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Government Encourages PSU Growth

With PSUs having cash reserves to the tune of Rs 2 lakh crore, the Government of India is looking to allow them to go on an expansion and acquisition spree, as there is no better time to do so than an economic slowdown, which provides ample opportunities to get  things done at the cheapest prices.

ONGC & BHEL: FPO Plans

As per government sources and newspaper reports, the shares of ONGC and BHEL are likely to hit the share market by March 2012 under the government’s divestment plan. The Finance Ministry is planning to divest five per cent of equity of each company, which could bring in Rs 15000 crore. According to the Government of India’s new divestment strategy, the shares of three companies – L&T, ITC and Axis Bank – held by the government-owned SU-UTI would be transferred to a special purpose vehicle, which in turn, would pledge them to borrow money from banks for buying government equity in PSUs.

ONGC: Capex Plans

ONGC continues to remain a sound investment candidate for the long-term, considering its inexpensive valuations, the likely  improvement in earnings from the rupee depreciation and the reduced royalty burden in the Rajasthan block. Moreover, the company’s new find at KG Basin, which is commercially viable at USD 4.20 per unit, will help sustain growth. In the past five years, the company has consistently managed to maintain a reserve replacement ratio above 1. In other words, its recoverable reserves are growing faster than its current production levels. This gives visibility into its future growth. ONGC’s joint ventures are set to complete two mega-projects in downstream industries in 2012 – an aromatics complex at Mangalore and a 725 MW gas-based power plant at Tripura. Its 1.4 MT petrochemical complex in Dahej under ONGC Petro-additions (OPaL) will be commissioned in 2013.


Shri Sudhir Vasudeva, CMD, ONGC

BEML: On The Growth Track

BEML has recently bagged a Rs 318 crore order from Jaipur Metro. The order is to manufacture, supply, test and commission 10 train sets of four cars each (totalling 40 cars) for the Jaipur Metro Project. The company is anticipating additional orders worth Rs 60 crore from the project. Recently, BEML had also received an order for supplying 150 coaches, valued at about Rs 1672 crore, from the Bangalore Metro Rail Corporation.

BEML has domain expertise in the indigenously designed Metro cars, and is currently the supplier of Metro cars to the Delhi Metro Rail Corporation (DMRCL) and the Bangalore Metro Rail Corporation (BMRCL). The company’s present order book stands at around Rs 6000 crore. It is aiming at a turnover of around Rs 4500 crore for the current financial year and more than Rs 5000 crore for 2013-14 to coincide
with its Golden Jubilee Year.

Central Bank Of India: Centenary Initiatives

In order to take Central Bank of India to the next level, the bank’s CMD, MV Tanksale, has unveiled many initiatives. He travelled through
an illustrious path of achievements and pioneering products while recalling the bank’s journey. Tanksale informed that the bank will open 100 new branches and will also launch an online remittance facility to the Prime Minister’s Relief Fund for its Net Banking customers. On this occasion, the bank inaugurated 100 ATMs and flagged off the ‘Granthali Grantha Yatra’.

Besides this, during the year too, the bank has come up with the Centenary Param Salary Account that provides many value-added services apart from the regular ones. It rolled out e-stamping in four states, tied up with Angel Broking to provide online trading facilities and with Cholamandalam MS General Insurance Company for the Non-Life Insurance business.

Central Bank of India has also come up with special schemes for SMEs in order to leverage the strength of Reputed Manufacturing Companies (RMCs)/Retail Chains dealing in FMCGs. Based on their recommendations, it will provide finance both to suppliers (vendors) and dealers (buyers).

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