Daily Bulletin (23rd December, 2019)

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20191223-29

1.Scrip code : 532605
Name : JBM Auto Limited
Subject : Board Meeting Intimation for Intimation Of Board Meeting, Primarily, To Consider And Take On Records The Orders Passed By Hon’Ble NCLT Delhi And Mumbai Approving The Scheme Of Amalgamation
JBM AUTO LTD.has informed BSE that the meeting of the Board of Directors of the Company is scheduled on 24/12/2019 ,inter alia, to consider and approve Sir / Madam, This is to inform you that a meeting of the Board of Directors of the Company is scheduled to be held on Tuesday, 24° December, 2019, primarily, to consider and take on records the orders passed by Hon’ble National Company Law Tribunal – Delhi and Hon’ble National Company Law Tribunal – Mumbai dated 14** June, 2019 and 25* October, 2019 respectively approving the scheme of Amalgamation of JBM Auto System Private Limited and JBM MA Automotive Private Limited with the Company JBM Auto Limited and other matters relating there to. Further, as per the “Code of Conduct for Prevention of Insider Trading” of the Company, the ‘Trading Window’ for trading in the securities of the Company shall be closed for Directors, KMPs, Promoters & Promoters Group and Designated Persons etc. covered under the said code from 21%t December, 2019 and will end 48 hours after the outcomes of the Board Meeting are made available to the public. Please take it on your record.

2.Scrip code : 533148
Name : JSW Energy Limited
Subject : Announcement under Regulation 30 (LODR)-Restructuring
Vide our Press Release dated 30th January, 2019, we had informed you that for optimal corporate holding structure and better operational control, the Board had approved the transfer of its 100% subsidiary, JSW Energy (Kutehr) Limited, to JSW Hydro Energy Limited. We now wish to inform you that the transfer has been completed and JSW Energy (Kutehr) Limited has become a wholly owned subsidiary of JSW Hydro Energy Limited.

3.Scrip code : 524654
Name : Natural Capsules Ltd.
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Outcome of Board Meeting held on 21st December, 2019 pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015: In accordance with Regulation 30, read with Schedule III, Part A, Para B, Clause 2 & 5 of SEBI (Listing Obligations & Disclosure Requirements)Regulations, 2015 and Annexure 1 of SEBI circular CIR/CFD/CMD/4/2015 dated September, 9 2015, we wish to inform you that the Board of Directors at their meeting held today i.e. 21.12.2019, have approved Company’s proposal to acquire new business. Natural capsules to acquire API business of Naari Pharma Private Limited Strategic Rationale for Diversification.

4.Scrip code : 530759
Name : Sterling Tools Ltd.
Subject : Announcement under Regulation 30 (LODR)-Joint Venture
This is to inform you that the Company has entered into a Joint Venture (JV) Agreement with Jiangsu Gtake Electric Company Limited, a China based Company. The two companies have agreed to join hands to provide the Indian Electric Vehicle OEM’s with best in class MCUs. The agreement calls for the companies to manufacture MCU’s domestically to cater to the Indian automotive market by developing local design engineering, application support and after sales service capabilities as per the requirements of the Indian industry.

5.Scrip code : 539141
Name : UFO Moviez India Limited

Subject : Announcement under Regulation 30 (LODR)-Acquisition
As part of the focus on data analytics towards enhancing -the business of cinema, the Company has identified a promising opportunity in Cinestaan Digital Pvt Limited (CDPL), a company promoted by Mr. Rohit Khattar.Its flagship product Cinestaan.com, an entertainment focussed destination, has a massive database of Indian cinema. CDPL”s initiatives are synergetic with the Company”s, in expanding product offerings in Tier II and Tier Ill towns. CDPL too shall benefit immensely from the Company”s footprint and movie related intelligence.The management of the Company believes that the proposed transaction synergizes both businesses to create a wining proposition in the market. The Board of Directors of the Company at its meeting held on December 20, 2019 has inter alia approved an investment of up to Rs 20 crores by way of convertible instruments over a period of three years in CDPL.The details of the proposed transaction is as per the attached file. Kindly take the same on your records.

6.Scrip code : 540145
Name : Valiant Organics Limited
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Incorporation of Wholly Owned Subsidiary (WOS) Company namely Valiant Speciality Chemical Limited

Daily Bulletin (20th December, 2019)

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20191220-42

1.Scrip code : 500092
Name : CRISIL Ltd.
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Acquisition of Greenwich Associates LLC

2.Scrip code : 540696
Name : KCD INDUSTRIES INDIA LIMITED
Subject : Announcement under Regulation 30 (LODR)-Preferential Issue
This is to inform exchange that the in accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and subject to approval of members, Board of Directors at their meeting held today has considered and approved the following matter: 1. Raise funds through Preferential Allotment / Private placement up to Rs. 5,37,50,000/- (Rupees Five Crores Thirty Seven Lakhs Fifty Thousand only) by issue of up to 25,00,000 (Twenty Five lakhs) Convertible Equity Warrants in accordance with SEBI (ICDR) Regulations, 2009, subject to the approval of members.

