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No real roadmap for telecom in India, says MP Chandrasekhar

2011-10-11T15:58:00.002+05:30

Rajeev Chandrasekhar, Member of Parliament - Rajya Sabha tells exclusively to CNBC-TV18 that he is ‘underwhelmed by the new draft telecom policy .’ According to him, the policy has not really laid out a real roadmap for more unified and much more holistic approach to growing telecom in the country. Therefore, he believes this has been a lost opportunity.

“We needed to improve the whole regulatory environment and fix the Telecom Regulatory Authority of India (TRAI), which has been the cause of a lot of confusion in the last few years,” he said in an exclusive interview. He goes on to say that the exit and surrender policy inserted by TRAI are unnecessary. “This is a free market and I believe there should be no restrictions for investors to invest and exit,” he adds.

Below is an edited transcript of his interview with Shereen Bhan and Siddharth Zarabri. Also watch the accompanying video.

Q: What do you make of the new telecom policy announced by the Telecom Minister?

A: I am abroad, so I really haven’t seen the details and the fine print of it. But prima facie, I am a bit underwhelmed by the policy. Going into this, we clearly knew what the objectives were. We needed to improve the whole regulatory environment and fix the Telecom Regulatory Authority of India (TRAI), which has been the cause of a lot of confusion in the last few years. We needed to address the broadband penetration in the country; we are clearly lagging behind wireless in terms of broadband. We also need to fix some of these issues of licensing and spectrum availability and so on and so forth.

Now I think what the policy seems to have done is essentially address the issues that are emerging from the controversies of the past few months and years. It has not really laid out a real roadmap for more unified and much more holistic approach to growing telecom in the country. Keep in mind that telecom is not just wireless; telecom is a broadband, attracting investments into broadband, about fixing this pain of having a TRAI that speaks with both sides of it’s mouth all the time and fixing this whole independent regulatory framework. So we need to address these fundamental issues in the policy, which I think from what I read and hear we have not and that would have been a lost opportunity I believe.

Don't miss: Roaming charges removal may impact pricing of Bharti, Idea

Q: Let’s talk about what he has actually articulated and announced and that is really doing away with domestic roaming charges. Also he has spoken about ‘encouraging re-farming of spectrum.’ So while the speculation was that the government will finally come out with the details of how that spectrum will be re-farmed, the fact of the matter is that Kapil Sibal has used the word ‘encouraging re-farming of spectrum’, which seems to suggest that it would be voluntary as opposed to be made mandatory by the government?

A: I don’t believe this is a policy issue; this is really an administrative issue. For example, one India is a 15 minute administrative decision to say that roaming rates will be brought down; Europe has done recently. So it is not really part of an architecture of a policy that will sustain the sector for the next few years. It is something that can be done very quickly.

On the issue of spectrum re-farming, I really don’t understand what that means. I am not sure if it’s an attempt to allow the spectrum sales between companies who have it, but don’t have the customers and some sort of a soft backhanded way of merging companies and their assets, in this case the spectrum as an asset. So I am not sure what it means. It sounds really great, but I still believe and I maintain that there are many other fundamental policy issues that should have been address in the NTP 2011; issues that would have addressed the problems that we have today from NTP 1999. So I believe it was a lost opportunity and I hope this was not a last word on that.

Q: NTP 2011 says that the government will frame an exit policy which will be different from a surrender policy. How should an exit policy operate in this environment for those telcos licensed in January 2008, if at all you agree that there should be an exit policy of some sorts? And how can it be different from a surrender policy?

A: No you see I believe a lot of these nomenclatures have been inserted by the TRAI to make life completely difficult. This is a free market and I believe there should be no restrictions for investors to invest and exit. At the same time, there ought to be clear obligations for the investors to do what they are supposed to do under the license agreement. So you can’t have a situation where companies that have not let the roll out obligation have been given an exit policy. Now it cannot be the Government of India’s telecom policy to provide for exit policy for investors. Investors make investments and wither succeed or they fail; this is a market issue. So I don’t think the Government of India should be focused on providing for exits for investors.

Now from the recent letters between the government and ministers, it has become clear that the Finance Minister has agreed that if a company is exiting a license that it got in 2008 at 2001 prices, the government must impose a windfall tax, and the government must get a fair share of that profit. So I would argue that there is no need of exit policies for investors; if they have made a bad decision, they have made a bad decision, that’s what free markets are all about. Also, if there is an attempt to get out of the Nripendra Misra recommendations of no-MNAs, then that should not be a windfall to the investors who got these licenses in 2008 at 2001 prices without sharing part of the gain with the government.

Q: So therefore you are saying that as far as current law is concerned, an investor can exit or surrender the license and walk away from the license fee, that he must have paid as well as forfeited all the bank guarantees and doesn’t need a specific enabling law to exit. So therefore, is the intent to provide some kind of cushion or soft landing to the new telcos who are probably going to face some sort of legal action also in the future?

A: Yes, that is the interpretation that you are making and I would also make on a reading of this policy and I don’t believe that it’s the Government of India’s job to provide such a soft landing. It is not the government’s job to provide exit for investors who made investments knowing fully when what the rules of the game are.

So if the NTP 2011 is spending a lot of time creating an exit policy for investors, then I suspect that that is really not been objective of public policy. Public policy objective should focus on regulation, public interest, consumer interest and sustainable competition. Not get into areas of how to provide for exits for investors who have made wrong decision.

Q: Let me make another point here. While the TRAI has spoken about graded reduction in the annual revenue share, the DoT says in its final response that there should be a uniformed license fee of 8.5% of adjusted gross revenue (AGR) across all services. So on one hand the Minister says that revenue generation is not their intent, yet on the other hand TRAI has said that they don’t agree with the proposal to reduce it gradually to 6%. Your thoughts on this?

A: I have maintained, and a lot of people including the media are maintaining that is whole interaction between the DoT and the TRAI is extremely non-transparent and it is deliberately being obfuscated where people have no clue who is saying what. Finally, the public policy is a result of a recommendation and who is responsible for the public policy. When the TRAI is making a recommendation, it has been chopped and diced and interpreted and misinterpreted or selectively interpreted by the DoT and then they go back and talk about AGR.

We are now talking about monetization of spectrum. The whole nation is in a discussion about how natural resources that belong to the country and its people should be deployed for private use. Now in that context if the minister says the telecom policy objective is not to maximize the revenues to the Government of India that is a separate debate in itself that is an unsustainable public policy objective.

Sensex regains 18,000 level after 9-days as crude falls

2011-06-24T13:45:00.002+05:30

The BSE benchmark Sensex added over 313 points to regain the 18,000-level after nine-days during intra-day trade today on heavy buying in blue-chips after a steep fall in crude prices and easing concerns on fuel prices hike.

The Bombay Stock Exchange benchmark index climbed 313.14 points to 18,037.63 at 1145 hrs, with most oil company stocks rising.

The National Stock Exchange's broader Nifty index rose by 92 points to 5,414.

The trading sentiment improved after Oil Minister S Jaipal Reddy said his ministry has made no specific proposal on increasing auto and cooking fuel prices for consideration by the EGoM on fuel prices later today, easing concerns of more monetary tightening to curb inflation.

Crude oil prices dropped by 4.6 per cent to USD 91.02 a barrel in New York yesterday.

The largest state-owned oil explorer, Oil and Natural Gas Corp, surged by 3.18 per cent, the most in a month, to Rs 272.90, while Gas Authority of India gained 2.20 per cent to Rs 446.50.

Tiger Global invests US$6 million in CaratLane

2011-06-23T10:29:00.002+05:30

Tiger Global has invested $6 million in online jewellery portal , CaratLane, in its second e-commerce investment this month. Earlier this month, the global PE major had invested $20 million in books-to electronics e-retail venture, Flipkart. CaratLane, which supplies to 50 cities, will use the funding to expand its national footprint.

"We want to strengthen our back end and invest in marketing and brand building," said the company's CEO Mithun Sacheti, who founded the venture in 2008 with Srinivasa Gopalan, founder-CEO of Lister Technologies. Tiger Global is betting big on Indian e-commerce.

The investment in CaratLane is its sixth this year. In May, the fund had led a $16 million investment round in online private sales retailer, Exclusively. in.

In April, Tiger Global, along with IDG Ventures and Indo-US Venture Partners, invested $14 million in e-retailer Myntra. They also invested in online electronics retailer Lets-Buy and in online babycare products retailer BabyOye.com .

E-commerce in India has been booming, with the market expected to rise 47% to Rs 46,000 crore this year, according to a report by the Internet and Mobile Association of India (IAMAI). However, e-retail constitutes just 8% of e-commerce, with personal items like jewellery, apparels, cosmetics, shoes and watches contributing 19% to e-retail.

While online retail has been popularly considered as driven by deals and low prices, CaratLane claims the average ticket size on their site is Rs 80,000.

But the company also claims its prices are upto 25% lower than retail store prices. Sacheti, a trained gemologist, said that in any nascent e-commerce market, low prices are the first step to attract customers. His family owns Jaipur Gems and Sacheti and he was able to leverage the connections and expertise in the area of gems and jewellery to build up CaratLane.

"We are able to keep prices low as we hold minimum stocks and are able to turn around pieces in 48 hours," said Sacheti. While the company manufactures and retails jewellery, it acts as an aggregator for solitaires. "We source solitaires from all over the world and are able to guarantee the lowest prices," he said. The company, which clocked revenue of Rs 50 crore in FY 2010-11, expects to expand to 100 cities by end of the year.

Sensex Index Swings Between Gains and Losses on Monsoon Forecast, Greece

2011-06-22T17:17:00.002+05:30

India’s benchmark stock index was little changed after swinging between gains and losses. A forecast of a below normal monsoon outweighed optimism that Greece may avoid a default on its debt.

Hindustan Unilever Ltd. (HUVR), India’s biggest home-products maker, dropped the most in five months. Monsoon rain in India will be below normal for the second time in three years, the weather office said yesterday, potentially lowering farm output and stoking inflation which is the highest among Asia’s major economies. Infosys Ltd., a software exporter that earns 22 percent of its revenue from Europe, rose the most in two weeks. Greek Prime Minister George Papandreou secured a parliamentary confidence vote, sparking a rally in global equities.

The Bombay Stock Exchange Sensitive Index, or Sensex, was little changed at 17,550.63 at the 3:30 p.m. close in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange climbed less than 0.1 percent to 5,278.30 and its June futures settled at 5,283. The BSE 200 Index fell 0.2 percent to 2,178.43.

