Wednesday, December 22, 2010

Natural Gas Sector; The stage is set, let the flow begin

Natural Gas Sector

The stage is set, let the flow begin

The natural gas transmission sector is gearing up for a long and sustained growth trajectory as impediments/roadblocks hampering its growth in the past are cleared. Increased natural gas supply from the KG D6 basin, higher supply of RLNG at reasonable rates, infrastructure in place to ensure seamless supply, emerging clarity on transmission tariff and strong demand from user industries (power, fertilizer, CGD etc) create a conducive environment for transmission and distribution players to clock steady growth.

We initiate coverage on the Natural Gas sector- specifically transmission and distribution companies with a long term bullish view. With most of the concerns on the sector being addressed, we expect a sharp improvement in the fundamentals of companies under our coverage. We expect our natural gas universe to register revenue, EBIDTA and PAT CAGR of 17.4%, 13.3% and 11.1% over FY10-FY12E respectively. We initiate coverage on GSPL, GGCL and Petronet LNG with a BUY rating and GAIL and IGL with an ACCUMULATE rating. While we prefer the business model of GAIL and IGL, the sharp run up in its prices offer limited scope for upsides from current levels.

Company

Rating

CMP (Rs)

Target (Rs)

GAIL

Accumulate

505

565

GSPL

Buy

116

151

Indraprastha Gas

Accumulate

338

382

Gujarat Gas

Buy

398

481

Petronet LNG

Buy

128

156

 

 

Thursday, December 16, 2010

Mid-Quarter Monetary Policy Review: December 2010

Monetary Measures
It has been decided to:
  • retain the repo rate at 6.25 per cent and the reverse repo rate at 5.25 per cent under the Reserve Bank's liquidity adjustment facility (LAF);
  • retain the cash reserve ratio (CRR) at 6.0 per cent of net demand and time liabilities (NDTL) of scheduled banks.
Liquidity Measures
It has been decided to:
  • Firstly, reduce the statutory liquidity ratio (SLR) of scheduled commercial banks (SCBs) from 25 per cent of their NDTL to 24 per cent with effect from December 18, 2010;
  • Secondly, conduct open market operation (OMO) auctions for purchase of government securities for an aggregate amount of 48,000 crore in the next one month, the schedule for which is being issued separately.
The above two measures are expected to inject liquidity on an enduring basis of the order of ` 48,000 crore.

Given the permanent reduction in the SLR by one per cent of NDTL, the additional liquidity support under the LAF announced by the Reserve Bank on November 29, 2010 will now be available up to the extent of 1.0 per cent (instead of 2.0 per cent) of the NDTL of SCBs from December 18, 2010 to January 28, 2011.

Banking Sector Update; Mid-quarter review of Monetary Policy 2010-11

Banking

Mid-quarter review of Monetary Policy 2010-11

·      RBI in its mid quarter policy review announced a permanent cut of 100bps in SLR to 24% wef Dec 18, and purchase of g-secs worth Rs480bn through OMO over the next one month

·      SLR cut to result in 3bps improvement in banks' margins, while OMO to infuse liquidity into the system easing short term interest rates

·      RBI kept other key policy rate unchanged with Repo at 6.25%, Reverse repo at 5.25% and CRR at 6.0%

·      Though rate hike on pause for now, inflationary pressures from domestic demand and higher global commodity prices to continue to guide the policy actions

Tuesday, December 14, 2010

Check Shipping Corporation of India Ltd FPO Allotment status

Shipping Corporation of India FPO was open on Nov 30, 2010 and closed on Dec 03, 2010. FPO of Shipping Corporation of India was oversubscribed by 4.92 times (6.56 times in retail).

Visit Check Your Application Status Here

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Sunday, December 12, 2010

IPO Punjab & Sind Bank December 2010

The IPO of Punjab & Sind Bank (PSB) opened for subscription on 13th December 2010 in the price band of Rs 113 to Rs 120 per share. The issue will close on 16th December 2010

 

The bank will to go public to raise Rs 470 crore by diluting 18% of government holding. After the listing, government holding in the bank will come down to 82%.

 

IPO of Punjab & Sind Bank (PSB) provides an opportunity to invest in India's one of the small sized bank with over 100 years of operations. The bank plans to establish its pan India presence by opening new branches throughout the country to increase its customer base and business. The bank has maintained capital adequacy ratio (CAR) at 13.04% with the tier-I capital at 7.9% and the tier-II capital at 5.1% as on September 2010. The proposed expansion of branch network is expected to help the bank to further improve CASA (Current And Saving Account) ratio. The bank has plans to open specialized industrial finance branches and aims at expanding its credit portfolio, by growing its corporate & retail loan segment. The bank has been able to reduce its net NPA (Non Performing Assets) ratio significantly from 8.11% in FY'05 to 0.36% in FY'10. Going forward, the bank is likely to maintain NPA ratios around this level. From a total of 17 branches on the CBS (Core Banking Solutions) platform, the bank seeks to bring around 500 branches on the CBS platform by Nov 2012 enabling it to have incremental CASA growth and profitability in future.

 

At the given price band, the issue is attractively valued and investors with long term investment horizon can subscribe the issue.  

Tuesday, December 7, 2010

A2Z Maintenance & Engineering Services Ltd - IPO Analysis

Engineering, procurement and construction (EPC) service provider A2Z Maintenance and Engineering Services' initial public offering (IPO) is set to open for subscription on December 8. The company has fixed a price band at Rs 400-410 per share and issue will close on December 10.

 

IPO of A2Z Maintenance & Engineering Services provides an opportunity to invest in growing power sector of India. It is Engineering, Procurement and Construction (EPC) company and provides services to the power transmission and distribution sector with focus on the distribution segment. It intends to further strengthen its presence across various segments in the power sector. It is diversifying EPC services to other sectors like road and telecommunications. It is significantly involved in generating power from renewable energy sources, providing Municipal Solid Waste (MSW) management services, providing Facility Management Services (FMS) and developing information technology (IT) solutions for power utilities. It has proven track record of efficient project management and execution of projects in EPC, FMS and MSW. Its business operations are geographically spread across the country and it is now also looking to explore international markets. It intends to establish strategic alliances or enter into mergers and acquisitions or joint ventures. It also focuses on exploring and participating in new investment opportunities. It is a professionally-managed and led by a team of qualified and experienced professionals. The strong order book provides revenue visibility to the company. It has delivered a strong financial performance in the past. The issue is available at higher valuations compared to peers.

 

Investors can subscribe the issue for a long term investment horizon. 

Wednesday, December 1, 2010

MOIL Ltd. : Final Subscription Figure




QIB                49.16x

NIB                143.29x

RETAIL        32.86x

EMP                0.58x

Total                56.43x
 
Total No. of Bids : Approx 13,42,376.

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