Analysts say that this is a record of sorts that a small, little known company like Jindal Cotex has achieved in choppy market conditions. This clearly proves the investor confidence in the company, they say.

The company’s IPO, launched on August 27, 2009 with a public issue of 1, 24, 53,894 equity shares of face value of Rs. 10/- each with price band of Rs. 70 to Rs. 75 per share, was subscribed 2.19 times. The HNI portion was subscribed by 5.9 times, retail 3.09 times and QIB segment 0.65 times.

Saffron Capital Advisors Private Limited is the Book Running Lead Manager for the issue, while Bigshare Services Private Limited is the Registrar to the issue which was through a 100% Book Building Process.

The proceeds of the issue will be used mainly for entering into technical textile space through investment in wholly owned subsidiaries viz., Jindal Medicot Limited (JML) and Jindal Specialty Textiles Limited (JSTL). JML is setting up facilities to manufacture Medical Textile Products like Absorbent Bleached cotton Wool & its products and Cotton Crepe Bandage like Stretch Bandage, Crepe Bandage Cloth mainly catering to healthcare and cosmetic sector.

The total capacity of the plant will be 5000 TPA. JSTL is setting up facilities to manufacture PVC Laminated products for various applications like Frontlit Banner Fabric, Backlit Banner Fabric, Inflatable Fabric for Boats etc, Tent Fabric, Tarpaulin fabric, Truck Siders, mainly catering to outdoor media advertising industry, recreation and army applications with an estimated annual capacity of 60 Million Sq. Meters. Both these facilities will be set up in District Una in the State of Himachal Pradesh. Further, Jindal Cotex is also expanding its capacity by setting up of a new facility for manufacturing cotton yarn, yarn dyeing and garmenting.

Technical textiles are specialized textile products manufactured for industrial usage. The market for technical textiles is expected to touch $14 billion by 2012, though it is less than $8 billion today. Technical textiles have the potential to attract investments worth Rs. 5000 crore and generate 3, 00,000 additional employment by 2012. The Government of India has also taken number of steps to promote its growth and as per National Textile Policy that priority will be accorded for their growth and development of technical textiles industry.

The annual rate of inflation, calculated on point to point basis, stood at 3.36 percent (Provisional) for the week ended 14/02/2009 (over 16/02/2008) as compared to 3.92 percent (Provisional) for the previous week (ended 07/02/2009) and 5.66 percent during the corresponding week (ended 16/02/2008) of the previous year.

The movement of the index for the various commodity groups is summarized below:-

1. PRIMARY ARTICLES (Weight 22.02%)

The index for this major group rose marginally to 248.1 (Provisional) from 248.0 (Provisional) for the previous week. The groups and items for which the index showed variations during the week are as follows:-

The index for ‘Food Articles’ group declined by 0.3 percent to 244.2 (Provisional) from 244.9 (Provisional) for the previous week due to lower prices of maize (5%), barley (3%), fruits & vegetables (2%) and eggs, condiments & spices and mutton (1% each). However, the prices of arhar (6%), fish-marine (4%), ragi (2%) and bajra, jowar and urad (1% each) moved up.

The index for ‘Non-Food Articles’ group declined by 0.1 percent to 228.4 (Provisional) from 228.6 (Provisional) for the previous week due to lower prices of raw silk (4%), raw cotton and raw rubber (2% each) and copra and rape & mustard seed (1% each). However, the prices of niger seed (12%), linseed (10%) and cotton seed (2%) moved up.

The index for ‘Minerals’ group rose by 5.3 percent to 622.6 (Provisional) from 591.1 (Provisional) for the previous week due to higher prices of magnesite (83%), barytes (38%), ochre (25%), iron ore (6%), chromite (3%) and steatite (1%). However, the prices of fire clay (35%), dolomite (24%) and asbestos (2%) declined.

2. FUEL, POWER, LIGHT & LUBRICANTS (Weight 14.23%)

The index for this major group remained unchanged at its previous week’s level of 323.5 (Provisional)
3. MANUFACTURED PRODUCTS (Weight 63.75%)

The index for this major group declined by 0.1 percent to 199.5 (Provisional) from 199.7 (Provisional) for the previous week. The groups and items for which the index showed variations during the week are as follows:-

The index for ‘Food Products’ group declined by 0.3 percent to 212.4 (Provisional) from 213.0 (Provisional) for the previous week due to lower prices of oil cakes and rape & mustard oil (2% each) and gingelly oil, sooji (rawa), coconut oil and rice bran oil (1% each). However, the prices of bran (all kinds) (3%) and imported edible oil and sugar (1% each) moved up.