“A weak monsoon will lead to a further spike in inflation, which is being driven by rising commodity and crude oil prices,” said Gaurang Shah, assistant vice president at Geojit BNP Paribas Financial Services Ltd. (GBNP)

Hindustan Unilever lost 3.6 percent to 310.75 rupees, its biggest slide since Jan. 27.

Rainfall will be 95 percent of the 50-year average in the June-September season, the weather office said yesterday after the markets closed. That compares with 98 percent predicted by the state-owned forecaster in April. A variation of 4 percent from the long-term average is deemed normal by the agency.

Record Harvests

Prime Minister Manmohan Singh is relying on adequate rain to harvest record quantities of food grain and oilseeds for a second year and cool inflation, which has led the central bank to raise rates 10 times since mid-March 2010. Farming makes up almost 14 percent of the economy and a reduced farm output can also lower rural incomes, hurting sales of tractors and cars.

Infosys increased 1 percent to 2,755.05 rupees and its June futures settled at 2,760 rupees.

The MSCI Asia Pacific Index rose 0.8 percent. A total of 155 lawmakers supported the motion in the 300-seat parliament in Athens, bolstering Papandreou’s chances of pushing through austerity measures to secure international financial aid for Greece. The International Monetary Fund, contributor of a third of the bailout money for the nation, has warned EU leaders that a failure to take decisive action on the debt crisis risks triggering “large global spillovers.”

“Markets may see a dead-cat bounce on good news from Greece but it will not sustain in the long term,” Geojit BNP’s Shah said.

‘Gloomy Horizon’

The Sensex has declined 14 percent in 2011, the worst performer in Asia. The stocks on the gauge are valued at 14.2 times estimated earnings, compared with 10.8 for the MSCI Emerging Markets Index.

“The horizon is still gloomy,” said Deepak Chatterjee, managing director of SBI Funds Management Pvt., which manages $9.3 billion in assets. “Inflation doesn’t seem to be tamed and we’re not at the end of the rate-increase regime. The government has to try to fix the structural problems. It is a question of sentiment rather than fundamentals.”

The central bank raised the repurchase rate to 7.5 percent from 7.25 percent on June 16, extending the longest streak of tightening in a decade, joining its peers from China to South Korea in stepping up the fight against surging living costs.

Rising borrowing costs have begun to crimp demand and hurt corporate earnings. India’s $1.4 trillion economy expanded 7.8 percent in the three months through March 31, the slowest pace in five quarters. Some 33 percent of companies in the Sensex reported profits that missed analysts’ estimates in the March quarter, compared with less than a quarter last year.

Overseas investors sold a net 5.51 billion rupees ($122.7 million) of Indian stocks on June 21, taking their total withdrawals from equities this year to 21.5 billion rupees, according to data fromthe Securities and Exchange Board of India.

To contact the reporter on this story: Santanu Chakraborty in Mumbai atschakrabor11@bloomberg.net

To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net

Nifty moves higher; oil & gas, banks, auto gain

2011-06-21T11:11:00.003+05:30

Indian markets bounced back after a sharp fall in the last session on concerns of renewal of tax treaty between India and Mauritius. Oil&gas and rate sensitives like banks and auto stocks led the pull-back while realty, power and capital goods stocks were down on profit booking.

"After Monday's Mauritius blues, a recovery appears in sight. A review of the tax treaty with Mauritius appears to be on the cards though no timeline has been fixed for negotiations.

Even if talks were to start, their duration and outcome is uncertain. What is also heartening to note is that there was no major sell-off from FIIs (net sales Rs 5 billion). The domestic funds pumped in over Rs 8.6 billion.

So, the start will be positive and a bounce back is a given. Global cues are also supportive. Stock indices in the US and Europe closed higher amid hope of a resolution to the Greek's debt woes. Most Asian markets are up this morning.

The euro has recovered while the dollar index is down slightly. Nymex crude is hovering around $93 a barrel while the Brent is around US$112.

The Nifty could find resistance around 5300. It is likely to find support around 5200. Overall, the market could remain jittery in the short term. One must stick to a 'wait-and-see' approach and be vigilant given the high degree of volatility," said IIFL report.

At 10:20 am; National Stock Exchange's Nifty was at 5283.65, up 25.75 points or 0.49 per cent. The broader index touched a high of 5297.25 and low of 5257 in trade so far.

Bombay Stock Exchange's Sensex was at 17595.65, up 89.02 points or 0.51 per cent. The 30-share index hit a high of 17642.77 and low of 17504.27 intraday.

BSE Midcap Index was up 0.22 per cent and BSE Smallcap Index moved 0.23 per cent higher.

Amongst sectoral indices, BSE Oil&gas Index was up 0.69 per cent, BSE Bankex gained 0.56 per cent and BSE Auto Index moved 0.53 per cent higher.

BSE Realty Index was down 0.94 per cent, BSE Power Index slipped 0.22 per cent and BSE Capital Goods Index declined 0.13 per cent.

Sun Pharma (1.84%), Bharti Airtel (1.67%), Reliance Industries (1.59%), Tata Motors (1.57%) and TCS (1.52%) were the major Nifty gainers.

HCL Tech (-2.39%), Jaiprakash Associates (-1.52%), ONGC (-1.37%), BHEL (-1.32%) and DLF (-1.12%) were the major Nifty losers.

Market breadth was positive on the NSE with 1068 gainers against 976 losers.

Meanwhile, the Asian markets were moved higher. Nikkei 225 was up 0.43 per cent, Strait Times moved 0.63 per cent higher and Hang Seng edged 0.32 per cent higher.

ONGC plans to invest $7.7 bn in India gas block: Report

2011-06-21T11:02:00.003+05:30

Indian state explorer Oil and Natural Gas Corp plans to invest USD 7.7 billion to develop a gas field in an east coast block and produce up to 30 million cubic meters a day in five years, the Economic Times reported on Tuesday.

The company plans to drill eight additional wells in the block to maximize output from the deep-sea field and has sought approval for the plan from the Directorate General of Hydrocarbons and the petroleum ministry, the newspaper said citing an emailed response from ONGC.

ONGC could not immediately be reached for comment.

Last week, the Business Standard newspaper had reported that ONGC was in talks with the Indian unit of BG Group and Italian oil major ENI to sell up to a 30% stake in an east coast block.

In February, BP agreed to buy a 30% stake in 23 oil and gas blocks owned by Reliance Industries, India's most valuable listed conglomerate, for USD 7.2 billion.

Rupee to start up on dollars broad drop, shares key

2011-06-21T10:59:00.003+05:30

The rupee is expected to open stronger on Tuesday tracking the dollar's losses overseas, but the domestic sharemarket performance would be key for direction.

The index of the dollar against six major currencies was down 0.2% at 74.897 points at 0250 GMT, and below 75.379 when the local forex market closed on Monday.

The euro extended gains in early Asian trade after remarks by the head of the eurozone bailout fund that the facility's guarantees will be raised triggered short-covering, though its advance could stall ahead of a confidence vote on the government in the Greek parliament.

Almost all Asian currencies were stronger versus the dollar.

Traders expect the rupee to open around 44.95 to the dollar and move in a 44.90 to 45.10 band, with a possibility of slipping to 45.25 if shares remain weak through the day.

The rupee had ended at 45.00/01 on Monday, after falling to 45.06 - a level last seen on May 31, and 0.3% weaker than Friday's close of 44.86/87.

The MSCI index of Asian stocks ex-Japan was up 0.4%, while the Nifty futures traded in Singapore were down 0.1%, suggesting a flat to slightly lower start to the local market.

Pledged shares sell off: More pain in the offing?

2011-06-20T16:11:00.001+05:30

Santosh Nair

Moneycontrol.com

What will drive the final round of bull capitulation for the stock market to bottom out? Panic selling by foreign institutional investors seems to be most logical answer. After all, they have been the biggest buyers of Indian shares in the last couple of years. Anecdotal evidence as well as shareholding data over the past many quarters point that very little domestic money—retail and institutional—has gone into equities during this period.

But some of the veteran players of the industry have a different take; they feel it could be the margin call-triggered liquidation of shares pledged by promoters that could mark the final sell-off.

Don't be fooled the numbers disclosed by companies to stock exchanges. An overwhelming majority of promoters hold shares in benami accounts, that don’t show up in disclosures of shareholding pattern to stock exchanges. Brokers and fund managers say this number could be anywhere between 3-10%.

With share prices steadily on the decline for some months now, promoters are faced with a difficult choice between either repaying a part of those loans-against-shares, or depositing additional shares as margin. If they fail to do either, the lender will dump the shares in the open market, sending the stock price into a free-fall, which in turn could trigger further margin calls. The promoter of Orchid Chemical nearly got thrown out of his own company in 2008 after the lender liquidated the pledged shares.

So, stock exchange data may show the promoters as holding a certain percentage in the company, while the actual holdings could be much higher.

It is the benami accounts through which promoters buy shares of their company whenever there is a panic selling in their stock, or when they have information about some development that could drive up the stock price. It is through these accounts that large blocks of shares are offered to fund managers for a premium, or dumped in the open market in tranches.

Many promoters pledge shares through unofficial accounts, to shield the stocks from attacks by bear traders. Bears target shares where a sizeable chunk of the promoters’ holdings is pledged. The strategy is weaken the stock price below a point that could then trigger margin calls.

In January 2009, the Securities and Exchange Board of India (SEBI) ruled that promoters should disclose details of shares pledged with lenders, to stock exchanges. The rule was prompted by sharp falls in many stocks where promoters had pledged shares with non-banking finance companies. Promoters have managed to work around the rule, by pledging their shares in the benami accounts.

This is not to say that pledging of shares is always for the promoters’ personal needs. Many promoters routinely pledge shares to fund working capital requirements, or some other requirement of the company.

But there are enough promoters who have been raising money to play the ‘market capitalization’ game. In fact, the stock market rally in many mid and small companies around Diwali last year had to do with promoters raising money by pledging a part of their holdings, and using that money to purchase shares through the open market in collusion with some market operator. That game is now up. There are far too many negatives at the macro level—both globally and locally—and the stock market is set for a downturn in the near term. Stock prices could fall even sharper than the benchmark indices, unless the companies manage to report spectacular earnings, which again looks difficult given rising interest costs, high raw material costs and falling consumer demand.

Pledging of shares is not a bad thing, but unless they were for the right reasons, some promoters will have to be ready for a dramatic fall in their stock price. Or who knows, maybe even losing control of their companies.

