Business Offer: Digital Business Solutions

Friends, it has been long that I have been associated with you, basically with regards to investments in Indian Stock Market, and other other miscellaneous issues. Since, 2006, this blog  has been active, in giving information in this direction only, apart from touching other hot current affair topics, too, from time to time. In between, I made lot of friends, both in India and in overseas--regardless of caste, creed and colour. 

The advent of technology has made this possible, forgetting the barriers of time and distance. As a result, I was fortunate enough to have well-wishers and clients all over the globe, cutting across continents. When some of  you call me-up on my cell and say, that "I have been following your Blog and Yahoo Group Posts, since the last 5-6 years"; it gives me immense satisfaction. 

However, I have now diversified into other fields too, apart from Stock Market and Real Estate. Hence, I would like all of you who are in Indian subcontinent or Europe or Africa (a growing sphere in the IT enabled service space) or Gulf or in North American countries or anywhere in the world, to join me in this new Information Technology Venture. 

Our company Webworkz Interactive (P) Ltd have got necessary infrastructure and wherewithals to cater to  your Digital Business Solutions, including Software Development. 

Webworkz Interactive is a digital business solutions firm, located in Mumbai (Bombay), helping enterprises achieve their revenue, market-share and customer loyalty objectives through the use of digital media. 

At Webworkz, we design, develop and deliver customized digital media solutions that focus on customer acquisition, audience engagement, community development & brand visibility. 

From display media and search to social media and e-commerce, Webworkz has the entire range of digital media expertise and it effectively combines these areas of expertise to deliver exceptional solutions for its clients. 

At Webworkz, we partner with a diverse and prominent portfolio of clients in Financial Services, BPO, Real Estate, B2B, Consumer Goods and Services sector including mid-sized organizations to top corporations and have a high client retention ratio. This speaks volumes about our solutions expertise and our servicing standards.

If you are a CEO or a Top Official of a company and need to outsource your products / services or want Digital Business Solutions for your organization, then you could look for our company Webworkz Interactive (P) Ltd (www.webworkzinteractive.com), Mumbai (Bombay), for  a Joint Venture. Even if you are an ordinary guy and can bring a minimum business for our company, you can join the team and work with us; from any part of the world. 

Moreover, since, I will be there, in this  collaboration, hence, you will not have to bother much as far as the quality of the work is concerned. Even then you would have direct access to me for solving any of your problems.   

In any business trust is an important factor. If you think you have confidence in me and my organization, kindly drop in a mail at: suman2005s@rediffmail.com. I will make arrangements, so that the concerned person of our organization speaks with you and finalize the deal. 

Therefore, let us not waste further time and see, if we can make this effort a grand success. Let us join hands together for a great future, ahead. Thanks a lot for your continuous love and affection. 

FIIs and DII trading activity

Though today, also, FIIs were net sellers but chartically speaking, the good point is that, 7440 and 7500 were both held by the bulls. In the morning inputs to the Paid Group, it was mentioned that the market could bounce back, if and only if 7440 holds. At that time Nifty was trading at 7481.35, up 27.20 points.  The Nifty ended the day at 7,526.65 up 72.50 points. I hope the Nifty traders have money even today. 
Join the Paid Service or trade through my recommended brokerage house/s and be ahead of others.

India's infrastructure sector will receive a multi-year boost from budget, Fitch says

Photo: The Hindu

COIMBATORE, Jul 14, 2014: The infrastructure sector is set to receive a multi-year boost from the budget, Fitch Ratings has said.

"By carrying forward the previous administration's efforts to clear the country's infrastructure backlog, the new government has made it a policy focus to drive forward a new long-term capital investment cycle," it said.

"This means that fiscal and regulatory policy changes should be supportive of corporates in the infrastructure, construction, and real estate industries," the agency said. While Fitch expects them to have only a minimal impact in the short-term, they would have a positive effect on infrastructure over the medium to long-term.

Significant new urban development objectives and thousands of new kilometres of highways and gas pipelines were included in the budget, in addition to over Rs 60,000 crore in direct infrastructure investments, special economic zones, port and subway projects.

Stating that the direct project announcements and objectives were significant, Fitch said the measures to ease funding were particularly noteworthy and would be critical for driving the new investment cycle.

Banks would be allowed to raise long-term funds for infrastructure lending with minimum regulatory requirements. They are also being encouraged to extend loans to the infrastructure sector, with tenures of 25 years—far above the current norm of 10 years.

Further, REITs (real estate investment trusts) have been proposed and urban construction would be opened up to foreign capital. Tax incentives for investments in manufacturing— including an allowance of 15% for investments over Rs. 25 crore— would also support growth in the sector, Fitch stated.

Power and utilities also received supportive policy measures in the budget. Fitch views the government's plans to rationalise and improve coal supplies for power plants as particularly critical for improving productivity. "The extension of tax benefits for power generation companies for a further three years will also be supportive to their bottom line," the agency said.

The new infrastructure drive over the long- term would be positive for the steel, cement and capital goods industries, which would benefit from rising demand, it said.

Though the 0.5% increase in duty on coke is marginally negative for steel producers, the agency believes that the broader impacts from higher rates of growth will be sufficient to offset the rising operating costs.

Courtesy: The Times of India

WTO faults U.S. over duties on Chinese, Indian steel goods

Photo: News1st

Tue Jul 15, 2014: World Trade Organisation judges said on Monday the United States broke its rules in imposing hefty duties on Chinese steel products, solar panels and a range of other goods that Washington argues enjoyed government subsidies.

