India's Top 100 CEOs

India's Top 100 CEOs

Name	Company/Group	Rank
		2010	2009
Ratan Tata	Tata Sons	1	1
Mukesh Ambani	Reliance Industries	2	2
NR Narayana Murthy	Infosys Technologies	3	3
Anil Ambani	Reliance ADAG	4	4
Sunil Mittal	Bharti Group	5	9
Azim Hasham Premji	Wipro	6	10
Kumar Mangalam Birla	AV Birla Group	7	11
Rahul Bajaj	Bajaj Auto	8	19
Anand G Mahindra	Mahindra & Mahindra	9	13
Vijay Mallya	UB Group	10	6
S Gopalakrishnan	Infosys Technologies	11	12
OP Bhatt	State Bank of India	12	17
Chanda Kochhar	ICICI bank	13	14
Vinita Bali	Britannia	14	NA
Venu Srinivasan	TVS Motors	15	26
Shiv Nadar	HCL Technologies	16	25
Uday Kotak	Kotak Mahindra	17	35
Harsh Goenka	RPG	18	42
A B Godrej	Godrej Group	19	27
Shashikant N Ruia	Essar Group	20	38
AM Naik	L&T	21	15
Ravikant N Ruia	Essar Group	22	NA
T S Vijayan	LIC	23	33
Aditya Puri	HDFC Bank	24	22
Kishore Biyani	Future Group	25	24

More @ India's Top 100 CEOs

TCS, Bharti among world's most sustainable cos

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It's advantage bears below 5,130

After a hectic trading week, the markets ended with gains, despite the near 300-point fall in the Sensex on Friday. The BSE benchmark index rallied to a high of 17,389, but closed the week with a gain of 225 points at 16,995.

Among index stocks, Mahindra & Mahindra and Tata Motors rallied 7 per cent each to Rs 523 and Rs 763, respectively. HDFC Bank, DLF, Reliance Infrastructure, Wipro, ICICI Bank and Tata Power were the other major gainers. Cipla and Bharti Airtel tumbled over 8 per cent each to Rs 313 and Rs 264, respectively. Reliance Communications, with a fall of 5.5 per cent, was the other major loser.

The markets' failure to sustain at higher levels is a sign of concern, and with every passing day it seems the bears are tightening their grip. For the moment, it looks like the bears will continue to have the upper hand as long as the Sensex stays below 17,080.

On the downside, the Sensex may revisit its recent low of 16,700, and has an outside chance of dropping all the way to 15,400 in case of extremely negative global factors. Next week, the Sensex is likely to face resistance around 17,220-17,290-17,360 and get support around 16,770-16,700-16,630.

The NSE Nifty moved in a range of 186 points — from a low of 5,027, the index surged to a high of 5,213, but finally settled with a gain of 75 points at 5,094.

The corresponding pivot level for the Nifty is 5,130. It will be advantage bears as long as the index stays below 5,130. Above this, the index may face resistance around 5,185-5,210. On the downside, the index is likely to find support around 5,020-5,000-4,980.

The medium-term (50-days) moving average of the Nifty has now crossed its short-term (20-days) moving average, which suggests bearishness in the short term and a neutral trend in the medium to long term. The medium-term moving average is 5,219 and the short-term moving average is 5,200.

The momentum indicators, MACD, Directional index and Stochastic slow, are in sell mode. However, the strength of the directional index is below 30 per cent, which suggests the trend is rather weak. Hence, there could be whipsawn movements till we get a clear indication.

Global cues to decide Dalal Street's course: Analysts

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TECHNICAL ANALYSIS: Index Snapshot: Sensex rally loses steam
The whopping $1-trillion emergency bailout fund agreed by European leaders in the early hours of Monday had a cascading effect on the global markets from Japan's Nikkei 225 index to Brazil's Bovespa, leading a spectacular rally in ...

