Wednesday, September 28, 2005

Sebi action against promoters sends IFSL reeling


IFSL plunged 10% to Rs 24.35 – the lowest permissible level of the day -
after Sebi banned the promoters of the company from trading in their own
shares.

1.5 lakh shares were traded in the counter on BSE. There were huge
outstanding sell orders aggregating 61.63 lakh shares at the lower circuit
of 10% in the stock on BSE.

Sebi’s order on IFSL's promoters followed the regulator’s preliminary
investigation into the movement of the stock. There was a sharp surge in
trading volume in the stock during mid-August 2005 to mid-September 2005.
"What was intriguing was the coincidence of this spurt with the trading by
the promoters through off-market transactions as well as by entities to whom
they transferred nearly 12% of the total share capital," a Sebi statement
said.

The Sebi order on IFSL also asked a number of stock brokers including
Indiabulls Securities, India Infoline Securities, Joindre Capital Services,
and Fortis Securities not to buy, sell or deal in securities of IFSL on
behalf of the promoters and directors.

Besides IFSL, Sebi has also barred the promoters of Minal Engineering from
dealing in the capital market.

Escorts may gain further ground on sale of stake in a hospital


Escorts may gain further ground on reports that it has sold equity stake in
Escorts Heart Institute and Research Centre (EHIRC) to Ranbaxy controlled
Fortis Healthcare for Rs 585 crore. The transaction will help debt-ridden
Escorts Group which was in the process of business restructuring, to
overcome its liquidity crunch and debt repayment problem. At present Escorts
has debts of around Rs 1,000 crore. The Escorts scrip jumped 8.3% on BSE on
Wednesday to Rs 107.70 amid speculation about the sell-off. The stock rose
on high volume of 17.2 lakh shares.

Reliance Industries may slip after the company denied media reports that it
may consider a stock split.

Bharti Tele-Ventures (BTL) and ICICI Bank may lose ground after Reserve Bank
of India banned fresh FII buying in shares of these two companies as they
had reached their respective FII investment ceilings. Ahead of the news, BTL
scrip fell 0.5% on BSE on Wednesday to Rs 344.25 rupees and ICICI Bank rose
1.9% to Rs 599.05.

Bajaj Auto may see action on reports that it expects to sell more than
200,000 two-wheeler and three-wheeler vehicles in September 2005.

Bharat Forge and Mahindra & Mahindra (M&M) may see action on media reports
that these two companies are considering bidding for acquiring the light
vehicle aftermarket (LVA) business of US based Arvin-Meritor. Last year,
Arvin-Meritor announced plans to divest LVA and coil coating businesses. It
had subsequently sold off its coil coating business to an affiliate of
Willis Stein & Partners. The LVA business has sales of around $ 800 million.

Sensex streaks past 8,600-mark as global markets rule firm, oil prices drop


The Sensex came out strong today following a late uptrend in a host of
stocks including index heavyweight Reliance Industries (RIL). RIL, in fact,
hit the Rs 800-mark today for the first time in its history, and the Sensex
rose above the 8,600-mark for the first time ever.

A drop in global crude oil prices and firmness in select Asian markets like
Japan and South Korea and European markets like the UK, Germany and France,
boosted local blue chips. US light crude dipped 33 cents to $ 64.74 a barrel
on concerns that crude demand will be dampened by the continued shutdown of
hurricane-hit US refineries.

The Sensex jumped 80.51 points or 0.9% to 8,606.03 – a lifetime closing
high. The S&P CNX Nifty surged 23.20 points or 0.9% to an all time closing
high of 2,598.05

A number of index heavyweights besides RIL, like ONGC, HDFC, ICICI Bank and
State Bank of India firmed up. Stocks like ONGC, L&T, Hero Honda, and NTPC
hit all time highs. FMCG major Hindustan Lever (HLL) scaled a 52-week high
following a late surge in the stock.

Software major TCS surged in late trading after it bagged a major Rs 1,000
crore order from another Tata Group company, Tata Teleservices. Other
software pivotals like Satyam Computer and Infosys recovered from the lower
level after an initial fall.

Select side counters surged. Stocks like Bharat Earth Movers (BEML), Agro
Tech Foods, Ansal Properties, Gati, McDowell, PSL, Mercator Lines, SREI
Infrastructure Finance, Escorts, Voltas, Crompton Greaves, GTC Industries,
and Hindustan Construction rose between 6% to 11% for the day.