Subscription begins for Rushil Decor IPO

2011-06-20T16:07:00.001+05:30

Decorative laminated sheets manufacturer Rushil Decor has opened its initial public offering of 56,43,750 equity shares of face value Rs 10 each for subscription today.

It has fixed price band at Rs 63-72 for the issue, which closes on June 23. The issue includes promoter’s contribution of 2,43,750 equity shares and issue to the public of 54 lakh equity shares.

Company manufactures decorative laminated sheets with a network of branches, distributors and dealers across India. Company offers comprehensive engineered interior products including decorative laminate sheets and plain particle boards.

Issue proceeds are proposed to be used for setting up of medium density fibre board (MDF) plant at Amble Industrial Area, Chikmagalur, Karnataka; and for working capital requirement. The issue will close on June 23.

Corporate Strategic Allianz Limited is the book running lead manager and Indbank Merchant Banking Services Ltd is the co-book running lead manager to the issue.

Sensex sheds over 300 pts; all sectoral indices in red

2011-06-20T15:54:00.002+05:30

The benchmark Nifty was consistently trading below the 5300 level after the news that Mauritius government agreed to restart talks of revising the Double Taxation Avoidance Agreement (DTAA) treaty with India.

Finance Secretary said Mauritius gave in-principle nod to mull treaty review. He said they would discuss Mauritius tax treaty in July-August.

He also said, "We await Mauritius confirmation on tax treaty review date. We need framework before levying tax on Mauritius investment." "We can't arbitrarily tax investment routed from Mauritius," he added.

Stocks with investments from Mauritius as well as companies, which pledged shares, came in under pressure as more than 40% of India's total foreign direct investments (FDIs) come from Mauritius. GTL crashed 61% and GTL plummeted 41% despite clarification from company.

KS Oils tumbled 18%. Delta Corp, Alok Industries, HDIL, Lanco Infratech, IVRCL and Punj Lloyd fell 6-8%.

The 30-share BSE Sensex was trading at 17,523, down 348 points and the 50-share NSE Nifty slipped 107 points to 5,259. About nine shares declined for every one share advancing.

All sectoral indices were in the red. BSE Oil & Gas, Realty, IT, Power, Auto, Metal, Healthcare and TECk indices dropped 2-4%.

Heavyweights Reliance Industries, ONGC, TCS, NTPC, ITC, Infosys, HDFC Bank and Wipro were down 2-3.5%. Tata Motors and Cairn India fell 4%.

Reliance Communications was down 8% and Reliance Infrastructure down 7%. Reliance Capital and Reliance Power were down 4-4.5%.

The sell-off in global markets too added some more pressure on our markets. European markets like France's CAC, Germany's DAX and Britain's FTSE were down 1% each. US index futures namely Dow Jones and Nasdaq lost 0.5% each.

VMS Industries debuts with 10% premium

2011-06-14T11:09:00.001+05:30

Shares of VMS Industries started the trade at Rs 43.95, up 10% as compared to issue price of Rs 40 a share despite lower subscription during the issue opened.

At 9:37 hours IST, the stock was trading at Rs 46.20, with volume of nearly 30 lakh equity shares on the Bombay Stock Exchange.

VMS Industries is engaged in ship recycling activities, off-shore support business activities. It raised Rs 25.75 crore through the issue.

Issue proceeds are proposed to be used for modernization of ship recycling plot, setting up of corporate office at Ahmedabad and for long-term working capital requirement.

Issue was opened for subscription during May 30-June 2 and was subscribed more than 1.4 times. Reserved portion of retail and non-institutional investors was subscribed 3.67 times and 1.24 times, respectively. However, qualified institutional buyers had not shown any interest in the issue.

YC Deveshwar re-appointed Chairman of ITC

2011-06-14T11:02:00.000+05:30

The shares of ITC are trading at 192, up by Rs. 1 or 0.76% over the previous close.

Yogesh Chander Deveshwar has been reappointed as ITCchairman for another five years, according to reports.

A resolution to this effect will be placed beforeshareholders for approval at the company’s forthcoming annual general meeting,reports stated.

The shares of ITC are trading at 192, up by Rs. 1 or 0.76% over the previous close. It touched the day's high and low at Rs. 192 and 191, respectively.

Even though ITC does not have a retirement age, Deveshwar’sextension has been the subject of discussion since his five-year term was closeto ending, added reports.

India HDFC falls after 16.5 mln shares change hands

2011-06-14T10:59:00.000+05:30

Shares in India's top mortgage lender, Housing Development Finance Corp , fell as much as 1.8 percent in early deals on Tuesday after 16.5 million shares, or 1.12 percent of equity, changed hands at 643 rupees each on the Bombay Stock Exchange.

Identity of the buyers and sellers were not immediately known.

At 9:25 a.m. (0355 GMT), shares in HDFC were down 0.6 percent at 653 rupees after falling as low as 645.50 in firm Mumbai market .

On Monday, two sources with knowledge of the matter had said Citigroup had decided to reduce its stake in HDFC to about 10 percent from 11.4 percent via stock market deals. (Reporting by Manoj Dharra and Devidutta Tripathy; Editing by Ranjit Gangadharan)

BSE Sensex rises 0.3%; May inflation data in focus

2011-06-14T10:44:00.001+05:30

The BSE Sensex rose 0.3% in early trade on Tuesday, with banks leading the rise, taking cues from strong Asian markets.

At 9:17 a.m. (0347 GMT), the 30-share BSE index was up 0.32% at 18,324.92 points, with 26 components advancing. The 50-share NSE index was up 0.4% at 5,502.75.

Financials such as State Bank of India, ICICI Bank and HDFC Bankwill be in focus as the data would provide cues on the Reserve Bank of India's (RBI) rate decision on Thursday.

The wholesale price index is expected to have risen 8.70% in May from a year earlier, up slightly from the previous month, thanks to rising food and fuel prices, a Reuters poll showed.

Economists expect the RBI to continue with its hawkish view as it attempts to control rising inflation.

Top mortgage lender Housing Development Finance Corp will be on the radar after sources said Citigroup has decided to reduce its stake in the firm to about 10% from 11.4% via stock market deals.

The MSCI's measure of Asian markets other than Japan was up 0.9% by 0304 GMT, while Japan's Nikkei rose 0.2%.

The Nifty India stock futures in Singapore were up 0.1%.

On Monday, the 30-share BSE index closed barely changed at 18,266.03 points.

STOCKS TO WATCH

* Tata Communications after the telecoms firm said it had increased its effective holding in South Africa's second-biggest fixed-line phone operator Neotel to 61.5% from 49%.

* Oricon Enterprises Ltd after the firm said it had alloted 2.2 million shares to Clearwater Capital.

Moneycontrol.com

Market continues downtrend momentum: Ashwani Gujral

2011-06-03T15:58:00.001+05:30

Ashwani Gujral, Chief Market Strategist, ashwanigujral.com, in a chat with ET Now, gives his views on market outlook.

Not holding to that 5550 mark ahead of the weekend?

Today's fall is a bit worse than yesterday's fall because today we retested 5600 and then came back down fairly sharply. Key stocks are breaking down, something like a Tata Motors is breaking down below 1050. Banking, metals, auto are unable to give leadership. You have an odd Hindustan Lever, ITC, which are trying to pull it up and Reliance, which was doing its bit has now again slipped below 950, so the market does not look as strong as it was looking say three days back and long positions clearly should be protected. As a disclosure, we have taken short positions around 5540. Now for the day, you can sell into Axis Bank with a stop of about 1280, a target of 1200. The bank index has turned and is doing much worse than the Nifty . Hindalco, we can sell with a stop of about 195, a target of 180 and maybe buy something like an Exide Industries with a stop of about 159, a target of 170.

Reliance to partner world leaders for new businesses, says Mukesh Ambani

2011-06-03T15:53:00.003+05:30

Bullish on adding further financial muscle to energy-to-retail conglomerate led by him, Mukesh Ambani on Friday said Reliance Industries will partner world leaders for entering new businesses in the country.

Although he was silent on specific details for the future course of action of RIL's entry into financial services and telecom businesses, Ambani said that a partnership-led transformation would be one of the top agenda going forward.

"... transformation is at the top of the Reliance agenda for a renewed organisation that will deliver continuous growth," Ambani said.

Addressing shareholders at the company's 37th AGM here, Ambani listed among the top agenda "a partnership transformation that will enable Reliance to partner with world leaders to enter new business domains in India". He also promised "a business transformation that will fundamentally strengthen the constitution and character of the organisation".

Ambani said Reliance was endowed with a strong balance sheet and it was reinforcing its constitution with the business transformation initiative. "Reliance is forging new partnerships to pursue new growth opportunities," he said, while adding that the group was determined to improve its ranking among global businesses.

Ambani went on to talk about a talent transformation to help it attract best talent in the country and abroad, an innovation-led technology transformation to explore new businesses and a market-transformation to help Reliance explore new consumer markets.

The RIL Chairman and MD said Reliance has transformed many sectors and redefined the way industries operate and has always been able to foresee changes in business trends.

Ambani said the focused efforts would be undertaken to transform Reliance into a "renewed and refreshed organisation prepared for opportunities and challenges of a 21st century world". He said the year 2010 presented the company with opportunities in market growth and for investments across each of its businesses.

At the same time, RIL also had to confront challenges arising out of high commodity and input prices and inflationary trends, he added.

Still, RIL added significantly to its financial strength and its enterprise value has grown to over USD 75 billion, Ambani said.

Buy Axis Bank, says VK Sharma

2011-05-27T10:21:00.001+05:30

Buy Axis Bank, says VK Sharma of HDFC Securities.

Sharma told CNBC-TV18, "I think the weakest in the banking sector seems to be State Bank of India where fundamentally we would expect one more quarter of the Chairman picking up the broom and cleaning some more act. So from that perspective there is more to follow fundamentally.”

He further added, “If you look at the position from derivative perspective this is the only stock in which we have seen 78% open interest addition and this is still in the new settlement, it continues to be the largest company having the open interest at 1,593 crore, more than Reliance. So from this perspective there is lot of shorts that are still in the system and it needs to come out. So this is one sector, this is one company which could lead the sector down although you have seen buying coming in the likes of Axis Bank but although we have a buy call for a trader, one can buy Axis, one can buy 1,200 calls at Rs 40 and hope to sell at Rs 60.”

