Markets & Finance While private sector companies are known to take that extra risk, diver- sify into newer areas even at the risk of inviting investors wrath, state- owned companies are happy in their comfort zone, anchored in their tradi- tional businesses despite holding the biggest chunk of idle cash in the cor- porate world. Its in this context that state owned Bharat Petroleums gradual but suc- cessful move into the exploration & production (E&P) space needs to be looked at. After all, E&P business is vastly different from refining and marketing, although they form the same value chain. In the next five years, the company will start earning much higher profits from its E&P business than the gov- ernment-sponsored profits it can earn from its traditional business. In 2010 huge natural gas deposits were discovered in a Mozambique offshore block. BPCLs 10% stake in it is already worth over $2.2 billion, or half of the companys value today. BPCL also holds be- tween 10% and 20% stake in 10 blocks in Brazil , whi ch have seen some exciting oil discoveries over the years. Although not certified yet, they are likely to be sig- nificant going by the technical details available. By 2018, both these mega projects begin production, BPCL is likely to have a bigger source of profits than its conventional businesses. Experts are already valuing the E&P portfolio steeply. In fact, most broker- age houses prefer BPCL as an invest- ment candidate for its E&P success. BPCL remains our top pick, men- tioned a Barclays report in May 2013 attributing the preference to its un- dervalued E&P portfolio. The oil reserves in Brazil will be known in the first half of 2014, ac- cording to a Motilal Oswal report. Assuming the recoverable reserves at 500 mmboe, it is likely to add around `50 to BPCLs share value, it mentioned. As more details trickle in, this chang- ing face of BPCL will turn it into a win- ner for investors. RamkrishnaKashelkar CHART of the day BPCL Is it a Refining Stock or an Exploration Play? Operations Listed Investment Unlisted Investment Upstream 2.0 1.6 1.2 0.8 0.4 0 Source: Barclays Research estimates FY14 P/B multiples (x) IOC BPCL HPCL 1.1 0.3 0.7 1.5 0.7 0.3 0.1 0.4 0.8 0.2 0.2 0.4 BISWAJIT BARUAH MUMBAI H DFC Bank continues to be the most expensive bank stock in the world though its price-to-book value (P/BV) has fallen from the peak levels achieved in the stock mar- ket boom of January 2008. The Mumbai-based bank is valued at a P/BV of 4.27 at the current market price, down from 7.75 of January 2008 and from 5.31 in January this year. But this level is not only higher than all its peers in India, but al- so higher than the P/BV of the biggest banks in the world, Bloomberg data shows. For in- stance, Citigroups P/BV is 0.78, JP Morgan is 1.03, while Bank of America has a P/BV of 0.71. Indias second-largest pri- vate sector lender also main- tains its premium over ICICI Bank, the largest private bank, despite announcing its slowest quarterly profit growth in a decade on Tuesday. The difference between the P/ BV of HDFC Bank and ICICI Bank changed to the formers advantage at the end of trading on Thursday, the first day of full trading after Tuesdays results. At 4.27, HDFCs P/BV was high- er than Tuesdays 4.25, but low- er than Mondays 4.35. ICICI Banks P/BV was 1.62, down from Tuesday 1.64 compared with 1.67 the previous day. HDFC Banks second quarter profit growth slowed to 27% compared with 30% in the previ- ous quarters as the economic slowdown, high interest rates forced customers to cut back on borrowings and spending. The difference between price- to-book value is the premium that investors pay when they buy shares of HDFC Bank. The values of both banks have fluc- tuated