SIMPLEXINFRA

Close433.55

Stock rises after the firmbags power transmissioncontract from REC

SINTEX

Close179.6

Scrip gains after thecompany gets 'buy' ratingby a domestic brokerage

SUNPHARMA

Close453.25

Counter soars on newsthat the company wonEloxatin case

% ch

5.55 4.96% ch

4.34% ch

SAIL

Close186.45

Share plunges on reportsthat the firms FPO pricewill be at a sharp discount

STR

EET

SIG

NS

Jhunjhunwasla’s A2Zplunges 17.7% on debutA2Z Maintenance & Engineering Services(A2Z) disappointed on the first day of tradeon the bourses, with the scrip plungingnearly 18% on the BSE over the issue price.A2Z slipped 17.77% to settle at Rs 328.90 onBSE below its issue price of Rs 400. Duringthe day, the stock had lost 20.33% to hit itsintraday low of Rs 318.65.

Sensex slips 33 pointson low volumesSensex edged down 0.2% in choppy trade onThursday amid low volumes as investorsstayed on the sidelines ahead of the holidayseason, but market participants see anupward trend for the year 2011. Sensex closed0.2%, or 32.9 points, lower at 19,982.88, with20 of its components declining. Nifty closed0.1% lower at 5,980 points.

Power Finance FPO likelynext fiscal : MinisterPower Finance Corporation (PFC)'s follow-on public offer (FPO) is likely to hit themarket next fiscal, Union Minister of Statefor Power, Bharat Solanki said. “Thenecessary procedure for disinvestment inPFC is underway and we expect the FPO tocome out some time in the next fiscal,”Solanki said.

Vrindavan pledges 2.58 mshares of JSW SteelVrindavan Services, part of the promotergroup, pledged 2.58 million shares of JSWSteel on December 16, it said Thursday. Theshares represent 53.35% of the company'sshareholding in JSW Steel.

Uniphos to raise up toRs 75 cr via rights issueUniphos Enterprises' board has approvedrights share issue of up to Rs 75 crore. In anotice to the Bombay Stock Exchange onThursday, Uniphos Enterprises said it israising funds to repay loans and for generalcorporate purposes. The ratio forentitlement and price of the issuance will bedetermined at an "appropriate time".

Nirma buyback issueto open on Jan 17Nirma on Thursday said it will open biddingfor its share buyback offer on January 17.The offer, where promoters will buyback22.83% shares from public shareholders, willend on January 20.

Quick view

Friday, December 24, 2010, New Delhi Marketsw w w . f i n a n c i a l e x p r e s s . c o m 11

WORDS THAT MATTER

8.35% ch

The new leadership coming from financialsis a very welcome sign. It's a very influentialgroup, without question. Everybodyremembers financials got us (the US) intothis big mess a couple years ago, and they'regoing to have to lead us out.Ryan Detrick,Senior technical analyst at Schaeffer's Investment Research

CHART OF THE DAY

ANALYSTCORNER

LOOK BEFORE YOU LEAP

FACTBOX

Bloomberg assigns a number to each rating that ranges from1 to 5, with 5 being the highest recommendation. To calculatethe average, these numbers are added together and the to-tal is divided by how many recommendations were made dur-ing the past 12 months. The target price is the average of an-alysts' 12 months predicted price. Only companies that have atleast three analyst ratings are included.

