Tag: Business news

Change in gas allocation policy key risk to profitability of city gas entities, says ICRA

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With softer gas prices propping up CNG and piped cooking gas consumption, city gas distribution (CGD) entities will continue to see robust margins but any adverse change in the policy of gas allocation is a key risk for the industry’s profitability, ratings agency ICRA said.

The volume consumption of compressed natural gas (CNG) by automobiles and piped natural gas (PNG) in domestic kitchens has been witnessing an increasing trend, supported by softer gas prices in the last 2-3 years, ICRA said in a statement on a report it has prepared on the domestic CGD sector.

“Going forward, demand growth favours CGD entities over the next decade and their margins are expected to remain healthy,” ICRA Senior Vice President K Ravichandran said.

Economics, he said, are favourable for CNG, with piped natural gas for industrial use (PNG-industrial) may be marginally profitable.

“The industry will benefit from the Central Government’s volume push but any adverse change in domestic gas allocation policy will be a key risk for the sector’s profitability and viability,” he said.

Currently, CGD entities get first priority in the allocation of cheap domestically produced natural gas. This gas is converted into CNG for sale to automobiles and piped to household kitchens for cooking purpose as well as to industries to meet their fuel needs.

ICRA’s Ankit Patel said the Supreme Court ban on the use of petcoke and furnace oil in a bid to control pollution in the national capital region would mean that industrial units need to shift to alternate fuels such as natural gas.

This would further boost demand for PNG for industrial use over the short to medium term, he said.

“The margin of CGD entities has improved in the last three years supported by CNG, despite cost-push factors like the relatively higher cost of energy at existing R-LNG prices, the depreciation of the rupee versus the dollar and the weak industry demand and competition from alternate fuels,” the statement said.

Encouraging industry prospects have resulted in high interest among potential bidders as seen in the auction of licence to retail gas in cities offered in last two bid rounds.

“Compared to previous two rounds (7 and 8), the latest rounds have the benefit of the new CGD regulations with increased incentives for serious participants,” it said.

Bids have been put in for 136 geographical areas (GAs) covering 53 per cent of India’s population and 42 per cent of the area, spread over 268 districts in full and part. Marketing exclusivity for companies too has been increased from five to eight years and is extendable by up to two years.

“The Round 9 had received a total of 406 bids (average 4.7 bids/GA) and Round 10 has received 225 bids (average: 4.5 bids/GA). Both the rounds are expected to create a significant impact on the overall geography as well as population,” it said.

There are significant penalty risks for the bidders for not meeting the committed infrastructure in terms of the number of CNG stations, inch-km of pipelines and number of domestic connections.

“In view of the aggressive bids, there is a high probability that the players will end up paying the penalties, though most bidders seem to have factored in the same,” ICRA said.

It said bid winners also face significant execution risks in new GAs as the vendors and EPC contractors are overbooked.

According to ICRA, CGD projects are exposed to large execution risks and the construction period involved is long and needs a host of approval from multiple agencies.

“Along with a high payback period involved, there are also issues relating to natural gas connectivity, taxation, forex fluctuations, consumer resistance for price hikes and time lags in the pass-through,” ICRA said. “Moreover, as these fuels gain popularity, there is no certainty that state governments will not see that as an opportunity to earn additional tax revenues.”

ICRA said most existing CGD players enjoy strong parentage, track-record and have high financial flexibility.

“Credit profile of the CGD incumbents, however, will be exposed to the project risks as they expand into new GAs and leveraging levels are likely to increase,” it said.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

NBCC may raise its offer to banks for Jaypee Infra, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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NBCC is expected to sweeten its offer to lenders for Jaypee Infratech, reported The Times of India.

The decision, the report said, comes after the public sector player decided to take steps to address the concerns of Jaypee Infratech’s lenders as the resolution plan for the company under insolvency action reaches the final stage.

The lenders of Jaypee Infratech-led by IDBI Bank are set to meet today and hear the offers from both NBCC and Suraksha Asset Reconstruction Company, said the report citing sources.

