Infomedia India - On The Prowl

Infomedia - Acquiring More Companies

Yellow pages and niche magazines publisher Infomedia India has acquired Delhi-based International Typesetting and Composition (ITC), a publishing services provider, for $12 million ( approximately Rs 54 crore). This is third acquisition by Infomedia in the last three months, the earlier being UK-based Keyword Group and Bangalore-based Cepha Imaging systems, which were acquired for $7 million in December 2005.

“We had identified publishing services and e-publishing as growth areas and with this acquisition will consolidate our position in the burgeoning publishing services sector. This will enable us to service both the main publishing geographies - UK and US - as our earlier acquisitions had enabled us to have a footprint in US,” Infomedia Managing Director Prakash Iyer told reporters here today. ITC is a publishing services provider, with a front-end in Fort Lauderdale and with footprints in both India and US. The acquired company employs 275 personnel and is expected to post $4 million in revenues in the current financial year, he said.

Infomedia is acquiring the company in two phases, with it already acquiring 83 per cent and the remaining to be acquired by June 2007. The consideration of $12 million is for the entire 100 per cent stake, and Infomedia expects to meet it through internal accruals. Quoting industry estimates, Iyer said that the publishing BPO market in India is a $250 million sector and is posting a 30 per cent annual growth. Of this, only less than 15 per cent is currently outsourced from India, and hence, there is a huge potential for growth in the country.

Earlier on December 20, 2005, Infomedia India had acquired two BPO firms, UK-based Keyword Group and Bangalore-based Cepha Imaging Systems, for $7 million. Keyword was founded by two individuals - Alan Rodwell and Steve Johnson - while Cepha was managed by an Indian, Benny Karunakaran. It is also planning to bring out directories for tier-II cities, such as Jaipur, Vijayawada, Chattisgarh and Orissa. At present, the company publishes directories from 16 locations in the country.

Infomedia is also planning to acquire American Devices India Pvt Ltd and US-based Software Services LC for Rs 52 crore. Both entities are engaged in the business of providing customised solutions to the publishing industry. The proposal for acquiring the two companies was approved by the board and the purchase consideration would be discharged in two instalments, the leading information products company informed the BSE.

Punj Lloyd - Engineering Conglomerate

Punj Lloyd - Investing In Global Health

The Delhi-based engineering firm Punj Lloyd will invest Rs 138 crore in Global Health Pvt Ltd (GHPL), a company promoted by noted heart surgeon Naresh Trehan. The investment is part of a larger fund raising plan of Global Health, which is setting up the Medicity Project in Gurgaon, near Delhi.

Indicating that this equity placement could be the first in a series of many, Naresh Trehan, Medicity’s promoter and Escorts Heart Institute and Research Centre’s executive-director, said, “We are working at several such deals. GHPL is a new company and it will take on equity stakes from several partners.” Declining to divulge details of the deal, Trehan said: “Both the parties are very keen on the deal. However, we can disclose the equity stake only after the deal has been closed.”

The Medicity project envisages a multi-speciality institution to provide top-notch healthcare facilities. It is expected to become operational by 2007. The $250-million institute will be spread over 43 acres and clinically modelled after global centres of excellence such as the John Hopkins and Mayo Clinic of the US. The campus will have a teaching hospital and research institute and will offer medical and nursing degrees, while providing healthcare services at its 1,800-bed facility with 20 medical specialties.

About a year ago, Trehan had entered into a memorandum of understanding with General Electric (GE) for collaboration in a number of initiatives regarding Medicity. While GE did not promise any monetary investment in Medicity, it would provide high-end diagnostic tools, clinical research and development and utility services such as power generation and distribution, lighting and water treatment to Medicity.

Jain Irrigation - Sprinkling Elixir

Jain Irrigation - Profit With Water Sprinklers

Jain Irrigation Systems Ltd. announced on Tuesday that the company, along with two other local companies, have been empanelled by the Government of Tamil Nadu for supply of drip and sprinkler irrigation systems for the year 2005-06 and 2006-07. This empanelment would enable the company to participate in a major way in the proposed centrally sponsored as well as state sponsored schemes, which envisage covering over 30,000 hectares in a year's time at an investment of about Rs1.2bn. The company has been selected from among 16 entities that had applied in response to an Expression of Interest called for late last year, Jain Irrigation said.

The recent acquisition of Terra Agro Technologies Ltd., at Udumalpet, Tamil Nadu augurs well with this empanelment, Jain Irrigation said. The empanelment is set to propel the company many notches ahead of competition besides marking Tamil Nadu in the Micro Irrigation map of the country, it added.

Besides being pioneer for drip irrigation, the company is already playing a leading role in the state sponsored Micro Irrigation Scheme in Andhra Pradesh, Gujarat and Maharashtra, Jain Irrigation said. With the addition of Tamil Nadu and expected addition of other states next fiscal year, this division is set for very exciting growth in the coming year, it added.

ORG Informatics - All Bags Full

ORG Informatics - Five Times FY05 Revenue Projected

ORG Informatics has announced that it has bagged an order worth Rs255 crore from Bharat Electronics Ltd (BEL) for the convergent billing system that is being implemented for the state-owned Mahanagar Telephone Nigam Ltd (MTNL). The order largely involves the supply and integration of the hardware related requirements of the project. Consequently, the margins are likely to be lower than the double-digit margins reported by the telecom business segment currently. The order is to be executed over the period of the next 24 months.

However, as part of the MTNL deal, the company expects another order worth over Rs100 crore that will have higher-end services work and would also include the highmargin maintenance business. The second part of the order is likely to be announced in the next couple of weeks and a considerable portion of the maintenance revenues will be spread over a period of seven years.

