Market Analysis: Review on Tuesday, Nov 23

Mumbai, Nov 23: On Tuesday, Nov 22 BSE Sensex gained 372 points and closed at 19,957, while NSE Nifty gained 119 points and closed at 6010. All the BSE sector indices closed in green. BSE Bankex and Consumer Durable indices gained by 2.6 percent and 2.5 percent respectively.

Honda, Hero ready for ready for break-up talks

Honda and Hero Group are set to meet shortly to break-up the 25 year old partnership. The two partners have been discussing a change in the ownership structure of the company which would see the Hero Group buy out Honda and acquire majority control over the bike maker.

As per the agreement between the two partners, either of the two parties want to exit, the other partner has the right to buy these shares at a 30-40 percent discount. But if this offer is not acceptable, the seller can turn buyer and offer to purchase the shares of the other partner at a premium.

Jubilant Energy plans to mop up $85 million through QIP route

Jubilant Energy will raise $85 million by selling 21.8 percent stake to institutional investors and will start trading on London Stock Exchange. The proceeds are expected to use for exploration and working Capital needs for the next calendar year. Jubilant Energy is the privately held Dutch holding firm for Indian energy assets of the Bhartias. The Company has nine oil blocks with a total gas reserve of 151.2 million barrels.

The Company is producing at only one of its plants located at Kharsang in Arunachal Pradesh that accounts for the bulk of revenues of around $20 million. The Company expects revenue to increase significantly once production from the KG Basin starts in Apr 2013. The Company plans to bid independently or jointly with partners for the 9th round of auctions by the government for 34 oil blocks next Apr.

Godrej talking to Israeli firms

Godrej Agrovet Ltd, the Agri-business arm of Godrej Ltd, has planned to enter the dairy farming business. It is in talks with atleast two leading Israeli dairy farm technology providers.

Godrej is looking to set up a model dairy farm, with about 200 cows. The Company may not be looking at commercial production of milk, but is interested in becoming a technology source for providing high yielding cows and world-class technology. The Company has interest in animal feed, Oil palm plantations, agri-inputs and poultry. Godrej's foray is part of a trend where major companies are seriously thinking of commercial dairy farming as against the conventional format of co-operative dairies.

Bharati Shipyard to buy 51 percent in Chennai-based Tebma

Bharati Shipyard has agreed to acquire 51 percent of equity stake in the Chennai-based Tebma Shipyard for Rs 75.75 crore. Bharati Shipyard will get management control in the South-based company. Currently, ICICI Venture holds a 53 percent stake in the company, existing promoters hold 4.93 percent while the rest is held by the public.

Bharati Shipyard will be issued fresh equity at a price of Rs 19.20 a share. This will expand the post-issue equity capital base of Tebma to Rs 77.36 crore. The current equity capital of Tebma Shipyards is Rs 7.78 crore. After the infusion, ICICI Venture's stake will come down to 44.28 percent.

Bharati Shipyard will get access to the Tebma's ready-made and modern shipyards in the South. Tebma has shipyards at Malpe in Karnataka, Kochi in Kerala and Chingleput in Tamil Nadu. Tebma has a current order book of approximately Rs 750 crore, which mainly consists of vessels required for the global exploration and production sector.

(An article by DAS CAPITAL MANAGEMENT & ADVISORS Pvt Ltd)