The commissioning of the 9-million-tonnes-a-year Bathinda refinery by HPCL-Mittal Energy Ltd (HMEL) was cheered by the market. The HPCL stock rose by 7 per cent on Friday. Joint venture partners HPCL and Mittal Energy hold 49 per cent each in HMEL.

The refinery, long in the works, has the capacity to cater to the entire fuel needs of Punjab, and strengthens HPCL's position in north India. Also, due to its proximity to Pakistan, exports from the refinery could be considered in the future.

In the South, production began from MRPL's phase-3 refinery expansion project. The completion of the project which was launched in 2008 has entailed an investment of around Rs 12,000 crore and has increased the refinery's nameplate capacity from 11.82 million tonnes per annum (mtpa) to 15 mtpa. It also improves the refinery's product mix and its ability to process cheaper, heavier crude. This will aid gross refining margins and improve the company's profitability. The MRPL stock was up almost 12 per cent in Friday's trade.

PTC Financial unlocks value

PTC Financial Service (PFS) divested a portion of its stake in Indian Energy Exchange. The value realised from the sale is 16 times the acquisition cost. Following the stake sale announcement on Friday, the stock of PFS gained 7 per cent. For a 14 per cent stake in this power exchange, the company will realise Rs 70.76 crore.

This gain is significantly higher than the company's earnings for FY11. The company has diluted its stake at Rs 166.5 a share, 44 per cent higher than the value it realised in FY11 when it sold 5 per cent.

Apart from the capital gains, the company will also enjoy high valuation for its residual stake.

Post-divestment, PFS' holding in Indian Energy Exchange will come down to 7 per cent. Apart from lending to power-sector companies, PFS also holds equity investments in power-generation assets and the Indian Energy Exchange.

In the first nine months of this fiscal, the company has already realised Rs 60.8 crore of gains from the sale of its equity investments. It still has Rs 410 crore of major equity investments on its books.

Another acquisition by L&T Finance

L&T Finance Holdings, to grow in the mutual fund business, made its second acquisition in two years. After acquiring DBS Cholamandalam Mutual Fund in January 2010, it is set to add Fidelity's Indian asset management company (AMC) to its fold.

The acquisition of Fidelity India AMC would enhance L&T Mutual Fund's equity-fund offerings. The assets under management of L&T Mutual Fund was Rs 4,616 crore as of December, of which equity schemes accounted for only 5 per cent .

On the other hand, more than two-thirds of the Rs 8,881 crore of Fidelity's assets under management are from equity schemes.

The funds for the Fidelity acquisition may come from the initial public offering (IPO) proceeds and internal accruals of L&T Finance.

As of December, L&T Finance had Rs 325 crore of unutilised IPO funds.

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