With this deal, the current confirmed order book of the company stands at around Rs425 crore (including maintenance contracts), which amounts to around five times its FY2005 consolidated revenues and 2.5x its current market capitalisation.

News You Can Use

PSL - To Set Up Unit In W Asia

PSL Ltd, one of the largest pipe producers in the country, will set up its first fully owned international manufacturing unit by the end of this calendar year. The mill will be located in the West Asia, already a prime market for the company. “Though we have helped other companies set up pipe mills overseas, this will be the first time we will be doing it for ourselves,” said Ashok Punj, managing director.

With a capacity of one million tonne per annum, PSL manufactures and supplies spiral weld pipes for oil, gas and water transmission for onshore and offshore sectors. As in the case of 11 mills of the 12 that the company operates in India, the new facility in the Middle East will also have a capacity of 75,000 tonne per annum.

“The construction cost will also be almost the same except for the higher labour and land rates in the region,” added Punj. A 75,000-tonne pipe mill usually entails an investment of about Rs 20 crore. PSL’s 12th and biggest facility, based in Kandla, has a capacity of 3,00,000 tonne per annum. The West Asia facility will have a pipe mill and a coating plant. The equipment for the plant will be sourced from the company’s manufacturing unit in Daman.

Among its other international operations, the Rs 1,500-crore company had earlier bagged a Rs 54 crore order from Kazakhistan’s Ispat Karmet, a part of the Mittal Steel group, to set up a steel mill.

Usha International - Launches New Range Of Products

The fans manufacturing sector has seen little technological makeovers during the past several years, what with the unorganised sector giving the branded segment the run for its money. Usha International Limited, one of the country’s leading consumer durable marketing companies promoted by Shriram Group, has now changed the trend by introducing features such as remote operation and ionisers that were till now limited only to air-conditioners. Launching a new range of products from the company’s stable, including fans, sewing machines and water pumpsets in the Andhra Pradesh market here on Monday, Usha International Limited vice-president Prakash Narayan said the new plans were aimed at strengthening the company’s leadership position in the domestic market.

Among the new products that the company launched in the Andhra market also included water dispensers for which the market growth is almost 25 per cent with urban households switching over to bulk distilled water cans being supplied by local units, Narayan told the media. Ceiling fans with extra air delivery and spread, and fans with curved blades having aerodynamic features with prices ranging between Rs 1,100 and Rs 1,400 a piece, besides a new range of table fans to suit the rural and semi-urban markets, and portable diesel pumpsets were some of the products that were showcased during the press conference.

SKF India - Knowledge Engineering Company

SKF India - To Anchor Group`s Global Plans

Bearings major SKF India is set to play a major role in the SKF Group’s global business plans. This will include manufacturing of the products from SKF’s global portfolio in India and also offer training to the company’s employees in the latest technologies.

Inaugurating the SKF College Campus within the premises of the company’s manufacturing facility 20 km from here, SKF’s Global President and CEO Tom Johnstone said the company is moving in the direction of becoming a “knowledge engineering company” and intends to pass on to the customers the expertise earned over a 100 years of its existence. “SKF College Campus will help us connect closer and translate our vast learning experiences for both our customers and employees through varied learning programmes,” Johnstone said. The centre will draw its faculty from SKF establishments in India as well as elsewhere in the world.

Similarly, the participants will comprise SKF employees or customers in India or overseas. “The training programmes will be on all the five platforms that form the company’s business, including bearings and units, seals, lubrication systems, services and mechatronics,” Johnstone explained. SKF has customers in a variety of areas including automobile, steel and metal or paper, he added.

This is the second SKF College after the one established in Netherlands in 1987. The company has also set up an applications development centre in Bangalore to work on two wheeler segment. SKF India’s Managing Director Rakesh Makhija said the company has been growing at a steady 20 per cent for the last few years and the pace will be maintained. “In addition to our existing businesses, we anticipate a major opportunity in the area of wind energy as we have developed products that enhance the performance of the wind turbines. There is a significant interest in India in wind power generation and we look forward to find customers who erect windmills here,” he said.

Zicom Electronics - Future Secured

Zicom - A Secure Bet

Next time you visit Pantaloon, Shopper's Stop, Globus, Landmark or any other mall, have a look at the ceiling and observe the Fire Alarm and Water Sprinklers installed, chances are that you will see the word Zicom written on them. Zicom is slowly and steadily evolving as the total Security Service provider.

Zicom Electronic Security Systems Ltd. (Zicom) has emerged as the pioneer and market leader in total electronic security systems for homes, offices, industries and large corporations. Established in 1995, Zicom is one of the few security solutions company which is listed on the Mumbai Stock Exchange.The company offers a wide range of products including access control systems using keypad, proximity cards & Biometrics, CCTV surveillance including remote video surveillance, fire alarm systems, smart cards, perimeter protection system, law enforcement products, etc. The company has also integrated all this multiple security applications into one coordinated hardware and software package. The company has got strong software capabilities relating to the security business. Zicom has positioned itself as the dedicated Electronic Security Solution company. The management has international strategic alliances with CA, Bosch, Motorola etc. The other major companies in the business include Honeywell, Johnson Controls and Group 4.

Moving up the value chain to generate competitiveness, Zicom has transformed itself from the low value added Burglar alarm company to high value added Biometrics Access control, Electronic surveillance system business. The company plans to focus on Home and Retail segments for future growth with technologies like RFID and biometrics being the future growth drivers. Zicom services the diverse and demanding security needs of private and public sectors. The company derives major part of its revenues from the Corporate Divison. The company has a varied client base with over 5000 installations Its customers include several large Indian and multinational companies in the field of Infotech, telecom, media, banking, finance, industrial, etc. as well as various public sector units.

