Micro Tech ties up with S Africa based TWI intl for marketing of vehicular security solutions, expects sales at Rs 150 Cr, PAT at 30% for FY08

Micro Tech has tied up with South Africa based TWI international for marketing of vehicular security solutions. P Sekhar, CMD, Micro Technologies India said it is a strategic agreement with TWI to market Micro VBB to South Africa. In South Africa this is suppose to be more than Rs 2000 crore market. We expect to capture 2-3% of the market in 1st year itself.

The company has approved issue of securities worth $ 20 million. The board has also approved preferential issue of up to Rs 35 crore to investor & promoters. Besides, the board has approved hike in FII limit to 49% and hike in borrowing limits to Rs 150 crore.

Regarding this, Sekhar said currently FII holding in the company is at 18%. FCCB issue will make it 38%, so we approved expanding it to 49%. For FY08, we are fairly confident to touch sales of Rs 150 with PAT at 28-30%.

Going forward, we are not going to concentrate in South Africa, rather we are going to concentrate on US. Some announcement is likely to come soon from US. in FY08, we expect US to play major role in last quarter and then it would be more after than, Sekhar added.


ICICI FPO subscribed 9.47 times

ICICI Bank FPO has been subscribed by 9.47 times untill now.

Earlier, it was subscribed by 5.18 times by the end of 21st june.

The bifurcation of these subscriptions is as follows:

Qualified Institutional Buyers: 10.38 times
Foreign Institutional Investors: 7.98 times
Mutual Funds: 0.24 times
Non-Institutional: 1.50 times
Corporates: 1.20 times
Individual: 0.30 times
Retail Investors: 0.10 times


Educomp Solution raises $ 80 mln via FCCB at conversion price of Rs 2949.83/share.

The company says that the funds raised will be used to utilise the capex plans of Educomp. None of the money is going to be used for funding the acquisition of Ask 'n' Learn. That was completely funded before they decided and we successfully closed this bond issue. The utilisation of this bond is mainly to fund Educomp capex or Educomp’s core business. Educomp’s core business is setting up computers, digitally enabled learning centre and schools both private and government.

For FY 08, the company is seeing excellent traction. By end FY08, 7,000 government schools were guided to be added by the management and out of that already 5,600 schools have been achieved. The company has plans to go through both the organic and inorganic route.


RCmm got approval for SEZ from BOA

Reliance Communication has got an approval for SEZ from Board of Approval. It will be based out of Dhirubhai Ambani Knowledge Center. They are having clients like Alcatel, Lucent which are anchor clients.


Hotel Leela: To be adding 105 rooms in Bangalore property, no decision for sale of Leela Laces yet

Management of the Hotel Leela Venture said there is buoyancy in the market. Both Mumbai and Bangalore markets are showing better growth. We are adding 105 more rooms in our Bangalore property. We are doing this because operating profit margins from Bangalore are highest and also the average room rates are highest there. Mumbai also has good margins.

Nothing has been finalised so far regarding Hotel Laces. We have not come to a decision for sale of Leela Laces. There is a possibility that the non-core business could be hived off, the management added.


Jindal Steel to ink final Bolivia pact early July

Jindal Steel & Power expects to sign a final pact with the Bolivian government by early next month to develop the El Mutun iron and steel project in the south American country, a senior company executive said Friday, according to the Dow Jones News Wires. "We are in the final chapter of our discussions with the Bolivian government...we are very close to signing the pact, its difficult to put a date to it but it would be definitely by early July," Director-Finance, Sushil Maroo said.

Once the pact is signed, Jindal Steel will need approval from Bolivia"s parliament to start the project, Maroo said. "We expect the parliament approval would take around two months," he added. The Bolivian government had given Jindal Steel a contract to develop El Mutun in June 2006, but continued negotiations delayed final approval.


Govt may sign 1st set of agreement for Tea Fund on Monday; McLeod Russel, Apeejay, Tata Tea have applied for special Tea Fund

The government may sign the 1st set of agreement for Tea Fund on Monday, reports NW 18. McLeod Russel, Apeejay, Tata Tea have applied for special Tea Fund.

