Market Update

MARKET UPDATE

* DLF : mgt says to be able to raise only half of targeted Rs 55bn in FY10 thru
asset sales.. Co selling non core assets to reduce debt

* HIND UNILEVER : cuts px of its Rin detergent powder by 30%.. Rin contributes
~ 14% of cos washing powder category sales & ~ 2% of overall sales

* DABUR : CEO says fast moving consumer gds industry cud see demand contraction
probably from Q1 FY11 as consumers tighten spending

* HPCL : plans to invest Rs 250bn in setting up a refinery on the west coast
with annual capacity of 15mn tonnes

* BHEL : signs JV with Madhya Pradesh Power Gen co to set up 1600mw thermal
power plant

* M&M : plans to launch Scorpio SUV in USA in current qtr

* CAIRN : media rpts co to be ready to supply crude to IOCL from its Rajasthan
fields by end Feb or early March 2010

* HPCL : plans to invest Rs250bn to set up a refinery with an annual capacity of
15mn tonnes a year on the west coast

* HAVELLS INDIA : acquires Standard Electricals, a privately owned promoter grp
firm enagaged in electrical products for around Rs1.2bn

* LUPIN : receives US FDA approval for perindopril erbumine tablets, used to
treat hypertension with annual sales of $24mn

* TATA STEEL : to form JV with Nippon Steel Corp to produce steel sheets for
autos.. CFO says Co may raise prices next month.. seperately Corus raises
long product prices by £60/ton

Corporate News – Industry trends

– DLF is looking at raising Rs12.5bn by exiting projects, selling land plots and a
refund from the Haryana government (DNA)

– Tata Steel said its net profit on a standalone basis for the quarter ended
December 31 more than doubled to Rs11bn against Rs 4bn a year ago. The
company’s profit grew on the back of higher demand for steel from automakers
and builders. Sales for the company grew by 33% to Rs63bn in the period; the
company has formed a JV with Japan’s largest steel producer, Nippon Steel, to
set up an automobile steel venture in India. Tata Steel will have 51% stake in the
JV, which will invest about Rs18bn to set up a plant in the Indian company’s
Jamshedpur complex. (BS)

– Rural Electrification Corporations follow-on public offer, through which the
government plans to divest a stake of 20%, will open on February 19. (BS)

– Software firm HCL Technologies signed US$50mn agreement with UK-based
aerospace equipment maker Meggitt to provide it engineering services. (BS)

– State-run Hindustan Petroleum Corp plans to invest Rs250bn to set up a
refinery with an annual capacity of 15 mn tonnes a year on the west coast. (BS)

– Reliance Industries’ plan to grab a larger piece of the US market is gathering
pace, after the owner of the world’s largest oil refining complex leased gasoline
storage in the Caribbean. (BS)

– Havells India acquires Standard Electricals, for c. Rs1.20bn. Standard
Electricals will operate as a separate subsidiary of Havells India to maintain its
brand identity (ET)

– NTT DOCOMO could acquire a controlling stake in Tata Teleservices (TTSL) in
which it has a 26% stake, if the latter is unable to meet some performance
benchmarks (ET)

– HPCL to invest Rs250bn in setting up a refinery on the west coast with an
annual capacity of 15 million tonnes. (Mint)

– Bharat Heavy Electricals Ltd, the country’s largest power equipment
manufacturer, signed a JV deal with Madhya Pradesh Power Generation Company
Ltd for setting up a 1,600-Mw supercritical thermal power plant in Khandwa
district. (BS)

– Reliance Communications has written to the Department of Telecom stating
that the Government should ask incumbent mobile operators with more than 6.2
Mhz spectrum to surrender the excess radio waves. (BL)

– Srei Infrastructure Finance is merging Quippo Infrastructure, another Srei
group member, as part of a major integration process. The merged entity will
have a combined net worth of over Rs20bn and the merger will take place
through a swap ratio, whereby Quippo shareholders will get three Srei
Infrastructure Finance shares for every two Quippo shares held (DNA)

– Cairn India has completed its 590-km pipeline from Rajasthan to Gujarat and
has started supplying crude to Reliance Industries. The company has faced
delays in completing the pipeline work, threatening its aim of increasing
production from 20,000 barrels per day to 125,000 barrels (DNA)

– Essar Oilfields Services, a subsidiary of Essar Shipping Ports and Logistics,
has achieved financial closure, mobilising Rs 12.1 bn through a consortium of
banks led by IDBI for its two jack-up rigs order with ABG Shipyard. (DNA)

– IT training and education firm Aptech will acquire Maya Academy of Advance
Cinematics (Maac) from Maya Entertainment in a part-cash and part-stock deal.
The enterprise value of Maac is Rs760mn. (BS)

– Swiss bank UBS is caught in a bind, facing the possibility of further legal battles
with the US authorities, as Switzerland attempts to wrestle with its infamous
bank secrecy laws. (BL)

– On the eve of the monetary policy review, the Reserve Bank of India sounded
upbeat on growth but worried over inflation; in the Macroeconomic and
Monetary Developments report released this evening, the central bank drew
comfort from the forecasters’ survey - which estimated that the Indian economy
would grow by 6.9% this year - and improved business sentiments. (BS)

– In a bid to solve the problem of increasing job losses in the US, President
Barack Obama reiterated a campaign pledge to end tax breaks to American
firms that outsource jobs overseas; immediate reactions from Indian IT firms
suggest that there is little cause for worry. They believe that outsourcing is here
to stay since recession-hit US firms need to cut costs for which they have to
offshore to low-cost destinations like India. (BS)

Economic/Regulatory development

– After easing for three weeks in a row, food inflation inched up to 17.40% for the
week ended January 16, a development that may prompt the Reserve Bank to
hike key policy rates to tame. (BS)

– The government cleared 14 proposals for foreign direct investment, including
a Rs2,730mn application from Asset Reconstruction Company, which could
together bring in foreign investment worth Rs7,325mn. (BS)

– The Andhra Pradesh Government has announced a steep hike on the value
added tax on aviation fuel, in a move that would send bad signals to the aviation
industry. (BL)