Companies & Sectors
SEBI bars Prayag lnfotech Hi-rise from raising money through securities

SEBI bars Prayag lnfotech Hi-rise and its directors from soliciting money from the public as the company is alleged to engaged in fund mobilising activity through issue of redeemable preference shares

Market regulator Securities and Exchange Board of India (SEBI) has barred Prayag Infotech Hi-rise Ltd and its directors from raising money from public by issuing any securities.
 

During investigation, SEBI found that, Prayag Infotech Hi-rise has mobilized Rs863 crore from the public as on 31 March 2012. The company has issued 2.50 crore redeemable preference shares of Rs10 each for Rs25 crore on 26 August 2009 and made refunds of Rs102.12 crore, which is far more than what they collected during the year.
 

SEBI barred, Prayag Infotech Hi-rise its promoters and directors including Basudeb Bagchi, Avik Bagchi, Swapna Bagchi and Lakshmi Kant under sections 11(1), 11(4) 11A and 11B and 11B of the SEBI Act, 1992.
 

Prayag lnfotech has been also asked not to issue prospectus, any offer document, advertisement for soliciting money from the public for the issue of securities. SEBI also directed the company and its directors not to dispose any of the properties of the company or divert any funds raised from public at large.

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Final tariff regulations offer little relief for NTPC

Nomura’s first cut calculations suggest that CERC’s final tariff regulations entail a potential 11%-13% dent to its earnings forecast for NTPC post FY14

For NTPC, the Central Electricity Regulatory Commission (CERC) issued the final tariff regulations for the period FY15-19 – these regulations form the basis of NTPC’s earnings (regulated returns) from its core business over the next five years. CERC had issued the FY15-19 draft tariff regulations in December 2013; subsequently, representations from various stakeholders were invited and a public hearing on the draft norms was held in January 2014.

 

Contrary to expectations, relative to CERC’s draft tariff regulations for FY15-19, the final tariff regulations overall offer meagre relief to NTPC’s earnings outlook, points out Nomura in a research note.

 

According to Nomura, “Purely on benchmark operating norms, our first cut calculations suggest that CERC’s final tariff regulations entail a potential 11%-13% dent to our earnings forecast for NTPC post FY14.” Nomura’s calculations assume zero utilisation-linked incentive for NTPC’s projects post FY14.

 

The research note makes it clear that relative to the tariff norms proposed in the draft regulations, the absence of material relief in CERC’s final tariff regulations for NTPC’s post-FY14 effective RoE (return on equity) prospects is a significant negative surprise. In this context, Nomura expects near-term stock price performance to be weak. Nomura however, maintains its ‘Buy’ rating on the Nomura share in the stock market.

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Tariff increase is a positive for GSPL

In a positive for Gujarat State Petronet (GSPL), PNGRB has re-computed the transmission tariff for GSPL’s High Pressure network by 11% to Rs26.6/mmbtu, says Nomura in a research note

The regulator Petroleum & Natural Gas Regulatory Board (PNGRB) has re-computed the transmission tariff for High Pressure network Gujarat State Petronet (GSPL) by 11% to Rs26.6/mmbtu.

 

According to Nomura, while exact impact of revised tariff order will be clear once zonal apportionment of tariff is finalised, the research note estimates, the impact is as follows:

 

(a) Annual transmission revenue increase of Rs820 million (post-tax impact of

Rs0.95/share – 12% of Nomura’s FY15F EPS of Rs8.0/share); and

(b) Retrospective gains of Rs1.4 billion for the period July12 to Mar14 (post tax impact of Rs1.6/share or 20% of Nomura’s FY15F EPS).

 

The tariff increase is a further positive for GSPL, points out Nomura. The research note says, “We highlight that GSPL was already a net gainer of the tariff-setting exercise. The average tariff for GSPL had increased by 11%-12%, and it had booked a gain of Rs1 billion for the nine-month period from July-12 to Mar-2013.”

 

However, PNGRB has said that it will file an appeal in the Supreme Court against the Appellate Tribunal’s order. Nomura has had a view, that there was not much case for retroactive tariff fixation, even for the period prior to network authorisation.

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