Kamal Behti of Mcleod Russel says that 50% of the total funding will be given as subsidy. The company will be applying for Rs 5.5 crore from the fund. speaking on tea prices, Behti says that the domestic prices have firmed up in the last couple of weeks. The export prices on dollar terms are taking a hit due to dollar appreciation. The company adds that they will be looking at acquisition going forward.


Rico Auto flares up; Stock up since signing equal JV with Continental AG, First phase to generate sales of Rs 165 Cr

Rico Auto has touched an intra day high of Rs 45.50 and an intra day low of Rs 42.50. Currently, the share is quoting at Rs 45.10, up Rs 3.10, or 7.38%. It is trading with volumes of 294,067 shares, compared to its 5-day average of 177,887 shares, an increase of 65.31%. Yesterday the share closed up 3.07% or Rs 1.25 at Rs 42.00

International automotive supplier Continental AG, for its Automotive Systems Division, has signed a Joint Venture Agreement with RICO Auto Industries Limited, India to build a hydraulic brake systems plant in India in a two step approach generating sales of € 30 million (Rs 165 Crores) in a first phase. The joint venture will be a 50/50 partnership between the two companies. Continental Automotive Systems will have the management lead. The plant will begin mass production of hydraulic brake systems in 4th quarter of 2008, with employment of around 450 staff in Gurgaon near New Delhi. On completion of 2nd phase the plant will have annual turnover of € 65 millions (Rs. 357.5 Crores) and would be employing 625 persons.

When construction is completed in 2008, the plant will produce hydraulic brake products and services consisting of calipers for front and rear axles, drum brakes, master cylinders, brake boosters and load sensing proportioning valves for vehicles of all classes, and supplying to OEM customers in India. The planned annual production capacity is 1.0 million of brake actuation units and 2.0 million of brake calipers, 1.5 million drum brakes and 0.5 million load sensing proportioning valves.

RICO, a US$ 250 million group is a well known name in the Indian automotive industry. With one of the biggest ferrous & aluminum casting & machining facilities in the country, RICO is one of the major suppliers of machined components and assemblies to Indian & global OEM’s.

The Continental Corporation is a leading automotive supplier of brake systems, chassis components, vehicle electronics, tires and technical elastomers. In 2006 the corporation realized sales of EUR14.9 billion. It has a worldwide workforce of around 87,000.

The Automotive Systems Division of Continental AG integrates extensive know-how and uncompromising quality in the fields of active and passive driving safety, embedded telematics and hands-free communication systems, powertrain and comfort. In 2006 the Division achieved sales of approx. EUR6 billion with a workforce of more than 30,000. Continental Automotive Systems develops and produces electronic and hydraulic brake, stability and chassis control systems, electronic air suspension systems, sensors, engine management and transmission control systems, hybrid drives, cooling fan modules, body and security electronics and also is the industry leader of embedded telematics and communication systems in vehicles.


Bank of India to acquire 76% stake in PT Bank Swadesi in Indonesia

Bank of India has signed the Acquisition Deed for acquiring 76% stake in M/s. PT Bank Swadesi, Indonesia. Bank Swadesi is a well run mid sized operating in Indonesia for last 38 years and has 16 outlets. Bank Swadesi has a licence to Forex Business and is listed on the Jakarta Stock Exchange.


Hindustan Dorr Oliver stuck in upper circuit; Mutual Funds pick up 6.6 lakh shares @ Rs 106.30

Hindustan Dorr Oliver is stuck in upper circuit of 5%. The stock is currently trading at Rs 111.60, up Rs 5.30. It is trading with volumes of 78,670 shares. Yesterday, Birla MF bought 4.70 lakh shares @ Rs106.3/sh and Sundaram MF bought 1.90 lakh shares @ Rs 106.3/sh

Hindustan Dorr Oliver, owned by IVRCL group, recently bagged order worth Rs85 crore from Indian Oil Corporation for the oil major's recycling plant at its refinery in Haldia. The project is to be commissioned within 18 months. Indian Oil's Haldia recycling plant uses the reverse osmosis technology and is supposed to be the biggest refinery using this technology in India.

