Sun Pharma's Karkhadi unit gets warning letter from USFDA

The US health regulator has warned  Sun Pharma it may withhold approval of new drug applications and extend an import ban at its Karkhadi unit in Gujarat if violations of manufacturing norms at the facility are not corrected. The US Food and Drug Administration said there were reasons to suggest a general lack of reliability and accuracy of data, including missing fundamental raw data, unacceptable data handling practice and inadequate investigation into 'the pervasive practice of deleting (raw) files'. "Until all corrections have been completed and FDA has confirmed corrections of the violations and deviations and your firm's compliance with CGMP (current good manufacturing practice), FDA may withhold approval of any new applications or supplements listing your firm as a drug product or an API manufacturer," USFDA said. In addition, failure to correct the violations and deviations may result in FDA continuing to refuse admission of articles manufactured at Karkhadi into the US, it said.

The warning letter was shot off after the USFDA conducted a review of Sun Pharma's initial response to the issues raised during inspection of the facility in November last year. "...it lacks sufficient corrective actions. We also acknowledge receipt of your firm's additional correspondence dated January 28, 2014, and March 11, 2014," the USFDA said. In March this year, the health regulator had banned the import of drugs from the Karkhadi facility for violation of manufacturing norms. USFDA said its investigators observed specific deviations during the inspection of the API manufacturing facility, including "failure to ensure that laboratory records included complete data derived from all tests necessary to ensure compliance with established specifications and standards."

The health regulator pointed out "failure to assign and identify raw materials with a distinctive code, batch, or receipt number, and to identify the disposition of materials" at the Kharkhadi facility. Mumbai-based Sun Pharma's Karkhadi facility manufactures antibiotics and active pharmaceutical ingredients (APIs). The company, which is acquiring Ranbaxy Laboratories, has 10 manufacturing sites in India. Sun Pharma shares closed at Rs 587.30 on the BSE, up 0.63 per cent.

Sun Pharma stock price On May 20, 2014, Sun Pharmaceutical Industries closed at Rs 587.30, up Rs 3.70, or 0.63 percent. The 52-week high of the share was Rs 653.10 and the 52-week low was Rs 458.00. The company's trailing 12-month (TTM) EPS was at Rs 0.95 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 618.21. The latest book value of the company is Rs 41.64 per share. At current value, the price-to-book value of the company is 14.10.

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How much juice is left in India's market rally?

The historic mandate won by India's pro-business Bharatiya Janata Party (BJP) has amped up investors' enthusiasm for Indian equities, with several banks raising their targets for the benchmark Sensex index. The market, which has rallied 15 percent so far this year, still has double-digit gains ahead, according to the revised targets. Nomura on Friday upped its year-end Sensex target to 27,200 from 24,700 – representing almost 12 percent upside from current levels. The index last traded at 24,363. 

"The historic mandate received by the BJP-led NDA [National Democratic Alliance] translates to a stable government at the center. The timing of this majority government could not have been more opportune as India has moved past key macro hurdles it has faced in the last three years," said Nomura strategists led by Prabhat Awasthi. "A Modi-led government's key comparative advantage lies in its superior managerial and execution ability, which will help considerably in reversing a debilitating policy paralysis and improving coordination between government departments, in addition jumpstarting the weak investment cycle," he said. The BJP captured 282 of 543 parliamentary seats in the world's biggest elections that concluded Friday, well above the 272 needed for a majority. It is the first time since 1984 that a single party has won an absolute majority. The NDA garnered a total of 336 seats in the lower house of parliament.

Short-term catalysts for the market include the formation of a new cabinet over the coming weeks, the presentation of the final budget for 2014-2015 by July and potential policy announcements and "feel good" initiatives by the new government, said Nomura. Nomura is not alone in its bullish outlook for the market. Citi too raised its year-end target for the Sensex to 26,300 – or an 8 percent rise from current levels. "The market run has more legs. The Modi-led NDA has won decisively, and India's equity markets could well have struck gold," Aditya Narain, equity strategist at Citi wrote in report on Friday. "The new prime minister's record, its economy/jobs focused campaign all suggest an aggressive growth and economic gains ahead. Do however remember the economy's still bottoming: and earnings will likely remain stable. This market should generate steady, surer and a long run ahead… but the (market's) big sprint's probably done," he added. 

