11 August 2008

Sensex up 336 pts, Nifty up 90 pts at 4620

Closing Bell: Benchmarks close over 2% up

Fresh bout of buying towards close of trade Monday helped benchmark indices close over 2 per cent higher. Banks, real estate were gained while IT stocks ended in the red.

Bombay Stock Exchange’s Sensex closed at 15,497.05, up 329.23 points or 2.17 per cent. It touched a high of 15,520.71 and low of 15,367.97. National Stock Exchange’s Nifty ended at 4620.15, up 90.65 points or 2 per cent. The broader index touched a high of 4625.20 and low of 4529.35 in the day.

BSE Midcap index ended 1.58 per cent up at 5980.22 and BSE Smallcap Index closed 1.22 per cent up at 7,269.65.

BSE Realty Index closed 5.31 per cent up at 5,801.34 and BSE Bankex ended 3.76 per cent higher at 7,673.25. BSE IT Index ended flat-to-negative at 3,882.07. Biggest Sensex gainers were Jaiprakash Associates (8.17%), Reliance Infrastructure (7.76%), Maruti Suzuki (5.16%), ICICI Bank (4.93%), State Bank of India (4.92%) and ONGC (4.31%). Losers comprised Sterlite Industries (-2.24%), Tata Consultancy Services (-1.06%), Tata Steel (-0.98%) and Infosys Technologies (-0.58%). Market breadth was positive on the BSE with 1723 advances and 985 declines. In Europe, FTSE was up 0.70 per cent, DAX gained 0.33 per cent and CAC 40 was up 0.46 per cent.
(above figures are provisional)
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Sensex ends up 336pts; realty, banking stocks shine

The Sensex opened with a positive gap of 262 points at 15,430 on the back of positive cues from the global markets. The index, thereafter, displayed firm trend throughout the day on the back of smart gains in banking, realty and oil & gas stocks.

The index touched a high of 15,521, and finally settled with a gain of 336 points at 15,504.
The BSE Realty index surged 5.3% to 5,799. The Bankex advanced over 4% to 7,702, and the Oil & Gas index surged 3% to 10,437.

The market breadth was fairly bullish - out of 2,776 stocks traded, 1,736 moved up, 971 declined and the rest were unchanged today.The NSE Nifty moved up 91 points to end at 4,620.

INDEX MOVERS

Jaiprakash Associates soared 7.7% to Rs 198. Reliance Infrastructure surged 6.7% to Rs 1,102. DLF added 3.5% to Rs 568.
ICICI Bank rallied 5.7% to Rs 771. SBI moved up 4.7% to Rs 1,593. HDFC and HDFC Bank added 2.2% each to Rs 2,570 and Rs 1,309, respectively.
Maruti surged over 5% to Rs 716. ONGC and Reliance Communications gained 3.7% each at Rs 1,103 and Rs 454, respectively. Reliance advanced 3.3% to Rs 2,326. Mahindra & Mahindra added 2.8% to Rs 590, and BHEL was up 2.5% at Rs 1,827.

...AND THE SHAKERS
Sterlite slipped over 2% to Rs 625. TCS and Tata Steel were down 1% each at Rs 834 and Rs 645, respectively.

VALUE & VOLUME TOPPERS
Reliance Communications topped the value chart with a turnover of Rs 239.50 crore followed by Reliance (Rs 232.50 crore), Reliance Capital (Rs 220.70 crore), debutant Vishal Info (Rs 216.25 crore) and Reliance Natural Resources (Rs 181.20 crore).Reliance Natural Resources led the volume chart with trades of around 1.73 crore shares followed by Vishal Info (1.17 crore), Kashyap Technologies (1.05 crore), IFCI (99 lakh) and Cals (73 lakh).

Source:ET, BS

India's Abinav wins Gold.... India's First Individual Gold in Olympic History

Abhinav Bindra makes history
India wins Gold

Abhinav Bindra [Images] won India's first ever individual Olympic gold medal on Monday with a thrilling come-from-behind victory in the men's 10 metres air rifle event.

Congratulate Abhinav Bindra!

Bindra was fourth after qualifying but had a brilliant final round and even hit a near perfect 10.8 on his last visit to pull in front of Henri Hakkinen of Finland, who dropped to bronze with a poor final shot of 9.7.

How Abhinav clinched gold

That allowed China's Zhu Qinan, the defending Olympic champion and heavy favourite, to pass him on his final shot and win the silver medal.

"It's just great," Bindra said just before climbing on to the podium.

Zhu suffered a late lapse in concentration in the qualification earlier on Monday morning when he had to rush his final shots to make the time limit, thus dropping to second place behind Hakkinen ahead of the final.

