Category Archives: Industry Term

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.

DLF Registers 28 Percent Decline in Q2 Net Profit

Real estate major DLF has registered 28 percent decline in net profit for second quarter. The biggest real estate company in India witnessed decline of 4 percent in income from operations, which stood at Rs 1956 crore compared to Rs 2039 crore during same period last year.

The consolidate net profit of DLF stood at Rs 100 crore compared to Rs 138 crore for the same period last year. The company incurred expenses of Rs 1527 crore compared to Rs 1476 crore during the quarter under review.

Real estate companies in India have seen lower margins and less number of sales due to slowdown in realty market in India. Many projects have been delayed by developers due to scarcity of funds and higher rates in Indian market. Buyers have also declined over the past few years due to higher interest rates. Also, many buyers are expecting real estate developers to reduce the prices and they are still waiting for better deals. In major cities, the slowdown in real estate has resulted in higher inventory levels for developers.

DLF currently has 52 million square feet area under construction for various projects. The company stock was trading marginally down in today’s trade. The stock has touched 52-week high of Rs 289 and low of Rs 120 on NSE.

Ranbaxy Reports Loss of Rs 454 Crore for Quarter Ending September

Ranbaxy Laboratories has reported Rs 454 crore loss for quarter ending September 2013 on 3.4% rise in revenues. The biggest pharmaceutical company in India has been suffering for past few years due to regulatory troubles with US FDA.

Ranbaxy Labs reported profit of Rs 754 during the same quarter last year. The company also suffered on account of stock write-off worth Rs 70 crore at Mohali plant. The company registered forex loss of Rs 360 crore during the quarter.

The revenue was up by 3.4% at Rs 2802 crore. The company registered Rs 480 crore sales in East Europe. The sales in West Europe were down by 31 percent. The company managed to grow marginally in Africa and Middle East.

The company has disappointed investors on many occasions in the past couple of years. Even after the Japanese pharmaceutical company took over the control of Ranbaxy, things haven’t improved much. The stock seems over-valued at current levels, considering the issues like FDA alerts on all its plants in India.

AirAsia Gets FIPB Approval to Start New Airline in India

AirAsia has received approval of Foreign Investment Promotion Board for setup of new airline in India. The Malaysia based budget airline has jumped in Indian aviation sector by setting up a joint venture with Tata Sons and Telestra Tradeplace. Tata Group was planning to enter aviation sector for quite some time.

After the modifications in FDI policy in September 2012, AirAsia is the first airline to enter domestic aviation sector in India. Domestic travelers in India can expect lower airfares as the new airline company will try to cut the market share of other players.

In Indian domestic aviation sector, Indigo Airlines and GoAir have been doing very good. Jet Airways and Air India are also prominent players in domestic aviation space.

Jet Airways is also looking to expand its base in India with investment from Abu Dhabi based Etihad Airways.

The Tata Sons-AirAsia joint venture company will operate from Chennai. The company will focus on Tier-II and Tier III cities connectivity by air routes. AirAsia will be involved in operations of the airline while Tata Sons will be holding 30 per cent stake in the company with negligible operating role.

More Painful Quarters for European Automakers

European automotive majors could see more struggle in coming quarters as the automobile sales have been dropping in the recent months. With bleak outlook for future months, the auto majors are having no option but to cut staff and reduce plant costs.

Major auto companies operating in European region are expecting years of low sales due to austerity measures by European governments. With continued plunge in sales of new vehicles, the companies have to reduce their operating costs.

In year 2012, the car sales dropped 8.2 per cent in the European Union nations. The new vehicle registrations in Germany were down by 10% this February compared to last year. For the same period, the sales in France were lower by 12% and in Italy were lower by 17percent.

Many companies are betting on the growing markets like India and Brazil. By shifting production base to these countries, the automobile companies are able to maintain a strong hold in the developing nations.

Indian Stock Market Gains; PSB Gains 10%

Indian Stock Market closed higher on Tuesday after US managed to escape the fiscal cliff for the moment. BSE Sensex closed 154 points higher at 19580 and NSE Nifty closed 46 points higher at 5950. Next major resistance for NSE Nifty is 6000.

Among European markets, CAC was up yesterday while FTSE and DAX closed lower. US Markets are expected to remain positive in the start of New Year 2013. Markets closed with decent gains with Dow Jones gaining 1.28% and Nasdaq closing 2 per cent higher.

