Billionaire Agarwal to Donate Most of Wealth After Meeting Gates

By Netty Ismail and Firat Kayakiran - Sep 26, 2014

Anil Agarwal, the billionaire founder of Vedanta Resources Plc, said he and his family decided to donate 75 percent of their wealth to charity after meeting Bill Gates, the world’s richest person.
Agarwal has a fortune of $3.3 billion that includes an almost 70 percent stake in London-listed mining and energy group Vedanta, according to the Bloomberg Billionaires Index. Gates, the co-founder of Microsoft Corp., has a fortune valued at $84.7 billion.
“What we earn must be returned for the greater good of society,” the 62-year-old said at an event yesterday to celebrate the 10th anniversary of Vedanta’s (VED) listing on the London Stock Exchange. “Life is not only about wealth.”
Interest in charitable giving is growing in Asia. In 2013, Azim Premji, chairman of Bangalore-based software exporter Wipro Ltd., became the first Indian to join the Giving Pledge program, which seeks to encourage the world’s wealthiest people to give away half of their wealth to charity.
The program was founded by Gates and U.S. investor Warren Buffett, the world’s 3rd-richest person with $67.3 billion, according to the index.
Agarwal said Gates and his wife, Melinda, discussed their philanthropic causes with him in Seattle last summer.
“After that, I had a meeting with my family and we decided to donate 75 percent of our wealth,” the Indian billionaire said.
To contact the reporters on this story: Netty Ismail in Singapore at nismail3@bloomberg.net; Firat Kayakiran in London at fkayakiran@bloomberg.net
To contact the editors responsible for this story: Robert LaFranco at rlafranco@bloomberg.net Andrew Heathcote

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Jaiprakash Sells Indian Power Assets to JSW in Third Try

By Unni Krishnan and George Smith Alexander - Sep 26, 2014

Jaiprakash Associates Ltd. (JPA), the builder of India’s only Formula One race track, agreed to sell some of its assets to JSW Energy Ltd. (JSW) in its third attempt to raise funds and pare debt.
JSW signed a memorandum of understanding to acquire one thermal and two hydropower plants operated by Jaiprakash Power Ventures Ltd., the companies said in statements late yesterday, without disclosing terms. Shares of both the Jaiprakash companies rebounded after the announcement.
Two failed attempts earlier had eroded confidence in Jaiprakash’s ability to find buyers, and investors will watch closely if the latest preliminary agreement will translate into a real deal, said Deepak Agrawala, an analyst at Elara Securities Pvt. in Mumbai. Success may help Chairman Manoj Gaur to cut debt after expanding the cement maker’s power, sports and construction businesses, including an F1 race track on the outskirts of India’s capital, New Delhi.
“As has happened in the past, there is and will be skepticism on whether or not the deal can fructify,” Agrawala said. “Everyone would wait for the actual transaction to happen before they start building this in their earnings estimate.”

Shares Recover

Jaiprakash Power (JPVL) jumped as much as 15 percent after tumbling 14 percent yesterday to a 13-month low. It traded at 12.65 rupees as of 11:25 a.m. in Mumbai, up 8.1 percent from yesterday’s close. Jaiprakash Associates climbed 4.7 percent to 27 rupees after plunging 19 percent yesterday, the most since January 2009. JSW Energy slumped 8.3 percent to 66.15 rupees.
Jaiprakash Associates’ debt climbed 64 percent over three years to 726 billion rupees ($11.8 billion) in March, according to data compiled by Bloomberg.
A unit of billionaire Anil Ambani’s Reliance Power Ltd. scrapped a deal on Sept. 24 to buy three of Jaiprakash’s hydropower plants, citing regulatory uncertainties and tariff issues.
In July, Abu Dhabi National Energy Co., known as Taqa, withdrew from an agreement to buy two hydropower projects after having signed a deal in March to take over the assets at an enterprise value of $1.6 billion along with a Canadian institutional investor and Indian infrastructure finance fund, IDFC Ltd.