The company has an Equity Capital of Rs.8.19 crores with promoters holding 28.22%. Fidelity Mutual Fund holds 5.26% stake in the company. Zicom has picked up a 49 per cent stake in a joint venture with UAE's Bin Jabr Group. The equity participation with Bin Jabr group will give the company the platform to cater to the fast growing safety and security market in the Gulf region.As per the agreement between the company and Bin Jabr group, Zicom will be responsible for operation, management, implementation, delivery and servicing of safety and security systems, while Bin Jabr Group will be responsible for administration and relationship management. Given the enormous growth in construction activity in commercial, residential and infrastructure segment in the Gulf, the company has aggressive plans to market its product Intelligent Homes in the Gulf. In Intelligent home system, the customer can put in place intrusion detection, fire or gas detection and control devices such as lights, airconditioning etc. Focus on RFID Products / Solutions & Biometrics RF-ID is the technology that uses radio waves for identification, using smart labels that can be attached to products or people. Radio waves are used to identify individual articles, automatically. Zicom has set its focus on the RFID technology to provide total solutions to the customers. The RF-ID components include – Transponders, Antenna, Readers and Software. RF-ID technology provides several benefits - it is a contact less data link and an automatic way to collect information quickly and easily without human error and can be applied successfully to hundreds of applications. The various RFID applications include :-Parking Lot Automation Solution, Personnel Access Control System, Asset Tracking System and Vehicle Monitoring and Tracking System. The RFID market is growing rapidly. Recent research reports by various consulting firms show a strong demand for the RFID solution in the short and the long run. RFID solutions are gaining acceptance in the consumer markets – Supermarkets, Libraries, Automatic Toll Payment, Automatic Refueling etc. The company has aggressive plans to tap the potential that the technology offers and offers the customers solutions using RFID technology. The company is also focusing to provide security solutions at various Malls & Retail outlets. With the government considering allowing FDI in retailing and with the coming up of Malls & Retails outlets, the segment provides good business opportunities.

The company has developed a product Z-Security, an electronic surveillance solution, which has evolved through the convergence of Security, IT and Telecom to deliver a holistic security solution that includes digital video recording and transmission of live video images through internet or broadband to anywhere in the world. The company plans to offer the product as a subscription service and is targeting shops, offices and residential premises. Z-Security is a high tech electronic security service which provides the customers different security levels as per the needs such as Electronic Surveillance system, Central Control Room which contacts and Emergency number in the event of a security breach, which contacts emergency services like Police or Fire Brigade. Mr. Pramod Rao, Managing Director, of the Company, said, "Z-Security service secures a person or an establishment 24 x 7 and will offer end-to-end security solutions. Our focus is to develop and deliver Eco Systems partnerships. We have entered into alliances keeping our ultimate objective in mind. The alliance with Bosch will ensure the world's best product is installed, Cholamandalam will insure the property of our customers and Topsgrup will provide emergency response service. This combination will help us in catering to the security needs of all the segments in the society including the ever-growing retail and home segments."

The company is in talks with Reliance Infocomm and other Broadband providers for the product. Z-Security targets the untapped niche retail market where the need for security is becoming vital. Z-Security would be a high volume business for the company and is capable of generating revenues for the company month on month. Z-Security is an innovative concept, has a potential market which could be HUGE. Any success on the front will lead to a huge rerating of the stock leading to much higher discounting on the bourses. In an effort to increase its revenues through the inorganic route, the company is planning both overseas and domestic acquisitions. The acquisitions would be in the areas of product development or system integration. We believe that innovation is the key to be competitive and successful. The Company today offers state-of-the-art electronic security solutions and has entered into strategic tie-ups with global leaders in this industry. The market is still at the exploratory stage and would see high-growth in the coming years. But the competition would only increase owing to the future industry attractiveness. However, I believe that the initiatives undertaken by the company would help it retain its leadership status in the industry and sustain its first mover advantage. Moreover, any success on the Z-Security product, which could be company’s trump card may lead to the markets giving the company much higher discounting than it currently enjoys.

........and don't forget to visit the website of Zicom.

Adlabs - Reliance's Entertainment Vehicle

R-ADAG - Eyes Entertainment Pie

Strategy for the entertainment sector is to have a dominant presence across films, TV, internet and mobile. Entertainment is becoming digital and Reliance’s strategy will reflect that, said Rajesh Sawhney, COO, Reliance Entertainment. Reliance-Anil Dhirubhai Ambani Group’s (R-ADAG) strategy for the entertainment sector is to have a dominant presence across four media — films, television, internet protocol television (IPTV) and mobile. Radio, too, will be a focus area for the company, as it has already won 45 licences through its recently acquired company Adlabs. Sawhney said Rs 165 crore had been pumped in for bagging the radio licences and another Rs 150 crore is being invested as capital expenditure for setting up radio stations. He is confident that all the stations will be operational by the end of this year.

As for the big screen business, Sawhney pointed out that digital cinema will be Adlabs’ thrust, as this is going to dominate the movie world in the future and, hence, being a first mover in this format will help the company rake in good revenue. “We are in the process of finalising the blueprint for digital cinemas, and are evaluating various technologies to arrive at an appropriate one,” he added. The company will look at launching its digital cinema initiative in the C and D-class cities and rural towns. It will adopt a business model — in an advertising-supported form or jointly owned cinema houses.