The best way to play the market is to overweight banks, IT, energy and cement – which represents "a mix of growth, revival, reform and valuations," Narain said. Mark Matthews, head of research Asia, Bank Julius Baer expects domestic investors will be a key driving force for the market's gains going forward. "What I find compelling is that so few retail investors own the Indian market – they only have about USD 300 billion in equity out of a total market cap of USD 1.2 trillion. The Indian household generates about USD 400 billion in savings every year," Matthews explained. "I think the momentum for the market here will come more from the domestic side than the foreign side…If the majority of [Indian] people are voting for BJP than I think they've got to like the market, it's just intuitive," he said.

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Dhanuka Commercial Ltd IPO

Incorporated in 1994, Dhanuka Commercial Ltd is a Non Deposit taking Non-systemically Important Non Banking Finance Company (NBFC-ND-NSI) engaged primarily in the business of advancing loans and investing/trading in securities.

The company wants to expand its portfolio of products and services by introducing products such as Loans against Property, IPO Funding, Financial and Management Consultancy in addition with the existing products of Unsecured ICDs and Loans and Personal Loans. They plan to continue to sell their products and services to existing corporate client base and further target other High Net Worth Individuals and Firms with impeccable credit track record to whom the company may advance funds both secured/ unsecured based on the risk profile and as envisaged in the loan policy of the company.

Company Promoters:

The Promoters of the Company the are:

1. Mr. Sanjeev Mittal
2. Mr. Mahesh Kumar Dhanuka
3. Mr. Gopal Krishan Bansal

Objects of the Issue:

The Object of the Issue is to raise funds for:

1. To augment our capital base and provide for our fund requirements for increasing our operational scale with respect to their NBFC activities; and
2. To meet Issue related Expenses.

Issue Detail:

  »»  Issue Open: May 22, 2014 - May 28, 2014
  »»  Issue Type: Fixed Price Issue IPO
  »»  Issue Size: 4,440,000 Equity Shares of Rs. 10
  »»  Issue Size: Rs. 4.44 Crore
  »»  Face Value: Rs. 10 Per Equity Share
  »»  Issue Price: Rs. 10 Per Equity Share
  »»  Market Lot: 10000 Shares
  »»  Minimum Order Quantity: 10000 Shares
  »»  Listing At: BSE SME

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Experts want urgent policy actions on infra from new govt

Industry experts Friday called upon the new BJP-led NDA government to focus on attracting investments in key sectors, especially the infra space, to revive growth and investor confidence. KPMG India Deputy Chief Executive Dinesh Kanabar said irrespective of who becomes the next Finance Minister, the one thing that is clear is the country needs to get back to the path of rapid development if it has to emerge as an economic powerhouse and be spoken of in the same breath as China.

"The key to the revival of economic growth is the renewed investment, particularly in the infrastructure space. The FDI took a back seat thanks to the flip-flop on economic policies, clogging up of the approval process for large projects and confrontational tax policies. The first task of the new Government would be to deal with these three issues. "We cannot have ambivalent policies in retail, an ambiguous stand on Mauritius tax treaty, a Ministry which sits on large projects for environment clearance and imposition of retrospective taxation," Kanabar said. Leading boutique investment banker Singhi Advisors, which focuses on stressed asset sales, said the BJP-led Government should revive PPPs in the roads sector. "The Modi Government must take a firm decision on many areas where investment climate has chocked up. We expect the new Government to initiate reforms in sectors like roads and power and attract investments in this (infra) space. "As the financial viability of most infrastructure projects is under threat, and capital becomes too costly, there is a huge demand for cheap foreign capital or in-bound M&As, to meet the mismatch between the cost of capital and return on capital. That would lead to many domestic companies being compelled to take FDI route or sell out once the projects reach certain maturity," Mahesh Singhi, Managing Director of Singhi Advisors, told PTI. He said he expects the new Government to encourage larger flow of FDI and liberalise policies, including certain relaxations in NHAI policy towards M&As.

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Sensex rides Modi wave to scale 25,000, trims gain at close

Benchmark indices ended at new closing highs Friday, but shed much of the intra-day gains despite the BJP-led NDA coalition winning by a much bigger margin than expected. The Sensex closed at 24121.74, up 216.14 points over its previous close after hitting a record high of 25375.63 intra-day high minutes after trading began. The Nifty settled at 7203, up 79.85 points after making a new peak of 7563.50 intra-day. Realty, capital goods, banks, power and oil & gas shares were the best performers, while investors dumped shares of defensive sectors like IT, FMCG and pharma anticipating a shift in money into cyclical stocks. Sectoral indices for IT, FMCG and pharma all closed in the red, underscoring the sudden change in investor preference. In a reminder of the problems still facing the corporate sector, the Supreme Court ordered an interim ban on 26 mines in Odisha operating on second deemed renewals.   Sesa Sterlite (+11 percent), PNB (+7 percent), BPCL (+7 percent), BHEL and DLF (6 percent each) were the star performers of the day. 