Investment advisor S P Tulsian says that he would not be surprised if the EPS exceeds beyond Rs 7 for FY08. "If you take the perception and valuation call for these type of companies that carry a very high P/E multiple, in some cases even exceeding Rs 20. The share is now available on a forward earning of about maybe 14-15 P/E multiple, I see this still has the room left for appreciation, one should remain invested definitely a clear buy call even at these levels,"

Hindustan Dorr Oliver is a energy solution provider for water-water solutions, pulp and paper, refinery and they have been getting regular orders from HP, BP, IOC, Reliance many other companies. Earlier this used to be a Chabaria Group company and post acquisition IVRCL, they have been consistently improving their quarterly performance, for FY07, the EPS was around Rs 4.50, which will sharply improve in FY08, Tulsian adds


Gayatri Projects bags 2 orders worth Rs 880 Cr along with Maytas Infra

Gayatri Projects has secured two new orders along with Maytas Infra under Consortium (MAYTAS-GAYATRI CONSORTIUM) under SOT (Annuity) with a Total Projects Cost of Rs 880 crore. Both the company and Maytas Infra will have a share of 50% each.

Both the projects are from Chief General Manager (Tech), Hyderabad Growth Corridor, Hyderabad. First one is for design, Construction, Development, Finance, Operation and Maintenance of Eight lane access controlled expressway under Phase - II A Programme as on extension of Phase - I of ORR to Hyderabad, Andhra Pradesh, India for the Package from Kollur to Patancheru from KM 12 to KM 23.70 (Project No.ORR/PH-IIA/BOT/AP-2) on Build, Operate and Transfer (BOT) (Annuity) Basis. Value of work is Rs 464.00 crore.

Second project is to design, Construction, Development, Finance, Operation and Maintenance of Eight lane access controlled expressway under Phase - II A Programme as on extension of Phase - I of ORR to Hyderabad, Andhra Pradesh, India for the Package from Bongulur to Tukkuguda from KM 108.00 to KM 121.00 (Project No.ORR/PH-IIA/BOT/AP-4) on Build, Operate and Transfer (BOT) (Annuity) Basis. Value of work is Rs 416.00 crores.

Both the projects are worth Rs 880 crore.



Indo Asian Fusegear board meet on June 28 to consider GDS/ADS/FCCB issue up to $ 50 m

Indo Asian Fusegear has informed the BSE that a meeting of the board of directors of the company will be held on June 28, 2007, inter alia, to:

1. Consider and approve the Audited Financial Results for the year ended March 31, 2007.

2. Consider raising of funds for the Company's plans for expansion, modernization, acquisitions, capital expenditure, other corporate purposes etc through issue, offer and allotment by way of Private Placement of equity shares and / or Global Depository Shares ("GDSs") and / or American Depository Shares ("ADSs") against the issue of underlying shares and / or Foreign Currency Convertible Bonds ("FCCBs") convertible at the option of the holder into equity shares and / or GDSs, or other securities aggregating upto USD 50 million subject to approval of shareholders to resident or foreign institutional investors and such other persons resident outside India / Companies / individuals as may be permitted under applicable law and policy whether or not they are members of the Company in such form as may be decided and in one or more tranches or as may be deemed appropriate.



Rain group plans Rs 300 cr cement expansion mode

The Hyderabad-based Rain Group, which has recently bought, through group company Rain Calcining, the world’s second largest calcined petroleum coke (CPC) producer CII Carbon Llc. for $ 595 million (Rs 2,440 crore), is planning to expand its cement operations at a cost of Rs300 crore.

The Rs 1,200-crore Rain Group, which nearly tripled its sales after the CII Carbon buyout, has businesses in calcined petroleum coke or CPC used in aluminium production, power generation and the manufacture of cement.

The expansion of its cement unit at Nalgonda in Andhra Pradesh is aimed at taking advantage of raw material and energy synergies with its expanding CPC and power units as also the rising cement prices in domestic market.

