Bourses hunt for straying bulls
Fresh move to switch on Dabhol
Rethink on import parity price for gas
Tata Tea sets deadline to launch Tetley brand
Indian Oil, NTPC zero in on Chennai for maiden project
Local tech titans face Chinese ache
Foreign Exchange, Bullion, Stock Indices

Mumbai, Dec. 10: 
Alarmed at the spike in volumes and suspicious about an unusual surge in stocks that used to be the darlings of fallen felon Ketan Parekh (KP), the Securities and Exchange Board of India (Sebi) has asked stock exchanges to find out how much key brokerages have staked on the shares of these companies.

Ravi Narain, managing director of the National Stock Exchange (NSE) and A. N. Joshi, executive director of the Bombay Stock Exchange (BSE), met top Sebi officials for three hours this afternoon, giving them an insight into the way the market has behaved recently. The two bourses, trying to dispel a growing apprehension that the sudden turn in sentiment and buoyant volumes mask a brewing scam, assured the regulator that they remain in control and are doing everything to ensure that the market’s integrity is not compromised.

The KP 10 stocks did come up for special mention though, but Narain and Joshi argued that these shares were not among the top 15 whose prices have almost doubled in recent weeks.

Aftek, Infosys, Geometric Software, HFCL and Trigyn Info are among the key new-economy scrips that soared 100 per cent; Colour Chem, Forbes Gokak, Ahmedabad Electricity and Sri Vishnu Cement are the only brick-and-mortar companies on the list.

Both exchanges said they had reviewed how much key individual brokers had invested in shares that have racked up large volumes, but found “no significant concentration in non-institutional activities”.

Sebi, which requires all institutional transactions to be delivery based, has sought details on the trading patterns of institutional brokerages to determine whether they had a role in engineering the recent surge.

What has raised eyebrows is a raft of data, which has shown that the turnover on the two bourses jumped from Rs 2000 crore on September 3 to Rs 4600 crore on December 7.

“The bourses have assured Sebi that they are vigilant and are keeping close tabs on the situation. Whenever necessary, measures like the imposition of special margins, additional margins calling for advance pay-ins, shifting of scrips to trade settlement, reduction of price bands and de-activation of terminals are being taken in right earnest,” the market regulator said.

BSE told the Securities and Exchange Board of India it now levies special margins on 56 scrips. NSE, on the other hand, has slotted 600 scrips for higher weightages, resulting in higher up-front margins. The exchanges said around 70 per cent of the exposures is covered by additional capital and margins.


Mumbai, Dec. 10: 
The domestic and overseas lenders are taking a fresh initiative to salvage the beleaguered Dabhol power project. They will be meeting in Singapore on Thursday and Friday to chalk out a revival strategy for the $ 2.9 billion Dabhol Power Company (DPC).

The meeting assumes significance because this is the first concrete move taken by the lenders after DPC’s parent Enron Corporation recently filed for bankruptcy cover in the US.

Though a meeting on the Dabhol power project was held in London some 10 days back where the overseas lenders were present, the local financial institutions chose to stay away.

This time they have, however, changed their stand. “We will appraise the situation following the recent developments,” a senior FI official told The Telegraph.

Though no definite agenda has yet been drawn up for the meeting, bankers who are following the DPC developments say the lenders will have to start afresh in view of the changed scenario at the Houston headquarters of the parent company.

According to them, Enron’s move to file for Chapter 11 bankruptcy has spiked the possibility of a new owner taking over DPC soon.

Just before Enron’s collapse, all the parties involved in the Dabhol power project were trying to solve the matter by finding a buyer for the plant and the adjacent LNG terminal.

Tata Power Company and BSES Ltd, the two leading private sector energy majors, have evinced interest but it is feared that Enron’s bankruptcy has complicated the process.

Reports also suggest that the Videcon group of Venugopal Dhoot has plans to bid for DPC.

