All posts by Monica Anand

Reliance Power Reaches Agreement with JP Group to Acquire Hydroelectric Business

Reliance Power has reached an agreement to acquire 1,800 mega watt hydropower assets of Jaypee Group. Reliance CleanGen, a unit of Reliance Power, will acquire 100 percent stake in the hydroelectric power business of Jaypee Group.

The financial terms of the deal have not been disclosed yet. After the deal, Reliance Power will become the largest private sector company in India in hydroelectric sector with combined capacity of 7,800 mega watts.

SBI Capital Markets has acted as the advisors to the group for the deal which marks the biggest deal in the power sector in India.

Jaypee Group had earlier offloaded its hydroelectric power projects in Himachal Pradesh to Abu Dhabi based energy major for Rs 10,500 crore. The deal could not be finalized.

Reliance Power was trading around Rs 93 in today’s market. The stock has touched 52-week high of Rs 112 and low of Rs 60.

Reebok India Alleged Fraud Cost Euro 153 Million to Adidas

Reebok India alleged fraud last year has put 153 million euro dent on the balance sheet of German sportswear maker Adidas. In year 2012, Reebok India filed FIR against two top officials of the company.

The investigation is currently on and ex-Managing Director Subhinder Singh Prem and ex-COO Vishnu Bhagat are under investigation for their alleged involvement in the fraud.

Adidas Group changed top management this year by bringing Erick Haskell from China operations to lead Indian team. The company also offered voluntary retirement to 84 employees last year. The company has also reduced its store count in India to reduce costs.

Adidas CEO Herbert Hainer announced that 2012 was successful year for Adidas Group with the company managing to grow its overall sales by six percent. The company registered 14.9 billion Euro sales in 2012.

Indian Market Trades Positive; CARE Debuts Strong

Indian Markets opened positive on Wednesday with BSE Sensex up by 42 points at 19296 and NSE Nifty up by 11 points. Asian Markets were trading strong as well. Nikkei 225 was trading higher as Japanese Yen was weak compared to US Dollar and Euro.

CFO of McLeod Russel has expressed his view that tea prices are likely to remain strong during year 2013. As the production of tea was hit by weather, the supply constraint will most likely push up prices. McLeod Russel stock was up by 0.6% at Rs 356.

Bharti Airtel, JP Associates, Ranbaxy Labs, Cipla and Sun Pharma were among major gainers in todays session. Infosys, TCS, Wipro and other technology counters were trading marginally lower. Banking stocks were also trading lower compared to previous close.

Market analyst SP Tulsian has given buy call for Balrampur Chini. Sudarshan Sukhani has given buy call for Sesa Goa. Manoj Murlidharan has given buy call for ITC with target price of Rs 301.

CARE has debuted on stock market today with positive surprise for retail investors. The stock has touched intraday high of Rs 985 and is currently trading at Rs 964 on back of strong trading volume.

Air India Strike Continues; DGCA Plans Strict Action

Air India pilots on strike might be in for a negative surprise as DGCA is considering cancellation of licenses. Many pilots have been issued show cause notice.

After the tough message sent across by aviation minister Ajit Singh, there are expectations that Air India pilots can return to work. The minister did not meet the pilot representatives and asked them to join their duties before any further talk.

Indian Pilots’ Guild has been derecognised by the Indian government and DGCA is considering tough action against office bearers of IPG.

Air India has been suffering massive losses in the past few quarters. After the government offered funds to keep the day-to-day business running at the national carrier, there has been pressure on Air India to register positive growth.

The aviation sector in India has been under pressure due to higher fuel costs. Vijay Mallya owned Kingfisher is private carrier facing trouble due to massive losses.

Asia Stocks, Won Jump on Central Bank’s Move

While countries across the world are grappling to combat the constraints triggered by the long running debt crisis in Europe, central bank’s intervention has certainly given the much needed boost to global market.

If reports are to be referred to, it has been seen that the MSCI Asia Pacific Index went up by 3.5% MSCI Asia Pacific Index, while the Standard & Poor’s 500 Index futures moved up by 0.2%. It was also told that South Korea’s won was seen moving up by 1.8% and the Dollar Index nosedived by 0.2%.