LEADERSAverage 1 Year

Company Average Total # Price Target %TKR Name rating Analyst 12/21 Price ReturnAlds Allied Digital 5.000 9 183.65 284.83 -17.0Amtk Amtek Auto 5.000 5 142.70 210.00 -22.3Bata Bata India 5.000 3 342.40 401.00 79.1Bd Bombay Dyeing 5.000 5 488.00 798.67 24.9Bijl Bharat Bijlee 5.000 4 916.60 1,391.67 3.7Bil Balkrishna Inds 5.000 8 133.00 189.51 57.9Bjfin Bajaj Finserv 5.000 3 456.40 619.00 40.7Bjhi Bajaj Holdings 5.000 3 847.30 981.50 42.2Cu Carborundum Univ 5.000 4 254.25 286.67 60.3Dech Deccan Chronicle 5.000 7 106.25 178.00 -30.8Eda Ess dee Aluminium 5.000 5 470.00 667.25 32.6Eedu Everonn Education 5.000 7 591.95 740.67 49.6Elsc Electrosteel 5.000 3 36.70 65.00 -18.3Fsol Firstsource Solu 5.000 8 23.45 35.64 -30.7Ftech Financial Techno 5.000 4 889.05 1606.00 -32.9Gisp Gammon Infrastru 5.000 3 20.40 30.00 7.7Grv Greaves Cotton 5.000 5 97.80 104.80 86.1Gsfc Gujarat State 5.000 5 361.20 497.50 115.2Hath Hathway Cables 5.000 7 172.80 259.20 259.2*Heg HEG 5.000 3 284.05 330.67 -24.3Heim Heidelbergcement 5.000 4 43.25 57.50 6.8Jbil Jai balaji 5.000 3 256.85 386.50 9.3Jki JK Tyre 5.000 5 134.80 194.75 -7.8Kair Kingfisher Air 5.000 4 61.90 85.00 11.0Kso KS Oils 5.000 8 45.30 72.33 -27.8Max Max India 5.000 6 136.55 220.33 -36.6Mcna Mcally Bharat e 5.000 8 205.30 348.67 1.7Mdhpj Madhucon Project 5.000 6 119.75 191.40 -26.5Mrgc Marg 5.000 3 155.35 361.00 -19.3Ober Oberoi Realty 5.000 7 264.55 348.00 348.0*Pki Prakash Inds 5.000 10 114.25 238.88 -37.5Prov Provogue 5.000 3 60.90 106.00 11.8Si Supreme Inds 5.000 5 145.80 211.50 132.7Stan StanChart-IDR 5.000 3 113.80 145.00 145.0*Ti Tube Inv India 5.000 3 149.85 180.00 143.5Uflx Uflex 5.000 4 199.75 448.00 123.2Usm Usha Martin 5.000 15 70.25 109.80 -1.8Vtex Vardhman Textile 5.000 5 293.75 400.50 39.2Ahlu Ahluwalia Contra 4.938 16 148.00 255.08 -15.3Esc Escorts 4.923 13 170.60 235.91 47.6Adml Adhunik Metaliks 4.917 12 102.45 162.20 9.8Dfpc Deepak Fertilisers 4.900 10 159.00 221.44 65.2Jklc JK Lakshmi Cement 4.857 14 56.25 76.22 -15.4Cesc Cesc 4.846 26 371.10 478.81 -1.9Pec Patel Engineer 4.846 26 306.80 503.23 -28.9Ttsl Tulip Telecom 4.818 22 174.10 227.75 -9.8Vysb Vysya Bank 4.818 11 368.15 457.50 25.1Wlco Welspun Corp 4.810 21 168.20 324.00 -34.6Dewh Dewan Housing 4.800 5 277.75 363.60 49.7Sjet SpiceJet 4.800 10 81.15 111.83 64.6Sobha Sobha Developers 4.800 20 328.25 419.44 42.7Str Strides Arcolab 4.800 5 418.90 583.50 81.0Trp Torrent Pharma 4.800 10 570.15 645.62 45.9*over 23 aug 2010, data as on 24 aug 2010 Source :Bloomberg

