Sensex up 121 pts, ends 09 with biggest annual gain in 18 yrs

The Bombay Stock Exchange benchmark index Sensex closed on a promising note on the last trading session of the year today by rallying 121 points and closed the day with the biggest annual gain in 18 years, on renewed fund-based buying and positive overseas cues.

After opening with a 139-points rally, the index touched a high of 17,530.94, before ending the session down with a gain of 120.99 points at 17,464.81, as the latest food inflation data that touched nearly 20 percent, slightly dented the momentum towards the later part of the session. However, capital goods and refinery stocks supported the market.

The broader National Stock Exchange index Nifty 50 too surged to retain the psychological 5,200 mark by rising 31.60 points to close at 5,201.05. It touched the day's high of 5,221.85 points.

The Sensex witnessed a historic 82 per cent rally this year, boosted by the UPA victory in May on expectations that new government would introduce measures to boost economic growth. Another reason for the rally was the sooner-than-expected economic recovery of the country.

The last day's gain was backed by power sector stocks led by NTPC by rising 1.20 per cent to Rs 235.70, a level never seen since the last two years on reports the government may relax a rule to allow power producers to sell at market prices. Tata Power rose by 1.65 per cent to Rs 1,377.95.

Trading sentiment boosted on reports that the government might approve to sell about 10 per cent of power company production at market-determined prices, boosting profits.

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Maharatna tag for SAIL, ONGC & NTPC

The board of directors of public sector giants Oil and Natural Gas Corp (ONGC), Steel Authority of India Ltd (SAIL) and National Thermal Power Corp (NTPC) will now have the freedom to take investment decisions of up to Rs 5,000 crore on their own with the Union Cabinet on Thursday upgrading these companies to Maharatna status.


Earlier, these companies fell in the Navratna category along with the other companies such as Indian Oil Corp (IOC) and Bharat Heavy Electricals Ltd (BHEL) which have financial powers to invest up to Rs 1,000 crore without the government approval.

This was among the slew of economic decisions taken by the government on a hectic Thursday when the Cabinet Committee on Economic Affairs (CCEA) cleared a proposal to give 30 per cent of BSNL and MTNL orders for ailing public sector Indian Telephone Industries (ITI).

SAIL, ONGC and NTPC met the criteria for the new status set by the Centre, which included a three-year track record of an annual net profit of over Rs 5,000 crore, a net worth of Rs 15,000 crore and a turnover of Rs 25,000 crore.

The companies also had to be listed on the stock exchange.
The public sector undertakings (PSUs), which have the potential to become Indian multi-national companies (MNCs), can be recognised as a separate class as Maharatnas, Soni added.

In an attempt to revive lossmaking telecom equipment manufacturer ITI, the government approved a proposal under which the company will continue to get orders for 30 per cent of products requirement of BSNL and MTNL through the reservation quota.
BSNL and MTNL will also give a 70 per cent advance payment against orders placed on ITI. However, CCEA made it clear that ITI would accept orders under the reservation quota only after the price is known and is commercially viable.

The earlier reservation benefit of 30 per cent along with 70 per cent advance to ITI had expired on September 20, 2009. BSNL and MTNL have been asked to extend these benefits to ITI for one more year from September 21, 2009.

ITI incurred an accumulated loss of Rs 3,219 crore on March 31, 2009.
The government on Thursday gave cash- strapped Jet Airways the go-ahead to raise $400 million (around Rs 1,850 crore) from foreign investors. The proposal was approved by the CCEA. It had been recommended by the Foreign Investment Promotion Board (FIPB).

The proposal involves raising $400 million via equity investment through the qualified institutional placement (QIP) route from foreign institutional investors (FIIs), according to an official statement.
The government also approved developing 352 km of highways with an investment of Rs 2,973 crore. The Cabinet Committee on Infrastructure approved two or four-laning of 163.5 km of Ranchi-Argaon-Jamshedpur section of National Highway-33 in Jharkhand at an estimated cost of Rs 1,011 crore. The Committee also approved four or six-laning of 71.4 km stretch on NH-8A from Gandhidham to Mundra Port in Gujarat at a cost of Rs 953.88 crore.

The proposal for four-laning of 117.60 km of NH-59 between Ahmedabad and Godhara in Gujarat at an investment of Rs 1,008.5 crore was approved.
Four-laning of 117.60 km of NH-59 between Ahmedabad and Godhara, Gujarat at an investment of Rs 1,008.5 crore.

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CBI pegs Satyam fraud at Rs 14,000 crore

Seven months after its first charge sheet in the Satyam scam, CBI on Tuesday filed a supplementary charge sheet against disgraced Satyam founder B Ramalinga Raju and nine others, pegging the Satyam fraud at Rs 14,000 crore instead of the Rs 7800 crore that Raju had owned up to in January this year.