Meanwhile, the delay in the transfer of ownership of DPC has put Industrial Development Bank of India (IDBI), ICICI Ltd and State Bank of India—the three domestic institutions—in a quandary. They have a combined exposure of Rs 6,100 crore (including guarantees) to DPC.

While, DPC has serviced loan interest for the quarter ended September 30, the institutions are not sure whether the Enron subsidiary will honour its December 30 and March 31 interest obligations.

The 2,184 MW Dabhol project in Guhagar district of Maharashtra is lying idle since June following a dispute with Maharashtra State Electricity Board (MSEB). The state power utility is the sole customer of DPC.

The domestic lenders attending the Singapore meeting would comprise IDBI, ICICI Ltd and State Bank of India.

Foreign lenders who are supposed to be present include Citibank, Bank of America and ABN Amro.

Enron Corp owns 65 per cent in Dabhol. While General Electric and Bechtel hold 10 per cent each, MSEB has the remaining 15 per cent.


New Delhi, Dec. 10: 
The government is yet to make up its mind on the issue of linking natural gas prices to 100 per cent import parity with fuel oil from April 1 when the petroleum sector is proposed to be deregulated.

The sixth round of discussions between petroleum minister Ram Naik and finance minister Yashwant Sinha, which Naik had earlier said would be the last in the series to chalk out specific steps for dismantling administered pricing mechanism (APM) from April, is understood to have deferred a final decision on linking gas prices to 100 per cent import parity.

“We have to decide whether we need to go for 100 per cent import parity in one step or in two steps,” Naik told reporters after 90 minutes of discussions on the issue.

Naik said broadly it has been agreed to go for 100 per cent import parity with fuel oil. “We will meet again to decide on the timing and how to go about it.”

At present, domestic natural gas has a price ceiling fixed at 75 per cent of import parity price of fuel oil. This ceiling of Rs 2,850 per million cubic meters is less than 50 per cent of international natural gas prices.

Today’s meeting also finalised the draft regulatory Bill for downstream petroleum refining and marketing sector which would now be sent to law ministry for vetting, Naik said. The Bill would than be placed before the Cabinet for approval, he added.

Naik said the next meeting, likely to be held during the current winter session of Parliament, would decide on the issue of gas pricing. Changes, if any, in natural gas pricing would be affected in the next budget and a regulatory authority for natural gas put in place before the sector is decontrolled, he said.

While natural gas from exploration blocks awarded under the new exploration licensing policy and through joint venture route is priced at international rates, domestic companies like Oil and Natural Gas Corporation are being paid at a cap of less than 50 per cent of that price.


Calcutta, Dec. 10: 
Tata Tea (TTL) is planning to introduce a Tetley brand in India in two-and-a-half months, and a new one from its own stable as part of a larger strategy of launching a brand every three months.

Temptation, a brand that has caught on in south India, is being offered to customers in the western region now, and will soon be available in the eastern markets.

The announcement came on a day shareholders approved the merger — effective from October 1 this year — of Bambino Investment and Trading Company Limited with TTL at an extra-ordinary general meeting.

Addressing shareholders, Tata Tea managing director H. R. Khusrokhan said the merger will help rationalise investments and tap the synergy in its product portfolio. After the merger, the employees of Bambino will move to TTL on the same terms and conditions.

“We will also save a lot by way of dividend tax, which added up to Rs 8 crore for Bambino in the last two years,” Khusrokhan said. Bambino, a wholly-owned company of Tata Tea, forked out a Rs 70-crore dividend to TTL, besides investing Rs 71 lakh in Telco’s rights issue.

Between March 31 and September 30, TTL has raised Rs 42.50 crore in call money against 10.65 per cent non-convertible debentures.


Calcutta, Dec. 10: 
Indian Oil Corporation (IOC) and National Thermal Power Corporation, the two public sector companies that have joined hands to set up petro-fuel power projects, have identified Chennai for their first venture.

IOC sources said the capacity of the power plant will be 500 MW and the total investment will be in the region of Rs 3,000 crore. The project will be located at Nelli, 20 kms from Chennai.

