Dhirendra Talk Marketing

Rel MediaWorks makes public offer for 52.48% in Fame India February 22, 2010

Good morning friends.  The Anil Ambani-led Reliance MediaWorks on Sunday made an public offer to buy an additional 52.48 per cent stake in the multiplex chain operator Fame India for about Rs 180.14 crore, countering an existing takeover bid by rival Inox Leisure.

Recently, Inox Leisure had signed an agreement to acquire 43.28 per cent promoter’s stake in Fame India and earlier this month made an open offer to buy another 20 per cent stake, at a price of Rs 51 per share.

At present, three Anil Ambani group firms–Reliance Mediaworks, Reliance Capital Partners and Reliance Capital– together hold about 10.26 per cent stake in Fame.

In a public notice, Reliance MediaWorks said it would make an open offer to acquire 52.48 per cent in Fame India.

Sources said the decision to make the open offer was made at a board level meeting held yesterday.

When contacted, a ADAG spokesperson declined to comment. The open offer is made for 2.16 crore shares at a price of Rs 83.40 per piece, much higher than that offered by Inox.

Interestingly, Inox’s open offer for 20 per cent additional stake in Fame is priced at Rs 51 per share. Inox has 42.68 per cent shareholding in the multiplex chain operator.

Once the open offer is completed, Reliance group would have a total stake of 62.74 per cent in Fame India.

Earlier this month, Reliance MediaWorks had said it would seek action against Fame for selling promoters’ stake in the theatre chain to Inox at a price much lower than it had offered earlier. -The Economic Times

Karvy upgrades Bharti Airtel to ‘Market performer’ February 16, 2010

Good morning friends.  Karvy Stock Broking has upgraded its rating on Bharti Airtel to ‘Market Performer’ from under performer earlier after the stock plunged on company’s plans to buy Zain Africa. 

Bharti Airtel has offered $ 10.7 billion for African operations of Zain Telecom and is in exclusive talks with Zain until March 25, 2010.

Its a key strategic move that gives Bharti a strong presence in the high potential African telecom market, says Karvy Stock Broking.

“While the direction that Bharti has taken with the signing of this deal is right in terms of global expansion in emerging markets, we await further clarity on any deal structure, if it goes through.

At the CMP, the stock trades at a P/E of 13.8x FY11E EPS and an EV/EBITDA of 6.5x FY11E EBITDA. We maintain our EPS estimates for Bharti Airtel, even as we upgrade the stock from ‘Under performer’ to ‘Market performer’ owing to the recent fall in the stock price.

We maintain our target price of Rs 315, which includes Rs 265 as the value of the core business and Rs 50 as the value of the tower company (Rs 30 as the value of its 42% stake in Indus Towers and Rs 20 as the value of Bharti Infratel standalone), based on our DCF calculations,” the report said. – The Economic Times

Investors bet money on for-profit social enterprises February 10, 2010

Good morning friends.  In Sindhudurg, on the coast of Maharashtra, the Fernandez family, which relies on fishing as the main source of income, is sprucing up its home, Rosary House, in anticipation of guests from the city.

There won’t be room service, but for Rs 500 a night, the beach-front property will offer direct access to the sea along untrammeled stretches of the Konkan coast.

Later this year, another social enterprise, BookBox, will launch a 13-episode television series of animated children’s stories in multiple Indian languages with the narration appearing as same language subtitles that children can read along with.

To be aired on both Doordarshan and private networks, the show will allow viewers to read books at no extra cost. The aim is to foster a culture of reading among children who either cannot afford or do not have access to books. Both ventures have been launched by entrepreneurs quick to spot an opportunity at the “bottom of the pyramid”, comprising poor fisherfolk and urban slum dwellers, among others.

The main purpose is social upliftment, but there is an important twist. Each project follows a “for-profit” model, is expected to show revenues and profit annually, and is backed by venture capitalists looking for decent returns.

