Thursday, January 31, 2008

India`s economic growth at 9.6% in 2006-07

Indian Gross domestic product (GDP) registered at growth of 9.6 % in 2006-07, as against the growth rate of 9.4 % during the previous year i.e 2005-06.

According to theCentral Statistical Organisation (CSO), Ministry of Statistics and Programme GDP at factor cost is estimated at Rs. 28, 643.09 billion as against Rs. 26, 128.47 billion in 2005-06 .At current prices, GDP in 2006-07 is estimated at Rs. 37, 900.63 billion as against Rs. 32, 756.70 billion in 2005-06, showing an increase of 15.7 % during the year.

The national income (i.e. net national product at factor cost) recorded a growth of 9.7% in 2006-07 is estimated at Rs 25,304.94 billion as against Rs. 23,068.94 billion in 2005-06 during the year. At current prices, the national income in 2006-07 is estimated at Rs. 33,258.17 billion as compared to Rs 28,707.50 billionin 2005-06, showing a rise of 15.9 % during the year.

The growth rate of 9.6 % in the GDP during 2006-07 has been achieved due to high growth in mining & quarrying (5.7%), manufacturing (12.0%), electricity, gas & water supply (6.0%), construction (12.0 %), trade, hotels & restaurants (8.5%), transport, storage and communication (16.6%), financing, insurance, real estate & business services (13.9%), and community, social and personal services (6.9%).

The per capita income (per capita net national product at factor cost) in real terms, is estimated at Rs. 22,553 for 2006-07 as against Rs. 20,858 in 2005-06, registering an increase of 8.1 % during the year. The per capita income at current prices is estimated at Rs. 29,642 in 2006-07 as against Rs. 25,956 for the previous year depicting a growth of 14.2 %.

In order to derive the GDP at market prices, the GDP at factor cost is adjusted by adding indirect taxes net of subsidies. As various components of expenditure on gross domestic product, namely, consumption expenditure and capital formation, are normally measured at market prices, the discussion in the following paragraphs is in terms of market prices only.

Private Final Consumption Expenditure (PFCE) in the domestic market at current prices works out to Rs. 23,241.09 billion in 2006-07 as against Rs. 20,622.22 billion in 2005-06. At constant (1999-00) prices, the PFCE works out to Rs. 18,336.73 billion in 2006-07 as against Rs. 17,107.39 billion in 2005-06. The per capita PFCE in 2006-07 works out to Rs. 20,714 at current prices and Rs. 16,343 at constant (1999-00) prices as against Rs. 18,646 and Rs. 15,468 respectively in 2005-06.

Domestic saving

Gross domestic saving (GDS) at current prices in 2006-07 is estimated at Rs. 14,414.23 billion as against Rs. 12,273.48 billion in 2005-06, constituting 34.8 % of GDP at market prices as against 34.3 % in the previous year. The rise in GDS has been contributed by all sectors. In respect of the household sector, the saving in the form of financial and physical assets has gone up from Rs. 4,208.41 billion and Rs. 4,459.15 billion in 2005-06 to Rs. 4,679.85 billion and Rs. 5,178.37 billion in 2006-07, respectively.

Saving of private corporate sector has gone up from Rs.2,683.29 billion in 2005-06 to Rs. 3,222.42 billion in 2006-07. The saving of the public sector showed a increase from Rs. 922.63 billion in 2005-06 to Rs. 1,333.59 billion in 2006-07. The net domestic saving has correspondingly gone up from Rs. 8,485.44 billion in 2005-06 to Rs. 10,069.56 billion in 2006-07 and constitutes 26.5 % of net domestic product at market prices in 2005-06 and 27.1 % in 2006-07. As in the case of gross saving, the net saving of the household sector has also gone up from Rs. 7,187.36 billion in 2005-06 to Rs. 8,168.87 billion in 2006-07, the net saving of the private corporate sector has increased from Rs. 1,576.46 billion in 2005-06 to Rs. 1,876.54 billion in 2006-07 and the net saving of the public sector has increased from Rs. 278.38 billion in 2005-06 to Rs. 24.15 billion in 2006-07.

Capital Formation

Gross Domestic Capital Formation at current prices has increased from Rs. 12,719.53 billion in 2005-06 to Rs. 14,877.86 billion in 2006-07 and at constant (1999-2000) prices, it increased from Rs. 9,501.02 billion in 2005-06 to Rs. 10,533.23 billion in 2006-07. The rate of gross capital formation at current prices is 35.9 % in 2006-07 as against 35.5 % in 2005-06. The rate of capital formation in 2006-07 was higher than the rate of saving because of net capital inflow from abroad of Rs. 463.62 billion in 2006-07. The rate of gross capital formation at constant (1999-2000) prices increased from 33.4 % t in 2005-06 to 33.8 % in 2006-07. The rate of net capital formation at constant prices in 2006-07 was 26.4 % as against 26% in 2005-06.

Within the gross capital formation at current prices, the gross fixed capital formation amounted to Rs. 13,465.01 billion in 2006-07 as against Rs. 11,091.60 billion in 2005-06. At current prices, the gross fixed capital formation of the public sector has increased from Rs. 2,515.07 billion in 2005-06 to Rs. 3,086.03 billion in 2006-07, that of private corporate sector from Rs.4,196. 47 billion in 2005-06 to Rs. 5,298.71 billion in 2006-07, and the household sector from Rs. 4,380.06 billion in 2005-06 to Rs. 5,080.27 billion in 2006-07.

The change in stocks of inventories, measured as additions to stocks increased at current prices, from Rs. 862.48 billion in 2005-06 to Rs 961.03 billion in 2006-07. The increase is observed in private corporate sector from Rs. 578.43 billion to Rs. 731.43 billion.Household sector has also increased from Rs. 79.10 billion to Rs. 98.10 billion

Puravankara Projects Q3 (cons.) net doubles to Rs 631.15 mn

Quarter on quarter basis

Puravankara Projects, on consolidated basis registered 2.21 times rise of net profit for the quarter ended December 2007. During the quarter, net profit stood at Rs 631.15 million as against Rs 284.36 million in the quarter ended September 2006.

Total income rose 78.45% to Rs 1,505.25 million for the quarter ended December 2007 from Rs 843.48 million in the previous quarter same year.

On Standalone basis, Puravankara Projects, registered marginal rise in net profit for the quarter ended in December 2007. During the quarter, the company experienced a 4.86% rise in profits to Rs 565.03 million from Rs 538.81 million in the quarter ended September 2007.