“But this is a function of where open interests are added on the last day. So we are not very sure, we don’t take what movement that happen on last day as sacrosanct so that will be suspect. So keep a stop loss of around Rs 30 in this.”

Rupee seen up as Asian peers, shares rise

2011-05-27T10:17:00.003+05:30

The rupee is expected to open stronger on Friday buoyed by gains in other regional currencies and shares, while the dollar's losses versus the euro is also seen helping sentiment.

The euro rose after a drop in US Treasury yields dented the dollar, and gave the single currency some respite from a recent sell-off on worries over the possibility of debt restructuring by Greece.

The index of the dollar against six major currencies was down 0.26% at 75.356 points at 0237 GMT, compared to 75.577 points when the rupee market closed on Thursday.

The MSCI index of Asian stocks ex-Japan was up 0.73% and the Nifty India stock futures traded in Singapore were up 0.7%, suggesting a firm start to the domestic sharemarket.

The partially convertible rupee ended 0.1% stronger on Wednesday at 45.30/31 per dollar.

Traders expect the rupee to open around 45.20 and move in a 45.15 to 45.35 band.

SEBI halts listing of Vaswani Industries shares

2011-05-27T09:53:00.003+05:30

The Securities and Exchange Board of India (SEBI) has halted the listing of securities of Vaswani Industries , whose initial public offering of shares had closed on May 3, saying subscriptions in the qualified institutional and high networth categories was artificially inflated.

"Certain applications were submitted to artificially inflate the subscriptions in QIB and HNI category to attract and mislead the investors," the stock markets regulator said in a statement.

"Post the closure of the issue, the same applications are being withdrawn by way of stop payment, stop allotment, cheque return, wrong cheque dates, etc," it said.

Alleging that this was a "pre-planned move" amongst the promoters, lead managers and other operators, SEBI said the listing of securities of Vaswani should be stopped till an investigation of the withdrawal of applications is completed.

SEBI said a detailed investigation shall be initiated and completed within 30 days from the date of the order.

Investors should be given an exit option so that securities allotted to them during the IPO can be withdrawn, before permitting the listing, the regulator added.

Vaswani Industries had fixed a price band of of Rs 45 to Rs 49 per share for its initial public offering of 10 million shares. It had appointed Ashika Capital Limited as the book running lead manager to the issue.

Sensex, Nifty trading below 200-DMA; Indian market in bear phase

2011-05-27T09:46:00.006+05:30

A key technical stock market indicator is signaling a protracted gloom for Indian equities, reviving memories of a similar downtrend two years ago. Benchmark share indices Sensex and Nifty as well as broader indices such as the BSE-200 are trading below their 200-day moving average, or 200-DMA, an indication that Indian markets are in bear territory.

A decline below 200-DMA means that new buyers of indices or stocks are not willing to pay more than the average price of the previous 200 days. While Sensex and Nifty are about 6% below their 200-DMA, more than 75% stocks on the BSE-200 are below the mark, a technical sign of pessimism.

The downswing in equities market is also evident in Asian peers such as China's Shanghai Composite and Singapore's Straits Times that are trading below this mark, analysts said. The classic definition of a bear market is when key indices fall 20% below their peaks, though the 200-DMA gauge is also widely used.

"We are clearly in a bear market at the moment," said Alex Mathews, head-research, Geojit BNP Paribas Financial Services . "Charts are pointing to a downtrend and a reversal looks difficult unless there are positive cues," he said.

The Indian markets last experienced a similar trend in March 2009 when shares were reeling under the impact of a global financial meltdown, and almost 78% stocks on the BSE-200 were below 200-DMA, Enam Securities said in a report. The difference between the two periods is that the Sensex is at about 18,000 now, almost 12% below peak, while it was nearing 8,000 in early March 2009.

Liquidity Remains Global Concern

Foreign funds have dumped Indian shares, pulling down the markets in recent weeks as stubborn price pressures and the central bank's aggressive monetary tightening threaten to hurt growth and dent corporate profits. Overseas investors have net sold Indian stocks worth Rs 8,200 crore so far in May, dragging down benchmark indices 5%. They have pulled out almost Rs 3,500 crore on a net basis so far this year, after investing about Rs 1.33 lakh crore in 2010.

Liquidity remains a concern globally and investors will closely watch the foreign flow trend post-June, when the Federal Reserve's bond purchase, or the second round of quantitative easing, comes to an end, analysts said. Overseas markets have been jittery over the closing of the bond buyback that pumped billions of dollars into global stocks and commodities in the last couple of years. Though there is consensus in the market that the undertone may remain weak, any sharp decline from current levels may take investors and traders by surprise, analysts said.

"Monthly and quarterly charts are showing bearish trends. While there may be a brief upmove to about 5,550 levels over the next couple of weeks, the trend over the next two months shows the Nifty is likely to fall 15% to around 4,500 levels," said Sandeep Wagle, managing director, Aptart Technical Advisors.

Nifty seen higher; Tech Mahindra, Tata Motors watched

2011-05-27T09:43:00.001+05:30

The 50-share Nifty index is seen opening higher on Friday while Asian markets drifted in red after euro slipped to a record low against Swiss Franc and a slight pull back in commodity prices weighed on the markets.

US economic data on Thursday showed the economy grew at an annual 1.8 percent rate in the first three months of the year, weaker than most forecasts. The weak economic data weighed on commodity markets, particularly oil, which dropped more than 1 percent overnight, but showed some signs of stability on Friday, according to a report.

Increasing concerns of high inflation, rising borrowing costs along with Europe debt crisis will keep investors on the edge. Also, surging inflations fanned concerns of further tightening by the Reserve Bank of India.

Food inflation rose to a four-week high of 8.55% for the week ended May 14 as prices of cereals, vegetables and milk rose during the week. Food inflation was up a sharp 1.08 percentage points during the week from 7.47% in the previous week, official data showed.

Markets ended the May F&O series with intense last minute tussle between options buyers and sellers while the Nifty managed to close above 5400 should give some heart to the bulls.

"There is a fair chance that markets will see a sharp pullback back to 5500 levels on the Nifty in the next few trading sessions", says Kunal Saraogi, CEO, Equityrush. Traders must initiate long positions on select stocks with tight stop losses. Automobiles and pharma companies look best positioned on the charts and may lead the recovery, he adds.

According to a report, benchmark share indices - Sensex and Nifty as well as broader indices such as BSE-200 are trading below their 200-day moving averages indicating markets are in a bearish phase.

The benchmark index is still down 1.5 per cent on the week and nearly 6 per cent down for the month of May but losing interest of FII in Indian markets which pulled out nearly $1.7 billion this month remains key concerns for investors. The benchmark index slipped more than 12 per cent in 2011.

At 07:50 A.M, the Nifty India stock futures in Singapore trading 63 points higher.

Shares in Tata Motors will be in focus after the largest truck and bus maker posted its highest-ever quarterly consolidated profits for the March 2011 quarter in line with the Street's expectations. Profits were mainly driven by higher sales at home and at its Jaguar and Land Rover unit, but warned of competition and high commodity prices

Shares in State Bank of India will be in focus after the biggest lender said it will submit the revised proposal to the government for Rs 20,000 crore right issue next month.

Other important results to watch out in today are - Bank of Baroda , HDIL, NHPC, Reliance Infra and Reliance Power .

Stocks to watch:

HPCL after the state-run refiner posted 48 per cent jump in quarterly profits from a year earlier. The company has also revived plans to build in a consortium a $10 billion refinery-cum-petrochemical project in Vizag city.

BGR Energy after the power project firm said it expects its sales to grow by 15 per cent in FY12 and expect good order flow.

Zee TV after the company it has joined hands with Murdoch's News Corp, Star India to distribute their television channels in the domestic market.

According to sources, Coal India is in talks to buy up to 40 per cent stake in Indonesia's Golden Energy Mines. The shares of the company are expected to move higher in trade today.

Reliance Industries after the largest company by market value has submitted an expression of interest to buy Australia's Premier Coal. According to sources, RIL is likely to initiate due diligence on the assets of Premier Coal.

Tech Mahindra after the India's No. 5 software company reported 59 per cent drop in fourth quarterly profits on account of legal expenses incurred by Mahindra Satyam.

Shares in Aanjaneya Lifecare will be watched in today's trade which lists on India bourses today.

Cairn India after a Group of Ministers (GOM) are likely to decide today (1630 hours) if the government should approve Cairn Energy Plc's sale of stake in its Indian unit to mining group Vedanta Resources.

Sensex to touch 24000 sometime during the year: Raamdeo Agrawal

2011-05-25T15:25:00.005+05:30

In an interview with ET Now, Raamdeo Agrawal , Jt. MD, Motilal Oswal Financial Services , talks about contra investing and his contra calls.

Define contra investing for us.

The stock which does not deserve popular opinion is what is called contrarian kind of view. You make money when you buy a stock which is absolutely unpopular, because most of the money is made in this kind of stock when the perception changes. Perception is the driver of PE. If the perception of the stock is negative and from there it changes to positive to a PE multiple of 10 to 100, it makes you a lot of money.

Has contra investing worked for you?

I am not a contra investing type. However, in one or two situations, I bought in the past and was very successful in those ideas. I had bought Calcutta Electric 5-6 years back at about Rs 13. The whole company was available at about Rs 90 crores. There were factors like monopoly into Calcutta, employing transmission and profitability and they were highly leveraged and the interest rates fell from 13-14% to around 6-7%. We did a ratio called interest cost to the market cap and it turned out that interest was 3 times or 4 times more than the total market cap and hence the impact of the interest rate decline would have been most on Calcutta Electric. People around me from Calcutta told me that it looked worse than BMC office and I couldn't even stand there. They told me not to look at it and that was the reason it was at Rs 13.

What prompted you to buy that stock?

I had a very bullish view on change in the value of a stock once the interest rates declined and we saw major decline in the interest rates. I wanted to buy something which was getting hurt due to the high interest rate scenario at that point of time and would be significant beneficiary. Calculated business was very stable and it had a good reputation in Calcutta under RPG management but yet the net profit after tax was low because it was heavily leveraged and West Bengal Government was disputing about what costs were allowed to be passed on. As the interest rate came down, the profits that were marginal or negative shot up by 4-5-6 times because all the interest became benefits to the company. The stock flew from Rs 13-14 to around Rs 150 in 2 years time and then I sold it at about Rs 120. The stock further went up to Rs 400-500.

