Herd on the street: Cairn India, Tata Chemicals, Tata Motors, Austral Coke, Oriental Hotels

Cairn India: The buzz in the market is that there are counterbids likely from RIL and ONGC. According to one report, Vedanta stands to make Rs5 billion if Cairn Energy fails to get shareholders’ nod for the deal or solicits a rival bid (a small price to pay if somebody seriously wants to counter bid). Another report states that since ONGC holds 30% in the Rajasthan block, it has the pre-emption or right of first refusal to buy Cairn India (in the block) in case of an ownership change. The block will be apparently valued at around $13 billion. Yet another report states that ONGC will be content to seek operator status on that block.

Tata Chemicals: Rakesh Jhunjhunwala is said to be accumulating the stock.

Tata Motors: There is some buzz of higher weightage in the MSCI index.

Austral Coke: Some rumours are floating around about Welspun looking at buying a stake. Austral makes low-ash metallurgical coke and refractories. It also trades in textiles and rents construction and earth-moving equipment. The promoter company also owns Gremach. Be warned that in January this year the government had ordered an enquiry by the Serious Fraud Investigation Office into alleged financial irregularities by Austral Coke. The corporate affairs ministry had apparently some evidence of fund diversion, manipulation of accounts, and tax evasion by the company. Austral is promoted by Ratan Lal Tamakhuwala and Rishi Raj Agarwal. Welspun is promoted by BK Goenka.

Oriental Hotels: Talk of promoters upping stake and a PE funding also coming in. In July this year, it talked of investing around Rs1.6 billion over the next two years in renovation and upgradation. The company is the Chennai-based associate company of Tata Group's Indian Hotels (which holds 19% in the company). It owns eight hotels with a total of 870 rooms. It is promoted by the Reddy family headed by Varada Reddy.


Arshiya International: Ambitious plans, insider trades

The company has been announcing that it has a lot of projects to be launched in the near future. But the trading in its scrip is more interesting than its purported growth plan

Arshiya International Ltd, part of the Arshiya Group, is a listed entity on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). It is an integrated supply chain and logistics infrastructure solutions provider.

On 18th August, Arshiya International announced the launch of its first free trade warehousing zone (FTWZ) in Mumbai. The company also announced plans for huge investments in its various other proposed projects.

The shares of Arshiya International have been volatile today, ahead of the launch of the company's first FTWZ. The stock opened at Rs296 on the BSE and Rs300 on the NSE today. It touched a high of Rs305.80 and a low of Rs291.55 on the BSE. Similarly, the stock touched a high of Rs306 and a low of Rs292 on the NSE.

The stock has also gained over the past three days. On 17 August 2010, the stock closed at Rs282.50 on the BSE. On 18th August it closed at Rs292.95 and today it closed at Rs296.75. The stock price has increased by 5% compared to the close on 17th August.

It appears that there has been a lot of insider trading going on in the company before its major launch announcements, based on Arshiya's disclosures to the NSE and BSE. The media has also been flooded with reports on the company's ambitious growth plans.

Before the 18th August announcement, the company disclosed three main insider trades to the BSE. These three trades were undertaken by V Shivkumar and Sandesh Chonkar, both executive directors of the company.

On the other hand, Ashish Bairagra, independent director, Arshiya International, reduced his shareholding in the company to nil from the earlier 0.085% that he had held. The shares were offloaded through a market sale on 22nd July and were intimated to the company on 26th July 2010.

G Hariharan, group legal counsel and head corporate governance, also increased his shareholding in the company from nil to 0.014% through a market purchase of 8,000 shares on 29th July 2010.

On 30th July 2010, the company informed the BSE that Mr Chonkar had purchased 20,000 shares through market purchase. This allotment was made on 29th July 2010.

On the same date, Mr Shivkumar had acquired 21,000 shares through market purchase. This allotment was made on 29th July. On 16th August, the company disclosed that Mr Chonkar had purchased 2500 equity shares through market purchase. This allotment was made on 13th August.


BSNL can buy equipment from Chinese vendors: Govt

New Delhi: After a temporary bar due to security concerns, the government has lifted ban on state-run telecom firm Bharat Sanchar Nigam Ltd (BSNL) to procure equipment from Chinese vendors, reports PTI.

"In the interest of national security, the government had directed BSNL in May, 2009 that resources should not be procured from the Chinese vendors for deployment in the sensitive regions (especially border states)," minister of state for telecom and IT Sachin Pilot said in a written reply to the Rajya Sabha.

New guidelines have been issued for procuring telecom equipment from foreign vendors in consultation with the ministry of home affairs to address security concerns, Mr Pilot said, adding "accordingly, now BSNL may enter into agreement with foreign vendors for purchase of equipments/ software/ services."

In its last tender for about five million GSM lines, the public sector undertaking (PSU) had invited bids only from three European and American vendors and Chinese companies were totally left out.

BSNL employee unions raised the issue with the Department of Telecom (DoT) last week. They alleged that the ban on BSNL for buying equipment from Chinese vendors was "discriminatory", as private players were allowed the imports from China.

Elaborating on the reasons for "discrimination" against BSNL, Mr Pilot said that participation of foreign companies in strategic sector has bearing on national security. "BSNL being a public sector undertaking, its network has to be relied upon in emergencies," he added.

Earlier, DoT had barred BSNL from deploying Chinese equipment in sensitive regions-Assam, Manipur, Tripura, Sikkim, Nagaland, Arunachal Pradesh, Mizoram, Meghalaya, West Bengal, Gujarat, Rajasthan, Punjab, Jammu and Kashmir, Himachal Pradesh, Uttarakhand and Maharashtra.

Now, with the new guidelines and template of agreement between telecom service providers and equipment vendors in place, BSNL would be able to place the orders with any foreign firm including from China.

Questioning the rationale behind the move, Sanchar Nigam Employees Association had said, "This is absolutely ridiculous for the simple reason that the move is just intended to jeopardise the growth of BSNL.

"How are the security interests of the country protected while allowing private operators to install Chinese GSM equipment and restraining BSNL from doing so?"

BSNL plans to expand network capacity manifold in the coming months in view of growing demand for mobile telephony, especially in the rural areas. Allowing BSNL to buy equipment freely from foreign vendors will help the state-owned firm in taking commercially viable decisions.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)