Net sales and Total Income for the quarter rose 6.74% to Rs 1,505.25 million compared with Rs 1,410.08 million in the previous quarter of the present year.

The basic and diluted EPS after extraordinary item declined 1.11% to Rs 2.65 for the quarter ended December 2007 from Rs 2.68 for September 2007.

Quarterly Standalone
Dec 07 Sep 07 %Change
Total Sales 1,505.25 1,410.08 6.74
Net Profit 565.03 538.81 4.86
EPS 2.65 2.68 (1.11)

Highlights of quarter:

The company has won the tender bid from APIIC (Andhra Pradesh Industrial Infrastructure Corporation) for development of a massive project at the prestigious Hi-Tech city, Hyderabad, involving an investment of over Rs 35 billion. The company`s bid for the land deal was for Rs 6.30 billion.

Puravankara Projects announced to launch its mega housing project `Purva Windermere` at Pallikarnai, Lake district in Chennai with an estimated project cost of over Rs 12 billion.

The Business:

Puravankara Projects, is one of the leading real estate development companies in India with a focus on developing residential and commercial properties. The company has operations in Bangalore, Kochi, Chennai, Coimbatore, Hyderabad, Mysore, Colombo (Sri Lanka) and United Arab Emirates.

Shares of the company declined Rs 13.9 , or 3.86% to settle at Rs 346.00. The total volume of shares traded was 3,394 at the BSE.(Thursday ).

Punj Lloyd net rises 2.05 times in Dec `07 quarter

Punj Lloyd disclosed a phenomenal jump in net profit for the quarter ended December 2007. During the quarter, the company experienced a 2.05 times rise in profit to Rs 391.60 million from Rs 190.39 million in the quarter ended December 2006.

Net sales for the quarter rose 91.13% to Rs 12,437.50 million compared with Rs 6,507.28 million in the corresponding quarter, a year ago.

Total income rose 87.95% to Rs 12,582 million for the quarter ended December 2007 from Rs 6,694.12 million for the same period last year.

The diluted EPS after extraordinary stood at Rs 1.26 for the quarter ended December 2007.

Quarterly results (Rs in mn)
As at December 2007(3) December 2006(3) %Change
Net Sales 12,437.50 6,507.28 91.13
Net Profit 391.60 190.39 105.68
EPS 1.26 - -

Shares of the company gained Rs 14.95 , or 3.5% to settle at Rs 442.2. The total volume of shares traded was 1,537,836 at the BSE.(Thursday ).

Reliance Power Allotment Status

Reliance Power Allotment Status can be checked here from feb 1.

Onmobile Global Ipo allottment

Allotment status can be checked online here once the allotment is done.

Todays Broker calls Intraday calls

As much expected and anticipated by the financial markets across the world the FED cut its rates by another 50 basis points indicating that the subprime crisis toll is not yet fully over and still on the way,,,,,,,,,,,,,, today being the expiry day expect the markets to remain volatile inspite of the fed rate cut as positive cues,,,,,,,,,,,,,,,,,,,,,,,,,,31/1/08 at 9:58 AM
support comes in at 5140-5106-5078 and resistance comes in at 5211-5264-530631/1/08 at 9:58 AM
Markets likely to remain weak today,,,,,,,,,,,,,,,,,, buy on dips31/1/08 at 9:59 AM
INTRA=DAY CALL : SELL REL CAP FUT 1902 SL 1917 TGT 187431/1/08 at 10:08 AM
Buy ICICI bank around 1166 stop below 115431/1/08 at 10:36 AM


MARKETS MOVING UP,,,,,,,,,,,,,,,
NEWS: Better to Rollover your Long Positions Of Jan Futures Contract to February Contract, as markets expected to give a break out in the upward direction after moving in a range of 5000-5300 levels in the month of February & Rel Power Refund money is to get pumped into the markets & Pre-budget rally also expected.

Buy powergrid at 105 .. target 109 .. stoploss 103.9

NIFTY,,,,,,,,,,,,,,,,,,,, 1ST TRGT REACHED,,,,,,,,,,,,,,,,,



NIFTY TARGET 5300 TODAY,,,,,,,,,,,,,,,,,,

Check this post for update as the day progresses

Market opens positive

The 30-share benchmark opened positive at 17,810.13 mirroring good global cues in the early trades.

Asian stocks advanced, led by electronic goods companies and autos, after Seiko Epson and Daihatsu Motor posted higher profits. Markets in the region rebounded from yesterday`s lows after the US Federal Reserve cut the interest rates by 50 basis points in yet another effort to stall the turmoil in financial markets worldwide

BSE Sensex was last trading at 17,816.40, up 57.76 points, or 0.33%, while NSE Nifty was trading at 5152.05, down 15.55 points (9.56 a.m.).

BSE Midcap index rose 0.92% and BSE Smallcap rose 0.54%.

Out of the total 1,521 stocks traded at the BSE, 725 advanced, 769 declined while 27 remained unchanged.

Among the sectoral indices, BSE Auto rose 0.92%, Bankex rose 0.54%, FMCG was up 0.43%, IT dipped 0.06% and Power rose 0.57%.

Gainers at the BSE were HUL, which inched up 2.67% to Rs 201.85, Tata Motors rose 2.13% to Rs 710.95 and ONGC rose 1.39% to Rs 982.00. Bharti Airtel, RComm, SBI, ICICI Bank, Ranbaxy and Bajaj Auto also rose.

Laggards at the BSE Sensex include Hindalco, which dipped 3.18% to Rs 170.50, Satyam declined 2.96% to Rs 383.00 and DLF was down 2.83% to Rs 837.80. RIL, NTPC, Tata Steel, REL and ITC also slipped.

Stock Alerts

Jan 30, 09:44 TCS may gain on new order win
Jan 29, 09:48 Banking, auto, realty shares may see action
Jan 28, 09:47 RIL may see action
Jan 25, 09:44 State Bank India may see action
Jan 24, 09:53 Shree Renuka Sugars may gain on stock split proposal

FIIs continue selling

Foreign institutional investors (FIIs) sold shares worth net Rs 285.10 crore on Tuesday, 29 January 2008, compared to their selling of Rs 1513.40 crore on Monday, 28 January 2008.

FII outflow of Rs 285.10 crore on 29 January 2008 was a result of gross purchases Rs 2924.50 crore and gross sales Rs 3209.60 crore. The 30-share BSE Sensex declined 60.84 points or 0.34% at 18,091.94 on that day.

FII outflow in January 2008 totaled Rs 12,424.30 crore (till 29 January 2008).