On the direct-to-home service front, the group is optimistic about a good beginning of its DTH service division, Reliance Bluemagic, by Diwali this year. It is expecting allotment of six transponders on INSAT 4B by July this year. According to industry reports, R-ADAG is ready to make huge investment in its DTH broadcasting network. The group is also expected to unveil its IPTV initiative this year. Trial runs are currently on with Microsoft, which is testing the DTH service, a company spokesperson said.

R-ADAG, which is currently into enterprise broadband, is in the process of expanding into consumer broadband. It is set to enter consumer homes with broadband internet service through its fibre-optic backbone, this year. The group is looking at the same connectivity to be used to deliver entertainment content such as channels and video-on-demand, among others. The mobile initiative, which, according to Sawhney, will be the driver among all the businesses, will soon see the launch of clip-oriented services with 50 more applications in addition to the exisiting 100 applications that Reliance CDMA mobile offers.

- Business Standard

GHCL - Also Into Home Textile

GHCL - More Aquisition In The Pipeline

After acquiring US-based Dan River for home textile business, GHCL is now in the process of increasing its spindle capacity at the cost of around Rs 90 crore. "The process of increasing capacity is already underway at our spindle unit from 85,000 spindles to 1,40,000," said Nikhil Sen, senior general manager – finance & strategy GHCL. He said the company is at a very close to initiating commercial production for its recently-established home textile unit at Vapi. Sen further said, "Our facilities at the Vapi unit, which specialises in wide-width fabric, will help us cater to the growing demands of global trade focussing mainly on Dan River products." We would leverage this global sourcing footprint to promote the Dan River brand in the western markets and also further substantiate our brand portfolio within the juvenile and other segments such as within the retail and specialty stores with more upcoming brand promotions, he maintained.

Talking about the capacity Sen said, "Our home textiles unit in Vapi is greenfield project and we are in the process of increasing its capacity to 36 million tonne per annum." He also added that the company's priority is to integrate the initiatives and consolidate business operations. According to Sen, the company is still looking for various mergers and acquisition options. However, he refused to disclose details of further mergers and acquisitions plans.

JK Paper - Growing Aggressively

JK Paper - Which Paper Do U Use ?

JK Paper Ltd today said it would invest about Rs 700 crore in the next 3-5 years to hike its production capacity to 5,00,000 tonnes per annum as the company sets eyes on a turnover of more than Rs 1,000 crore. “The four major areas of thrust for the company in the future will be the writing and printing, photocopier, coated and packaging board paper segments. In the next 3-5 years we are looking at a total capacity of 5,00,000 tpa for which there could be an investment of around Rs 700 crore,” JK Paper Ltd Managing Director Harsh Pati Singhania said. He said the company was currently investing Rs 335 crore on a 60,000 tpa multilayer packaging board plant in Gujarat, over and above other modernisation plans.

To part fund the project, JK Paper today signed an agreement with Washington-Based International Finance Corporation (IFC) to allot about 10 per cent of equity shares worth Rs 50 crore. Moreover, IFC would provide JK Paper a loan of about Rs 70 crore for a 10-year term as part of the agreement. The promoters of the company are injecting Rs 50 crore for the purpose and another Rs 50 crore through internal accruals, he said, adding the rest of the requirement would be met through other instruments, which may be “debt or convertible bonds”. “Once the packaging board project is completed by the first quarter of next year, the overall capacity of the company would be around 2,40,000 tpa,” he said, adding with the further investments planned its capacity would be doubled.

When asked about the plans to fund future investements, Singhania said the company was looking for more investments from its new equity partner IFC. “We look forward to more meaningful partnership with IFC as there are tremendous opportunities here in the paper industry,” he said, adding the company would also explore other options but without disclosing the details.

News You Can Use

Centurion Bank Of Punjab - Raising Fund

The Centurian Bank of Punjab today said it has received approval from the Reserve Bank of India for the preferential issue of 12.9 crore equity shares at Rs 19.25. Under the issue, the bank will allot seven crore equity shares of this price to India Value Fund, it said in a release here.

The bank which was formed after merger between Centurian Bank and Bank of Punjab, would also allot 5.90 crore equity shares to Citigroup Venture Capital International Growth Partnership Mauritius Ltd, it added.

Shasun Chemicals - Got MHRA Approval

Chennai-based Shasun Chemicals and Drugs Ltd Wednesday said it received approval from Britain for its oral solid dosage forms for the bulk tablets market. With the approval from the British Medicines and Healthcare products Regulatory Agency (MHRA), Shasun's products from its formulation facility in Pondicherry can now be sold in Britain and other European countries.

Shasun's plant at Pondicherry, set up in 2005, has a capacity to produce 3.6 billion tablets per year. "With this first approval for the formulation plant having been received in record time, the company is closer to commercialising its plan in integrating its support operations in the complete value chain of pharma business," Vimal Kumar, Shasun's joint managing director told reporters Wednesday. "Going forward, we expects this approval to enhance our capabilities to support the requirements of companies worldwide, providing back end manufacturing support across the complete pharmaceutical value chain," he said.

Shipping Corporation - Smooth Sailing

SCI - Plans New Container Service To US

Shipping Corporation of India (SCI) plans to start a new container service to the East Coast of the US and adding another loop to its Far Eastern services being in its immediate radar. SCI, which operates weekly mainline container services to Far East/China and UK/Continent in consortium with leading global players, is prompted to add new services in the light of the country's economic growth story. In the feeder market, the company made a small beginning in January by chartering a 250 TEU geared vessel for one year and deploying it on the Colombo-Chittagong route. "This is essentially a pilot project and, if successful, we hope to enter the feeder routes on the Indian sub-continent in a big way, possibly in consortium with like-minded players," a senior SCI official told Business Line.