Himachal Futuristic Communications (HFCL) surged on huge volume.

The market breadth was weak as a host of small-cap and mid-cap stocks
slipped on profit taking. 1,655 stocks declined on BSE as compared to 905
stocks that rose. 46 stocks were unchanged. Losers outpaced gainers by a
ratio of 1.8:1 on BSE.

ONGC surged 3.6% to Rs 1,079.50. High global crude oil prices supported the
stock.

Housing finance major HDFC jumped 3.5% to Rs 1,036.

A strong order flow and healthy order book triggered renewed buying in L&T.
The stock gained 2.8% Rs 1,481.

NTPC advanced 2.7% to Rs 108.75. 15.3 lakh shares changed hands in the
counter on BSE.

HLL rose 2.6% to Rs 185.50. The stock rose on high volume of 11.6 lakh
shares. The scrip has surged in the past few days on renewed buying due to
positive outlook for the FMCG sector.

RIL rose nearly 2% to Rs 802.75. 32 lakh shares changed hands in the counter
on BSE. RIL has been at the forefront of Sensex’s solid surge in the past
few days, it being a heavyweight in the barometer index.

Bike major Hero Honda gained 2% to Rs 727

Bank stocks firmed up further. ICICI Bank rose 1.5% to Rs 597, HDFC Bank
gained 1.5% to Rs 691 and State Bank of India gained 0.6% to Rs 934.

Liberty Shoes takes a stride on shareholders' assent for liberal bonus issue


Liberty Shoes is currently up 2.1% to Rs 625.40 on volumes of 41,474 shares.

The stock indicated volatility today, swinging in the range of Rs 615 and Rs
642 so far on BSE.

The stock has had a dream run, advancing four-fold in 3 months from the
close of Rs 155.60 on 24 June 2005 to Rs 643 on 21 September 2005.

Liberty Shoes today informed BSE that its members have passed a resolution
for the issue of bonus shares in the ratio of 1:1, i.e. one bonus share for
every equity share held.

This is the company's maiden bonus issue. The lastest paid-up share capital
of the company is Rs 5.07 crore.

Earlier, Liberty Shoes forged a joint venture with Pantaloon Retail.
Pantaloon Retail will take up a majority 51% stake in the new joint venture
retailing firm and Liberty Shoes will account for 49% stake. Pantaloon's
contribution to the equity will be Rs 12.75 crore, while that of Liberty
will be Rs 12.25 crore.

Liberty Shoes (LSL) had already turned aggressive in footwear retailing in
recent years to tap the retail boom, along with its subsidiary Liberty
Retails Revolutions (LRRL). Currently, LRRL owns 11 stores throughout India.
The company has planned to increase its retail presence from the existing 11
stores to 39 stores by FY 2006.

Liberty Shoes makes about 40,000 shoes a day, including 5,000 high-end
shoes. It is engaged in the business of manufacturing and selling leather
and non-leather shoes, leather shoe uppers and leather garments.

For Q1 June 2005, the company reported a 144.8% growth in Q1 June 2005 net
profit to Rs 4.53 crore (Rs 1.85 crore). Net sales have risen 14.5% to Rs
48.45 crore from Rs 42.28 crore.

Talbros Automotive stays flat


Talbros Automotive is currently flat at Rs 115.50 on volumes of 7.46 lakh
shares.

At this level, volumes on the counter were at an all-time high.

The day's range so far was Rs 109.85 and Rs 117.70 so far on BSE.

Talbros Automotive’s recent allotment of 49.02 lakh shares (second public
offer) hit the market today, and were admitted to trading.

The stock has drifted from the close of Rs 145.65 on 13 September 2005 to Rs
115.60 yesterday.

Talbros Automotive came out with a public issue with a face value of Rs 10
each for cash at a premium, aggregating Rs 50 crore, through the 100%
book-building process. The price band was Rs 90-Rs 102. Later, the IPO price
was fixed at Rs 102 per share.

The issue opened on 1 September 2005 and closed on 7 September 2005. The
company’s IPO received strong response, especially from Foreign
Institutional Investors (FIIs). FIIs bid for a total of 1.86 crore shares as
against a total of 26.3 lakh shares reserved for the qualified institutional
investors' category as a whole. Domestic financial institutions and mutual
funds, too, bid aggressively in the offer.

Meanwhile, the stock traded in a range of Rs 138.40 and Rs 133.25 from 1
September to 7 September 2005 in the secondary market.