He was close to tears and said: "I was under tremendous pressure and at times I felt really agitated. But I tried my best."

India's last Olympic gold medal was from hockey (8th gold) at the 1980 Moscow [Images] Olympics [Images]. Bindra's feat betters the silver medal effort of double trap shooter Rajyavardhan Singh Rathore [Images] at the Athens Games in 2004.

Randhir Singh, Indian Olympic Association secretary-general and former shooter who was present at the range, was stricken with nerves as the competition reached its climax.
"I haven't prayed so much in my life. With the second last shot they tied together and then he (Bindra) shot a 10.8. It couldn't have got better," he said.

Bindra won the 2006 World championships and finished seventh in Athens four years ago.
Earlier, Gagan Narang failed to make the final cut in the same event as he finished ninth with a score of 595/600. He shot a series of 97,100,100,100,98,100, while Bindra, a Khel Ratna winner, finished the qualifying event joint-fourth with Romania's George Alin Moldoveanu. The duo had a score of 596/600.

The bespectacled shooter scoring sequence was 100, 99, 100, 98, 100 and 99.
Finland's Henri Hakkinen qualified first for the event with a score of 598/600 after shooting a series of 100, 100, 99, 100, 100 and 99.

China's Qinan Zhu was a point adrift of Hakkinen with a series of 100, 100, 100, 100, 99 and 98.
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Abhinav Bindra: Grit and determination personified
Olympics: Abhinav Bindra wins men's 10m air rifle gold
Congratulate Abhinav Bindra / Greet Abhinav
India must give Abhinav respect GOLD-en words / Images
Goldfinger Bindra makes history
Not bothered about history: Bindra
Victory of nation: Abhinav’s parents
President, PM congratulate Bindra
'Abhinav has made India proud'
Happiest moment of my life: MilkhaIndia's Olympic medal winners


Source:ET, Rediff

IPO analysis: Austral coke, Resurgere Mines Minerals

Mining for more?

COMPANY : AUSTRAL COKE & PROJ ISSUE
SIZE : Rs 119.1-142 .3 CRORE PRICE BAND : Rs 164-196
DATE : AUGUST 7-13 , ’08 RATING: ***

Austral Coke looks attractive at the current offer price. Investors are advised to subscribe to this issue Austral Coke & Projects, a metallurgical coke manufacturer and provider of construction equipment on lease, has come out with a public issue of 7.26 million equity shares and another 1.09 million shares will be available under a greenshoe option. It plans to use the funds mainly to set up a metallurgical coke plant of 1.5 lakh tonne capacity and an 8-mw captive power plant. Post-issue , the promoters’ holding in the company will decline from 87.41 per cent to 63.18 per cent.

BUSINESS:

Austral manufactures coke and refractory, and provides construction equipment on lease to medium/large construction companies. Around 55 per cent of the company’s topline comes from the coke division and 25 per cent from equipment. But the coke business accounts for 80 per cent of its operating profit, compared to 15 per cent contributed by equipment. Austral has a current met coke capacity of 3.75 lakh tones, which will rise to 5.25 lakh tonnes by the end of FY09. Its captive power plant will also come up at the same time. The company’s customer base is welldiversified and is thus, insulated from any slowdown in a particular industry. Its customers include Jindal Saw, Essar Steel, DCW and Nirma. The company plans to get away from its leasing business and focus on acquiring coking coal mines and manufacturing coke. It also plans to start mining from its mine in Mozambique.

FINANCIALS :

Austral’s revenue from manufacturing has almost quadrupled in the past three years. Its focus on coke manufacturing and use of advanced technology (stamp charging) has improved its operating margin by five times in the past three years to 35 per cent. In fact, this is higher than 27 per cent for its closest competitor, Gujarat NRE Coke (GNCL). Though the company has made many investments in recent years, the average RoCE for the past three years works out to a modest 17 per cent. Traditionally, Austral’s debt-equity ratio (DER) has remained slightly below 1, while the interest coverage ratio is well above 5. Post-issue , the company’s DER will further fall to around 0.5.

GROWTH POTENTIAL :
Huge demand for coke from steelmakers has pushed up price to $700-800 a tonne. Given huge expansion plans by steel companies, demand is set to stay robust, as there’s not enough supply of this commodity globally.