in a narrow band in the past one month though the gap between them has been in- creasing in the past three years. In 2010, the average P/BV of HDFC Bank was about 4.09 compared with ICICIs 2.07. Fund managers and analysts believe that HDFCs focus on as- set quality, its expansive retail franchise and focus on profit- ability will help it weather the current slowdown despite the September quarters slippage in growth. Some brokerages have retained their price targets de- spite Tuesdays numbers. HDFC Bank is best placed among defensives to weather the storm. Hence, we maintain our buy rating on the stock with a price target of . `725and have relative prefer- ence for HDFC Bank against other defen- sives, said Adarsh Paras- rampuria, ana- lyst at Prabhu- das Lilladher. HDFC Banks performance is also better than that of the Sensex, whose price-to-earnings multiple and P/BV have fallen from their 2008 highs but still re- main below that of the bank. The Sensex is trading at a price- to-earnings multiple of 18.1 times and a P/BV of 2.64 times. HDFC Banks PE is 22.4 times. Experts say as the fall at the shorter end of yield curve after the 125-bps cut in the MSF, or marginal standing facility, rate by the Reserve Bank of India will lower the marginal cost of funds and increase the prospec- ts of a recovery in the whole- sale lending business. MSF is the penal overnight rate at which banks borrow from RBI. We continue to believe the bank is well positioned to play the India consumption story with best in class underwriting abilities and superior manage- ment capabilities, its current valuation premium is largely reflective of these strengths, said Jignesh Shial, analysts at IDBI Capital Research. HDFC Bank shares ended 0.36% up at . `653.75 on Thursday, while ICICI slipped 0.95% to . `966.15. We believe HDFC Bank remains uniquely positioned among Indian banks its strong asset quality and profitability make it a safer stock, said Man- ish Chowdhary, analyst at IDFC Securities who maintains an outperformer rating. Fund houses are bullish on loan advances, which they ex- pect to pick up with the festival season coupled with good mon- soon, as the bank has been ag- gressive in adding branches in semi-urban and rural areas, which are likely to push growth in the coming quarters. biswajit.baruah@timesgroup.com HDFC Bank Maintains Its Primacy Despite Sept Blip Lenders price-to-book value has come down, but it is still far ahead of global giants The difference between P/BVs of HDFC Bank and ICICI changed to formers advantage on Thursday OUR BUREAU MUMBAI Hours before he was arrested, Anjani Sinha, former MD & CEO, NSEL, in a statement to the Mumbai police, said the board, comprising Jignesh Shah and Jo- seph Massey, was aware of the goings on at the exchange. Massey, former MD of MCX-SX, Shah and other board members will be questioned in light of this fresh statement. In an earlier affidavit, Sinha said the NSEL board was not aware of the fraud being perpetrated on the bourse. In the first high-profile arrest made in connection with the . `5,600-crore NSEL fraud, Sinha was arrested by Economic Offences Wing (EOW), Mumbai police, on Thursday evening. In another important development, EOW received the consent of the Mumbai city and suburban collec- tors to invoke the Maharashtra Protec- tion of Investors Deposit (MPID) Act, 1999, against the accused. Commodity markets regulator FMC will direct the MCX board to remove Shreekant Javalgekar, MD and CEO, MCX, and Dipak Shah, head of surveil- lance, who are directors on the board. Sinhas arrest came a day after he was grilled by ED, which is investigating the case under the Prevention of Money Laun- dering Act. He was grilled for seven hours by EOW