3.Scrip code : 500355
Name : Rallis India Ltd
Subject : Announcement under Regulation 30 (LODR)-Scheme of Arrangement
Sanction of Scheme of Merger by Absorption of Metahelix Life Sciences Limited with Rallis India Limited and their respective shareholders by National Company Law Tribunal, Mumbai Bench and Bengaluru Bench.

4.Scrip code : 520111
Name : Ratnamani Metals & Tubes Ltd
Subject : Announcement under Regulation 30 (LODR)-Award of Order Receipt of Order
Dear Sir/Madam, Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are pleased to inform you that the Company has received two major orders in Carbon Steel division as under: 1) Domestic Order of Rs.124.00 Crores for supply of coated CS pipes for an Oil & Gas Pipeline project to be completed between April to September, 2020. 2) Export Order of USD 14.30 Million (equivalent to approx. Rs.100.00 Crores) for supply of bare CS Pipes to be completed between May to June, 2020. Kindly take the above on your record.

5.Scrip code : 500770
Name : Tata Chemicals Ltd
Subject : Announcement under Regulation 30 (LODR)-Acquisition
We wish to inform you that the Company, through its wholly-owned subsidiary, Valley Holdings, Inc., has acquired the remaining 25% partnership interest from The Andover Group, Inc. in Tata Chemicals (Soda Ash) Partners Holdings. With this acquisition, the Company has increased its ownership in Tata Chemicals (Soda Ash) Partners, the soda ash producing operating entity, from 75% to 100%. A press release in this regard is also enclosed herewith.

Daily Bulletin (19th December, 2019)

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20191219-25

1.Scrip code : 522074
Name : Elgi Equipments Ltd.
Subject : Announcement under Regulation 30 (LODR)-Updates on Acquisition
Update – Elgi Equipments Limited has informed the Exchange regarding ”Incorporation of a step down subsidiary in Spain by name Elgi Compressors Iberia SL”. Details required under Listing Regulations are provided in the Annexure attached herewith.

2.Scrip code : 540953
Name : Kenvi Jewels Limited
Subject : Board recommends Bonus Issue
Kenvi Jewels Ltd has informed BSE that the Board of Directors of the Company at its meeting held on December 19, 2019, inter alia, have approved and recommended the issuance of fully paid up bonus shares in the ratio of 115:100 (i.e. 115 (One hundred Fifteen) fully paid up equity share for every 100 (Hundred) fully paid up equity shares held, subject to the shareholders’ approval in the Extra Ordinary General Meeting of the company.

3.Scrip code : 532500
Name : Maruti Suzuki India Ltd.
Subject : Introduction Of VXI+ Variant In Alto 800
Dear Sir, You are kindly informed that Alto 800 is now available in VXI+ variant also. The Ex Showroom price in Delhi and NCR of Alto 800 VXI+ is Rs. 3,80,209/-. The same is effective from today i.e. 19th December, 2019.

4.Scrip code : 503031
Name : Peninsula Land Limited
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Intimation under Regulation 30 (2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding acquisition of further 21% of Equity Shares of Pavurotti Real Estate Private Limited, one of the subsidiaries of the Company.

5.Scrip code : 500302
Name : Piramal Enterprises Limited
Subject : Record Date For Rights Issue
In relation to the Rights Issue, the Company has approved the following: 1. Fixed record date for the purpose of determining the Eligible Equity Shareholders as Tuesday, December 31, 2019; 2. Fixed rights entitlement ratio as 11 (Eleven) Equity Share for every 83 (Eighty Three) fully paid-up Equity Shares held as on the Record Date by the Eligible Equity Shareholders of the Company.

6.Scrip code : 539978
Name : Quess Corp Limited
Subject : Announcement under Regulation 30 (LODR)-Updates on Acquisition
Additional Investment in Vedang Cellular Services Private Limited, Subsidiary of the Company.

7.Scrip code : 505800
Name : Rane Holdings Ltd.
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Pursuant to preferential issue of warrants made by Rane (Madras) Limited (RML), in terms of Chapter V of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, the Company has on December 18, 2019 acquired 17,42,160 warrants of face value Rs.10/- each on payment of Rs. 12,50,00,000 being warrant subscription price at 25% of issue price, convertible in one or more tranches into 17,42,160 Equity shares of face value of Rs.10/- each fully paid up, at the issue price of Rs.287 per equity share (i.e. at a premium of Rs.277 per equity share) at any time on or before the expiry of 18 (eighteen) months from the date of allotment of the said warrants.

Daily Bulletin (18th December, 2019)

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20191218-37

1.Scrip code : 542066
Name : Adani Gas Limited
Subject : Announcement under Regulation 30 (LODR)-Open Offer – Updates
Submission of Recommendations of the Committee of Independent Directors
(‘IDC’) on the open offer made by TOTAL HOLDINGS SAS (‘Acquirer’) to the public shareholders of the Company, for acquiring up to 27,71,46,602 fully paid up equity shares having a face value of Re. 1 each, constituting 25.2% of the Equity Share and Voting Capital of the Company (‘Open Offer’).