The additional chargesheet however fails to nail Raju and aides on siphoning of funds from Satyam Computer, instead saying that the investigating agency was planning to file a separate chargesheet on the allegations of funds diversion and income-tax frauds within the next few days.

The 200-page chargesheet filed in the CBI court here, charged the accused of forging board resolutions and unauthorisedly obtaining loans worth Rs 1220 crore from banks as well as inflating Satyam revenues to the tune of Rs 430 crore by creating fake customers and generating fake invoices.

The chargesheet also identifies 1065 properties with a documented value of Rs 350 crore that were acquired by the Rajus with the spoils of the fraud. These include 6,000 acres of land, 40,000 sq yd of housing plots and 90,000 sq ft of built-up property.

CBI has also slapped charges of criminal breach of trust and falsifying accounts by inflating the acquisition price of Nipuna Services Ltd, the ITeS arm of Satyam. It also slapped a criminal breach of trust on them in the declaration and disbursal of dividends of Satyam Computers.

Meanwhile, the Rs 1220 crore unauthorized loans detailed by CBI in the chargesheet are not reflected in the company's books and are over and above the Rs 1230 crore that Raju confessed to Satyam having received from various Raju family owned companies including Maytas Infra and Maytas Properties.

The CBI, which on Saturday arrested Satyam's internal audit head VS Prabhakar Gupta making him the 10th accused, also charged the accused of criminal breach of trust in declaration and disbursement of dividends. 

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India’s Richest Woman Plans Power IPO as Rivals Wane

Jindal Power Ltd., controlled by India’s richest woman, plans to raise as much as 100 billion rupees ($2.1 billion), testing appetite for energy shares after investors lost money on every Indian utility IPO this year.
The generating unit of Jindal Steel & Power Ltd. will seek shareholder approval for the sale, according to a statement yesterday. The offer will be the second by the family of billionaire Savitri Jindal after JSW Energy Ltd. on Dec. 9 closed its initial sale.


Jindal Power, India’s biggest power IPO in two years, follows offers by Adani Power Ltd. and Indiabulls Power Ltd. that are trading below their sale price. The New Delhi-based company may outperform because it generates more electricity than its rivals in a nation where energy demand outstrips supply, according to Macquarie Group Ltd.
“Jindal Power will trade at a significantly higher valuation compared with its peers,” Rakesh Arora, an analyst at Macquarie, said by telephone from Mumbai. “It already has assets that are operating and are highly profitable.”


The parent company’s shares rose 2 percent to 743.8 rupees at 10:18 a.m. local time after gaining as much as 2.6 percent. The benchmark Bombay Stock Exchange Sensitive Index advanced 0.8 percent.



The family fortune of Savitri, the matriarch of the O.P. Jindal group, more than quadrupled in the past year to $12 billion in part because of the 380 percent increase in Jindal Steel’s stock in 2009, according to Forbes Asia. Her sons manage the family businesses including Naveen who runs Jindal Power and Sajjan who oversees JSW Energy.



Naveen, chairman of Jindal Power and also a member of India’s parliament, didn’t take calls to his office or respond to e-mailed questions on the company’s share sale plans.


Jindal Power is yet to decide on the number of shares it will sell, Sushil Maroo, deputy managing director of Jindal Power, said by phone. He didn’t give details on the company’s expansion plans or timing of the sale.
Maroo said in an interview Sept. 15 that the funds may be used for a 134-billion-rupee plan to more than triple capacity to 3,400 megawatts. One megawatt is enough to power 200 middle class homes in India.
Raising Funds


Utilities are raising funds to build power plants as India aims to double generation capacity in the next seven years to sustain the world’s second-fastest pace of economic growth. The decline in energy shares contrasts with the 78 percent advance in the Sensex this year, the best performance since 1991.

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Vineet Nayyar is Satyam’s chief

Mahindra Satyam has announced the appointment of Vineet Nayyar as the company’s chairman. Nayyar was so far heading the company as vice-chairman. Announcing this after the company’s board meeting, a Mahindra Satyam statement also said that the company had appointed former Sebi chairman M Damodaran and Gautam Kaji as additional directors with immediate effect, expanding its board to eight members. Meanwhile, the company said it had appointed Deloitte Haskins & Sells as the company’s statutory auditor for fiscal year ended March 31, 2009 as well as fiscal year ended March 31, 2010. Deloitte Haskins & Sells, one of the two audit firms roped in by the postscam Satyam Board to restate accounts, will vet the accounts of Mahindra group company for the 2008-09 and 2009-10 fiscals as statutory auditor. The company, which was acquired by Tech Mahindra in April, has secured time until June 2010 from the Company Law Board to file financials, including quarterly results.