before being arrested at 6 pm on Thursday evening. Sinha will be presented before a metropolitan magistrate within 24 hours of the arrest. Sinha has been arrested at 6 pm, said Balsing Rajput, DCP, EOW. Sinha has been arrested as he was associated in one capaci- ty or the other with NSEL. He was on the board of NSEL as its MD & CEO. All things related to the company are reported to the board by the MD. He had all the powers and it was with his knowledge and intention that what has transpired on the exchange has been carried out. The decision of the management starts from Sinha. We have also received permission to invoke MPID against the accused . Sinha was issued summons by EOW ear- lier this month but failed to appear before the agency for almost a fortnight on grounds that he was laid low by viral fe- ver. This, EOW sources pointed out, could be placed on record against him. Significantly, EOW sources confirmed that Chandrakant Kamdar, a director on the board of FT, the promoter of NSEL, was being interrogated by EOW. Being a pro- moter of NSEL, we are trying to ascertain whether FT knew of the happenings on the spot exchange, they said. On MPID, EOW sources said it would have to prepare a list of all moveable and immoveable properties belonging to the accused and trace whether funds from the NSEL fraud were used to acquire them. If a link is indeed established, properties, cash, investments in debentures, stocks, etc, could be frozen, the sources added. Asked earlier whether the provisions of the MPID Act could be applied to an ex- change, which is not in the business of tak- ing deposits, Rajput said, If an agent, bro- ker or anybody takes money (from investors) on the pretext of delivering a ser- vice in cash or kind, including a commodi- ty and fails or refuses to do so, it is sup- posed that he has duped an investor and is liable to face action under the MPID Act. EOW filed an FIR on September 30 against directors and key management personnel of NSEL, its promoter FT, 25 borrowers/ trading members of NSEL, some of the brokers of NSEL and others. NSEL Ex-MD Anjani Sinha Arrested Sinha: The LAW CATCHES UP Now claims that board, including Jignesh Shah & Joseph Massey, were aware of exchanges working BAIJU KALESH MUMBAI Saurabh Agrawal has pounded the path leading up to Aditya Birla groups Mumbai headquarters plenty. The in- vestment banker has helped the Birlas cut many significant deals restruc- turing cement business, purchase of UltraTech, acquisition of Spice Tele- com by Idea Cellular and later an in- vestment from Axiata in Idea. It was on one such trip that Agrawal, 44, a graduate from IIM, Kolkata, posed a simple, humble question to Kumar Mangalam Birla: Can I be helpful? Agrawal, MD and regional head of corporate finance, South Asia, Stan- dard Chartered Bank, was referring to the stalled discussions by Birlas ce- ment company UltraTech to purchase JP Associates cement plant in Gujarat. The two sides had engaged in many spurts of negotiations for almost two years, but couldnt agree on a deal. Several rival investment banks had already unsuccessfully tried cooking up a deal. It wasnt completely mari- nated...some ingredients were mis- sing, recalls Agrawal who has more than a passing interest in cooking. In any negotiations, deals get stuck on a rigid stance, says Agrawal. Be- sides his proximity to Birla, Agrawal had also developed a warm relation- ship with Manoj Gaur, executive chair- man and CEO, JP Associates. He had advised JP on its fund-raising plans. Armed with consent from both Birla and Gaur, Agrawal set out to break the deadlock. He did it in 13 weeks. On September 11, Birla announced a . `3,800-crore deal to buy out JP Asso- ciates cement plant in