There are a total of 1,276 FIIs registered with the Securities & Exchange Board of India (Sebi).

Too early to estimate impact of global eco slowdown on India:IMF

On 29 January 2008, the Economic Counsellor and Head of the Research Department of the International Monetary Fund (IMF) Simon Johnson informed that it is still too early to say what impact the recent financial market turmoil will have on India. He added no country was going to be exempt from the global slowdown.

Johnson further explained India has relatively less trade exposure than some other countries that will limit the effects. India also appears not to have been drawn in through the financial mechanism. Hence they do not think there is substantial exposure there.


Jan 30, 20:52 Electrotherm India net profit rises 71.71% in the December 2007 quarter
Jan 30, 20:42 MphasiS net profit rises 382.49% in the December 2007 quarter
Jan 30, 20:38 Indo Asian Fusegear net profit declines 36.40% in the December 2007 quarter
Jan 30, 20:36 Development Credit Bank net profit rises 828.16% in the December 2007 quarter
Jan 30, 20:34 Rane Holdings net profit declines 83.05% in the December 2007 quarter

Ongoing and forthcoming Ipo's

Ongoing IPOs
Ongoing IPO section displays a list of IPOs that are currently opened for subscription.
Company Name Issue Price Min.
Max. Retail Investment Start Date End Date
IRB INFRASTRUCTURE DEVELOPERS LIMITED 185-220 30 30 100000 31-Jan-08 05-Feb-08 15:00
WOCKHARDT HOSPITALS LIMITED 280-310 20 20 100000 31-Jan-08 05-Feb-08 15:00
SHRIRAM EPC LIMITED 290-330 20 20 100000 29-Jan-08 01-Feb-08 15:00
BANG OVERSEAS LTD 200-207 30 30 100000 28-Jan-08 31-Jan-08 15:00

Forthcoming IPOs

610-690 10 10 100000
06-Feb-08 15:00
80-85 75 75 100000
05-Feb-08 15:00

Asian markets open positive, Similar sentiments expected in Indian markets for the day

Asian stocks advanced, led by electronic goods companies and autos, after Seiko Epson and Daihatsu Motor posted higher profits.

Markets in the region rebounded from yesterday`s lows after the US Federal Reserve cut the interest rates by 50 basis points in yet another effort to stall the turmoil in financial markets worldwide.

Japanese benchmark index Nikkei gained 72.95 points, or 0.55%, to trade at 13,417.98.

Hong Kong`s index Hang Seng jumped 117.29 points, or 0.50%, to trade at 23,770.98.

China`s Shanghai Composite gained 10.07 points, or 0.23%, to trade at 4,427.92.

Taiwan`s index Taiex declined 69.97 points, or 0.93%, to trade at 7,473.53.

South Korea`s KOSPI added 22.06 points, or 1.39%, to trade at 1,611.12.

Singapore`s Straits Times added 11.48 points, or 0.38%, to trade at 3,011.51. (8.10 a.m., IST)

Fed cuts rates by 50 bps; Dow ends lower

The Federal Reserve, in line with street expectations, cut the interest rates by 50 basis points in yet another effort to stall the turmoil in financial markets worldwide.

The Fed lowered the discount rate, or the interest the Fed charges on loans to banks, by a half-point to 3.50%. It also lowered the fed funds rate, (the interest banks pay one another for overnight loans) to 3%, the lowest level since spring 2005.

The market reacted positively to the news with both the Dow Jones and Nasdaq Composite index taking a u-turn and spurting back in action from their day`s lows.

However, the last hour of trade saw some heavy selling by traders who chose to lock-in profits ahead of the employment report on Friday. Key reports on the job market and manufacturing set could raise concerns about the state of the economy, which has been dogged by the sub prime crisis which emerged last year and losses at major financial institutions.

The Dow, which had been up more than 200 points after the Fed`s decision, finished down 37.47 points, or 0.30% at 12,442.83, and the Nasdaq composite index fell 9.06 points, or 0.38%, to 2,349.00.

The Fed had recently cut rates by 75 basis points in a rescue-act after global markets had fallen sharply.

Market ends weak ahead of US Fed meet

The 30-share index, Sensex opened marginally higher by 28 points at 18,120.22 and soon slipped into the negative in the early trades.

Accordingly, the index made further inroads into the negative on the back of intense selling pressure in frontline stocks. The index ended the day on a weak note after touching an intraday low of 17,683.51.

BSE Sensex plunged 333.30 points, or 1.84%, to close at 17,758.64; while the broad-based NSE Nifty closed at 5,175.15, down 105.65 points, or 2%.

Midcap Index shed 192.18 points (2.40%) and Small Cap Index dropped 230.81 points (2.22%) on Tuesday.

Global markets

Asian markets ended down on Wednesday (Jan. 30, 2007) after UBS AG reported a record loss and BNP Paribas posted earnings below analysts` expectations.

Market Statistics

Out of the total 2,787 stocks traded at the BSE, 726 advanced, 2,018 declined while 43 remained unchanged.

Amongst the sectoral indices, BSE Auto declined 2.26%, FMGC dipped 1.76%, Bankex was down 1.98%, Realty shed 2.43%, IT declined 0.60% and Power dipped 2.88%.

Movers and Shakers

Top gainers at the BSE Sensex were BHEL, which advanced 1.82% to close at Rs 2089.25, HDFC rose 1.53% to Rs 2894.05 and Tata Steel rose 1.02% to end the day at Rs 723.50. Ambuja Cement, ACC, TCS, Bharti Airtel and HDFC Bank also rose.

Laggards at the BSE Sensex include REL, which plunged 5.44% to close at Rs 1992.30, HUL dipped 5.14% to Rs 196.60 and ONGC was down 4.94% to finish at Rs 968.50. RComm, NTPC, Bajaj Auto, RIL, ICICI Bank, Tata Motors, DLF and Hindalco were among the other losers.

Top Volumes

Ispat Industries topped the volume chart with 10,460,521 shares followed by RPL with 9,423,514 shares and NTPC with 4,417,933 shares.

Top Turnover

REL topped the turnover chart with Rs 1,782.7 million followed by RPL with Rs 1,554.3 million.


Lanco Infratech, engaged in the business of construction and infrastructure development, disclosed phenomenal jump in net profit for the quarter ended December 2007. During the quarter, the company experienced a 91.64% rise in profit to Rs 389.13 million from Rs 203.05 million in the quarter ended December 2006. Total income increased 2.83 times to Rs 3,892.80 million for the quarter ended December 2007 from Rs 1,375.31 million for the same period, last year.