Rupee nears 3-month low on local shares, euro weakness

2011-05-25T15:24:00.001+05:30

The Indian rupee fell further in afternoon trades on Wednesday to hover near its three-month lows as concerns of dollar outflows heightened on the back of the continuing fall in local shares.

* The persistent weakness in the common European unit also weighed on the rupee, traders said.

* At 1:45 p.m., the partially convertible rupee was at 45.41/42 per dollar, weaker than the last close of 45.21/22.

* The rupee had last crossed the 45.43 level on Feb. 25, and if it breaches this level, it could drop to near 45.50 before any support is seen, traders said.

* The euro was at $1.4026 and the index of the dollar against six major currencies was at 76.227 points. * The euro fell on Wednesday, as investors including hedge funds cut bullish bets on mounting worries over Greece's finances, with many traders expecting the single currency to test key support levels on charts.

* Indian shares extended losses to more than 1 percent in afternoon trades on Wednesday as fresh worries about Europe's spreading debt crisis and weak Asian markets dampened investor sentiment.

* The actively traded one-year onshore forward premium was 247.75 points against 248.25 points last close.

Sensex close in green, Bankex gains.....Nifty below 5400

2011-05-24T17:24:00.001+05:30

BSE Sensex ended at 18,011 adding 19 points. Nifty closed at 5,398 adding 12 points.

After a steep fall on Monday, the Indian markets ended with modest gains on Tuesday amid some volatility ahead of the F&O expiry. The key stock indices started off with smart gains despite weak cues from the US and European equity markets. However, the Asian indices recovered from the previous session's drubbing and European markets too managed to break the recent sequence of losses. As a result, the sentiment on Indian bourses too improved.

FMCG, Realty and PSU stocks were among the major laggards. On the other hand, Capital Goods, Consumer Durables and Banking stocks were in demand.

Domestic headwinds like inflation and policy stalemate on key issues continue to haunt the Indian markets. Technically, the NSE Nifty could find meaningful support around the 5340 levels. While on the upside the 5490 levels could be the near term resistance for the index.

The fact that the crude oil has softened in recent days also supported the Indian markets. Results from the likes of L&T, Bajaj Auto, BHEL, Gail and ITC have been well received by the markets as well.

"Volatility could escalate ahead of the F&O expiry. Overall mood will hinge on upcoming results, FII flows, possible policy announcement, monsoon and of course overseas markets.Safety of one’s portfolio should be top priority. So, avoid undue risk taking.
There could be a minor bounce after a steep selloff but don’t aggressively buy into it as there could be further weakness. One will get opportunities in the coming days to pick up quality stocks for medium- to long-term perspective," says Amar Ambani, Head of Research (India Private Clients) - IIFL.

The BSE Sensex ended at 18,011 adding 19 points. It had earlier touched a day's high of 18,110 and a day's low of 17,933. It opened at 18,016. The NSE Nifty closed at 5,398 adding 12 points.

The European markets were trading in the green, the FTSE index was up 1%, CAC index was up 1.3% and DAX index was up 1.4%.

Outside the index, the major gainers were Patni, Shriram Trans, Jub Food, Biocon and Canara Bank. Among the major loses were DB Realty, Bharat Forge, PFC and Tata Global.

www.indiainfoline.com

Multi-cap MFs yield best in SIP

2011-05-24T10:13:00.001+05:30

Systematic investment plans (SIPs) have been observed to be the simplest and most useful wealth creation tools in the hands of average retail investors. But here too, diversity in portfolio helps. SIPs in multi-cap or diversified equity mutual funds(MFs) have given more bang for the bucks both in the long and short run.

Analysis shows that while SIPs in the best performing diversified funds generated average returns of 7.4% in the past year (till April 30), top large-cap funds gained 5.5%. Mid-cap funds slipped 1.7% during the period. Diversified funds gave 32.4% annual gains in the three-year period under the SIP route compared to 22.7% and 25.9% returns generated by large-cap and mid-cap equity MFs. "SIPs work well with diversified equity funds," says Srikanth Meenakshi, co-founder and director, FundsIndia, an online investing platform.

The average annual returns through SIPs of diversified funds are higher than their peers in the five-year period as well. Multi-cap funds invest across market capitalisation and are not biased towards any particular theme, sector or style. This gives fund managers the much-needed flexibility to make quick changes depending on market conditions.

"Their (diversified funds) ability to move into different m-caps has given them the edge (over peers)," says Anil Rego, CEO, Right Horizons, a wealth management firm.

These funds have benefited from astute sector moves, which have ensured robust performance. For instance, a leading diversified MF nearly doubled its exposure to auto stocks between August 2010 and April 2011, which improved its fortunes.

The underperformance of small and mid-cap stocks, which usually rise and fall at a faster pace than other categories, has also enabled diversified funds to stay on top. Analysts say that diversified funds are also capable of outperforming large cap funds.

Analysts further say that though these funds tend to sway with market swings by investing more in momentary best performers, they are less risky than mid-cap and thematic funds. Though diversified MFs should form an essential part of the portfolio, investors should carefully examine the quality of fund management, their 3-5 year performance and track record of the asset management company before making a decision, say experts.

Satyam-Tech Mahindra merger likely in 2012: report

2011-05-24T10:07:00.002+05:30

The report stated that the company is in talks with the US regulator, Securities and Exchange Commission (SEC), to clear certain issues

The merger of Mahindra Satyam with its parent company Tech Mahindra will take place by 2012, according to a report.

The report stated that the company is in talks with the US regulator, Securities and Exchange Commission (SEC), to clear certain issues and is hopeful of its relisting on the New York Stock Exchange (NYSE).

Mahindra Satyam chief executive C P Gurnani has reportedly said that the company plansto add about 12,000 staffers over the next four to five quarters.

www.indiainfoline.com

Sensex regains 18,000 level in opening trade

2011-05-24T10:02:00.002+05:30

The BSE benchmark Sensex regained the 18,000 points level in opening trade on Tuesday, shooting up by over 113 points on a fresh spell of buying by funds and retail investors, taking cues from the firming trend on other Asian bourses.

The 30-share index of the Bombay Stock Exchange, which lost 332.76 points in the previous session, recovered by 113.45 points, or 0.63 per cent, to 18,106.78 in the first few minutes of trade today, with oil and gas, auto, banking, realty and consumer durable stocks leading the recovery.

Similarly, the wide-based National Stock Exchange Nifty index also moved up by 28.50 points, or 0.53 per cent, to 5,415.05.

Brokers attributed the recovery in stocks to fresh buying by funds and retail investors, driven by a firming trend on other Asian bourses.

In addition, covering-up of pending short positions ahead of monthly expiry in the derivatives segment of the National Stock Exchange on Thursday also supported the recovery, they said.

Meanwhile, Japan’s Nikkei index was trading 0.11 per cent higher and Hong Kong’s Hang Seng Index gained 0.10 per cent in early trade today. The US Dow Jones Industrial Average ended 1.05 per cent lower in yesterday’s trade.

Rupee down 20 paise against U.S. dollar in early trade

2011-05-23T10:51:00.000+05:30

The Indian rupee depreciated by 20 paise to Rs 45.21 against the U.S. dollar in early trade on the Interbank Foreign Exchange on Monday, weighed down by dollar gains against the euro and other currencies overseas and a subdued trend in the equity market.

Forex dealers said the strengthening of the dollar against major currencies overseas and a lower opening in the domestic stock market mainly put pressure on the rupee.

The rupee ended 4 paise lower at Rs 45.01/02 against the American currency in the previous session on Friday on the back of demand from importers as the dollar gained in the global market.

Meanwhile, the Bombay Stock Exchange benchmark Sensex fell sharply by 219.10 points, or 1.19 per cent, to 18,106.99 in opening trade today.

Nifty down below 5450; Sesa Goa, IDFC, HDFC down

2011-05-23T10:49:00.002+05:30

Indian markets were witnessing profit booking as sentiments turned bearish globally on concerns of global economic recovery. Banks, metals and auto stocks led the decline while FMCG space showed some resistance.

"Things have turned a little sour for world equity markets in May. Investors seem to have taken the old axiom of 'sell in May and go away' seriously; and they have been lucky so far. India has been no exception with the key indices on a mostly downward spiral. The slide is likely to persist at least at the start of the last week of the month.

The US and European stocks slid amid lingering worries over the precarious fiscal conditions of Greece and other peripheral eurozone nations. The dollar has advanced while the euro has hit a record low versus the Swiss franc. Asian stock markets are down 1-2% this morning. Crude oil is hovering around $100 a barrel mark.

Indian markets did recover some ground late last week, but the overall outlook remains murky. Things could get volatile in view of the F&O expiry on Thursday. The near-term sentiment will hinge on global cues and results of a few top companies. The onset of monsoon will be another key event to keep an eye on," said IIFL report.

At 9:45 am; National Stock Exchange's Nifty was at 5432.25, up 54.10 points or 0.99 per cent. The broader index touched a high of 5456.70 and low of 5417 in trade so far.

Bombay Stock Exchange's Sensex was at 18159.68, down 166.41points or 0.91 per cent. The 30-share index hit a high of 18269.06 and low of 18106.99 in early trade.

BSE Midcap Index slipped 0.55 per cent and BSE Smallcap Index moved up 0.42 per cent lower.

Amongst sectoral indices, BSE Bankex was down 1.53 per cent, BSE Metal Index moved 1.46 per cent lower and BSE Auto Index slipped 1.29 per cent. BSE FMCG Index was up 0.37 per cent.

Sesa Goa (-3.74%), IDFC (-2.51%), HDFC (-2.25%) Tata Motors (-2.13%) and Kotak Bank (-2.13%) were the top Nifty losers.

GAIL (0.96%), ITC (0.91%), BHEL (0.71%), Bharti Airtel (0.16%) and Siemens (0.05%) were amongst the major gainers.

Market breadth was negative on the NSE with 1051 declines as compared to 649 advances.

Meanwhile, Asian markets were witnessing some selling pressure. Nikkei 225 was down 1.34 per cent, Hange Seng fell 1.74 per cent and Taiwan Weighted slipped 1.31 per cent.

ITC turnover up 17 pc to Rs. 30,604 crore

2011-05-21T10:57:00.001+05:30

The ITC posted yet another stellar performance in its Centenary Year of operations recording an impressive topline growth and high quality earnings reflecting the robustness of its corporate strategy of creating multiple drivers of growth.

