Coal india IPO has dented some secondary market investments and indian govt owned financial institutions have sold indian shares in order to prop up Coal india IPO. So there is decline in NIFTY.
Investors get time till Oct 25 to withdraw CIL IPO bids
Stating that there were certain inadvertent errors that crept into its offer document, Coal India (CIL) today offered its investors time till October 25 to reconsider their decision to take part in its IPO.
"...It is clarified that on account of typographical errors in the company's standalone summary statements of profit and loss (restated), the amount shown under accretion in stock and other income for the quarter ended June 30, 2010 on pages...Of the Red Herring Prospectus were inadvertently interchanged with each other.
"...In view of the above, kindly note that the bidders including QIB bidders, if they so desire, may withdraw their bids. The request for withdrawal of such bids shall be received on or before 5:00 PM on October 25, 2010," said in a statement to the stock exchange which coinciding with the final day of public offer.
Market experts said that whenever there are any changes made in the prospectus of IPO bound companies, regulatory norms mandate them to make public announcements and give investor an option to withdraw bids.
"It is not the first time such a thing has happened. In such scenarios, generally investors have not been seen withdrawing their bids," a merchant banker said.
Among many such IPOs, VA Tech Wabag had given investors the option to withdraw their bids in its recent share sale as certain errors came to light in its offer documents.
"Generally speaking, we have not seen investors withdrawing their bids from the company due to this," the banker said.
Meanwhile, Coal India maintained that there has been no change in the total income of the company or the company's standalone summary statement of profit and loss in the offer document due to the error.
Many investors may think whether it is a plan to allow FII/mutual funds/LIC ti withdraw their applications in part before allotment thus misguiding the retail investors about total subscriptions before they subscribe on the closing day.But chance is given to retail investors also to withdraw but quantum of withdrawal by FII/mutual funds/LIC should be made public and retail investors should be allowed one more day for withdrawal as per the tradition in offer documents.
On seeing the downtrend in price of tata steel, I could understand the level of games that are played by FIs especially when the derivatives settlement approaches fast for Oct 10. Anyhow, still I recommend Tata steel in the portfolio of one's investment as it is the only stock that is available cheap. In this respect, the following research editions also enthused me.
My recommendation:
Don't sell Tata steel. Either buy at current price of Rs.617 or Hold. You will get good returns in another 6 months to 1 year. For other stocks, my old posts stand valid including visa steel, Jp associates etc.
Edelweiss: Target Rs.781/-
Raising consolidated EBITDA by ~7% in FY11 and ~10% in FY12
We are revising upwards Tata Steel Europe’s (Corus) EBITDA by 6.7% to USD
841 mn in FY11 and by 5.6% to USD 1.3 bn for FY12, primarily due to betterthan-
expected realisations in Europe. We increase our FY12 EBITDA/t for Corus
from USD 66/t earlier to USD 80/t. For the Indian operations, we raise our
estimated EBITDA to USD 2.3 bn (up 5.7%) and USD 2.4 bn (up 12.4%) for
FY11 and FY12, respectively. This is led by increase in steel prices ahead of
expectations and firm price outlook.
2.9 mtpa brown-field expansion on track; to be completed by Dec-11
The 2.9 mtpa brown-field expansion will fully commission by December 2011,
with blast furnace and pellet plants likely to commission in June 2011. We expect
incremental volumes of 0.2 mtpa in FY12 and 2.4 mtpa in FY13 from this plant.
Dhamra port, with 27 mtpa capacity, has just commenced operations.
Better visibility on raw material projects; significant long-term value
Tata Steel is executing projects in Mozambique for coking coal and Canada for
iron ore. These projects are gathering pace and are expected to be completed by
end CY11. The company could attain raw material integration of 15-25% through
these projects.
Outlook and valuations: Positive stance; maintain ‘BUY’
We continue to believe that margins for non-integrated steel players would bottom
in Q2FY11 and expand thereafter. Steel prices have increased by ~USD 25
recently globally even as contract iron ore and coking coal prices have declined by
~USD 15/t, suggesting this play-out has already started. For Tata Steel
specifically, we see multiple triggers playing out, including Corus achieving
EBITDA/t of USD 80/t in FY12, sale of TCP plant by Q1FY12, ramp-up of Dhamra
port, the 2.9 mtpa expansion and international raw material projects completing
by end CY11. Potential surprises could be through additional sale of non-core
assets. We value international raw material projects at INR 23/share and also
considering increase in our estimates, raise our fair valuation from INR 623/share
to INR 781/share. We maintain ‘BUY/Sector Outperformer’ on the stock.
