NVS BROKERAGE PVT. LTD.

702, Embassy Centre, Nariman Point, Mumbai 400 021. Tel.: 61539100 Fax: 61539134
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28th July 2014
Benchmark share indices ended their eight-day winning streak on Friday after they hit fresh alltime highs in the previous session even as selective buying was seen in defensive pharma and
FMCG shares.
The 30-share Sensex ended down 145 points at 26,127 and the 50-share Nifty closed 40 points
lower at 7,790. The broader market also witnessed selling pressure with the BSE Mid-cap index
losing 1.3% and the BSE Small-cap index closing 2% lower. Market breadth weakened further
with 1,943 losers and 975 gainers on the BSE. NSE cash turnover was Rs.18,437crs. Vs.
Rs.15,780crs. in the previous session.
The BSE Realty index was the top loser down 2.8% followed by Power, Oil and Gas, Metal,
Capital Goods, IT and Banks. However, defensive sectors were seen higher with FMCG and
Healthcare indices gaining 0.7-1.7% each.
As per provisional figures on Friday, FIIs were net buyers of Rs. 126 cr in the cash market and
net buyers of Rs. 126 cr in the F&O markets. DIIs were net sellers of Rs. 210 cr in the cash
market.

Stock Recommendation
Sintex Industries - Buy (CMP 87 TARGET 92)
Sintex Industries has announced the acquisition of 100 percent equity in SIMONIN Group, a
manufacturer of metal and plastic sub-assemblies and technical components in France. The
French companys acquisition has been done from a strategic perspective to widen companys
product offerings adding new and prestigious client base, says Sunil Kanojia, Group CEO, Sintex
in an interview with CNBC-TV18. In 2013, SIMONINs revenue stood at 48 million euros while
its EBITDA margin stood at 8 percent. Kanojia believes this acquisition will be value-accretive
for companys moulding business.

Reliance Power - Buy (CMP 91 TARGET 94)

Anil Ambani-led Reliance Power has acquired the 1800 MW hydroelectric power assets of
Manoj Gaur led Jaypee Group worth over Rs 10,000 crore. On Sunday, a MoU was signed
between Reliance CleanGen (RCL), a 100 percent subsidiary of Reliance Power, and Jaiprakash
Power Ventures (JPVL), a subsidiary of Jaiprakash Associates (JAL), for the 100 percent
acquisition by RCL of the entire hydroelectric power portfolio of JPVL. If this deal goes
through, Reliance Power will become one of the largest provider of hydroelectric power in the
private sector in India with 7,800 MW operating capacity by end of FY15. JPVLs portfolio
comprises of 3 plants, with an asset life of over 50 years, each using run-of-the-river technology
to convert natural water flow to electricity, eliminating the need for a large reservoir. These
plants include 300 MW Baspa stage two plant in Kinnaur, Himachal Pradesh, a 400 MW
Vishnuprayagn plant Chamoli District, Uttarakhand and 1091 MW Karcham Wangtoo plant in
Himachal Pradesh. Reliance Power has its own hydro electric power projects aggregating over
5,000 MW, however, all under development. On the other hand, JPVL, which was the largest
hydro power operator in the private sector, has all operational assets. The generation capacity
and size of the assets being acquired would make it the largest M&A deal in India's
infrastructure and power sector, for which SBI Capital Markets is acting as advisors for the
proposed transaction. Jaypee Group intends to utilise the entire proceeds of the proposed
transaction to reduce its outstanding debt, and thereby deleverage its consolidated balance sheet,
said a company statement. The Jaypee Group had sold its two hydro power projects in Kinnaur
district to a consortium led by Abu Dhabi National Energy Company PJSC (TAQA), the
international energy and water company from Abu Dhabi, for Rs 10500 crore, but the deal
soured. Debt-ridden Jaypee Power management seems to reassure its investors that there is a
Plan B in place. This deal is imperative for JPVL, which is facing huge project cost
overruns. The company has equity commitments of Rs 2,000-2,500 crore just for this year.
JPVLs board has already sought extension of approval from shareholders to raise Rs 3,000 crore
funds through various options (QIP/ECB with right of conversion into shares / FCCBs/ ADRs/
GDRs/ FPO, preference shares, etc), hitherto valid up to July 2014. Reliance Power has a debt of
Rs 30,000 crore on its books and cash of approximately Rs 3,000 crore. In all likelihood, analysts
say, it will have to come to the markets to raise funds for the buyout. However, since all three
plants of Jaypee are operational, they should be able to service their debt

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