Further, with trade between India, Indonesia and Thailand expected to increase, SCI has started accepting shipments from Indonesia and Thailand on transhipment basis. "We are considering extending the services to the Philippines and other ports very soon on transhipment basis," according to the official. SCI, which entered fully cellular container services in early 1994 with the sailing of its first cellular vessel, m.v. Lal Bahadur Shastri on the India-UK sector, offers the Indian-Europe service, Index-I and Index-II.

The Indian sub-continent Europe (ISE) service, which was launched in January 2002, is through a consortium with ZIM, K-Line, MISC and EMC as partners. Seven vessels of about 2,650 TEU effective capacities are deployed in this service, with a round voyage of 49 days. The ports of call under this service include Colombo, JNPT, Barcelona, Rotterdam and Hamburg. "Each of the partner in this service has one vessel, with the seventh vessel being jointly operated by SCI and ZIM in the ratio of 70:30," the official said.

SCI has pinned significant hopes on growth in this service in 2006, especially in the light of the seven per cent growth in textile exports and high charter hire rates on long term. "It is proposed to open up sectors like Ukraine and Black Sea ports under the ISE service to help expand the scope of business. The growth sectors in imports along this route will mostly be project cargoes, machinery and fine print," according to the SCI official.

In the Index I service, which covers the Far Eastern sector, SCI is partnering with K-Line, PIL and DNA, among other lines, for deployment of five vessels of 1,350 TEU capacity each that were upgraded to 1,800 TEU capacity. The ports of call in this service include NSICT, Colombo, Port Kelang, Singapore, Shanghai and Hong Kong. "The factors influencing this service is the fastest transit time of 18 days from Busan to NSICT and 16 days from Shanghai to NSICT that it offers," the official said. SCI feels there is a need to upgrade the Index I service with larger vessels to retain market share and improve marketing scope by exploring new areas.

Trading Calls For 08.03.06

These are Trading Calls and Stop Loss should be maintained.

1. Buy Grasim at current rate with a stop loss of Rs. 1804 for a price Target of Rs. 1947.
2. Buy Suzlon at current rate with a stop loss of Rs. 1190 for a price Target of Rs. 1260.
3. Buy IVRCL at current rate with a stop loss of Rs. 1152 for a price Target of Rs. 1200+.
4. Buy SBI if it crosses Rs. 914 for a price Target of Rs. 1025.
5. Sell Sterlite at current rate with a stop loss of Rs. 1452 for a price Target of Rs. 1415.

Thank You SEBI

Retail Quota Not Abolished

My report on Retail Quota In IPO seems to have worked. I am very grateful to SEBI for retaining Retail Quota and making PAN mandatory for every Demat Account holder.

I hope SEBI will also listen to my request of making minimum allotment size to 50 shares.

For those, who fear Income Tax and for that matter PAN. There is nothing to worry about if you are doing nothing wrong. Simply apply for PAN card and if you are not earning more than you can always file NIL returns.

Patel Engineering - David Or Goliath

Patel Engineering - Qualified For Projects Worth Rs. 5500 Cr.

Patel Engineering, an infrastructure civil - construction company, informed that it has been qualified for a number of infrastructure projects aggregating to Rs. 5,500 crore. Among them are Rs. 700 crore Loharingpala Hydro Electric Project, Rs. 800 crore Vishnu Tapovan Hydro Electric Project, Rs. 700 crore Rampur Hydro Project and Rs. 800 crore Pala Tiloth Hydro Electric Project.

Further, Rs. 1,000 crore Kishan Ganga Hydro Electric Project and Rs. 3,500 crore Tipaimukh Hydro Electric Project are in the market as turnkey hydro electric projects for which the company is in the process of forming joint venture with international contractors. The company currently has an unexecuted order book position of approximately Rs. 4,400 crore.

The company has since announced plans to foray into hydro power generation as an Independent Power Producer. Beginning FY 2007, it plans to bid for medium size projects in the range of 100 MW to 500 MW on BOLT basis in the North and North Eastern regions of India.

The company, in a consortium with Larsen & Toubro, has recently bagged Rs. 439.07 crore, 520 MW Parbati Hydro Electric Project Stage (III) from the National Hydroelectric Power Corporation. Hydropwer projects account for 60 % of the total bids submitted recently by Patel.

What's UR Theory - Think A Little

Invent A Theory, And Let Investors Follow

-by Vivek Kaul & Nikhil Lohade

Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. — John Maynard Keynes

Every bull market has a theory behind it. The theory puts across the “reasons for investing in the stock market”. At other times, it explains why the market is rightly valued when evidence suggests otherwise. Even at times when an individual or a group is rigging the stock market, it helps convince investors to come and join the party.

The theory is essentially used to influence the investor’s perception of the stock market. As Harshad Mehta, the original big bull, remarked in an interview to a business magazine, “The crucial thing about stock markets is that they are primarily driven by perceptions, not performance. That’s unlike the commodity markets, which are more performance-oriented.”Mehta had his favourite theory, too, — the replacement cost theory. When he rigged up stocks like ACC, he justified the inflated price using this theory. And what did the theory say? “The market capitalisation of ACC (as well as the other stocks that were rigged) should be at least equal to the money required to create another ACC.”

He backed up this theory with some really media-friendly comments, “I thought I’d be like Pied Pier. I thought I can sell dreams... that asset-creation is not a crime, that if you wanted to be Harshad Mehta, come to the stock market.” After Mehta’s downfall, this theory has been confined to the dustbins of history, at least, as far as the Indian stock markets are concerned.