Gujarat. Agrawal had excellent persuasive skills in college, his classmates say. Saurabh was comfortable with numbers, had a sharp sense of com- merce and excellent persuasive skills, recalls Venkat Viswanathan, Saurabhs classmate at IIM, and now chief executive of Latent View Ana- lytics, a data analyser for many mul- tinational companies. Its not just the Birlas, Agrawal enjoys a good rapport with the Tatas too. He never sells anything to you; he only brings value propositions with the best insights to the table, says Natarajan Chandrasekaran, chief executive and managing director, Tata Consultancy Services, Indias largest software ser- vices exporter. He is extremely de- pendable, trusted and brings in high quality advice. Agrawal advised TCS on its public offer in 2004 and also on a string of acquisitions. He helped me with how and what to present to in- vestors during our road shows for the TCS IPO, recalls Chandrasekaran. Investment banking sources say Agrawal was also part of the team that blew the whistle on Satyam founder Ramalinga Raju. In 2009, Raju had ap- pointed DSP Merrill Lynch to find buyers for Satyam. Sources say that Agrawal, who was working with DSP Merrill Lynch, found some gaps in the accounts, and alerted Sebi along with his mentor Hemendra Kothari, then DSP Merrill Lynchs chairman. Raju later made his famous confession. Early in his career, Agrawal ap- peared for an interview for a summer internship position at Citibank in Kol- kata. How can a chemical engineer Agrawal was from IIT, Rourkee deal with finance, he was asked. Ultimate- ly, it is all about making money wheth- er it is chemical engineering or run- ning a business, he had replied. He got the internship and also persuaded Citibank to let him work in Mumbai. Managing businesses is not new to Saurabhs family. His father owned a printing and publishing business in Mathura which published epics Mahabharata and Ramayana in tra- ditional oil press. I still have some of the original copies, he says. His younger brother Parag Agrawal co-founded Onmobile, a value-added service provider for mobile companies. Soon after passing out from IIT, Rour- kee, Saurabh joined Engineers India, a public sector unit, as a trainee engi- neer. A year later, he got into IIM, Kol- kata. His next stop was investment banking. He started that journey with DSP Merrill Lynch before finding his way to StanChart 16 years later. He was able to pull together all the corporate business, be in finance, mergers and acquisitions, equity cap- ital market under one roof in India, says Mark Dowie, his boss and the group head, corporate finance, whole- sale banking at StanChart. We had growth in market share and added more clients under his leadership. After two decades at work, Agrawal took a four month break before he joined Standard Chartered Bank in 2011. He has missed all the anniver- saries and festivals after our marriage as he had crazy travel schedules, says Shelly Agrawal, his wife. She is a for- mer banker and now a part-time teach- er. But now, he teaches geography and history to his two school kids. I went for a 10-day vipasana medita- tion in Mumbai and have turned much more calm, says Agrawal. I am tak- ing life a bit more easy now. With deals like JP cement, he can afford to. baiju.kalesh@timesgroup.com Cooking Up a Deal Comes Easy to This Investment Banker He was able to push through the stalled deal between Birlas and Gaurs and has a good rapport with the Tatas too PROFILE SAURABH AGRAWAL MD & REGIONAL HEAD, CORPORATE FINANCE, SOUTH ASIA, STANCHART P I C : N I T I N S O N A W A N E e-PROC IJREMENT TENDER FOR COSICII ITTARANJAN No. COS/CRJ IPLTB/ e-Tender /13/0162 Dated: 15.10.2013 The following e-Tender s can be accessed under