Month: June 2008

Indian Inflation soared to a NEW HIGH for the week ended June-7th to 11.05% Vs 8.75%. More Details will be updated soon.

Update @ 16:00 IST:
While this week’s data incorporates the effect of the fuel price hike (auto-fuels by 10%-15% and cooking fuels by 17%), the headline was expected to be close to ~10% levels. Besides the fuel price increase, the uptrend seen in basic metals and iron-ore since the last two months continues up 20.7% and 41.6% respectively.

Primary articles were up 10.8%; manufactured products were up 9.1% while the fuel price index was up 16.25%. Of the headline 11.05% WPI number, 2.5% is attributed to primary articles, 5.1% to manufacturing and 3.5% to the fuel index.

Most Analysts are of the view that RBI will hike the repo rate ahead of July policy meeting.

The Government of India has clearly failed to control Inflation which is expected to touch double digit leaving the conservative investors [Fixed Interest Instruments] in deep pain. Here is how various brokerage houses are expecting the Indian Inflation numbers to be announced tomorrow.

ABN Amro Bank 10.5%
CARE Ratings 9.23%
CRISIL Ltd. 9.82%
Dun & Bradstreet Info. 9.10%
ICICI Bank 10.10%
IDBI Gilts Ltd. 9.68%
JPMorgan Chase Bank 9.77%
Kotak Mahindra Bank 9.77%

Along with global weakness, the above numbers shocked Traders which led to some unwinding today.

Power Grid Corporation’s revenue for the year was up 23.9% to INR 46,148 mn over FY07. While revenue from Transmission grew by 29% to 41,885 mn, Telecom revenue was up 60% to INR 1,235 mn. The company saw a steady increase of 10% in its Consultancy segment.

Net profit for the year was up 50% to INR 16,528 from INR 10,975 mn last year. In the current year, the company has commissioned projects worth INR 60,185 mn in the transmission space on which it has started to receive returns. Other income for the year was up 30% at INR 4,667 mn.

The company had its IPO in FY08 and has ~INR 8,800 mn of cash left from the issue. The company also saw increase in Open access charges by 36% to INR 527 mn. Also in FY08, the Telecom segment of the company has become PBIT positive. The company plans to invest close to INR 85,000 mn in FY09 for various transmission projects. On the Telecom front, the company intends to increase its revenues to ~50,00 mn by FY10

IRB Infrastructure’s topline for FY2008 increased by 40% yoy to Rs7.3 bn driven by 28% growth in toll collection segment (Rs3.7 bn) and 46% growth in E&C segment (Rs3.6 bn). Operating profit for the year stood at Rs4.1 bn, a yoy improvement of 47% and accordingly the operating profit margin for the year improved by a healthy 300 bps to 56%. PAT after minority interest witnessed a strong growth of 86% yoy to Rs1.1 bn against expectations of Rs996 mn.

The order book of the E&C division stood at Rs65 bn. Out of this, pure E&C order backlog is at Rs38 bn (Rs34 bn captive E&C) which is expected to be completed in next 30 months. The balance is operations & maintenance order book of Rs27 bn, which is to be executed over next 10 years.

A BUY was first recommended on JPT Securities on the 26th of May. Since then the stock has tripled and still locked in upper circuit today at Rs 124.

Lets closely look at what has happened in JPT Securities. JPT Securities suddenly came into the spotlight, striking an all-time high of Rs 124. They have appreciated 302.76% in the past quarter. The one-year period return was a massive 985.81%.

The rally materiliased after the promoters, headed by Managing Director J P Totla, sold their entire stake of 18.05 lakh shares, or 60.06%, at Rs 32.10 per share to Awaita Properties, Mumbai [Promoted by Nikhil Gandhi and Bhavesh Gandhi]. The shares were sold through a block deal on the BSE on 24 April 2008. Consequently, the promoters also agreed to transfer the management control to the acquirer.

On 30 April 2008, Awaita Properties launched an open offer to the public shareholders for acquiring an additional 20% stake in JPT Securities, at Rs 32.5 per share, as per the Sebi guidelines. The company’s equity share capital is Rs 3.01 crore, with face value of Rs 10 per share.

Nikhil Gandhi is said to be the right hand of Reliance Industries’ CMD,Mukesh Ambani. Speculation is rife in the market that Nikhil Gandhi will opt for a backdoor listing of his Mumbai-based SKIL Infrastructure.

What is the Modus Operandi employed by Gandhi and Mukesh Ambani ?
Ambani’s no doubt create wealth for shareholders, but in turn they create more wealth for themselves. Infrastructure is currently a Big Game. They want to unlock the value on this theme of their privately held companies and projects. If you look at what has happened to Horizon Infrastructure [PDF]- They buy a company which is listed in BSE completely, go for an open offer mop up as much more shares as possible. Now Change the name of the company and Transfer Big Infrastructure projects to this company thus giving it a way of backdoor listing.

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