In a similar case involving U.S. methods in deciding when foreign imports are unfairly priced, another WTO panel ruled in support of some claims by India against tariffs on steel exports from three of its major firms.

Trade diplomats said the two cases, both under scrutiny for nearly two years by the separate panels, reflected a widespread concern in the 160-member WTO over what many see as illegal U.S. protection of its own producers.

In the $7.2 billion Chinese case, the panel found that Washington had overstepped the mark in justifying the so-called countervailing duties it imposed as a response to alleged subsidies to exporting firms by China's government.

Under the 1964 Marrakesh accords, which also set up the WTO, these duties can only be levied when there is clear evidence that state-owned or partially state-owned enterprises passing on the subsidies are "public bodies."

The panel found that Washington had produced insufficient evidence for this, and was also at fault in its calculations of the value of the subsidies to Chinese firms producing items like kitchen shelving, grass cutters and even citric acid.

And it told the United States it should adapt its measures to bring them into line with the WTO's agreement on subsidies and countervailing measures, dubbed the SCM in trade jargon.

SOME COMFORT

The ruling, which gave the United States some comfort in rejecting some aspects of the Chinese complaint, was welcomed in a statement from China's Ministry of Commerce distributed by Beijing's trade mission in Geneva.

"China urges the United States to respect the WTO rulings and correct its wrongdoings of abusively using trade remedy measures, and to ensure an environment of fair competition for Chinese enterprises," the statement said.

The United States said it was weighing its options.

U.S. Trade Representative Michael Froman said the decision to reject many of China's challenges was a victory for American businesses and workers.

"With respect to the other findings in the panel report, the Administration is carefully evaluating its options, and will take all appropriate steps to ensure that U.S. remedies against unfair subsidies remain strong and effective.”

Many other members of the organisation, including the European Union and Japan, declared themselves interested parties in the disputes, although they did not say if their sympathies lay with the United States or its challengers.

The ruling in the Indian case - which involves steelmakers like Tata, Jindal and Essar who are supplied by the state-run iron-ore mining firm, NMDC - was not so clear-cut.

It said the United States had "acted inconsistently" in terms of some provisions of the SCM agreement and had unfairly reduced Indian trade revenue. Washington should bring its measures into line with the pact, the panel said.

But it rejected many of the technical aspects of the Indian case.

Froman hailed the panel ruling while recognising it as a "mixed result."

"The panel's findings rejecting most of India's numerous challenges to our laws and determinations is a significant victory for the United States and for the (U.S.) workers and businesses making these steep products," he said.

(Reporting by Robert Evans, with additional reporting by Krista Hughes in Washington, Editing by Angus MacSwan)

Courtesy: Reuters

FIIs and DIIs trading activity

Resurgere Mines and Minerals Ltd: Clarifications

It has come to my notice, some days back that some baseless rumors are being spread by vested interest groups, having some ulterior motives, in various message boards and discussion forums. I had earlier given my clarifications on the same, but it seems, the things are being stressed beyond tolerable limits. Below, I have tried to answer some of the most talked about questions, to the best of my abilities; after speaking with my sources. If you still have questions on this scrip, please do mail me at: suman2005s@rediffmail.com. 

Moreover, the difference of price of the scrip in the two exchanges, have probably confused the investors; who are finding it difficult to gauge the discovery rate of the scrip. It is natural that when a scrip trades with so much difference in two of the leading exchanges in India, the investors are bound, get perplexed. I had mentioned about problem, a number of times earlier in various forums including this blog, but unfortunately, it perhaps fell in the deaf years of the regulators. Hope the exchange authorities will soon, bring the price of the scrip, almost same, in the two trading platforms, by putting suitable circuit filters. Anyway, here is my take:  

Q.1. The CMD of the company Mr.Subhash  Sharma is drawing Rs.10 lakhs salary per month. 

Ans. Mr.Sharma is not taking any salary since the last one year, according to my sources. Moreover, the total employee cost for FY14, is shown to be only, Rs.62.56 lakhs. If Mr.Sharma had taken such high salary, then the amount would have been crores. Isn't it?

Q.2. The company does not have any mines. 

Ans. If the company is not carrying out any mining activity then from where Mine Development Expenses, shown in the result sheet, being written off as Rs.1137.76 lakhs came for the year ended 31st March, 2014 and Rs.2472.07 lakkhs occurred for the year ending 31st March, 2013? This will only come if the mining takes place, isn't it?

Q3. If the company had mandates to do mining, in Maharashtra, then why is the mining  not taking place now? 

Ans. Yes, the company do have the permission for mining in Mahalmiriya (Bauxite), Maharashtra. But Resurgere Mines and Minerals Ltd, has some problems with the lease agreement. According to my close sources, the company hopes to solve it at any time from now. However, mining can take place only post monsoon, which is natural in this business. This is also one of the reasons, why there is no mining taking place now. 

Q4. The company does not  have any Iron Ore mines.

Ans. The company has applied to the authorities to allow them to mine in  Satarda Mine, Maharashtra. The management hopes that with the new government taking lot of initiatives to revive the steel sector, such permission would be granted soon.  

Q5. Resurgere Mines and Minerals Ltd is a paper company with no sales and  no employees. No one knows what it does at present. 

