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Tuesday, June 29, 2010

SAMRUDDHI CEMENTS LISTS AT Rs.579.75

NAME - NSE - SAMRUDDHI ; BSE- 533209.
Share Price - Rs.488 ;
Market Cap - Rs.12,770.15 cr ;
Total Debts - Rs.2100 cr ;
52 Week High - Rs.590 ; Low- Rs.477.15 ;
P/E - 00.00 ; EPS - 00.00 ;
Book Value - Rs.175.15 ; Industry P/E - 8.95 ;
Fv - Rs.5.00 ; Dividend - 35 % ;
Total Shares Issued - 26,16,83,571 shares ;
Promoter's Holding - 16,99,99,988 shares ; Promoter's holding in % - 65%

SAMRUDDHI CEMENTS LTD today made its debut at Rs.588 on BSE after its demerger with GRASIM IND
Listing Samruddhi Cement on the bourses is a part of the restructuring process of the cement business of the Aditya Birla group.

The company has listed with 26.16 crore equity shares of face value of Rs 5 each.
Shares of Samruddhi Cement touched a high of Rs 600 and a low of Rs 478.15 on the Bombay Stock Exchange.
On the National Stock Exchange, the scrip listed at Rs 579.75. It touched a high of Rs 590 and low of Rs.477.15.
The company made its listing on the bourses after Aditya Birla Group flagship firm Grasim Industries, last year, approved the demerger of Samruddhi Cement with itself.

As part of the arrangement, the company will be merged with UltraTech Cement on 10 July 2010.
Accordingly, 4 shares of UltraTech would be issued for every 7 shares of Samruddhi.
Each Grasim shareholder had received one equity share of Rs 5 of Samruddhi Cement for every one share held in Grasim, as a part of the scheme.
The merged entity will have an annual capacity to produce 48.8 million grey cement with 22 plants. It will also have 11. 7 million cubic metres of ready mix concrete across 68 plants along with captive thermal power plants of 504 mega watts.
After the completion of the merger, Grasim would hold 60. 3% of UltraTech's expanded equity capital and 39.7 % would be held directly by other shareholders of UltraTech and Samruddhi.
It is to be noted that the Fair Value of Samruddhi Cements is 55 % Ultratech Cements price.

My previous post on this event click - GRASIM IND SAMRUDDHI DEMERGER

Sunday, June 27, 2010

Cabinet Deferres the decision on Rupee Symbol

The rupee's entry into the elite club of currencies with their own symbols will take longer with the government on 24th deferring a decision on the issue. The Cabinet was to finalise the symbol on 24th June 2010, but the matter was deferred after Finance Minister Pranab Mukherjee asked for more time to go through the short-listed signs, sources said.
                   The issue was on the agenda of the Cabinet, which met under the chairmanship of Prime Minister Manmohan Singh here, but was deferred, sources said.
The government has shortlisted five designs for the rupee from among the symbols suggested to the Ministry of Finance by the public.
In the Budget this year, Finance Minister Pranab Mukherjee had said that "in the ensuing year, we intend to formalise a symbol for the Indian rupee, which reflects and captures the Indian ethos and culture."
With this, the rupee will join the select club of currencies, such as the US dollar, British pound sterling, euro and Japanese yen that have a clear distinguishing identity, he had said.
Last year, the Finance Ministry had invited design suggestions from the public for the Indian currency.
"The government of India proposes to have a symbol for the Indian rupee to be selected through public competition," the Finance Ministry had said.
The symbol, the ministry had said, should represent the historical and cultural ethos of the country as widely accepted across the country and should be applicable to the standard keyboard.

My favourite one is number- 4

Sunday, June 20, 2010

ONE SHOULD ALWAYS BUY GOLD

               Before the great depression most of the world used gold as a currency. Of course that did mean every time someone purchased something they paid for it in gold. Governments maintained a certain amount of gold in their vaults & paper currency was issued against the value of that gold. (In INDIA, the minimum reserve worth Rs.200 cr should be maintained at any point of time, out of these reserves Gold reserves should be worth Rs.115 cr @ Rs.94/10 grams & Forex reserve of Rs 85 cr at current market price. If actual reserve are more than minimum reserve RBI may prints new currency notes & issues them to deficit banks in form of loans against gold, foreign exchange, promissory notes & treasury notes) So every time you pay paper money you effectively using gold. This system was “Gold Standard”. Citizens also had freedom to exchange these currency notes for gold, as and when they deemed fit.

               Government ensured that no more notes are printed. The reason was simple if they had to print more money they needed more gold in their vaults, because every paper currency note out there was essentially gold. And if citizens got slightest hint that the government is printing currency, they would all land up at the bank to exchange their paper currency for gold. So even if government were tempted to print money they would think twice before doing it.