2.Scrip code : 540205
Name : Aditya Vision Limited
Subject : Corporate Action-Updates on Buy back
Approved the proposal to buy back up to 3,350,000 (Thirty Three Lakhs Fifty Thousand only) Equity Shares of the Company being 23.74% of the total paid-up equity share capital (the “Buyback”), at a tender price of Rs. 20 (Rupees Twenty only) per Equity Share (hereinafter referred to as the “Buyback Price”) for an aggregate amount not exceeding Rs. 67,000,000 (Rupees Six Crores and Seventy lakhs only) (hereinafter referred to as the “Buyback Size”). The Buyback is proposed to be made from the shareholders of the Company as on the record date, on a proportionate basis under the tender offer route in accordance with the provisions contained the SEBI (Buyback of Securities) Regulations, 2018 (“Buyback Regulations”) and the Companies Act, 2013 and rules made thereunder. Members of the Promoter and Promoter Group expressed that they do not intend to participate in the Buyback

3.Scrip code : 524594
Name : Ashok Alco-Chem Ltd.
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Intimation under Regulation 30 – Acquisition of Equity Shares of Aeon Procare Private Limited by the Company.

4.Scrip code : 540621
Name : Bhagyanagar Properties Ltd
Subject : Announcement under Regulation 30 (LODR)-Diversification / Disinvestment
We refer to our intimation dated 30th September, 2019 regarding divestment of equity investment held in Masanto Containers Private Limited, wholly-owned subsidiary to M/s Sia Publishers and Distributors Private Limited, Hyderabad. In this regard we would like to inform you that, the said transaction has been materialised and divested the entire equity shares held in M/s. Masanto Containers Private Limited to M/s. Sia Publishers and Distributors Private Limited pursuant to Share Purchase Agreement dated 30.09.2019. We would like to further inform you that, consequent to above divestment, M/s Masanto Containers Private Limited ceased to be a Subsidiary Company with effect from 18th December, 2019. We request you to kindly take the same on your records.

5.Scrip code : 526371
Name : NMDC Ltd
Subject : Indian Bureau Of Mines (IBM) Approves The Mining Plan Of Kumaraswamy Iron Ore Mines Of NMDC-Reg.
18th December, 2019 To The BSE Stock Code: NSE: NMDC BSE: 526371 Sub. : Indian Bureau of Mines (IBM) approves the Mining Plan of Kumaraswamy Iron Ore Mines of NMDC. -Reg. Dear Sir, Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, and other applicable provisions of law it is hereby informed that the Company has received from Approval for Modified Mining Plan of Kumaraswamy Iron Ore Mines of NMDC from 7MTPA(7-Million Tonnes per Annum) to 10MTPA (10-Million Tonnes per Annum) from the Indian Bureau of Mines (IBM), Ministry of Mines, Government of India. The effective date of approval is for 2020-21 and 2021-22. NMDC operates the Kumaraswamy Mines at its facility in the state of Karnataka. You are requested to please take the same on record. Thanking you, Yours faithfully, For NMDC Limited A S Pardha Sardhi Company Secretary

Daily Bulletin (17th December, 2019)

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20191217-24

1.Scrip code : 524091
Name : Acrysil Ltd.
Subject : Announcement under Regulation 30 (LODR)-Updates on Acquisition
We are hereby enclosing announcement for acquisition of balance stake of 1.25% equity shares of Homestyle Products Limited through our wholly owned subsidiary Acrysil UK Limited. The total equity stake of Acrysil Limited through Acrysil UK Limited in Homestyle Products Limited is now increased to 100%.

2.Scrip code : 958438
Name : Reliance Industries Ltd
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Indiavidual Learning Private Limited (‘Embibe’), a subsidiary of Reliance Industries Limited (‘RIL’ or the ‘Company’) has acquired equity shares of eDreams Edusoft Private Limited (‘Funtoot’) for a cash consideration of INR 71,64,35,143/- (Indian Rupees seventy one crore sixty four lakh thirty five thousand one hundred and forty three only) representing 90.5% holding in the equity share capital of Funtoot. Embibe proposes to make a further acquisition of equity shares of up to INR 10 crore (Indian Rupees ten crore only), subject to Funtoot achieving agreed milestones. The further acquisition is expected to be completed by December 2021 and the shareholding of Embibe will thereafter increase to 100% of the equity share capital of Funtoot.

3.Scrip code : 506414
Name : FERMENTA BIOTECH LIMITED
Subject : Board to consider Bonus Issue
Fermenta Biotech Ltd has informed BSE that a meeting of the Board of Directors of the Company is scheduled to be held on December 24, 2019, inter alia: 1. To consider, approve and adopt Trust Deed of ‘Fermenta Biotech Limited ESOP Trust’, ‘Fermenta Biotech Limited- Employee Stock Option Plan 2019’ and all other relevant documents thereto by modifying the same in view of the order for Scheme of Amalgamation dated September 19, 2019 issued by the National Company Law Tribunal, Mumbai; 2. To consider, approve and adopt amendment to Fermenta Biotech Limited- Employee Stock Option Plan 2019, subject to members’ approval; and 3. To consider and recommend the issue of bonus equity shares to the members of the Company. In accordance with the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company’s Code of Conduct to Regulate, Monitor and Report Trading by Insiders, the “Trading Window” (period for trading in Company’s securities) has been closed with effect from December 17, 2019 and shall continue to remain closed till 48 hours after the publication of the outcome of the Board Meeting. During the closure of Trading Window, all Directors, Promoters, Insiders, Designated Persons including Auditors shall not, directly or indirectly trade or deal or enter into any transaction involving sale or purchase of the Company’s Equity Shares, either in their own name or in the name of their immediate relatives. Terms not defined in this notice shall have the same meaning as defined in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and the Company’s Code of Conduct to Regulate, Monitor and Report Trading by Insiders.

