Market Analysis: Review on Monday, Dec 6

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Sensex
Mumbai, Dec 7: Benchmark Indices closed marginally flat. BSE Sensex gained 14 points and closed at 19,981. NSE Nifty lost 0.5 points and closed at 5992. BSE Metal and Oil & Gas indices gained 2.3 percent and 0.8 percent respectively. BSE Bankex and PSU indices were down by 2.4 percent and 0.9 percent respectively.

Religare likely to buy 85 percentage stake in piramal realty fund

Religare Enterprises is buying 85 percent of Ajay Piramal Group promoted real estate fund, and the remaining 15 percent is owned by Indiareit Fund Advisors CEO and the employees. The value of the entire fund is estimated around Rs 250 crore. The deal is expected to be announced by the end of Dec. The fund, started in 2006, is currently managing three domestic and one offshore fund with assets totaling around Rs 2,850 crore, and is planning to launch two more funds to raise Rs 1,350 crore.

The Ajay Piramal Group"s exit from the fund is because of a likely conflict of interest as the group is now focused more on land acquisition and development. Realty Consultancy firm DTZ is acting as the advisor for the transaction.

Steel Cos gear up for Iron ore price hike

International iron ore prices are forecast to rise in the January-March quarter of 2011, backed by a recovery in China"s steel production. Leading global companies like Rio Tinto, Vale and BHP are widely expected to raise prices by an estimated 7-8 percent in the coming quarter. NMDC too, follows a quarterly pricing norm for its steel consumers, including large players like Essar Steel, and Ispat Industries. In addition, spot prices of iron ore too are expected to firm up in the wake of more steel companies gradually resuming production levels.

Most of new mine capacities are scheduled to come into operation and are due to be commissioned in the second half of 2011.In the end of November end, spot iron ore prices were up to $166 per tonne, from $160 in recent months. Long-term prices are slated to climb up to between $130-140 per tonne.

Volvo buys partner's stake in Indian JV

Volvo Bus Corporation today had bought out its joint venture (JV) partner Azad Group"s stake in Volvo Buses India Pvt Ltd (VBIPL) for an undisclosed sum. With this, VBIPL has become a wholly-owned subsidiary of Volvo Bus Corporation. VBIPL was formed in January 2008 as a 70:30 JV between Volvo Bus Corporation and Azad Group, with its headquarters in Bangalore.

The company had invested Rs 100 crore to start operations with a 1,000 buses per annum capacity plant at Hoskote near Bangalore. Volvo Buses is witnessing increased demand from both private and institutional customers and this strategic move will provide Volvo Buses greater flexibility to expand and put in place ambitious growth plans in the coming years.

Volvo would invest Rs 100 crore to increase the manufacturing capacity of its Bangalore plant to 5,000 buses per annum in the next five years. VBIPL would also introduce one to two new products every year.

To cater to the growing demand and plans, Volvo Buses will augment its factory and establishment, with new facilities for refurbishment operations, customer experience lounge, integral production principles and a competence development centre. As a result of expansion, the company would also increase its headcount by 30 percent at its plant.

Numeric Power to acquire Amex Alloys of Coimbatore

Numeric Power Systems Ltd (NPSL) has signed a MoU with the majority stakeholders of Coimbatore-based Amex Alloys Pvt. Ltd. to take over the management control for an undisclosed sum. In communication to stock exchanges, NPSL has entered into a MoU on Dec 5 with the majority stakeholders of Amex Alloys Pvt Ltd Coimbatore for acquisition of equity shares up to 92 percent and to take over its management control. It is not clear who owns the balance 8 percent of the equity stake of the privately owned company.

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

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