Market observers are of the view that this jump was all due to the steps taken by six central banks. It has been told that Federal Reserve has reduced the cost at which dollar is being given to others through swap agreements. This step would allow purchase of dollar easy for other countries. Even the People’s Bank of China has trim down the reserve requirements after 2008.

With such steps being taken, there is common belief that global monetary policy is making a transition towards good but how long it will take to negate the problem of debt crisis is yet not known.

There was rise of 2.8% in Commonwealth Bank of Australia (CBA), and 14% in Evergrande Real Estate Group Ltd in Hong Kong. There has been Beige Book survey which has revealed that the economy has done well in recent times and that due to significant performance in manufacturing and consumer sector. This survey also made it clear that despite all the lingering fears about US recession, there are fair chances that Us economy would be able to seam through all challenges, however, unemployment rate would remain a concerning point for one and all.

It has been confirmed that the US Federal Reserve, the European Central Bank, and the central banks of the UK, Canada, Japan and Switzerland would take some concrete decision on 5 December.

Mahindra Unveils XUV500 at Rs 10.8 lakh

Good news for car enthusiasts in India is coming straight from the horse’s mouth. The Indian car manufacturing prodigy, Mahindra and Mahindra has rolled out its first international edition of Sport Utility Vehicle (SUV).

The latest launch, dubbed XUV500, was launched at a sparkling ceremony in Pune, which is reportedly home to the company’s latest sensation.

As per company officials, two editions (W8 and W6) of the SUV will be offered in both four-wheel and two-wheel drive.

According to latest information, the Mahindra W8 has been pegged around Rs 11.95 lakh, ex-showroom price in Delhi. On the other hand, the Mahindra W6 will cost Rs 10.8 lakh, ex-showroom price in Delhi.

However, the said prices are applicable only for the two-wheel drive version of Mahindra W8/W6.

The XUV500 is accessible in both four-wheel (4×4) and two-wheel (4×2) drive edition, with an ultra-advance gearbox and 6-speed manual.

The powerful wagon is fueled by 2.2-litre, “Common-Rail Diesel Engine” (CDE) and the chunk is similar to the one available on Mahindra’s benchmark ‘Scorpio mHawk’.

In addition, the company claims efficient fuel efficiency, certified by ARAI, of 15.1 km/l, which will certainly mark the second best fuel-efficient product developed under Mahindra’s glittering passenger SUV inventory, just next to ‘Mahindra Bolero’.

VLCC To Spend Rs 200 Cr By 2013 Aiming Growth

Riding high on the rising demand for skincare items, VLCC stated that it plans to launch a novel variety of products in the anti-pollution group and will spend around Rs 200 crore by 2013 on domestic and abroad development.

VLCC healthcare managing director Sandeep Ahuja stated, “We will launch the anti-pollution range by the end of this month, which will be priced affordably. It will cater to a far greater population. It is a whole range of products from sunscreen to shampoos and we have high hopes for that.”

Mr. Ahuja stated that the products will be priced below Rs 100, which is far less than its other items.

VLCC, which has attendance in seven nations, with around 20 outlets, is also making plans to swell its overseas footprint.

“We added three new countries – Sri Lanka, Bangladesh and Qatar. We plan to open another outlet in Dhaka in six months, the second in Doha by this year-end and Kuwait by early 2012,” Ahuja said, adding that VLCC proposes to launch a manufacturing division in the Middle East by the next two years.

Wellness and beauty firm, which has 163 slimming and beauty centres in approximately 102 cities across India, projects to roll out 15 new company-possessed outlets in the xsiting financial year.

VLCC also anticipates doubling its franchisee outlet strength from the subsisting 35 to 70 in a period of one year.

“We are targeting a 25% growth and aim to be a Rs 1,000-1,400 crore company in the next two years. We will spend Rs. 100 crore each year for the next two years,” he added.

Top Stories in Indian Automobile Sector this week

This week, BMW India said that the luxury car maker will be aggressive about Indian market and will bring out coupe version of 6 series. The company has also planned to launch BMW 3 series convertible by the end of this year in India.

BMW has been doing pretty well in India and owns mor than 40% market share in premium car segment. The company president Andreas Schaaf is confident that they will be able to sell over 10k cars this year. The company has already sold 5364 cars till July. With the new model launch and better marketing efforts, the company can reach around 50% market share in India.

BMW X3 launch was delayed in India due to technical reasons. The car has been recenly launched with starting range of Rs 42 lakh.