The index for ‘Beverages Tobacco & Tobacco Products’ group rose by 3.0 percent to 301.5 (Provisional) from 292.6 (Provisional) for the previous week due to higher prices of zerda (28%) and Indian made foreign spirit (17%).

The index for ‘Textiles’ group rose by 1.2 percent to 140.7 (Provisional) from 139.0 (Provisional) for the previous week due to higher prices of cotton yarn-cones (6 %), texturised yarn (2%) and synthetic yarn and polyester staple fibre (1% each). However, the prices of hessian & sacking bags and other cotton yarn (1% each) declined.

The index for ‘Paper & Paper Products’ group rose by 0.1 percent to 204.9 (Provisional) from 204.7 (Provisional) for the previous week due to higher prices of news paper (1%).

The index for ‘Rubber & Plastic Products’ group rose by 0.1 percent to 167.4 (Provisional) from 167.3 (Provisional) for the previous week due to higher prices of decorative laminates (2%).

The index for ‘Chemicals & Chemical Products’ group declined by 1.4 percent to 214.7 (Provisional) from 217.7 (Provisional) for the previous week due to lower prices of epoxy resins (76%), polystyrene (15%) and liquid chlorine (3%). However, the prices of p.v.c. resins (5%), fireworks (4%) and caustic soda (sodium hydroxide) (1%) moved up.

The index for ‘Non-Metallic Mineral Products’ group rose by 0.3 percent to 217.0 (Provisional) from 216.4 (Provisional) for the previous week due to marginal increase in the prices of cement.

The index for ‘Basic Metals Alloys & Metal Products’ group declined by 0.1 percent to 257.4 (Provisional) from 257.6 (Provisional) for the previous week due to lower prices of aluminum ingots (6%). However, the prices of chains (11%), zinc (9%) and steel ingots (plain carbon) (5%) moved up.

The index for ‘Machinery & Machine Tools’ group declined by 0.1 percent to 172.2 (Provisional) from 172.4 (Provisional) for the previous week due to lower prices of furnaces (5%) and air & gas compressors (3%).

The index for ‘Transport Equipment & Parts’ group rose by 0.1 percent to 176.1 (Provisional) from 176.0 (Provisional) for the previous week due to higher prices of motorcycles (1%).

4. FINAL INDEX FOR THE WEEK ENDED 20th December 2008

For the week ended 20/12/2008, the final wholesale price index for ‘All Commodities’ (Base: 1993-94=100) stood at 229.2 as compared to 230.2 (Provisional) and annual rate of inflation based on final index, calculated on point to point basis, stood at 5.91 percent as compared to 6.38 percent (Provisional) reported earlier vide press note dated 01/01/2009

RBI has announced the reduction of the repo rate under the liquidity adjustment facility (LAF) by 100 basis points from 6.5 per cent to 5.5 per cent with immediate effect.

The reverse repo rate under the LAF will also be slashed by 100 basis points from 5.0 per cent to 4.0 per cent with immediate effect.

The apex bank also announced that the cash reserve ratio (CRR) of scheduled banks will reduced by 50 basis points from 5.5 per cent to 5.0 per cent from the fortnight beginning January 17, 2009.

The RBI announcement said that the reduction in the CRR will inject additional liquidity of around Rs. 20,000 crore to the financial system and more importantly kick-start another interest rate cut.

It is expected that the reduction in the policy interest rates and the CRR will further enable banks to provide credit for productive purposes at appropriate interest rates. The Reserve Bank on its part would continue to maintain a comfortable liquidity position in the system.

Even as some public sector and private sector banks have cut lending rates in response to the Reserve Bank’s monetary policy stance, concerns over rising credit risk together with the slowing of economic activity appear to have moderated credit growth.

The Reserve Bank continues to urge banks to monitor their loan portfolio and take early action, including debt restructuring where warranted, to prevent the rise of bad assets down the road and safeguard the gains of the last several years in improving asset quality. At the same time, banks should price risk appropriately and ensure that quality enterprises continue to get funding.

The Reserve Bank appreciates that risk management is difficult even in normal circumstances; it is even more difficult in an environment of uncertainty and downturn.

The fundamentals of our economy continue to be strong. Once the crisis is behind us, and calm and confidence are restored in the global markets, economic activity in India would recover sharply. But a period of painful adjustment is inevitable, the Bank pointed out.

In a communique, SEBI said: It has been widely reported in the media that SEBI has vide order dated December 19, 2008, directed Mr. P S Saminathan, the CMD of Pyramid Saimira Theatre Ltd. (PSTL), to make an open offer for acquisition of shares of the Target Company (PSTL) at a price of not less than Rs. 250/-. A copy of the letter purported to have been issued by SEBI was also flashed on some TV Channels today.

