Tata Groupss' debt to cross Rs 1-trillion mark

The Tata group’s debt is set to exceed Rs1 trillion by April, but the company will comfortably meet both its funding requirements and debt obligations, a brokerage has said in a recent report.

Free cash flows: The Tata group’s outstanding debt has increased by at least Rs30,000 cr from a year ago. Harikrishna Katragadda / Mint.

“We expect the total debt of the Tata group as of the end of FY09 at over Rs1 trillion, of which Rs117 billion is due through March 2010,” analysts at Kotak Institutional Equities Research said in a report.

“We are not in a position to comment on such reports. As you are aware, Tata Sons (the holding company) does not aggregate the debt of individual group companies as each company is a stand-alone legal entity and is evaluated accordingly,” a Tata Sons Ltd spokesperson said.
The group’s outstanding debt has increased by at least Rs30,000 crore from a year ago, primarily due to aggressive capital expenditure plans and past acquisitions, the analysts said.
The analysts, however, said the group’s funding challenges are manageable and its debt obligations could be met through free cash flow generated at various group companies and proceeds from a possible stake sale by Tata Sons.

“We believe the group’s liquidity position is comfortable at an aggregate level,” the Kotak analysts said, adding that fund-raising options include monetizing Tata Motors Ltd’s commercial vehicle division as well as stake sales in Tata Consultancy Services Ltd (TCS) and Tata Teleservices (Maharashtra) Ltd.

“We believe the Tata group of companies (represented by five largest listed entities) would generate Rs10,000 crore in free cash flows in fiscal 2010, against Rs11,700 crore in debt coming due for repayment/refinance, implying a funding gap of Rs1,700 crore,” the analysts wrote.
The debt of the five group entities—Tata Motors, Tata Steel Ltd, TCS, Tata Power Co. Ltd and Tata Communications Ltd, which account for 90% of the group’s revenues, is estimated at Rs91,000 crore in fiscal 2010, they added.

“Within the group, the most pertinent issue remains Tata Motors’ Rs11,300 crore debt coming up for repayment/refinance in FY2010,” the analysts said.

Tata Motors needs to refinance $2 billion (Rs10,320 crore) of its $3 billion one-year bridge loan due in June, while another Rs1,300 crore debt is due in its books.

Stock Market Prediction and Forecast for 17th March 2009

Market may open up. Market may up between 11.38 and 11.58 Market may steady or up side between 12.44 and 13.07. Market may close at up to previous closing.




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Opening Bell Call
Buy
RELIANCE - Reliance Industries Ltd More.... Target - 3200
RANBAXY - Ranbaxy Laboratories Ltd
TATASTEEL - Tata Steel Limited
TCS - Tata Consultancy Services Limited
NTPC - NTPC Limited

On 16th March 2009 - The BSE Sensex closed at 8,943 (up 186 points) while the NSE Nifty closed at 2,777 (up 58 points).

Opening Bell Call
Sell

ICICIBANK - ICICI Bank Ltd
HINDUNILVR - Hindustan Unilever Limited
GAIL - GAIL (India) Limited
RAJESHEXPO - Rajesh Exports Ltd.
VGUARD - V-Guard Industries Limited

Technical Analysis for 17th March 2009

BSE-SENSEX - Major Resistance - 8865, 8949, 9033, 9078, 9123, 9207, 9291, 9375
BSE-SENSEX - Major Support - 8820, 8775, 8691, 8607, 8562, 8517, 8472, 8427

NSE-NIFTY - Major Support - 2753, 2779, 2805, 2819, 2833, 2859, 2885, 2911
NSE-NIFTY - Major Resistance - 2739, 2725, 2699, 2673, 2659, 2645, 2631, 2617

Top Hot Stocks for 2009 - Best Stock for 2009 - Long Term Buying Stock for 2009

Indian stock markets Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) has been seen more volatility during 2008 and 2009 due to short selling by big
institutions. 500-1000 point intra-day swings will become common due to SEBI’s new policies.

Top Stock for 2009 / Best Stock picks for long term investors:
Top Hot Stocks for 2009 - Best Stock for 2009 - Long Term Buying Stock for 2009

1. Reliance Communications:
• GSM subscribers will increase.
• business of Rcom is less dependent on American financial system.

2. Glenmark Pharma, Educomp solutions and Divis Labs:
• Good performance for the last 2 years.

3. L&T:
• High valuations.
• Demerger of L&T in 2010 will surely benefit long term investors.

4. Reliance Industries:
• Buy this stock below 1000 and wait for 1 to 2 year.

5. Welspun Gujarat:
• This stock is Fundamentally sound stock.

6. Among metal companies, we Stock Market Prediction prefer Jindal Steel while ABG Shipyard is a good one in the shipping sector.

7. Among financial stocks we Stock Market Prediction prefer SBI and PBN bank.

8. BHEL and ACC may give decent returns for long term investors during 2009 and 2010.

Stock Markets Prediction View on Stock Market:

1. SEBI allowed FIIs for short selling in Indian Stock markets which has given more volatile markets.

2. Stock investments may not give you stunning returns but if you invest in accumulating manner for long term, you will get decent returns.

3. Retail investors should stay away from derivatives and penny stocks. Invest in fundamentally good stocks at reasonable valuations.

4. Investors in Tata Steel (corus), Hindalco and Tata Motors (Nano) will need to wait 2-3 years to get real benefits.

5. Tata Chemicals and Matrix Labs are best stocks for long term investors.

Accumulate the above mentioned stocks at reasonable prices and wait for 1 to 3 years to get decent returns.