4.Scrip code : 522074
Name : Elgi Equipments Ltd.
Subject : Announcement under Regulation 30 (LODR)-Press Release / Media Release
Press Release on “ELGi Acquires Michigan Air Solutions and Expands its Presence in the North American Air Compressor Market” is enclosed

5.Scrip code : 505744
Name : Federal-Mogul Goetze (India) Ltd
Subject : Announcement Under Regulation 30 Of SEBI (LODR), 2015
With regard to the Open offer for acquisition of up to 13,916,676 fully paid-up equity shares of face value of Rs. 10/- each, representing approximately 25.02% of the fully diluted voting equity share capital of Federal-Mogul Goetze (India) Limited (‘FMGIL’ or the ‘Target Company’) from the public shareholders of the Target Company by Tenneco Inc. (‘Acquirer’).

Daily Bulletin (16th December, 2019)

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20191216-31

1.Scrip code : 531533
Name : e.Com Infotech (India) Ltd.
Subject : Announcement under Regulation 30 (LODR)-Acquisition
We wish to inform you that the company in its BOD meeting on December 14, 2019, has decided to acquire a 51% stake in the form of equity shares in a Mumbai based Pvt Ltd company. The proposed start-up as Freebird Aerospace India Pvt Ltd will focus on the Aerospace vertical and is planned to be registered under the Startup India scheme announced by the Government of India.

2.Scrip code : 522074
Name : Elgi Equipments Ltd.
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Acquisition of 10% shareholding and control of Michigan Air Solutions LLC, and 2. Approval of ESOP 2019 for the employees of Elgi Equipments limited and its holding and subsidiary companies.

3.Scrip code : 500228
Name : JSW Steel Limited
Subject : Announcement under Regulation 30 (LODR)-Updates on Acquisition
Vardhman Industries Limited – Reciept Of written Order of the The Hon’ble NCLAT dated December 11, 2019

4.Scrip code : 500325
Name : Reliance Industries Ltd
Subject : Announcement under Regulation 30 (LODR)-Updates on Acquisition
Further to the earlier disclosures on the subject, Reliance Industrial Investments and Holdings Limited (‘RIIHL’), a wholly-owned subsidiary of Reliance Industries Limited (‘RIL’), has entered into binding agreements with Brookfield Infrastructure Partners L.P. (‘Brookfield Infrastructure’), and its institutional partners, for an investment of Rs. 25,215 crore in the units to be issued by the Tower Infrastructure Trust (‘Trust’) in accordance with the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014.

5.Scrip code : 539875
Name : RSD Finance Limited
Subject : Corporate Action-Updates on intimation of Sub division / Stock Split
The Board has approved the Sub-division of each equity share of face value of Rs. 10/- (Rupees Ten only) fully paid up into 2 (two) equity shares of face value of Rs. 5/- (Rupees Five only) each fully paid up as per Section 61(1) (d) of the Companies Act, 2013 read with rules issued thereunder, subject to approval of members of the Company.

6.Scrip code : 513534
Name : Vardhman Industries Ltd
Subject : Announcement under Regulation 30 (LODR)-Public Announcement-Delisting
We refer to our earlier intimation dated December 14, 2019 and in this regard, we hereby inform you that, pursuant to the provisions of Regulation 30and Regulation 42(2) of the LODR Regulations, Friday, December 27, 2019 has been fixed as the record date for identification of existing shareholders for delisting of the equity shares. We further inform you that upon implementation of the Resolution Plan, the Company shall be delisted in accordance with the provisions of the SEBI ( Delisting of the Equity Shares) Regulations, 2009.

Steel Industry: An overview

Steel Industry: An overview

 

Global Overview

  • In January-Oct 2019, the world crude steel production reached 1541.77 million tonnes (mt) and showed a growth of 3.2% over January-Oct 2018.
  • China remained world’s largest crude steel producer in same period (829.21 mt) followed by India (93.31 mt), Japan (83.79 mt) and the USA (74.07 mt).
  • World Steel Association has projected Indian steel demand to grow by 5% in 2019 while globally, steel demand has been projected to grow by 3.9% in 2019. Chinese steel use is projected to show 7.8% growth in 2019.
  • Per capita finished steel consumption in 2018 was 224.5 kg for world and 590.1 kg for China (Source: World Steel Association). The same for India was 74.1 kg in 2018 (Source: JPC).