STOCKS: Kotak Mahindra Bank: Buy
Fresh investments can be considered in the Kotak Mahindra Bank (KMB) stock. Even as the bank closed 2009-10 with a doubling of its net profits, it is likely to sustain high earnings growth over the medium term due to strong advances growth, ...

STOCKS: Cairn India: Buy
Cairn India (Cairn) is a good prospect for investors with a medium-term perspective and high-risk appetite. The company is a promising play on the hydrocarbon exploration and production sector in India, with reserves higher than ...

STOCKS: Geometric: Buy
Investors with a two-year horizon can consider taking exposure to the stock of Geometric, a software and engineering services provider, considering the improvement in the outsourcing budgets in key client segments such as automotive and ...

STOCKS: Coromandel International: Buy
Despite a more than four-fold gain from its 2009 lows, the stock of Coromandel International (Coromandel) remains a good exposure for investors with a ...

TECHNICAL ANALYSIS: Pivotals: Reliance Industries (Rs 1,043.5)
Following a bright start with a 4.5 per cent gain on Monday, the stock began to waver, encountering resistance at Rs 1,090 mid- week. On Friday, it declined 2.6 per cent, which penetrated its 50-day moving average firmly. However, the stock ...

TECHNICAL ANALYSIS: Query corner: Reliance Capital slipping to support level
I purchased Reliance Capital at Rs 926. It has been falling ever since. Shall I book loss? I can hold the stock longer if there is any hope. ...

TECHNICAL ANALYSIS: Consider shorting Cairn India, Ashok Leyland
Cairn India (Rs 292.45): After touching its 52-week high at Rs 321 in April end, the stock has been on a downtrend since then. The outlook appears negative as long as Cairn India stays below ...

TECHNICAL ANALYSIS: Sizzling Stocks: Aban Offshore (Rs 831.2)
Aban Offshore tumbled 20 per cent intra-day on May 14 following its announcement that Aban Pearl, a semi-submersible ship of its subsidiary reportedly sank. The volume traded was extraordinary on Friday. The stock started the week on a ...


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Weekly Technicals - May 15 2010

Ess Dee Aluminium

Hindalco, Ranbaxy

Jubilant Foodworks

Gas Sector

Educomp Solutions Ltd

Weekly Watch - May 15 2010

Dish TV

Cipla Ltd

Hindustan Unilever

Crompton Greaves

Kewal Kiran Clothing

Graphite India

Aban Offshore

src: Economictimes, Smartinvestor.in, DP blog and etc

Euro tumbles to 14-month low under $1.25

Euro tumbles to 14-month low under $1.25


LONDON: The euro nosedived under 1.25 dollars on Friday, striking a new 14-month low, and equities slumped as markets were slammed by fresh concerns about the eurozone financial crisis, dealers said.

Paul Volcker, a special adviser to President Barack Obama and a former Federal Reserve chairman, spooked markets late Thursday when he warned of the "potential disintegration of the euro," according to analysts.

At 0917 GMT, the shared European unit staggered to 1.2465 dollars, striking a level which was last seen on March 4, 2009.

European stock markets also headed lower, with Frankfurt dropping 1.03 percent, London sliding 1.45 percent and Paris plunging 2.37 percent. Madrid meanwhile slumped by more than four percent in value.

"Clearly, I think we have to say that the euro failed and fell into a trap that was evident at the beginning," Volcker said at an event in London late on Thursday.

"I think Europe's going to have to decide in the end whether to get more integrated or to get less integrated, in which case the euro is the question."

Derek Halpenny, economist at The Bank of Tokyo-Mitsubishi UFJ in London, expressed his amazement at the comments.

"It is quite something for an official from the US administration, Paul Volcker, to openly discuss his view of a 'potential disintegration of the euro' and this will surely not go down well amongst eurozone officials," he said.

"But judging from the comments by ECB President Trichet that the eurozone needs 'fundamental changes', it may be that Trichet privately shares Volcker's view."

