Raju asks staff to stay with him
Hyderabad, Dec 30: Virtually hitting back at four directors who quit over the Maytas takeover fiasco, Satyam Computer Chairman Ramalinga Raju today asked employees to stand-by him, saying the Board had unanimously voted in favour of the now-aborted deal. Under continuous attack over the deal for two firms promoted by his family, Raju also held out a promise to investors that everything possible is being done to get Satyam back on track.
Raju, who was forced to step back from the deal in the face of stiff opposition from institutional investors, said that "the Board arrived at its decision to bid for Maytas by following all required processes and procedures... Their vote to approve the motion was unanimous." But the company's decision raised questions about ethics and corporate governance issues, following which four directors resigned. “I am of the view that resigning from the Board now is like deserting a troubled ship. We should remember Satyam is a major player in global IT space...,” independent director T R Prasad said today, referring to the resignations of Mangalam Srinivasan, Vinod Dham, Krishna G Palepu and M Rammohan Rao. The four also came in for criticism from lawyers and chartered accountants and company secretaries, who said that by resigning the directors failed in their fiduciary duty to protect the interest of shareholders and other stakeholders whose interest they represent on the board. Company law practitioner Naseer Ahmed said, "They are accepting the wrong which had happened at the Satyam's Board meeting... They should not run away from their collective decision and responsibility...It also appears that they are influenced by some vested groups in the company."
Breaking his silence on the embarrassing developments over the last two weeks, Raju asked the employees to "please be assured that the Board and the leadership team are doing everything that's possible to get Satyam back on track. "We cannot do this without your help... I ask for your continued faith in Satyam and for your steadfast focus on your customers, specially in the face of wild speculation and unchecked rumours." There are five members left on the Board, including Raju. The letter comes amid reports of uneasiness among the over 50,000 employees of the company, even as speculation was rife that a chunk of its talented employees was already looking for other options.
Raju further assured employees that customers continue to show a high level of trust in Satyam. “We have also been in contact with many of our investors, and we have taken key steps to regain their confidence. These include strengthening the board by changing its size and composition, and engaging DSP Merrill Lynch to provide strategic advice and options,” he added.
The Satyam board is scheduled to meet on January 10, 2009 to consider these options. The company has suffered a series of embarrassments after its abortive USD 1.6 billion bid to acquire two firms - Maytas Properties and Maytas Infrastructure - promoted by Raju’s family and the World Bank's decision to bar the IT major from doing business with it for eight years. On issues of business strategy, he said the company would continue to focus on its core business. (PTI)

Business Clips
Reliance Communications launches GSM telephony
Mumbai, Dec 30: The Reliance Anil Dhirubhai Ambani Group Wednesday launched its much-awaited GSM mobile telephone services spread over 11,000 towns and 340,000 villages with a capital infusion of Rs.10,000 crore (Rs.100 billion/$2 billion). Chairman Anil Ambani, who launched the services from the Reliance Centre here, said the rollout happened six months ahead of schedule, with the company having secured the frequency spectrum for the services only in January. “What has taken other companies 15 years to achieve, we have completed in less than 15 months,” Ambani said, adding that the GSM telephony will complement the group's CDMA offering to give customers a wider choice. The CDMA network of Reliance Communications spans more than 20,000 towns and 450,000 villages and has some 60 million subscribers across the country, as per the company’s web site. The launch of GSM services came just two days after the 76th birth anniversary of the company's late founder Dhirubhai H. Ambani. It was on his 70th birth anniversary Dec 28, 2002 that Reliance had launched its mobile phone services.(IANS)

Air India announces fare cut up to 82 per cent
New Delhi, Dec 30: A day after Jet Airways reduced fares on domestic routes, state-owned operator Air India on Tuesday announced fare cut up to 82 per cent in at least 20 sectors, mostly on metro routes, a senior airline official said. “The new fare cut comes into effect today (Tuesday). We have cut fares on 20 sectors by up to 82 per cent. This will largely benefit passengers on metro routes,” an airline spokesperson told IANS. India’s leading private air carrier Jet Airways Monday reduced fares on its domestic routes by up to 40 per cent with immediate effect. Another leading carrier, Kingfisher Airlines, Sunday announced fare cut from Jan 1. However, it has not announced the quantum of fare cut. Low cost carriers are also expected to follow suit, said an industry official. The fare cuts comes in the wake of slackening demand in the post-peak season and continued decline in fuel prices. Over the past four months, there has been a sharp decline in aviation fuel prices. While some air carriers earlier this month reduced the fuel surcharge on the ticket price by Rs.200 to Rs.400, they did not touch the base fare. Oil companies have reduced aviation fuel prices seven times since September. The fuel is now sold at Rs.32,691.28 per kilolitre in Delhi after prices were slashed by Rs.4,208.37 in the first week of December. (IANS)