“The Nalgonda unit, which currently has a capacity of one million tonnes (mt), will have another 1.5mt added at an investment outlay of Rs300 crore,” said Rain Group managing director N. Jagan Mohan Reddy.

The Nalgonda expansion will begin early next year and be completed by early 2010. Rain’s cement business is organized under Rain Commodities.

This is in addition to the capacity expansion currently being implemented at one of the group’s unit at Sreepuram in Kurnool district of Andhra Pradesh by 1.5mt. The Kurnool project is being taken up at Rs 334 crore, which is being funded by Rs 94 crore of internal accruals and Rs 240 crore debt.

The group currently has combined capacity of 1.5mt at Nalgonda and Kurnool and the expansions at Kurnool and Nalgonda would raise capacity to 4.5mt. Reddy said the group plans to reach a total cement production capacity of 5mt by 2010.

“It is estimated that (cement) demand will grow by 10% to 12% for next five years. But at the same time, new capacities are also coming up in next 12-36 months. We expect 90mt to be added by fiscal 2010. This will raise the total industry capacity to around 255 mt,” said a cement analyst with Religare Securities Ltd who asked that he not be identified in keeping with his company’s policy.

The analyst said South India has shown the highest growth in demand of 17% in fiscal 2007 against the all-India average of 11%. Among southern states, Andhra Pradesh has the highest capacity of 24mt. Heavy demand of cement for infrastructure projects coupled with government sponsored housing and infrastructure projects has kept cement prices rising in the southern states.

Separately, the Rain group plans to merge Rain Calcining and Rain Commodities. “Power and fuel together constitute 35% of production costs of cement. The amalgamated entity would now be in a position to supply both power and coal, thereby making the cement operations self sufficient for critical raw materials,” said Reddy.

To meet the captive power needs, Rain is adding 50MW of power capacity as part of a new CPC facility it is setting at Visakhapatnam. The expansion will take the total power capacity of the company to 100MW.


Tata Steel faces fresh setback in Vietnam

Tata Steel is heading for another prolonged bidding war overseas. The company’s proposed acquisition of Vietnam-based Vinausteel and Structural Steel Engineering (SSE) has taken a new turn with rival suitor, Prudential Vietnam Securities Investment Fund Management Company, launching an all-cash unsolicited takeover for parent, Vietnam Industrial Investments (VII).

The unsolicited offer came after the legal counsel of NatSteel, a part of Tata Steel, accused VII of breaching their agreement on the sale of Vinausteel and SSE and has also threatened that it will take legal recourse if the agreement is not implemented.

This is for the second time that Tata Steel is getting into a take-over battle. It acquired the Anglo-Dutch steel company Corus Group after beating rival suitor, CSN of Brazil, through auction.

Bankers close to the development said VII’s lawyers have received an unsolicited offer from Clayton Utz, on behalf of Prudential, which stated that the fund management company and VII’s managing director Henry Lam Van Hung, who holds 10.46 per cent stake, intended to go for an off-market cash takeover. Lam held 10.46 per cent in VII.

The bid would be made through an entity jointly held by Prudential, which manages and advises over $ 1.3 billion in funds, and Lam. Lam is stepping down from his current position for the duration of the offer period. Tata Steel did not “wish to comment at this point in time.” The Prudential offer values VII at over Rs 80 crore.

The VII AGM slated for today to choose the competing offers for its two subsidiaries, has been adjourned. NatSteel announced in March that it would acquire 100 per cent interest of SSE Steel and 70 per cent in Vinausteel.

The transaction was to be completed by June. The impasse began with Prudential launching an unsolicited offer of $ 13.3 million, 10.65 per cent higher than the NatSteels, to acquire majority stake in these two companies in May. VII’s independent directors felt that the Prudential offer had more certainty and demonstrably better terms than NatSteel’s.

VII has also requested the Australian Securities Exchange for a trading halt in its shares. The halt is likely to continue, till an announcement is made by the company.
SSE Steel is a 250,000 tonne bar/wire rod mill and Vinausteel produces 180,000 tonnes of reinforcing bars.