The next big bull was Ketan Parekh. Parekh was not as media- friendly as Mehta was. But stock market experts picked up on his investment style and justified it by saying that the companies he has invested in have been selected for investment with help from his research team. The research team, they said, had listed out stocks with a low capital base and a low liquidity. And this convinced not only ordinary investors, but also foreign institutional investors and mutual funds. The FIIs and funds bought stocks Parekh had invested in, even after he had more or less exited them.

Another theory that has gained currency among analysts in recent times is the ‘sum of the parts theory’. This is applied in case of companies which are in multiple businesses. The profits of such a company are essentially made up of profits through its multiple businesses. But the stock price at a given point of time may not have captured the right value of the various businesses. Thus the logic: stock is cheap. Using this theory, analysts remained gung-ho on Reliance even after its recent demerger. Most analysts expected the price of the Reliance stock in the range of Rs 700-800, post-demerger. They used the sum of the parts analysis to justify the price. The price of the Reliance stock before the demerger, they felt, did not rightly value its investments in financial services, power and telecom.

Since so much information is available these days, something insightful can always be said about each and every market event. And this makes truly random happenings in the market look like they happened due to some reason. Also, a lot of stock market experts are very intuitive. But intuition cannot serve an investment argument. Thus, a theory through which one can convince the investors to invest.

News on Crest, Gateway & Shipping Corp

Crest Animation - Exim Bank Funding Project

Export-Import Bank of India (Exim Bank) is for the first time funding an animation film project. It has agreed to lend $ 7 million to Crest Animation Studios Ltd which has signed a three-picture co-production and co-financing agreement with Lions Gate Entertainment. While $ 5 million will be to fund Crest Animation's Indian outfit, Exim Bank is willing to sanction another $ 2 million in the US subsidiary company, RichCrest Animation.

"We have acquired the rights for Sylvester and Magic Pebble and Alpha & Omega through an SPV between Richcrest Animation and Lion's Gate. Work has begun on Sylvester and Magic Pebble and there shall be a fund requirement of roughly US$ 20 Million over the next two years for these projects. While we have already announced an FCCB of US$ 12 Million, EXIM bank has agreed to lend US$ 7 Million" a Crest Official shared with Animation 'xpress.

"This will be our first financing for an animation movie project. We have agreed to fund Crest Animation Studios as well as its wholly owned subsidiary company in the US. Crest has tied up with Lions Gate Entertainment which is a leading distributor in the world. Besides, the company has a completion bond in place," said Exim Bank general manager Mathew John.

Of the three movie projects with Lions Gate Entertainment, the first to kick off is Sylvester and the Magic Pebble which is based on the Caldecott medal-winning story by William Steig, the creator of the blockbuster Shrek. The pre-production work on the movie is near completion, and the production plan is as per schedule for 2008 release. "Our funding to Crest will be for the first movie," said John. Exim Bank has been funding Hindi movie projects which have a potential to earn foreign currency revenues in the overseas market. It has financed nine movies so far to the tune of Rs 580 million. This includes Rs 400 million to noted filmmaker Yash Chopra for movies like Veer Zaara, Hum Tum, Bunty Aur Babli and Dum. "We have also lent Rs 100 million for Don and Rs 80 million for Mangal Pandey - The Rising," he added.

Gateway Distriparks - Eyeing CFS At Navi Mumbai

Port-based logistics company Gateway Distriparks is close to acquiring a container freight station (CFS) near Jawaharlal Nehru Port Trust in Navi Mumbai. The company is also exploring the option of acquiring a domestic cold chain company to support its refrigerated cargo business.

Sources said the acquisition of this private CFS is likely to be concluded by the month end while negotiations for the acquisition of the cold chain business are in advanced stages.

“After securing an in-principle approval for moving container trains in major routes of country from Railway board, the company is planning to acquire CFS facilities which will supplement the container train operations,” industry sources said. Gateway Distriparks is also looking at acquiring similar CFS facilities in Tuticorin.

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Shipping Corp - Plan To Float JV Gets Cabinet Approval

The government on Saturday gave its approval to state-run shipping giant Shipping Corporation of India (SCI)’s plan to invest $20.88 million for 33.77 per cent stake in a joint venture company in Panama. The joint venture will be formed for the expansion of Petronet LNG Ltd (PLL)’s terminal at Dahej, said Union information and broadcasting minister Priyaranjan Dasmunsi said after a cabinet meeting.

Other partners in the joint venture are Mitsui OSK lines of Japan with a stake of 33.77, Nippon Yusem Kabushiki Kaisha with a share of 21.64 per cent and Kawasaki Kisen Kaisha 10.82 per cent stakes respectively. The share of SCI in the JV may go down to 26 per cent if PLL or its nominee exercises the option to take up 23 per cent share in above JV, the minister added. Besides earning a share of profit to be generated in 25 years of the time charter agreement, the SCI would be the only Indian shipping company to venture into the second LNG transportation business. “By participating in the management, SCI will be able to train and develop its officers which would be useful for future projects.”

PLL was formed by the government in 1998 to set up LNG receiving, storage and re-gasification terminals in the country. These four public sector companies have an equity participation in equal parts to the extent of 50 per cent. While an initial quantity of 5 million metric tonne per annum (mmpta) is being transported on two LNG tankers also owned by joint venture companies, where SAI is already participating with Mitsui OSK Lines, Nippon Yusen Kabushiki Kaisha Lines, Qatar Shipping Company and Kawasaki Kisen Kaisha, the proposed joint venture will be formed to transport the additional quantity of 2.5 mmtpa required for PLL’s expansion project at its Dahej terminal.