Talbros Automotive is a market leader in the field of manufacturing of
gaskets in India, having around 50% of the market share. The company
supplies gaskets to OEM customers like Tata Motors, Tata Cummins, Hero
Honda, Eicher Motors, Hindustan Motors, Hyundai, Ashok Leyland, Bajaj Tempo,
Swaraj Mazda, Mahindra & Mahindra, Escorts, New Holland, John Deere, Punjab
Tractors, Tafe, Eicher Veltra, LML, and Royal Enfield among others.

For the quarter ended 30 June 2005, the company posted a 156% jump in net
profit to Rs 1.59 crore on net sales of Rs 29.10 crore. Net sales increased
by 30.43%.

Time for gains for HMT following reports of JV proposal with Mitsubishi


HMT is currently trading higher by 5.8% to Rs 94.10 on volumes of 31.29 lakh
shares.

The day's trading range on the counter so far was Rs 89.80 and Rs 97.80 on
BSE.

From the close of Rs 45.15 on 11 July 2005, the counter surged to Rs 92.10
on 11 August 2005.

The HMT stock is back in the limelight over the past few days, having
appreciated from Rs 73.20 on 23 September to Rs 88.95 yesterday, on
expectations of some key announcement from the company.

State-owned Hindustan Machine Tools Ltd (HMT) jumped today on reports that
the company is likely to enter into a joint venture with Japanese automaker
Mitsubishi to manufacture multi-utility vehicles (MUV) 'any time' now. The
two companies have been in advanced talks, as per media reports.

HMT has been scouting for a JV partner for its proposed MUV foray since its
move to roll out vehicles on its own was shelved following the poor show of
its indigenously-developed MUV prototype Garuda. Union minister for heavy
industries Santosh Mohan Dev had recently went on record saying that HMT is
looking for a tie-up with a Japanese company to manufacture a vehicle that
could work on the farm and also transport a small number of people.

Regarding the Mitsubishi tie-up, talks are at a preliminary stage, and it
has not yet been decided whether the talks would fructify in a JV or a
technical collaboration. Lately, a team from HMT visited Mitsubishi's
headquarters in Japan, and a return visit by Mitsubishi officials to the
Pinjore unit is expected shortly.

HMT, which is a diversified PSU, achieved a turnaround in FY 2005 mainly on
the back of growth in its machine tools and tractor segments. The company
recently introduced a low-power tractor, priced at around Rs 1.25 lakh,
which has done well in the market so far.

The company, incorporated in 1953 by the central government as a machine
tools manufacturer, has over the years diversified into watches, tractors,
printing machinery, metal forming presses, die casting and plastic
processing machinery, CNC systems and bearings.

For the quarter ended 30 June 2005, the company posted a lower net loss of
Rs 1.56 crore (net loss of Rs 15.51 crore). Net sales increased 14.39% to Rs
49.04 crore (Rs 42.87 crore).

Approval for expansion plan sets Kanoria Chemicals racing up


Kanoria Chemicals treaded higher by 5.5% to Rs 138.90 on volumes of 83,053
shares.

The stock has rallied from Rs 120.65 on 22 September 2005 to Rs 131.45
yesterday.

Kanoria Chemicals edged higher after the company said that its board has
approved setting up a 110 tonnes per day (TPD) membrane cell based
chlor-alkali plant with simultaneous expansion in various other chlorinated
derivatives at its Renukoot works. The company has decided to raise funds
through the issue of securities, including FCCBs, up to a maximum of Rs 120
crore.

Kanoria Chemicals, a manufacturer of chemical intermediates, had in March
this year, signed a unique power purchase agreement with Power Trading
Corporation (PTC) to supply 10 MW surplus power from its coal-based thermal
power plant at the integrated chlor-alkali manufacturing facility at
Renukoot, Uttar Pradesh. The company will sell its surplus power to PTC.

For the quarter ended June 2005, the company posted a 230% jump in net
profit to Rs 10.05 crore (Rs 3.05 crore). Net sales increased 18% to Rs
74.42 crore (Rs 63.06 crore).

Eveready Industries rises on proposed premises sale


Eveready Industries is currently up 1.6% to Rs 132.40 on huge volumes of
10.36 lakh shares.

The day's trading range so far was Rs 131.50 and Rs 137.45 on BSE.

The stock has jumped 21% from Rs 108.55 to Rs 130.35 on 27 September 2005
(in just 3 trading sessions).