Ans: Resurgere Mines & Minerals India Limited is a Public Limited Company engaged in the business of extraction, processing & sale of Ore and exploration & development of mining assets. Presently the Company is enjoying long term raising and purchasing rights for Bauxite Mine in the State of Maharashtra and mining rights for Soapstone in the State of Rajasthan. The Company has also 99.98 % equity holding in Shree Warana Minerals (India) Pvt. Ltd. having another bauxite mine in the State of Maharashtra through its wholly owned subsidiary i.e. Warana Minerals Private Limited.

It has an office in one of the prime locations in Mumbai (Bombay) and does have employees. However, since at present it is engaged in very small amount of mining, the company shed its employee strength; with an eye to save costs. When full scale mining will take place, which is probably after the monsoon, we could see an increase of employee head count. 

Q. Recently the promoters sold the shares of the company and made  money. 

Ans. The promoters did not sell any share, in contrast to one of the peer group companies, like SVC Resources Limited (Rs.2.48, Face Value: Re.1). If anything has been sold, it happened when pledged shares were invoked by the lenders.

Q. The company has no future, as the management, till now has failed to perform. 

Ans. The management, in order  to further their business, opened the followed subsidiary companies, but due to tight liquidity conditions it was not able fructify their idea. Subsidiary companies are: 

a. Warana Minerals Private Limited - Wholly owned Subsidiary Company.

b. Shri Warana Minerals (India) Private Limited - Subsidiary Company of Warana Minerals Private Limited.

c. Resurgere Sponge Iron Limited - Wholly owned Subsidiary Company.

d. Resurgere Ferro Alloys Limited - Wholly owned Subsidiary Company.

e. Resurgere Industries Limited - Wholly owned Subsidiary Company.

f. Resurgere International FZE - Wholly owned Subsidiary Company at UAE.

g. Resurgere Coal India LLP - Limited Liability Partnership Firm. 

In future the company hopes to start business in these companies too. With the present government taking, a balanced view of the mining sector; the things have started to look better again.  

Q. At Rs.2.28 the shares of the company are overvalued and should be exited.

Ans. The book value of the shares of the company is Rs.26.49, which is more than 10 times the current price of the scrip. It's share price fell from Rs.200 plus to the current rate. However, if the company is not closing down, then what is the need to sell the shares of the company, at this price, which is almost one fifth of its Face Value of Rs.10? Moreover, the market cap of the company is only Rs.45.34 Cr, which fell from Rs.1500 Cr in 2008. 

Therefore, when one is buying the stocks of such a company, it is given that there are inherent risks involved. If anyone is able to take such risks, they only should stay invested for high gains. This is a high-risk-high-gain scrip. 

Disclaimer: I hold a very small stake in the company, but many of the blog readers and followers, might have taken large positions, based on my recommendation. This clarification is basically for them; so that they do not get unnecessarily worried due to misinformation campaign, under-taken by a group of unscrupulous fellows. 

Budget 2014-15: Simplicity, transparency and thrust on growth in economy

~~Deven Choksey, MD K.R. Choksey Sec.Financial Solutions

Revolutionary Reforms:

Photo: Moneycontrol.com

1. Income Tax exemption: 21000 crores of money left in hands of individuals. This will boost savings and consumption in economy. 

2. Banks are exempted from CRR & SLR deductions on their infrastructure funds portfolios. This is a big booster as it will have few advantages:

(a) It will result in 34-35 bps savings in the margins of banks which could result in additional funds for lending. On ? 10 L crore portfolio, additional funds available with banks would be 3500 crores.

(b) Availability of funds for infrastructure will help revive stalled infrastructure projects. It would thus reduce NPA stress in the books of banks.

(c) It could pave way for faster expansion in economy, which would have positive impact on lending to infrastructure asset class in road, power sectors. It also holds promise to let banks grow faster.

3. Portfolio income of FII is being classified as capital gains vs business income would not only give greater clarity to global investors bout also would result in attracting higher tax compliance and more inflow of funds in India, under the transparent norms. Fine print reading of many other measures should reveal further growth. 

They are: (i) Increased allocation & spending by government of 50,000 crore has all the potential to kick start the mega investment program in the country.

(ii) For faster implementation of projects, thrust has been given on IITs or infrastructure investment

trusts & giving a larger thrust on REITs or Real Estate Investment Trusts means attracting more funds in economy.

(iii) Roadmap for fiscal deficit is made clear with intent to bring it down to 3% in 3 years from 4.5% currently. To bring down fiscal deficit, credit of 65000 crores has been taken from divestment, additional collection of 7500 crores from indirect tax and relying on growth coming from infrastructure spending measures which would eventually swell the collection kitty of the government.

(iv) FDI in defence and insurance raised to 49% from 26% which will result in higher inflow of foreign investments in the country. Defence import bill will eventually come down which also means that current account deficit equation will be taken care of now and also in future.

(v) Host of social and agriculture sector reforms has the character of transforming lives of masses and in turn give them large economic power. It could result into transforming rural lives and in turn higher spending by them could spur industrial growth.

Given the reform orientation covering rural to urban economy we think this budget should be given full marks. Fine print will help us analyse further and we will bring company specific impact analysis to you. 