Bharti Airtel, India`s top mobile operator, reported 41.74% increase in consolidated net profit, as per United States Generally Accepted Accounting Principles (US GAAP) rose to Rs 17,224.00 million for the quarter ended Dec. 31, 2007 as against Rs 12,151.30 million in the corresponding quarter, last year. Total income for the period in comparison rose 41.74% to Rs Rs 69,639.00 million, compared with Rs 49,129.20 million, last year.

Simplex Projects posted a 16.34% growth in net profit at Rs 52.41 million for the quarter ended December 2007 as compared with Rs 45.05 million for the previous quarter ended September 2007. Total Income has increased 7.33% to Rs 589.97 million for the quarter ended December 2007 from Rs 549.70 million in the last quarter.

Godrej Industries posted a marginal 2.54% increase in net profit to Rs 330.60 million for the latest quarter ended December 2007 as compared with Rs 322.40 million for the corresponding quarter in the last fiscal.

Total income for the quarter rose 4.12% to Rs 2,027.30 million from Rs 1,947.00 million in the same quarter, last year.

Public sector lender Bank of Baroda (BOB) posted 52.23% growth in net profit to Rs 5,010.50 million for the quarter ended December 2007 as compared with Rs 3,291.30 million for the corresponding quarter in the last fiscal. Interest earned for the latest quarter rose 25.77% to Rs 30,021.90 million as against Rs 23,870.00 million for the corresponding quarter, a year ago.

Bajaj Auto, on consolidated basis, registered 16.60% drop of in net profit for the quarter ended December 2007. During the quarter, net profit stood at Rs 2,738.20 million as against Rs 3,283.50 million in the quarter ended December 2006. Net Sales & Income rose marginally 2.83% to Rs 26,960.30 million for the quarter ended December 2007 from Rs 26,332.60 million for the same period, last year

Wednesday, January 30, 2008

Indian Markets likely to follow global markets on Wednesday

Anuj Anandwala, analyst, KJMC Capital Services said that markets were choppy today (Jan 29). Market opened with an upward gap, following the good global cues but could not sustain the gains and was trading flat during the end of the trading session. It was mainly due to unchanged interest rates by the Central bank of India, as market expectation was a rate slash of 25 bps.

Most of the interest sensitive sectors dragged the market down. Banking and realty ended in red. Auto stocks were badly hit, though FMCG and Oil & gas were trading firm.

He expects markets to take cues from global markets in the next trading session as Fed meet is scheduled for tomorrow (January 30).

He recommends investors to do some value buying in IT sector.

Sunil Godhwani, CEO, Religare said that RBI has kept Bank Rate, Reverse Repo Rate, Repo Rate and Cash Reserve Ratio (CRR) unchanged. The governor has been concerned about the inflation, which RBI believes is `artificially` suppressed.

He also added that while non-food credit has decelerated, growth in money supply and aggregate deposits of scheduled commercial banks continues to expand well above indicative projections, which kept RBI maintain the interest rate.

He stated, `` We believe RBI statements are cautious to neutral and there is scope of cut in the rate going forward.``

According to him, most of the rate-sensitive sectors, including those, which went up yesterday anticipating a rate cut, have given up their gains of yesterday.

Investors will be better off if buying decisions are based on fundamentals and not on any event. He continues to like banks, as their fundamentals remain strong irrespective of a rate cut, said Godhwani.

Tuesday, January 29, 2008

When the U.S. coughs, the whole world still catches cold: IMF

"No one is exempt from a global slowdown. That is why you call it global," International Monetary Fund chief economist Simon Johnson said on Tuesday as he updated the IMF's World Economic Outlook.

"It will be very hard for even the most effective counter-cyclical policy to keep any country from having some slowdown in these circumstances," he said.

The IMF has trimmed its estimate for world growth this year to 4.1 percent from its prior outlook of 4.4 percent, with still-resilient emerging economies seen growing at a rate of 6.9 percent from 7.8 percent last year. Even growth in China will moderate from a thumping 11.4 percent in 2007 to 10 percent.

"There are obviously linkages. I think that reports of decoupling have been greatly exaggerated. It is a question of what kind of linkages," Johnson told a media briefing.

Estimating the extent of the fallout will depend on a judgment of the strength of these ties to the U.S. economy, and whether policy-makers in other countries are able to take action to mute the impact.

"It is going to be a story of how are you linked to the U.S. and to what extent can your policy deal with the repercussions," said Johnson.

"To what extent...are you constrained by your domestic inflation in terms of having an appropriate counter-cyclical policy," he added.

The Bank of England has already cut interest rates and may ease again, while the European Central Bank has kept interest rates on hold, citing inflation concern.

World stock markets have swung wildly since problems in the U.S. subprime mortgage market surfaced in August, sparking a global credit crunch that has yet to fully abate. Investors have bet heavily that the United States will tip into recession and drag other economies in its wake.

Johnson ducked the question of an outright recession, but made plain that no economy would entirely dodge the bullet from a slowdown.

"There are some financial linkages, and that is what has brought in Europe. There are some trade linkages, and that is what is bringing in Latin America and it is bringing in Asia, and that is what could spill over to Africa," he said.

Indian Market slips after RBI holds rates

The 30-share benchmark index after trading in the positive, slipped into the negative on the back of selling pressure in pivotal stocks. It touched an intraday low of 17,927.92.

YV Reddy, Governor of the Reserve Bank of India (RBI) decided to keep all key rates unchanged at a policy review on Tuesday. Bank rate and CRR is kept unchanged at 6.0% and 7.5% respectively. The central bank left all other rates steady as well.

BSE Sensex was last trading at 18,035.98, down 116.80 points, or 0.64%, while NSE Nifty was trading at 5,304.65, up 24.95 points (12.56 p.m.).

BSE Midcap dipped 0.05% and BSE Smallcap dipped 0.39%.

Out of the total 2,695 stocks traded at the BSE, 1,267 advanced, 1,383 declined while 45 remained unchanged.

Among the sectoral indices, BSE Auto declined 0.87%, Bankex shed 3.84%, FMCG was up 1.88%, IT inched up 1.50%, Power dipped 0.07% and Realty fell 1.54%.

Gainers at the BSE were Infosys, which inched up 3% to Rs 1,489.80, Grasim rose 2.76% to Rs 3,029.00 and Cipla rose 2.76% to Rs 189.70. ITC, M&M, Tata Steel, Ambuja Cement, Ranbaxy and Wipro also rose.