More @ Euro tumbles to 14-month low under $1.25



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Nifty ends 85 pts lower on Eurozone debt fears; SBI dips 4%

Closing Bell: Nifty ends 100 points lower; metals, banks fall

Oil can rise to over $100 per barrel: Mukesh Ambani

Check out world's top 10 most admired companies

Aban Offshore plunges on rig collapse

SBI Q4 profit weaker at Rs 18.67mn

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Europe woes not over yet: CLSA ( Read Our 1500th post given about CLSA)

With its USD 1 trillion rescue package from the International Monetary Fund (IMF) and the European Union, Europe may have managed to dodge the bullet, but the problems are not yet over, says Russell Napier, Strategist, CLSA. “The ECB wants parts of Europe to deflate. However, deflation, both politically and socially is impossible,” he says.

There has been a face off between the ECB and the European governments, he says, adding that the crisis could have been as big as Lehman. However, now, the risk is much lower than last week.

On India, Napier says, it is time to be cautious on Asian equities. “West is at the bottom of the credit cycle and China, along with India, is near the top of it,” he adds.

With a long-term bullish outlook on India versus China, he says the equity capital is over committed to Asia.

Src: Economictimes, MOneycontrol etc

Listen Them... (Its my 1500th Post)

Listen To Them

I have given Few Personalities/Company details Who are the Best Analysts in Equities, Derivatives and etc. They are Investment Gurus. Almost Most of Their Predictions on Markets(Equities, Derivatives) happen, Happening, Will happen. So Whenever, Wherever they Speak, Just Listen Their Precious Words For Investment.

They Are:

Marc Faber

Background

Faber was born in Zürich and schooled in Geneva, Switzerland where he raced for the Swiss National Ski Team. He studied Economics at the University of Zurich and, at the age of 24, obtained a Ph.D. degree in Economics magna cum laude.^[1] Faber is best known for the Gloom Boom & Doom Report newsletter and its related web site featuring "Dance of Death" paintings created by Kaspar Meglinger.^[2]

During the 1970s Faber worked for White Weld & Company Limited in New York City, Zürich, and Hong Kong. He moved to Hong Kong in 1973. He was a managing director at Drexel Burnham Lambert Ltd Hong Kong^[3] from the beginning of 1978 until the firm's collapse in 1990. In 1990, he set up his own business, Marc Faber Limited. Faber now resides in Chiangmai, Thailand, though he keeps a small office in Hong Kong.^[4]

Faber has a reputation for being a contrarian investor and has been called "Doctor Doom" for a number of years. He was the subject of a book written by Nury Vittachi in 1998 entitled Doctor Doom - Riding the Millennial Storm - Marc Faber's Path to Profit in the Financial Crisis.^[5][6] Faber has become a frequent speaker in various forums and makes numerous appearances on television around the world including various CNBC and Bloomberg outlets, as well as on internet venues like Jim Puplava's internet radio show.^[7] He has also been a participant of the Barron's Roundtable.^[8]

More @

Marc Faber

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CLSA

CLSA Asia-Pacific Markets is one of the region’s largest and most highly rated independent equity brokers and financial-services groups, focused on providing broking, investment banking and asset management to corporate and institutional clients around the world.^{[1] [2]}

Founded in 1986, CLSA has its headquarters in Hong Kong and offices or representatives in 15 cities across the Asia-Pacific region, as well as New York, London, San Francisco and Dubai. CLSA is majority owned (65%) by Crédit Agricole, France’s largest retail-banking group, with the remainder held by staff.

Unlike most of its competitors, CLSA is a research-driven agency broker.^[3] It’s known for its annual investor forums (particularly the calibre of its keynote speakers and the star acts at its parties), as well as its unique reports, the hallmarks of which are colourful and sometimes irreverent “cartoon” covers^[4] and analysis that goes beyond the numbers and ‘tells the story’ (a legacy of the journalism background of its founders). It has produced a number of seminal reports, including Billion Boomers and Mr & Mrs Asia.

