India Pre-Policy Rate action – Impact Analysis

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Reserve Bank of India’s surprise Rate hike (25bps each for repo and reverse repo) caught the market off-guard, even as the past week’s buying in government bonds indicated a distinct comfort on the part of market participants most of whom anticipated the action at the time of the April policy – scheduled on April 20, 2010. We would expect the impact on the respective fixed income segments as below.

Sovereign bonds – with most of the action concentrated in the 2016 and the benchmark 2020 bonds, we would expect the belly of the curve to steepen and the 2s10s spread to harden as market prices in the distinctly emerging hawkishness on interest rates from the central bank.

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L&T SPV signs concession pact with NHAI

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L&T Samakhiali Gandhidham Tollway, a Special Purpose Vehicle (SPV) incorporated by Larsen & Toubro (L&T) has entered into a concession agreement with National Highways Authority of India (NHAI) for six laning of the 56 km stretch of NH-8A.

The project will be executed on a BOT Design Build Finance and Operate (DBFO) basis, with a concession period of 24 years. The estimated cost of project is about Rs 1,400 crore and is scheduled to be completed within a period of 30 months. The concessionaire is

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Bharti Airtel plans to mop up dollar loan for Zain acquisition

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Bharti Airtel, the country’s largest telecom operator by revenue, is looking to mop up $8.5 billion worth of offshore loan to fund the acquisition of Zain’s African mobile operations, as mentioned in some media reports.

The report further added that the telecom major has also issued a term sheet to lenders for the same. The offshore facility is likely to consist of four phases and it will be for a period six years.

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Nifty ends flat amidst tumbling Asian Indices

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The benchmark indices pared early losses and shut shop on a flat note on Monday. The markets were trading deep in the red during the initial hour of trade on apprehensions of a double-digit inflation figure. But the indices remained quiet for a while after the inflation data was announced, which stood at 9.89% for February against 8.56% in January. The rate hikes during RBI’s upcoming monetary policy review in April is almost certain, albeit the magnitude of such a hike remains a subject for debate.

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Reliance Communications 100mn Customers – In Wrong Hands

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Reliance Communications, India’s largest and only nationwide operator offering both GSM and CDMA mobile services, has crossed the landmark of 100 million customers for its wireless services with the target of doubling the number over the next three years making it the second largest wireless operator in the country. Without any hesitation we believe that majority of 100 mn customers are in the Wrong Hands of Weak Management of Reliance ADAG Group because of extremely poor customer care

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Jan Factory Output Up 16.7% with heavy Investment

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Industrial production rose 16.7% yoy, higher than our expectations, but broadly in line with consensus. Growth, which initially started picking up in Jun 09, gathered momentum post August and has averaged 12.7% since then v/s 1.9% in the same period last year. On a fiscal year basis (Apr-Jan), growth was 9.6% v/s 3.3% in the same period last year.

The strong numbers are reflective of (1) the base effect (2) the impact of the stimulus measures and (3) the economy

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