the the link www.irepa.gov.in Offers for such e-Teiider can be submitted oniy electronically by accessing the link wwwireps.gov.in -CLW-COS/CRJ-4ogin. Vendors may also contact the following officials to obtain clarification regar ding particular tender if any. Dy. CMMIII Q/CLW/Chittaranj an. 0341-2525594 or Dy. CMMIP/CLW/Chit tara nj an, 0341-2535921 or SMMJCON IHQ, 034 1-2535 63 1 for 1REPS related information , if any, may please contact: Dy. CMM/SYSTEM/CLW/Ch itt ar anj an, 0341-2535568. Tender infomiation is also available in CLW s website: www.clw.lndlanrail ways.govi n : SI. No.; Tender No.; Brief Descr iption of Item; Qty.; Cost of Tender Documents () #; Earnest Money Deposit (fl; Tender Closing Date & Time (1ST). [1]; 91140857; Complete Stator Assembly for 3-Phase Tra ction Motor Type 6FRA-6068. Dig. No. OTWD.096.002 ALT-3 [Or Latest Alteration]. Speon. No. 4TMS.096.069 ALT- 5 (Or Latest Alteration]; 295 Nos.; 2,290.00; 10,00 000.00; 20.11.2013, 11:00 firs. [21; 91140389; Set of Stator Chamber and Associated Components each set consisting of 15 [Fifteen] Items. (1) Stator Chsmber/DE (CNC Machined) to Drg. No. 1TWD.096.0 17 ALT-6 & to Specn. No. 4TMS.096. 059/Latest Version & RDSO STR No. 21. (II) Inner Lab nth/DE (CNC Machined) (Rotor) to Dig. No. 4TWD.096.043 ALT-5 & to Specn. No. 4TMS.096.068 REV- t [Latest Version] & RDSO STR No. 21. (ifi) Outer Bearing Cap/DE (CNC Machined) to Drg. No. 1TWD.096. 006 ALT-3 & to Specn. No. 4TMS.096.068 REV-i [Latest Version] & RDSO STR No. 21. (IV) Inner Labyrintb/DE (CNC Machined) to Dig. No. 4TWD.096.028 ALT-4 & to Specit No. 4TMS.096.068 REV-i [Latest Version] & RDSO STR No. 21. (V) Outer Labyrinth/DE (CNC Machined) to Dig. No. 4TWD.096.029 ALT-5 & to Speen. No. 4TMS. 096.068 REV- 1 (Lat est Version] & RDSO STR No. 21. (VI) End Frame/DE Assembly (CNC Machined) to Dig. No. ITWD. 096.005 AALLT-T-i i REF-4 with Air Out let Net to Dig. No. 2TWD. 096.078 ALT-l & to Specn. No. 4TMS. 096.068 REV-i [Latest Versi on] & RDSO STR No. 21. (VII) Stator Chamber/NDE (CNC Machined) to Drg. No. 1TWD. 096.0l6 ALT-6 & to Specn. No. 4TMS. 096.059/Latest Ver sion & RDSO STR No. 21. (VIII ) Inner Labyrinth/NDE (CNC Machined) to Drg. No. 4TWD.096.042 ALT-5 & to Speen. No. 4TMS. 096.068 REV-i [Latest Version] & RDSO SIR No. 21. (IX) Inner Labyri nth/NDE (CNC Machined) to Dig. No. 4TWD. 096.03 1 ALT-4 & to Specu. No. 4TMS.096.068 REV-l [Latest Version] & RDSO SIR No. 2211 . (X) Bear ing Cap/NDE (CNC Machined) to Dig. No. 3TWD.096.032 ALT-5 & to Speen. No. 4TMS.096.068 REV-i [Latest Version] & RDSO SIR No. 21. (XI) Clamp PlatefNDE (CNC Machined) to Dig. No. 2TWD. 096.033 ALT-6& to Specsi No. 4TMS.096.068 REV-I [Latest Ver sion] & RDSO SIR No. 21. (XII) End FsamNDE Assembly (CNC Machined) to Dig. No. OTWD.096.003 ALT-9 REF-5 & to Speen. No. 4TMS. 096.068 REV- l [Latest Version] & RDSO SIR No. 21. (XIII ) Speed Probe Housing (CNC Machined) to Drg. No. 1TWD.095.077 ALT-4 & to Specn. No. 4TMS.096.061 REV-i [Latest Version] & IWSO SIR No. 21. (XIV) Machined Terminal Box Assembl y to Drg. No. 3TWD.096.059 ALT.3 & to Specn. No. 4TMS.096. 055 ALT-4 [Latest Version]. (XV) Terminal Box Cover Assembly to Dig. No. 4TWD.096.027 ALT-2 & to IS:1019282.; 808 Set; 2,290.00; i0,00,000.0G, 25.11.2013, 11:00 fir s. [3]; 91140949; End Ring Plate for Scheme-I Rotor. Dig. No. SKEL-4739 ALT- l, Specn. No. 4TMS.096. 