In May, IOC and NTPC signed a memorandum of understanding (MoU) to set up petro-fuel power plants in the country. According to the agreement, Indian Oil and NTPC will form a joint venture to set up petro-fuel based power plants utilising refinery residue, naphtha or other petroleum products as fuel on the basis of feasibility studies to be carried out.

“The feasibility study for the plant will be completed soon. We will then appoint a consultant for carrying out a detailed project report. The entire process will be completed within another two months’ time,” IOC sources said.

“We are also working out the structure of the joint venture company. The company will be formed soon,” sources added.

As part of its initiative towards integration and globalisation, Indian Oil has decided to enter the power sector, particularly projects based on refinery residues.

“IOC has decided to develop power projects in joint venture to add value to the heavy residue streams from the refineries. One of the power projects under implementation, based on petroleum coke, is the Panipat power project. IOC is also examining the feasibility of mega power projects based on alternate fuels,” company sources said.

Setting up of more power plants has become necessary as the consumption of electricity is increasing at a very fast rate.

As on March this year, the total installed capacity of utilities stood at 101,153.6 MW. Most of this installed capacity is under government control. The state governments control nearly 60 per cent of the generating capacity. The Central government owns about 30 per cent of the power generating capacity in the country, the majority of which is in the thermal sector.

A senior official of NTPC said, “The company has a total operating capacity of 19,435 MW. NTPC plans to be a 40,000 MW plus company by 2012.”


New Delhi, Dec. 10: 
Wipro, Bharat Sanchar Nigam, ITI and ECIL are among the companies that could suffer if the government decides to take action against Huawei Technologies, a Chinese telecom company suspected of manufacturing surveillance gear for the Taliban at its research and development hub in Bangalore.

Azim Premji’s Wipro Software, working on a key software project in China and eager to grab a slice of the growing telecom business there, will have to take it on its chin if relations with India’s northern neighbour fray.

“Wipro works with many companies the world over, executing projects and servicing clients. We are not in a position to say how we would be affected since our 25 executives are meeting outside Bangalore. All the same, the Chinese market does not figure as our immediate priority,” a company spokesman told The Telegraph.

Sources in communications ministry said they had first heard of Huawei when it filed a bid for supplying switching equipment. The privately held Chinese firm impressed Sanchar Bhavan mandarins with its credentials, but was disqualified because the wares that would be supplied had to be tailored to local specifications.

Since then, it has been approached for tie-ups by Electronics Corporations of India Ltd (ECIL) and ITI, besides a host of private telecom equipment makers in India.

“We were in talks with Huawei for upgrading switches. Its state-of-the-art technology was compatible with the existing networks. However, the negotiations could not progress due to bureaucratic delays in the communications ministry,” a senior ITI executive said.

Sources in the industry and communications ministries who have visited the Chinese firm’s unit recently said its marketing arm in Pakistan could have been used as a conduit in catering to the hardline Afghan junta.

“Huawei’s R&D centre at Bangalore primarily develops application software. The product supplied to Afghanistan, through Pakistan, could have been a telecom network management software,” they said

According to them, the company is unlikely to have sold software meant for a defence project in Afghanistan. “It is unlikely. The network management software allows telecom service providers to keep tabs on the calls made, received and those routed through the network. It may be true that Taliban used it as an instrument to keep track of possible uprisings against it.”

The $ 2.5-billion Huawei has a reputation for making good transmission, switching, and access equipment. Strong on telecom research and development, the Shenzen-based company, which started operations only in 1988, has 15,000 software engineers all over the world. There are 500 of them working for it at Bangalore, including 178 Chinese.

The company entered India last year, but it acquired the image of a “competitive” player willing to offer technology not available from European and American telecom firms.

Huawei’s customers include large enterprises, service providers, local postal, telephone, and telegraph (PTT) authorities besides nation-wide carriers across 30 countries and regions. It is the key equipment supplier to China Telecom and China Unicom, the two largest phone networks in the country.



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