Stay invested in cyclical stocks as they hold larger promise under the budgetary proposal

India's steel consumption inches up by 0.7% in first quarter

NEW DELHI, 13 Jul, 2014: India's steel consumption grew by a mere 0.7 per cent during the first quarter of current fiscal to 18.82 million tonnes (MT). 

The country had consumed 18.69 MT steel in the April-June quarter of last fiscal, showed data compiled by Joint Plant Committee (JPC), a body under the Steel Ministry. 

In recent months, the rate of growth in consumption was the fastest at 3.4 per cent in April. It was 0.3 per cent in May and 0.9 per cent in June. 

Production of finished steel grew by 1.5 per cent during the period at 21.86 MT over the same period last year. SAILBSE -6.06 %, RINL, Tata SteelBSE -4.01 % and other major players cumulatively produced 11.34 MT clocking a growth of just two per cent, the JPC said. 

Contribution of mini and small firms' production rose by 0.3 per cent during the period. 

India, which became a net exporter of steel in recent times, exported 1.34 MT of finished steel during April-June period clocking a 18.5 per cent growth over a year ago. 

Imports also went up. During the period, India's import of finished steel saw a growth of 11.8 per cent to 1.49 MT. 

India's steel consumption grew by just 0.6 per cent in the 2013-14 fiscal, the slowest in at least four years, to 73.93 MT. Exports grew by 4.1 per cent at 5.59 MT, while imports were down by 31.3 per cent during the period 5.445 MT. 

India is the fourth largest steel maker in the world with 81 MT of production in last year. The sector contributes about two per cent of the country's GDP and employs over six lakh people. 

The Steel Ministry estimates that the country's consumption may go up to 176 MT by 2025-26 if the economy grows by 6.5 per cent during the period between now and 2025-26.

Courtesy: The Economic Times

Govt mulls single-window system to boost steel, mining sectors

[Editor: I have been saying this since the last couple of months and I am happy the government has at last started to think in this direction. The biggest beneficiaries, apart from Steel and Mining space, would be Construction and Power  sectors]

The Environment Minister 

June 25, 2014: To boost sagging sentiments in steel and mining sectors, the government on Tuesday began the process of setting up single-window mechanism to fast-track clearances for various projects and create special mining zones to ensure raw material security for existing and upcoming steel plants in the country.

In the course of a three-hour-long meeting steel and mines minister Narendra Singh Tomar, coal minister Piyush Goyal and environment minister Prakash Javadekar said that there is a pressing need for a single-window clearance system and agreed to engage more stakeholders to take the process forward.

While there was a general agreement that such a system “cannot happen overnight as rules for different departments are not the same,” but creating such a dispensation also cannot be an endless process.

Currently, 44 coal projects, both opencast and underground, and at least six steel projects are awaiting environmental and forest clearances.

Considering that over Rs 4.4 lakh crore of investments are in the pipeline in the steel sector in Jharkhand, Orissa and Chhattisgarh, such a mechanism is likely to translate these investments on the ground. In response to the contention of steel ministry officials that the existing plants perpetually complain about raw material insecurity, Goyal told the meeting that some blocks can be auctioned specifically for the steel companies, while steel PSUs can continue to enjoy allocations through the government dispensation route.

Steel ministry officials had, in a presentation to Tomar last month, contended that the sector has been discriminated in allocation of captive coal mines despite the companies completing their end-use plants and investing heavily in mining. They told the minister that 44 captive coal blocks pertaining to steel and iron projects have been canceled notwithstanding their investments made.

“The three ministers said that like the special economic zones, certain big mineral bearing areas can be demarcated as special mining zones exclusively for meeting the demands of the iron-ore starved plants,” a source said. The erstwhile UPA government had set a target of producing 300 million tonnes steel per year by 2025 for which the nation would require nearly 350 MT of iron ore.

However, the steel ministry officials could not confirm whether such mining zones would be entitled to financial sops as enjoyed by the SEZs. Javadekar said that National Board for Wildlife (NBWL) will be reconstituted soon and matters pending for clearance of the NBWL will be thereafter be disposed off expeditiously.

Goyal, meanwhile, is learnt to have been firm in ruling out de-merger of Bharat Coking Coal Limited (BCCL) from Coal India and making it a stand-alone company, as demanded by the steel ministry last year.

The 12th Five Year Plan working group had suggested de-merging BCCL from Coal India to service the raw material needs of the steel companies steel industry which spends heavily in sourcing the fuel from abroad.

Goyal, who also holds the charge of power ministry, is learnt to have told the meeting that since Coal India is a listed entity, it would be imprudent to distribute its assets.

Courtesy: The Indian Express

Indian steel sector is upbeat on budget proposal to develop 100 smart cities

India is the biggest producer of sponge iron. Its production is set to jump 10 times in 20 years
Photo: Down To Earth

Sunday, 13 Jul 2014: The domestic steel sector is upbeat on the budget proposal to develop 100 smart cities, a move that is likely to generate demand for key building and construction materials like steel and cement.

Mr CS Verma chairman of Steel Authority of India Limited said that "The renewed focus on infrastructure viz. development of smart cities, ports, Pradhan Mantri Gram Sadak Yojna, power plants, plan for doubling pipeline grid, metro for tier 2 cities, industrial corridor, incentives for housing, and revival of SEZ etc. will go a long way to further consolidate growth and giving fillip to steel sector which has faced stagnant demand of late."

The increase in customs duty for stainless steel will provide the requisite protection at a time when the demand has slackened. Other measures such as reduction in customs duty for steel grade limestone and dolomite, as well as ships for breaking should also help the industry.

