Will invest in India this fiscal & clear all cheques, promises Buffett

Chairman and CEO of Berkshire Hathaway Warren Buffett, who is in India, regaled audience in Bangalore by saying he regarded metal as a very exciting industry. This was the first time he admitted his liking for a particular sector since he stepped into the country.

The 'Oracle of Omaha' has a succession plan ready as well. Speaking to investors in Bangalore Buffett said he knows who will take over from him. "Just that I have not announced it yet." (So, will Ajit Jain succeed?)

Speaking to a group of investors, Warren Buffett reminded he has begun insurance operations in India only in the last 10 days but "unlikely that I would get into Indian automobile market by myself".

The 80-year-old billionaire investor exhibited his huge appetite to further grow his empire Berkshire, whose market cap stands at a staggering USD 200 billion. "Berkshire is in the acquisition hunt for good profitable businesses," he said but refrained from spelling out an acquisition strategy that he will adopt in India. During his first brush with Indian media yesterday, Buffett had said India was a logical investment destination and the country was too big to be called an emerging market.

What convinced Buffett to come to India?

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Tech Mahindra bags Satyam: Samir Arora, Forrester react

After three months of the new board taking over Satyam, Tech Mahindra finally won the high profile race for Satyam. The company bid Rs 58 per share, beating rivals engineering major Larsen & Toubro and private equity (PE) major Wilbur Ross. Tech Mahindra will have to pay Rs 1,757 crore to buy the 31% stake in Satyam. The total acquisition cost will rise upto Rs 2,890 crore once it gets the mandated 51% stake.

Satyam's government-appointed board clarified that Tech Mahindra will take control only when the Company Law Board (CLB) gives its nod for the sale process. They also admitted that the crucial process of restatement of accounts would take a few more months.

Samir Arora, Fund Manager, Helios Capital, feels the model which the government adopted for Satyam could be an operating model for future scams in India. He credits the government for handling the situation deftly and swiftly without loss of jobs, confidence, or clients.

Arora feels the risk going forward will be on Tech Mahindra financing the deal.

However, JR Varma, Former Member, SEBI, said the deal has gone very well for everyone except Satyam's shareholder. "A preferential allotment to Tech Mahindra means the old shareholders of Satyam will receive less. Other than the open offer that is going to be there, they are not going to receive any money. It is not very clear whether they will benefit from the ongoing business as well."

Sudin Apte, Senior Analyst, Forrester, feels questions still persist on how the integration process will pan out. Clients, he feels, are also wondering how a company specializing in telecom will be able to service them. "Also, it is not exactly present in the domain and the lines of services of Satyam." He feels a Tier-I Indian company or a multinational could have been a better option to take over approximately a USD 2 billion company when this fiasco opened up. "I wish there was one top company who was trying to buy this company as it would have been much better for clients." According to Apte, there is going to be a possible 5-6% rationalization of staff at Satyam based on how its clients ramp up.

Also Read:

Restatement of co's accounts will take few months: Satyam

Continued on next page…

Thanks to http://www.moneycontrol.com

Can investing in land assure good returns in future?

The lucrative long-term return on land plots may tempt you to buy, even at a time when the real estate sector is reeling under the impact of a slowdown. In such a market scenario, can investing in land still assure you of good returns in the future? What is the best way to invest in this precious asset and what are the crucial determinants to assess your prospective buy?

There are various ways to invest in land. Global real estate consultancy Jones Lang LaSalle Meghraj (JLLM) shares some key factors that are necessary to consider. “Identifying a piece of land that is in close or reasonable proximity to future market drivers is important.

Next, one should inquire into the legal status of the land and establish if it is for sale. Finally, locate the owners and make a purchase proposal. For maximum future returns, its is important to make one’s investment while entry costs are low,” says Anuj Puri, chairman and country head of JLLM.

One must especially keep in mind certain aspects to avoid any legal hassles later. For instance, land may be under litigation or may be earmarked for a government project. It could be categorised as forest land or could even be in a Coastal Regulation Zone.

