Monthly Archives: June 2019

The engineering and construction company, did not provide the exact value of the contract, but specified that as per its classification, the mega project is over Rs 7,000 crore.

Infrastructure major Larsen & Tourbo (L&T) on Monday said its power business has won a mega order from SJVN Thermal Pvt Ltd to set up an ultra-supercritical power plant in Buxar district, Bihar.

The engineering and construction company, did not provide the exact value of the contract, but specified that as per its classification, the mega project is over Rs 7,000 crore.

“The scope of work for L&T includes design, engineering, manufacture, procurement, supply, construction, erection, testing and commissioning of Buxar Thermal Power Project (2×660 MW).

SJVN Thermal Pvt Ltd is a wholly-owned subsidiary of SJVN Ltd, a joint venture of the Government of India and the Government of Himachal Pradesh and a Mini Ratna public sector undertaking.

Prime Minister Narendra Modi laid the foundation stone of the plant in March this year.

Shares of the company were trading at Rs 1,545.40 apiece, up 0.35 per cent from their previous close, on BSE.

https://www.moneycontrol.com/news/business/lt-bags-power-project-worth-over-rs-7000-cr-in-bihar-4129521.html

IndiaMart InterMesh, operator of the online listing platform- Indiamart.com online, is opening its IPO for a subscription today. The issue would close on June 26.

IndiaMart InterMesh, operator of the online listing platform- Indiamart.com online, is opening its IPO for a subscription today. The issue would close on June 26. The price band has been fixed at Rs 970–973 per share for the IPO, which is completely an offer for sale. The company will offload up to 48,87,862 equity shares and is expected to raise around Rs 475 crores. IndiaMart will not receive any proceeds from the issue. Promoters Dinesh Chandra Agarwal and Brijesh Kumar Agrawal will offload 14,30,109 shares via this issue. The company’s promoters holding will reduce to 53 per cent from 58 per cent after this IPO. Other major investors Intel Capital (Mauritius), Amadeus IV DPF and Accion Frontier Inclusion Mauritius will also sell some of their stakes via this issue.

On Friday, IndiaMart InterMesh garnered about Rs 214 crores by allotting 2,195,038 equity shares at Rs 973 per share to 15 anchor investors, including ICICI Mutual Fund, HDFC Mutual Fund, SBI Mutual Fund, Birla Mutual Fund, SAIF Partners and Malabar India.IndiaMart InterMesh earns revenues from the sale of subscription packages, from the sale of request for quote or “RFQ” credits, advertising from IndiaMART desktop, mobile optimised platforms and revenue from payment facilitation services. The company has 129,589 paying subscription customers in its three different packages as on FY19. It had 82.7 million registered buyers and 5.5 million supplier storefronts in India as on FY19. Indian supplier storefronts had listed total 60.7million products. The company reported an aggregate of 723.5 million visits in FY19 out of which mobile traffic constituted 76 per cent of total traffic, Reliance Securities said in a report.

General demand slowdown for the types of products and services listed by the suppliers on IndiaMART online marketplace and higher competitive intensity are the key risks as stated by reliance Securities in its report.IndiaMart reported consistent growth in its revenue over the past three financial years. In FY17, the company’s revenue was Rs 317.8 crore, whereas in FY18 and FY19 it rose to Rs 410.51 crore and Rs 507.42 crore, respectively. It registered a loss of Rs 64 crore in FY17. In FY18, its adjusted profit after tax (PAT) stood at Rs 55 crore, while in FY19, it was Rs 20 crore.

https://www.financialexpress.com/market/indiamarts-rs-475-crore-ipo-opens-today-check-price-band-date-offer-details/1616885/

U.S. President Donald Trump said last week that he called off a military strike to retaliate for Iran’s downing of an unmanned U.S. drone, and he said on Sunday that he was not seeking war with Iran.

Oil prices climbed on Monday as tensions remain high between Iran and the United States, with U.S. Secretary of State Mike Pompeo saying “significant” sanctions on Tehran would be announced. Brent futures were up 37 cents, or 0.6%, at $65.57 a barrel by 0044 GMT. West Texas Intermediate crude was up 43 cents, or 0.8%, at $57.86 a barrel.