Laggards at the BSE Sensex include ICICI Bank, which plunged 5.39% to Rs 1,205.05, Bajaj Auto shed 4.45% to Rs 2,350.00 and Maruti was down 4.23% to Rs 826.10. HDFC Bank, Bharti Airtel, SBI and L&T were among the other losers.

Reliance Power Ipo Allottment

Reliance Power Ipo allottment will be announced on 5th FEB and the listing will be on 18th FEB

Market calls for the day

this week is very important for the market, after two days january F&O series will expiry, today RBI will announce it's credit policy, FED bank will also meet again on 29th to review rate cuts. please trade in banking, auto and reality stocks with strict stop loss 29/1/08 at 9:57 AM
Thermax , Maruti, Elder Pharma Stocks with +ve bias: IDFC, RCOM, Voltas Stocks for short-term delivery: ABB, Powergrid , Ranbaxy,ITC Stocks for Investment : SBI,Aban Offshore,PunjLyod,JPAssociates, Shiv-Vani Oil 29/1/08 at 9:57 AM
Imp Results today – Thermax , Maruti, Elder Pharma29/1/08 at 9:58 AM
Aban Offshore, Ashok Leyland, Dr.Reddy's Labs in the Investor Eye.29/1/08 at 9:58 AM
BUYON HDIL FAST FOR TRG OF 1080 WITH SL OF 101529/1/08 at 10:15 AM

Results today: Dabur India, Essar Oil, GE Shipping, Maruti Suzuki, Nalco, SAIL, Sterlite Industries, Suzlon Energy, Syndicate Bank, Tata Power, Zee Ent, Akruti City, Bombay Dyeing, Cinemax India, Clutch Auto, Consolidated Construction, Dredging Corporation, Eicher Motors, Firstsource, Geodesic Information, GNFC, Godrej Industries, Havell’s India, Hindustan Oil Exploration, HMT, ITI, Jagran Prakashan, Lanco Infra, Mahindra Lifespace, Mcleod Russel, Mundra Port, Opto Circuits, Oudh Sugar Mills, Piramyd Retail, Praj Industries, Prithvi Information, Pyramid Saimira, Sakthi Sugars, Sical Logistics, Subex, Thermax, Torrent Power, Triveni Engineering, Voltamp Transformers, WWIL, Yes Bank10:48 AM

MARKETS WAITING FOR REDDY SHAKE,,,,,,,,,,,,,,,,,,,,,, 11:08 AM

Indian hotels Q3FY08 results—above estimates, strong operating performance.
· Net sales up 15% to Rs520.6cr (expected Rs506cr), driven by 15.4% yoy growth in Average room rates.
11:11 AM

Operating margins up from 41.9% to 47% yoy, this is a reflection of higher ARRs and stringent cost controls (total expenditure up by only 4% yoy)11:11 AM

Operating profit up 29% yoy to Rs244.7cr
· Net profit up 31% yoy to Rs134.6cr (expected 114.5cr)

Asian markets Advance. Indian markets expected to see an upside of 3-4%

Asian markets on Tuesday (Jan. 29, 2008) advanced on speculation the US Federal Reserve will slash US interest rates.

The advance was led by automaker and miners.

Market players expect a 50 basis point rate cut by Fed at its Jan. 30 policy meeting.

Japanese benchmark index Nikkei surged 241.16 points, or 1.84%, to trade at 13,329.07.

Hong Kong`s index Hang Seng jumped 594.76 points, or 2.47%, to trade at 24,648.37.

China`s Shanghai Composite gained 63.23 points, or 1.43%, to trade at 4,482.52.

Taiwan`s index Taiex added 26.14 points, or 0.35%, to trade at 7,511.93.

South Korea`s KOSPI gained 13.66 points, or 0.84%, to trade at 1,640.85.

Singapore`s Straits Times added 33.59 points, or 1.10%, to trade at 3,074.65. (8.25 a.m., IST)

Backed by global cues Indian markets which have been reeling under pressure, is expected to bounce back by 3-4% today.

Monday, January 28, 2008

L&T net up 40% in Dec`07 quarter

Larsen & Toubro, India`s largest engineering and construction conglomerate registered a 40.10% growth in net profit to Rs 4,817.90 million for the quarter ended December 2007 as compared with Rs 3,439.00 million for the corresponding quarter last fiscal.

Quarterly results (Rs in mn)
As at December
Net Sales 63,826.80 41,184.20 54.98
Net Profit 4,817.90 3,439.00 40.10
EPS 16.66 - -
Net sales for the quarter jumped 54.98% to Rs 63,826.80 million for as against Rs 41,184.20 million for the quarter ended December 2006.

Total income for the quarter rose 52.69% to Rs 64,835.50 million as against Rs 42,463.50 million for the same quarter a year ago.

The earnings per share (EPS) of the company stood at Rs 16.66 in the quarter ended December 2007.

Business Profile

L&T is India`s largest engineering and construction conglomerate with additional interests in electricals, electronics and IT. A strong customer-focus approach and constant quest for top-class quality have enabled L&T to attain and sustain leadership position over 6 decades.

L&T enjoys a premiere brand image in India and its international presence is on the rise, with a global spread of over 30 offices and joint ventures with world leaders.

Highlights of the quarter

With a view to generate 5,000 MW power in the next five years, L&T floated a power generation arm, L&T Power Development. The company would invest Rs 200 billion in this firm.

During the quarter, Larsen & Toubro (Oman) LLC bagged a project of Muscat Golf Course valued at Rs 4.33 billion.

It also secured a contract fr
om Mumbai Metropolitan Region Development Authority (MMRDA) for the construction of Elevated Access Road from Western Express Highway (WEH), Mumbai, to the Chatrapathi Shivaji International Airport (CSIA).The contract, valued at Rs 2.87 billion, has to be completed in 30 months.

L&T acquired 26% equity in Feedback Ventures, a consulting firm in the infrastructure space, for Rs 400 million.

In November, the company in consortium with Paul Wurth has secured an order worth Rs 5,807.4 million from SAIL. This contract is for the upgradation of blast furnace No 2 at Bokaro steel plant on a turnkey basis.

Recent Developments

On Jan. 23, 2008, L&T (Oman) LLC, a subsidiary of L&T and one of the leading engineering and construction majors in Oman, bagged 3 EPC contracts worth USD 116 million (Rs 4.57 billion), from Oman Electricity Transmission Company (OETC) for electrical grid stations and associated transmission system in Oman. It also received another order to build a USD 48 million (Rs 1.89 billion) factory complex in Oman.

