Top Picks by ShareKhan

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Vishal Retail - Subscription Details

Qualified Institutional Buyers (QIBs) - 45.5514 times

Non Institutional Investors - 311.5705 times (yes 311)

Retail Individual Investors (RIIs) - 50.4015 times

Employee Reservation - 1.3438 times

OVERALL - 69.08 times

Merrill Lynch - Sun TV

Merrill Lynch has put a buy on Sun TV with a 12 month target of 1625, they say its India's No.1 media company and deserves the premium

ICICI Bank, India Economy

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Kotak - Construction Sector, Megasoft

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Kotak - Subex Azure, Vishal Retail, IIP Performance

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FIIs power DLF oversubscription

Foreign investors seem to have ignored warning signals on real-estate by placing bids for over Rs 10,000 crore for the mega initial share offer by Delhi property developer DLF Ltd.

This is more than the total initial public offering (IPO) size of Rs 9,625 crore at the upper price band of Rs 550 per share.

The IPO for 175 million shares was oversubscribed 1.28 times at 5 pm today. There are two more days to go for the issue close.

The retail portion, however, is yet to gather speed, being subscribed only 0.101 time.

Data available with the National Stock Exchange shows that foreign institutional investors (FIIs) have placed bids for 198.7 million, out of the 104.44 million shares reserved for qualified institutional buyers (QIBs).

In fact, the bids by FIIs are higher than the total size of 175 million. At the lower price band of Rs 500, the FIIs bids are valued at Rs 9,935 crore.

“Foreign investors have been putting money into the country’s realty sector. The valuation and risk associated with DLF will be more or less similar to that with the Sensex and the Nifty,” said Arun Kejriwal of Cris Research.

For foreign investors, DLF will be one of the few stocks that they relate with the future of their investments in a specific market, he said, adding, “That’s the reason it has attracted big foreign investment”.

The Qualified Institutional Buyers (QIBs) portion, which forms 60 per cent of the IPO, was oversubscribed over two times.

Unconfirmed reports said a few global investors are believed to have placed bids worth $1 billion and most of the inflows have come in the form of participatory notes. Overseas funds investing in India have also put a large number of bids for the issue.

DLF is expected to join Futures and Options (F&O) trading on its listing. The upper band of the IPO values the company at $23 billion, which will be more than double the market valuation of Unitech, the current top real-estate firm by this measure.

“The realty sector is facing a few issues. But, there is no reduction in foreigners interest in this sector. Real estate is a significant asset class. Foreign players want to broaden their exposures to this sector,” Avinash Narvekar, partner, Ernst & Young said

Broker Reports on 13th June

ONGC, India Economy

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Emkay - Bharati Shipyard

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Anand Rathi - Daily Fundamental Snippets - June 13 2007

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Market Tracker By Team Intraday

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Sector Watch : Cement

Q4 Review: The net profit growth rate of cement firms declined to 85 per cent in the fourth quarter ended March 2007 compared with 150 per cent in the first three quarters. The Q4 sales growth was subdued at 35.2 per cent compared with 51.2 per cent in Q3, 40.5 per cent in Q2 and 37.3 per cent in Q1.

Government intervention curbed the industry’s pricing power in a traditionally strong quarter. After abolishing the customs duty on imports in January, the government increased the excise burden through a dual excise duty regime in February and March, abolished the countervailing duty and special additional duty on imports. As a result, cement firms increased their focus on power cost amid rising freight costs.

Trigger: The import duty reduction from 12.5 per cent to nil made imports cheaper by Rs 20 a bag. The excise duty was raised to Rs 600/MT from Rs 400/MT. Cement producers passed on the rate hike to consumers almost overnight, raising prices by Rs 15 a bag.

The government put pressure on cement producers to freeze the hikes following their refusal to roll back the pass-on of excise duty. With the CVD on cement reduced to zero, the import parity price reduced by Rs 23 a bag.

Outlook: The cement despatches in the first two months of 2007-08 was almost static at 8.68 per cent compared with 8.08 per cent in the corresponding period last year. According to analysts, the net price realisations have remained unchanged in the last four months, with the exception of southern and western regions.

Though procedural issues have delayed imports, the excess capacity creation of 65 million tonnes by the end of 2008-09 remains a major concern. The industry’s volume growth is slowing down owing to the rising capacity.

Moreover, it is not able to reap the benefit of higher prices owing to government controls. The cement stocks have underperformed the market by 30 per cent since the announcement of the price-control measures.

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