Companies with Largest Stake sales

Bharti Airtel becomes 5th largest in world, after acquisition of Zain

Country's leading telecom services provider Bharti Airtel today announced the completion of acquisition of Kuwait-based Zain Group's mobile operations in 15 countries across Africa for 10.7 billion dollars, making it the world's fifth largest telecom firm.

''We are delighted at the closure of this transformational deal for India and Bharti Airtel...Bharti is now among the five largest mobile operators in the world,'' Bharti Chairman and Managing Director Sunil Bharti Mittal told a press conference here.

The transaction, he said, is the largest ever cross-border deal in emerging markets and will result in combined revenues of about 12.4 billion dollars and EBITA of over 4.7 billion dollars.

Zain has over 42 million customers in these 15 African countries--Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia.

Zain is the leader in 10 of these countries and second in four countries.

With this acquisition, Bharti has a presence in 18 countries across Asia and Africa with a customer base of over 180 million.

As per the deal, Bharti will be paying 8.3 billion dollars upfront and 700 million dollars after a year. The company would also take over about 1.7 billion dollars of Zain's debts as on December 31, 2009.

The deal comes after Bharti had failed twice in the last two years to strike a 23 billion dollars merger deal with South African telecom firm MTN.

RCom okays 26% stake sale

RCom's board has approved the induction of a strategic partner. It's board has an in-principle approval to sell a stake of up to 26% in the company.

Highlights
Approved in-principle induction of private equity investor
To dilute 26% stake in company
To sell stake at premium to the prevailing market price
To pursue appropriate strategic combination /consolidation opportunities
To sell 53.66 cr shares in investor

Why stake sale
Stake sale will bring down the debt burden of the companies
RCom currently has Rs 30000 cr of net debt
Net debt to Operating profit ratio for RCom reached closed to 4 times

Higher debt to Operating profit ratio act as deterrent to raise money
Debt ratio reached elevated level due to 3G auction

Debt Repayment Schedules
Maturity Date	Type	AmountPayable ($ Mn)	Amt Payable (Rs cr)
Mar-11	ECB	280	1288
May-11	FCCB	374	1720.4
Sep-11	ECB	116	533.6
Feb-12	FCCB	1219	5607.4
Total		1989	9149.4

Stake sale impact
Promoter stake to reduce to 41.58% from current 67.58%
To raise over Rs 9,000 cr via 26% stake sale
Stake sale to value RCom at approx Rs 34,500-38,000 cr
Every 1% premium from Friday price to garner additional Rs 90 cr

Gold snaps longest rally since Dec 2008

Gold dropped for the first time in eight days, snapping the longest rally since December 2008, as the euro rebounded and Asian stocks pared declines after Japan’s prime minister resigned, sapping demand for haven investments. Bullion for immediate delivery fell as much as 0.4% to $1,221.10 an ounce, and traded at $1,224 at 10:31 a.m. in Singapore. It climbed for a seventh day to a two-week high of $1,228.85 yesterday. “The gold rally has been driven by risk aversion and safe- haven buying and this is not going to go away anytime soon,” Zhou Li, an analyst at Changjiang Futures Co., said from Hubei. “We’ll see some profit-taking on the way up but the rally remains intact.” Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, rose to a record 1,268.23 metric tons yesterday, according to data on the company’s website. The euro strengthened to $1.2248 from $1.2229 yesterday when it touched $1.2111, the weakest since April 2006, after a report showed the region’s jobless rate increased to 10.1% in April, the highest rate since June 1998. Most Asian stocks gained after Japanese Prime Minister Yukio Hatoyama said he will step down, fueling a drop in the yen and boosting the earnings outlook of the country’s exporters. Silver for immediate delivery added 0.2% to $18.48 an ounce after falling 0.7% yesterday. Platinum gained 0.8% to $1,560.20 an ounce after declining 0.9% yesterday, while palladium rose 0.8% to $461.50 an ounce, rallying from yesterday’s 2.3% slump.