VALUATIONS :
The company’s closest listed peer is GNCL, which was originally promoted by the current promoters of Austral. By end-FY 09, Austral will have a met coke manufacturing capacity equal to 42 per cent of that of GNCL. The latter has an m-cap of Rs 3,500 crore. So, Austral should have a market value of around Rs 1,500 crore . Though both companies have mining assets abroad, in case of Austral, mining from these assets has not yet started. Even after discounting this value by 50 per cent, the fair value per equity share of Austral is almost double that of the offer price. At the upper price band, Austral’s trailing P/E is close to 15.4, which is at par with its peers. We have assumed full exercise of the greenshoe option and its diluting effect on shares for these estimates . Considering its attractive valuations , investors can subscribe to this issue.

RISKS:
Austral sells in the spot market; hence, it is subject to spot price fluctuations. Further, any downturn in the commodity cycle will hit the company’s profitability.
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COMPANY :
RESURGERE MINES & MINERALS
ISSUE SIZE : Rs 117-121 CRORE PRICE BAND : Rs 263-272
DATE : AUGUST 11-13 , ’08 RATING : ** 1/2

Negative cash flow from operations is a major concern for Resurgere Mines. Only investors with high risk appetite should consider the IPO Resurgere Mines & Minerals, an iron-ore miner , has come out with a public issue of 4.45 million shares, which includes 0.25 million shares reserved for its employees. The company plans to use the IPO proceeds to purchase mining equipment to set up extraction and crushing facilities at mines. It will also invest in six railway rakes to set up transportation logistics facilities for captive purposes. Post-issue , the promoters’ holding will decline to 56.12 per cent from 66.5 per cent.

BUSINESS:
The company produces iron ore of different sizes and trades iron ore fines. Currently, it operates in three mines - two in Orissa and one in Jharkhand. But it carries out mining activities in the area of third parties, who have the original mining lease. Resurgere has also got a bauxite mining lease through one of its wholly owned subsidiaries. The total amount of iron ore and bauxite reserves in the current mining area of these mines is estimated at 74.82 and 4.92 million tonnes (mt), respectively.

FINANCIALS:
Resurgere’s revenue from mining and trading activities has more than quadrupled in the past three years, while operating profit has risen by more than seven times. The company’s operating margin (currently 26.7 per cent) has remained volatile due to the variation in trading amounts. Once export of iron-ore fines commences , margins are set to improve further. One major concern for the company is the negative operating cash flow in the past five years. The company has tried to maintain a low debt-equity ratio (currently 0.24). With the IPO, this ratio will fall further.

VALUATIONS:
The company’s enterprise value (EV) is close to Rs 820 crore at the upper price band. A discounted cash flow approach reveals that even at 30 per cent of capital cost and 20% growth rate, it will take only 5-6 years to recover the EV from operating cash flow . Further, an estimated inventory of iron-ore fines worth Rs 34 crore is lying idle, which can be used once the company obtains railway rakes from next year. The bauxite mine, with estimated reserves of 4.9 mt in 43 acres out of a total 661 acres will add further value. All these facts indicate reasonably good valuations at current offer price. But the main concern lies in the company’s ability to convert its revenue into cash flow, since it has failed to generate cash from operations in each of the past five years. We believe the issue is risky and only investors with above-average risk appetite should subscribe to it.

RISKS: Any downturn in the commodity cycle will majorly impact the company’s profitability.

Source:ET

Investor's Guide (ET Mutual Fund Tracker), Deadpresident reports

Investor's Guide (ET Mutual Fund Tracker)

Here's How We Keep Score11 Aug, 2008, 0538 hrs IST
The ET Quarterly MF Tracker lists MF schemes on the basis of their risk-adjusted performance, based on a detailed number-crunching exercise.

The Best Place To Be In 11 Aug, 2008, 0529 hrs IST, Gaurav Pai
Around this time last year, mutual fund (MF) houses were busy launching equity schemes like there was no tomorrow.

The New Turks 11 Aug, 2008, 0515 hrs IST, Bakul Chugan & Preeti Kulkarni
The June ’08 quarter has seen quite a few upsets in top rankings.The new leaders do not boast of outstanding performances on an individual basis.

(Common) Sense And Simplicity 11 Aug, 2008, 0500 hrs IST, Preeti Kulkarni
Follow these simple strategies by renowned investment gurus to reap the rewards of your equity investments.

Challenges and Opportunities before MF industry 11 Aug, 2008, 0457 hrs IST
The domestic mutual fund industry has undergone significant transformation in past few years. Two experts share their views on the possible avenues for the industry in near future, so as to sustain its momentum and make inroads into consumers' lives.

Nifty's future direction 11 Aug, 2008, 0454 hrs IST, Shakti Shankar Patra
This is a clear sign that market participants are now unsure about the Nifty’s future direction. As a result, the focus has shifted to individual stocks.

