Stocks
Sensex, Nifty book highest loss in three and half months: Thursday closing report
Nifty may bounce back a little but will remain within the current range
 
Indian indices opened Thursday marginally lower, but soon started marching lower and recorded their highest daily percentage loss since 13th February. 
 
The BSE 30-share Sensex opened at 24,523 while NSE 50-share Nifty opened at 7,317. Immediately after hitting a high at 24,528 and 7,325, both the Sensex and Nifty headed lower to hit a low at 24,207 and 7,224, respectively. After hitting a six day low since 21 May 2014, the Sensex closed at 24,234 (down 322 points or 1.31%) while the Nifty closed at 7,236 (down 94 points or 1.28%). On the day of expiry of May 2014 expiry of futures & options (F&O),  NSE recorded a volume of 126.27 crore shares. India VIX fell 4.94% to close at 16.6900.
 
Except for Media (0.65%), Pharma (0.24%), PSU Bank (0.13%) and Auto (0.01%) all the other indices on the NSE closed in the negative. The top five losers were IT (3.35%), CPSE (1.75%), Service (1.75%), Infra (1.46%) and PSE (1.41%).
 
Of the 50 stocks on the Nifty, 14 ended in the green. The top five gainers were Hindalco (1.66%), Dr Reddy (1.42%), NTPC (0.99%), M&M (0.98%) and Sun Pharma (0.76%). The top five losers were Infosys (3.43%), Jindal Steel (3.37%), Ambuja Cements (3.05%), HCL Technologies (2.92%) and IDFC (2.89%).
Of the 1,593 companies on the NSE, 648 companies closed in the green, 900 closed in the red while 45 closed flat.
 
The prime minister Narendra Modi has unveiled top 10 policy priorities of the government on Thursday which included infrastructure and investment reforms. He has also asked his ministers to set 100-day agenda and ensure time-bound delivery. The newly named principal secretary in the prime minister's office Nripendra Misra said in a newspaper interview that the policy priorities would focus on overcoming delays to major infrastructure projects and addressing why India has become a coal importer.
 
Hindalco Industries posted a growth in it March 2014 quarter topline but its bottom line did not register a rise. However, the stock was the top gainer (1.43%) in the Sensex 30 pack.
 
Infosys (7.81%) came out to be the top loser in the Sensex 30 stock and also the ‘A’ group on the BSE. BG Srinivas, president and member of the board has conveyed his intention to resign from the services of the company. The Board has accepted his resignation and has decided to relieve BG Srinivas from his responsibilities effective June 10, 2014.Been for a long time with the company BG Srinivas was overseeing most of Infosys' client-facing functions.
 
After reporting a good March 2014 quarter results and the board of directors of the company declaring a dividend of Rs 3.23 (323%) per equity share of Re 1 each for the FY13-14, Amara Raja came as the top gainer (5.80%) in the ‘A’ group on the BSE.
 
US indices closed in the negative on Wednesday.
 
Asian indices had a mixed performance. Straits Times (0.88%) was the top gainer while Shanghai Composite (0.47%) was the top loser.
 
European indices were showing mixed performance while US Futures were trading marginally higher.

User

Who is Anupama, the largest stakeholder of Prithvi Info Solutions?
Anupama Yellajoshyula, a US citizen holds a hefty 25% stake in the scam-ridden Prithvi Information Solution. Is she holding this stake on behalf of the promoters whose stake is down to just 6.42%?
 
Prithvi Information Solutions is a beleaguered Andhra Pradesh IT company that had once attracted many foreign institutional investors. In recent years, it has been sued by business associates in the United States. All along, the company's promoters have been thought to be Madhavi Vuppalapati and her brother Satish Vuppalapati. It is they who have dealt with local and international investors. Well, it now transpires that one investor, Anupama Yellajoshyula holds almost 25% or the largest stake in the troubled company. And yet, there is very little or no information about her or the funds that she brought in to purchase these shares.
 
Anupama Yellajoshyula, a US citizen, is the wife of Srikanth V Swarna, the president and chief executive of Agadia Systems Inc, which provides cost effective solutions for healthcare management in the US.
 
Interestingly, Anupama, the largest stakeholder, is shown as “public” holding more than 5% of the shares in Prithvi Info Solutions. At the same time, the company promoters, Madhavi Vuppalapati and her brother Satish Vuppalapati together holds just 6.42% in Prithvi Info as on 31 March 2014.
 
In September 2012, Anupama Yellajoshyula and one another shareholder, Sarat Kumar Addanki were allotted shares under preferential allotment as the 'non-promoter group'. Through these allotments, Anupama bought 86.47 lakh shares (24.99% of total shares) having a face value of Rs10 each with a premium of Rs16 for Rs22.48 crore while Sarat Kumar bought 78.80 lakh shares (22.77% of total shares) for Rs20.49 crore during September 2012 with one year lock-in period. Why did they invest money into this company?
 
