Stock Watch:Jet Airways,United Bank of India,Maruti Suzuki, ITC

Private carrier Jet Airways plans to increase domestic low-fare capacity to 80 percent of the total fleet from present 72 percent and may launch more budget flights for short-haul international routes. It may also consider more low-fare flights for short-haul international routes. Globally, there is a progressive transfer of capacity from full service to low-fare carriers. On the financial front, the airline has already converted about Rs 2,500 crore of local currency loans to dollar-denominated debt from last October, which would help it save about Rs 175 crore in interest costs in FY12.

United Bank of India, one of India’s public sector banks, in order to enable WAN optimization solution across all of its 1,600 plus branches spread all across the length and breadth of the nation. This WAN Optimisation solution, to be deployed by Wipro, is amongst the largest globally, for any public sector banking organisation. Underscoring its transformative role, the network will help enable UBI’s vision of providing the benefits of banking to rural and agricultural economies, and to India’s burgeoning small and medium-sized enterprise sector.

Automobile major Maruti Suzuki launched the new model of its bestseller car Swift, priced between Rs 4.22 lakh and Rs 5.53 lakh for petrol car and Rs 5.17 lakh to Rs 6.38 lakh for diesel-powered vehicle. The company chose to launch the new model of the hatchback even as the older version of the car was still in demand. It has invested Rs 550 crore in the development of the new car which has over 95 percent of localized parts. The car is built on a new platform which is light-weight, longer and wider than its old version and packs near 140 new features. The car gives a four percent improved mileage in petrol version at 18.6 km per litre and six percent better mileage at 22.9 km per litre in diesel. Both the variants are environment-friendly and come under Bharat Stage-IV emission standards.

Tobacco-to-foods giant ITC is planning to enter the chewing gum market and take on multinational players like market leader Perfetti Van Melle and Wrigley’s. Perfetti has varied products in the Rs 4,000 crore confectionary business that includes sugar confectionery (mints, candies, éclairs, etc) and gum. But, ITC operates only in the sugar confectionery arena, which limits its size of business. Wrigley’s, which has been taken over by Mars, is primarily a chewing gum company. With an industry-estimated 25 per cent market share (in 2009), Perfetti is one of the largest confectionery players in the market.

 

Hotel Leelaventure, Reliance Infrastructure and JSW Steel may grab investors attention today

Hotel Leelaventure would sell its luxury hotel property in Kovalam, Kerala to Travancore Enterprises (TEPL) for Rs 500 crore, in an effort to reduce its debt. The sale will be structured in such a manner that Leelaventure will transfer the hotel undertaking to a subsidiary special purpose vehicle (SPV), which will be then acquired fully by TEPL. Pursuant to such transfer of undertaking to the SPV, TEPL shall acquire 100% of the shares of such SPV from Leela for a total cash consideration of Rs 500 crore. Leelaventure said the deal was pursuant to the decision of the board to pursue an ‘Asset Light Strategy’ to reduce its debt. The company’s debt is currently estimated at Rs 3,950 crore. It has been looking to raise funds through sale of land and promoter equity to repay debt. The hospitality chain has been holding talks with 2-3 private equity players to raise up to Rs 600 crore.

Reliance Infrastructure (R-Infra) has hinted at declining permission to its business rival Tata Power to use its transmission network to supply electricity in sub-urban Mumbai. Currently, Tata Power, which has over 8,00,000 customers in the metropolis, uses the Anil Ambani-led firm’s 400 sq km long transmission network to supply electricity in the area where R-Infra also has a distribution licence. R-Infra at present serves 2.8 million customers in its licenced area. In a recent judgement, Maharashtra power regulator (MERC) granted distribution and transmission licences to R-Infra, which were expiring on August 15, for a period of 25 years. The licence was granted after the MERC was satisfied that R-Infra had the necessary transmission network and power purchase plan in place.

JSW Steel is committed to setting up a 10 million tonnes integrated steel plant in West Bengal, to be constructed at an estimated cost of Rs 35,000 crore, within the time frame the company is discussing with the state government. The first phase, the company plans to invest Rs 20,000 crore in the project, including investments in power station and coal mines. The Sajjan Jindal-led company, which had entered into a development agreement with the state government in 2007, has plans to construct a 3 million tonnes per annum (MTPA) steel-making capacity, along with a captive power plant of 300 MW in the first phase. The statement of JSW Steel came after a decision of West Bengal government last week, in which it decided to vest 270 acres of land from JSW, which has so far acquired 294 acres of land in West Midnapore district for the project.

US market closed mixed on weaker economic report and sales forecast by Dell

The US market closed mixed on Wednesday while Dow and S&P gained marginally, Nasdaq was weighed down by forecast of weaker sales by Dell Inc. the indices pared their early gains with two Federal Reserve officials warning against applying too much stimulus to the economy and Labor Department reporting US producer prices increased by 0.2% in July.

The market rose in the early trade on couple of good earnings announcements but as the personal-computer maker Dell Inc. reported tepid consumer demand and as gains in market share by Apple Inc. to be the reason behind crimping its sales forecast, the markets started losing weight. Also a data released by the US Labor Department showed that US producer price index rose 0.2% in July following a 0.4% decrease in June. The core producer price index, which excludes the food and energy sectors, rose 0.4% in July after climbing 0.3% in June. The report showed the cost of crude goods dropped in July for a third consecutive month, led by declining petroleum and food prices.

The Dow Jones industrial average gained 4.28 points, or 0.04 percent, to 11,410.21. The Standard and Poor’s 500 closed higher by 1.13 points, or 0.09 percent, to 1,193.89, while the Nasdaq composite lost 11.97 points, or 0.47 percent, to 2,511.48.

The Indian ADRs closed mixed on Wednesday, Infosys Technologies was up by 0.84%, HDFC Bank was up by 0.41% and Sterlite Industries was up by 0.23%.On the flip side, ICICI Bank was down by 0.64% and Patni Computers was down by 0.25%.