-Business Standard

Jagran Prakashan - Will Shine Bright

Jagran Prakashan - BUY

Jagran Prakashan Ltd (JPL) is the publisher of the Hindi newspaper Dainik Jagran. JPL publishes 25 main editions and 200 sub-editions of Dainik Jagran in 10 States in the Hindi heartland of India - Jammu and Kashmir, Punjab, Rajasthan, Delhi, Uttaranchal, Uttar Pradesh, Bihar, Jharkhand, Madhya Pradesh and Chattisgarh.

The National Readership Survey (NRS) 2005 and Indian Readership Survey (IRS) 2005 (Round 2) gave Dainik Jagran a readership of 2.12 crore and 1.92 crore respectively, which is more than the readership of all English dailies put together. JPL has diversified into other media spaces also. In 2003-2004, JPL launched Jagran Solutions that provides outdoor advertising, loyalty and incentive programmes, school and college contact programmes, road shows and event management services. This division earned revenues of Rs1.58 crore during Apr-Sep 2005. JPL launched the integrated voice recording/automatic speech recognition (IVR ASR) service on short code 7272 in Jan 2005 and SMS service on the same short code in Mar 2005. From these services, JPL earned revenues of 68.5 lakh during Apr-Sep 2005.

JPL also has a monthly Hindi magazine called Sakhi for high- society women. The magazine earned revenues of Rs33.9 lakh during Apr-Sep 2005. JPL has introduced two vans on a trial basis for mobile outdoor advertising and plans to buy 250 more vans in the coming two years.

JPL's advertising revenues have increased by 135 percent from Rs99 crore in 1999-2000 to Rs233 crore in 2004- 2005. JPL's gross income increased by 20 percent from Rs312.78 crore in 2003-2004 to Rs377.47 crore in 2004-2005. Its operating profit decreased by 37 percent to Rs26.93 crore from Rs42.87 crore owing to a 30 percent increase in operating expenses. During Apr-Sep 2005, JPL recorded a profit of Rs31.4 crore as compared to a profit of Rs26.93 crore earned during Apr-Sep 2004.

Jagran Prakashan will invest Rs 298 crore for major expansion in the country, of which Rs 80 crore would be exclusively for acquisitions of and strategic investments in other journals and magazines. "Our dream is to make Jagran the number one publishing house not only in terms of revenue but also in the respect of readers," Jagran Prakashan Ltd chairman Mahendra Mohan Gupta said on Tuesday. Asked if the publisher of 'Dainik Jagran' hindi newspaper is planning to acquire dailies and magazines, he said: "It will depend on the strategic alliance. We are open to buy out any language journal and magazine." The group has set up an internal selection committee to screen the offers already coming from various newspapers and magazines, he said.

With a readership of over 2.12 crore and pan-India infrastructure, the group is also looking for strategic alliance and ties with newspapers for revenue sharing. "Many newspapers are number two or three in their regions but lack ad revenues. We would like to tie up with them for sharing ad revenues to the tune of 25-33 per cent and providing them strategic and financial package," Gupta said. He said the group, which has editions in 25 centres, has earmarked Rs 298 crore for expansion of which Rs 137 crore will be capital expenditure for colour printing, quality improvement and minimising newsprint wastage through automation of operations. The group has created a war chest of Rs 80 crore for acqusition and Rs 40 crore for working capital expenses and another Rs 40 crore for outdoor expansions. Apart from planning new editions for Chandigarh and Shimla, the publishing house is planning major brand-building exercise.

Recently, Indrajit Sen, President, Primesite, the integrated Out-of-Home solution arm of Mudra Communications, who has put in his papers yesterday has joined the out of home media solutions division of Jagran Prakashan. He will be begin his innings with Jagran Engage, the OOH division of Jagran Prakashan from March 01, 2006.

In his last assignment, Sen was the President of Primesite, Mudra's ooh agency division, for the last 6 years or so. There he was responsible for turning around the loss-making division and bringing it to within the top 3 position in the OOH industry and the largest revenue -earner amongst the Mudra Group brands this year. A post-graduate from BITS, Pilani, Sen had spent 10 years with The Times Group as Response Head in various territories. Prior to that, he has extensive experience in marketing with different verticals in Indian and foreign markets.

At Jagran Engage, Sen will lead a national team which will be in the OOH business from the media owning perspective. The difference from traditional media owners will be in its offerings to the market - Engage will offer complete OOH media solutions to its' clients nationally and not only sell individual sites. This means, Engage will provide brands with OOH media planning and consolidation services - besides creative adaptations, maintenance and monitoring - at very competitive rates. In doing all this, Engage will get the unstinted support of The Independent Group plc, who has major interest in the largest out-of-home companies in Australia and South Africa.

Jagran Prakashan Limited, it may be recalled, has already declared its commitment to the OOH business and its intention to be a long term and dominant player in this media segment. Engage will execute this business intention by occupying niches and developing the capability of offering solutions with a national footprint with a rapid scale-up model. To enable Engage to do so, Sen is putting together a team of very experienced and seasoned players from the industry. Jagran Prakashan Limited also expects synergistic effect of its other media divisions, including that of the Event Marketing Division - Jagran Solutions, to contribute in making the OOH plans a great success in a short time frame, to add to the Group's overall capabilities to offer unique and effective pan-media communication solutions to its clients.