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Yahoo-Microsoft Deal

In the spring of 2008, Microsoft made a $47.5 billion hostile offer to buy Yahoo after on-and-off talks about a merger had led nowhere. After a bruising, four-month battle, Microsoft abandoned the offer. Anger among Yahoo shareholders led to a management change and the replacement of its co-founder Jerry Yang by Carol Bartz, an outsider who is now Yahoo's chief executive. On July 29, 2009, the two companies announced a more limited deal, a partnership in Internet search and advertising intended to create a stronger rival to the industry powerhouse Google.
The new Microsoft-Yahoo pact is a measured step that represents a pragmatic division of duties between the two companies. Under the pact, Microsoft will provide the underlying search technology on Yahoo's popular Web sites. The deal provides a lift for Microsoft's recent overhaul of its search engine, renamed Bing, which has won praise and favorable reviews, after years of falling farther and farther behind Google. For Yahoo, the move furthers the strategy under Ms. Bartz to focus the company on its strengths as a producer of Web media sites, from finance to sports, as a marketer and a leader in on-line display advertising that accompanies published Web sites.
While Microsoft receives access to Yahoo's search technology, Yahoo receives a big bump in annual revenues, 88% of the search-generated ad revenues from its own sites for the first 5 years of the 10-year deal, much higher than is standard in the industry.
After the takeover bid failed, the companies renewed talks about a partnership in the summer of 2008. The talks included a discussion of a large up-front payment from Microsoft. But when Ms. Bartz became Yahoo's CEO at the beginning of 2009, the company's emphasis shifted. She was more interested in steady revenue to ensure the longer-term financial health of Yahoo instead of a big one-time payment. Yahoo estimates that after the partnership is fully in place, the company's operating income will increase by $500 million a year, based on higher search traffic and ad revenue, and a substantial drop in its investment in search technology.
Steven A. Ballmer, Microsoft's chief executive, said that Ms. Bartz had driven a hard bargain. "Look," he said, "she got 88 percent of the revenue and none of the cost."
Mr. Ballmer also said that he got something he badly wanted as well:  "I got an opportunity to swing for the fences in search."
When it made its initial takeover offer in February 2008, Microsoft said it wanted to buy Yahoo to compete more effectively with Google in online search and advertising, two related markets where Google is the runaway leader. Both Microsoft and Yahoo have spent billions trying to best Google in search and advertising, and both have failed so far.

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Reliance Power’s Rosa power plant to start operation by December-end

The CEO of Reliance Power Ltd Mr. J P Chalsani has announced that the Rosa power plant's first 300 MW unit in Uttar Pradesh will go on stream by the end of this year.     

Reliance Power Ltd has been developing a power project, which is coal-based in two stages with a capacity of 600 MW each. Reliance Power has invested Rs. 6000 crore for the whole project. The second phase of this project is expected to be completed by March
2012, which is way early than the planned schedule in twelfth year plan.

Rosa project took 33 months to complete as compared to the projected 40 months. On this success, Mr. J P Chalsani said, "This has been made possible by putting the project on fast track. The firm expeditiously obtained all the statutory and regulatory clearances and nods, took over the possession of the land and commenced construction at site within three months."

Reliance has contracted with Uttar Pradesh Power Corporation for selling the first phase of the power generation. Next phase's generation will be shared equally between UP Power Corporation and the company out of the state. The fuel supply for thepower plant is scheduled to be supplied from Jharkhand, under a long- term supply contract. Railway has been contracted for the coal transportation. And for providing the equipment, the company has selected Shanghai Electric (Group) Corporation, as EPC contractor for both the phases.

The Rosa project, which is of worth Rs. 6000 crore is expected to be the first thermal independent power producer in UP and will account around 20% of the total power generating capacity of the state.

Reliance Power took over the control of the project in November 2006, which was earlier being developed by Aditya Birla group till the year 1994.

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ArcelorMittal to get 1 billion pounds for carbon credits

ArcelorMIttal, the biggest steel maker in the world, could gain 1 Billion pounds under European scheme, which is aimed at curbing global warming. Carbon credits are provided to the companies under the European Union Emissions Trading Scheme (ETS), which can be bought and sold in open market.

The European companies are permitted by the ETC to emit a specific amount of the carbon dioxide, which is a green house gas. Companies can buy and sell the unused permits in the open market.

Arceleormittal has carbon credits of worth 1 billion pound, which are valid till 2012.

The price of each carbon credit it is about 12.70 pound, but the European Union wants to drive it to 30 pounds per credit to push green practices among companies.

ArcellorMittal boasts of having more than 80 steel plants around Europe, has confirmed Pearson's figures. The ETS covers 10,000 industrial installations, which are responsible for 40% of the EU's greenhouse gas emissions.

Regarding the issue, one of the spokesperson of the company said, "The extra surplus arose when actual steel production fell way below forecasts because of the unexpected global economic crisis. As the world returns to growth, we expect to use them up."

Mr. Laxminiwas Mittal holds 43% stake in the ArcellorMIttal and is believed to be the richest man in the Britain.

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