Average 1 YearCompany Average Total # Price Target %

TKR Name rating Analyst 12/21 Price ReturnMrpl Mangalore Refinery 1.000 3 72.35 60.33 -2.2Ttls Tata Teleservice 1.000 9 18.95 17.14 -26.4Atd Areva T&D India 1.333 15 321.90 246.91 18.8Nacl National Aluminium 1.469 32 382.65 342.95 4.3Bjh Bajaj Hindusthan 1.500 16 110.20 94.50 -47.2Abb Abb 1.556 36 764.05 653.89 1.3Rpwr Reliance Power 1.556 18 149.60 134.64 4.8Rcf Rashtriya Chems 1.667 3 99.10 65.33 39.1Mtnl Mahanagar Tele 1.750 16 52.95 49.12 -26.1Gtli GTL Infrastructure 2.000 3 43.10 43.67 22.1Mast Mastek 2.000 5 176.80 200.50 -54.9Nfcl Nagarjuna Fert 2.000 4 30.50 36.25 -2.8Tcom Tata Comm 2.067 15 250.00 279.00 -26.3Acem Ambuja Cements 2.078 51 138.10 125.37 45.7Huvr Hindustan Unilev 2.275 40 293.75 279.12 14.7Prj Praj Industries 2.286 7 71.90 66.80 -23.4Punj Punj Lloyd 2.323 31 105.75 117.47 -45.6Apil Ansal Props & in 2.333 3 58.80 75.00 -12.1Mc Madras Cements 2.333 9 107.75 106.17 -3.8Pipv Pipavav Shipyard 2.333 3 76.45 69.67 44.1Utcem Ultratech Cement 2.365 52 1073.00 1023.11 20.9Nmdc NMDC 2.385 13 263.55 256.00 -34.4Icem India Cements 2.550 40 105.20 117.87 -8.4Acc ACC 2.556 54 1078.45 948.85 29.1Nest Nestle India 2.600 30 3610.65 3227.00 44.9Vamp Voltamp Transfor 2.600 15 784.10 838.27 -7.7Rcom Reliance Comm 2.628 43 127.45 160.66 -24.1Techm Tech Mahindra 2.629 35 699.15 769.59 -29.5Suel Suzlon Energy 2.630 27 50.65 55.91 -37.4Siem Siemens India 2.714 21 785.15 761.31 43.5Nhpc NHPC 2.750 12 27.50 30.69 -12.0Glxo GlaxoSmithKline 2.808 26 2200.25 2092.59 39.3Brit Britannia 2.875 8 404.00 417.50 25.5Ccri Container 2.895 19 1264.10 1317.23 2.6Mhrl Mahindra Holiday 2.909 11 407.45 435.38 -7.9Boi Bank of India 2.940 50 451.00 513.07 29.8Idea Idea Cellular 2.957 46 67.35 71.73 18.1Jsw JSW Energy 2.957 23 97.90 117.17 117.2*Mtcl Mindtree 2.958 24 516.50 552.33 -26.3

LAGGARDS

Source: Kotak

PE (x) RoE (%)

Company FY 11 FY 12 FY 11 FY 12

HDFC 2299..33 24.5 2200..99 22.2

IDFC 1199..55 15.7 1144..66 13.8

LIC Housing Fin 99..33 8.7 2255..66 23

M&M Fin ser 1166..99 12.3 2211..88 23.5

Power Finance 1122..11 9.8 1199..55 21.3

Shriram Finance 1144..22 12.3 2299..77 28.7

SREI Infra 2255..00 18.2 1122..88 11.3

VALUATION OF NON-BANKINGFINANCE COMPANIES

fe Bureau

Chennai, Dec 23: The Securi-ties and Exchange Board ofIndia (Sebi) on Thursday hand-ed down a 10-year ban on Pyra-mid Saimira chairman andmanaging director PS Sami-nathan from trading and beinga director of a listed company.The watchdog held Sami-nathan, who is also the promot-er, guilty of inflating revenueand profit using fictitious enti-ties in 2007-08.

The regulator also directedSaminathantomakeapublicof-fer, which must be completedwithin three months. Sebi hasordered the company to delist ifpublic shareholding fell belowthe minimum limit. also direct-

ed the Bombay Stock Exchangeto facilitate valuation of sharesto be purchased as per the aboveSebiRegulationsandcompulso-

rily delist the company, if thepublicshareholdingreducesbe-low the minimum level in viewof aforesaid purchase.

Sebi's order of November10, 2009 had banned PyramidSaimira from the market forseven years.

The market regulator alsoimposed a five-year ban on UmaSaminathan from the marketand being a director of a listedcompany.

The Sebi also said that thecompany made false announce-ments regarding agreementswith theatres.Itallotedconvert-ible warrants to Saminathan onpreferentialbasisinviolationofSebi guidelines.

