ICI India's decision to hive off its explosives business to form a joint venture company with Orica Limited is in line with the company's strategy to strengthen some of its businesses through alliances with global leaders, while re-deploying resources in other growth businesses to generate the best possible returns to shareholders. This move should improve the company's valutaions at the bourses. The scrip is currently changing hands at Rs 205.50 on the Mumbai Stock Exchange (BSE). Since the announcement, the counter has begun witnessing heavy volumes. On Monday, nearly 70,000 shares were traded as against a daily average of 4000-5000 shares. On Tuesday, the counter witnessed trades of 58,000 shares while the stock closed at Rs 205.5 against Monday's close of Rs 201.5. Marketmen are targeting a price of Rs 300 for the scrip in the next 12 month period. Under the proposed joint venture ICI India will hold the majority 51 per cent stake, while the rest would be heldby Orica Ltd. The US $ 2.7 billion Orica Limited are world leaders in commercial explosives and mining services. The India arm of ICI Plc. exited from the explosives business after its parent divested its worldwide explosives business to Orica Limited. ICI India is a market leader in explosives in the country.

Under the joint venture, ICI India's existing explosives business together with the shareholding in its subsidiary, Initiating Explosives Systems India Limited, will be transferred to the joint venture company. IES India, a joint venture with Ensign Bickford company of the US, is a leading supplier of initiating systems in India and select markets abroad.

ICI has over 14 per cent market share in the paint industry and plans to be the market leader by 2005. It is also looking at acquisitions to grow and meet long-term targets. It is also in the process of building distributuion strengths by targeting semi-urban markets and extending product line in the faster growing intermediate and economy segmentsof the market.

Happy days are here for auto-ancillaries

With the automobile industry coming out of recession, bargain-hunters have shifted their focus to the auto-ancillary segment. Stocks like Sona Steering and Z F Steering have started attracting attention. Sona Steering, which was quoting at Rs 30.3 a month ago, has been on the rise for the last 16 trading sessions. On Monday, the stock touched a new 52 week high of Rs 48.15 before closing marginaly lower at Rs 47.05. Z F Steering Limited also witnessed a similar trend. The scrip has steadily moved up from Rs 20.15 to Rs 44 in the last 15 trading sessions. It touched a 52 week high of Rs 45 on Monday.Sundaram Fastners has alos been in the limelight. The company recently picked up controling stake in Autolec Industries. The company would be making a open offer at Rs 82.5 per share. Although marketmen are not sure how the company will look post-acquisition, analysts feel regardless of the outcome of the acquisition, Sundaram Fastners' long termprospects are extermely bright. The stock is currently trading at Rs 412 and analyst expect the scrip to cross the Rs 500-mark in next six months.