As per the shareholding pattern filed on the exchanges, Sarat Kumar Addanki and Anupama Yellajoshyula are shown under the 'public category holding shares more than 5%'. The promoter holding at 21.02% as on June 2011, fell to 10.98% in September 2011 and a low of 6.42% in March 2014. Madhvi Vuppalapati is a foreign promoter and holds only 0.47% and her brother Satish Vuppalapati is Indian promoter holds 5.95%.
 
As per the company's listing agreement, on 8 October 2012, Anupama Yellajoshyula has made disclosure under regulation 29(1) of the SEBI (Substantial Acquisition of Shares & Takeover) Regulations, 2011 to the exchanges. 
 
One of the descrepancies, is declaration of foreign national status of Anupama. Anupama Yellajoshyula holds a US passport no4836****2 issued on 23 May 2011, which is valid till 22 May 2021. The passport clearly mentions her as citizen of the US.
 
But a company secretary issued a certificate to Anupama Yellajoshyula in December 2013 that shows her as a resident of Hyderabad, India. However, just a year before, during October 2012, the company secretary in a letter to Anupama Yellajoshyula, allotting her shares on preferential basis, stated her address from New Jersey, US.  
 
Then there is a question about the money that was used by Anupama to  purchase the stake in Prithvi Info Solutions. According to our sources, there is no trace of the funds that were sent from the US to India to purchase these shares. Will market regulator Securities & Exchange Board of India (SEBI), the ministry of corporate affairs (MCA) or Serious Frauds Investigation Office (SFIO) wake up and look at this brazen scam?
 
There may be another angle to the story. As reported by Moneylife, in November 2011, Prithvi Info Solutions entered into an agreement with Kyko Global Inc, a Canadian company, for certain factoring services. Prithvi was to sell to Kyko some of its customer account receivables for IT services and authorise direct payment on those customer accounts receivable to be made to Kyko.
 
When Kyko tried to contact the alleged customer companies directly for payments, it discovered that some of them were associates of Prithvi, who had posed as clients and created and executed the verifications. In order to get the money back, Kyko filed a lawsuit on 16 June 2013 against Prithvi Information Solutions at the US District Court in Seattle.
 
As reported by Moneylife, the Bankruptcy Court in the US has directed Madhavi Vuppalapati to make herself available for an examination under the Federal Rule of Bankruptcy Procedure before 8 May 2014. The case related to a suit filed by Kyko Global Inc seeking to recover damages of over $18 million from Prithvi Info Solutions, which was once a high flying part of India's software story and had been purchased by many top foreign funds.
 
Last month, the Sheriff from King County auctioned personal assets of Madhavi Vuppalapati to recover $17 million as per directions from a US District Court. Later on, April Prithvi Info was able to get the name changed, for its subsidiary Prithvi Catalytic Inc to Abilius. 
 
Was Anupama Yellajoshyula (and Sarat Addanki) also made to believe in the 'growth' and 'business potential' story by Prithvi Info Solutions and its promoters like Kyko? Or is she a front? Then there is the question about the funds that were transferred from US to buy those shares.
 
Prithvi Information Solution has been shifted to 'T' (Trading settlement) group of shares on the BSE. On 1 November 2013, it hit its 52-week high at Rs14. The company's 52-week low at Rs5.10 per share was recorded on 4 July 2013.
 
Prithvi Information Solutions closed Thursday 3% up at Rs6.5 on the BSE, while the 30-share Sensex ended the day 1.3% down at 24,234. 
 
Read more stories about Prithvi Information Solution and its frauds here,
 
 
 
 
 
 
 

User

COMMENTS

shcilian

3 years ago

Enterprising Telugu's. Of every 10 telugu guys in U.S atleast three are suspect. They live on one dream "How to hit easy money". Every guy who is working has side business.

Nilesh KAMERKAR

3 years ago

" You can never underestimate market's ability to lose sight of the basics from time to time " - Debashis Basu, Face Value, Creation and Destruction of Shareholder Value in India

R Balakrishnan

3 years ago

Another one from Hyderabad. Nothing should surprise anyone. As Hemant Gupta writes, this cos credentials were suspect from 2007.

Hemant Kumar Gupta

3 years ago

I had written articles at least 4 years back when scrip was around 350 levels that it is bogus billing money laundering co and i have proved right. Father of Madhavi was alleged/supposed to be very very close to Indira Gandhi(looking after her clandestine monetary matters). Look at prospectus preapred at time of IPO made everything clear that it was bogus billing co. On one hand, co was SHOWING revenue of more than 100 million dollars but Net Block in prospectus was shown (if i remember correctly)less than 1 crores. Vehicles were shown at few lacs (not even millions).

