Ranbaxy trades up floowing approval of demerger

The Board of Ranbaxy Laboratories Limited (Ranbaxy) cleared a Scheme of De-merger of the Company’s New Drug Discovery Research (NDDR) Unit into a subsidiary, Ranbaxy Life Science Research Ltd. (RLSRL). This is subject to requisite approvals.

Ranbaxy believes that this is a significant step in creating an independent pathway for NDDR with dedicated resources and an enhanced focus for long-term growth. Ranbaxy has state of the art Research infrastructure and a highly skilled scientific talent pool. These strengths can be more effectively leveraged through an independent vehicle that better aligns assets with priorities to accelerate the company’s drug discovery programmes. The resulting operational freedom and flexibility will also help to open up new growth opportunities while providing a platform for increased collaboration. The demerger will result in cost savings of approx. US $ 25 Million in the current year for Ranbaxy, a recurring expense, likely to increase significantly in the coming years.

Speaking on the occasion, Mr Malvinder Mohan Singh, CEO and MD, Ranbaxy Laboratories Limited, said, "The de-merger of our NDDR Unit into a separate entity establishes a robust structure to carry out pathbreaking research at the cutting edge of modern medicine. It will also enable RLSRL to create intellectual property at a faster pace while positioning it for the future".

Under the Scheme, the shareholders of Ranbaxy will be entitled to receive one equity share of Re.1 each of RLSRL, without any payment for every four equity shares of Rs.5 each held in Ranbaxy, as on the Record Date, to be fixed for this purpose, after receipt of requisite approvals. All assets, liabilities, research personnel and pipeline related to the NDDR Unit will be transferred to RLSRL.

The Appointed Date for the Scheme to come into effect after receipt of all the requisite approvals is January 1, 2008.

Ranbaxy has subscribed to redeemable preference shares of RLSRL aggregating Rs.200 Crores, to meet its business needs. Post the De-merger, the equity capital of RLSRL will be approx. Rs. 12.6 Crores. Ranbaxy and RLSRL Employees Welfare Fund Trust will respectively hold 19.8% and 4.9% of the equity share capital of RLSRL . The balance will be held by the shareholders of Ranbaxy.

It is proposed that equity shares of RLSRL will be listed on the National Stock Exchange and the Bombay Stock Exchange while GDRs will be listed at the Luxembourg Stock Exchange.

Back again with the stocks to buy!!

U.S. markets opened in the positive for the second successive trading session and if recent data and the incentives announced to revive the economy are to be believed, then the fears of the U.S. economy slipping into an recession have been blown away for some time. Despite the poor show of the Reliance Power IPO and lack of investors' interest in the IPOs post the Reliance Power issue, the Indian markets look set to gain some lost ground in the coming days. A careful analysis of the large, mid and the small caps will help you make a killing and pick up some cheap stocks at a heavy discount! So here are my picks, which I expect to do well in the first half of this year.. So, get set readers, the Sensex is ready to put on the rocket boosters and make a high jump!!!!!!!!! Here are my picks for the forthcoming months:


1) NTPC -- http://www.ntpc.co.in/


With an installed generating capacity of over 28,ooo MW and with expansions plans to raise the generating capacity to over 50,000 MW by 2012, this goveernment-owned power company is set to grab a major chunk of the $250 billion which is going to be pumped into India for the improvement of the country's infrastructure. Much better valued and placed than either Reliance Power and Tata Motors, shares of this undervalued company may prove to be the real diamonds in one's portfolio.



2) Ranbaxy -- http://www.ranbaxy.com/


One of the Indian Pharmaceutical giants, this company is set to grow via acquisitions and unlock the value inherent in the company via demergers. It is a good defensive stock to own in one's portfolio. Sample this: In the last 1 month, when the market has corrected by over 25%, this stock fell by only 5%.. just goes to show the fundamentals of this stock! Truly, a gem to treasure.


3) DLF -- http://www.dlf.in/


Please forgive me if I'm misconstruing a lot of statistics and facts when I state that DLF is the FACE of the Indian Realty Sector. An innovator, a great thinker, a trend setter and an inspirer, DLF has delivered results where others have only promised! With the proposed listing of the company's Real Estate Investment Trust on the Singapore Stock exchange (SGX) by June 2008, this realty giant will give you the BANG for your bucks!


4) Indiabulls Financial Services (ILFS) -- http://www.indiabulls.com/


Almost all the financial services sector are diversifying into other arenas and markets, none will be able to match the speed of diversity with which ILFS will consolidate its hold in the financial services sector to carve out a niche for itself in lucrative arenas like infrastructure, casino and gambling.. This seems like the right time to build a position in this stock as the shares are down relatively; this is a sharp shooter and expect handsome gains from this stock. However, a word of caution here -- ILFS shares tend to touch and then slip off the peak.. So keep an eye on the movement of this stock!

Currently I have time to give you a brief insight into these select stocks only.. I'll be looking to publish another post shortly with a few more names which will help you to strike the right balance between aggression, caution and retuns! So, keep tuning in to this space!

Consumer spending pushes up U.S. markets in initial trade!!

The Sensex finally snapped its losing streak yesterday, closing in the positive after 7 consecutive days of closing in the negative.. Retail report issued by the U.S. Government last night pointed to an unexpected increase in consumer spending despite rising oil prices, a choppy stock market and worsening credit squeeze in the real estate sector. Additionally, unexpected strong growth in Japan in the last quarter of 2007 sparked off a rally in the Asian markets which were up 2%-3% @ 9:30 a.m. .. So, worried investors, breathe easy, initial indications are that the Indian marekts may open in the positive for a second consecutive day..

However, Indian investors are still wary of re-entering the market. A strong closing of the market over a session or two will give some confidence to these investors. Indication are that a lot of investor money is currently waiting on the sidelines, investors are hesitant to enter the market currently but an improving scenario and strong closing of the Sensex and Nifty will lead to increased money inflows.. Advice remains to invest in stocks with a long-term horizon. Near-term investors would be advised to book their gains at every rally because the uncertainty is not out of the market yet. Experts believe that the markets may re-test the levels touched in January 2008 again before staging a comeback rally!

Received a funny mail today which took a dig on the stock market and the sale season going on.. Got it in a PDF format, trying to see if I can upload it here. But one good thing to come out of the market's downfall is that a few defensive stocks have come in the limelight. One such stock is Ranbaxy, the Indian pharmaceutical giant. The stocks of this company declined by only 5% in the period when the marekts declined by as much as 25%. This stock is a good long-term play and with the demerging of the NDDR business unit, an unlocking of asset value will drive the shares higher.