New Delhi: The power ministry has recommended allocation of natural gas from Reliance Industries' (RIL) fields to four power projects including the Anil Dhirubhai Ambani Group (ADAG)-run Reliance Power's (R-Power) Samalkot expansion unit in Andhra Pradesh.
The ministry, at the last meeting of Empowered Group of Minister (EGoM) on 27th July, sought 14.5 million standard cubic meters per day (mmscmd) of gas from RIL's KG-D6 fields for the four projects totalling 4,136 MW.
The request was made on the grounds that these projects have most approvals and would be commissioned by 31 March, 2012, sources in the know of the development said.
It recommended allocation of 8 mmscmd gas for the 2,400 MW expansion project planned by R-Power at Samalkot, saying the project had environmental clearance besides "land, water and all other infrastructure facilities." Also, it has executed and EPC contract on 21 July, 2010.
The ministry sought 4.48 mmscmd gas for the 1,200 MW project Torrent Power is setting up at Dahej SEZ in Gujarat, 0.4 mmscmd for 100 MW unit of Pandurang Energy Systems at West Godavari District in Andhra Pradesh and 1.62 mmscmd for 436 MW plant of RVK Energy at East Godavari District, also in Andhra Pradesh.
All the four projects, according to the power ministry, would be commissioned during the current Eleventh Five Year Plan period (2007 to 2012).
Sources said the EGoM did not make any allocation to any plant as RIL had informed that it cannot produce more than 60 mmscmd gas from KG-D6. All of the current output of 60 mmscmd from KG-D6 has already been allocated to urea manufacturing units, power plants, LPG units, city gas projects, steel plants and refineries.
More gas from KG-D6 would flow when RIL completes drilling additional wells in the eastern offshore field.
The EGoM decided that "subject to availability of gas, necessary allocation from KG-D6 fields will be made to the projects in pipeline as and when such projects are ready to commence production."
Sources said besides the four projects, GMR is also in queue for 3.88 mmscmd for its 2x284 MW Vemagiri project that it says has obtained all clearances including from ministry of environment and forests and is at very advanced stage of completion.
The company also entered into a Gas Transportation Agreement with GAIL for transportation of gas, which the project will need from April 2011.
Also, Lanco has sought 3.5 mmscmd for 742 MW stage-III expansion of its Kondapalli power project that will be commissioned by June 2011. The project has requisite statutory approvals and clearances, including environmental clearance in place and also having adequate evacuation systems for the power to be generated out of it, they said.
Sources said the power ministry stated that Torrent had land and water for its Dahej project and non-EPC work, including area grading, and civil work was being executed in full swing.
Torrent had signed Turnkey EPC contract with Siemens AG of Germany and Siemens for engineering, procurement and commissioning (EPC) of three units of 400 MW each on 2 July, 2010.
Pandurang Energy Systems Pvt Ltd's 2x50 MW project in Annadevarapeta village in West Godavari District had land and water and all other infrastructure facilities while RVK Energy's 436 MW unit at Jagurupadu village in East Godavari districted had placed purchase orders for the equipment with GE and Wartsila.
SEBI’s latest proposal for biometrics based know your distributor (KYD) norms for independent financial advisors is being reworked and the final guidelines could be expected by 15th August
The Association of Mutual Funds in India (AMFI) is taking another look at its know your distributor (KYD) guidelines that were expected to be implemented by 1 August, 2010. We learn that a circular listing the new rules had even been issued and quickly withdrawn in the past few days.
Although KYD rules are largely supported by the industry, two issues are rankling many insiders- firstly, who would set it up and secondly the onus for verification on fund houses. Sources say that AMFI is reviewing its stand on the issue. When asked, AMFI's chief executive officer, HN Sinor said, "We are working on it. Around 15th August".
A top official from a fund house told us that the Securities and Exchange Board of India (SEBI) wanted the National Securities Depository Ltd (NSDL) to create a subsidiary to implement the 'background checker' model with biometrics-based identification (as was done for the database of IT company employees) for mutual fund distributors. There was also a condition that funds would be responsible for physical verification of addresses and other details.
According to sources, some senior AMFI office bearers pointed out that CDSL Ventures, a subsidiary of Central Depository Services of India Ltd (CDSL) had already worked with the mutual fund industry on an investor database. Further, Karvy and Computer Age Management Services (CAMS), with over 350 offices together across the country, have also been handling registration and transfer issues and had also created excellent software for online and offline tracking of portfolios. AMFI sources say, it makes much more sense to build on existing relationships rather than go to NSDL for a new database.