Gross turnover for the year grew by 17 per cent to `30,604.39 crore. Net turnover at `21167.58 crore grew by 17 per cent primarily driven by a 23 per cent growth in the non-cigarette FMCG businesses, 23 per cent growth in agri business and 18 per cent in the hotels segment.

Pre-tax profits increased by 21 per cent to `7268.16 crore, while post-tax profits at `4987.61 crore registered a growth of 23 per cent. Earnings Per Share for the year stood at `6.49 (previous year - adjusted for Bonus Issue - `5.34).

Vedanta plans $1.5 billion bond issue to fund Cairn deal

2011-05-21T10:42:00.002+05:30

Vedanta Resources will issue $1.5 billion bonds to help it finance its $9.6 billion Cairn India deal, a move, experts say, shows the company is close to complete the deal, now pending for over 10 months.

Vedanta will start a global roadshow on Monday and expects the funds to replace its earlier short-term bridge loan.

“We’ll raise $3.5 billion from bank loans, $1 billion from equities and this bond issue,” Vedanta Resources chief financial officer, Tarun Jain told DNA, adding that this is a part of the $6 billion deal financing Vedanta has in place to acquire Indian assets of Scottish oil & gas explorer, Cairn Energy.

Barclays, Citigroup, Credit Suisse, Royal Bank of Scotland Group and Standard Chartered are managing the bond issue.

Vedanta has already tightened its grip over Cairn India after acquiring an 18.5% stake in it, including 10.4% stake from Malaysia’s Petronas for $1.5 billion and 8.1% stake through an open offer by subsidiary, Sesa Goa.

The company has been left frustrated as New Delhi dithers on approving the remaining control of 40% stake in the Rajasthan-focused oil explorer.

“Vedanta expects to use the proceeds of the offering for, among other things, to finance a portion of the purchase price for the acquisition and to pay related fees and expenses, which will result in a cancellation of commitments under a bridge facility for a total aggregate amount of up to $1.5 billion.,” Vedanta informed the LSE on Friday.

“(Today’s news) shows that the company is closest than ever to close the deal,” a Mumbai-based analyst at a foreign brokerage said on the condition of anonymity.

On Thursday, Cairn Energy extended the deadline for completing the deal without setting any new one ahead of the May 20 deadline expiry. The company first expected to close the deal by March 15 - after announcing the deal on August 16 last year - and later hoped to close the transaction by April 20.

Not surprisingly, Vedanta is still unsure if the group of ministers, which meets on May 27, will approve of the deal, as the company statement said that in case the acquisition failed to get government nod, it will use the proceeds to “fund capital expenditure, repay debt and for other general corporate purposes.”

Cairn India is locked in a messy royalty dispute with state-controlled Oil and Natural Gas Corporation (ONGC) and New Delhi is debating if the resolution of the issue should be set as a precursor to the country’s biggest cross-border acquisition.

ONGC, which pays 100% royalty on production from Cairn’s Rajasthan block to the Rajasthan government despite holding only 30% stake, wants the agreement to be tweaked. Both Cairn and Vedanta strongly disagree with the suggestion, saying any change in financials would make the deal less appealing for their investors.

Sensex steady at open...SBI extends losses

2011-05-18T09:58:00.002+05:30

At 09:25 am (IST), theBSE Sensex was trading at 18,180, up 39 points over the previous close. It had earlier touched a day's high of 18,218 and a day's low of 18,114. It opened at18,177.

The Indian market has opened with a positive bias, with the BSE Sensex and the NSE Nifty posting modest gains in early morning trade. However, the two main indices are struggling to hold on to the gains as weakness in banking major SBI continues to weigh on the sentiment. The market breadth is not great with the non-index counters too not going anywhere in a hurry.

At 09:25 am (IST), theBSE Sensex was trading at 18,180, up 39 points over the previous close. It had earlier touched a day's high of 18,218 and a day's low of 18,114. It opened at18,177.

NSE Nifty was trading at 5,444, up 5 points over the previous close. It had earlier touched a day's high of 5,460 and a day's low of 5,429.It opened at 5,448.

The BSE Small Cap index and the BSE Mid Cap index were trading flat.

In terms of sectors, FMCG and Capital Goods were leading the rise withthe indices up ~1%. Select, IT, Power and Metal were up marginally. PSU, Auto,Oil & Gas and Banking indices were down 0.5-0.2%.

Wipro, HDFC,ITC, L&T, BHEL, Hindalco, TCS, Bharti Airtel, Power Grid, Hero Honda, RCOMand HUL were among the clear winners on the Sensex and the Nifty.

SAIL, TataMotors, BPCL, Maruti Suzuki, ACC, NTPC, Cairn India and GAIL were among the major laggards in the Sensex and the Nifty.

Shares of mid-cap IT firm Mphasis are down sharply after its US parent Hewlett-Packard announced disappointing outlook overnight. HP shares fell 8% in the US trading.

Among the index heavyweights, Tata Motors and Reliance Industries are in thered while ONGC has recovered. ITC and L&T are up ahead of their results over the next couple of days.

In global action, most Asian markets are trading on a firm footing. European markets closed sharply lower amid sovereign debt worries. US stocks recovered to end off intraday lows. Crude oil in New York is up from a three-month low. In currencies, the yen is at a one-week low versus the euro while the British pound has gained against the dollar.

Market expert: SBI, RIL, Tata Steel may lead Nifty to 5330

2011-05-18T09:53:00.003+05:30

In an interview with CNBC-TV18, Jatinder Sharma, Partner, Equity Strategists says, after trading between 5,450-5,460 and 5,600 for past nine sessions, the market has given very valid technical breakdown. “SBI results may have tilted balance firmly in favour of the bearish outcome,” he adds.

He believes that now the levels to look forward would be around 5,330-5,335. “SBI, Reliance and Tata Steel could be the leaders in this particular fall and they might lead it towards 5,330-5,335 kind of levels,” he adds.

Also read: See Nifty in range of 5450-5600 for few days, says Deven Choksey

Below is verbatim transcript of his interview with Reema Tendulkar and Gautam Broker Also watch the accompanying video.

Q: The Nifty has broken that 5,450 mark? Now, what is the kind of downside which is opened up on any kind of trade?

A: I think after trading between 5,450-5,460 and 5,600 on the upside for past nine sessions, the market has given very valid technical breakdown. SBI results may have tilted balance firmly in favour of the bearish outcome. So, I believe that now the levels to look forward would be around 5,330-5,335 levels with some support coming in between around 5,375-5,380 levels.

Q: If we go all the way down to the 5,350 mark, what is primarily going to be leading us downside over there? Any kind of strategy that you have on key banking names or even the banking index now?

A: Along with SBI today, two more heavyweights have seen technical breakdown, Tata Steel as well as Reliance Industries. Reliance Industries was finding support around Rs 935-940 levels. It was expected that it will bounce back again to about Rs 979-980 kind of levels, but it has broken support. Now, it could be headed towards Rs 880-885 levels.

Similarly Tata Steel, it has given a valid breakdown again on daily charts as well as weekly charts. It could shed some more weight in the coming days. So, SBI, Reliance and Tata Steel could be the leaders in this particular fall and they might lead it towards 5,330-5,335 kind of levels.

Q: Technically, what about State Bank of India? What are the charts telling you as key support levels for State Bank of India?

A: State Bank of India was precariously placed around Rs 2,600 levels before the results. It has given a breakdown now. The levels to look forward to in the short run would be around Rs 2,375-2,380 where strong weekly support is seen. So, there could be technical rebound from around those levels.

Q: Do you think there could be any kind of an opportunity in the financial space, any other smaller banks that you like?

A: In the morning, Bank of India was looking good because it was finding support around Rs 390-385 levels. It has found support around these levels for past so many months now. So, a technical rebound could have been expected. Even now, I believe that that stock could be bought at current levels with small risk trade because Rs 385 is the stop loss level for Bank of India and it could go to all the way up to around Rs 435-440 or maybe if the market support, it could even head higher.

Among the largecaps, I believe HDFC Bank is still showing some resilience around Rs 2,240-2,245 levels. So, maybe on semblance of some support around these levels, one could go long in HDFC Bank.

Q: What would you recommend buying in terms of the sectors in the defensive side, pharma, FMCG and maybe IT?

A: FMCG and pharma are looking much better than even IT. In IT, the whole chart pattern is not looking good because of Infosys. Infosys is trading just around its strong support levels, weekly support levels about Rs 2,835-2,850 levels. But it is not showing any inclination to move higher.

TCS might trade in a range. But it is not looking good to give you some decent returns even in the short run. So, we are left only with the FMCG as well as pharma.

In FMCG, Hindustan Unilever looks to be a better chart right now, in fact better than ITC because it has held on to most of its gain for past three-four sessions and absorbed all the profit taking above Rs 305-306 levels. So, it could head towards Rs 320-325 levels over next five-seven trading sessions.

Glenmark Pharma inks $613-million licensing deal with Sanofi

2011-05-17T10:24:00.004+05:30

Mumbai's Glenmark Pharmaceuticals has licensed a new biotech drug to France's Sanofi which has the potential to generate revenues of $613 million or 2,734 crore.

Glenmark will receive $50 million ( 223 crore) or 8% of the potential deal value as an upfront payment in the next three months, chairman Glenn Saldanha said at a press conference on Monday.The company also stands to earn double-digit royalties on sales, he said.

Glenmark has sold marketing rights to Sanofi in North America, Europe, Japan, Argentina, Chile and Uruguay. While it has retained co-marketing rights in Russia, Brazil, Australia and New Zealand, in India, it has exclusive rights.

The product, GBR 500, is still in early human trials and being evaluated as a treatment for Crohn's disease or chronic inflammation of the bowels. It could also work in case of number of other inflammatory conditions such as multiple sclerosis and ulcerative colitis, the company said.

Shares of the company touched a new one month high as institutions accumulated large chunks of the stock. The stock touched an intra-day high of 327.80 but then gave up some of its gains to close at 305.15, up 11% from its previous close with volumes nearly twenty five times its two week average. The Sensex closed down 1%.

Of the $50 million, half is expected to flow in June-when the transaction will close-while the balance is subject to assessment of data on the drug. The entire $50 million will be used to repay debt by Glenmark, which had about 1,900 crore debt in fiscal 2011, with a debt to equity ratio of 0.8.

The rest of the money, $563 million, is a total of all milestones or bullet payments that it stands to make if and when the drug makes progress in clinical trials and goes to market. The earliest it can reach the market is 2017.

"It's premature to calculate the drug's potential going forward," said Surajit Pal, pharma analyst at Elara Capital, pointing out that a lot depends on which disease conditions are pursued, and how that market will look in these many years. "As of now, it's a one-time deal," he said.

This is Glenmark's sixth licencing deal since it began new drug discovery a decade ago and it's first for a biologic.

"It is very difficult to cut such a deal, the licensing environment is very tough," said Michael Buschle, Glenmark's president (biologics). "It's hard work, it takes years and now we've been successful."

Siddhant Khandekar, Chief Manager (Research) at ICICI Securities said: "This is a first NBE outlicensing deal done by any Indian company, and we believe it will have a positive impact going forward in terms of revenues."

A majority of analysts across brokerages expects a 8-10 gain per share on an upfront basis from the Sanofi deal. The company's earnings per share (EPS) currently stand at 20.5 for FY12 which could go up to 23.30 for FY13. The stock has a "Buy" recommendation at most brokerages as it is currently trading at 17 times FY13 earnings, which consider to be an attractive level by most.

Drug R&D a high-risk endeavour

The long-term prognosis is less certain. The odds are often stacked against companies doing new drug research. For every drug that comes to market there are seven or eight that fail.

Since 2004, Glenmark has struck five licensing deals for chemical drugs that emerged out of its research laboratory in Navi Mumbai for diseases such as diabetes, pain, and respiratory disease. Of these, four were returned or killed in trials and one -for pain - is currently in development. GBR 500, a product of its lab in Switzerland, is its sixth such deal.

Glenmark entered biologics research in 2006 by establishing a small laboratory in Switzerland with 5 scientists. Unlike several Indian companies researching biotech copycats or biosimilars in the hope of launching them as they go off-patent, Glenmark focused on new biologicals.

In 2007, Glenmark snapped up two biotech drugs in early stages of research from Canadian firm Chromos Molecular Systems for an undisclosed sum. GBR 500 was one of them. Scientists at the Switzerland lab then re-engineered it, and put it through animal testing.

GBR 500 recently completed the first phase of human trials in the US. This judges the drug's safety while successive phases prove safety and efficacy.

Nifty hovers around 5500; market awaits SBI results for cue

2011-05-17T10:06:00.003+05:30

The Indian markets opened on a subdued note awaiting results of India's largest public sector bank SBI. The limelight was hogged by MSCI India addition stocks in early trade.

At 09.20 hrs IST, the Sensex was up 39.15 points or 0.21% at 18384.18, and the Nifty was up 5.80 points or 0.11% at 5504.80. About 530 shares advanced, 191 shares declined, and 2920 shares remain unchanged.

Buying was seen in capital goods, FMCG, IT and consumer durables stocks. The broader markets too were trading with nominal gains.

Titan Ind, Shriram Transport, Mundra Port, Dabur, Bank of India and Asian paints have been included in MSCI India Index. The stocks have rallied in the range of 2-11%.

Top gainers on the Sensex: TCS, Sterlite Industries, Larsen, Bajaj Auto and Cipla were up 0.-1.1%.

Top losers on the Sensex: ONGC, Hero Honda, NTPC, Wipro and Maruti Suzuki were down 0.5-3.5%.

Government increased upstream subsidy share to 38.5% of total subsidy burden for FY11. Now upstream companies like ONGC will have to bear Rs 30,000 crore in FY11, reports CNBC-TV18, quoting Sources.

According to CNBC-TV18's estimates, SBI's January-March quarter net interest income (NII) is seen at Rs 9176 crore, a growth of 37% as against Rs 6721 crore, same quarter previous year. Its Q4 PAT is seen up 59% at Rs 2963 crore versus Rs 1866 crore, YoY.

Midcap gainers: Kalpataru Power, State Bank of Mysore, CMC, KSK Energy and Berger Paints were up 2.5-6.5%.

Midcap losers: Page Industries, SKS Microfinance, Greaves Cotton, Godrej Proper and Bharat Forge were down 1.4-2.6%.

Smallcap gainers: Unisys Soft, Prime Securities, Ashapura Mine, Nirlon and Money Matters were up 4-6%.

Smallcap losers: Empee Sugars, R M Mohite Inds, Apar Ind, Halonix and Consolidated Co were down 4-10%.

Stocks to watch

Gammon Infrastructure Projects Ltd after it said it would consider issue of preference shares to Gammon India on May 19.

Software services firm CMC Ltd after it won an order from the Life Insurance Corporation of India.

Shalimar Paints after the Financial Express cited sources as saying the paints maker was up for sale and Kansai Nerolac and Sherwin-Williams were in the race to buy it. The company's chief operating officer, Sandeep Sarda, told the newspaper it does not comment on market speculation.

The US markets slid as technology stocks unraveled, and investors worried about the euro zone debt crisis and its impact on the economic recovery. Asian markets also trading in red.

Market cues:
Results Today: SBI, Bajaj Finserv, HT Media, Opto Circuits, Prestige Estates, Petron Eng
FIIs net sell USD 825 million in the cash market on May 13
MFs net buy Rs 14.80 cr in cash market on May 13
NSE F&O Open Int was up by Rs 4393 cr at Rs 1.42 lakh cr
MSCI India additions: Titan Ind, Shriram transport, Mundra port, Dabur, Bank of India, Asian paints

F&O cues:
Total Futures Open Int up Rs 1008 cr and Total Options Open Int up Rs 3385 cr
Total Stock Futures OI add 1.63 cr shares in OI
Nifty Futures OI add 12.11 lakh shares in OI
Nifty discount at 10.3 pts Vs premium at 14.15 pts
Nifty Open Int PCR at 0.96 Vs 1.05
Total Put sheds 4.61 lakh shares in OI
Total Call adds 58.55 lakh shares in OI
Highest OI Outstanding At 5400 Put, 5800 Call and 5600 Call
Nifty 5500 Call adds 29.10 lakh shares in OI
Nifty 5600 Call adds 16.61 lakh shares in OI
Nifty 5400 Call adds 7.35 lakh shares in OI
Nifty 5700 Call adds 3.5 lakh shares in OI
Nifty 5400 Put adds 3.12 lakh shares in OI
Nifty 5600 Put sheds 9.05 lakh shares in OI
Nifty 5200 Put sheds 2.3 lakh shares in OI
Nifty 6000 Call sheds 2.22 lakh shares in OI
Nifty 5800 Put sheds 1.06 lakh shares in OI
Nifty 5500 Put sheds 1.06 lakh shares in OI
India VIX up 4.02 % at 21.46
Deccan Chronicle, PFC and Orchid Chem in F&O ban

(With inputs from Reuters)

Sensex in green; FMCG, metals, oil&gas advance

2011-05-09T15:36:00.002+05:30

Buying activity near support levels helped the equities bounce-back in the positive terrain. FMCG, metals and oil&gas provided support while rate sensitive sectors like realty, auto and banks were marginally lower.

At 2:50 pm; Bombay Stock Exchange's Sensex was at 18584.22, up 65.41 points or 0.35 per cent. The 30-share index hit a high of 18643.58 and low of 18367.21 intraday.

National Stock Exchange's Nifty was at 5565.85, up 14.40 points or 0.26 per cent. The broader index touched a high of 5586.05 and low of 5502.40 in trade so far.

BSE Midcap Index was up 0.24 per cent and BSE Smallcap Index moved 0.14 per cent higher.

Amongst the sectoral indices, BSE FMCG Index was up 1.36 per cent, BSE Metal Index gained 1.04 per cent and BSE Oil&gas Index advanced 0.32 per cent. BSE Auto Index was down 0.73 per cent, BSE Bankex declined 0.06 per cent and BSE Realty Index edged 0.01 per cent lower.

Bharti Airtel (3.62%), Tata Power (2.39%), Hindustan Unilever (1.58%), Sterlite Industries (1.43%) and Jindal Steel (1.27%) were the major Sensex gainers.

Tata Motors (-1.74%), Jaiprakash Associates (-1.68%), Maruti (-1.52%), Hero Honda (-1.27%) and Reliance Infrastructure (-1.19%) were the top losers.

Market breadth was negative on the NSE with 1412 losers as compared to 1284 gainers.

Coal India Reaches Record as Price Increase May Lift Earnings

2011-05-09T15:33:00.000+05:30

Coal India Ltd. (COAL), the world’s biggest producer of the fuel, reached a record in Mumbai on optimism higher prices will boost fourth-quarter earnings due this week.

Shares of the Kolkata-based company climbed as much as 5.2 percent to 388.9 rupees, the highest price since the stock’s trading debut in November, and traded at 387.8 rupees as of 2:32 p.m. local time. The shares have gained 23 percent this year, compared with a 9.5 percent decline in the benchmark Bombay Stock Exchange Sensitive Index.

The company raised prices by 30 percent for certain grades on Feb. 27., which will increase revenue by 6.5 billion rupees in the year ended March 31, it said in a statement on Feb. 28. Chairman N.C. Jha last month said the company will decide on increasing prices for the second time this year as a revision in wages is due July 1. Earnings are due on May 12.

“There is expectation that profit will rise significantly in the fourth quarter because of the hike in prices,” Rakesh Arora, head of research at the Indian unit of Macquarie Group Ltd., said from Mumbai. “That is boosting share prices.”

Coal India and its units may report a net income of 36.5 billion rupees in the quarter ended March 31, according to the average estimate of nine analysts surveyed by Bloomberg News. Profit was 26.3 billion rupees in the three months ended Dec. 31. The company hasn’t announced earnings from a year earlier.

To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

RIL cuts headcount; mulls accountability-linked pay for staff

2011-05-09T15:25:00.005+05:30

Billionaire Mukesh Ambani-led Reliance Industries has cut its headcount for third year in a row and is mulling a salary model where pay is based on accountability and responsibility of its staff.

The company's staff strength fell by 704 workers during the fiscal year ended March 31, 2011, and stood at 22,661 employees.

RIL has disclosed its latest headcount in its 2010-11 annual report, where it also disclosed a new compensation model being mulled over at the company.

"FY-11, saw a significant change in the company's compensation and banding management process. On the variable pay front, efforts are afoot to move towards accountability and responsibility driven variable pay programmes designed uniquely for various levels," it added.

The company's headcount stood at 23,365 employees at the end of fiscal ended March 31, 2010, during which its employee strength had fallen by 1314. During the fiscal year 2008-09 also, the company's headcount had fallen by 808 people.

RIL is one of the biggest employers among the non-IT private sector companies in the country and the company's profitability has been on a sharp uptrend in recent years. During 2008-09, RIL's total headcount had declined for the first time in six years, despite the company hiring more than 1,500 engineers that year.

