RIL BP Deal

RIL and BP Plc today announced a historic partnership in which BP will take a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the producing KG D6 block, and the formation of a 50:50 joint venture between the two companies for the sourcing and marketing of gas in India. The joint venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India. The deals are subject to approval of GOI. BP will pay RIL an aggregate consideration of US$7.2 billion, and completion adjustments, for the interests to be acquired in the 23 production sharing contracts. Future performance payments of up to US$1.8 billion could be paid based on exploration success that results in development of commercial discoveries. These payments and combined investment could amount to US$20 billion. The 23 oil and gas blocks together cover approximately 270,000 square kilometres. This will make the partnership India’s largest private sector holder of exploration acreage. RIL will continue to be the operator under the production sharing contracts, whose blocks lie in water depths ranging from 400 to over 3,000 metres. These currently produce about 1.8 billion cubic feet of gas per day (bcf/d), over 30 per cent of India's total consumption, and over 40 per cent of India's total production.

Tata Motor - Great Wall Deal

Tata Motors' Jaguar and Land Rover unit is in talks with top Chinese sport utility vehicle maker Great Wall Motor Co about a potential China tie-up.

Tata Steel - Orissa Plant

Tata Steel expects to start production from a new Orissa plant by end-March 2013. The plant at Kalinganagar in Orissa will have initial capacity of 3 million tonne, which would eventually be doubled. Tata Steel signed the initial memorandum for the plant with the local government in November 2004 and preliminary work on land acquisition and resettlement of locals is still under way The company was likely to invest Rs 17,000 crore ($3.77 billion) in the plant's first phase.

RIL-BP Deal

BP will pay $7.2 billion for a 30 % stake in 23 oil and gas blocks of Reliance Industries
Ltd (RIL). The fields include the most prolific KG-D6 off the east coast.

SAIL -12 billion investment

Steel Authority of India (SAIL) plans to put up four 3-mtpa manufacturing facilities, one each in Indonesia, Mongolia, South Africa and Oman with a cumulative investment of $12 billion. They have already signed the Memorandum of Understanding with the Indonesian government and are in constant dialogue with the governments in Mongolia, South Africa and Oman for setting up the 3-mtpa steel plant. The proposed investments are likely to be financed in a 80:20 debt-equity ratio and the state-owned firm might rope in strategic investor to part-finance the equity part.

Ranbaxy Labs - Cholesterol Drug

Ranbaxy Laboratories will soon launch a generic version of Abbott’s cholesterol lowering medicine 'Tricor' after the latter decided to settle a patent litigation case against Ranbaxy. This would add several million dollars to Ranbaxy’s revenues. However, the terms of the settlement were not disclosed and were kept confidential. Abbott generates about $1 billion in annual sales by selling fenofibrate under the brands Tricor and Triplix in American market alone.

Punj Lloyd - NHAI order

Punj Lloyd Infrastructure (PLIL), a Punj Lloyd Group subsidiary, received an order worth Rs 735 crore from the National Highways Authority of India (NHAI) today. PLIL, set up for implementing infrastructure development projects, will upgrade NH-31 from Khagaria to Purnea in Bihar to a two-lane, undivided carriageway with paved shoulders, under the National Highways Development Programme - three. The project will work on a build- operate-transfer (BOT) annuity basis. And the scope of work will involve the design, building, finance, operation and transfer of the 140 km section of the national highway. PLIL will form a Special Purpose Vehicle (SPV), which in turn will sign a concession agreement with NHAI for 17 years. It will be entitled to semi annual annuities of Rs 56

ONGC - G1 and GS-15 KG Basin

Oil and Natural Gas Corporation (ONGC) is expecting initially to raise its daily gas output by 2 million standard cubic meters (mscm) and produce 9,400 barrels of associated oil once its offshore blocks- G1 and GS-15 in KG Basin to start production from May, this year. As per its plan, initially two million cubic meters oil or oil equivalent gas will be produced from G-1 and GS-15 blocks. It will continue for two years and sustainable tests will be conducted periodically. Based on the test results, the production will be increased up to 3 million cubic meters

M&M - GripssAero

Mahindra & Mahindra (M&M) plans to launch an 8 seater utility aircraft -- GrippsAero GA8 TC 320 Airvan --shortly in the domestic market. The company, in reference to this, has already applied for regulatory approvals like certification

JSW Steel - ECB raising

JSW Steel has successfully managed to raise $280 million (Rs 1280 crore) via external commercial borrowing (ECB). The company has tied-up funds for its 2.3 million tonnes of cold rolled mill at its Vijaynagar plant. The total cost of the Vijaynagar plant is Rs 4,025 crore. JSW Steel will infuse Rs 1300 crore of equity funding via internal accruals. The company while buying equipments for the plant will arrange for the rest of debt and will tie-up via external commercial assistance (ECA).