The market regulator essentially wanted the new guidelines for two reasons-to ensure that details about fund distributors are known to the industry and also to ensure that persons appearing for mutual fund certification examinations are genuine. Fund houses were given six months to verify their existing distributors' lists. After implementation of the KYD norms, there will be an 'in-person' verification of each distributor at the time of empanelment. "This process was not followed so far, but the guidelines will make it mandatory for every asset management company (AMC) to follow it," added the official. The need for verification is evident and distributors too support the idea.
Rajesh Krishnamurthy, managing director of iFAST Financial India Pvt Ltd, has this to say, "KYD is a welcome move. This will bring in complete authenticity of the person(s) dealing with the end client. With a few recent instances of mutual fund agent related fraud coming up in the media, there is also a need to demonstrate pro-consumer and pro-industry measures-for the consumer, for his protection, and for the industry-to avoid being broadbased as fraudsters. KYD will be a step in the right direction".
"As a private limited company, we are already confirming with similar requirements for directors - for example: A Director Identification Number (DIN). Plus, we go one step forward and file various papers with the ministry of corporate affairs by affixing the director's digital signature. To make it successful, there is a need to have points of presence for KYD in all locations where we have AMFI/NISM (National Institute of Securities Markets) registered distributors without which the biometric requirement will become a bigger challenge in itself," he said.
Moneylife, too, had exposed the case of a fraudulent, Jabalpur-based mutual fund distributor on 7 July 2010 (http://www.moneylife.in/article/81/6918.html ). However, many distributors find the requirement for biometric-based verification rather excessive and invasive of their privacy. The other irritant is the flood of new rules and operating guidelines that the regulator seems to issue almost everyday; source say that they spend most of their time on figuring out the compliance and implementation of each new change directed by SEBI. Meanwhile, assets under management (AUM) have been dwindling at an alarming rate and continue unabated every month since August 2009, when upfront commissions were abolished.
"I don't know why they come up with new rules every week. It is going to be difficult for all distributors to follow the all the rules. They (regulators) want people who have large AUM to be in the industry since complying with all their guidelines and rules have costs involved," said a Mumbai-based financial planner.
"People who wish to do business in a straightforward way will not hesitate to give KYC details. The biometric issue needs to be reconsidered," said Ramesh Bhatt, an advisor. A Mumbai-based planner says, "Investor education is still lacking. I don't know how biometric will curb the intention of mis-selling. I am not averse to KYD but they should come up with simple and practical solutions."
Sun TV: Release of the big-budget south Indian film Enthiran now
postponed to 24th September. If the film is a hit, benefits will accrue only
in the December quarter. The film features Rajinikanth and Aishwarya
Rai in the lead roles. The story goes something like this apparently-Rajini is a scientist who develops an android like robot with human characteristics (to help mankind) who looks like him. The robot fallsin love with Aishwarya Rai. Danny Denzongpa wants the robot to do evil things. Rajini fights to save the robot and destroys the villains using the robot (source: www.enthiran.net). It is touted to be Asia's costliest film.
Sterling Holiday Resorts: Potential buyout target. Sterling is a timeshare company established in 1986. Its website says it has 115,000 members. Interestingly, in its latest result, Club Mahindra (Mahindra Holidays) said its membership was 108,041. In November 2009, the Securities and Exchange Board of India (SEBI) directed Sterling to dematerialise about 300,000 shares of the company in the name of GIIC immediately since it had borrowed Rs50 million and repaid only Rs2,50,000.
JL Morison: Buzz is that ownership pattern to change. JL owns brands such as Bigen hair dye, Equal sugar, Zero Gravity deodorants, VO5 hair products, St Ives skin care products, and Playboy perfumes and deodorants. The promoters own 68.5% in the company (Rasoi Ltd, Hindustan Composites Ltd, Raghu Mody).
Uflex: Rights issue next month. Uflex is a flexible packaging company.
It reported a consolidated net profit of Rs605 million for the June quarter, up 20% y-o-y. The company's board recently approved changing the ratio of its rights issue to one share for every three held (four earlier) and upped the fund raising limit to Rs4 billion from Rs2.5 billion. Uflex is planning to spend Rs11.5 billion over the next two years on capacity expansion.
Indian Hume Pipe: Land bank worth is said to be around Rs20 billion.
Geodesic and Aarti Drugs: Bonus buzz.