The company's appeals filedagainst the earlier Sebi orderwere dismissed by the Securi-ties Appellate Tribunal and theSupreme Court in April and Ju-ly, respectively.

LiquidityfromtheFIIfrontis drying up, at least itsdiscernable in the cash

market segment, if not in the fu-tures and options. But the goodpart is that there is no signifi-cantsellingeither.Lastweek,wesaw unwinding of long posi-tions in index futures by FIIsand this week—in the first twodays—wedidseesomefreshfor-mation of long positions. Thisaction of FIIs is amid concernspertaining to the European re-gion, monetary tightening inChina,politicaltensionsinEastAsia and corporate governanceissues related to us. Taking allthatintoconsideration,wedon’texpect any major selloff to betriggeredbythem;anddollarin-dex too is stabilising.

Nifty is likely to face immedi-ate resistance at 6,050 and maxi-mum built-up of futures and op-tionspositionsisseenin6,000and6,100calloptions.Itlooksveryun-likelythatmarketmayformnewmonthlylows.And5,750-5,800hasgainedstrengthassupportforthemarkets. This overall appears tobetherangefortheNifty.Impliedvolatility has also been range

bound and has been gyrating be-tween17%and21%.

In single stock futures, largecap, rally is being led by shortcovering and price correctionare accompanied by formationof short positions. There hasbeen exceptions like IT andsome metal counters in whichlong formation was observed.Banking had shown somebounce back due to short cover-ing though many short posi-tionsstillcontinueinthisspace.Mostof themidcapstocksaren'tseeing much of open interestwith unwinding of retail andHNI positions (due to margincall trigger) which in turn had

led to recent correction at thesecounters.

From a trading perspective,we suggest forming 'negativebias' strategy for Nifty and golong on a stock specific basis. InNiftyaswearenotexpectingsig-nificantdownside,forming'longput ladder' by buying 6000 putand selling one 5900 put and one5800putisadvisable.Thisstrate-gywill leadtolossif marketgoesbelow 5725 levels. And Nifty'sclosing between 5900 and 5800willgeneratemaximumreturns.

Among market capitalisa-tion, we prefer midcap stocksfrom investment as well as trad-ing perspective. Some of thestocks in which we would sug-gest to trade with positive biasare HDIL, CESC, India Infoline,Shipping Corporation, RELIN-FRA, Great OFFSHORE, StateBank of India amongst others.

■ Siddarth Bhamre, head-equity derivatives, AngelBroking

(View given above is sharedwithclientsandBhamrehasper-sonal holding in some of thestocks recommended)

Long put ladder: Buy Nifty6,000, sell 5,900 & 5,800

JSW Steel has acquired41.3%equityinIspatIn-dustriesbyinvestingRs

2,157 crore, implying an en-terprise value of Rs 12,300crore (including preferencecapital) and equity valuationof Rs 5,200 crore. Ispat hasHRC and downstream flatscapacity of 3.3 mtpa and ~0.5mtpa, respectively. For12mFY10, Ispat posted rev-enue, EBITDA and PBT of$1,733 million, $308 millionand$(-60million),respective-ly,withsalesvolumeof 2.6mt.

Ispat achieved Ebitda/t of$118 in 12mFY10. We expect acombination of cost savings,better realisations and cycli-cal improvement in steelmargins to lead to EBITDA/tand EBITDA of USD 175 andUSD 525 mn, respectively, byFY13E. Such a turnaroundwould imply EV/EBITDA of5.2x which is fair but notcheap. Potential cost savingsincludethoseonfreight,pow-er, VAT and raw material(leveraging JSW’s existingsupplier base and upcomingpelletcapacity).Theeffectivecost of Ispat’s term debt, ag-gregating INR 67.8 bn, is~12.5%.JSWproposestorefi-nance this by September2011, which will bring downinterest costs by 200-250bps.