Mr Manoj Kumar Agarwal MD of Adhunik Metaliks, a maker of speciality steels said that "The move to develop 100 smart cities leading to infrastructural development will increase demand of steel and cement resulting in inclusive growth. Various sectors will be highly benefited by this infrastructural enhancement."

Mr Subhrakant Panda MD of Indian Metals and Ferro Alloys Limited said that "The Finance Minister's maiden budget is noteworthy for the statement of intent to revive manufacturing and infrastructure sectors while maintaining fiscal discipline. The government's mission of housing for everyone by 2022 and setting up 100 smart cities are bold moves which will go a long way in changing the country's landscape.”

He said that "These will not only help sectors like cement, steel etc but will also increase the employment opportunities. As far as the ferro alloys industry is specifically concerned, steps taken to encourage key sectors which in turn will boost growth will have a positive impact."

Mr Jayanta Roy Senior VP, Co-head, Corporate Ratings, ICRA Ltd said that "The long term impact on the steel sector is expected to be positive because of the policies on construction and infrastructure sectors, which generate around two third of steel demand in India.”

Mr Roy said that “Policies including increased tax incentives to individual home buyers and enhanced allocation towards affordable housing are expected to spur growth in the housing sector. Additionally, development of 100 smart cities, 15,000 kilometers of pipeline for the oil and gas sector, 8,500 kilometers of roads, and development of new ports and airports would provide a fillip to the construction sector.”

He said that also, the increase in custom duty on stainless steel flat products and reduction of customs duty on import of ships for breaking and steel grade dolomite and limestone are positives for the industry. The Government's intention to sort out the current issues in iron ore mining and a modification of the MMDR Act towards making it more supportive to the industry would be critical for the growth of the sector.

Mr Jaijit Bhattacharya, Partner, Infrastructure and Government Services, KPMG said that "We welcome the initiative which is the need of the hour for the Indian economy. Cities are the growth enablers and current Indian cities are choking with the economic growth in India. It is heartening to note that budgetary provisions have been made for modern next generation cities."

Mr Venkatesan Subramanian, Vice President & Global Leader, Metals & Minerals Practice, Frost & Sullivan said that "For the metals and minerals industry, the hike in export duty of bauxite and import duty hike on flat rolled products of stainless steel are positive as it is expected to boost domestic sales and bring additional investment into the sector in form of new projects and capacity expansion in these industries. The government policies in this sector points to the right direction of value addition for mineral ores fulfilling domestic demand through local production."

Courtesy: Steel Guru

Budget-2014-15: Power Sector

Photo: The World Bank

In the Union Budget 2014-15 presented on 10 July 2014, Finance Minister Arun Jaitley proposed Rs.200 crore for power reforms.

Jaitley also proposed a ten-year tax holiday to the power sector undertakings, which begin generation, distribution and transmission of power by 31 March 2017.

Further, the Finance Minister has proposed to allocate an initial sum of Rs.100 crore for preparatory work for a new scheme "Ultra-Modern Super Critical Coal Based Thermal Power Technology" to promote cleaner and more efficient thermal power.

Jaitley also announced comprehensive measures for enhancing domestic coal production with a stringent mechanism for quality control and environmental protection. Measures will be initiated to provide adequate quantity of coal to power plants which are already commissioned or would be commissioned by March 2015 to unlock dead investments.

To further improve rural life, the government will launch the Deen Dayal Upadhyay Gram Jyoti Yojana to augment power supply at a cost of Rs.500 crore.

To promote wind energy, Jaitley proposed to reduce the basic customs duty from 10% to 5% on forged steel rings used in the manufacture of bearings of wind operated electricity generators. Also, he proposed to exempt the SAD of 4% on parts and raw materials required for the manufacture of wind operated generators. Further, he proposed to prescribe a concessional basic customs duty of 5% on machinery and equipment required for setting up of compressed biogas plants (Bio-CNG).

Source: Capialmarket.com

Big boost for road, housing, power, shipping sectors

Friday, 11 July, 2014: With zero tolerance for poor infrastructure and amenities, Jaitley put infrastructure at the core of his budget.

A promise to create 'one hundred smart cities by putting in Rs.7,060 crore this year and giving the National Highways Authority of India and State Roads Rs.37,880 crore with a commitment to build 8,500 kilometers, the government kick-started the much needed investment cycle that would have a multiplier effect taking along every core industrial sector.

"The government's mission of housing for everyone by 2022 and setting up smart cities will not only help sectors like cement or steel but would go a long way in changing the country's landscape," said Subhrakant Panda, managing director, Indian Metals and Ferro Alloys.

Beyond smart cities, the real estate sector would greatly benefit from steps to attract Foreign Direct Investment in the sector.

Requirement of built-up area for FDI has been reduced from 50,000 square metres to 20,000 square metres while and capital conditions halved to $5 million.

Projects having 30% of cost for affordable housing, has been exempted from the minimum built up area.

"These coupled with pass-through of income allowed obviating incidence of double taxation on REIT would facilitate flow of savings into the real estate sector," said Harsh Vardhan Patodia, vice-president of a real estate body.

On the financing side, Jaitley talked of a modified REIT-type structure for infrastructure or Infrastructure Investment Trusts having similar pass through status while commercial banks, he said, would be helped to raise long term money to fund infrastructure projects.