Punjab & Sind Bank gained 10% in today’s session after the bank announced that the board has approved the plan to raise Rs 1000 crore. The stock touched intraday high of Rs 81.75 on NSE and closed Rs 8.10 higher.

Among other major gainers were Reliance Infra, Jindal Steel, Hindalco and PNB. Among banking counters ICICI Bank, Bank of Baroda, HDFC Bank and Axis Bank closed positive.

Power Grid, NTPC, Infosys Technologies and Asian Paints were among major losers in today’s trade.

Indian currency gained smartly compared to USD. USD was down by 31 paisa at 54.68. Euro-INR was trading at 72.28.

Indian Market Closes Marginally Lower; Metal Stocks Shine

Indian Stock Market closed marginally lower after hovering in negative territory for the trading session. European markets closed marginally higher compared to previous closing. BSE Sensex was down by 22 points at 19453 during the closing bell.

USD gained further ground compared to Indian currency. USD-INR was trading at 54.85. Euro was also trading strong at 72.81. Euro is near its all time high compared to Indian currency.

Among major gainers in today’s session were metal stocks. Hindalco gained 2.35% to close at Rs 132. Jindal Steel gained 2.2%. Tata Steel was also higher by 1.77% at Rs 431.

Major losers included Ambuja Cements, Sun Pharma, BPCL and Jaiprakash Associates.

Among major companies, Reliance, ONGC, ITC and Coal India closed flat. TCS gained Rs 19.4 to close the day at Rs 1252.

The banking amendment bill received final approval in the parliament today. BJP has retained similar number of seats in Gujarat. Congress won 36 seats in Himachal Pradesh.

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.

Will Indian Retailers Allow FDI?

There seems to be no end to the controversy surrounding FDI in retail for the Indian Government as mass protests across all the states are not soothing out. While parliament is not reaching at any consensus at all on the same, there are over 6,000 traders in Shimla who have closed their shops to oppose the decision.

Adding fuel to the fire in the joint opposition by Bharatiya Janata Party (BJP) in the state and Communist Party of India-Marxist (CPI-M), which are hell bent to jolt the government. As of now, no reports of violence have been received.

“We have got very good response from across the country and 5 crore traders will not open their shops tomorrow. They will hold protest in their own markets. We will not hold demonstrations in front of foreign stores”, said Praveen Khandelwal, Secretary-General of the Confederation of All India Traders association. Backed by support from other states, there seems to be no early breather for the government.

Apparently, there are confirmed reports that several Bharti-Walmart stores would be shut down on Thursday to avoid any violence. Even security has been escalated at stores of World’s second largest retailer Carrefour in Delhi and Jaipur as a part of precautionary measures. Meanwhile, such similar shutter down operation was seen in Karnataka against the government’s decision to allow 51% the FDI in retail.

Nonetheless, the government has assured that there decision in favor of public interest, there are lingering fears in the minds of retailers that there would be threat to their presence in case such malls are being set up in their states.

There are countries like US where such decisions have affected many small stores, and that’s what has made retailers to put up strong opposition for the entry of foreign players in the retail market. While government would be putting up their best efforts, it would be interesting to see how they would seam through the fierce attack of retailers and opposition parties.

HTC Promises Combat

It has been revealed in a recent report that HTC has said that they are soon going to come up with new and improvised version of their products, for various needs of the people. It has been said in wake of the competition that prevails in the cell phone markets about quality and features.

HTC is of the view that they are not going to come up with phones that are like the others, and have similar features. They are of the view that they are going to bring newness in their designs and features, and will bring new models of HTC phones next year.

This came after the revelation that the firm had dropped its sales levels in the past one year and was performing at its worst, in the race of smartphones. They are of the view that they are going to come up with improvised versions to keep up with the growing competition of the market.

In a statement, the firm also said that it wasn’t another firm like Nokia, which has seen decline in the dominant position in the markets.

The firm was of the view that it is still capable of fighting the competition offered by other brands in the market and that it is going to fight back with new versions of the HTC phones.

“We will focus on the product next year, better and more competitive. Other than new LTE phones for the US market, we also have phones for the global market. We will launch some worldwide flagship products. We’re confident in them”, revealed Chief Financial Officer Winston Yung. They are of the hope of seeing better results in the time to come.