Top Stories
PM accords top priority to Dedicated Freight Corridor
The Prime Minister has directed that the Dedicated Freight Corridor Project costing nearly one lakh crore rupees should be given the highest priority by Central Ministries and urged the State Governments to also do so. The project will connect a land mass over 3300 kilometers in the country and could prove to be a backbone of India’s economic transport facility.
The Western corridor from Dadri in Uttar Pradesh to Jawaharlal Nehru Port Trust near Mumbai will be 1499 kilometers and will connect Haryana, Rajasthan, Gujarat and Maharashtra with an exclusive high speed railway track. The Eastern Dedicated Freight Corridor from Ludhiana to Dankuni will be 1839 kilometer long and will connect Punjab, Uttar Pradesh, Bihar and West Bengal.
A major part of Western corridor will be funded with Japanese assistance and nearly two third of the Eastern corridor will be built with World Bank assistance. The Sonnagar- Dankuni section will be executed on PPP mode. Indian Railways is also investing a substantial amount in the Project.
In a meeting held in the Prime Minister’s Office, the Chief Secretaries and the representatives of the States assured the full cooperation of their state governments in taking forward this important project. It was decided that Monitoring Committees will be constituted by the State Governments to resolve the issues relating to the Dedicated Freight Corridor project especially land-acquisition in an expeditious manner.
India's power sector facing an unsustainable structural imbalance: Moody's
Moody's Investors Service says India's power sector is facing an unsustainable structural imbalance, which is having a detrimental impact on a number of players in the sector. At the same time, Moody's highlighted that the creditworthiness of NTPC Ltd (Baa3, stable) and privately-owned Tata Power Ltd. (Ba3, stable) has remained largely insulated from the sector's woes.
"India's policy of providing all communities with power has reached a stage where the low tariffs paid by consumers have resulted in a massive build-up of losses at some of the country's state-owned power utilities,which are bearing the brunt of this policy," says Alan Greene, a Moody's Vice President and Senior Credit Officer.
"In FY2011, losses on power sold by state-run utilities were estimated atUSD18 bn. We expect further pressure on power purchase costs."
Greene was speaking at the launch of a special report on the Indian Power Sector, which he authored.
In Focus Stories
IIFL recommends ‘Add’ on Power Grid Corp
IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends ‘‘Add’ on Power Grid Corp
The brokerage said, PGCIL’s 3QFY12 adjusted profit grew 29% YoY, in line with our estimates, driven by: 1) project completion (Rs67bn over the past 12 months), and 2) income from short-term open access (up 82% YoY).
“We maintain FY12-14ii EPS Cagr of 15% underpinned by: 1) pick-up in annual capitalisation rate and 2) PGCIL’s annuity model, which insulates the company from volatility in underlying power prices and fuel shortages, unlike IPPs. We prefer PGCIL over NTPC and NHPC in the near term”, IIFL said.
PGCIL’s telecom and consulting businesses together contribute 5-6% to revenue and PBT; performance of these businesses has improved, leading to an increase in their contribution, according to IIFL report.
The report was published by IIFL’s Institutional Equities Research desk.
India's industrial output growth slumps again
India's industrial production decelerated in December after posting a smart rebound in the previous month, as aggressive rate hikes by the RBI and policy impasse at the Centre hit investments and consumer spending.
However, there is a school of thought which believes that the disappointing December IIP numbers could force the RBI to ease its hawkish monetary policy sooner rather than later.
The factory output, as measured by the index of industrial production (IIP), grew by 1.8% in December as against 5.9% in November, data released by the Commerce Ministry showed today.
Industrial production had expanded by a healthy 8.1% in December last year.
Industrial output in the April to December 2011-12 period grew by 3.6% compared to the expansion of 8.3% in the corresponding period a year earlier.
Domestic News
L&T's Rajkot-Jamnagar-Vadinar road project starts operation
L&T Rajkot Vadinar Tollway Limited (L&T-RVTL), a wholly-owned subsidiary of L&T Infrastructure Development Projects Limited (L&T-IDPL), commenced commercial operations of the four-laned 132km stretch of SH-25 on February 1, 2012. The project is between Rajkot & Vadinar (via Jamnagar) in Gujarat and is for The Gujarat State Road Development Corporation (GSRDC).