U.S. President Donald Trump said last week that he called off a military strike to retaliate for Iran’s downing of an unmanned U.S. drone, and he said on Sunday that he was not seeking war with Iran. But Pompeo also said “significant” sanctions on Iran would be announced on Monday aimed at further choking off resources that Tehran uses to fund its activities in the region.

“The Middle East clashes should support oil prices at the start of the week as crude markets will wait to see Iran’s response to the threat of additional sanctions,” said Edward Moya, senior market analyst at OANDA in New York. Oil prices surged last week after Iran shot down a drone that the United States claimed was in international airspace and Tehran said was over its territory.

Amid the escalating tensions Brent racked up a gain of about 5% last week, its first weekly gain in five weeks, and WTI jumped about 10%, its biggest weekly percentage gain since December 2016. Trump said he had aborted a military strike on Iran because such a response to Tehran’s downing of the unmanned U.S. surveillance drone would have caused a disproportionate loss of life.

ranian officials told Reuters that Tehran had received a message from Trump through Oman overnight warning that a U.S. attack on Iran was imminent.

“We’re prepared to negotiate with no preconditions,” Pompeo told reporters on Sunday. “They know precisely how to find us. I am confident that at the very moment they’re ready to truly engage with us we’ll be able to begin these conversations. I’m looking forward to that day.”

https://www.financialexpress.com/market/commodities/oil-prices-rise-as-middle-east-tensions-simmer/1616706/

Glenmark said it will continue to pursue regulatory approval for Ryaltris and work closely with the FDA to determine the appropriate next steps

Glenmark Pharmaceuticals plunged over 6 percent intraday on June 24, after the pharma player said the US Food and Drug Administration has issued a Complete Response Letter (CRL) regarding the new drug application for Ryaltris.

The CRL cites deficiencies in the Drug Master File pertaining to one of the active pharmaceutical ingredients and in manufacturing facilities, the company said in a regulatory filing.

At 1000 am, Glenmark was trading 6 percent down at Rs 469. The stock hit a fresh 52-week low at Rs 467.70 on the BSE.

“We would like to inform you that the US Food and Drug Administration (FDA) has issued a Complete Response Letter (CRL) regarding the New Drug Application for Ryaltris (olopatadine hydrochloride [665 mcg] and mometasone furoate [25 mcg]), Nasal Spray,” Glenmark Pharmaceuticals said.

“The CRL does not specify any deficiencies with the clinical data supporting the New Drug Application for Ryaltris. We feel confident that we should be able to resolve these issues within the next six to nine months,” it added.

The company said it will continue to pursue regulatory approval for Ryaltris and work closely with the FDA to determine the appropriate next steps.

In a separate report, Glenmark said that it plans to partner with Novartis to promote, commercialize and distribute three respiratory products in Brazil. Novartis will be responsible for manufacturing the products and Glenmark will exclusively commercialise them in Brazil.

“A delay in Ryaltris approval (due to CRL issued by USFDA) will weigh on the stock until clarity emerges. The exclusive partnership arrangement will strengthen Glenmark’s respiratory franchise in Brazil,” said a Sharekhan note.

https://www.moneycontrol.com/news/business/markets/glenmark-pharma-usfda-crl-ryaltris-4129231.html

Jet stopped operations on April 17 leaving over 14,000 employees in the lurch

The National Company Law Tribunal (NCLT) on Thursday admitted the insolvency petition moved by State Bank of India (SBI) — under section 7 of the Insolvency and Bankruptcy Code (IBC) — against Jet Airways, and instructed that the resolution process be wrapped up in 90 days as the matter is of national importance.

Typically, the corporate insolvency resolution process (CIRP) should be completed in 180 days, and an extra 90 days’ time is granted in case the process doesn’t conclude in the stipulated period. The interim resolution professional (RP) has been instructed to submit fortnightly progress reports on the CIRP process, with the first to be filed on July 5, the day of the next hearing.

