ONGC halts development of six discoveries
Owing to lack of proper infrastructure set up, state-run exploration and production (E&P) major Oil and Natural Gas Corporation (ONGC) has only shelved out development of six prospective discoveries made in recent years in the backward regions. ONGC has discoveries under its belt like Karjan, Linch and Mekrang lying in areas where no infrastructure is available. To add much to the worries, it has not found any customers for these discoveries and hence it has not prepared any detailed development plan.
ONGC’s six discoveries are a part of 66 (26 onshore and 40 offshore) finds, which are in various stages of exploration. It is in the process of crystallising the plans to put these discoveries into production, keeping in view the connectivity and resource planning.
On linkages of discoveries with the requirement of customers, one of its finds in Tripura, has been linked to an upcoming power plant, likely to become operational from 2012-13.
Out of the total 111 discoveries made during the past six years, the company has put 45 into production.
Reliance Industry Sales + Profits Slip – GRMS Down – Bad performance
Reliance Industries Limitd, has reported 4th successive bad quarterly results with both Sales and net profits slipping and are no where near street expectations.
The Company has posted a net profit after tax of Rs 36360 million for the quarter ended June 30, 2009 as compared to Rs 41100 million for the quarter ended June 30, 2008. Total Income has decreased from Rs 418050 million for the quarter ended June 30, 2008 to Rs 327570 million for the quarter ended June 30, 2009.
GRMs were down to $7.5 / barrel below ONGC’s %9.0 / barrel, pathetic performance. Looks like the insiders were aware that their would be a sell off if the results were declared during market hours and hence on a Friday evening 
L&T Finance plans to enter the mutual fund + insurance biz
L&T Finance (LTF), part of engineering major Larsen & Toubro, plans to enter the asset management and insurance segments in a time frame of 12-18 months. According to the company, LTF is aggressively working on the foray into these segments.
Presently, LTF is one of the players in vehicle financing segment in India, with total assets around Rs 5,400 crore. Further, it aims to grow this segment by 30% to Rs 7,000 crore in FY’10. Last year, company has financed around 15,000 tractors, targets to increase it’s by at least 20%.
At end of FY’09, company’s total revenues stood at Rs 830.28 crore, whereas its non-performing assets (NPAs) rose to 2.04% from around 1% a year-ago.
Adani Power – Dirty Energy IPO – Carbon Credits Unanswered Question
Without any regards to the environment, Indian companies are in a rush to produce power at any cost and in the next 5 years it will cost them dearly. Adani Power wants to generate 6600 MW of Power using Coal and is planning to raise Rs 3,000 cr or $700 mn in an IPO. This is the second such mega IPO after Reliance Power which was a Box office flop
One should read the financial engineering of Goldman Sachs which is lobbying hard with the Congress to pass Carbon Credit Trading bill and once this is in place, the Coal Power plants will be the worst affected.
We advise investors to stay away from the IPO and instead look at National Hydro Electric Power IPO – a green energy plant which will be the major beneficiary of clean energy.
Essar Oil seeks alliances for boosting retail market share in LPG
Essar Oil, part of the Ruia Group, has invited alliances aimed at boosting its market share. The company presently has 1,250 fuel outlets located at highways, rural areas and tier II and III cities.
The private sector E&P and marketing major plans to house food chains and will also supply auto LPG at its outlets. Essar Oil already has a tie-up with Rallis for marketing pesticides and chemicals and NSC for seeds at 60 fuel pumps located in rural areas. Its pumps in tier II cities sell dairy products from Amul.
The company is in talks with LPG marketers such as SHV of the Netherlands, ELF of France and Mumbai-based Aegis. It will start selling LPG through 10 outlets in the current fiscal itself. Each facility will cost Rs 55-60 lakh. The company hopes to sell 40 kl of LPG sale every month.
Setting up food courts, shopping facilities and better toilets are also part of the company’s plan. It plans to expand its retail network to 1,500 outlets by the end of the fiscal. . The company hopes that the government will implement market-linked fuel pricing mechanism for a level playing field with the public sector companies
RBI likely to hold rates in Q1 policy review
The Reserve Bank of India (RBI), which is set to present its first quarterly review of monetary policy next week, is unlikely to go for further interest rate cuts, although its overall stance is likely to be more pro-growth than otherwise.
There are two main reasons that may prevent the Indian monetary authority from going in for further easing of the policy stance. First, a rate cut in present circumstances when the government is set for huge borrowings will have little impact. While there is enough liquidity in the system currently, in wake of large sovereign paper hitting the market, it will be liquidity management that would drive policy in near term rather than short term lending rate of RBI.