I feel Jagran Prakashan can be accumulated at around Rs.220-240 and kept for long term. Those who got allotment in IPO should not panic and can even buy more. The promoters are very experienced and are also foraying into new ventures keeping pace with time. Entrepreneurship of the promoters can be judged by the fact that CNN IBN has acquired 50 per cent stake in Channel 7, a Hindi news channel promoted by Jagran TV Private Ltd, for about Rs 60 crore in an all-cash deal. Click Here to read full article about the deal. Further, Jagran Prakashan has raised the cover price ranging from 0.50 paise to Re 1 per copy of most of the editions of its Hindi daily newspaper “Dainik Jagran” from the current month which will improve the profitability in coming quarters.

Emami - Rural Thrust

Emami - Going HLL Way

Emami Ltd, the Kolkata based FMCG major, is planning to induct 20,000 rural individuals in West Bengal for its ambitious rural marketing initiative as a part of its corporate social responsibility (CSR) initiative. After starting in West Bengal on a pilot basis in 2005, the company has already rolled out the initiative in four other states - Madhya Pradesh, Orissa, Andhra Pradesh and Chattisgarh. The company is now in the process of rolling it out in Karnataka and Maharashtra.

Emami's managing director Sushil Goenka told reporters here that the company has targeted to bring 100,000 rural individuals under the project in next three to four years in India. West Bengal, leading the company's initiative currently, would be in forefront with 20,000 people involved. According to Goenka, Emami's rural development initiative included two schemes - Emami mobile traders and small village shops. "We have started the initiative only last year and now in just one year we have more than 2,500 mobile traders and 200 small village shops," Goenka said. West Bengal was leading the chart with 1,288 followed by Andhra Pradesh with 988 people involved.

Elaborating on the project, the Emami MD said that the mobile traders were ensured a guaranteed income of Rs 1,000 on goods worth Rs 4,000 sold per month. They were provided uniforms, winter and monsoon protection equipment and identity badges. "Even for the Emami small village shops, devised primarily to augment the income of housewives, we are providing banners, sign boards and garden umbrellas," he said. Goenka pointed out that following the success of the rural initiative, the company is planning to roll it out further to states like Assam, Gujarat, Tamil Nadu and Haryana. "We are getting Rs 50 lakh worth of sales from rural network which we are spending entirely on the project itself," he added.

News You Can Use

Suven Life Science - Solid Research Solid Development

Hyderabad-based Suven Life Sciences is planning to merge Asian Clinical Trials, a clinical research organisation, with itself. In a notice to the stock exchange, Suven Life Sciences has informed that a meeting of the board of directors of the company will be held on March 4, 2006, to approve the draft scheme of merger of Asian Clinical Trials Ltd with the company.

Suven is into the design, manufacture and supply of bulk active, drug intermediates and fine chemicals, while Asian Clinical Trials provides services like phase II/ III/ IV clinical trials, post-marketing surveillance and clinical data management to pharmaceutical, biotechnology and medical device companies. Asian Clinical Trials was incorporated in April 2001 by Suven Life Sciences managing director Venkat Jasti. According to Jasti, this merger will enable seamless transition of projects from one phase to another. “This arrangement will ensure that all activities catering to the life sciences industry can be done under one roof,” Jasti told Business Standard. The merged entity will continue with the name of Suven Life Sciences and Asian Clinical Trials will function as a separate business unit under the company.

Jasti, however, declined to comment on the combined revenues of the merged entity. For the third quarter ended December 2005, Suven registered an increase of 94 per cent in its total income at Rs 27.11 crore from Rs 13.95 crore in the corresponding quarter last year. Its net profit for the third quarter surged by 181.57 per cent to Rs 3.21 crore as compared to Rs 1.14 crore in the previous corresponding quarter. Suven expects to file its first investigational new drug in the US before the end of 2006.

ITC - More Paper More Profit

The ITC Bhadrachalam plans to invest Rs 1,100 crore in a new fibre line and paper and board making machinery for its Sarapaka mill. The elemental chlorine-free (ECF) pulp line will have a capacity of 600 tonne/day of bleached kraft pulp. It will use a mixture of wood and non-wood fibres, including eucalyptus, bamboo and subabul as raw material. The fibre line would commence the production in 2007-2008. The proposed fibre line would have an environment-friendly technology and an upgraded paper and board making unit. Once installed, the equipment would put the Bhadrachalam mills at the top in terms of production and Sarapaka unit would become the leader in India in paper boards and specialty division (PSPD). The new unit would produce 1.35 lakh tonnes of pulp every year.

According to KK Shashikumar, general manager, (personal and administration), the new fibre line would cater to the needs of four board machines and two paper machines on the Sarapaka campus. He said the expansion would take the output capacity to 525,000 tonnes/yr with the aid of new machinery. The Bhadrachalam mill commissioned India’s only elemental chlorine free pulp mill with a capacity of 100,000 tonnes three years ago in September 2002.

SPEL Semiconductor - Budget Push

The Indian semiconductor industry today hailed the budget and the Finance Minister, P Chidambaram's "proactive support" extended to this sector. Describing the decision to set up a committee with MCIT to formulate the national semiconductor policy as extremely "timely", Poornima Shenoy, President of the India Semiconductor Association, said "this step will provide India with the edge beyond VLSI and embedded design". "It will make India a preferred destination for the manufacturing of semi-conductors and other high technology IT products including wafer, assembly, test and manufacturing of semi conductors: LCD panels and storage devices," she said.

The proposal to use the existing vehicles of viability gap funding and the India Infrastructure Finance Company Limited to create a window to provide equity participation and or viability gap funding to new ventures are "excellent schemes," she said. This will help make India globally competitive with other nations. The three-year window will help accelerate early investment.

Lauding the announcment of the Indian infrastructure policy with projects on international airports,investments on roads, power, it said these would provide the needed impetus for semiconductor manufacturing.