To compete with market leader BMW, Audi has reduced the price of 2.0 litre TDI engine Q5 price to 35 lakh. Audi has been trying hard to increase its market share in India. As other markets in Eurozone and US still face lower sales, the premium car segment has been growing in India.

BMW has also raised its Chennai plant capacity to meet rising demand in Indian market. The company has capacity of making 11k SUVs and cars at present.

Another car maker betting high on the Indian market is Renault Nissan. The company informed that its Chennai facility has reached 100k petrol engine milestone. The plant started petrol engine manufacturing May 2010.

The Chennai facility manufactures Renault Fluence and Micra at present and plans to shortly start Renault Koleos and Nissan Sunny. Companies are expecting mid size car markets to have better growth in coming quarters.

Volkswagen was not able to impress the Indian consumer with its Jetta. However, the company is trying hard to bring back customer interest with an updated version launch. The Jetta comes with diesel engine and offers better performance.

Jetta Trendline is priced at Rs 13.8 lakh while Jetta Highline DSG comes with a price tag of Rs 17.47 lakhs. Time will tell if Indian consumers will buy the car which offers good performance but seems expensive at current price tag. There are many other options in this price range and some cars which offer better value for money.

Hindustan Motors-Mitsubishi has launched limited edition Mitsubishi Outlander Chrome with a price tag of Rs 20.5 lakh. The car comes with side skirts, upgraded interiors, LED floor illumination lamps and many other features which add class. There are many more options for SUV lovers in India now.

BMW India to Intensify Its Luxury Car Segment

German automobile giant BMW has been aiming to expand its luxury car segment in India by 10 times over the next 10 years.

The company has recently launched its X3 vehicle priced between Rs 41.2 lakh and Rs 47.9 lakh.

BMW India President Dr. Andreas Schaaf during the launch of BMW X3 SUV in Pune stated that the luxury car sales in India have been witnessing growth and the company has been expecting a boost in the near future. He said that BMW India has been anticipating 60,000 units’ sale annually by 2021 and soon they will be investing Rs 70 crores to heighten its sales.

Dr. Schaaf announced that their annual production capacity has increased since June as BMW India’s only manufacturing and assembling unit in the country is located in Chennai where the production capacity has increased by
1,000 units.

“We have expanded our production facility by starting the second shift of production. The production has been expanded to 11,000 units annually from 10,000 units”, Dr .Schaaf said.

Also, in March, the company had increased its production capacity from 8, 000 to 10,000 units per year in single move.

Dr. Schaaf added that that if required the company will add another assembly line and will increase the output of the second shift by adding more production.

Aditya Birla Nuvo’s Textiles Revenue To Increase Two Fold By Next 5 Yrs

Diversified Aditya Birla Nuvo anticipates its textile section to more than double its income to Rs 750-800 crore by the next four-five years.

The textiles biz of the company falls under Jaya Shree Textiles, a completely-owned division that brings in 14% to the company’s manufacturing biz.

At present, the textiles biz, which makes linen fabric and yarn, has revenue of Rs 300 crore.

Aditya Birla Nuvo has retail stores under the brand Linen Club, which retails fabric and ready-made garments. It plans to open 14 new outlets in the current fiscal year from 46 currently.

S Krishnamoorthy, president, textiles division, stated, “Our focus is to expand our retail footprint going forward and in the next five years we plan to have 200 stores. It will all be franchisee outlets.”

The company is eyeing a promotion operation for Linen Club and has outlined a capex of Rs 15 crore for the existing fiscal.

The stores are likely to see a same-store sales expansion of 15% in the existing fiscal as against an average of 15-20% during the last years.

Aditya Birla Nuvo also proposes to lift up linen fabric capacitance by 30-40% by 2013.

“We will add capacity in our existing plant in West Bengal. The total linen capacity at the plant is 9 million metres per annum now,” Krishnamoorthy added.

Aditya Birla Nuvo also stated that it is eyeing an increase in raw material costs and has already augmented costs of fabric by 7-8% during the past six months.

On August 19, the stock of the company declined 1.9% to end the week at Rs 853.50 on the Bombay Stock Exchange (BSE).

The share price has seen a 52-week high of Rs 969.70 and a low of Rs 728.05 on BSE.

Current EPS & P/E ratio stood at 84.57 and 10.09 respectively.