have more than doubled this year, gained 1.4% to Rs1,658.35 at close of trade on Thursday.

Meanwhile, L&T said it had received an order worth more than Rs2,000 crore to set up a gas-based power plant for GMR Energy Ltd. The power plant is to be set up in Andhra Pradesh, the company said in a statement.

Reuters contributed to this story.

 

[Pintu]

Chola DBS exits MF biz, sells AMC to L&T Finance- Finance-Banking/ Finance -News By Industry-News-The Economic Times

Chola DBS exits MF biz, sells AMC to L&T Finance
25 Sep 2009, 2127 hrs IST, ET Bureau

CHENNAI: Cholamandalam DBS Finance, part of the $3 billion Murugappa Group on Friday said it has reached an agreement with L&T Finance to sell its mutual fund business to the latter for Rs 45 crore. The Chennai-based company said the exit from the asset management business was part of its strategy to focus on its core businesses.

A statement from the company read, "Chola DBS (CDFL) and L&T Finance signed an MOU for the sale of CDFL's 100% shareholding in DBS Chola asset management (DCAM) for Rs 45 crore."

Edelweiss capital was the sole advisor to CDFL for the transaction. DCAM has assets under management of Rs 2,900 crore across 24 schemes. It said in the last one year, it has taken several strategic inititives to strengthen its position to be a strong NBFC.

In a recent interview to ET, Murugappa group chairman-designate A Vellayan said the group is not emotionally attached to any business but that it will stay in mainstay businesses where its already achieved position of being number one or two.
"In terms of portfolio analysis, we do this once every two years, look at what value we can create and then get out of it.

If we feel there's no value and its saturated & not core, we will sell it." In a separate statement, L&T Finance said the acquisition would help synergise with its existing financial services business by deepening and widening its services.
It believes that its brand and reach will enable building a robust and valuable asset management business.

DCAM has a professional team with a vast experience in asset management business. Many of its schemes have star ratings from Morningstar and Value Research and are placed in Platinum, Gold and Silver category by ET Mutual Fund Tracker.
L&T was advised by Equirus Capital on the transaction.

 

[Pintu]

L&T Finance Enters into MoU for Purchase of 100% Stake of DCAM

L&T Finance Enters into MoU for Purchase of 100% Stake of DCAM
Announcement / Corporate September 25, 2009, 19:35 IST

L&T Finance Limited (LTF) and Cholamandalam DBS Finance Limited (CDFL) have today signed a MoU for the purchase by LTF of the 100% shareholding of CDFL in DBS Cholamandalam Asset Management Limited (DCAM) for a consideration of Rs. 45 crores adjusted for cash balance and current assets as of date of closing.

Consummation of this transaction is subject to appropriate regulatory approvals to be obtained.

This acquisition would help synergise with L&T’s existing Financial Services Business by deepening and widening its services.

L&T believes that its brand and reach will enable building a robust and valuable asset management business. DCAM has a professional team with a vast experience in asset management business. Many of its schemes have star ratings from Morningstar and Value Research and are placed in Platinum, Gold and Silver category by ET Mutual Fund Tracker.

The average assets under management of DCAM was Rs. 2893 crores as of August 31, 2009.

L&T was advised by Equirus Capital on the transaction.

About L&T’s Financial Services Business
L&T has a presence in the financial services sector through its two wholly owned subsidiaries - L&T Finance Ltd. (LTF), and L&T Infrastructure Finance Ltd. (LTIF). Both LTF and LTIF are predominantly fund-based organizations catering to different classes of customers. On a consolidated basis, these entities have an asset size of over Rs. 9,000 crores. They have a nation-wide distribution network, with presence in over 230 locations, especially in the rural and semi-urban areas.

LTF
LTF offers a wide range of products that include asset-backed funding for purchase of construction equipment, tractors, commercial vehicles, farm equipments, supply chain finance, channel finance, term loans, lease products, capital market products, and micro-finance. It also undertakes distribution of third party financial products.

LTIF LTIF undertakes funding of large sized infrastructure projects, across various sectors in the country. It offers structured financial solutions for projects, equipment and other infrastructure development activities in segments like power, transportation, aviation, railways, ports, shipping and urban infrastructure.