Dr Reddy's developing 8 more biotech drugs

Dr. Reddy's Laboratories Ltd, India's biggest drug maker, is developing eight generic medicines using biotechnology and plans to release one for sale a year, challenging companies such as Roche Holding NV and Amgen Inc, reports the ET.

"Reddy's may double the number of people in its biotech division to about 340 in the next two years and plans to spend about million bolstering production capacity there," Chief Executive Officer G.V. Prasad said on Wednesday.

Reddy's and local rivals including Ranbaxy Laboratories Ltd and Wockhardt Ltd built billion-dollar businesses copying blockbuster medicines and selling them at a fraction of the price in the US and Europe.

They are developing the capability to produce more complex drugs, known as biologics, for which sales are growing at 14 times the pace of traditional chemical compounds and are among the most expensive prescriptions.

About $ 40 billion of biologic medicines are dispensed annually in the US, accounting for about 15% of Americans' drug purchases, according to IMS Health Inc, a research company in Fairfield, Connecticut. These products include Amgen's Enbrel for arthritis and Aranesp for anemia, the Herceptin breast-cancer drug sold by Roche, as well as insulin and human growth hormone.

The expiry of their patents opens the door for other companies to sell copies as much as 70% cheaper. Mumbai based Wockhardt is seeking US sales of insulin and a genetically engineered version of erythropoietin, or EPO, a protein made in healthy kidneys that stimulates red blood cell production.

“A large portion of the drugs coming off patent in the future will be biotech drugs," Prasad said in an interview from the company's headquarters in Hyderabad. “Biologics are going to play an important role in therapy in future and even now."

Cheaper Rituxan Reddy's already sells Reditux, a version of Basel, Switzerland-based Roche's rituximab cancer medicine, in India, where it charges about 50 per cent less than the brand name product.

The injectable treatment, which Roche sells as Rituxan, isn't protected by a patent in India and was developed using a cloned antibody made for Reddy's by a U.S. company. Its release in April came about six years after Grafeel, Reddy's version of Neupogen, a drug to boost white blood-cell production made by Thousand Oaks, California-based Amgen, the world's biggest biotechnology company.

Prasad declined to name the biotech products in development, saying only they include so called monoclonal antibodies used to treat cancer as well as arthritis medicines that work by inhibiting an immune system protein called tumor necrosis factor.

Reddy's, which had sales of $ 1.42 billion in the year ended March 31, generates less than 5% of revenue from biotech drugs. The medications, which use living cells to produce human proteins, may contribute as much as 30 per cent to revenue within a decade as the company starts selling Reditux outside India and patents on other biologics expire, allowing Reddy's to copy them.

“When the US and Europe open up, we will be there," Prasad said. Expensive treatments it costs close to ,000 in Great Britain to treat a patient using Herceptin. The higher price of biologics reflects the more complicated process of making them as well as the limited competition they enjoy, Prasad said.

"The biotech industry is a very closed industry,'' he said. “They are very strong about not allowing generics into the biologics space and as a result there is very limited competition and pricing tends to be very high."

US law allows the Food & Drug Administration to approve generic versions of conventional drugs, mostly made from chemical synthesis, after their patents expire. Congress is considering a law that would create a process to allow the FDA to approve generic versions of biotech medicines.

“It is not a question of if the government will do it, I think it's a question of when,'' Prasad said. “There is enough pressure on the US government to do this and to put a regulatory framework together for approval.''

Genentech Recruit, the company's biologics development center is headed by Cartikeya Reddy, who was recruited in 2003 from San Francisco based Genentech Inc, the world's biggest maker of cancer medicines.

“About 25 of the division's 170 workers were hired from overseas, mostly from the US,” said Satish Reddy, Reddy's managing director and chief operating officer.

Reddy's currently produces Reditux in a 200-liter fermentation tank at the center outside Hyderabad, in central India. “It will complete construction of three more 200-liter tanks by October and is working on a million second facility that will include three 5,000 liter fermentation tanks for making Reditux and other monoclonal antibodies,” said Bijaygopal Chakrabarti, the center's director of quality assurance.