The Gujarat model explained
Nomura has just released a research report, which puts together Gujarat's extraordinary achievements under Narendra Modi
 
There is widespread optimism around Prime Minister Narendra Modi’s ability to deliver faster growth. This stems from the reforms he oversaw as chief minister of Gujarat from 2001 to 2014. What clues can we get from this model? If he applies the same thinking as the PM what should we expect? "Mr Modi’s policies may focus more on developing agriculture and the industrial sectors, particularly small and medium-scale enterprises (SMEs) and raising their share in GDP. He is also likely to focus on turning around the power sector, deepen penetration of internet and technology and encourage renewable sources of energy generation," says Nomura in a research note.
 
However, the implementation of Gujarat model at the central level will not be easy, says Nomura. "For example, some areas, “such as power appear on the concurrent list, meaning responsibility is shared by both the central and state governments, while agriculture falls under state purview. However, the changes brought about under Mr Modi in Gujarat give a broad direction of his likely policy focus." 
 
Here are the key areas the Modi govt is likely to focus on...
 
Agriculture:
•       Despite its semi-arid climate, Gujarat has been able to achieve average agricultural growth of over 9% in the last 10 years compared to all-India average of 4%.
  •  
  • •       The state government amended the Agriculture Produce Market Committee (APMC) Act to enable farmers to directly sell their produce to wholesalers, exporters, industries and large trading companies, which helped encourage contract farming and also reduced mandi (wholesale market) charges.
  • •       In order to improve productivity, the state machinery enabled knowledge-sharing between various stakeholders in agriculture such as farmers, scientists, input suppliers, cooperatives and banks on a regular basis through annual outreach programmes.
  • •       The state government started issuing Soil Health Cards to every farmer to improve soil management and introduce farmers to new technology. In another initiative, the government started certifying seeds to avoid farmer exploitation.
  • •       Implementing Mr Modi’s commitment of “less government, more governance”, the Gujarat administration devolved power to farmers’ cooperatives in procurement of inputs.  
  • •       Gujarat also invested heavily in the construction of major and medium-sized canal irrigation projects (such as the Sardar Sarovar project), encouraged water harvesting and micro-irrigation (created a special purpose vehicle to promote micro-irrigation, which has covered over 700,000 hectares of land).
  • •       However, despite all these measures and productivity gains, inflation trends in Gujarat have been broadly in line with all-India levels likely due to spillover of inflationary pressures from other not-so-efficient sectors and regions.
 
Promoting industrialisation:
•       The industrial sector in Gujarat has grown at a much faster pace than overall India. The share of the manufacturing sector in Gujarat’s economy rose from 22% in 1993 to 28% in 2013. During the same period, the share of the manufacturing sector at an all-India level rose from 15% to 16%.
•       Gujarat has put an emphasis on developing small and medium-sized enterprises (SMEs) through policy initiatives that offer interest subsidies, venture capital assistance and quality certification. The government has also focused on emerging sectors (nano-technology, biotechnology, non-conventional energy sources) and focused on a “cluster development method”.
•       Gujarat has encouraged industrialization by focusing on four key areas:
 
1) faster approval process; Gujarat is the second-most industry-friendly state according to a Planning Commission sponsored study.
 
2) providing assistance in land acquisition; Gujarat’s land acquisition model ranked top in a commerce ministry-sponsored study.
 
3) the state provides good infrastructure with regular power and excellent road and port networks.
 
4) a number of areas have been earmarked as Special Economic Zones (SEZs) to further industrial growth. Gujarat enacted a separate legal framework – the Special Investment Regions (SIR) Act in 2009 to develop specialized industrial zones in the state (an SIR is much bigger than an SEZ and is not just export-focussed). This is similar to the Delhi-Mumbai Industrial Corridor (DMIC) project pursued by the central government. The first SIR is being set up at Dholera, near Ahmedabad. Gujarat is also a major stakeholder state in the DMIC project and the work in Gujarat is running ahead of schedule.
 
Fiscal:
 
•       Gujarat became a revenue-surplus state in FY12 and is expected to remain one in the years ahead. This has been achieved by relying on more efficient tax collection, which in turn relies on increased use of technology without raising tax rates. 
 
•       Most of government expenditure has been on capacity-building programmes. Given a superior credit profile, the yields on Gujarat state bonds are one of the lowest among the states in India. According to CARE Ratings, Gujarat has successfully implemented the recommendations of the Sixth Pay Commission, while adhering to the targets of the Thirteenth Finance Commission and the Gujarat Fiscal Responsibility Act. 
 