About Cholamandalam DBS Finance Limited
Cholamandalam DBS is a listed joint venture between the Murugappa Group and DBS Bank of Singapore. One of the leading Non-Banking Finance Companies in India, the Company operates out of over 150 branches across the country. The Company, along with its subsidiaries offers individual and institutional customers a range of financial services – vehicle finance, home equity, capital market finance, corporate finance, securities broking and distribution of investment and insurance products. CDFL in the last one year has taken several strategic initiatives to strengthen its position to be a strong NBFC. Considering its own longer term vision in its core business, CDFL has decided to exit the asset management business.

About DCAM
DBS Cholamandalam Asset Management, an investment Manager for DBS Chola Mutual Fund, currently manages over Rs. 2890 crores (average AUM for Aug’09). It is one of the oldest AMCs in India, operating since 1996 and currently manages 6 Debt funds 11 Equity funds. The average AUM has grown from Rs. 1023 crores in Mar’09 to Rs. 2893 crores in Aug’09.

DBS Chola Opportunities Fund has been given a Platinum Medal and DBS Chola Growth Fund and DBS Chola Midcap Fund have been given Silver Medal by Economic Times Intelligence Group (Apr’09 to Jun’09). DBS Chola Monthly Income Plan, DBS Chola Freedom Income Fund and DBS Chola Liquid Fund are rated 4 star by both Value Research and Morning Star (Aug’09).

3 of its funds, viz., the DBS Chola Infrastructure fund, DBS Chola Midcap and the DBS Chola Small Cap Fund featured among the top 100 funds in the world for the quarter ended June ‘09 as per a study conducted by Lipper.

Sanjay Sinha, Chief Executive Officer (September 08 to date) is a PGCGM from IIM Calcutta, Hon. Grad. in Economics from University Of Delhi.

He has experience of over 20 years in the asset management business in India, including career with UTI AMC Pvt. Ltd and SBI Funds Management. Funds managed by him were the first few funds from UTI that won awards for their performance. During his tenure at SBI Mutual Fund, the Fund House won 34 awards in the 3 years between 2005-08 for the performance of its funds.

 

[Pintu]

L&T Fin pays Rs 45 cr for DBS Chola AMC- Engineering-Ind'l Goods / Svs-News By Industry-News-The Economic Times

L&T Fin pays Rs 45 cr for DBS Chola AMC
26 Sep 2009, 0237 hrs IST, ET Bureau

MUMBAI: L&T Finance — the financial services arm of engineering major Larsen and Toubro — announced its entry into India’s mutual fund industry on Thursday, by buying DBS Cholamandalam Asset Management for Rs 45 crore.

The buyout values DBS Cholamandalam AMC — a unit of the joint venture between the Murugappa Group and Singapore’s DBS, at 1.55% of its total assets under management of Rs 2,893 crore on August 31.

Equirus Capital was advisor to L&T Finance for the deal, while Edelweiss Capital advised DBS Chola. Industry officials said the valuation is one of the lowest among the deals in the domestic mutual fund industry in the recent years.

In June, Japan’s Nomura bought a stake in LIC Mutual Fund for a valuation of about 2.5% of the fund’s assets under management. Last year, IDFC bought Standard Chartered Bank’s asset management business for a price that worked out to 5.7% of assets under management. Both these deals were considered expensive for the buyers, as a major chunk of the assets was debt at the time of acquisition.

Some in the industry believe that the deal is expensive for L&T as well, given the asset management company’s debt-laden asset mix. DBS Cholamandalam’s total assets comprises close to Rs 253 crore in equity and the rest in debt, according to data from Morningstar India, quoting AMFI figures.

The mutual fund industry has been abuzz with talks about DBS Cholamandalam AMC being on the block since 2007, though the company has officially denied it all the while. The current valuation is just a shade of what was offered to buy the AMC in 2007, said a person, who was familiar with the talks during the last stake sale attempt in 2007.

“The promoters were asking for 8% of the assets in 2007, when assets were over Rs 5,000 crore. What was offered was 6%,” said the person, on condition of anonymity. DBS Cholamandalam officials were unavailable to comment on the matter.