068 REV- I , ALT-4; 355 Nos.; 1,145.00; 77,000.00; 20.11.2013, 11:00 lIr e. [4]; 81140126; Polyamide Sheet [NOMEX 1pe-4l 0]. Size: 0.25 MM Thick x 914 MM Wide in Roll Length of 30 Mtrs. Specn. No. A0255, ALT-2 ; 530 Mtr s.; 172.00; 8,500.00; 25.11.2013, 11:00 firs. [# Coat of Tender Documents (?) are inclusive of VAT @14.5%I Tenderer to submit Tender Documents Cost through h DD. in favour of FA&CAO/CLW/Chlttar anjan payable at Cliltiaranjan. Tenderers are also advised to give D.D. Number, Date and amount of Tender Cost in t he Oflbr . The Date of Demand Draft should be Date of Tender Opening or any prior date. Any Demand Draft prepared after the Date of Tender Opening will not be considered as valid Cost of Tender Documents. The cost of Tender Documents should be received in Purchase Office preferably on the Date of Tender Opening but not later than 10 (Ten) days from Tender Opening (excluding the day of Opening). Offers Received without cost of Tender Documents will be summarily rejected. No post Tender correspondence wilt be made with the Fism for obtaining Tender Document Cost. NOTE: Drawing and specification is available and the same may be collected from Dy. CMM/IIQ or Dy. CMMI P or SM1WCON/HQ. ADDRESS: Office of the Controller of Stores, Chittaranjan Locomotive Works, P.O. & P.S.: Chittaranjan, Distt.: Burdwan, State: West Benga PIN: 713331, IndIa. FAX No. 91-341-2525643. HL.261 Controller of Stores Please visltwww.bhel.comt ordetalis. Sr. Manager (IBMU) TRAtSMISSION BUSINESS GROUP, TBMM, LOOtS ROAD, NEW DELHI .3 Ph: II1-41793 486/297. Email : tenderboxdbhelind uetry. com NOTICE INVITING TENDER TBG BhELInvlte tendsr sfor prororuneni of SurgeAtTestor, BusPost Insuteto r , Ill umin adon n CossuItan Work , Ftu Protecitn System, UPS, CurrentTransforrnee, MS Red, Tranaformeras perJrTNos . 15281, 15288, 15267, 15279, 15280, 15291,1529 15292 ,15294. ordet ai led int o maIcn, pleeseiuitwebeitewwwbheLcoei. ftj l050llendA addenda ameiidmeets, tmes extensions, BHARAT HEAVY EL ECTRI CALS LI MI TED (A Govt. of l r diu Uodet aki o g) IAW ,(?K EN NE THIIN/1341/13 1730-1930 Tethnology Round Table RoundTable Round Table Round Table Round Table Round Table Showcase on Engereels on Software ott Challenges on Infectious on Massive on Identilicalon (Mateti ale) to Managers & Digital and Innovation DseS Open Online and Security Technotogies in India s Courses forAeronaulics urbal rail (MOOC) Day 2: 24 October2013 1000-1200 Technology Rosnd Tle on Round Tableon Round Table on Round Tabs on Showcase Indo-French Surface Treathients IT Systems in Susttinthb titles (Health) opportun ities for & coatings the Industry and the challenges SMEs inAerospace oturbatization ____________ industri es ______________ _______________ _____________ in lada 1200-1400 Technology CEFlP Session Round Table on Round Table on Round Table on Round Tabl e an Showcase on ndo Fmnch 1rm IT for Health Maths & Energy EtIdenr, & electrronnics: Frromm (Aerospace) Design collthorati on silicon to Systems, innovation Renewable Energy Emerging contribution and ____________ opportunities collaboration French Industries 270 + & Research Institutes For registration and i nformat i on please contact : mayank.tewari@cii .in I TeL: +91-9654504401; 9650234349; 9582821619 INDIA-FRANCE 23-24 TECH NOLOGY OCr0BER1 3 SUMMIT I = NEW-DELHIII The Biggest Yearly Technology Technology Event of DST & CII for last 18 years LIMITED SEATS AVAILABLE FOR FORGING TECHNOLOGY - BUSINESS PARTNERSHIPS WITH Register for Technology Showcase, Round Tables and B2B Meetings Day 1: 23 October2013 1530-1730 Technology CEFt Technology Showcase (Smart City) CEFIPRA Session on Knowledge forward Chain RoundTable on Energy Challenge of PJr Transport Round Table on Round Table Round Table Round Table Nanotechnology on Metabofic on Multi cultural on Smart diseases Management Networks Pro-Scheduled B2B Meetings Pro-Scheduled B2B Meetings 1500-1700 Technology Round Tthle on Round Table on Round Tableon Round Table DEITY Showcase (I CT) Nouros tience Complex Systems Wator &Agriculture on Marine Workshop on Technology Competi tiveness Clusters