               Now, during the time of great depression, growth was a problem, unemployment was at its peak. Firms were shutting down. One way to create growth was the government printing notes & giving it to people in various ways to spend. Once the citizen got some money in their hands, they would go out and spend it. This ensures that they buy goods & services. And one man’s spending is other man’s income and so the cycle would continue and this would create some growth. And that’s what government did; they moved out of Gold Standard and went into FIAT Currency i.e. a currency that does not have anything backing it but basically the fiat of government. This gave them the free way to print any amount of money they want to.

               In fact, in the year 1933, US government confiscated all the gold that its citizens had through Executive Order 6102 signed by the then President Mr. Franklin D Roosevelt, forbidding the hording of gold coins, gold bullion & gold certificates by US citizens. They were off course compensated for their gold at the rate of $20.67 per troy ounce (1 troy ounce=31.1grams). So because of this the government across the world had freedom to print currency whenever the economy was in trouble. And as per basics of economics, an increase in supply leads to decrease in purchasing power. That’s why economists who follow the Austrian school of economics, say that all paper currencies over a period of time go back to their intrinsic value i.e. zero.

               So that is why when ever there is a hint of major financial crisis, people figure out that almost any solution that the governments might come up with will ultimately ends up to printing more & more money (which US is doing to solve its financial problem, and Europe cant due to its structure). This means decreasing purchasing power. Smart money in this situation always moves to gold. As it is now, people end up treating gold as nothing but what it was always used as i.e. CURRENCY. One should always have at least 25 % of its portfolio in Gold in order to hedge inflation .

Always buy gold in parts a SIP Systematic Investment Plans, or go into Gold ETFs....
Some of the GOLD ETFs are -
GOLD BeES (I prefer this as it is the first ever launched, more experienced and of huge gold deposits)

READ MY POST ON US PRINTING MORE NOTES

GOLD PRICES PERFORMANCE

Gold Price Performance Silver Price Performance

Wednesday, June 9, 2010

SUZLON ENERGY : RIGHTS ISSUE DETAILS

SUZLON ENERGY gave rights issue in the ratio of 2 new shares for 15 held at Rs.63/share(Face Value-Rs.2 and premium of Rs.61), the record date is fixed at 10th June 2010, Suzlon goes ex- rights on 9th June 2010. The Issue Opens at 18th JUNE 2010, Closes on 2nd JULY 2010, Last date for receiving request for split form 25th JUNE 2010.

Here are some details about how will the proceeds from the issue will be utilised -

Gross proceeds of Issue  -                Rs. 1307.66 Cr.
Discharge of Promoter loans
(towards Promoter entitlement) -      Rs. 694.06 Cr.
Issue Expenses                                  Rs. 10.00 Cr.
Net Proceeds                                      Rs. 603.60 Cr.

*The amount of promoter loan Rs. 1175 Cr.

CAPITALIZATION STATEMENT
STANDALONE - DETAILS  
                                   
SHORT TERM DEBT -  Rs.1883.52 Cr.
LONG TERM DEBT - Rs.5717.70 Cr.
TOTAL DEBT - Pre issue- Rs.7601.22 Cr ; Post issue - Rs.6426.22 Cr.
SHARE CAPITAL - Pre issue - Rs.311.35 Cr ; Post issue - Rs.352.86 Cr.
ESOPs O/s - Pre issue -Rs.15.68 Cr ; Post issue -Rs.15.68 Cr
RESERVES & SURPLUS - Pre issue - Rs.5277.24 Cr ; Post issue - Rs.6543.39 Cr.
TOTAL SHARE HOLDERS FUND - Pre issue -Rs.5604.31 Cr ; Post issue -Rs.6911.97 Cr.
TOTAL DEBT/EQUITY RATIO - Pre issue - 1.36 ; Post issue - 0.93

CONSOLIDATED -  DETAILS  

SHORT TERM DEBT-  Rs.3337.11 Cr.
LONG TERM DEBT - Rs.9330.83 Cr.
TOTAL DEBT - Pre issue -Rs.12667.94 Cr ; Post issue -Rs.11492.94 Cr.
SHARE CAPITAL - Pre issue -Rs.311.35 Cr ; Post issue - Rs.352.86 Cr.
ESOPs O/s - Pre issue -Rs.15.67 Cr ; Post issue - Rs.15.67 Cr.
RESERVES & SURPLUS - Pre issue -Rs.6274.21 Cr ; Post issue - Rs.7540.36 Cr.
TOTAL SHARE HOLDERS FUND - Pre issue -Rs. 6601.27 Cr ; Post issue -Rs.7908.93 Cr.
TOTAL DEBT/EQUITY RATIO - Pre issue - 1.92 ; Post issue - 1.45.

Now, when the markets price per share are quoting at Rs.53/sh why would anyone subscribe to its Rights issue...........This issue is only meant for SUZLON Promoters....same story as Fortis health care..here SUZLON's promoters will subscribe all 20,75,65,299 shs at Rs.63/sh , raising their holding to 103,38,33,299 shs from 82,62,68,000 shs from 53.08% to 58.59% on new Eq of 176,43,05,042 shs from 155,67,39,743 shs. But will surely reduce some of its debts...which is good news.