Government to bring down fuel prices
Kochi (Kerala), Dec 30: Union Petroleum and Natural Gas Minister Murli Deora has said the Government has decided to bring down the prices of petrol, diesel, kerosene and LPG further following the fall in international oil prices. Deora added that the announcement could be made in a few weeks. He was speaking here during a function to facilitate Hibi Eden, who was recently elevated as president of the National Student Union of India (NSUI), the student wing of the Congress. Deora said oil prices in the international market had come down to 37 dollars to 38 dollars a barrel. He pointed out that the Government hadn't raised the kerosene price even at a time when the crude oil price was at a record high as the poor people depend on it.In a dig against the Left parties, which have been agitating for a further cut in the price of petrol and other products, Deora said that during the galloping rise of oil prices, the government exchequer had shelled out Rs 58,000 crore as a shield to counter the cascading effect of high oil prices. (ANI)

Suzlon raises stake in REpower to 73.7 per cent
New Delhi, Dec 30: Suzlon Energy, India's largest wind turbine manufacturer, has acquired the first tranche of Martifer group's stake in REpower Systems AG of Germany for approximately euro 65 million ($89 million or Rs.4.23 billion), the company announced Tuesday. The transaction takes Suzlon's holding in REpower to 73.71 percent. It already holds 91 percent voting rights in REpower through an existing agreement with Martifer. Earlier this month, Suzlon signed an agreement with Martifer Group on a revised payment schedule to pick up a 22.4 percent stake that Martifer Group of Portugal holds in REpower, which upgraded its holding in the German firm to about 91 per cent. As per the new terms, Suzlon will pay Martifer in three tranches with the first instalment of euro 65 million which the company paid. The next instalment, of euro 30 million ($41 million or Rs.1.95 billion), will be made in April 2009 and the final one of euro 175 million ($239 million or Rs.11.38 billion)the following month. Suzlon's acquisition of REpower Systems is aimed at tapping the European and North American wind energy markets. While Suzlon's largest on-shore wind turbine is of 2.1 MW capacity, REpower's wind turbines are in the range 2.2 MW to 5 MW. (IANS)

Housing bank expects finance firms to reduce rates
Kolkata, Dec 30: India's apex housing finance institution, the National Housing Bank (NHB), expects housing finance companies to reduce lending rates, a top company official said here on Tuesday. "As we have reduced rates, we expect housing finance companies to reduce rates and pass on the benefits to consumers," NHB chairman and managing director S. Sridhar told reporters on the sidelines of a workshop on reverse mortgage. Sridhar agreed that some housing finance companies have already reduced rates by 50-75 basis points. Dwelling on refinance rates, he said these varied depending on the schemes, and added: "At present, it is available at 8 percent for the weaker sections or rural housing while other refinance rates vary from 9-9.75 percent depending on the period and borrowing institutions." NHB has reduced its prime lending rate (PLR) from 11.25 percent to 10.75 percent; it reduced its refinance rates earlier. Asked whether the bank has plans to raise any fund from market, Sridhar said: “Depending on the demand, we will plan to raise funds from the market. We have a plan to raise Rs.3,000 crore (Rs.30 billion) by June 2009, mainly through bonds.”(IANS)