More @

CLSA

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Mark Mobius

Dr. Joseph Mark Mobius (born August 17, 1936) is a global investor and emerging markets fund manager, and is considered to be one of the leaders in the industry^[1] as he has been involved in these markets for over 40 years.^[2]

Biography

Joseph Benhard Mark Mobius was born to German and Puerto-Rican parents in Hempstead, New York. He earned his B.A. and M.S. in Communications from Boston University, and received a Ph.D in economics from MIT in 1964. ^[3] He also studied at the University of Wisconsin, University of New Mexico, and Kyoto University in Japan. He joined Templeton in 1987 as president of the Templeton Emerging Markets Fund (NYSE: EMF), a closed end mutual fund, and there integrated his knowledge of new international markets with Sir John Templeton's disciplined, long term approach to investing.^[4] This was the first emerging market equity fund available to US investors,^[5] and Mobius' one key condition to take on this challenge was that Templeton must open its first emerging market office, which it did in Hong Kong.^[5]

His current duties include managing over 35 closed-end and open-end Franklin Templeton mutual funds worldwide including 13 offices overseas.^[2]

Before joining Templeton, Mobius worked at international securities firm Vickers-da-Costa, and later was president of International Investment Trust Company in Taipei, Taiwan. He once ran an independent consulting company that marketed among other things, Snoopy cartoon merchandise.

More @

Mark Mobius

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Warren Buffett

Warren Edward Buffett (pronounced /ˈbʌfɨt/; born August 30, 1930) is an American investor, industrialist and philanthropist. He is one of the most successful investors in the world often called the "legendary investor Warren Buffett"^[4][5], he is the primary shareholder, chairman and CEO of Berkshire Hathaway.^[6] He is consistently ranked among the world's wealthiest people and currently the third wealthiest person in the world as of 2010.^[7][8]

Buffett is called the "Oracle of Omaha"^[9] or the "Sage of Omaha"^[10] and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth.^[11] Buffett is also a notable philanthropist, having pledged to give away 85 percent of his fortune to the Gates Foundation. He also serves as a member of the board of trustees at Grinnell College.^[12]

More @

Warren Buffett

Always Listen To Them

Its My 1500th Post... Thanks to all Readers, Viewers for Reading, Surfing this blog... Feedback, Comments are welcome on Whether This Blog is Useful to you on Any kind of information... Please Share or Send your views @ srisaiperumal@gmail.com

Src: en.Wikipedia.org

Morning calls

F&O: Nifty support likely to come at 5000 level

High volatility has continued to define global equity markets over the past few days. After a round of massive short-covering-led bounceback on Monday, the markets dipped again on Tuesday, as Nifty futures slipped back into a discount of over 3 points from a premium of 7 points.

The Nifty 22-day realised volumes, which were at historical lows of sub-10 levels in early April, have now moved up to over 18. Not surprisingly then, implied volatilities, too, have moved up from 15-odd levels to early-mid-20s now.

And perhaps, the most important barometer of global equity market risk, the US VIX, remains elevated at 29 levels, significantly higher than its 200-DMA at 22.2. Till volatilities remain elevated and risk continues to be high in the system, a sustained move up will be highly suspect. No surprise then that FIIs have been continuous buyers in index options, positioning themselves well for a spike in volatilities.

They have bought $4.2 billion in options already in this fiscal year. Overall, derivatives cues suggest stiff resistance for the Nifty at 5200 and then 5300 levels, while on the way down, support lies at 5000 levels, a breach of which could trigger further and sharp downsides in the market. We think that options remain the best way of playing markets in these volatile times and investors should look to keep themselves hedged using these instruments.

On a stock specific basis, Everest Kanto and Patni have been a few counters showing activity on the long side in a volatile and falling market, while ABB and BankIndia have shown noticeable shorts in the last few trading sessions.