"Infra Investment Trusts is not entirely new as SEBI had in December floated a consultation paper on it. Exempting CRR and SLR conditions on infra fund for commercial banks would help them raise cheap money which the sector needs," said Ashok Pareek, executive director of Srei Capital Market.

Shipping industry got a lot of attention: 16 new port projects to be awarded this year and Rs.11,635 crore for development of Outer Harbour Project in Tuticorin.

The finance minister also announced an ambitious inland transport project along Ganga between Allahabad and Haldia, at a cost of Rs.4,200 crore.

"If the project can ensure a minimum draft of 3.5 meters then it would be possible to sail 1500-2000 tonne barges giving shape to what the finance minister has wished for," V.K. Singh, chief executive officer of Shreyas Shipping, told dna.

Lowering of tax incidence on coastal shipping as well as changes made to Place of Provision of Services Rules, 2012, are the incentives that brought cheers from the shipping industry, he said.

In the amendment notification for Place of Provision of Services (Amendment) Rules, 2014 issued today aircrafts and vessels except yachts have been exempted.

Power sector including coal-based and renewable got the push with Jaitley proposing to channel coal supply to projects commissioned by year end and extending ten-year tax holiday to 2017.

The FM set aside Rs.500 crore for feeder separation to augment power supply to rural areas and for strengthening sub-transmission and distribution systems.

"The resources required for this, however, are far larger than budgeted, and this initial allocation should be used to attract domestic and multilateral funds," Kameswara Rao, Leader Energy, Utilities Mining, PwC India.

Import duty on coal was rationalised, a step welcomed by CESC Ltd chairman Sanjiv Goenka who said this would bring down costs at a time of poor domestic supplies and inability to power producers to pass on additional costs to consumers.

Goenka however rued that the larger issue of viability of the energy sector including poor financial health of the state-run discoms wasn't addressed.

FDI in housing

Built-area clause for FDI 50k sq mt 20k sq mt

Capital $10mn $5mn

Exemption on built-up: Projects having 30% of cost reserved for affordable housing

On a platter

100 smart cities Rs.7,060 Cr

NHAI and state roads Rs.37,880 Cr

Inland transport project along Ganga Rs.4,200 Cr

Courtesy: DNA India

Union Budget 2014: Import duty on stainless steel up 7.5%, to help domestic firms

[Editor: Rohit Ferro-Tech Ltd's (Rs.12.64) much awaited 67 MW captive power plant (at its Jajpur unit, Odisha), is likely to come up by September, 2014--the scrip is already reacting to the positive news and is moving up, since the last couple days. Moreover, the CDR money has already started to flow, into the company, which is meeting working capital and other requirements. It is to be noted that the company earlier, went in for restructure of its loan portfolio. Besides, the company's Manganese alloys production facility of 100,000 mtpa with 6 nos. 9 MVA furnaces in Haldia, West Bengal is working fine. NONE of the company's plants are are CURRENTLY CLOSED according to my close sources--all are RUNNING. This is just a baseless rumour spread by some vested interest groups. In April 9, 2008, the company incorporated a wholly owned subsidiary in Singapore named SKP Overseas Pte Ltd and acquired economic interest in two coal mining companies in Indonesia with a reserve of 20 million tonnes of Thermal Coal and 5 million tonnes of Coking coal. Also, Rohit Ferro-Tech Ltd, started operations in the thermal coal mine during the year 2008-09. Today, the scrip hit the upper circuits at Rs.13.50, before closing at Rs.12.64; as the Sensex ended the day with a net loss of 348.40 points. 
On 11 July, 2014, Steel Guru writes: Import duty on flat rolled products of stainless steel hiked from 5% to 7.5% percent (Budget: 2014-15). 
Impact: Theoretically, price of imported flat rolled products of stainless steel will rise benefiting Indian flat rolled stainless steel producers and cost of end users of this type stainless steel would rise by about INR 4000 per tonne to INR 5000 per tonne considering current prices of about USD 3000 per tonne to USD 4000 per tonne for 304 and 316 grades respectively. But as major volumes of imports take place from South Korea and Japan, the impact of import duty hike would not be this extant due to FTAs. However, thousands of small users could be impacted due to some price rise in domestic market]

Photo: DDN

Thursday, July 10, 2014: New Delhi: In a major relief to domestic stainless steel industry, reeling under severe under- utilisation of capacity, the government Thursday increased import duty on flat-rolled products from 5 percent to 7.5 percent.

Presenting his maiden Budget, Finance Minister Arun Jaitley said this was done to provide an impetus to domestic stainless steel industry.

"The domestic stainless steel industry is presently suffering from severe under-utilisation of capacity.

"To give an impetus to the stainless steel industry, I propose to increase the basic customs duty on imported flat- rolled products of stainless steel from 5 percent to 7.5 percent," he said.

The domestic stainless industry has been facing a threat in the form of a sudden and immense surge in imports from various countries, especially China, primarily because of the current import duty which is considered to be on the lower side in comparison to other nations.

China has an average customs duty of 10 percent and Brazil, 14 percent.

Taking opportunity of lower customs duty, imports from these countries were on the rise in recent times.

India's imports of stainless steel surged to 307,226 tonnes in 2013-14 from 239,136 tonnes in 2011-12, reporting a growth of nearly 30 percent.

