L&T partners with Befula to explore South African power sector

with South Africa-based Befula Investments to explore opportunities in the power sector in that country.

L&T and Befula Investments have signed an agreement to form a joint venture firm Larsen Toubro TD SA, it said in a statement. The JV would capitalise on the power transmission and distribution opportunities in South Africa, it said.

The installed power capacity of South Africa is close to 44,000 MW and the current peak demand shortage is about 3,000 MW which is expected to grow 6% every year, the release said.

On Friday, L&T shares gained 0.9% to Rs2,016 on the Bombay Stock Exchange, while the benchmark Sensex closed 0.9% up at 20,045 points.
 

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Foreign banks lower lending, workforce in India in 2009-10

New Delhi: Foreign lenders operating in the country reduced their overall lending by over 1% and staff strength by over 6% in the 2009-10 fiscal, reports PTI.

This happened even as the overall economy bounced back and foreign banks increased their number of branches in India during 2009-10.

According to the Reserve Bank of India (RBI), foreign banks gave out total advances of Rs1,63,260 crore during 2009-10. This was 1.28% less than Rs1,65,385 crore of loans given by the banks in 2008-09.

In addition, overseas banks had 27,742 employees in India as on 31 March 2010, a fall of 6.22% compared to the previous fiscal, RBI said in its latest 'Profile of Banks'.

However, the total number of offices operated by foreign lenders in the country went up to 310 in the last fiscal, from 295 in 2008-09, it added.

There are 32 overseas banks operating in the country.

Among major foreign lenders, Citibank gave out advances of Rs36,655 crore in 2009-10, down from Rs39,920 crore in the previous fiscal, while Barclays Bank's lending fell to Rs7,565 crore in the last fiscal from Rs10,551 crore in FY'09.

Hong Kong & Shanghai Banking Corp gave out Rs23,475 crore in India last fiscal, down from Rs27,589 crore in the year before that. Royal Bank of Scotland NV's lending in the country fell to Rs13,406 crore in 2009-10, against Rs16,660 crore.

However, Deutsche Bank's advances to Indian customers went up to Rs12,923 crore in the fiscal ending March 2010, from Rs8,798 in the previous year.

Standard Chartered Bank had the largest payroll among foreign banks in India as on 31 March 2010. It employed 7,903 staff in the country, which was a small rise from 7,825 in the previous fiscal.

But many of the other overseas banks reduced their staff strength substantially last fiscal.

Hong Kong & Shanghai Banking Corp cut staff numbers to 6,685 last fiscal. It had 7,746 employees in India in 2008-09.

Royal Bank of Scotland NV's workforce in India came down to 2,716 in 2009-10 from 3,241 in the previous fiscal, while Citibank's went down to 4,613 from 4,795.

Barclays reduced India payroll by a third and ended 2009-10 with 1,083 employees against 1,534 in 2008-09.

Even as they shed staff in India, overseas banks added more branches in the country last fiscal.

Standard Chartered Bank increased the number of its offices to 95 from 91, while Hong Kong & Shanghai Banking Corp touched the 50 mark from 47 a year-ago. Citibank's total branches in the country went up to 43 in 2009-10 from 41 in the previous fiscal.

User

Sea TV Network IPO: A small fish in a big pond

Low earnings and competition from pan India players will make it difficult for Sea TV

Issue

Price: Rs90-Rs 100 per share with a face value of Rs 10 per equity share.
Number of shares: 55.77 lakh.
Issue size: Rs50.20 crore.
Issue duration:  27 September-29 September 2010.
Listing: BSE.
Book running manager: Chartered Capital and Investment Ltd.

Valuations

The issue is priced at nine times at the lower end of the price band and ten times at the upper band. Sea TV Network had an EPS of Rs2.15 in FY10. This compares with its competitor Den Networks Ltd which had an EPS of Rs1.60. The P/E ratio for Sea TV was 41.86 (in the lower band) and 46.51 (in the upper band) against 127.90 for Den Networks which was the highest in the industry. The lowest P/E in the industry in FY10 was 1.20 and the average was 25.10.  Another cable TV service provider, Hathway Cable & Datacom Ltd, posted a net loss of Rs13.93 crore in the year ended 31 March 2010.