It may also lack basic facilities such as water and power supply or fall in a politically or socially challenged sector. Any or a combination of these factors can subtract or nullify the investment potential of land. Hence all negative possibilities should be covered before purchase.

Another aspect which cannot be neglected is the paperwork needed. A number of documents are necessary in land purchase and need to be checked. The title deed (a legal document proving a person’s right to property), the encumbrance certificate (which proves that the land is not under some sort of legal dispute), the release certificate (in case the land was previously pledged to someone else), the surveyor’s report (to establish its exact dimensions) and — if the owner is an NRI — the power of attorney that gives his representative the legal right to act on the NRI’s behalf, are all significant documents that should be given careful consideration.

But is it profitable to invest in land in the current market situation? Some advise caution. “The current economic recession is leading to unprofitable business for everyone, whether it be a company or an investor. The downturn is obviously not the right time to invest in property as it is not going to reap any positive or profitable results. To make a profitable deal, the investor should wait for at least 2-4 years,” advises Vijay Jindal, CMD of SVP Builders India.

More :- economictimes.indiatimes.com

S and P launches index of Indian equities for int'l investors

NEW DELHI: Standard & Poor's on Monday launched an equity index of 60-listed Indian companies, including the likes of Infosys, Bharti Airtel and Reliance Industries, to provide international investors with information on tradeable exposure to the largest and most liquid scrips in the country.

"The new S&P India Select Index was developed in response to growing investor demand for access to the leading companies in India. The index has a pool of easily accessible underlying stocks that provides a unique way for international investors to take part in India's growth story," R Ravimohan, Managing Director and Head of South and Southeast Asia, S&P said in a statement.

The 'S&P India Select Index' comprises leading companies, with no single scrip representing a weight more than 10 per cent in the index.

According to the leading index provider, the stocks that have reached the maximum percentage holding for Foreign Institutional Investors (FIIs) are excluded from the index in order to reflect the "lack of access of those stocks to foreign investors."

"The index is fully float adjusted and stock weights are determined by what is legally and practically available to foreign investors," the statement added.

The top 10 holdings by percentage of index weight are Infosys Technologies, Bharti Airtel, Oil and Natural Gas Corporation, Reliance Communications, Housing Development Finance, Reliance Industries, ICICI Bank, Hindustan Lever, Bharat Heavy Electricals, and Larsen & Toubro.
thanks to: economictimes.indiatimes.com

Dabur Pharma gains on Fresenius investment

MUMBAI: Shares of Dabur Pharma extended gains after German healthcare group Fresenius said its unit will invest 10-30 million euros over the next 2-3 years to double Dabur Pharma's API plant capacity.

At 1 pm, the Dabur Pharma share was up 2.73 per cent at Rs 64 with volume traded at 11,529 against two-week average of 11,950 shares.

Amara Raja gains 3% after BSE block deal

MUMBAI: Auto and industrial battery maker Amara Raja Batteries extended gains after a block deal of about 3 million shares or 5.2 percent of its equity was struck on theBSE, at Rs 132 a share. Amara Raja's shares were up 3 per cent after the deal. At 11:20 am, the shares gave up some gains and were at Rs 135, up 1.28 per cent.

Niraj Cement IPO Listing: Share closes at issue price

Niraj Cement Structurals an engineering and construction company focusing on road construction development, closes at Rs 190.15 on the BSE which is marginally above its issue price of Rs 190. Its intraday high was at Rs 197.90 and intraday low was at Rs 169.70. The total traded quantity was 1,77,56,320 shares. The share had opened at Rs 185 on the BSE against the issue price of Rs 190 at a discount of 2.63%.

The Company proposes to utilize the net proceeds of the Issue to finance its plan for investment in capital equipment on a recurring basis, fund long term working capital requirements and for general corporate purposes. It intends to bid for road related infrastructure projects - leveraging and building the specialization and pre-qualification and thereby participating in more states and regions and gaining access to more complex projects.