The Indian market opened marginally in the green tracing positive opening trades in the SGX Nifty and most of the Asian indices. The US markets moved notably higher over the course of the trading day on Friday. The markets benefited from a positive reaction to the latest batch of earnings news, which overshadowed a disappointing housing report. Major European bourses ended the trading session on Friday in positive territory. The stronger than expected increase in German business sentiment and the news regarding bank repayment of LTROs were viewed positively. Comments from ECB President Mario Draghi also provided a boost to investor sentiment. The markets were largely able to shrug off the higher than expected decline in British GDP. Meanwhile, the Indian markets rallied on Friday on growing hopes of at least 25 basis points cut in policy rates by the RBI in its upcoming monetary policy review on Tuesday. Reports that the RBI may issue final guidelines for new bank permits by next month and positive global cues following upbeat economic data from China, Europe and the U.S. also helped boost investor risk appetite.
Reliance Industries and its partner BP plc's KG-D6 gas fields and gas discovery area NEC-25 are among 14 oil and gas blocks that have been declared "No-Go" areas by the Defence Ministry, barring any exploration or production activity. Ministry of Defence has either withdrawn or withheld clearances for 47 oil and gas blocks. Of these, 14 have been classified as "No-Go" areas, sources privy to the development said. RIL-BP's KG-DWN-98/3 or KG-D6 block has been declared as "No-Go" as it overlaps with a proposed Naval base. KG-D6, which was awarded to RIL BSE -0.43 % in 2000 by the Cabinet after clearance from all ministries concerned, had been producing oil since September 2008 and gas from April 1, 2009. RIL-BP's Mahanadi basin block NEC-OSN-97/2 (NEC-25) where sizable gas discoveries have been made, too has been classified as "No-Go" area as it is close to missile launching range/air force exercise area. Sources said the other 12 "No-Go" blocks are with state- owned ONGCBSE -0.57 %, Cairn India BSE 1.08 % and Australia's BHP Billiton and reasons cited for withdrawing clearance including being close to missile launching range, overlapping with proposed Naval base, with the Naval firing range and Air Force exercise area. Companies like RIL have already invested USD 15 billion since 2000 and the Ministry of Defence has now withdrawn or withheld clearance to them. Sources said the newly constituted Cabinet Committee on Investment (CCI) is likely to consider this week giving clearance to 47 oil and gas blocks where the Defence Ministry has either withdrawn clearances or put stringent conditions. Finance Minister P Chidambaram had last week indicated that the CCI would for the first time meet before the end of this month in which clearances to oil and gas blocks would be considered.Source: Economic Times
Godrej Consumer Products Ltd on Friday said it has inked a pact with private equity firm Creador to divest its non-core food business in Indonesia for an undisclosed amount. The transaction is expected to close in about two months, Godrej Consumer Products Ltd (GCPL) said in a statement. “Our decision to divest the foods business is very much in line with our strategic intent to focus on home and personal care,” GCPL Chairman Adi Godrej said. The divestiture of this business would improve the margin profile of our Indonesian business and help the team to take the household and personal care platforms to their full potential, he added. “The consideration from this divestiture will further strengthen our balance sheet,” Godrej said. The company's foods business in Indonesia includes cereals, snacks and instant food products under largely the brands Simba and Turbo. “This acquisition demonstrates our commitment to making growth investments in Indonesia, and reflects our strong capabilities in both Indonesia and India,” Creador Founder and CEO Brahmal Vasudevan said. Creador is a private equity firm focused on long-term investments in growth-oriented businesses in Indonesia, India and Malaysia. Under the agreement with Creador, Godrej's Indonesian subsidiary will continue to distribute the brands for a two-year period, GCPL said. Last year the company's food business in Indonesia generated net sales of about $22 million. GCPL had acquired the business in 2010. Godrej Indonesian Business COO Naveen Gupta said this divestment will now enable the company to focus on its key brands - Hit, Stella and Mitu and further Accelerate their growth trajectory. Shares of GCPL today closed at Rs 723 on the BSE, up 0.10 per cent from their previous close. Source: Financial Express
Ceat signs JV with a Bangladesh firm
Flagship company of the RPG Group, tyre maker Ceat has signed a joint venture agreement with A K Khan & Company, a Bangladesh-based business house, to set up a tyre manufacturing facility in Bangladesh. The Mumbai-based company and its partner will collectively invest $67 million (Rs 355 crore) towards the new plant which is expected to commence operation by the end of 2014. The plant is the first large scale tyre making plant in Bangladesh with a capacity of 110 metric tonnes per day in phases. "The joint venture forms part of the long term strategy for both the partners to have a presence in the growing tyre market in Bangladesh", stated a company release. Under the proposed joint venture, the Indian company will hold a 70% shareholding while the Bangladeshi company will hold the balance.As per the joint venture agreement, Ceat will provide technical and business expertise and manage the JV company operations while A K Khan & Company will bring in their knowledge of Bangladesh market besides providing the strength of their goodwill and local presence. Anant Goenka, Managing Director, Ceat, said, “This strategic partnership will enable us to establish a leadership presence in the large tyre market of Bangladesh. The manufacturing facility at its full capacity will be able to cater to majority of the tyre requirement of Bangladesh." The plant will manufacture bias tyres in truck, light commercial vehicle, and 2/3 wheeler segments for the local Bangladesh market. Source: Business Sandard
Ashok Leyland to sell stakes in subsidiaries to raise Rs 500 cr
Commercial vehicle major Ashok Leyland is planning to offload stake in some of its subsidiaries and also in IndusInd Bank Ltd. Ashok Leyland hopes to garner about Rs 500 crore from the stake sale over the next 12 months, said a senior company official. The firm will use proceeds of the sale to pay off part of its Rs 3,500-crore debt. The process is expected to start once the merger of two of its associate companies, Ashley Holdings and Ashley Investments, with Ashok Leyland are completed. K Sridharan, chief financial officer, Ashok Leyland, told analysts the company would either partially or totally divest its stake in the companies. He said that the firm hired investment bankers and consultants to find strategic customers and buyers. Consulting firm McKinsey is advising Ashok Leyland on better working capital management. Among the companies in which Ashok Leyland will be diluting its stake include IndusInd Bank (in which it holds shares worth Rs 700 crore), Hinduja Leyland Finance Limited (HLFL), Albonair GmbH, Defiance Technologies and Defiance Testing & Engineering. Ashok Leyland is the major shareholder in HLFL with 60 per cent holding, which it plans to bring down to below 50 per cent, said Sridharan. The NBFC company is also in talks with private equity firms for stake sale. Meanwhile, Ashok Leyland has partially diluted its stake in IBL and in ICICI and booked a profit of Rs 75-76 crore during the current financial year, said Sridharan. He added that the company’s long term borrowing level currently stands at around Rs 3,500 crore and in the next two-to-three months, it will swell to Rs 4,100 crore. “If we succeed in offloading the stake, it will reduce our loan book and asset base,” said Sridharan. He noted that in the next financial year, the firm has to repay around Rs 700 crore of debt. The offloading will help the company meet the target, said Sridharan. Source: Business Standard
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