The tribunal also declared a moratorium on recovery of dues from Jet, the country’s first aviation firm to be admitted for bankruptcy. Jet had over 120 planes, of which only about a dozen have not been de-registered by the civil aviation regulator. The rest of the planes had their leases terminated and many of them have been inducted by other airlines in India or abroad.

Also, on a day which saw the beleaguered airline being admitted under the insolvency process, Jet shares posted their highest single-day gain on the bourses on Thursday, rising 93 per cent on the BSE to end at Rs 64 after declining 75 per cent in the previous 10 sessions. Such a movement in share prices is highly unusual.

Moreover, presiding judges V P Singh and Ravi Kumar Duraisamy did not take cognizance of the Dutch court order that had declared Jet bankrupt, given that cross-border insolvency is still not in place under the IBC and because the jurisdiction of the corporate debtor rests with the tribunal (as the company is listed in India).

SBI, in its plea, said the airline had defaulted on working capital loans of up to Rs 970 crore. Jet had a working capital facility of Rs 505 crore. This account was overdrawn by around Rs 460 crore for 30 days. The lender had also provided a term loan facility of Rs 1,292 crore to the carrier, which owes over Rs 8,000 crore to a consortium of 26 lenders.

Jet stopped operations on April 17 leaving over 14,000 employees in the lurch. SBI had declared Jet an NPA and made provisions in its Q4 results. The other 25 lenders will have to get their claims admitted when the interim RP begins to admit claims of various lenders. On the Jet case, SBI chairman Rajnish Kumar said lenders had taken every decision after a lot of deliberation.

“It (taking Jet to NCLT) is the last effort. This is the first case of bankruptcy in the aviation sector, which will be tested,” he said on the sidelines of the bank’s annual general meeting. Nobody appeared on behalf of the airline as most of the key management personnel had resigned as early as in May, the bank told the tribunal.

Ashish Chhawchharia of Grant Thornton has been chosen as the interim RP by SBI for 30 days, and the final decision on the RP will be taken by the committee of creditors. The interim RP will gather details of the airline’s assets along with along with inviting claims from creditors and employees. The two operational creditors — who had filed separate insolvency pleas — will file their claims with the interim RP now that the SBI plea is admitted.

https://www.business-standard.com/article/companies/nclt-sets-90-day-deadline-for-jet-airways-bankruptcy-resolution-119062100041_1.html

Approval for the proposal is critical for Suzlon as ratings on its long-term bank facilities were downgraded at Care Ratings to D from BB in April

Suzlon Energy jumped the most in five months on Thursday a day before its lenders are poised to consider the beleaguered wind-turbine maker’s plan to sell its operations and maintenance business to pare debt.

Suzlon shares gained 22.4 per cent to close at Rs 4.1 in Mumbai paring its losses for the year to 24 per cent. The benchmark BSE Sensex index gained 9.9 per cent this year. The firm plans to offer a so-called one time settlement to the lenders led by SBI using the proceeds of the sale, said sources, asking not to be identified as the information is private. A spokesman for SBI and a spokeswoman for Suzlon didn’t immediately respond to an email seeking comment.

Approval for the proposal is critical for Suzlon as ratings on its long-term bank facilities were downgraded at Care Ratings to D from BB in April.

“Unfortunately, on account of a temporary mismatch in cash flow, the company was unable to fund its scheduled repayment obligations to its lenders,” Suzlon Chief Executive Officer J.P. Chalasani said in an exchange filing in April, reacting to the downgrade. He said the company was actively working with lenders for a debt revamp.

https://www.business-standard.com/article/companies/suzlon-energy-jumps-as-bankers-meet-today-to-resolve-1-4-billion-debt-119062100042_1.html

In April this year, Lakshmi Vilas Bank had announced its merger with Indiabulls Housing Finance in a share-swap deal with an intent to create a combined entity with larger capital base and wider geographical reach.

Indiabulls Housing Finance on Friday said the Competition Commission of India (CCI) has approved the proposed merger of the company with Lakshmi Vilas Bank.

In April this year, Lakshmi Vilas Bank had announced its merger with Indiabulls Housing Finance in a share-swap deal with an intent to create a combined entity with larger capital base and wider geographical reach.