 

Top 10 Countries according to their Steel Making capacity (2019)

Country Crude steel Capacity MT
  China 1023.4
  India 128.1
Japan 128.1
United States 112.6
Korea 87.9
  Russia 84.5
Germany 51.9
  Brazil 50.7
Turkey 48.9
  Ukraine 42.5

 

Top 10 Steel producing countries in the world (2019)

Country Steel produced MT
  China 928.3
  India 106.5
Japan 104.3
United States 86.7
Korea 72.5
  Russia 71.7
Germany 42.4
  Turkey 37.3
Brazil 34.7
 Iran 25

 

Total World Production:

World crude steel production was 1,391.2 Mt in the first nine months of 2019, up by 3.9% compared to the same period in 2018. China’s crude steel production for September 2019 was 82.8 Mt, an increase of 2.2% compared to September 2018. India produced 9.0 Mt of crude steel in September 2019, up 1.6% on September 2018. Japan produced 8.0 Mt of crude steel in September 2019, down 4.5% on September 2018. South Korea’s crude steel production was 5.7 Mt in September 2019, a decrease of 2.7% on September 2018.The US produced 7.1 Mt of crude steel in September 2019, a decrease of 2.5% compared to September 2018.

 

Demand:
In 2018/19, the global steel consumption rose 4% to 1.792 billion tonnes. There was a stable growth in consumption in North America and emerging markets of Asia. The Chinese demand for steel was up 5.5% despite the economic slowdown.After two years of rising steel consumption, the slow economic growth, lending restrictions in China, trade disputes, and the slowdown in the automobile sector slowed down the demand for steel globally. The steel consumption was however forecast to grow at a slower rate in 2019.

Indian Scenario

Industry Analysis:

India was the world’s second-largest steel producer with production standing at 106.5 MT in 2018. The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to India’s manufacturing output.

The Indian steel industry is very modern with state-of-the-art steel mills. It has always strived for continuous modernisation and up-gradation of older plants and higher energy efficiency levels.

The Indian steel industry has entered into a new development stage, post de-regulation, riding high on the resurgent economy and rising demand for steel. Rapid rise in production has resulted in India becoming the 2nd largest producer of crude steel during 2018, from its 3rd largest status in 2017. The country is also the largest producer of Sponge Iron in the world and the 3rd largest finished steel consumer in the world after China & USA.

 

Demand:

ICRA, in their report on the steel sector said that the demand for steel in India could grow at the slowest pace in three years as an economic slowdown in the global industry’s bright spot deepens. Steel consumption in India is likely to increase by less than 6% this fiscal year. That would make it the slowest pace since a 3.1% increase in the year ended March 2017. However, the profitability of steelmakers may recover somewhat in the third quarter of 2019-20, with a sharp fall in prices of coking coal, key steel-making ingredient, in August 2019, and expectation of better demand from the construction sector during that quarter, it said.

“The domestic steel consumption growth is expected to decelerate to around 5 per cent-6 per cent in FY2020 as compared to 7.9 per cent in FY2019, on the back of an unprecedented slowdown in economic activity, as reflected by GDP (Gross Domestic Product) growth tapering down to 5 per cent in Q1 FY2020,” ICRA said in the report.

The decline in steel prices and seasonally weak demand are also likely to keep second quarter financial performance muted for the domestic steelmakers. Given the challenges prevailing at present, it is estimated that  the industry’s operating margin may decline to around 18 per cent in 2019-20, compared with 23 per cent in the previous financial year, and demand worries will continue to keep steel prices under pressure, which are currently trading at a discount to imported offers.

In 2019-20, domestic iron ore prices are expected to remain range-bound and there is a possibility of an ore supply deficit in the next fiscal, if mine auctions are delayed. On the other hand, blast furnace players would benefit in H2 from a steep correction in coking coal prices in recent months.

India’s crude steel production grew 3.3% to 106.56 MnT in FY 2018-19, making it the world’s second largest steel producer, behind China. Steel exports fell 26.4% to 8.54 MnT as global demand weakened due to geopolitical uncertainties and additional tariffs on imports by the US. Finished and semifinished steel imports rose by 4.6% to reach 8.79 MnT. The domestic market saw rising imports from China, Japan and Korea.

 

Company Analysis:

 There are 3 major players in the Indian Steel Industry and they are listed on the stock exchange. Here are some insights from the Indian players of the steel industry and their productions and capacities.

 

Tata Steel Ltd

Tata Steel
Year FV Equity Capital Net Worth Total Sales PAT BV EPS % change in Revenue % change in Profit
  Rs Rs Cr. Rs Cr. Rs Cr. Rs Cr. Rs Rs % %
2020 H1 10 1145 72644 70961 4739 634.48 41.39 (0.08) (0.06)
2019 H1 10 1145 66292 77105 5017 579.00 43.82

 

  • World’s second-most geographically diversified steel producer
  • Commercial presence in over 50 countries with employees across five continents
  • Lowest cost producer of steel in Asia
  • Second largest steel producer in Europe with a crude steel production capacity of over 12.1 MTPA
  • Crude steel production of 26.4 million tonnes in Q2 FY19
  • Tata Steel has manufacturing units at Jamshedpur, Jharkhand and Kalinganagar, Odisha with production capacities of 10 MnTPA and 3 MnTPA, respectively.
  • During Financial Year 2018-19, Tata Steel acquired Bhushan Steel Limited. (Renamed as Tata Steel BSL Ltd)
  • Tata Steel group acquired the steel business of Usha Martin Limited through one of its subsidiaries Tata Sponge &Iron Ltd. This move helps the Company to create a globally competitive long products business focussed on value-added and differentiated products while achieving cost competitiveness.
  • During the year, the company commenced the Tata Steel Kalinganagar Phase II expansion project to augment the cumulative capacity of the Kalinganagar plant from 3 MnTPA to 8 MnTPA.
  • T V Narendran is the CEO & MD of the Company.