Mining for more? 11 Aug, 2008, 0359 hrs IST, Santanu Mishra
Two mining firms as investment options.

Yeh Dil Maange More 11 Aug, 2008, 0358 hrs IST
The domestic mutual fund industry has undergone significant transformation in past few years. Two experts shared their views over the key challenges and triggers for the industry to sustain this growth.

The domestic MF industry 11 Aug, 2008, 0353 hrs IST, Gaurav Pai and Bakul Chugan
It’s been a momentous journey, which started 15 years ago with the privatisation of the Indian mutual fund industry. But this is just the beginning... things are only set to get better from here on
The best Mutual Funds 11 Aug, 2008, 0348 hrs IST, preeti kulkarni and bakul chugan
It’s almost impossible to predict the course of the market. So, long-term investment in a well-managed fund with a good track record is the ideal tool to wade through murky waters.
Pages:

The Busy Bees11 Aug, 2008, 0347 hrs IST, Gaurav Pai
SEBI and Amfi had their hands full in the June quarter. We give you a ringside view of all the action on the policy front…
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Deadpresident blog

India's first bio-fuel pump to start soon
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Weekly Stock Picks - Aug 8 2008
Industrial production data may set direction
Sensex garners 511 points as oil slumps


Source: ET,deadpresident blog

India's first bio-diesel pump to start in September

India's first bio-diesel pump to start in September

In winter 2005, Chief Minister Narendra Modi was at the Gujarat Agriculture University campus in Navsari, riding a tractor with a difference - it ran on bio-diesel. Come September, that bio-diesel will be available at a pump for the first time in India. The bio-diesel production, from Jatropha plants, is the brainchild of 40-year-old Dharmendra Parekh, chairman and managing director of Aditya Aromedic and Bio-Energy. Since April, the firm has been producing bio-diesel from the jatropha plant. Registered in 2005 and set up with a capital outlay of Rs 5 crore, the company produces 17,000 litres of bio-diesel per day at its 140,000-sq ft plant located in Tarsadi village on the Navsari-Bardoli highway in Navsari district. The bio-diesel is sold at Rs 38.90 per litre while the price of regular diesel is Rs 39.20 per litre and that of premium diesel Rs 40.40.

The firm has been pre-selling its entire output every day since April. "We don't have to do any marketing. On the contrary I take a deposit of Rs 5,00,000 from all my customers and everyone irrespective of the quantity purchased has to pay the full amount in advance. And the delivery is done only after 20 days," says Parekh. "I have at least five customers waiting in the queue, each of whom has a daily requirement of over 500 tonnes of bio-diesel." Right now, the fuel is supplied from two depots - one at Navsari and other at Mehsana in north Gujarat. The clientele is spread over Ahmedabad, Nadiad, Vadodara and north Gujarat, Mumbai and Delhi. Importantly, diesel vehicles do not need to modify their engines to use bio-diesel. "I have been using my own bio-diesel in my Tata Indica diesel car for the past nine months and it runs very smoothly and also gives me a mileage of 21 to 22 km on the highway," says Parekh, a graduate in computer science and master in bio-informatics. "There is no problem at all even if you keep on changing the fuel from regular diesel to bio-diesel." Parekh also claims that his bio-diesel was much better in quality than most of the premium diesel brands being hawked by the oil majors.

The hardy jatropha plant is resistant to drought and pests. It produces seeds containing up to 40 percent oil. When the seeds are crushed and processed, the resulting oil can be used in a standard diesel engine, while the residue can also be processed into biomass to generate electricity. To ensure a steady supply of jatropha, Parekh has entered into a contract with 1,500 farmers of Gujarat, Rajasthan, Madhya Pradesh and Maharashtra. These farmers plant jatropha in the periphery of their fields so that the normal food chain is not disturbed. Over 300 hectares of land have been brought under jatropha cultivation. "In a jatropha plantation you get your break-even within three years and the plant makes money for you for the next 40 years," says Parekh. He has prepared a plantation manual for jatropha farmers. The most important aspect of jatropha is that it can grow on soil otherwise considered a wasteland. Parekh has a huge first-mover advantage in this field. But it's not a smooth ride all the way. "It is a very hard and complicated thing, especially the procurement of raw materials," he says. "You have to plan out each and everything in such a manner that the fuel you produce becomes commercially viable." The company has staff strength of 200. Crude, glycerine and de-oiled cakes are the by-products. The company is now preparing a blueprint to extract biogas from the de-oiled cakes, leaving manure as the last residue. The company plans to use this biogas for power generation.

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Metros, SUVs may have to shell out more for fuel
'Biofuel can ensure India's energy security'


Source: ET