Power:
•       Power production in Gujarat rose at a 10% CAGR between 2000 and 2013 compared to all-India growth of 6%.
•       Under the Jyotigram Yojana (rural electricity scheme), Gujarat provides power to all domestic, commercial and industrial consumers 24/7. The state has separate feeder lines that supply power to rural areas: one for agriculture, which is subsidised and another for households and other needs. This helps reduce pilferage by other sectors and ensures quality and subsidised power reaches farms.
 
•       In May 2003, the Gujarat government passed the Gujarat Electricity Industry (Reform and Reorganization) Act, dividing the electricity board into a holding company, a power generation company, a power transmission company and four distribution companies, which enabled better management.
 
•       Under Mr Modi, the Gujarat government turned around the Gujarat State Electricity Board from losing Rs22.5 billion in 2001-02 to recording a surplus of Rs5.3 billion in 2010-11, by substantially reducing transmission and distribution losses, renegotiating power purchase agreements with private power suppliers and without any increase in electricity tariffs for seven years.
 
•       To meet the growing needs of the state economy, Gujarat increased its installed generating capacity from 9,663MW (in 2007) to 15,715MW (in March 2012) and is now a power-surplus state. The state plans to add a further 14,622MW of capacity by March 2017, taking total capacity to 30,337MW. Gujarat has already established 2,582MW of wind power capacity and 690MW of solar power capacity; it has the highest share of renewable energy sources in India.
 
•       In a successful attempt to reduce power theft (a chronic problem across India), the state government set up specialised police stations to check for power theft. 
 
Roads, ports and oil & gas:
 
•       The Gujarat government has focused on developing the physical infrastructure relying heavily on a public-private partnership model. 
 
•       Through various schemes the government has built road infrastructure from village roads to state highways. Gujarat has the highest density of roads in the country, with approximately 92% of them paved (the national average is just 58%). 
 
•       Bestowed with the largest coastline in India, Gujarat has also focused on developing ports, the backbone of its export-oriented manufacturing sector.
 
•       As well as the state-owned ports, there are two private ports (a first in the country). Gujarat also has the country’s first dedicated chemical terminal and the first LNG terminal and is the only state to have a state-wide gas grid.
 
Information Technology:
 
•       The Gujarat State Wide Area Network (GSWAN) is the largest optical fibre network in Asia – connecting all government offices at every level, right up to the 18,000 villages.
 
•       Further, the state has increasingly relied on online systems to disseminate information to potential investors. General public thought initiatives such as GIDC MITRA (for potential investors in the state) and SWAGAT (e-governance initiative for citizens to seek quick turnaround on their grievances) were implemented.
 
Investor outreach:
•       Marketing and investor outreach was an important part of Mr. Modi’s administration in Gujarat. The Vibrant Gujarat Summit is the flagship outreach program where it hosts investors from all over the world and pitches itself as an investment destination, promising extensive government assistance to those willing to set up there. 
 
•       The outreach program has been supplemented with a mechanism to monitor these projects.
 
Managing state-owned enterprises:
 
•       The Gujarat government was able to turn around several state-owned companies such as Gujarat State Fertilizer and Gujarat State Petroleum Corporations in the last 10 years, making them engines of growth by granting them more autonomy and focussing on increasing efficiency. As a result, Gujarat ranked first in terms of net profitability of State Level Public Enterprises (SLPEs) according to the National Survey of SLPEs.
 
Education:
•       Gujarat boasts 100% enrolment in every locality, for every child in every family, and the dropout ratio has fallen from 20.5% in 2001-02 to 2.09% in 2010-11.
 
•       The state also pays special attention on quality of education through the annual outreach program. The government has opened several specialized universities focusing on, among others, agriculture and education. To fill the skill deficit, the government increased the number of Industrial Training Institutes from 275 in 2001 to 1,054 in 2013-14.
 
Drinking water:
•       Gujarat is also the first state to have a Water Grid – comprising 1900km of bulk pipelines and 100,000 km of distribution pipelines with filtration plants covering almost 10,000 villages. Consequently, 75% of the population now has drinking water directly through pipelines/taps, compared with a national average of just 30%.

 

User

COMMENTS

Francis Lobo

3 years ago

The data is highly misleading. The graphs cover from 1993 to 2013. But the growth in the last five years of Gujarat v/s India as a whole is more or less the same.

FRANCIS LOBO

shadi katyal

3 years ago

India is not Gujarat and thus there will be many road blocks but let us watch and see which way the wind blows. Criticism is good for the govt to know hat is wrong and why if one wishes to develop the nation.
One question still unanswered about the reduction of poverty level?

S.S.A.Zaidi

3 years ago

what more proof is needed about the development in Gujarat?critism for the sake of criticism is nonproductive and reflects the immaturity of the people whio indulge in it.
zaidi

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