Another research report says price target: Rs.846/-
Though this is on the higher side, Rs. 700 in short term and Rs.800 on long term(1 or 2 years) appears to be reasonable.The report goes like this:
Firm Indian operations, Corus uncertain
Corus to remain under pressure despite strong Q1FY11
Corus’ (TATA Steel UK) Q1FY11 results reinforced the operational
turnaround. However, we expect the next two quarters to be
challenging for the company due to: 1) pressure on utilisation and
2) higher raw material prices should squeeze margins. Despite this,
we believe Corus should be cash positive and EBITDA/t will stabilize
in the range of US$50-70/t from Q3FY11F up from US$30-35/t
expected in Q2FY11F.
However domestic business to remain highly profitable
The company’s Indian operation’s profitability has surprised the street
both through higher realizations and lower costs. Although we expect
EBITDA/t to come down from Q1FY11 levels with the fall in steel
prices, we believe higher volumes will keep absolute profits strong.
Volumes have picked up in Q2FY11, after higher imports had
impacted sales in Q1FY11. We expect consensus earning upgrades
for the India business due to positive surprises in Q1FY11.
Valuations attractive, already factoring uncertainty
We believe steel prices should start stabilizing after the recent
turbulence, as indicated by high scrap prices. The Indian business
remains strong with EBITDA/t of US$ 350-400/t despite the correction
in steel prices. Since there is consensus about strength of Indian
business, we believe the current stock price is ascribing significant
negative value to Corus. We estimate the value domestic business at
Rs753/share (at 10x FY12E EPS). Therefore, the negative value
ascribed to Corus is closer to Rs100/sh. This is unjustified, in our view,
given our expectation that Corus will be cash positive in Q2FY11,
which is typically the worst quarter for them. We value Corus at 5x
EV/EBITDA at EV of US$ 5bn and contributes Rs34 to our target price.
South East Asia business is also valued at 5x EV/EBITDA and
contribute Rs15/share. Rs44 comes from its stake in Riversdale
mining (RIV AU, not covered).
So don't sell Tata steel. Either BUY or HOld. Don't sell. This is the only share which has got potential in the NIFTY stocks.Tata Steel today said its sales increased by 14 per cent to 1.66 million tonnes in the July-September quarter of the current financial year over the year-ago period, mainly on account of rise in demand for its products.
Tata steel sales rose by 14% in second quarter
"Tata Steel completed the second quarter and the first half of the current financial year with a significant increase in its production and sales volume, as compared to the corresponding period of last year," the company said in a statement here.
"The second quarter of 2010-11 witnessed some best ever production and sales in various units of the steel company," it added.
The company had sold 1.46 million tonnes of steel in the second quarter of the last financial year.
For the half-year-ended September 30, Tata Steel said it sold 6 per cent more steel products at 3.06 million tonnes as against the sales of 2.87 million tonnes in the year-ago period.
"The second quarter of 2010-11 witnessed some best ever production and sales in various units of the steel company," it added.
During the quarter under review, Tata Steel saw its saleable steel production surging by 6 per cent to 1.61 million tonnes against 1.51 million tonnes last year. For the half year period, the company saw production in the segment growing by 5 per cent to 3.2 million tonnes, as compared to the output in the first six months of the last financial year.
Tata Steel's crude steel output for the second quarter of the current financial year surged 5 per cent to 1.72 million tonnes over the year-ago period. The company had produced 1.64 million tonnes of crude steel in July-September last financial year.
For first half of 2010-11, the crude steel production surged by 7 per cent to 3.35 million tonnes as against 3.14 million tonnes in the year-ago period.
The company said its hot metal production rose by 6 per cent in the second quarter to 1.89 mt. Tata Steel had a hot metal output of 1.79 mt of in the same period last year.
For the first half of the current financial year, Tata Steel saw production in the hot metal segment rising by 7 per cent to 3.72 million tonnes, as against 3.48 million tonnes in the corresponding
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