As per the report, NBCC is all set to bag the deal for the company that has over 30,000 real estate units under its belt.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Huawei CFO Meng Wanzhou suing Canada over December arrest

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The lawyers for Huawei Chief Financial Officer Meng Wanzhou are suing the Canadian government, its border agency and federal police, alleging their client was detained, searched and interrogated for three hours in violation of her constitutional rights.

Canada arrested Meng in Vancouver on December 1 at the request of the United States, which has brought sweeping charges against her and China’s Huawei Technologies Co that portray the company as a threat to US national security. Meng was charged with bank and wire fraud to violate American sanctions against Iran.

In a civil lawsuit filed in the British Columbia Supreme Court on Friday, Meng’s lawyers said the manner in which officers obtained evidence and information from Meng constituted serious violations of the Canadian Charter of Rights and Freedoms. Meng is the daughter of Huawei‘s founder.

It added that Canadian Border Services Agency (CBSA) officers deliberately delayed the immediate execution of an arrest warrant and unlawfully subjected Meng to detention, search and interrogation to extract evidence from her before she was arrested.

The Royal Canadian Mounted Police – Canada‘s federal police – only exercised its arrest warrant three hours after Meng’s “unlawful” detention at the airport, the lawsuit added.

There was no immediate response from Canada‘s justice ministry or the RCMP. The CBSA said it did not comment on matters before the courts.

Meng, who is out on bail, is due to appear in a Vancouver court at 10 a.m. PST (1800 GMT) on Wednesday, when a date will be set for her extradition hearing. The Canadian government approved her extradition proceedings on Friday.

China, whose relations with Canada have deteriorated over the affair, denounced Canada‘s decision on Friday and repeated previous demands for Meng’s release.

The lawsuit further alleged that Meng was directed to surrender all her electronic devices, computers and passwords and that CBSA officers then unlawfully opened and viewed the contents of the seized devices in violation of her right to privacy.

CBSA officers also searched Meng’s luggage in violation of the right to privacy, the lawsuit said. “The CBSA Officers knew or were recklessly indifferent to the fact that they had no authority to conduct such a search, which search was performed under the false pretense of a routine customs or immigration related examination,” according to the lawsuit.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

2018 saw greater advocacy by institutional shareholders: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shareholder meetings in 2018 saw high level of participation by institutional investors who made their voices heard by voting against resolutions proposed by managements, a report released on Thursday noted.

The number of resolutions, where more than 20 per cent of institutional shareholders voted against the resolution, increased by 14 per cent to 716 in 2018 as compared to 629 in 2017, as per nseinfobase.com, which is developed and compiled by data service provider Prime Database.

Most of such resolutions were related to board appointments, stock options and board remuneration.

“This reflects an increase in advocacy on the part of institutional investors, which is on account of the facility of e-voting being made mandatory a few years back as also the stewardship code brought about by regulators,” Prime Database Group Managing Director Pranav Haldea said.

“It is also attributable to a greater role being played by proxy firms as also a steady increase in institutional holding as a whole, ” he added.

Of these 716 resolutions, a huge 700 (or 98 per cent) still got passed, mostly owing to high promoter holding in the companies, the report noted.

There were 45 resolutions which were completely voted against by shareholders at Annual General Meetings (AGMs), Extra Ordinary General Meeting (EGMs), postal ballots and court or National Company Law Tribunal (NCLT) convened meetings held in 2018.

However, of these 45 resolutions, 5 were re-proposed to be passed, out of which all 5 resolutions eventually got passed.

In comparison, the number of such resolutions were 34, which were completely voted against by shareholders in 2017 and 28 in 2016.
According to the report, almost all resolutions were voted in favour by promoters.

Besides, “domestic mutual funds, as a whole, voted in favour in 84 per cent of the cases, against in 3 per cent of the cases and abstained in a high 13 per cent cases (from January 2018 till December 2018),” the report noted adding the trend has remained fairly constant over the last four years.