STOCK COMMENTS
HCC has target of Rs 65: G Shah
 Gaurang Shah of Geojit Financial Services is of the view that HCC has target of Rs 65.
Shah told CNBC-TV18, “We have a target price of Rs 65 on HCC. It is a leading infrastructure and construction company. It has presence in the spectrum of transportation, hydel-power, airports and ports etc. HCC has got a very order book of around about Rs 9,000 crore plus and large part of this order book around 71% is fairly shielded from any kind of cost pressures, which leaves a fair amount of margins on the hands of the company and improves the bottomline. The Lavasa Project which is a 12,500 acre project on the Mumbai-Pune expressway, is valued at around about Rs 10,000 crore and if you take a very conservative contribution from this particular project towards the share price of Rs 38, then considering the current market price at around about Rs 50 the other verticals are going to contribute significantly going forward. Also the other catalyst possibly could act as a positive trigger is the reimbursement of the Bandra-Worli Sea Link, the resolution in favour of HCC of the SawalKote hydro-project and of course any further stake sale of Lavasa Project is going to be expected to be at a higher level.”
He further added, “Other triggers for the company could be contribution from BOT and Vikhroli IT Park to contribute to share price. Considering Rs 50 as the share price of HCC, the amongst the infrastructure sector, HCC stands to benefit if somebody has got a time horizon of at least one-and-half to two-years. A very decent return can be expected out of the stock.”
Satyam has support at Rs 125-135: R Jain
Rajesh Jain of SMC Global Securities is of the view that Satyam Computer Services has support at Rs 125-135.
Jain told CNBC-TV18, “Satyam is definitely quite oversold at the moment; Rs 125-135 would be a very strong support zone because it’s taking a technical bounce. But between Rs 180-200 levels it’s going to face a lot of resistance where it’s much better to quit and then stay away and even if the stock is to move up in the long term chart it has to form a base and without forming a base I don’t think it will be easily able to move up. But the stock is likely to trade between Rs 130-200 levels in the next few days.”
Pick Punj Lloyd on declines: Mukadam
Shahina Mukadam, Director of Varun Capital Markets is of the view that one can pick Punj Lloyd on declines.
Mukadam told CNBC-TV18, “Punj Lloyd is doing pretty well in terms of its business and if you see the last quarter numbers, the turnover was almost up by 56%. They have an orderbook close to about 18 months, which puts them in a very comfortable position and construction companies are now preferred if you look at it in the overall construction and real estate pack and I like the way Punj Lloyd’s business has been distributed over various geographies like they have 30-35% from India, another 30-35% from south east India by some acquisitions done lately and Middle-East is also a growing market for them at 20%. But I am not too sure if it’s the right price to get in today or now at Rs 145 and maybe to buy at declines would be a better strategy and hold it then for upto maybe Rs 160-170. So it is a good buy and maybe one can pick it at declines.”
Book profits in Core Projects: Mukadam
Shahina Mukadam, Director of Varun Capital Markets is of the view that one can book profits in Core Projects & Technologies at higher level.
Mukadam told CNBC-TV18, “Core Projects is more of a speculative stock and I don’t think its so much fundamentally tracked. So now it’s in the news given its acquisitions and I would take this opportunity to book profits at upper levels.”
Hold HDIL, says Mukadam
Shahina Mukadam, Director of Varun Capital Markets is of the view that one can hold Housing Development and Infrastructure, HDIL.
Mukadam told CNBC-TV18, “I would hold on HDIL and I think in the whole real estate space this is one stock with very attractive valuations, its available currently at just 0.5 times book value and even if you take the market value of the land bank it is about close to Rs 450. So I would just hold on to the stock and there is a definite upside from here and technically also it looks pretty okay.”
 Satyam looks attractive: Reddy
 KC Reddy, Head-Asset Mgmt, Amas Bank is of the view that Satyam is looking attractive.
 Reddy told CNBC-TV18, “In Satyam there are a lot of moving things in that subject to comment on but obviously a positive outcome would be some kind of change in the ownership structure or new management being in place. But we need to see more clarity on what the existing management has to say. They haven’t said much in the last week or so and also if there are any new interested parties either strategic investors taking over a private equity. So I think this space needs to be watched for the next one-two weeks.”
 He further added, “Having said that I still think that whether with the existing management or not, the valuations are significantly attractive and the company would be of good strategic interest given that the business is fairly low beta in terms of its exposure to the global economy. So I think it is a fairly good level, one way or the other I think the resolution will happen and I would believe that even to some extent it is pretty unacceptable but even with the existing management valuations are fairly attractive in my opinion.”
 Aptech has target of Rs 120: Gujral
Technical Analyst, Ashwani Gujral is of the view that Aptech is sort of moving up, next target here could be around Rs 105 and then Rs 120.
 Gujral told CNBC-TV18, “Aptech is sort of moving up, next target here could be around Rs 105 and then Rs 120. If the market stabilizes these stocks could have some upside. Rolta may rally upto Rs 157-160, once it is clear that IT probably would not as bad you would see a huge rally in this midcap IT stocks. Rolta has support now at Rs 104.”
 He further added, “NIIT Tech has been showing a bit of bottoming out, so if it can get past Rs 68 that could head upto Rs 82, the support out there is above Rs 57. They have been beaten out of shape much more than the largecaps. So, if you need to look for a space that has low risk in terms of stock price, then probably midcap IT is a better bet.”
 SAIL can test Rs 103: Gujral
 Technical Analyst, Ashwani Gujral is of the view that SAIL can test Rs 103.
 Gujral told CNBC-TV18, “SAIL has found support around Rs 65. I think the next level here could easily be Rs 90 and then Rs 103. Steel seems to be showing some action. Basically, along with the market it is a high beta kind of stock, it tends to move but steel is showing more gumption than the other metals.”