Tuesday, June 1, 2010

SUZLON DECLARES RIGHTS ISSUE AT Rs.63

As declared earlier Suzlon energy declares rights issue of equity shares of Face value Rs.2.
 Share holders will get 2 shares for every 15 shares held. The rights is priced at Rs.63/sh (including a premium of Rs.61 for each equity share). Record date - 10th June 2010. 

This will mean a 13.33 % of dilution of shares a nearly of 20,75,65,299 shares on the total outstanding shares of 155,67,39,743 shs. The rights issue will garner Rs.1307.66 crs to Suzlon enabling the company to reduce its total debts of Rs.10153 cr. Which will bring down the debts to Rs.8845.34 crs.

It should be noted that Suzlon has restructured its FCCBs at Rs.97.26/sh v/s Rs.359.68/sh ($/Re=44.60).
This means, total number of shares to be issued on conversion of FCCBs - 23,71,52,577 sh (a dilution of 15.23%). Yester day the share prices of Suzlon tanked 8% on bad results but the rights issue news will take back SUZLON to Rs.70

SUZLON ENERGY ANNUAL RESULTS INSIGHTS FY 2009-2010

SUZLON ENERGY ANNUAL RESULT INSIGHTS – FY 2009-2010
NET DEBT REDUCTION- FY 10
- Consolidated net debt as on 31st March 2010 - Rs. 9764 cr.
- Consolidated net debt as on 31st December 2009 - Rs. 10488 cr.
- Net consolidated debt reduced by Rs. 724 cr.
- Net debt of Suzlon Energy Wind as on 31st March 2010 – Rs.10153 cr.
- Net debts reduce by 17% a Rs.2036 cr Y-O-Y.
- HANSEN STAKE NOW AT 26.06%.
- REpower Systems AG stake now at 90.50% v/s 90.71% (due to further issuance of shares as ESOPs)
- RIGHTS ISSUE ANNOUNCED.

SALES FIGURES- FY 10
- India = Q4 FY10- 361 Mw; FY10 - 688 Mw v/s 749 Mw FY09.
- Internationally = Q4 FY10- 290 Mw; FY10- 773 Mw v/s 2041 Mw FY09.
- Total Mw Sales (Suzlon Wind) – Q4 FY10 - 650 Mw; FY10- 1460 Mw.

ORDER BOOK – FY 10
- As on 26th May 2010 – 1126 Mw.
- Order book value as on 26th May 2010 – Rs. 6174 cr.
- Average realisation of Order Book -
 INDIA – Rs. 5.48 cr/Mw.
 INTERNATIONAL – Rs. 5.50 cr/Mw.
 RE Power order book as on 31st March 2010 – Euro 2.1billion(US$2.6bn).

REVENUE - FY 10
- Suzlon Wind Business Revenue – Q4 FY10- Rs.4150 cr; FY10- Rs.9635 cr.
- Consolidated Revenue – Q4 FY10- Rs.6084 cr; FY10- Rs.20620 cr.
- Karnataka wind energy tariff Rs. 3.70/Kwh from Rs. 3.40.
- Gujarat wind energy tariff Rs. 3.56/Kwh from Rs. 3.50/Kwh.
- Global Market Share – Suzlon + RE power – 9.8%; GE wind – 18.6%; Vestas – 19.8%; Siemens – 6.9% as on 31st March 2010.

OTHER FINANCIAL DETAILS -
- Net operating working capital as on 31st March 2010 – Rs. 5103cr v/s Rs.6153 cr.
- Absolute reduction of working capital of Rs. 1050 cr from March 2009 levels.
- Acquition Loans – Rs.2083 cr.
- FCCBs – Rs.2151 cr.
- Capex &Working Capital & Other Loans – Rs.6284 cr.
- Gross External Debt – Rs.10519 cr.
- Loans from Promoter group – Rs.1175 cr.
- Cash Holdings – Rs.1541 cr.
- NET DEBT – Rs. 10153 cr.
- NET EXTERNAL DEBT – Rs.8973 cr.
- Gross Profit/Mw - 9m FY 2009-10 – Rs. 2.03 cr v/s Rs. 2.07 cr in 9m FY 08-09.

DEBT MANAGEMENT EXERCISE –
- DEBT REDUCTION –
- Refinanced acquisition loan of US$465m in Rupee-denomination from SBI.
- Rupee loan refinancing of Rs.10624 Crs done from SBI.
- Rs.6587 cr & trade credits facilities (non-fund based) of Rs.3037 Crs.
- Holiday of 2 years in principal repayments done.
- Issue of GDRs for USD 108 million (Q2 FY 2009-10).
- FCCBs restructuring by removal of covenants & reduced the conversion price to Rs.97.26/sh from Rs.359.68/sh at Rs.44.60/US$.
- Infusion of funds through FCCBs – US$ 90 million.
- Total number of Shares to be issued on conversion of FCCBs – 237152577. (a dilution of 15.23%)
- Infusion of funds by promoters – Rs.1175 Crs.
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