Motorcycles, India’s main mode of transport owing to its lower maintenance cost and fuel efficiency, have an annual sales of 78 lakh units of which 60 lakhs is just for the 100cc bike. The industry is poised to grow to 10 million units by 2012.

To tap this growing market, Honda Motorcycle & Scooter India (a subsidiary of Honda Motors and 11% market share) and Hero Honda Motors (in which Honda Motors has a 26% stake) are planning to launch 100cc entry-level motorcycles, a segment till now dominated by Bajaj Auto and Hero Honda.

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A little know 12 year old company, Nitin Fire Protection Industries, got listed today on the stock exchanges. The issue price was Rs. 190 valuing the company at a PE multiple of 24. Most analysts had at that time termed the price to be high but considering the listing gains, they were proved wrong. The stock touched a high of Rs. 517 on NSE, a whopping 172% gain over the issue price, easily giving the best listing gains in recent time IPOs. Those who are not aware of the company, may consider it to be in the business of fire protection business, but the main business is the cylinders business which constitute 80% of total sales.

The high-pressure seamless cylinders primarily cater to the industrial, medical, fire-fighting and beverages segments. However the real play would be in the CNG space, as it is being increasingly marketed as an alternative eco-friendly fuel. The demand for CNG vehicles is expected to grow given the firm oil prices, lower running cost and rising environmental concerns. The Supreme Court’s decision mandating the use of CNG as auto fuel for heavy vehicles in New Delhi and to further enhance it into 28 highly polluted cities has created a demand for such cylinders by both original equipment manufacturers and conversion agents.

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The Bajaj family has finally ended the long awaited feud between its brothers, akin to Mukesh-Anil saga. The result would be 3 companies comprising of Bajaj Auto, Bajaj Finserve and Bajaj Holdings.

Investors are piggying back hopes on the gains from demerger as all these are zero-debt companies and the large land bank, whose value is not reflected in its books. But after the news of demerger, the shares fell nearly 9% from the day’s high owing to the call option available with the Bajaj insurance partner - Allianz, which is at a meagre Rs. 13.42 per share.

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