Gayatri Projects to hive off invesments in BOT road projects

February 19, 2008

Gayatri Projects is planning to hive off investments in BOT road projects to its subsidiary company with an intention to dilute a part to strategic investors to raise funds for further investment into BOT projects.

A meeting of the board of directors of the company will be held on Feb. 26, 2008, to consider the issue of convertible equity warrants to promoters in accordance with the provisions of SEBI Guidelines, 2000 and allotment of equity shares to FCCB holders upon conversion.

The board will also consider incorporation of new objects clauses in the memorandum of association.

Shares of the company gained Rs 8.4, or 1.62%, to settle at Rs 527.75. The total volume of shares traded was 13,891 at the BSE. (Tuesday)


Gammon inks pact with Mumbai Port for Rs 1,200-cr terminal project

December 4, 2007

CHENNAI: Gammon India Ltd has informed the BSE that Indira Container Terminal Pvt Ltd, the special purpose vehicle incorporated by the consortium of Gammon and Dragados S.P.L., on December 3 signed the licence agreement with the Mumbai Port Trust for dev eloping the Mumbai Offshore Container Terminal Project.

The project’s estimated cost is Rs 800 crore in the initial phase of three years, and Rs 400 crore subsequently, thus aggregating Rs 1,200 crore.

It is on BOT basis for 30 years, including three years of construction and equipping period, from the date of signing the licence agreement. – Our Bureau


Toll policy change may rationalize annual hikes

December 4, 2007

Under the proposed policy, only 40% of the WPI will be taken into account while revising the rates

New Delhi: Even as tolled roads are becoming a norm in the country with the government handing over more highway projects to the private sector, a new tolling policy is seeking to limit the annual increase in toll rates.

As of now, toll rates are revised every year and concessionaires are compensated in full as per the increase in the wholesale price index (WPI). But under the new policy, which is yet to be placed before the cabinet for approval, only 40% of WPI will be taken into account while revising the toll rate. This is apart from a fixed component of a 3% increase every year.

As many as 54 highway construction packages of around 320 projects awarded under the National Highway Development Programme were “build operate and toll” projects. According to Planning Commission member Anwar-ul-Hoda, the idea behind changing the structure of toll revision was to ensure that the concessionaires are paid only their due share while fixing annual hikes on toll.

“The input costs of the concessionaire mostly occur many years before they begin to collect toll. So why should the toll revision be based on the wholesale price index of the current year?” asks ul-Hoda.

An official with the National Highways Authority of India (NHAI) also said that many components of WPI did not directly affect the highway construction industry.

The CEO of the roads division of the GMR Group, Rajan Krishnan, said his company was neutral to the proposal as WPI was difficult to predict. “Even the best economists cannot clearly track the movement of WPI. This is just a matter of mathematical modelling,” said Krishnan.

According to Krishnan, however, concessionaires stood to gain from the new policy so long as WPI was less than 5%. But when WPI moves beyond 5%, the toll rate to be charged under the new proposal would be lower than what is currently collected, he added.

Nirmaljit Singh, member, technical, NHAI, said the proposal was with the ministry of road transport and highways, from where it would be sent to the cabinet for clearance.

“I just think you are increasingly reaching a situation where the risk-reward equation is being changed against the government,” said an analyst with a consulting firm, who did not wish to be identified. “The government is taking more and more of the risk. You don’t need to guarantee a 3% increase every year when concessionaires had already accepted the earlier policy (where fee revisions were tied only to WPI),” the analyst said.

According to accepted wisdom, the government passes on fewer risks—such as those associated with traffic—to the concessionaire when evolving a public-private partnership policy and as the market evolves, passes on more of the risks. However, this administration is doing the opposite, the analyst said.

The analyst cited the example of the recent move away from “negative grants”, a term for upfront money paid to the government for the privilege of winning a concession, over and above the cost of the project. Mint had earlier reported plans to do away with negative grants in favour of a revenue-share model, where NHAI would derive a percentage of revenues from toll roads. “By going for revenue sharing, the government is taking more risks,” the analyst said.


Market stays in red

November 21, 2007

At 13:07pm (IST),the BSE 30-share Sensex lost 324 points to 19,956 and NSE Nifty was down 99 points at 5,681.

Markets continue to stay in negative territory in the afternoon trades as selling pressure prolongs. The IT stocks are witnessing fresh buying momentum as the IT bellwether; Infosys, TCS and Satyam Computer are trading in green. IT index is the only gainer up (0.3%).

All the other key sectoral indices continue to be in red, the BSE Bankex index (down 3.5%), BSE Power index (down 3.3%) and BSE Capital Good index (down 3%).

At 1:07 pm (IST), the BSE 30-share Sensex lost 324 points to 19,956 and NSE Nifty was down 99 points at 5,681.

GSPL has gained 1% to Rs77 after reports stated that the company would invest Rs2500cr on new pipeline it also would add 850km of gas Pipeline in next year. The scrip has touched an intra-day high of Rs79 and a low of Rs73 and has recorded volumes of over 10,00,000 shares on NSE.

Fortis Financial has surged by over 5.5% to Rs105 after the company announced that it purchased 76% stake of UK’s Capital Market Solution. The scrip has touched an intra-day high of Rs109 and a low of Rs102 and has recorded volumes of over 14,000 shares on NSE.

Tata Steel is down 3% to Rs832. Reports stated that the company is launching a mega rights issue of Rs100bn to repay the bridge loans raised for funding the acquisition of Corus for US$12.9bn. The scrip has touched an intra-day high of Rs878 and a low of Rs831 and has recorded volumes of over 7,00,000 shares on NSE.

L&T has slipped 3% to Rs4205. The company yesterday signed a MoU with Raytheon Company, US, to develop defence technology for the Indian military forces. The scrip has touched an intra-day high of Rs4335 and a low of Rs4145 and has recorded volumes of over 3,00,000 shares on NSE.

Mytas Infrastructure has dropped by over 5% to Rs920. The company yesterday said a consortium the company, NCC Infrastructure Holdings and VIE India Project development and Holdings bagged the BOT contract to develop and operate airports at Gulbarga and Shimgo in Karnataka The scrip has touched an intra-day high of Rs1010 and a low of Rs905 and has recorded volumes of over 1,00,000 shares on NSE.

Strides Arcolab is trading flat at Rs291 the company yesterday announced that it would be selling 50% stake in Strides Latina to Aspen, South Africa, for US$152mn. The scrip has touched an intra-day high of Rs324 and a low of Rs290 and has recorded volumes of over 35,000 shares on NSE.

Ansal Housing is down over 3.8% to Rs179. The company declared that they have planned to raise Rs353.6mn in warrants sale. The scrip has touched an intra-day high of Rs188 and a low of Rs175 and has recorded volumes of over 19,000 shares on NSE.

HPCL has lost over 5% to Rs285. Reports stated that the company planned to spend US$4.5bn on exploration, gas marketing and petrochemicals by 2012. The scrip has touched an intra-day high of Rs304 and a low of Rs284 and has recorded volumes of over 8,00,000 shares on NSE.