The road traverses through the towns of Rajkot, Dhrol and Jamnagar and provides better connectivity to the industrial hubs of Vadinar and Jamnagar. This four-laning project is expected to accelerate the development and growth prospects in this region. The cost of the project is Rs 10.96 billion, and the concession period for the project is 20 years (including the construction period). L&T-RVTL is entitled to collect toll from the users of the project highway during the concession period.
L&T bags order worth Rs19.37bn
L&T has bagged a major order worth Rs19.37bn from the GVK group for Design, Engineering, Procurement and Construction for 4 Laning of a major portion of Shivpuri - Dewas section of NH -3 in Madhya Pradesh totaling 235 Km.The project has to be completed in 27 months.
This project is a part of the phase IV of the National Highway Development Programme and is one of the three mega projects of NHAI. With this order L&T Construction is proud to be associated in the construction of all of the three mega projects of NHAI.
PFC enters bond market to raise Rs. 1.5bn for 5 years: reports
Power Finance Corporation (PFC) has reportedly marked its entry in the bond market to raise a minimum Rs. 1.5bn for five years.
According to reports, the bond issue, which was rated ""AAA"" by both Crisil and Icra will remain open for two days and it may retain oversubscription. The company has fixed its coupon at 9.33% a year while Rural Electrification Corp is raising Rs. 15bn crore at 9.28% for similar maturity.
During the year 2011-12, PFC has set a target of disbursing Rs. 350bn. It plans to up the disbursal target to Rs. 40,000 crore in 2012-13, reports added.
L&T Infra expects huge investments in next five years
Suneet Maheshwari, CEO of L&T Infrastructure Finance Company Limited which opened Tranche 2 of its tax saving infra bonds, expects huge infrastructure investments in India over the next 5 years . While highlighting the strong future prospects of infrastructure sector in India, he said that Infrastructure bonds are a boon to the economy and the tax payers.
Infrastructure bonds are gaining popularity as a tax saving instrument amongst the various debt options. With yields on government securities beginning to moderate, interest rates (which are linked to gilt yields) on future bond issues may not be as high as compared to the current issues. Already, rates on the current tranche of issues are lower than what was offered a month or two ago.
GVK Power plans to acquire thermal power projects: reports
Technofab Engineering bags order worth Rs647mn
Welspun Infratech seeks Rs. 4.79bn for Vizhinjam Port
GPT Infraprojects bags order worth Rs994mn
Numeric Power sells UPS biz to Legrand...Stock spurts
Reliance Power Samalkot Power Plant ready for Synchronization
Adani Enterprises to divest holding in "Real Estate Business"
Bankable PPP projects will set tone for Infrastructure development : S V R Srinivas
Railway revenues up 10.41% during April to December
Power Grid Board approves Interim Dividend
NTPC pays Rs. 28.85bn interim dividend to Govt
SMS by IRCTC on par with ERS for e-tickets: Railways
Adani to exit Realty biz; To focus on core sectors
IL&FS Transportation wins Rs18.20bn contract
PwC unveils 2012 outlook for global power deal activity
Railways extend advance reservation period to 120 days
Gayatri Projects to approve final list of Bankers to Rights Issue
Unity Infraprojects bags two orders worth Rs4.85bn
Results watch
Triveni Engineering Q1 net sales at Rs4.25bn
Adani Power Q3 net net loss at Rs3581.20mn
Power Grid Corp Q3 net profit at Rs8092.30 mn
Jaiprakash Power Q3 net profit at Rs595.20 mn
International News
Vestas reports net loss for 2011
Vestas has reported a net loss for 2011 of 166 mn euros ($218.4 million), compared with a €156 mn profit in 2012, according to reports.
Reports stated that CFO and deputy CEO Henrik Norremark resigned following two profit warnings on his watch.
The head of Vestas Offshore Hans Jorn Rieks was fired after just one month in his position, says report.