Secondly, although the wholesale inflation is in the negative terrain, the consumer prices indices continue to grow at close to 8-9%. Food prices are high and increasing at a swift pace. Overall, there are all indications that RBI needs to suggest that inflationary pressures are building in the economy notwithstanding the statistically generated negative WPI numbers.
Therefore the RBI would like to avoid any possibility of overheating the economy as even if the bank decides to cut rates now, the monetary policy transmission will take its time and by the time the monetary currents reach the destination, broader inflation too may already be on rising trajectory.
Better than expected growth in the March quarter at 5.8% (compared with market expectations of 5.3%), and sequential improvement high frequency indicators like the index of industrial production etc also suggest that economy is gaining momentum, dispensing the need for further cuts.
However, only factor that RBI would be wary of is poor credit off-take. Credit growth has fallen to about 16% from more than 23% last year. While the apex bank believes poor credit off-take is due to lesser demand from the corporate sector, it will still have to take a soft view on the issue. Most likely the RBI will use its persuasive powers to ensure greater lending by banks rather than using any policy or reserve instrument.
ING Life inks deal with e-seva
Private sector life insurance company ING Life India has inked a tie up with e-seva, the citizen services arm of the Andhra Pradesh government for premium collection.
This tie up will provide customers a faster, efficient and accessible method of renewal premium payment.
Presently, the insurer has a network of 259 branches with a presence in 234 cities and towns. Further, the company has a strength of 70,000 advisers that assist customers in offering products that cater to their needs.
In FY 2008-09, ING Life garnered a renewal premium of Rs 750 crore, and has set a target of Rs 1,200 crore in FY 2009-10. The insurer has market share of 1.6% and has no proposal of marketing its products via these e-seva centres..
The tie up will be activated in 21 e-seva centres is spread across the Visakhapatnam district.
Mild Recovery in Mumbai + Noida Real Estate – Bangalore and Hyderabad No Signs of Recovery
Mumbai Residential Real Estate absorption was around 5,000 units a month in March-May 2009, which is broadly in-line with levels in early 2008 and up significantly from around 2,000 units/month in September 2008-February 2009. The number of months of unsold inventory has fallen to 11, which is in-line with early 2008 levels and may be a sign that the market is bottoming out.
Noida and Greater Noida: There was a significant recovery, particularly in May, with absorption of over 4,500 units.
In Bangalore, monthly residential real estate absorption remains well below average 2008 levels and the number of months of unsold supply stands at 33 in May, compared with 11 through most of 2008 indicating excessive oversupply.
The Hyderabad real estate market probably looks the most unfavorable out of the cities we have covered so far with about 800 units/month sold in January-May 2009 compared with about 1,800 units/month in 2008. There is 44 months worth of unsold inventory based on average absorption in March-May 2009.
NSDL, CDSL revise norms for expired commodity stocks
The National Securities Depository and Central Depository Services (India) have revised the norms relating to expired commodity stocks. The depository entities have decided to restrict off-market deals, which enabled inter-client transfer of expired commodity stocks at exchange warehouses.
As per a circular issued by NCDEX on Tuesday, members must transfer the holdings from his pool account to the beneficiary or client’s account on the final expiry date of the stock The commex added that after July 31, when the new norms come into effect, the client will have to take physical delivery of the goods after the final expiry date of the stock.
SBI Life Maha Anand ULIP – Review
SBI Life has recently launched SBI Life Maha Anand — a unit linked (ULIP), non participating insurance plan. It is an simple and affordable scheme which does not require any medical examination, offers flexibility to increase investments of policyholders through top-ups and liquidity through partial withdrawals.
Under the scheme, a policyholder needs to choose premium amount and policy term. The premium after deduction of premium allocation charges will be invested into funds chosen by policyholder. On maturity accumulated fund value will paid and in case of unfortunate event of death, the nominee will receive higher of fund value or sum assured.
The minimum entry age is 0 years whereas maximum is 55 years. The maximum maturity age is 65 age. The payment mode of premium is yearly, half yearly, quarterly and monthly. The minimum premium amount is Rs 6000 (yearly), Rs 3000 (half yearly), Rs 1500 (quarterly) and Rs 500 (monthly). While the maximum premium amount is Rs 30,000 (yearly), Rs 15,000 (half yearly), Rs 7500 (quarterly) and Rs 2500 (monthly). The policy term under this scheme is 10 years, 15 years and 20 years.
Under the scheme, partial withdrawal is possible only after completion of 5 policy years to meet any sudden or unforeseen expenses. The 3 investment fund options available under the scheme are Equity Fund, Optimiser Fund and Bond Fund.