HDFC stake in Kaizen Management Advisors

Housing Development Finance Corporation (HDFC) has bought a minority stake in Kaizen Management Advisors, the asset management company that advises India’s first education-focused fund Kaizen Private Equity. The lender has also invested in the fund as limited partner. This investment is the company’s second investment in the education sector this month. It is looking to enter the education sector on a larger scale through a separate entity. Kaizen is raising a total of $100 million, $70 million from foreign investors and $30 million from domestic investors for its fund.

Adani Enterprises - MOU Carbon Energy

Adani Enterprises has signed a Memorandum of Understanding (MoU) with Australia’s Carbon Energy to set up a joint venture (JV) to explore opportunities in the Underground Coal Gasification (UCG) assets in India. Both the companies will jointly bid for state-run Coal India’s UCG tender in which it has sought UCG technology partners for development of UCG across its coal mining assets in India. UCG is a process of converting un-worked coal into a combustible gas which can be used as a fuel for heating, power generation, manufacture of hydrogen, syngas or even diesel fuel.

Cement - Fitch Report

As per a recent report prepared by rating agency Fitch, India's cement production capacity was 201.3 mtpa in FY08 vis-a-vis 167.7 mtpa demand. Capacity went up to 236.9 mtpa compared to total demand of 181 mtpa in FY09.

The agency further said that the demand-supply imbalance would reach to its highest level in FY13 to 125.8 mtpa with capacity going up to 392.8 mtpa.

Fitch had said that the continued overcapacity in cement sector would exert further pricing pressure on the commodity in 2011, leading to squeezed margin for the manufacturers.

"We forecast around 10% demand growth and over 12% capacity addition in 2011. The overcapacity is likely to result in pricing and consequently margin pressures for most cement companies," it had said.

Cement Companies - pre budget update

In its pre-budget memorandum to the finance minister, the Cement Manufacturers' Association (CMA) has put forward the suggestion of a uniform rate of excise duty be levied on cement. Currently, different rates of excise duty are levied on cement based on retail price.

CMA has also suggested zero import duty on coal, pet coke, gypsum & other inputs. All the three inputs currently attract 5% duty if imported, while there is no duty on cement import. The association has also asked for reducing taxes and levies on cement pointing out that the tax on cement is the highest among the items required for building infrastructure.

The petrol price deregulation has caused structural changes in the subsidy burden sharing mechanism for Oil companies ( both upstream and downstream companies).

Recently BPCL had hiked the petrol prices by Rs. 2.95 which had given a fillip to the stock.

The recent crude price increase is causing BPCL to a huge loss as the under-recoveries for the Oil Marketing Companies are increasing daily. They are losing Rs. 275 cr. in revenue daily because the increase in Crude prices. The BPCL is losing Rs. 7 per litre of Diesel. They also lose Rs. 18 on Kerosene and Rs. 280 on LPG.The OMCs review the retail prices every 1st and 16th of every month.

Again with crude at 90 dollar from hereon the subsidy burden would come to 75000 cr. for this fiscal. Though people speculate the subsidy sharing to be adhoc but the oil secretary has clarified it to be 33% for the upstream companies. 50% is to be shared by the government in cash and the rest shall fall upon the OMCs i.e. 17%. 17% of 75000 cr. is 12750 cr. which shall be shared between 3 OMC.

The postponement of increase in Diesel and LPG prices has been caused further troubles for OMCs as the government clarified it couldn't undertake price hike in this high inflationary scenario.

BPCL expects to increase it refining capacity to 45 mt by 2015 from the current 30mt. They are also aggressively trying to develop their exploration and production facilities. For developing these it would require huge capex of 50000 cr. in the next 5 years. This should entail it to earn profits of atleat Rs. 2000-Rs. 5000 cr. each year. It has refineries in Mumbai, Cochin, MP and Assam. Since 2 of them are port areas they can use it export petrochemicals.