Money,Market & Monsoon

Introduction

After the monetary policy, the markets were keenly awaiting the monsoon forecast of the India Meterological Department to gauge the impact on food prices and on companies dependent on the agricultural sector.
The IMD dispelled fears by forecasting a normal monsoon for June-September. Rainfall is expected to be 98 per cent of the long period average, significantly higher compared to last year's 77 per cent LPA.
A normal monsoon is good news as it helps bring down prices of agricultural commodities and eases cost pressures for companies which use these as feedstock.
"It is quite possible that under a normal monsoon, food inflation declines significantly to more than offset the hit from non-food categories.
A poor monsoon, on the other hand, pushes up agricultural prices due to dwindling food stocks. Last year's rainfall deficit saw the country's foodgrain production dip to 216.85 million tonnes (mt) in 2009-10 as compared to 233.9 mt in 2008-09.
This meant agricultural growth declined 0.2 per cent in 2009-10 from 1.6 per cent in 2008-09. Agricultural growth was a robust 4.7 per cent in 2007-08, when the country saw a normal monsoon.
Improved outlook:
For India, the monsoon is critical as a large part of the arable land is dependent on rain. Kharif crops, which account for 55-60 per cent of the country's foodgrain production, are sown in June and July. Adequate rain, in terms of volumes and coverage (area-wise), is critical during this period.

Historically, it is observed that after a drought year, we have normal monsoon. So, this year, there is fair chance of a better monsoon. While last year, the industry took a hit, the outlook for the current financial year should improve.

2.Sector benifiting out of good monsoon:

1. Fertilizer:
A normal monsoon means the demand will be higher and the payment cycle will improve, which will be marginally positive for fertilizer companies.
Aries Agro, which makes nutrient-based fertilizers that help improve crop yields, is looking at 25 per cent growth in turnover in 2010-11 to Rs 175 crore (Rs 1.75 billion).
"We are expecting strong volume growth in fertilizers this year as compared to single-digit growth registered by the sector last year," says Sangeeta Tripathi, who tracks the fertilizer sector at Sharekhan.
We recommend a buy for Chambal Fertilizers and Coromandel International. Companies like Coromondel Fertilizers generate almost 90 per cent of their revenues from the fertilizer segment.
Deepak Fertilizers, which is largely into the chemical business, has a marginal exposure to fertilizers. Tata Chemicals and Chambal Fertilizers are among the most diversified players in this sector but still stand to gain.

2. Agri-inputs:
Irrigation India's monsoon, the main source of irrigation for the nation's 235 million farmers
Companies like Jain Irrigation the largest company in the drip irrigation segment, should benefit. This is due to the fact that a normal monsoon will lead to improved demand and working capital cycle, as most of its units are sold on credit.

3.Tractors Companies in the tractors segment like Mahindra & Mahindra will also benefit considering that the company's revenues from the segment are 30-35 per cent of its auto segment revenues.

4.Seed and crop protection segments: A normal monsoon will also mean good demand for companies in seed and crop protection segments.
These are the leading companies in these two segments
• Advanta India
• Monsanto India
• United Phosphorus
• Excel Crop Care

3.Who can benefit out of no rain
Farmers across North India may be looking up at the skies with hope but some punters on Dalal St want no rain.

• That’s because inadequate rains will fuel demand for pump sets, PVC pipes and drip irrigation systems fetching companies’ high returns. Operators on the bourses betting on deficient rain are lapping up shares of KSB Pumps, Kirloskar Brothers, Jain Irrigation, Bharat Bijlee and Finolex Industries faster.
• If India imports foodgrain, though it may not be necessary, shipping companies would be directly benefited. Lack of domestic demand for two-wheelers, tractors, especially rural demand could mean that companies will export these products to other countries.

4.list of companies

source : moneyconrtol.com

source :moneycontrol.com

source:moneycontrol.com



source :moneycontrol.com

source :moneycontrol.com

Cabinet increases natural gas prices

The Union Cabinet today effected an increase of over 113 per cent in the prices of natural gas produced by public sector companies Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL). These companies will now realise a price of $3.82 per million British thermal units (mBtu), compared to the existing one of $1.79. However, consumers of this gas, which mainly comprise the power and fertilizer sectors, will have to pay $4.2 per mBtu (inclusive of a 10 per cent royalty on the base price). This is equivalent to the price of $4.2 realised by Reliance Industries from its prolific KG-D6 gas block.

This gas, also known as the administered price mechanism (APM) gas, is produced from the fields earlier given to these companies on nomination. The price of APM gas was last revised in 2006. The new price is valid till March 31, 2014.