In 2018, a total of 12,972 resolutions were proposed to be passed in 2,478 AGMs, EGMs, postal ballots and court/NCLT convened meetings of 1,744 companies which were listed on NSE as on January 1, 2018, up from 12,341 resolutions in 2017.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Praj Industries shares touch 52-week high, jump over 17% on expansion of bio-energy basket

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Praj Industries touched a new 52-week high of Rs 161.50, jumping 17.28 percent on Friday.

The small cap stock jumped after the company expanded its bio-energy basket by adding compressed bio-gas (CBG) technology, outperforming the industrial equipment sector by 12.41 percent.

CBG is a complementary renewable transportation fuel to compressed natural gas (CNG).

“Praj’s demo plant is first of its kind integrated CBG plant in the country. This flexible and highly instrumented plant will test, improve and optimise production of CBG from different feedstock such as biomass, press mud, variety of agri waste, paper mill pith etc,” Praj said.

Praj provides solutions for bio-energy, ethanol plant, and breweries and industrial wastewater treatment.

The company’s shares have gained more than 50 percent this month, while the stock returned more than 21 percent in the last one year.

The 5-year and 10-year return on the stock stands at nearly 230 percent, 174 percent, respectively.

Also, catch all the action and updates in our Market Live blog.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sensex, Nifty start cautiously in line with Asian peers; TCS earnings in focus

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian shares began cautiously on Thursday, tracking tepid Asian cues, as markets await more news on US-China trade talks and ahead of the third-quarter earnings of Tata Consultancy Services later in the day.

At 9:50AM, the broader 50-share Nifty slipped nearly 9 points to trade at 10,846.50 in early trade. The BSE Sensex also edged lower by almost 41 points, or 0.11 percent, at 36,172. 

The Nifty MidCap was mildly higher, up by 0.11 percent in initial trade and surged 0.45 percent to outperform frontline indexes. The BSE MidCap also traded higher by 0.29 percent.

Sectoral indexes were mixed with Nifty Realty leading 28 advancing indices. BSE Auto, Nifty IT and BSE FMCG were other major sectoral gainers. BSE Telecom dipped 0.80 percent, the weakest among 15 declining sectors, which also included Nifty Pharma, BSE Bankex, BSE Oil & Gas and Nifty Energy.

Among index gainers, Tata Motors, Yes Bank, ONGC, Eicher Motors, Adani Ports, NTPC and Bajaj Finance, surged between 0.61 percent and 1.12 percent.

Bharti Infratel, HPCL, BPCL, InudsInd Bank, IOC, Axis Bank, Asian Paints, HDFC and HCL Technologies, slipped between 0.60 percent and 2.45 percent.

Software major Tata Consultancy Services gained 0.5 percent ahead of its quarterly results. Analysts’ expect constant currency growth to weaken on account of seasonality.

Meanwhile, the rupee opened nearly unchanged at 70.53 against the US dollar. The home currency had settled at 70.46 against the greenback on Wednesday.

Asian markets traded subdued awaiting more clarity on the outcome of the three-day US-China trade talks. Japan’s Nikkei was down by 1.15 percent, while South Korea’s Kospi slightly up by 0.15 percent. Hong Kong’s Hang Seng index was also marginally up by 0.18 percent. The Shanghai Composite Index was higher by 0.23 percent.

Also, catch all the action and updates in our Market Live blog.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Samara Capital looks to create sector-specific platforms for future acquisitions, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Private equity firm Samara Capital is looking to create sector-specific platforms  for catering to future acquisitions, Business Standard reported.

“There will be separate verticals for retail, logistics, HR and so on, which will leverage technology to provide cutting-edge. All future acquisition in these sectors will be housed in those platforms,” sources told the paper.

The private equity company joined Xponentia Fund Partners to buy Spoton Logistics for more than Rs 500 crore. The company is also readying itself to buy Aditya Birla Retail from the Aditya Birla Group with Amazon.

Samara is planning to close its third fund of $550 million by the end of this year, the report said. “They already have a strong food platform and taken the famous Paradise Foods biryani chain to different cities with promoters,” sources added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow