Indian companies stock alert – December 13, 2011

IT stocks will be in focus after the rupee dived to its lowest level ever on Monday, 12 December 2011 as investors sought refuge in the dollar after factory output data pointed to a further slowdown in India. The partially convertible rupee fell 1.53% to close at 52.84/85 to the dollar, its biggest one-day loss since 21 November 2011. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion’s share of revenue from exports. However, weak rupee will negatively impact shares of air carriers, public sector oil marketing companies and some automobile firms.

Infosys has won a multi-year transformation and business information technology services contract from Swiss agribusiness major Syngenta AG. Infosys did not disclose financial details of the contract, but said it will set up a business architecture service to advise Syngenta on its future information technology and process roadmap.

Real estate firm Unitech said it has put on hold its plans to demerge the infrastructure vertical indefinitely on account of sluggishness in economy. The company also decided to withdraw the amalgamation of two wholly-owned subsidiaries — Aditya Properties and Unitech Holdings — with itself. “Keeping in view the prevailing macroeconomic scenario, the company has decided to put its plans to expand the infrastructure business on hold and focus on its core business of development of residential and commercial real estate,” it said.

Suzlon Energy announced that its wholly-owned subsidiary, REpower, has signed deals for a total of 35 MW to supply wind turbines for Hall Farm, developed by Ridgewind/HG Capital, and Earls Hall Farm, developed by Renerco in the UK. Construction at Earls Hall Farm will start in the summer of 2012, and scheduled for completion later in the year. Hall Farm will start in the spring with a similar completion date. Financial details of the deal were not disclosed.

Gati opened its foreign currency convertible bonds (FCCB) issue for subscription on 12 December 2011. The company said it expects to raise up to $22.18 million from this issue. The FCCBs are proposed to be listed on the Singapore Stock Exchange.

Petronet LNG’s board has approved the expansion of Dahej Terminal from 10 million metric tonnes per annum (MMTPA) to 15 MMTPA.

GMR Infrastructure announced that GMR Kamalanga Energy (GKEL) has executed an agreement for supply of 260 megawatts (MW) to Bihar State Electricity Board (BSEB) under Case I bidding. “With this agreement, GKEL has tied up 85% of its power sale under tariff policy,” remarked Mr. K.V.V. Rao, Managing Director of GKEL. This makes GKEL eligible to avail mega power status under the new policy. “GKEL is the first power project in the country eligible to receive mega power status under the new policy,” Mr. Rao added. GKEL, promoted by the GMR Group, is presently executing the 1050 MW (3×350 MW) coal-based thermal power project at Kamalanga in Orissa’s Dhenkanal District. Besides BSEB, GKEL has executed power purchase agreements with GRIDCO, HPGCL and PTe. GKEL is expected to commence power supply from its first unit in mid-2012.

The first unit of GMR Rajahmundry Energy’s combined cycle power plant at Vemagiri in Andhra Pradesh was synchronized on Sunday (11 December 2011) night, adding 384 MW capacity to the Andhra Pradesh grid. The GMR Group is setting up the 2×384 MW capacity combined cycle power plant adjacent to its existing plant located at Vemagiri. The first unit has been commissioned in a record time of 24 months . The second unit is expected to be commissioned by February, 2012. This GMR project was identified as a XI plan project and accordingly was shortlisted for gas allocation by the Government of India. It is expected that gas will be made available to this project shortly.