The low prices of gas have discouraged state-run oil companies from making investments in these blocks. Therefore, it became essential to increase the price of APM gas - Cabinet.

The increase would mean an increased fertiliser subsidy burden. The retail prices of fertiliser are capped by the government and any increase in input cost is offset as subsidy. The difference between cost and the maximum retail price (MRP) is released as fertiliser subsidy to manufacturers and importers. In case of power, any increase in input can be passed on to consumers. The power and fertiliser sector together account for 75 per cent of APM gas consumption. The total output of APM gas is estimated at 45 million standard cubic metres of gas a day (mmscmd).

ONGC –“This hike will also help us to wipe out the underrecoveries that were being incurred.” The state-run company incurred underrecoveries or revenue loss of Rs 4,745 crore from sale of 17.71 billion cubic metres of APM gas in 2008-09.

With this increase, ONGC’s revenues from APM gas will increase by Rs 6,550 crore to Rs 12,350 crore. While assuring better revenues to ONGC and OIL, the move will also bring a level-playing field between consumers of APM and non-APM gas.

3G auction ends, Govt to get Rs 67,719 cr windfal

Auction for 3G licence ended on Wednesday, with bids for pan-India licence touching Rs 16,751 crore that ensures the government a revenue of Rs 67,719 crore.

No single bidder bid for a pan-India license and Delhi emerged the most valuable circle at Rs 3,317 crore. Today was the thirty-fourth day of the bidding. The government’s revenues from the 3G spectrum are much higher than its original estimates and even surpassed its revised estimates by a hefty amount. The 3G proceeds will help the government to bridge its fiscal deficit.The government had budgeted revenues of Rs 35,000 crore from sale of air waves for 3G and Broadband Wireless Access (BWA) put together.

The Winners

Delhi: Vodafone, Bharti, Reliance Com at Rs 3317 cr
Mumbai: Reliance, Vodafone, Bharti Airtel at Rs 3247 cr
Maha: Tata Com, Idea, Vodafone at Rs 1258 cr
Gujarat: Tata Com, Vodafone, Idea at Rs 1076 cr
Andhra Pradesh: Bharti, Idea at Rs 1373 cr

Karnataka: Tata Telecommunication, Aircel, Bharti at Rs1580 cr
Tamil Nadu: Bharti, Vodafone, Aircel at Rs 1465 cr
Kolkata: Vodafone, Aircel, Reliance Communications at Rs 544 cr
Kerela: Idea cellular, Tata Telecommunications, Aircel at Rs 312.5 cr
Punjab: Idea Cellular, Reliance Communications, Tata Telecommunications, Aircel at Rs 322 cr
Haryana: Idea Cellular, Tata Telecommunications, Vodafone at Rs 222.6 cr

The auction for Broadband Wireless Access (BWA) spectrum would begin soon after the 3G auction is over. The 3G auction had commenced on 9 April, 2010 and there were nine bidders in the fray for the slots of 3G spectrum on the block. The government auctioned three slots in 17 telecom service areas and four slots in the remaining five states of Punjab, Bihar, Orissa, Jammu and Kashmir and Himachal Pradesh.

BSNL and MTNL received spectrum outside the auction process, but the price would be determined by the auction price.

The third-generation spectrum allows subscribers to download hi-speed data and stream videos on mobile telephones. The successful bidders would be allotted air waves in September after the spectrum is vacated by the defence forces.

The 3G spectrum saw aggressive bidding by the telecom players as India remains one of the fastest growing mobile-services market by subscribers. With the addition of over 20 million new users in March, the mobile subscriber base in the country has jumped to 584.32 million customers. The number of telephone subscribers in India, both wireless and wireline combined, increased to 621.28 million at the end of March-2010 from 600.98 million in February 2010, thereby registering a growth rate of 3.38 per cent. With this, the overall Tele-density in India reached 52.74.

Telecom players hope that the 3G spectrum will ease capacity constraints and also increase the revenue per user, which has been falling due to intense completion in the sector.

For broadband wireless access, there are 11 operators are in the fray. The reserve price for BWA spectrum has been fixed at Rs 1,750 crore and only two slots of 20 MHz each are on the block.