Domestic makers have been demanding 15 percent duty. They were also demanding removal of the basic customs duty on key raw materials and on scraps to ensure the domestic stainless steel industry can manifest itself as a globally competitor.

India now ranks as the third largest consumer and producer of stainless steel.

Industry sources said country's stainless steel consumption was expected to grow at 8-9 per annum annually to reach around 3.5 million tonnes by 2015. 

Courtesy: Zeebiz

Fingers crossed for early resumption of mining

[Editor: The resumption of mining in Goa, will have sentimental effect on two of my recommended counters, viz. Resurgere Mines and Minerals Ltd (Rs.2.20) and Western India Shipyard Ltd (Rs.2.45). The former is a pure mining company, which is expected to start mining in Mahalmiriya (Bauxite) Mines in Maharashtra, post monsoon. It has already got approval for the same from the authorities, but got struck-up due to some problem in the lease agreement. While later would get benefited, as more ships will start taking ores from Mormugao Port, Goa. After repair, the ships do not generally want to go empty. Western India Shipyard Ltd (WISL) is strategically located at Mormugao Port Goa along the west coast of India. WISL repairs vessels such as cargo vessels, passenger vessels, transhippers, dredgers, coast gaurd / Naval vessels, barges, tugs, OSV'S, tankers and deepwater oil rigs. Its clients include: Chowgule Steamship Ld, Varun Shipping Ltd, Reliance Industries Ltd, SCI Ltd, Navy, Coast Guard, PFS Shipping, Transocean, Nobel Sedco Forex, Jindal Drilling, Aban Offshore, ONGC, etc. In the Budget 2014-15, the outlay for defense was hiked over the previous year. The Company hopes that repair of naval vessels will continue to be given priority in view need for extensive repair and modernization of the naval fleet in the coming years. Moreover, as a subsidiary of ABG Shipyard Limited, it enjoys continuous access to technical, marketing and financial support from ABG Shipyard Limited, who is an established market leader in the Shipbuilding Industry]

Abg shipyard, Dahej
Photo: Icon Ven

PANAJI, Jul 11, 2014:  The beleaguered mining industry in Goa hopes that mining activity will soon resume in the state as Union finance minister Arun Jaitley said that the current impasse in the mining sector, including, iron ore mining, will be resolved expeditiously.

"It is my government's intention to encourage investment in mining sector and promote sustainable mining practices to adequately meet the requirements of industry without sacrificing environmental concerns. The current impasse in the mining sector, including, iron ore mining, will be resolved expeditiously. Changes, if necessary, in the MMDR Act, 1957, would be introduced to facilitate this," Jaitley said.

Reacting to the budget speech, S Sridhar, executive director of the Goa Mineral Ore Exporters' Association (GMOEA), said that the GMOEA is hopeful of mining resuming.

Sridhar also said that the government intends to make changes in the MMDR Act and the GMOEA has to wait till it comes out. "We are waiting for the state government mining police and renewal of mining leases as soon as possible," he added

Jaitley also said, "There have been requests from several state governments to revise the rate of royalty on minerals. Members are aware that the rate of royalty can be revised after a period of three years. The last revision took place in August, 2009. Therefore, another revision, which is due, will be undertaken to ensure greater revenue to state governments."

Goa mining came to a halt in September 2012, since then the state's mining industry has been living in hope of an early resumption of mining activities.

Courtesy: The Times of India

Ban-hit Goa mining industry sees ray of hope in Budget

Time is running out for Mr.Manohar Parrikar 
Photo: Hindustan Times

Friday, July 11, 2014: Panaji: Goa's beleaguered mining industry on Thursday said certain proposals in the Union Budget are expected to help the resumption of iron ore extraction, which had been stalled in the State since the last two years.

Finance Minister Arun Jaitley, in his maiden Budget speech, proposed to expeditiously resolve the "current impasse" in mining industry to encourage investment and bridge supply-demand gap.

He proposed to revise royalty rates on minerals which would help swell the coffers of States and make changes, if necessary, in the Mines and Minerals (Development & Regulation) Amendment Act (MMDRA) to facilitate to encourage investment and promote sustainable mining practices.

"We hope necessary amendments are done in the MMRD Act so that mining operations resume at the earliest and existing ambiguities are removed," Glenn Kalavampara, Goa Mineral Ore Exporters Association (GMOEA) Secretary, told PTI, reacting to the Budget.

"It's correct decision to amend the MMRD Act. At present there is a lot of ambiguity due to multiple interpretation of the Act. The amendment will help the entire mining sector in the country," Kalavampara said.

Asked about the revision of royalty rates, he said stakeholders should be taken into confidence before moving ahead on this front as the current rates of taxes paid by the mining industry are high.

India's mining sector, particularly extraction of iron ore - the steel-making raw material - was affected after the Supreme Court imposed a ban in Karnataka and Goa on allegations of illegal mining.

The SC had banned iron ore mining in Karnataka in July-August 2011, and in Goa in October 2012 and it was lifted early this year with a cap on production.

As a result of the ban, both production and exports of iron ore fell drastically. 

Courtesy: Zee News India

FIIs' and DIIs' Trading Activity 

Today, customary selling after Infosys Ltd's Quarterly Results is going on. Also, some people are booking profits before the weekend. Nifty is now at 7514 and Sensex at 25232. The markets are expected to recover, by the end of the day, as Mr.Arun Jaitley's budget--2014-15 was more or less satisfactory, with no big bang reforms. 