By Gaurav Mehta, Institutional Derivative Analyst, Ambit Capital.




Top 5 stock picks | Mid-term picks

Telecom cos may legally challenge new TRAI 2G rules

Trai’s 2G rules could kill GSM ambitions of key players

Margin funding revives as broking firms cut charges

What does the Ambani verdict mean for Indian energy?


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Finolex Cables

Hindustan Zinc Ltd

ENIL

Euro zone euphoria fizzles out

Crompton Greaves

Src: Economictimes, DP blog etc

F&O: Nifty faces resistance at 5250-5330

F&O: Nifty faces resistance at 5250-5330


Top 5 stock picks | Mid-term picks


Standard Chartered plans country’s maiden Indian Depository Receipt on May 25

Institutions dump Cipla after poor quarterly nos


Strong demand helps housing fin cos beat Sensex in returns


Canara Bank on a high as an operator laps it up

Daily News Roundup - May 11 2010

Mixed end for precious metals

Dabur

Dhampur Sugar

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Src: Economictimes

Global Stocks Surge on Massive EU Rescue

Global stocks, euro surge on massive EU rescue


BRUSSELS: A $1 trillion global emergency rescue package to stabilise the euro reversed the slide in world financial markets on Monday but left longer-term questions about whether Europe's weakest economies can manage their debt.

The plan, hammered out by European Union finance ministers, central bankers and the International Monetary Fund in weekend negotiations, was the biggest since G20 leaders threw money at the global economy following the collapse of Lehman Brothers in 2008.
"We have closed ranks to save the euro," French Finance Minister Christine Lagarde told Europe 1 radio after the 11-hour meeting in Brussels ended in the early hours of Monday as Asian markets opened.

The "shock and awe" scale of the package of standby funds, loan guarantees, liquidity measures and central bank bond purchases surprised financial analysts and the euro rose some 2 per cent, while stocks in Europe and Asia firmed.

The FTSEurofirst 300 index of top European shares surged by 3 per cent in early trading, after falling 8.9 per cent last week to a seven-month low on Friday. The Asian rally was more modest compared to last week's losses.

In a move sought by anxious European banks, the European Central Bank will buy euro zone government bonds in a reversal of its long-standing reluctance to use what many economists call the "nuclear option" under market pressure.

"The EU has taken a decisive action to stamp out the speculative attack against the euro and this should be sufficient to bring some calm into the market," said Klaus Wiener, head of research at Generali Investments.

German Chancellor Angela Merkel, who for months resisted pressure to aid Greece with a debt crisis that eventually sent market tremors around the world, said the measures were necessary to guarantee the future of the euro.

"This package serves to strengthen and protect our common currency," she told reporters in Berlin. "We are protecting people's money in Germany."

Merkel consented to the massive rescue plan after her centre-right coalition lost a regional election on Sunday and US President Barack Obama and French President Nicolas Sarkozy telephoned her to ensure Europe would take the necessary steps to support the euro and keep global liquidity flowing.

CONCERTED ACTION

In concerted action, the US Federal Reserve reopened currency swap lines with several central banks to try to assure markets of dollar liquidity and the European Central Bank said it would buy government debt to steady investor nerves.

More @ Global stocks, euro surge on massive EU rescue



Greece debt crisis

• ECB to buy euro zone govt bonds to fight crisis

Greek crisis impact on India seen minimal: Report

Nifty nears 5200; Hindalco, RInfra surge

Reality check: Where are the markets headed?

• Verdict may release RIL from bear grip | 'India a good bet'
• Invest if long-term's positive | Global trends important

Src: Economictimes

Morning views

Growth data, RIL to set market course


MUMBAI: Stock market investors are anxiously eyeing economic readings worldwide in the week ahead for respite from the recent market turbulence caused by the debt crisis in select European economies.