 

The operations capacity of the company is as follows:

 

Operations FY19 FY18 % Change
Mn Tonnes
Hot Metal 14.24 13.86 3
Crude Steel 13.23 12.48 6
Saleable Steel 12.98 12.24 6
Sales 12.69 12.15 4

 

 

Production & Sales of Tata steel Bhusan Steel Ltd is as follows:

Operations FY19
Crude Steel 3.58
Saleable Steel 3.5
Sales 3.57

 

JSW Steel Ltd

JSW Steel
Year FV Equity Capital Net Worth Total Sales PAT BV EPS % change in Revenue % change in Profit
Rs Rs Cr. Rs Cr. Rs Cr. Rs Cr. Rs Rs % %
2020 H1 1.00 240 33369 33565 4356 139.04 18.15 (0.14) (0.03)
2019 H1 1.00 240 26512 39048 4471 110.47 18.63

 

  • India’s largest steel exporter
  • Production capacity of 18 MTPA
  • Crude steel production of 4.17 million tonnes in Q4 FY19, achieving 16.69 MT in fiscal year 2018-19.
  • During the year, JSW Steel Coated has installed and commissioned a Tin Plate Mill of 0.25 MTPA and related facilities at itsTarapur Work to cater to the increasing demand for the tin plate. The total project cost incurred is Rs 575 crores.
  • Mr Sajjan Jindal is the Chairman & MD of the company.

 

Steel Authority of India Ltd

SAIL
Year FV Equity Capital Net Worth Total Sales PAT BV EPS % change in Revenue % change in Profit
  Rs Rs Cr. Rs Cr. Rs Cr. Rs Cr. Rs Rs % %
2020 H1 10 4131 39232 29280 (183) 94.98 (0.44) (0.11) (1.16)
2019 H1 10 4131 36851 32842 1162 89.22 2.81

 

  • Largest steel producer in India
  • Five integrated steel plants
  • Crude steel production 3.930 MT in Q1 FY20
  • Anil K Choudhary is the Chairman of the company.

 

Production Breakup for SAIL

(Unit : ‘000T)

 

Peer Comparisons :

Particulars Tata Steel Ltd JSW Steel Ltd SAIL
Face Value (Rs) 10 1 10
CMP (Rs) 430 260 40
52 Week H/L (Rs) 560.35/320.3 313.4/201.9 60.1/29.5
Market Cap (Rs Crs) 48918 62666 16851
Promoter Holding % 33.12 42.4 75
Equity Cap (Rs Crs) 1144.94 301 4130.53
Networth (Rs Crs) 66650 34795 39646
Debt (Rs Crs) 91146 35989 41434
Sales (Rs Crs) 159060 84961 67468
PAT (Rs Crs) 9098 7524 2349
EBITDA (Rs Crs) 29770 18952 10283
EBITDA Margin 19% 22% 15%
EPS (Rs) 79.5 25.0 5.7
BV (Rs) 582 116 96
P/E 5.4 10.4 7.0
P/BV 0.7 2.2 0.4
ROE % 14 22 6
Debt/ Equity times 1.4 1.0 1.0

 

Current Scenario:

The US-China trade war, slow global economy and a prolonged subdued demand took away the shine of steel in recent times but brokerages and experts are now seeing a spark of revival in the sector.

In a report on December 6, Edelweiss Securities said that the US-China trade war had not reduced the steel trade in Asia. Besides, China’s production rate had likely reached it’s peak and the construction demand in the first half of the calendar year 2020 could even surpass the estimates. Also, low raw material prices are helping maintain the margins in China. All these factors augur well for steel manufacturers, as a stable market balance in China is critical for them.

Despite unenthusiastic auto sector growth in CY20, the property construction to drive consumption is expected to grow. The iron-ore prices have stayed robust in 2019 mainly because of the disruptions at Vale, the world’s largest ore miner.

Furthermore, a higher profit margin of steel mills amid pollution concerns has led to the widening of discount between higher grade and lower grade ore. Unless winter cuts are undermined in China, iron ore and coking coal prices are likely to trend lower, resulting in higher margins for steel players.

In India, while prices are off the lows, but demand is still subdued. Imports are also likely to be constrained by protectionist measures. However, exports are imperative given the surplus production, particularly for flat producers. Owing to the weak domestic demand environment and surplus production, Indian players are increasingly tapping exports markets. In the last three months, India exported steel to the extent of 1mt per month, whereas imports gradually halved to 460kt. Subdued demand in the Indian market in the light of weak macroeconomic environment remains a concern for steel. A revival in major consumers such as auto and realty sectors is also important for the revival of the metal manufacturers. Hope of a demand revival is supporting.