Further, L&T also bagged an EPC order valued at Rs 4.11 billion from the Al Ain Distribution Company (AADC) for the construction of 5 electrical substations and associated MV Cabling in the Al Ain city of Abu Dhabi.

On Jan. 21, 2008, L&T`s Heavy Engineering Division bagged a massive order worth Rs 16.95 billion to manufacture and supply 22 Hydrocracker & Atmospheric Residue Desulphurization (ARDS) Reactors for Kuwait National Petroleum Company`s prestigious `Clean Fuel Project 2020`.

On Jan. 10, 2008, construction arm of L&T bagged various new projects worth over Rs 35 billion.

On Jan. 07, 2008 the engineering and construction division of the company was awarded two major contracts worth more than Rs 13 billion, for the construction of civil works and the consolidated construction works for the northern area development project located near Barmer in Rajasthan.

Shares of the company were last trading down Rs 181.95, or 4.68%, at Rs 3,708.45. The total volume of shares traded at the BSE was 79,751. (12.37 p.m., Monday)

Share prices fall on Asia markets Indian market might follow the cue.

Share prices in the Far East have fallen more than 2% amid continuing anxiety over world economic prospects and the US outlook in particular.

The falls of about 2.5% in Tokyo and more than 3% in Hong Kong come after losses on Wall Street on Friday.

Analysts say dealers are cautious ahead of another meeting of the US central bank, the Federal Reserve.

It is expected to agree on a further cut in interest rates in a bid to stave off recession.

Despite the falls, the market mood seemed calmer after last week's ups and downs, Reuters news agency notes.

The week saw global equity markets brought down by growing despair over the US economy, only to be later lifted by a $150bn stimulus plan agreed between the US Congress and the Bush administration.

'No appetite'

"The market appears to have hit bottom last week but it's still not in a position to keep rising, considering various events pending such as the Fed rate decision," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo.

Francis Lun, general manager at Fulbright Securities in Hong Kong, argued that the market was "fluctuating wildly".

"Investors don't have the appetite to buy stocks now," he was quoted by AFP news agency as saying.

Shares on Seoul's market also slipped by about 2%.

"Although aggressive US stimulus measures are likely to stabilise global financial markets, South Korea and its companies are still vulnerable to economic risks," said Lee Young-won, a strategist at Prudential Investment & Securities.

Indian market have lately shown a tendency to overreact to the global cues. So substantial fall in the market can't be ruled out. Investors are adviced to be cautious.

Friday, January 25, 2008

US home sales 'see 25-year low'

Sales of existing US homes fell by 12.8% last year, the biggest annual decline in 25 years, said the country's main estate agency body.

In the latest snapshot of the US housing slump, the National Association of Realtors (NAR) also said average prices declined by 1.4% in 2007.

The fall in prices accelerated towards the end of the year, with prices declining 6% in December, said NAR.

Its figures come two days after the Federal Reserve slashed interest rates.

The Fed cut interest rates to 3.5% from 4.25% on Tuesday, its biggest reduction in 25 years, as it aims to prevent the US economy falling into recession.


The housing market has been at the centre of the slowdown in the US economy, with record mortgage defaults triggering billion-dollar losses at many of the country's biggest banks.

This in turn caused the global credit squeeze, as much of this bad mortgage debt was repacked into wider debt offerings and resold around the world.

As a result, banks worldwide have been much less willing or able to lend to each other, companies or individuals.

NAR said sales were down in all parts of the US.

Its latest figures also come as the US government and Congress are close to agreeing a fast-track plan to boost the American economy.

They are expected to announce a package of tax rebates and other incentives.

Analysts said the NAR data was not as bad as many feared.

"Housing is in such a crisis state, some were looking for an even weaker number," said Kim Rupert of Global Fixed Income Analysis.

Deora moots 2.5% customs duty cut

The petroleum ministry has pitched for a customs duty cut across the board: on both crude oil and petroleum products. It is asking for a duty restructuring that includes a 2.5% Customs duty cut on crude oil and petroleum products, removal of ad valorem excise duties and reduction in specific excise duty rates.

A reduction in Customs duty on crude and products from the existing 5% to 2.5% will reduce the retail price of petrol and diesel by Rs 1.54 per litre and 1.56 per litre respectively. The proposed excise duty reduction would mean a further Re 1 per litre relief for consumers on both petrol and diesel, official sources said. It is understood the proposal is part of the presentation made by the group of ministers (GoM). The group is reviewing commodity prices in the country, including impact of rising global crude oil prices.

It is estimated that a duty rejig (both excise and Customs) will mean a revenue loss of Rs 18,000 crore. Customs duty on crude oil, naphtha, non-domestic LPG, LNG and natural gas is 5%. The excise duty on petrol and diesel has two components: a 6% ad valorem duty and a specific duty computed per litre. It is proposed the ad valorem duty be replaced by a larger specific duty. Currently, the excise duty is 6% plus Rs 13 per litre for petrol and 6% plus Rs 3.25 per litre for diesel. This is inclusive of the road cess but excludes the 3% education cess.

The government had eliminated excise duties on both PDS kerosene and domestic LPG. The finance minister reduced the ad valorem component of excise duty rate of petrol and diesel to 6% from 8% in Budget 2007.

Sources said the petroleum ministry had been pressing for a duty restructuring to provide immediate relief to PSU oil marketing companies, which are losing Rs 9.20 per litre on petrol, Rs 10.94 per litre on diesel, Rs 331.34 per cylinder on domestic LPG and Rs 19.89 per litre on PDS kerosene. The under-recoveries the oil companies are estimated at Rs 71,800 crore.

Global crude oil prices touched $100 per barrel in early January and the Indian crude oil basket was Rs 93.40 per barrel on January 8, 2007. The Indian basket had, however, softened to Rs 84.40 per barrel on Tuesday.

Advocates for an excise duty rejig also cite the Rangarajan Committee report on pricing and taxation of petroleum products, which states that “...imposing ad valorem duties during a time of persistent price increase is debatable”.

“Not only do ad valorem levies exacerbate the burden on the consumer, they also result in the government willy-nilly benefiting through higher tax yields, making it vulnerable to the criticism of profit at the expense of consumers.

There is, therefore, need for both softening and smoothening the impact on the consumer of international price variations and for the government sacrificing windfall gains in revenue,” the committee had said. The Centre’s total revenue earning in 2006-07 stood at Rs 93,800 crore from petroleum, of which 55% (Rs 51,920 crore) was excise duty mopup.