Target Cut

The sale of the hydro units would have helped bring down the debt of the Jaiprakash group by 58 billion rupees, according to a company presentation in June. Jaiprakash aims to reduce its debt to 450 billion rupees by the end of this fiscal year in March 2015, it said in July after the Taqa deal fell through.
Kim Eng Securities Pvt. cut its rating on Jaiprakash Associates to “hold” from “buy” yesterday and reduced its target price by 58 percent to 39 rupees. Deutsche Bank AG also cut its target price to 32 rupees.
JSW will add 1,891 megawatts of generating capacity from the deal. Currently, JSW produces 3,140 megawatts of power, with a capacity for another 8,630 megawatts under implementation, according to the company’s website.
JSW Energy’s balance sheet allows it to raise as much as 100 billion rupees, assuming a 3:1 net debt to equity ratio, Bhargav Buddhadev, an analyst at Ambit Capital Pvt., said on the phone from Mumbai. “If they want to raise further they will have to dilute equity.”
The Mumbai-based company’s debt fell to 91 billion rupees in March as against 95 billion rupees last year, according to data compiled by Bloomberg.

Coal Permits

Jaiprakash Associates also had coal mining permits canceled Sept. 24 by India’s Supreme Court, which annulled 98 percent of extraction licenses issued from 1993 until now.
The cancellation of the four coal blocks alloted to Jaiprakash Associates was “negative as it takes away the captive mines linked to its power and central India-based cement capacities, and in turn, takes away its supply of inexpensive fuel,” Pulkit Patni and Mohit Soni, Mumbai-based analysts with Goldman Sachs Group Inc., wrote in a research note yesterday.
“There are gray areas and whether JSW is able to successfully close it or not, only time will tell,” Ambit’s Buddhadev said. “There could be regulatory issues and knowing JSW they have so far stayed away from assets that are not clear in terms of regulatory requirements.”
Jaiprakash Associates sold its Gujarat cement unit to billionaire Kumar Mangalam Birla’s UltraTech Cement Ltd. for 38 billion rupees. It also sold its 74 percent stake in Bokaro Jaypee Cement Ltd., a joint venture with Steel Authority of India Ltd., to Dalmia Bharat Ltd. for 11.5 billion rupees in March.
To contact the reporters on this story: Unni Krishnan in New Delhi at ukrishnan2@bloomberg.net; George Smith Alexander in Mumbai at galexander11@bloomberg.net
To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net; Daniel Ten Kate at dtenkate@bloomberg.net Sam Nagarajan, Abhay Singh

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Coal India Promises Higher Bonuses to Woo Staff Before Sale

By Rajesh Kumar Singh - Sep 24, 2014

Coal India Ltd. (COAL) is offering higher payouts and family benefits to workers to avoid any unrest before the government sells a stake worth $3.5 billion in the state-run miner.
Bonuses will be increased by almost 30 percent to 13 billion rupees ($213 million), Personnel Director R. Mohan Das said in an interview. The company will improve post-retirement health benefits and assure female workers taking early retirement that one of their children will get a job with the company, Das said.
Trade unions have vowed to go on an indefinite strike should the government proceed with the planned 10 percent stake sale. The success of the sale is crucial for Finance Minister Arun Jaitley to meet almost a third of his 634 billion rupee asset-sale target in the year to March 31.
“The government is going to follow a carrot and stick approach with the workers and unions to make the plan a success,” said Deven Choksey, managing director at Mumbai-based KR Choksey Shares & Securities Pvt. “The government is also engaging in more constructive communication with the unions so that they don’t come in the way of economic goals. Raising public shareholding will improve corporate governance in the company.”
Coal India gained as much as 2 percent to 341.90 rupees, the most in three weeks, in Mumbai. They traded at 339.25 rupees as of 10:23 a.m. local time, boosting this year’s gain to 17 percent. The key S&P BSE Sensex fell as much as 0.5 percent. The stake sale will raise about 214 billion rupees at today’s price.