Conclusion:

Construction industry is the largest consumer, accounting to approximately 50% of the world’s steel consumption. Following it is the transport, machinery and metal products industry. The wide range of continuing infrastructure projects is likely to support growth in steel demand in India in 2020. This is because the government has allocated, Rs. 4,50,000 Cr. for the infrastructure development of the country which was allocated in the interim budget FY2019/20.

 

References:

 

Daily Bulletin (13th December, 2019)

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20191213-36

1.Scrip code : 532921
Name : Adani Ports and Special Economic Zone Ltd
Subject : Intimation For Incorporation Of A Wholly Owned Subsidiary Company Namely ‘Adani Pipelines Private Limited’
Intimation for Incorporation of a Wholly Owned Subsidiary Company Namely ‘Adani Pipelines Private Limited’

2.Scrip code : 532482
Name : Granules India Ltd.
Subject : Announcement under Regulation 30 (LODR)-Updates on Joint Venture
Company has entered into an agreement with Hubei Biocause Heilen Pharmaceutical CO., Limited., Joint Venture Partner

3.Scrip code : 539289
Name : MAJESCO LIMITED
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended We hereby intimate you that the Company has entered into a share purchase agreement with Mastek (UK) Limited (the ‘Seller’) on December 12, 2019, for acquisition of 2,000,000 shares of Majesco (USA), a material subsidiary of the Company (‘SPA’). In consideration for purchase of the shares, the Company will pay the Seller USD 15.94 Million, based on closing stock price of Majesco (USA) on the NASDAQ on December 11, 2019. Accordingly, after the completion of the aforesaid purchase, stake of the Company in its material subsidiary i.e. Majesco (USA), will increase to 74.6% from existing 69.9%. You are requested to take the above on your record.

4.Scrip code : 532898
Name : POWER GRID CORPORATION OF INDIA LIMITED
Subject : Announcement under Regulation 30 (LODR)-Acquisition
POWERGRID acquired Rampur Sambhal Transco Limited under TBCB route.

5.Scrip code : 532955
Name : REC LIMITED
Subject : Sale And Transfer Of Rampur Sambhal Transco Limited, Wholly Owned Subsidiary Of RECTPCL And Also Of REC.
In compliance with the provisions of SEBI (LODR) Regulations, 2015, it is informed that the entire shareholding of REC Transmission Projects Company Limited (RECTPCL), a wholly owned subsidiary of REC Limited in Rampur Sambhal Transco Limited, comprising of 50,000 equity shares, have been transferred along with all its assets and liabilities on December 12, 2019, to Power Grid Corporation of India Limited, the successful bidder selected through Tariff Based Competitive Bidding Process for construction of 765/400/220 kV GIS substation, Rampur and 400/220/132 kV GIS substation, Sambhal with associated lines. Hence, with effect from the aforesaid date, the above Project Specific SPV is not subsidiary of RECTPCL & REC.

6.Scrip code : 500325
Name : Reliance Industries Ltd
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Reliance Strategic Business Ventures Limited (“RSBVL”), a wholly-owned subsidiary of Reliance Industries Limited (“RIL” or the “Company”) has acquired equity shares of Asteria Aerospace Private Limited (“Asteria”) for a cash consideration of INR 23,12,49,584/- (Indian Rupees twenty three crore twelve lakh forty nine thousand five hundred eighty four only). The said investment represents 51.78% holding in the equity share capital of Asteria.

7.Scrip code : 508494
Name : Warren Tea Ltd.
Subject : In Principle Decision Of The Board Of Directors To Monetise Some Assets Of The Company
The Board of Directors at its Meeting held today has decided in principle, to monetise certain Tea Estate(s) and /or other assets and for this purpose has authorized the Executive Chairman, the Managing Director and the President-Legal & Company Secretary to identify the Tea Estate(s) and/or other assets and to carry out the process of disposal. The Directors are of the view that it may be prudent for the Company to dispose of one or more of its Estates and/or other assets which have varying contributions and use the proceeds thereof to consolidate and strengthen its financial position including containment and optimization of liabilities including borrowings, as a concrete step towards improvement of the overall performance of the Company. For the purposes of such disposal of tea estates and/or other assets, consent of the shareholders of the Company pursuant to the provisions of the Companies Act, 2013 would be sought by postal ballot.

Daily Bulletin (12th December, 2019)

https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20191212-38

1.Scrip code : 540078 
Name : Mitsu Chem Plast Limited
Subject : Corporate Action-Board recommends Bonus Issue
Increase in Authorised Share Capital of the Company from existing 4,02,50,000/- (Rupees Four Crores Two Lakhs and Fifty Thousand Only) divided into 40,25,000 (Forty Lakhs Twenty Five Thousand) Equity Shares of ? 10/- (Rupees Ten Only) each to ? 12,08,00,000 /- (Rupees Twelve Crores and Eight Lakhs Only) divided into 1,20,80,000 (One Crore Twenty Lakhs and Eighty Thousand) Equity Shares of ? 10/- (Rupees Ten Only) each. 2.Issue of bonus shares in the ratio of 2 (Two) equity shares for every 1 (One) existing equity share held by the shareholders of the Company as on the record date to be fixed for the purpose. The details pertaining to Issue of Bonus Shares as required under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are provided in Annexure attached herewith. 3.Migration of the Company from SME segment of BSE Limited to Main Board of BSE Limited. 4.Draft Notice of Postal Ballot.