“The Competition Commission of India… at its meeting held on June 20, 2019, considered the proposed combination and approved the same,” Indiabulls Housing Finance said in a BSE filing.

The board of Lakshmi Vilas Bank had approved the merger with Indiabulls Housing Finance in which shareholders of the bank will get 14 shares of Indiabulls Housing Finance for every 100 shares they hold.

The combined entity, with employee strength of 14,302, will have a loan book size of Rs 1.23 lakh crore for the first nine-month period of 2018-19.

After the proposed merger, Indiabulls Housing Finance will get access to low cost deposits, geographical diversification and expanded client-base and cross-selling opportunities.

https://www.moneycontrol.com/news/business/indiabulls-housing-finance-lakshmi-vilas-bank-merger-gets-cci-nod-4122711.html

Yellow metal likely to hit Rs 35,000/10 gm; energy, base metals also firm up

Standard gold price in India on Thursday recorded the highest single-day gain of 2.21 per cent in recent years, following a sharp spurt in its prices in global markets on the US Fed’s dovish stance on economic growth in the United States.

The data compiled by the India Bullion and Jewellers Association (IBJA) showed standard gold price  at Rs 33,559 per 10 gm in Zaveri Bazaar here on Thursday, barely 0.3 per cent lower than the all-time high of Rs 33, 716 in February this year. On Wednesday, Standard gold price  in Zaveri Bazaar was Rs 32,851 per 10 gm.

Oil prices, too, jumped on Thursday but on rising US-Iran tensions, with gains accelerating on a cryptic tweet by American President Donald Trump after Iranian forces shot down a US spy drone. At 8.35 pm IST, US benchmark West Texas Intermediate climbed 6.3 per cent to $57.13 a barrel, while Brent futures in London gained 4.7 per cent to $64.69 a barrel.

Base metals remained resilient to trade, with a marginal gain on the London Metal Exchange (LME).

“The sharp spurt in gold prices can be attributed to the dollar’s weakness. The US Fed in its last meeting changed the narrative. So far, the narrative has been that the dollar interest rate is going up. But, the Fed is now turning dovish due to the ongoing trade talks, with the delay affecting the US economy. Thus, the Fed signals problems in the US economy with steady interest rate cuts. Consequently, crude and base metals did not follow the speed of surge in gold prices,” said Gnanasekar Thiagarajan, director, Commtrendz.

On Wednesday, the US Federal Reserve hinted at interest rate cuts beginning as early as July, saying it is ready to battle growing global and domestic economic risks as it took the stock of rising trade tensions and growing concerns about weak inflation. Lower interest rates, in fact, decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, thus making gold cheaper for investors holding other currencies.

In the US, gold price hit the highest in five years in the late Wednesday trade as investors sought refuge in the bullion as a safe haven. Spot gold was up by 2 per cent at $1,386.38 an ounce, the highest since March 17, 2014. The gold price traded at $1,382.87 an ounce in London on Thursday.

“Gold has given a breakout above $1,365 an ounce, which could lead to a sustained upmove towards $1,430-1,440 an ounce. Domestic gold prices also holding firm above the breakout level of Rs 33,400 per 10 gm could trigger a further upside to Rs 34,300 per 10 gm in the short term,” said Navneet Damani, vice president, Motilal Oswal Financial Services.

Both Gnanasekar and Damani forecast gold price in the rupee term at Rs 35,000 per 10 gm in the near term before investors start a pullback from riskier assets like bullion for investment in equity markets.

On India’s Multi Commodity Exchange (MCX), gold futures for delivery in August jumped by 2.31 per cent to trade at Rs 33,844 per 10 gm. Silver and crude oil futures also moved up by 2.43 per cent and 2.7 per cent to Rs 38,210 a kg and Rs 3,876 a barrel for delivery in July, respectively. Copper and zinc futures jumped, too, jumped, albeit marginally.

Meanwhile, jewellery stores remained deserted as buyers deferred their non-essential purchases awaiting softness in gold prices.

https://www.business-standard.com/article/economy-policy/gold-price-jumps-2-21-on-us-federal-reserve-s-interest-rate-cut-signal-119062100023_1.html