Market Commentary Thursday, February 16, 2012 08:59 Hrs IST

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STOCK ALERT

Aviation stocks may edge higher after ATF cut

Shares of aviation firms will be in focus after public sector oil marketing companies cut jet fuel prices by a marginal Rs 350 per kilolitre from midnight Wednesday (15 February 2012), the second reduction in this month. The price of aviation turbine fuel (ATF), or jet fuel, in Delhi was cut by Rs 350.7 per kilolitre (kl), or 0.5%, to Rs 62,557.12 per kl. The reduction comes on back of a 3% cut in rates effected from 1 February 2012. The three fuel retailers revise jet fuel prices on the 1st and 16th of every month, based on the average international price in the preceding fortnight.

Rural Electrification Corporation, Glaxosmithkline Pharmaceuticals and Thomas Cook (India) will unveil their October-December 2011 results today, 16 February 2012.

Telecom stocks will be watched after the government on Wednesday (15 February 2012) unveiled some points of a new telecommunications policy, including separating licenses from bandwidth and easing mergers and acquisition rules. "This policy is announced and will operate from now," Communications Minister Kapil Sibal told the media. Sibal said the government has decided to allow mergers and acquisitions where the resultant entity won't have a market share of more than 35% or over 25% of bandwidth in a telecom service area. Operators will also now have to pay a unified license fee across all telecommunication services at 8% of adjusted gross revenue. Telecom operators currently pay 6%-10% of their revenue as license fees for basic mobile services, depending on the areas they operate in.

Norway-based telecom firm Telenor issued a notice to its Indian strategic partner Unitech on Wednesday (15 February 2011), seeking indemnity and compensation following the cancellation of Uninor's 22 licenses by the Supreme Court of India.

The Supreme Court of India on 2 February 2012 passed an order to revoke 122 licenses issued to all operators on and from 10 January 2008. This included all licenses issued to Uninor. The Supreme Court decision refers to actions that happened prior to Telenor Group's entrance into India.

Telenor Group said it held Unitech liable for the breach of warranties related to the cancellation of the licenses seeking compensation for all investment, guarantees and damages caused by the Supreme Court Order. Telenor Group also made an indemnity claim against Unitech for the failure to obtain spectrum in the strategically critical Delhi circle.

FMCG firm Marico on Wednesday (15 February 2012) acquired the personal care brands of Paras Pharmaceuticals from the UK consumer products giant Reckitt Benckiser (RB) for an undisclosed sum. The transaction will see Marico acquire brands such as Set Wet, Livon, Zatak and certain other personal care brands now owned by Reckitt Benckiser. Reckitt Benckiser had acquired these brands from Paras Pharmaceuticals in a deal completed in April 2011. Marico said the latest transaction envisages transfer of all key assets, including intellectual property rights, supply agreements and third party manufacturing agreements.

Marico said it expected revenue of Rs 150 crore from the acquired business in the year ending March 2012. The assets are in the process of being transferred to a separate company in which Marico will acquire 100% stake and the transaction is expected to close in the next few months. The buy is to be funded through a mix of internal accruals, equity and debt.

HCL Technologies on Wednesday entered into a strategic partnership with Great American Insurance Group (GAIG) to provide IT, back office and infrastructure management services to the US major and its affiliates.

Max India denied media report that suggested that New York Life Insurance Co may sell its stake in the company's joint venture, Max New York Life Insurance and may share one-third of the sale proceeds with the company. Max India said, "There is interest shown periodically by potential investors to participate in our future growth. However, there is no firm development to report as of date and thus the commercials published under the article stand denied."

The board of Ravi Kumar Distilleries considered issuing preferential issue of fully convertible equity warrants to promoters and associates/outsiders including bodies corporate and individuals for augmenting the resources for business and operational activities. The board also constituted a preferential issue committee.

The board of Tata Metaliks will meet today, 16 February 2012 to consider further issue of shares on preferential basis.

The board of Sasken Communication Technologies will meet today, 16 February 2012 to consider a share buyback.

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