Following the model pioneered by microfinance institutions, a group of entrepreneurs across the country are setting up firms that seek to fulfill the twin aims of making profit while providing social uplift. From being on the fringes of the consciousness of urban Indians, the “other India”, which includes dairy farmers in rural Orissa, youth in Uttarakhand and fisherfolk like the Fernandez family, are taking centre stage. Investors are putting money and giving attention to what is now being referred to as the business of social good.

“We are right at the inflexion point and will see the emergence of more social ventures that will raise commercial capital to build for-profit businesses and investors willing to take the risk of investing in such enterprises,” says Vineet Rai, founder and chief executive officer of Aavishkaar Venture Management Services, who pioneered the trend of making risk capital available to entrepreneurs aiming at helping society with their business.

Unlike earlier, when philanthropic capital was used solely to create livelihood and products that the poor could afford, this new wave of enterprise works like a business corporation with a profit motive, while attempting to retain the essential social purpose.

It is a wave that many Indian entrepreneurs are set to ride on. In Kolkata, Srikumar Misra quit the elite Tata Administrative Services (TAS) and a position as director on the mergers and acquisitions team to set up Milk Mantra, a start-up that will source milk from farmers in rural Orissa to be marketed as fresh pasteurized branded milk to consumers in Bhubaneshwar and Kolkata. By end-2010, the start-up hopes to process 100,000 liters of milk sourced from about 50 villages. – The Economic Times

FIIs turn net seller in 2010; pull out Rs 7,000 cr last week February 1, 2010

Good morning friends.  Foreign institutional investors pulled out a whopping Rs 7,000 crore last week from the Indian stock market making them net seller of shares for the first time in the last 11 months.

In just four trading sessions last week, foreign fund houses sold equities worth Rs 7,043.5 crore, the data with the market regulator Securities and Exchange Board of India (SEBI) said.

After witnessing an outflow worth Rs 1,648.5 crore during the week ended January 22, the selling trend continued in the last week making foreign funds net seller for the first time since February, 2008.

During January, overseas investors were gross seller of equities worth Rs 58,630.60 crore, while they bought shares worth Rs 58,130.30 crore, resulting in a net sell of Rs 500.30 crore, as per the SEBI data.

Significantly, in January the secondary market barometer the Bombay Stock Exchange’s Sensex fell by 1,106.85 points to below the psychological level of 17,000. Sensex ended the fist month of 2010 at 16,357.96 points.

However, on the other hand, FIIs were bullish about the Indian debt market and made a net investment of Rs 8,913 crore (USD 1.9 billion) in debt instruments, as per the SEBI data. – The Economic Times

61st Republican Day January 26, 2010

61st Republican Day - Indian Flag

Wishing All A

61st Republican Day

to My Countrymen

State Bank of India posts steady Q3 net, meets forecast January 25, 2010

Good morning friends.  State Bank of India on Monday reported steady quarterly net profit, with better loan growth helping the country’s top lender.

October-December net profit was 24.79 billion rupees ($538 million), compared with 24.78 billion a year earlier.

A Reuters poll of analysts had forecast a 1.1 percent drop in net profit to 24.5 billion rupees. A rise in yields on government bonds in the quarter, in contrast to a sharp fall in yields a year earlier, has hit banks’ treasury income. Indian banks were largely insulated from any direct impact of the credit crisis which rocked the global economy in 2008, but the subsequent slowdown hit the country harder than expected and led to a sharp slowdown in credit growth in the current fiscal year.

The revival in the economy and an improvement in customer confidence is expected to boost demand for loans, especially in the housing, retail and automobile sectors. ICICI Bank, India’s No.2 lender, last week posted a 13.4 percent fall in quarterly profit due to the drop in treasury income, but it said credit quality was improving as conservative lending policies and a strong rebound in activity slowed the rise in loan defaults.

Shares in State Bank, valued at $28.7 billion, are down 8 percent so far in 2010 and are trading near 4-month lows, underperforming a 3.3 percent drop in the banking sector index. ICICI shares are down 4.8 percent so far this year.  – The Economic Times