That and the trend in index heavyweight Reliance Industries (RIL) will set the tone for the market this week. RIL shares gained 3% on Friday to close at Rs 1,040 after the positive court ruling. Brokers say that the stock is unlikely to rise sharply this week, but could stay firm as nervous investors switch money from mid-cap shares to large-caps like RIL. But for the strength in RIL, benchmark indices would have fallen more than 1.5% on Friday.

Analysts recommend buying shares of Anil Ambani group company Reliance Infrastructure, which fell 7% to Rs 979.70 on Friday after the Supreme Court verdict. “The stock is a buy at around Rs 970-980 as the impact of the gas case outcome on the company is expected to be limited,” said Siddharth Bhamre, head-derivatives, Angel Broking.

Edelweiss Capital, too, is positive on the stock. “Reliance Infrastructure’s sum-of-the-part (SOTP) based on this decision (Supreme Court) would be lower by Rs 210/share, at Rs 1,241. Considering the stock has already corrected by 8% to Rs 970/share, we recommend investors to use this as a buying opportunity,” the broking firm said in a note to clients.


MOre @ Growth data, RIL to set market course


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Bull's Eye: GVK Power, Finolex, Glenmark, Hexaware, Rel Capital
10 May 2010, 0719 hrs IST

JP Morgan maintain Overweight rating on GVK Power with a new price target of Rs 57.

Investors need to wait for more quarters before leaping into Cement sector
10 May 2010, 0609 hrs IST, Amriteshwar Mathur

With weak realisations and rising cost structure putting pressure on cement companies, investors will have to wait for a few more quarters to leap into the sector.

Investors can consider UTV software communications for long term
10 May 2010, 0607 hrs IST, Rajesh Naidu

UTV Software Communications has been diversifying into various business, including broadcasting, with the investment push by Walt Disney Company. Investors can consider the stock for a long term.

Investors may consider investing in ICICI Prudential tech fund
10 May 2010, 0602 hrs IST, Bakul Chugan Tongia

Investors daring to bet on single sector may consider investing in ICICI Prudential Technology Fund.

Firstsource Solutions looks attractive at current levels
10 May 2010, 0559 hrs IST, Ranjit Shinde

The worst seems to be behind for Firstsource Solutions. Given its prospects, the stock looks attractive at current levels.

Does market indicate an entry into a bull run
10 May 2010, 0558 hrs IST, Devangi Joshi

The last week’s 5% decline in the Nifty and the manner of the decline took us down the memory lane. At the end of March 2009, in the first derivatives diary for which I made a contribution.

Is market in troubled waters?
10 May 2010, 0545 hrs IST, Deepak Mohoni

The market declined last week, sending the Sensex 4.50%, or 789.60, points lower , and the Nifty 4.93% down. The CNX Midcap Index lost 3.62%.

Corporate round up: NDTV, Parsvnath, Allcargo Global
10 May 2010, 0540 hrs IST

New Delhi Television (NDTV) continued to make losses in the March 2010 quarter. This is the seventh consecutive quarter in which the company posted losses.

IOB: High NPA and slow business growth
10 May 2010, 0531 hrs IST, Karan Sehgal

High NPA and slow business growth have crippled the performance of IOB. Investors should sell the stock

Oriental Bank of Commerce: Investors should accumulate on dips
10 May 2010, 0524 hrs IST

OBC is back on fast track after absorbing the losses of Global Trust Bank. However, the stock has gone up already. Investors should keep a check on its price and accumulate it on dips.