Tata Steel topped the list of losers, falling 4 percent as the company sources a big chunk of its iron ore requirements from Odisha. Other big losers in the Nifty included, ITC, Dr Reddy’s, Infosys and HCL Tech, shedding around 3 percent each. IT stocks were hit the hardest as it felt that increased foreign capital flows in the coming days, as a result of NDA victory, would strengthen the rupee and hut the sector’s profitability. Profit booking in the second half of the session caught many investors unawares as they were hopeful of the market retaining gains and even hitting the upper end of the circuit filter. Brokers said they expect equities to be volatile near term, but trending higher. 

Ace investor Ramesh Damani said he expected the bull run to continue on the back of increased retail investor participation in the coming days. “I think we are now perhaps crossing the first stage of a bull market and moving to a more mature second phase of the bull market,” he said in an interview to CNBC-TV18. Most experts shared Damani’s views, saying a stable government at the Centre was likely to change global investor perception about India. “This is a very important endorsement of economic reform; an electorate in India going out and asking for a better growth environment, voting for a administration that has the reputation at the state level for getting things done,” said JP Morgan’s Adrian Mowat, adding, “foreign investors are certainly going to welcome this.” But there were voices of caution as well. “It is important to be realistic about the pace of political and economic change, at least in the nearer term,” said brokerage house HSBC in its note to clients. “The new government will not be able to change things overnight and the recovery in GDP growth will likely prove protracted, possibly even move sideways in the near term until we have measurable progress on reforms and investment projects,” the note added. Among stocks of Gujarat-based companies, key gainers included Adani Enterpriises, Pipavav Defence, Guj State Petro, Gujarat Pipavav, and GNFC, up between 3-6 percent.

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SPS Finquest Ltd IPO (SPS Finquest IPO) Detail

Incorporated in 1996, SPS Finquest Ltd is a Non-Banking Finance Company (NBFC-ND) engaged primarily in the business of advancing loans and investing/trading in securities. Company provides loans against securities and also in financing investments and trading in securities and thus is in high risk low income field.

SPS Finquest Ltd is a part of SPS group and proposes to provide loan products like IPO financing and loan against gold and commodities etc. Company provides its shareholders with the opportunity to participate in a diverse portfolio of investments and gain access to a defined investment process and the investment experience of the management team. Company is the NBFC Arm promoted by the Shah Family in order to carry out their financing and investment activities and in order to bring in the benefits of synergies from their brokerage and other businesses.

Company Promoters:

The promoters of the company are:

1. Mr. Pramod P. Shah
2. Mr. Sandeep P.Shah

Objects of the Issue:

The Objects of the Issue are:

1. To augment their capital base and to repay existing high interest cost debt.
2. To meet the issue related expenses.

Issue Detail:

  »»  Issue Open: May 21, 2014 - May 23, 2014
  »»  Issue Type: Fixed Price Issue IPO
  »»  Issue Size: 3,344,000 Equity Shares of Rs. 10
  »»  Issue Size: Rs. 25.08 Crore
  »»  Face Value: Rs. 10 Per Equity Share
  »»  Issue Price: Rs. 75 Per Equity Share
  »»  Market Lot: 1600 Shares
  »»  Minimum Order Quantity: 1600 Shares
  »»  Listing At: BSE SME

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Jhunjhunwala buys 17.10 lakh shares of Orient Cement

Ace investor Rakesh Radheyshyam Jhunjhunwala today picked up 17.1 lakh shares of  Orient Cement for about Rs 9 crore through an open market transaction. According to the bulk deal data, Jhunjhunwala bought 17,10,000 shares of Orient Cement at an average price of Rs 53.1 apiece, valuing the transaction at Rs 9.08 crore. Orient Cement was an initiative of CK Birla Group. The firm later de-merged and became an independent public limited company. The firm began cement production in 1982 and presently its total capacity stands at 5 MTPA (metric tons per annum). As part of its growth plan to reach 15 MTPA by year 2020, mOrient Cement is geared up for its latest Greenfield project with a proposed capacity of 3 MTPA at Chittapur, in Gulbarga district, Karnataka. Shares of Orient Cement today surged 7.88 percent to end at Rs 56.80 apiece.

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