Neyveli Lignite Corp (NLC) said, it has started its lignite based power plant at Barsingar in Rajasthan.
The state owned company has commissioned the first 125 MW unit of the 250 (2x125) MW project. The government of India had already sanctioned expansion of this lignite cum power project, which would add another 250 MW of power plant linked to 2.25 million tonne per annum (MTPA) lignite mine.
On Monday, NLC shares ended 1.9% down at Rs145 on the Bombay Stock Exchange, while the benchmark Sensex closed 2% down at 16,781 points.
While it is a good move in the long run and will help the government's disinvestment process, in the short-to-medium term, there would be crowding out of resources, Hari S Bhartia said
The government's move to enforce a minimum 25% public holding in all listed firms should be put on hold for another three months, as a lot of "grey areas" need to be cleared, CII president Hari S Bhartia said today, reports PTI.
"Large cap firms, in fact all the companies, should definitely be given more time. The government can give three months' time. The policy announcement of 4th June can be treated as the concept paper on which views of different stakeholders can be sought," Mr Bhartia said.
According to the new rules, both public and private sector listed companies will have to increase their public participation to at least 25%.
The companies can achieve this threshold over a period of years but will have to offload at least 5% per annum.
Mr Bhartia said while it is a good move in the long run and will help the government's disinvestment process, in the short-to-medium term, there would be crowding out of resources.
"Too much paper—Initial Public Offerings (IPOs) and Follow-on Public Offers (FPOs)—will chase the same money," the CII chief said, adding that wider industry consultations should be held in the next few months before implementing the new rules.
He said the grey areas on which clarity is required included the treatment of the private equity investment.
The stock market has reacted negatively to the new norms that were announced after market hours on Friday. The benchmark Sensex settled 336 points lower today.
"We are living in uncertain times. We have to be cautious," Mr Bhartia said.
However, according to the CII Chief, the move will help the government consolidate its fiscal position further after raising Rs67,719 crore from the auction of the third generation (3G spectrum) radio frequency.
Interestingly, all the positive news flow happened to come from just one media house, leading to higher share prices for all ADAG companies
Last week, shares of almost all Anil Dhirubhai Ambani Group (ADAG) companies suddenly rallied together owing to a string of 'positive' (planted?) news, which appeared only in the newspapers belonging to one media group. Over the weekend, the business daily from the same media house also published a story, sourced from an agency this time, that there is no manipulation in last week's rally in ADAG companies' shares! But who was asking? What was the group/the agency/the media house clarifying?
The reason why the agency copy (clarifying that there was no manipulation) had to be planted was because all the 'positive' news stories except one, are false and exaggerated.
It all started with scrapping of the non-compete agreement between Anil Ambani and his elder brother Mukesh Ambani. While every other media house wrote a number of stories about how the deal is profitable for the elder sibling, Moneylife argued that in reality the deal is one-sided and is not scrapped, but extended. (Read more http://www.moneylife.in/article/8/5688.html). We also argued that the Reliance truce means little in real terms. (http://www.moneylife.in/article/8/5563.html).
However, what followed later was a number of 'positive' looking news articles appearing in one business daily, which sharply boosted share prices of ADAG companies-against the overall market downtrend. Last week Reliance Media World Ltd (RMWL) shares hit the upper circuit twice, mainly on reports that the company was in talks with US-based CBS Corp and may form a joint venture to launch television channels.
Interestingly, RMWL shares have been falling since December 2009. In the last week of May, its shares hit a new 52-week low on a full year net loss of Rs76.1 crore. For the year to end-March, RMWL reported a net loss, mainly on debt-servicing cost, depreciation and amortisation, it said in a release. During FY10, its total revenues were Rs180 crore. However, on 31st May, news about RMWL's possible joint venture appeared in the same daily prompting the shares to hit the upper circuit. The same movement was witnessed in RMWL shares on Friday where it hit the upper circuit of Rs61.7 again. Overall, during the week that ended on 4th June, RMWL shares rose 26%, courtesy the 'positive' news in one paper! Never mind, just last month the company reported a huge net loss for the year to end-March. This news died its natural death, eventually.
Over the next two days, the business and general daily belonging to the same media house published two-three different 'positive' stories on ADAG companies. The reports said, 'Reliance Communications Ltd (RCom) could re-open merger talks with South Africa's MTN' and 'UAE-based Etisalat was in talks with RCom to buy 25% stake in the ADAG company for Rs18,000 crore'. No wonder, shares in RCom, India's second-largest mobile carrier, ended 6.4% higher on Thursday after gaining 11% on Wednesday, cutting its losses for the year, after being one of the worst performers in the 30-share main BSE index. RCom shares ended the week 14% higher at Rs168.5 from the previous week's closing of Rs147.5 on the Bombay Stock Exchange. Just a fortnight ago, RCom shares hit a 52-week low of Rs131.8 on 21 May 2010.
On Sunday (6th June), the board of directors of RCom approved sale of 26% stake in the company at an appropriate premium to the prevailing market price and also to examine and pursue other appropriate strategic combinations or consolidation opportunities. According to media reports, three companies, Etisalat, MTN and US-based AT&T are the frontrunners to buy 26% stake in RCom. Passing a resolution is one thing. Closing a deal is another.
Another ADAG company that was trading at its 52-week low during the past fortnight and has moved up on 'positive' flow of news is Reliance Capital Ltd (RelCap). On 21 May 2010, RelCap shares ended at Rs611.30 on the BSE. Then, the same newspaper came up with a story that RelCap is in the race to buy stake in Over-The-Counter Exchange of India (OTCEI). The news pushed up the share price of RelCap by 5% over the week to end at Rs679.2 on Friday.
The 'positive' news flow about ADAG companies that continued during the past 10 days or so, also boosted the share price of Reliance Natural Resources Ltd (RNRL) by 3% to Rs54.52, Reliance Infrastructure Ltd (RInfra) by 5% to Rs1,110.7 and Reliance MediaWorks Ltd (RelMedia) by 6% at Rs182 at the end of trade on 4th June. With market regulator Securities and Exchange Board of India (SEBI) and the stock exchanges pretending that we have manipulation-free markets, everyone seems to be having fun.
On Monday, RCom shares closed 4.6% higher at Rs175.9 while RMWL ended 4.9% up at Rs64.8 on the Bombay Stock Exchange (BSE). While RNRL shares fell 2.7% down at Rs52.7, RelMedia declined 0.7% at Rs180.6 and RInfra closed 2.4% down at Rs1,083.90 while the benchmark Sensex ended the day 2% down at 16,781 points.