Nifty seen slipping below 5,000

Wkly Tech Analysis: Long-term support in sight

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NIIT Technologies

SGX Nifty jumps

Alembic

Weekly Review - May 10 2010

Allcargo Global

Ultratech Cement

Reliance Power Ltd

Value Guide - May 2010

Biocon Ltd

RCF

Aditya Birla Nuvo

Cipla

Weekly Watch - May 10 2010

LIC Housing Finance

Src: ET and DP blog etc

Mukesh Ambani wins family gas feud

Mukesh Ambani wins family gas feud

(FILE) In this picture taken on January 12, 2009, chairman of India's Reliance Industries Mukesh Ambani gestures as he speaks during the innauguration of the Vibrant Gujarat Investment Summit in Ahmedabad. The Supreme Court ruled in favour of billionaire Mukesh Ambani on May 7, 2010, in his dispute with his younger brother over a family agreement to divide the country's richest gas find, his lawyer said. (AFP)

More @ Mukesh Ambani wins family gas feud

Supreme Court favours RIL in gas dispute

NEW DELHI/MUMBAI: The Supreme Court has handed out an emphatic victory to Mukesh Ambani’s Reliance Industries (RIL), ruling that it need not supply gas to a company owned by estranged brother Anil at a previously agreed price, putting the profitability of many power plants of the younger sibling under threat and tightening government control over gas pricing.

The ruling is a setback for Anil, chairman of the eponymous Anil Dhirubhai Ambani Group (ADAG), who wants to build more than 10,000 mw of power plants across the country using gas from RIL. But the ruling would help RIL avoid potential losses it might have incurred had it lost the case, forcing it to sell gas at a lower price of $2.34 per million British thermal units (mmBtu) mentioned in the family MoU that formed the basis of the division of RIL in 2005.

In 2007, the government set a price of $4.20 per mmBtu, prompting RIL to say it would not be able to sell at the 2005 price. In a conference call after the verdict, Anil Ambani said he would not file a review petition. The only whiff of a positive outcome for the ADAG chairman was the court’s direction that RIL and Reliance Natural Resources (RNRL) should begin negotiations for a fresh gas supply agreement within eight weeks.

The negotiations, to be initiated by RIL, should end within six weeks from the day the talks begin, the court ruled. Such an agreement would have to be in consonance with government policy, it said. The RNRL scrip crashed 23% while RIL rose in a falling market.

“We direct both the parties to renegotiate to sort out the differences, but within the government’s policy of Gas Utilisation Policy and the EGoM decisions,” said Chief Justice KG Balakrishnan and Justice P Sathasivam in their separate rulings. Another member of the bench, Judge B Sudershan Reddy, said the MoU was not relevant at all, though he too directed the brothers to negotiate again.

The ruling, at its core, strongly reaffirmed the government’s right to set gas prices and to decide on its allocation. It said government policy would prevail over private contracts such as the family settlement, a position that could adversely impact private investment in sectors like minerals where the government is heavily involved.

A mechanism is provided under the PSC between the government and the contractor (RIL, in the present case). The PSC shall over-ride any other contractual obligation between the contractor and any other party," said Justice Sathasivam, writing the majority verdict.

As the case has dragged on through various courts, the government has tightened its control over the sector, not only approving the price but also directing the producer of the gas as to who it should sell to. This has suited RIL in this particular case, though it remains to be seen if the state would be willing to raise prices in line with the international prices.

RIL stressed its fealty to government policies in a statement issued on Friday evening. "The judgement recognises the dominant role of the production sharing contract and has upheld the policies formulated by government under which it has the authority to regulate the production and distribution of natural gas... In view of the judgement, RIL can only sell at the price approved by the government and only to the entities who have been allocated gas under the Gas Utilisation policy," the statement said. One possible outcome of the SC ruling might mean that a similar agreement between state-run utility NTPC and RIL for gas is also under a cloud after the verdict, though the circumstances of that case are somewhat different. NTPC lost nearly 1% to close at Rs 201.65.

Doubts over negotiations

In the post-verdict conference call, the younger Ambani was characteristically pugnacious seizing on some of the court’s observations on the need for a new gas supply agreement.

"The...court has also directed that suitable arrangements for gas supply should not only be suitable for RIL but also the shareholders of RNRL..(we) look forward to ..secure gas supply for the Group’s power plants in line with the Supreme Court order," Mr Ambani said.