It is hereby clarified that no order or letter has been issued by SEBI to Mr. P S Saminathan on 19.12.2008. It appears that the said letter is being circulated with ulterior motives.

SEBI is separately investigating into the matter including the origin of the letter. SEBI is also separately inquiring into the dealing in the scrip following the press report including alleged violation of SEBI (SAST) Regulations, 1997.

Mumbai

December 23, 2008

• Confidence in global credit markets continues to be low, and credit lines remain clogged. The tight and hesitant conditions in the credit markets are precipitating erosion of demand which, in turn, is feeding a recession – deflation vicious cycle. Central banks around the world are responding to the developments by aggressive and unconventional injection of liquidity, monetary easing and relaxation of collateral norms and eligibility criteria for their lending to financial institutions.
• Contrary to earlier expectations that emerging economies will be affected only marginally, growth prospects of emerging economies have most definitely been undermined by the ongoing crisis with, of course, considerable variations across countries.
• The transmission to emerging economies is taking place via both trade and financial channels. Reflecting the contagion of the crisis, the IMF revised its growth forecast for emerging economies for 2009 to 5.1 per cent, down from its early October figure of 6.1 per cent.
• The outlook for India going forward is mixed. There is evidence of economic activity slowing down. Real GDP growth has moderated in the first half of 2008/09. Industrial activity, particularly in the manufacturing and infrastructure sectors, is decelerating.
• The services sector too, which has been our prime growth engine for the last five years, is slowing, mainly in construction, transport and communication, trade, hotels and restaurants sub-sectors. For the first time in seven years, exports have declined in absolute terms in October.
• Recent data indicate that the demand for bank credit is slackening despite comfortable liquidity.
• Higher input costs and dampened demand have dented corporate margins while the uncertainty surrounding the crisis has affected business confidence. 
• Given the uncertain outlook on the global crisis, it is difficult to precisely anticipate every development. The Reserve Bank will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as appropriate.
• The Reserve Bank’s policy endeavour will be to minimise the negative impact of the crisis and to ensure an orderly adjustment.
• In particular, we will try to maintain a comfortable liquidity position, see that the weighted average overnight money market rate is maintained within the repo-reverse repo corridor and ensure conditions conducive for flow of credit to productive sectors, particularly the stressed export and small and medium industry sectors.
• The fundamentals of our economy continue to be strong. Once the crisis is behind us, and calm and confidence are restored in the global markets, economic activity in India will recover sharply.
• But a period of painful adjustment is inevitable.

 

 

“We are very pleased with the induction of Mr. Patel in Reliance Money.  We are sure that with his extensive experience of over 28 years in the financial market arena, Mr. Patel will play a critical role in our foray into the exchange space covering commodities and currencies.  We are looking at both domestic and international opportunities at present,” said Mr. Sudip Bandyopadhyay, Director and CEO, Reliance Money

Prior to joining Reliance Money, Mr. Patel was the Managing Director & CEO, Bombay Stock Exchange, where he was responsible for the corporatization and demutualization of BSE, making it a billion dollar institution.

An accomplished banker, Mr. Patel has also had a long stint with the banking regulator, Reserve Bank of India, besides being a part of MNC and PSU banks such as BNP Paribas, State Bank of Saurashtra and Bank of Maharashtra. 

“I am very happy to be associated with Reliance Money, particularly for the vision, the scale and the speed of implementation.  I believe there is a huge scope for an innovative, professional and committed approach in commodities, currency futures and related exchange space.  I am very excited at the future possibility of value creation for all stakeholders in the financial system,” said Mr. Patel.

Mr. Patel was the longest serving Chairman of South Asian Federation of Exchanges (SAFE).  He was also a member of the Working Committee of the World Federation of Exchanges (WFE).  Mr. Patel has also been a part of various committees of SEBI, CII and others.

About Reliance Money
www.reliancemoney.com

Reliance Money, a part of the Reliance Anil Dhirubhai Ambani Group is a comprehensive financial services and solution provider, providing customers with access to Equity, Equity and Commodity Derivatives, Portfolio Management Services, Wealth Management Services, Mutual Funds, IPOs, Life and General Insurance and Gold Coins.  Customers can also avail Loans, Credit Card, Money Transfer and Money Changing services.

The largest broking house in India with 2.7 million customers and a wide network of over 10,000 outlets and 20,000 touch points in 5,000+ locations.  Reliance Money endeavors to change the way investors transact in financial markets and avails financial services.  The average daily volume on the stock exchanges is Rs. 4,000 crores, representing approximately 4% of the total stock exchange volume.

Reliance Capital is one of India’s leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking groups, in terms of net worth.