2.Scrip code : 532189
Name : India Tourism Development Corporati
Subject : Announcement under Regulation 30 (LODR)-Scheme of Arrangement
In terms of Regulation 30(1) of SEBI (LODR) Regulations, 2015, this is to disclose that ITDC Board in its meeting held today on lih December. 2019 has accorded inprincipal approval regarding merger with ITDC of M/s Kumarakruppa Frontier Hotels Private Limited, a Government Company under the Ministry of Tourism, Govt. Of India in which the Govt. Of India holds 90.09 % shareholding with the Company. The approval of the Board will be conveyed to the Ministry of Tourism for its consideration and onwards approval from DIPAM, Ministry of Finance/CCEA etc.

3.Scrip code : 540975
Name : Aster DM Healthcare Limited
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Disclosure under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, pursuant to increase in the shareholding in subsidiary Company, Prerana Hospital Limited. The Company held 84.93% equity shares of Prerana Hospital Limited. Pursuant to the exercise of put option by the promoters of Prerana Hospital Limited, the shareholding of the Company in Prerana Hospital Limited has increased by 2.06%, thereby making the aggregate shareholding of the Company to 86.99%. In this regard, as per Circular Number CIR/CFD/CMD/4/2015 dated September 09, 2015 pertaining to continuous disclosure requirements for Listed Entities under Regulation 30 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed Annexure I for your records. We request you to kindly take the above information on record.

4.Scrip code : 958437
Name : Reliance Industries Ltd
Subject : Announcement under Regulation 30 (LODR)-Acquisition
Reliance Strategic Business Ventures Limited (‘RSBVL’), a wholly-owned subsidiary of Reliance Industries Limited (‘RIL’ or the ‘Company’) has acquired equity shares of NowFloats Technologies Pvt. Ltd. (‘Nowfloats’) for a cash consideration of INR 141,63,78,822 (Indian Rupees one hundred forty one crore sixty three lakh seventy eight thousand eight hundred twenty two only). The said investment represents 85% holding in the equity share capital of Nowfloats. RSBVL proposes to make a further investment of up to INR 75 crore (Indian Rupees seventy five crore only), subject to achieving agreed milestones. The further investment is expected to be completed by December 2020. Post the further investment, the shareholding of RSBVL will increase to 89.66% of the equity share capital of Nowfloats.

Tata Motors Share V/S DVR

What is a DVR?
DVRs or differential voting rights are shares that carry different voting rights than ordinary shares. In this case, voting right for one DVR was equal to 10% of the voting right of an ordinary share and a 5% higher dividend. Therefore, 10 Tata Motors DVRs carry 1 vote.

Tata Motors was the first company to issue a DVR in India. It received a very underwhelming response where the underwriter JM Financial had to renegotiate terms with the company and the Tata Group had to pick up most of the stake which was up for sale.

DVRs also take a haircut in terms of price due to their lower voting rights, lower liquidity and the reluctance of shareholders which may need greater incentives to invest. This Haircut is the difference between the equity share price and the price of the DVR. In developed countries this haircut is lower. Higher liquidity and trading volumes also reduce this haircut.

Tata Motors DVR Dividends:
The DVR Holders receive a higher dividend on Face Value making the Dividend yield higher for DVR Holders.

Dividend
Date Tata Motors DVR Tata Motors Equity
03-Aug-09 6.5 6
10-Aug-10 15.5 15
19-Jul-11 20.5 20
18-Jul-12 4.1 4
30-Jul-13 2.1 2
09-Jul-14 2.1 2
18-Jul-16 0.3 0.2

 

Equity Share Price V/S DVR Price

A few things become evident by looking at the above chart:

  1. The % difference between the DVR and Equity share tends to move inversely with the equity share price. I.e. As the equity share price of Tata Motors falls, the % difference between the price of the DVR and equity share increases.This means that the price of the DVR has fallen at a greater rate in comparison to the equity share.
  2. The % difference between the price of the DVR and Equity Share is at a record high at 59.5%
  3. The average % difference between the DVR and share price since 2015 is 41.4%. . The range for the % difference is shown below:
Date Tata Motors DVR Price Tata Motors Equity Share Price % Difference
Lowest 28-Jan-16 267.5 334.2 20.0
Highest 11-Dec-19 64.15 158.45 59.5

 

  1. As the % difference increases, the return provided by the DVR in comparison to the equity share decreases.Since the % difference between the equity share price and the DVR is at a record high, now is a good time to consider investing in the DVR in place of the Equity share if one is looking to invest in Tata motors as Historical data suggests that the Equity Share Price and DVR % difference should converge to its average or at least decrease once the company starts doing better which will mean a higher % return for DVR holders in comparison to equity share holders and a much higher dividend yield.

 

If the company’s performance improves in the future, the DVR will provide greater capital appreciation to its holders.