But the ground rules for tweaking the MoU is far from clear and could set the stage for further legal tussles, belying hopes of RIL’s lawyer Harish Salve that the ruling from India’s highest court would encourage the warring brothers to put their bitter and seemingly unending feud behind them. "Price of gas has been upheld at $4.20 and there isn’t any change in that. Within that framework, the court has asked the two parties to renegotiate," said Mr Salve, the legal heavyweight who shepherded RIL’s case to a successful conclusion.

But a senior ADAG official said the price of $4.20 was applicable for a five-year period between 2007 and 2012. "Any power plant that we build will come up after that, so the price of $4.20 has no relevance for us," said the official, who spoke on condition of anonymity because of the sensitivity of the matter. "The government would have to eventually fix the price and it is certainly won’t be in a hurry to do so given that our gas-fired power plants are years away."

"RIL will renegotiate the gas supply agreements with RNRL in the manner and within the timeframe stipulated by the court. While the MoU may be kept in mind during the process of renegotiation, it is clearly held that the MoU is not binding," the statement from RIL said.

RIL gains, ADAG stocks crash

The Supreme Court ruling, though a victory for Mukesh Ambani, will not bring much additional monetary benefit for RIL, where investors had already factored in the $4.2-a-unit pricing for all the 80 mmscmd gas from the KG basin. Even in the worst case scenario, it might have had to supply ADAG companies only after 3-4 years when they begin operations.

RIL shares gained 2% to close at Rs 1,033.85 on Friday in a falling market, which sank with the rest of the globe due to the European crisis.

"Cash flows would (have been) negatively impacted by $700 million annually for selling 28 mmscmd of gas at $2.34/mmBtu as against $4.20 per mmBtu," Ambit Capital said in a note to investors.

RIL and its partner in the field, Niko Resources, are forecast to earn $10.63 billion in sales from the gas field. The government may earn $16.57 billion as its share of revenues from the KG-D6 field.

Shares of RNRL and Reliance Power run by Anil crashed as investors began to count the danger of owning stocks without much business. Both the companies’ fortunes were partly tied to the gas supply from RIL.

RNRL crashed 23% to Rs 53 and Reliance Power, which has the record of the biggest initial public offer in the country, tumbled 9% to Rs 140. The stock has lost 69% from its IPO price, adjusted for splits.

Reliance Power planned to build nearly 25,000 mw of power based on the assumptions that it may get gas from RIL at the agreed price. The biggest of them was at Dadri in Uttar Pradesh. In the conference call, though, Anil Ambani reiterated that he was committed to building 8,000 mw of capacity fired by gas, but he did not elaborate.

The ruling could also lead to a bigger blow to RNRL, the company that was supposed to get the gas and trade on it if SC had upheld the lower court ruling. While a favourable ruling would have given it a profit of Rs 3,000 crore a year, the absence of it makes it a near shell company with just some under-developed coal bed methane blocks and petroleum exploration licences.

There are no significant operations in both the segments to forecast revenues or profits, so there are no analyst forecasts.

The ruling dents, at least to some extent, hopes of Anil Ambani to establish a business empire comparable to his brother with power generation at the heart of it. When the brothers split with an agreement brokered by their mother Kokilaben Ambani in 2005, it was agreed that a specified amount of gas would be supplied to the younger Ambani at a particular price for his power plants. Subsequently, Mukesh’s RIL said it will not be able to do so given its agreement with the government on sharing of gas with the government. The matter was then taken to court.

Reliance Industries, the nation’s most valuable company, operates the biggest gas reserves in the Krishna-Godavari basin off the coast of Andhra Pradesh. The field known as KG-D6 has the peak capacity to produce 80 mmscmd. While RIL operates the field, the government decides the price and the quantity to be sold to various customers is laid down in the production sharing agreement. The gas was discovered before the split was formalised.

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Src: Economictimes, DP blog and Business-standard