However, that does not mean that the NDA government would not continue with policy reforms--the announcements can come up at any time. Some sectors like Ferro-alloys, Steel, Shipping, Mining, etc, could shine in the coming days. 

Also, the Finance Minister announced to increase export duty on bauxite from 10% to 20%, which is ill conceived and will damage the domestic mining sector. According to RK Sharma, Secretary General, Federation of Indian Mineral Industries, or FIMI: “At present, most of the bauxite that is exported from India comes from Gujarat and Maharashtra. These are not required in India as these are refractory grade bauxite and are not used by the aluminium makers in the country,” he says. “Now, these bauxite reserves will lie around unused". The government should immediately roll back this decision, so that domestic interests are protected. 

Pre-Session:Market may edge higher in early trade

11-Jul-14: Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 14 points at the opening bell. IT major, Infosys announces Q1 results today, 11 July 2014.

The Reserve Bank of India has on Thursday, 10 July 2014, notified that shares of Kotak Mahindra Bank can now be purchased through primary market and stock exchanges by Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) as the restrictions placed on the purchase of shares of the above company was withdrawn with immediate effect after the share holdings by FIIs/RFPIs under Portfolio Investment Scheme in Kotak Mahindra Bank have gone below the prescribed threshold limit stipulated under the extant FDI Policy. The Reserve Bank has also notified that all the approvals received against the said scrip are duly cancelled.

GMR Infrastructure said after market hours on Thursday, 10 July 2014, the Management Committee of the Board of Directors of the company has, at its meeting held on 10 July 2014, approved the issue and allotment of 46.88 crore shares to eligible qualified institutional buyers at the issue price of Rs 31.50 per share which is at a discount of Rs 1.64 per share on the floor price of Rs 33.14 per share, aggregating to approximately Rs 1476.77 crore.

Shree Cement will be watched. With reference to the earlier announcement dated 1 July 2014, regarding the commissioning of 2 million Tons Per Annum (MTPA) capacity Grinding Unit at Aurangabad in Bihar on 30 June 2014, Shree Cement has now informed that the commercial production from the said Grinding Unit has started from 9 July 2014.

Exide Industries turns ex-dividend today, 11 July 2014, for dividend of Rs 0.70 per share for the year ending March 2014.

Jindal Steel & Power turns ex-dividend today, 11 July 2014, for dividend of Rs 1.50 per share for the year ending March 2014.

JSW Energy turns ex-dividend today, 11 July 2014, for dividend of Rs 2 per share for the year ending March 2014.

IL&FS Engineering and Construction Company bagged an EPC contract from Indian Strategic Petroleum Reserves (ISPRL), Ministry of Petroleum and Natural Gas, Government of India, for laying of pipeline from Land Fall Point (LFP), Mangalore Port to Mangalore/Padur Cavern via Intermediate Valve Station (IVS) for storage of crude oil project.

The total length of the Project is 50 kilometres. The total value of the contract is Rs 213 crore. It is to be completed within 15 months from the date of issue of LOA.

The company is currently executing Halol Dahod Pipeline Project of Gujarat State Petronet (GSPL) on EPC basis.

Further, the company is also executing two Oil & Gas projects - one involves construction of 15 storage tanks having a total storage capacity of 0.85 million tons at Fujairah, UAE, and the other consists of laying 6 pipelines from the IPTF Terminal at Fujairah to the Port of Fujairah for evacuation of white oil and black oil products, IL&FS Engineering and Construction Company said in a statement.

Astral Poly Technik said that its board will meet on 18 July 2014, to consider raising long term funds.

Industrial output is seen rising 3.8% in May higher than 3.4% in April, as per the median estimates of a poll of economists carried out by Capital Market. The government will unveil industrial production data for May 2014 today, 11 May 2014.

Indian stocks edged lower after witnessing immense intraday volatility on Thursday, 10 July 2014, after Finance Minster Arun Jaitley made a number of announcements in Union Budget 2014-15 such as a proposal to increase in foreign direct investment in insurance and defence manufacturing, a sharp increase in plan expenditure, measures to boost long term financing for infrastructure by banks and provided clarity on taxation with respect to foreign portfolio investors.

Market expectations that the Finance Minster would scrap the law on retrospective taxation were not met. The S&P BSE Sensex fell 72.06 points or 0.28% to settle at 25,372.75 on that day, its lowest closing level since 27 June 2014.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 161.55 crore on Thursday, 10 July 2014, as per provisional data from the stock exchanges.

Asian stocks rose in choppy trade on Friday, 11 July 2014. Key benchmark indices in China, Taiwan, Hong Kong, and Singapore were up 0.14% to 0.56%. Key benchmark indices in Indonesia, South Korea and Japan fell 0.26% to 0.63%.

US stocks fell on Thursday, 10 July 2014, on concerns that trouble at a European bank might spread,

European bonds tumbled on Thursday after a parent of Portugal's No. 2 lender missed a debt payment. Shares of Banco Espirito Santo were suspended yesterday after sliding more than 17 percent, while its bonds sank to record lows even as Portugal's central bank said it can avoid contagion risks. Espirito Santo International missed payments on commercial paper to “a few clients,” according to a July 8 statement. The company is the biggest shareholder of Espirito Santo Financial Group, which owns 25% of the bank. Trading in ESFG shares and debt was also halted yesterday.

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