RBI may cut CRR after Fed rate cut: Bankers

After the US Fed rate-cut early this week, Indian bankers on Thursday said Reserve Bank may resort to a 0.25 per cent cut in the Cash Reserve Ratio (CRR) in its monetary policy review on January 29, sending strong signals for a rate cut.

Though the Reserve Bank would want to keep excess liquidity under check to contain inflation, it may still go for a CRR cut to enable banks lower interest rates in order to spur growth through increased credit offtake.

The apex bank was widely believed to pitch for stable rates, but bankers now feel it might go for a marginal CRR cut even though it would have preferred to maintain the status quo.

HDFC Chairman Deepak Parekh had said that interest rates could soften by 0.25-0.50 per cent if there was no hike in CRR.

After the Fed rate cut, there are now all the more reasons to cut rates.

Dena Bank Chief P L Gairola felt that one could expect a 0.25 per cent cut in CRR accompanied by a 0.25-0.50 per cent cut in rates.

The difference between the repo and reverse repo rates, now at 1.75 per cent, could also be reduced, he said.

High crude oil prices and an unprecedented volatility in the stockmarket may prompt the regulator to come with a tight policy, a senior official with DBS Bank said.

"A cut by 0.50 per cent in interest rate will be a fair expectation. I don't think the CRR will be hiked this time," the official said.

The recent volatility in the stockmarket is unlikely to have any major impact on the India growth-story, given the fundamentals of the economy which are strong, he said.

SBI Life may go public

SBI Life Insurance is mulling over an initial public offer in the year 2008-09. With the proposal of a holding company, submitted to the Reserve Bank of India, still uncertain, the life insurer is seriously weighing a float and has approached the Insurance Regulatory and Development Authority (Irda) for clarifications of the Insurance Act, over changes in the promoters’ stake. SBI Life also plans to raise Rs400 crore equity, while expecting robust growth during the last couple of months of the fiscal.

The insurer has set in process an elaborate internal exercise to assess various valuation benchmarks like “actuarial parameters” and “ratios of credit worthiness” for the company.

Sharing the company’s plans, Uday Shankar Roy, managing director and CEO, told DNA Money, “We have to think in terms of an IPO, now that there is an uncertainty on the status of a proposed holding company. We are now qualified to float an IPO as we have made consecutive profits.”

The RBI is buying time on a decision to allow a holding structure for banks. As the Banking Act does not provide for specific guidelines for holding companies, this will enable financial biggies like ICICI, SBI and others to spin off their insurance and mutual fund ventures into a separate entity.

“We have also asked the IRDA for certain interpretations on the Insurance Act with regard to delisting in 10 years and once all that is in place, respective promoters will take decisions. All these are basically run-ups to a formal listing sometimes next year”, Roy said.

The company is aiming to close the fiscal with a premium income of around Rs6,000 crore. According to the CEO, about 44% of its business comes from bancassurance and the ideal figure would be a share of 50%, for which the company is working on SBI linkages. Having launched the child’s plans and a unit-linked HNI product recently, the company is also planning to come up with a health insurance scheme over the next few months.

Wednesday, January 23, 2008

Sensex fall shocks grey market

The bustling Ahmedabad grey market reacted with shock to the bloodbath in the stock markets on Monday. Market operators, who are normally agile in fixing premiums, refrained from taking any new positions as the news of the crash began pouring in.

Not a single transaction was registered in the grey market here on Monday as majority of operators were left gasping for reasons for the fall. The premium on Reliance Power IPO has plummeted to Rs 205 per share from Rs 250 that was seen on January 18.

Even at this rate of premium, there were no transaction on the Reliance Power counter. Operators were busy calculating the losses they incurred in the stock markets.

The mood at Future Capital counter, which witnessed transactions at a premium of Rs 500, too was sombre as operators were not willing to bet due to uncertainty in the official stock markets.

Reliance Power IPO, which had resumed trading on January 3 with a premium of Rs 380 that went up to Rs 450 few days ahead of the opening of IPO, has shed over 50 per cent premium. Reliance Power IPO is expected to be listed in second week of February but operators say that if the bearish sentiments continue, investors may not get the desired listing gains.

Their negative take on the Reliance Power IPO stems from the fact that power stocks like NTPC and Reliance Energy too suffered as much as 15 % loss in the bloodshed.

The mood in the grey market is expected to remain gloomy for the next few days till the stock markets see some signs of recovery.

"Retail investors are not expected to participate in huge numbers as before and this bloodshed is going to have an impact on the forthcoming IPOs too," said a grey market operator.

Tuesday, January 22, 2008

Bank of China's shares suspended

Trading in Bank of China shares has been suspended in Shanghai after the company did not comment on reports that it was planning big write-downs.

"Bank of China failed to make a statement on an important event," the Shanghai stock exchange said.

According to media reports, the Bank of China may post a loss for 2007 because of its exposure to the US sub-prime mortgage sector.

The bank's Hong Kong-listed shares were not suspended and lost 8.6% on Tuesday.

The stock also fell 6.4% in Hong Kong on Monday on the media reports, but Bank of China, one of the largest in the country, said on Tuesday it was "not aware of any reasons for such movement".

'Expectation of a loss'

Meanwhile, the Shanghai Composite index followed the global trend on Tuesday and fell 7.2%, after dropping 5% on Monday, while Hong Kong shares experienced a record one-day fall of 8.7%.

Zhang Gang, an analyst at Southwest Securities, said that investors were "worried that the US credit crisis may spread into other countries".

"Financial stocks were hit the most, with the sentiment dampened on the expectation of a loss in the Bank of China annual report," said Shen Jun at Bank of China International.

Wall St futures fall, point to further sell-off

Futures on leading U.S. stock market indexes fell before the start of Wall Street trading on Tuesday, signaling that American shares would join the global equities sell-off.

Cash equities markets in the world's largest economy, seen by some analysts as teetering on the brink of recession, are due to resume trading at 9:30 a.m. EST having been closed on Monday for Martin Luther King Day.

"All eyes will be on the U.S. market's performance today," ABN AMRO said in a note. U.S. equities tend to set the pace for many other stock markets.

Speculation of a rate cut by the Federal Reserve before the next scheduled Fed meeting appeared to provide a sliver of support, lifting the U.S. stock index futures from early morning lows although they remained deep in the red.

At 5:40 a.m. EST, S&P 500 futures were down 5.2 percent, having fallen as much as 5.3 percent earlier. Dow Jones futures fell 4.6 percent and Nasdaq futures dropped 5.5 percent.

The indicative Dow Jones index, which tracks how the Dow stocks trade in Frankfurt, was 5.9 percent lower.