Ispat is planning capex ofINR 31.4 bn over the next twoyears,whichincludessettingup a 110 MW CPP, 3 mtpa pel-let plant, 1 mtpa coke plantandcapacityexpansionto4.0mtpafromtheexisting3.3mt-pa. So far, it has spent Rs 400crore. Of the equity infusionof Rs2,15,700croreintoIspat,Rs700-800crorewillbethere-quired equity capital for thiscapex; the remaining capexislikelytobefundedthroughfresh debt of ~INR 20 bn overthe next two years.

This acquisition will en-able JSW to emerge as India’slargest steel player, at 14.3 mt-pa, by early FY12. We believeJSW has the financialstrength and operational ca-pabilities to effect the turn-around as mentioned above.However, the issue of in-creased debt of INR 94 bnwouldactasadrag.Hence,wedo not see upside to our fairvaluation of INR 1,372/share.We maintain ‘BUY' The newshareholding structure, postJSW investment, includesconversion of preferenceshare of INR 4.86 bn into 245mn shares to promoters (181mn), lenders (10 mn) and oth-ers(54mn). Edelweiss

FUTURES OPTION

fe Bureau

Mumbai, Dec 23: Bharti-AXAMutualFundismostlikelytosellitsstaketoBankof Indiaandthedeal is to be finalised in the nextonemonth.Earlier,publicsectorbanks like Central Bank and In-dianOverseasBankwerereport-ed in the race to buy the stake inthe mutual fund house.

According to the market par-ticipants, Bharti Enterpriseswhich holds 25% stake in theventure is likely to exit from themutual fund business. SandeepDasgupta, CEO of Bharti AXAinvestment manager said, “Weare looking for a banking part-ner,butIcan'tcommentwhetherit will completed within the nextmonth, as there are severalprocessestogothrough.”Hedid-n'tcommentonthesharepriceatwhich Bharti will exit the busi-ness. “You will know it once thedeal is done,” he said.

For the last two years, Bharti-AXA MF was looking for a part-ner to expand its asset manage-ment business, but talks wereput on hold following financial

meltdown of 2009. A senior offi-cial close to the developmentsaid, “valuations are still beingworked-out as Bank of India isplanning to buy more than 25%stake in the fund house.”

Market participants say that,with current regulatory envi-ronment in the mutual fund in-dustry, banks are turning out tobe a crucial link to sell mutualfund products. “We are witness-ingatrendinwhichafundhouseare increasingly partneringwith banks with pan-India pres-ence to sell mutual fund prod-

ucts,” said a CEO of the leadingfund house on condition ofanonymity. Banks are alreadythe largest among various cate-gory of mutual fund distribu-tors,headded.Bankof Indiacur-rently has over 3,300 branchesacross the country which canhelp to attract more investors.

In 2010 IDBI mutual fund en-tered the mutual fund business,while Union Bank along withKBC asset management is alsoplanning to come out with itsmutual fund business. In thepast Bank of India had startedits mutual fund business in 1990and later in 2004 they had of-fered exit option for their in-vestors in which they had re-deemed four of their schemesand transferred two schemes toTaurus Mutual Fund.

In 2009 we had seen T RowePrice buying 26% in UTI mutualfund, while Nomura Asset Man-agement had bought 35% stakein LIC Mutual Fund and L&T Fi-nance had acquired 100% stakeinDBSCholamandalam.Recent-ly, Daiwa Group also boughtstake in Shinsei Mutual Fund.

Pyramid Saimira promoterbanned from mkt for 10 yrsÇ Sebi gives co three month to buyback Ç Uma Saminathan gets 5-yr ban

Bharti may sell mutual fundJV stake to Bank of India Ispat buy

favourablefor JSW Steel

PS Saminathan, Pyramid Saimira CMD

NIFTY IS LIKELY TOFACE IMMEDIATERESISTANCE AT 6,050AND MAXIMUMBUILT-UP OF FUTURESAND OPTIONSPOSITIONS IS SEEN IN6,000 AND 6,100CALL OPTIONS

We are looking for abanking partner,but I can't commentwhether it willcompleted within thenext month, as there areseveral processes togo throughSandeep Dasgupta,CEO of Bharti AXAinvestment manager