Public Holding

The government, which owns 89.65 percent in the company, also needs to comply with a June 19 ruling by the capital markets regulator that requires state-owned companies to increase public shareholding to at least 25 percent within three years. A timeline for the sale has yet to be set.
Coal India’s moves aren’t convincing some unionists.
“Stake sales raise the ownership of foreign institutions in the company and we fear the company will curtail workers’ benefits to protect those shareholders’ interests,” said Jibon Roy of the All India Coal Workers Federation, a group of five major trade unions at the coal miner. “There’s an effort to dilute worker resistance but we will not agree to any disinvestment in the company.”
The cabinet on Sept. 10 approved share sales in Coal India, Oil & Natural Gas Corp. and hydropower-producer NHPC Ltd.
To contact the reporter on this story: Rajesh Kumar Singh in New Delhi at rsingh133@bloomberg.net
To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Indranil Ghosh, Abhay Singh

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India’s Rupee Snaps Five-Day Gain on Month-End Dollar Purchases

By Kartik Goyal - Sep 23, 2014

India’s rupee fell for the first time in six days on speculation importers boosted dollar purchases to pay month-end bills.
The Indian currency weakened 0.2 percent to 60.9100 per dollar as of 9:47 a.m. in Mumbai, according to prices from local banks compiled by Bloomberg. The rupee has gained 1.4 percent this year, after plunging 11 percent in 2013, supported by $34 billion of inflows into local stocks and bonds.
“Month-end dollar demand by importers is impacting the rupee,” said Ankur Jhaveri, co-head of currency and rates at Edelweiss Financial Services Ltd. in Mumbai. “The rupee’s direction is highly dependent on foreign flows.”
Improving economic growth and slowing inflation are attracting overseas investment. Consumer-price inflation eased to 7.8 percent in August, from 7.96 percent in July, and the economy expanded 5.7 percent in the second quarter, the fastest pace since 2012.
The rupee should outperform regional currencies including Malaysia’s ringgit and Indonesia’s rupiah as lower commodity prices will help curb India’s import bill and reduce inflationary pressure, Jonathan Cavenagh, a foreign-exchange strategist at Westpac Banking Corp. in Singapore, wrote in a research note last week.
One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, rose eight basis points, or 0.08 percentage point, to 7.03 percent.
Three-month offshore non-deliverable forwards fell 0.1 percent to 61.82 per dollar, according to data compiled by Bloomberg. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
To contact the reporter on this story: Kartik Goyal in Mumbai at kgoyal@bloomberg.net
To contact the editors responsible for this story: James Regan at jregan19@bloomberg.net Andrew Janes

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Singapore Overtaking Mumbai for India Futures: Chart of the Day

By Santanu Chakraborty - Sep 21, 2014

Singapore is overtaking Mumbai as the biggest market for Indian stock-index futures, a sign of foreign investors’ growing influence over equities in the world’s second-most populous nation.
The CHART OF THE DAY shows open interest, or the number of outstanding contracts, for CNX Nifty Index futures on the Singapore Exchange Ltd. climbed 55 percent during the past four years to about 345,000. That compares with a 60 percent decline for similar contracts traded on the National Stock Exchange of India Ltd., according to data compiled by Bloomberg. Singapore is luring foreign investors with longer hours and lower trading costs, Kotak Institutional Equities said in a report this month.
International money managers have bought more than $14 billion of Indian shares this year, helping fuel a 29 percent rally in the Nifty index. Much of the gains have come since Prime Minister Narendra Modi’s landslide election victory in May, with investors betting the new premier will boost growth in Asia’s third-largest economy.
“New offshore investors have started nibbling at India,” said A.S. Thiyaga Rajan, a senior managing director at Aquarius Investment Advisors Pte in Singapore, which has $450 million in Indian stocks. “Already-invested guys are also increasing exposure on optimism the new administration will boost growth.”
Divya Malik Lahiri, an NSE spokeswoman in Mumbai, declined to comment.
“NSE and SGX have been in long-term partnership to develop the global Nifty franchise,” the Singapore Exchange wrote by e-mail. “SGX provides a convenient access point for offshore investors seeking exposure to Indian equity and complements the already deep liquid equity and derivatives markets in India.”
To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net
To contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net Ravil Shirodkar

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