New Delhi, October 22
The government’s decision to introduce an ordinance to re-auction cancelled coal blocks is the first step by way of policy actions to revive the much mired power sector, according to a report by India Ratings.

The proposed e-auction is likely to trigger positive actions from project sponsors, lenders and companies so that opportunity is capitalised to the maximum extent.

India Ratings said power project companies, which have not tied up power in long-term purchase agreements (PPA), will aggressively bid for coal blocks in the proposed e-auction.

Banks could fund aggressive project costs of mines as the ordinance provides banks an opportunity to revitalise their existing thermal energy portfolio which is locked up in the imbroglio. Therefore, banks would leave no stones unturned and are expected to swiftly respond to this scenario by backing up end-use project sponsors to bid for these coal blocks that could turn a significant portion of their assets to performing ones. Before the ordinance was passed, banks were left with no choice but to either let the loans slip into the non-performing category or reluctantly allow loan rescheduling, expecting a policy redress.

Concerns related to locked capital have been allayed, said the report as the cancellation of coal blocks by the Supreme Court of India had sprung up concerns related to investments (loans and equity) in de-allocated coal mines. However, the ordinance is likely to revive a significant amount of bank loans from slipping into the NPL category. In respect of coal mines which are operational or close to commercial operations (74 mines), winning bidders will have to pay a compensation to existing allottees.

The report said the move to allocate coal blocks directly to state and state-owned generators is a positive step. This could substantially reduce their proposed exposure to the volatile imported coal market and reduce generation costs, especially since India’s maximum energy is still generated by central and state sector projects.

The government’s decision to pass on auction proceeds to states could help speed up the projects that were stuck in the land acquisition process due to compensation issues. “We expect state governments to set up a dedicated fund to channelise these resources that would help rehabilitate and resettle deprived land owners”, it said.

Mumbai, October 22
Barred by SEBI from accessing capital markets, realty giant DLF today sought interim relief from Securities Appellate Tribunal (SAT) to allow it to redeem funds locked in mutual funds and other instruments.

After hearing the petition filed by India's largest realty developer last week against the ban, SAT presiding officer JP Devadhar adjourned the matter to October 30, and sought response from the capital markets regulator on DLF's plea for an interim relief.

Pleading for relief, the Delhi-based realtor said it needs to redeem funds, including around Rs 2,000 crore locked in mutual funds as also through redemption of some bonds worth thousands of crores, but the SEBI has restrained it and six others including top executives from tapping capital markets for three years.

DLF had received shareholders’ approval last month to raise up to Rs 5,000 crore through non-convertible debentures.

The full SAT Bench headed by Devadhar and comprising members Jog Singh and AS Lamba, wanted response from SEBI by this afternoon itself to consider any interim relief. However, the regulator's counsel Jamshed Cama said his client's offices are closed for Diwali holidays.

Devadhar observed that SEBI, while passing its order, should have envisaged the impact of its regulatory actions on the investors, who have lost more than Rs 7,500 crore of their wealth following the unprecedented ban imposed last week.

"What were you doing all these seven years and when the company applied for IPO way back in 2007? Why didn't you envisage the impact of your actions on the investors as they have lost more than Rs 7,500 crore of their wealth even as you try to be a world class regulator?" Devadhar told Cama.

To this, the SEBI counsel said if DLF were to be believed, they did not disclose information about three subsidiaries (Sudipti, Shalika and Felicite) during IPO launch arguing that they were of no material value. — PTI

New Delhi, October 22
The government has granted operational flexibility which will help companies such as Cairn India and ONGC to start producing oil and gas from several discoveries that are stuck in contractual disputes.

The Cabinet on October 18 approved a policy framework for relaxation, extensions and clarifications in timelines for development and production of oil and gas under the Production Sharing Contracts (PSC).

“This a reform initiative which will help in monetisation of some of the pending discoveries, leading to resolution of various long-pending operational issues which are hampering exploration and production (E&P) operations and create better climate for investment,” Petroleum Secretary Saurabh Chandra said today.

Operational flexibility has been provided in enforcing contracts by way of relaxing some of timelines prescribed for discoveries so that E&P activities do not suffer on account of excessive rigidity in decision making. The PSC between the government and the explorer has rigid timelines for each stage of exploration and actions have been initiated against firms even if deadlines are missed by a day.

New Delhi, October 22
Private sector housing mortgage lender HDFC Ltd has reported a 8.8% rise in consolidated net profit at Rs 2,064.36 crore for the second quarter ended September 30, 2014-15.

The company had posted a net profit of Rs 1,891.17 crore for the July-September quarter of 2013-14. Its consolidated income increased from Rs 9,982.71 crore in Q2 of last fiscal to Rs 11,644.08 crore for Q2, 2014-15, it said in a filing to the BSE. On a standalone basis, the Q2 net income rose by 7.2% to Rs 1,357.56 crore, over Rs 1,266.33 crore in the year-ago period.

“Total income has increased from Rs 5,953.98 crore for the quarter ended September 30, 2013 to Rs 6,670.67 crore for the quarter ended September 30, 2014,” it said. — PTI