Business model

Sea TV Network is a multi-system operator (MSO) based in Uttar Pradesh. It aims to raised Rs 50.20 crore from the capital market through a 100% book-building issue. Sea TV airs programmes produced by its own team on its channels. These local channels mainly focus on Agra city/UP,  state news/events and information and they broadcast free of charge to its subscribers. 

Sea TV is engaged in providing MSO services to local cable TV operators in Agra. The company is promoted by Neeraj Jain, Akshay Kumar Jain, Pankaj Jain, Sonal Jain and Chhaya Jain.  It plans to install optical fibre network with optical cable having 48 lines, of which 33 lines would be reserve for its own use against the immediate requirement of 15 lines. It plans to give the other 15 lines on rent to third parties which would translate into an additional source of income.

As per industry estimates, there are 120 million TV homes in the country. Of this 71 million are served by cable TV network, about 6 million by DTH and the rest by terrestrial TV. Apart from some ground-based channels, there are about 225 satellite channels registered under up-linking/downloading guidelines of the government of India.

Financial Snapshot

  •  Total Income: Rs9.46 crore (in FY10)
     
  •  Operating Profit: Rs3.41 crore (in FY10)

 

Objects of the issue

1) To set up a complete digital head end and network for implementation of conditional access system (CAS) at a cost of Rs27.51 crore.

2) To set up network for complete IPTV solution for Rs5.28 crore.

3) Setting up a cable distribution (underground optical fibre) network capable of digital transmission across Agra City and adjoining areas at a cost of Rs6.56 crore.

4) Setting up 20 branch offices in Agra at Rs15.55 crore, and

5) Meeting the issue expenses of Rs4.73 crore.

Analysts take

The Sea TV Network IPO has been graded as 'IPO Grade 1' by rating agency ICRA, indicating concerns over poor fundamentals. This grading reflects the concerns over risks arising out of the small scale of operations, the company's significant expansion plans, risk of geographic concentration with a presence only in Agra (Uttar Pradesh) and competition from other players in the city, as well as from companies like Bharti Airtel, Reliance Big TV, Dish TV etc which provide direct-to-home (DTH) cable services. 

Positives

Expected revenue streams

  •  Subscription revenues from direct subscribers as well as franchisees. 
     
  •  Steady income from set-top box rent and value-added services through the IPTV set-up.
     
  • Carriage fees from broadcasting channels, and rentals from its optical fibre network.
     
  • Advertising from its own channels (like Sea News) should contribute a steady share of the income.

Concerns

Permissions and competition

  •  Poor IPO grading.
     
  • Yet to obtain certain approvals, licenses, registrations and permits.
     
  • Threat of technological obsolescence.
     
  • Yet to receive nod for launching three channels like 'Real News', 'Ocean TV' and 'Your TV' from the Ministry of Information & Broadcasting.
     
  •  It is the third cable Multi System Operator in Agra.
     
  •  Faces competition from big players like Tata Sky, Dish TV and BIG TV that are eyeing an all-India reach through the DTH platform.
     
  • Company does not own the registered trademark "Sea TV".

Concluding notes

Sea TV Networks is a small player with low earnings. In the face of competition from other small players and some really big operators, the company requires funds to expand its operations. Sea TV could find it quite difficult to achieve its ambitious plans and execution will be the critical factor.

User

COMMENTS

Ankul Amheshwari

6 years ago

Thanks for your Excellent view over Sea TV Network Ltd., Agra
In Initial phase every business do have difficulty but only those survives who do continious innovation and value addition. apart from from Big companies with big investment, most of the business does have uncertainity but in case of Sea TV consistancy from last couple of year show clarity of vision, mission and objectives.
By just having a look on financial and edger Management one can think of possible possitive upside.
For further expansion company can also approach to PE firm to fulfil their dreams

Best:
Ankul Maheshwari


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