In a sign of investor risk aversion, the yield on two-year U.S. Treasury bonds briefly fell below 2 percent for the first time in almost four years as fears of a U.S. recession spread throughout global financial markets.

S&P 500 companies scheduled to report quarterly results on Tuesday include bond insurer AMBAC Financial Group, a unit of which lost a crucial triple-A rating on Friday, as well as iPod, iPhone and computer maker Apple, drugmaker Johnson & Johnson, and Fifth Third Bancorp and Bank of America.

Brazilian offshore oil discovery refutes peak oil theory

Petroleo Brasileiro SA, Brazil's state-controlled oil company, and Portugal's Galp Energia SGPS SA discovered a natural gas field that may be as big as Tupi, one of the world's biggest finds of the past 30 years.

The discovery, known as Jupiter, is beneath more than 5 kilometers (3.1 miles) of ocean and seabed and contains natural gas liquids known as condensate as well. It's located about 290 kilometers (180 miles) off the coast of Rio de Janeiro state, 37 kilometers from the Tupi field, Rio de Janeiro-based Petrobras said in a statement today sent by e-mail.

This Could be a big blow to peak oil Theorists who have been claiming that most of world’s recoverable oil has already been discovered and that world’s Oil production has peaking in 2005 and that no significant increase in oil production could be expected in the decades to come. The peak oil theory has been seen as the major driving factor behind the sky high oil prices of today.
The experience of Brazil's offshore drilling is proving that giant new oil fields are out there,
waiting to be discovered, just off shore along the continental shelf.

The find, if it contains as much gas and oil as Tupi, would be the second giant strike reported by Petrobras in the past 10 weeks. The Tupi field, disclosed Nov. 8, has as much as 8 billion barrels of oil and gas, three quarters of the reserves of Kazakhstan's 12-billion-barrel Kashagan field. Kashagan was the largest oil discovery in the last three decades. ``This find makes it clear that what we have in Brazil is another huge geological basin,'' John Parry, senior analyst with Jonn S. Herold Inc., a Norwalk, Connecticut-based energy research unit of Denver-based IHS Inc., said in a telephone interview. ``As they say the best place to find oil and gas is usually right near where you've already found it.''

Checking proportions

When the oil field's discovery was announced last November, the Brazilian government said Tupi could turn the country into one of the World's major oil suppliers.

Analysts were more cautious, pointing out the difficulty of extracting Tupi's oil from beneath deep layers of rock and salt.

Petrobras, though, is a world leader in deep water oil production, and the find was hailed as a major discovery for Latin America's largest country.

The discovery was made by a consortium made up of Petrobras - which has an 80% stake in the find - and Portugal's Galp Energies.

A number of surveys will now have to be carried out to try to establish the scale of the new field.

U.S. Supplier

Petrobras, which owns 80 percent of Jupiter and operates the well, said the oil bearing rock is more than 120 meters wide, suggesting that ``the area of this structure could have dimensions similar to Tupi.''

Lisbon-based Galp, which also holds a stake in Tupi, owns 20 percent.

Should the estimates for Tupi and Jupiter be confirmed, it would more than double Petrobras's 11.7 billion barrels of reserves, according to U.S. Securities and Exchange Commission standards.

Brazil's discoveries may result in the country overtaking such producers as Venezuela and Mexico and becoming a major supplier to the U.S., Parry said.

``It is conceivable that after 2010 or 2012 you could see Brazil and Petrobras matching Venezuela and exceeding them,'' he said. ``Brazil would become an important producer in the western hemisphere and you would have a natural market to the U.S.''

A Tupi sized field would likely produce about 1 million barrels a day in 5-to-10 years, he said.

Petrobras worldwide operations produced an average 2.37 million barrels of oil and natural gas equivalent a day in December, according to Petrobras' Web site. Brazilian output was an average 2.3 million barrels a day, 80 percent from its offshore Campos and Santos basins.

The Jupiter well is in the BM-S-24 exploration block in Brazil's offshore Santos Basin. As with Tupi, the hydrocarbons are in rock formations beneath a layer of salt.

Petrobras preferred shares, the company's most-traded class of stock, fell 5.33 reais, or 7.4 percent, in Sao Paulo. Trading ended before the Jupiter announcement was made. Galp fell 65 centavos, or 4.6 percent to 13.65 euros in Lisbon before the announcement.

Ispat offers to supply steel for Tata Motor's Nano

Domestic steel maker Ispat Industries may become the first company outside the Tata fold to supply steel for Tata Motors’ ‘lakhtakia’ car Nano.

The company has initiated talks with Tata Motors for supplying auto grade hot roll coils (HRC) for Nano scheduled for launch later this year.

“We have started dialogue Tata Motors for supplying HRC required for its small car Nano. As the company is already an established supplier of steel to Tata Motors, we are hopeful to be part of Nano project too,” Ispat Industries (IIL) executive director (marketing) Vinod Garg said.

IIL is currently meeting roughly 80% of HRC requirements of Tata Motors for its Pune plant. With the addition of Nano, the company would become the single largest domestic steel supplier for Tata Motors.

Apart from IIL, Tata Steel and other global players supply steel to Tata Motors.

Priced at about Rs 1 lakh, the Tata Nano car is set to revolutionalise the automobile industry creating an altogether new segment. Though the car is expected to use high levels of plastics and lighter metals like aluminium, it would also use steel, especially for body and components.

“The HRC requirements for the car may be a mere Rs 200 Kg, half that of other small cars. However, with initial production of about 2,50,000 cars which will soon get doubled, it would provide enough business for steel makers. The HRC would be used for body moulds and other applications by the new car,” a steel industry expert said.

Rough estimates suggest, that the Nano deal would translate into annual sale of over 50,000 tonne of steel by the steel maker.

IIL produces special grade steel for automobile that is light in weight and is stronger, an ideal combination for Nano. The business opportunity in Nano is part of IIL’s strategy to expand its portfolio of value-added steel for segments like automobile, oil and gas, pipeline and consumer durables.

“We plan to increase the share of value-added steel in company’s product mix from the current 35% to 50% by next fiscal,” Mr Garg said. The company is planning to expand its HRC capacity from the current 3 million tonne (mt) to 5 mt by 2011-12. It is also focusing on development of its power business.

In fact, the company is planning offload its equity in Ispat Energy, a wholly-owned subsidiary, to private equity players and other strategic investors to raise resources for implementing the power plan.

Ispat Energy is currently implementing 110 MW captive power plant for the requirement of company’s steel plant at Dolvi, Maharashtra.