Eveready Industries’ board of directors plans to pre-sell the company’s
entitlement of approximately 2,20,000 sq.ft. of built-up area in the
building complex to be developed as an information technology park on the
company's land at Guindy near Chennai, in accordance with a development
agreement with Khivraj Tech Park Pvt Ltd (KTPL). Eveready Industries today
informed BSE that an understanding has been reached between the company and
KTPL for the sale of the above mentioned entitlement of 2,20,000 sq.ft of
built up area to KTPL for a consideration of Rs 72 crore which will be paid
in tranches - Rs 15 crore on up front basis while the balance of Rs 57 crore
will be paid by 31 March 2006 upon execution of a formal agreement of sale.

Eveready Industries added that it has already received Rs 51 lakh as earnest
money from KTPL to substantiate the expression of interest of KTPL in the
proposed sale.

Eveready Industries last week entered into a Memorandum of Understanding
(MoU) with BPL for acquisition of 4.90 crore equity shares of Rs 10 each,
representing the entire paid-up share capital of BPL Soft Energy Systems
(BSESL) from BPL and its associates for a gross consideration of Rs 67
crore.

Eveready’s current production is in the region of 1.2 billion batteries
while that of BSESL is 240 million pieces of dry cell batteries per annum.
The current market share of BSESL is estimated at about 10% of the dry cell
battery market.

BM Khaitan group company, Eveready Industries, is a market leader in the dry
cell batteries and flashlights segment in the country. The products of the
company are marketed under the brand name ‘Eveready’. The company’s
portfolio spread includes carbon zinc batteries, rechargeable batteries,
alkaline batteries and flashlights.

For the quarter ended 30 June 2005, Eveready came out with turnaround
results. Net profit amounted to Rs 6.3 crore in the Q1 ended June 2005 and
net sales rose 8.47% to Rs 188.29 crore.

Stock exchanges' move to suspend trading in the scrip sinks SBI Home Finance


SBI Home Finance plunged 5% to Rs 18.70 – the lowest permissible level of
the day - after the stock exchanges took a decision to suspend trading in
the scrip.

19,060 shares changed hands in the counter on BSE. The stock is traded in
the `trade to trade’ segment on the bourses.

NSE and BSE will suspend trading in the scrip from 5 October 2005. According
to an NSE circular, the suspension is because the SBI Home Finance is no
more functional. In a reply to a query from NSE regarding its operations and
financials, SBI Home Finance had replied to the bourses that its operations
have come to a standstill. In view of the continued losses and complete
erosion of its net worth, the company closed down all its branches,
separated all its employees voluntarily, disposed off its assets and paid
off public deposits and the company is no longer a “going concern”, SBI Home
Finance had informed NSE.

SBI Home Finance has been incurring losses for the past several years, its
net owned fund is negative to the extent of a huge Rs 250.66 crore (as on 31
March 2005).

It may be recalled that, only recently, the National Housing Bank had
cancelled the certificate of registration issued to the company. The company
has been incurring losses for the past several years, mainly on account of
high non-performing assets.

It may be recalled that housing finance major HDFC had acquired a 20% stake
in SBI Home Finance which was originally promoted as Housing Finance
Promotional Company nearly 16 years back. The company was renamed SBI Home
Finance after State Bank of India increased its stake in the company to 26%
following a rights issue where HDFC relinquished its entitlement. Last year,
HDFC sold out its entire 14% remaining stake in SBI Home Finance.

Hanil Era rose 5% to Rs 58.05 on volumes of 47267 shares


The stock jumped 15% in the last 3 days as marketmen must have got some clue
of that export order coming to the company.

Hanil Era Textiles extended its rally after it announced winning an export
order worth Rs 30 crore. This new order has come from its existing client
and the company expects more exports orders from new markets in future.

Hanil Era Textiles entered the home furnishing segment comprising bedsets,
curtains, table linen, etc. It has partially commenced fabric production at
its new weaving capacity with the installation of 36 looms.

Hanil Era, is a 100% export-oriented unit (EOU) and is one of the largest
acrylic yarn exporters in the country. It manufactures and exports acrylic,
cotton, viscose and blended yarns in varying textures, blends and counts.

For Q1 ended June 2005, Hanil Era's net profit slipped 13% to Rs 3.75 crore
compared to Rs 4.31 crore in Q1 June 2005. Net sales declined 6.84% to Rs
24.23 crore (Rs 26.01 crore).

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