The steepest fall so far has been in 2003-04, when the headcount fell from 12,915 to 11,358 employees. During 2006-07 it rose by a massive 12,156 people while in 2007-08 the headcount rose by close to 791 employees.

Along with its subsidiaries such as Reliance Retail , the company had a total workforce in excess of 48,000 at the end of 2007-08, according to the company's annual filing for that year for its shareholders.

RIL has not disclosed specific numbers of employees of subsidiaries for the years 2008-09, 2009-10 and 2010-11.

RIL's average employee age stood at 41 years during 2010-11, unchanged from the level in previous fiscal. The average age of employees at the company had increased from 34 years to 39 years during 2008-09.

Shares of gold lender Muthoot Finance list at 12 per cent premium

2011-05-07T12:35:00.002+05:30

Shares of India's largest specialist gold lender Muthoot Finance Ltd listed At Rs 196.60 on the NSE , a premium of 12.34 percent to its issue price.

The company, which raised Rs 9 billion by selling 51.5 million shares through the initial public offering, set its issue price at the upper end of its Rs 160-175 price band.

At 10:35 a.m., the shares were trading at Rs 177.40, a marginal premium to the issue price.

In all eleven anchor investors including Citigroup Global Markets Mauritius, Abu Dhabi Investment Authority , Goldman Sachs India Fund and Baring India Private Equity Fund invested Rs 1.3 billion in the company.

ICICI Securities and Kotak Mahindra Capital Co were the book running lead managers to the issue while HDFC Bank was the co-manager.

The rising prices of gold makes the company's core business stronger, Managing Director George Alexander Muthoot said.

"Borrowing powers of gold owners rise with the prices and this would prove beneficial for us going forward."

Commenting about the interest rates for gold loans, Muthoot said "RBI (India's central bank) has given the direction...hence we will have to take a decision on raising interest rates soon".

The company has a network of about 3,000 branches of which about 60 percent are based in southern India.

Gold prices slips on Akshaya Tritiya

2011-05-07T12:30:00.001+05:30

Silver nose-dived by Rs. 6,000 to Rs. 53,200 per kg and gold plummeted by Rs. 225 to Rs.22,120 per 10 grams.

Gold prices has been declined despite heavy buying on Akshaya Tritiya.

Gold plummeted by Rs. 225 to Rs. 22,120 per 10 grams, while Silver nose-dived by Rs. 6,000 toRs. 53,200 per kg.

Akshaya Tritiya, also known as Akha Teej is a Hindu and Jain[citation needed] holy day, that falls on the third Tithi (Lunar day) of Bright Half (Shukla Paksha) of the pan-Indian month of Vaishakha.

The word "Akshaya" means the never diminishing in Sanskrit and the day is believed to bring good luck and success.

There are reports that gold buying festival ‘Akshaya Trithiya’ is expected to boost growth in gold sales in the country by at least 15%..

Air India strike called off

2011-05-07T12:20:00.001+05:30

Government agrees to reinstate sacked and suspended pilots

Air India pilots called off their 10-day strike on Friday night (6 May 2011), after the government agreed to reinstate the sacked and suspended pilots and look into their demands within a timeframe.

After the several hours negotiations with the officials of Civil Aviation ministry and the assurance from the Civil Aviation minister Praful Patel that status quo will prevail on cost cutting measures relating to productivity-linked incentive (PLI), the strike was called off by Indian Commercial Pilots Association (ICPA).

The 10-day strike by the Air India pilots demanding pay parity and better working conditions resulted in cancellation of about 90% of the domestic Air India flights and an estimated loss of Rs. 150 crore to the airlines. But it expected that Air India operations will be normalized in the next two days as the pilots have resumed their work from Friday (6 May 2011) night.

Bear hug costs Sensex 1392 pts in 8 days; Hero Honda up 6%

2011-05-07T12:07:00.004+05:30

The mood on Dalal Street has not improved yet after the key rates hike and hawkish tone set by the RBI governor Duvvuri Subbarao in a policy meeting on May 3. The Sensex shed nearly 259 points on Thursday, with continuing downtrend for eighth consecutive session.

Experts see earnings downgrade in the quarter ended June 2011 after the 50 basis points hike in repo and reverse repo rate. Interest cost of the companies will increase going ahead as banks have slowly been increasing their lending rates.

Deven Choksey of KR Choksey Shares & Securities feels that people basically want to sit on cash for a simple reason that there is a kind of possibility of earning downgrade happening going forward once this particular oil price hike is announced.

Inflation is a major cause of concern, says Finance Minister Pranab Mukherjee. "Food and oil prices are major inflation factors," he said. Food articles inflation for the week ended April 23 was at 8.53% as against 8.76% in previous week. Fuel group inflation was unchanged at 13.53% during same period. RBI governor has made the move to contain inflation without hurting country's growth.

Robert Prior-Wandesforde, Credit Suisse says that the Indian economy and markets are facing a particularly unpleasant combination of macroeconomic circumstances right now. "This includes high inflation, rising interest rates and the likelihood of downside growth surprises. This situation may continue for some months making us pessimistic about the equity market outlook," he said.
The 30-share BSE Sensex dropped 258.78 points or 1.40%, to close at 18,210.58 and the 50-share NSE Nifty closed below the 5500 mark for first time since March 23, down 77.30 points or 1.40% to 5,459.85, dragged down by 42 shares out of 50.

Choksey feels that the Nifty could possibly stay in range of 5400-5700 because the option traders are basically taking a strong long bet on the 5400 level.

Amit Dalal, Executive Director, Tata Investment Corporation said there would be some more pressure mainly because people have to still adjust their portfolios worldwide. "So there maybe some largecaps where there maybe selling based on global perspective," he said.

Realty, power, FMCG, healthcare, banking, metal, technology and capital goods stocks saw selling pressure today, with respective indices falling 1-3%.

Bharti Airtel plunged more than 3% after less than expected bottomline reported in fourth quarter on dip in margins. India's largest telecom operator reported net profit of Rs 1,401 crore on consolidated basis as against street expectations of Rs 1,740 crore.

Largecaps like TCS, NTPC, ITC, ICICI Bank, Sterlite, HDFC Bank, HUL and BHEL were down 1-3%. Tata Power, Reliance Power, PNB and Reliance Communications plunged 5-6%.

Ranbaxy Labs was the biggest loser on Nifty, with falling 6%. US Federal prosecutors are negotiating a settlement with Ranbaxy that could result in fines and payments exceeding USD 1 billion, as mentioned in the Fortune Magazine, for fraudulent conduct alleged by the FDA, reports CNBC-TV18 quoting sources.

ACC and Ambuja Cements tumbled about another 4% after Holcim increased stake above 50% in both companies.

However, Hero Honda showed outstanding performance today, with rising 6% on short covering. Analysts feel that company's fourth quarter EBITDA performance was better than street expectations.

The broader indices too were down around 1%. Midcap stocks like HDIL, Shriram City, Redington, Hathway Cable and Marico lost 5-8%.

However, Jyothy Labs, Apollo Hospital, United Phosphorous, Tulip Telecom and Religare Enterprises gained 3.5-7%. Rs 474.75 3.51%

About 899 shares advanced as against 1955 shares declined on Bombay Stock Exchange.

Hold Bharti Airtel; target of Rs 410: KRChoksey

2011-05-05T10:59:00.003+05:30

KRChoksey has maintained hold rating on Bharti Airtel with a target price of Rs 410 in its May 4, 2011 research report.

“Bharti Airtel, India’s the largest telecom service provider may raise up to USD 1 billion in the form of debentures and will have a tenure of 10 years. The proposal will be put up before the company's board on May 4, when it meets to discuss results for the financial year-ended March 11. The proposal is expected to be cleared during the meeting.Banks and individuals in the global market will subscribe the debentures. The final amount to be raised will depend on the interest rate the company gets and the response from promotional roadshows, the official added.The proceeds of the issue will go towards refinancing part of the debt raised by Bharti to acquire Kuwaiti Zain's operations in 15 African countries.”

“Bharti has debt of USD 13.5 billion as on end of Q3FY11. The average interest rate for the same is 5.5% per annum. We assume that the company will raise USD 1 billion via bonds with coupon rate of 3.5%. Considering this money will be used to retire debt taken for Zain acquisition, it would have a very small impact on net profit margin. Although net profit margins will improve, we believe it will have a neutral impact on valuation as net debt remains unchanged.”

“In the current environment which is growing increasingly competitive, Bharti’s leading market share and diversified business model will give it a strategic advantage over peers. While the results of Q1FY10 clearly indicate a plateau in terms of profitability from the mobile business, the company’s dominant volume growth, visibility of earnings and diversified business model justify its premium compared to peers. 3G roll out; increasing revenues from African market will boost revenues going forward. We have HOLD recommendation on the stock with target price of Rs 410, by assigning 9.5 EV/Ebitda to FY12E earnings,” says KRChoksey research report.

FIIs holding more than 30% in Indian cos

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To read the full report click on the attachment

Attachments : BhartiAirtel_KRC_050411.pdf

Nifty ends in red; auto, tech, metals down

2011-05-04T17:21:00.002+05:30

Indian markets ended in the red after briefly moving into positive terrain. Gains in oil&gas, FMCG and capital goods were offset by losses in auto, technology and metals space.

National Stock Exchange’s Nifty ended at 5537.30, down 27.95 points or 0.50 per cent. The broader index touched a high of 5578.80 and low of 5503 intraday.

Bombay Stock Exchange’s Sensex closed at 18469.36, down 65.33 points or 0.35 per cent. The 30-share recovered from intraday low of 18339.53 and high of 18604.36.

BSE Midcap Index was down 0.45 per cent and BSE Smallcap Index moved 0.54 per cent lower.

Amongst the sectoral indices, BSE Auto Index was down 1.33 per cent, BSE IT Index moved 1.08 per cent lower and BSE Metal Index slipped 1.05 per cent. BSE Oil&gas Index was up 1.2 per cent and BSE FMCG gained 0.36 per cent.

ACC (-6.20%), Ambuja Cement (-5.61%), Bajaj Auto (-4.91%), Dr Reddy’s Laboratories (-4.64%) and Grasim (-4.57%) and were the top losers.

ONGC (5.73%), BPCL (4.18%), Punjab National Bank (3.47%), HDFC Bank (1.76%) and Ranbaxy Laboratories (1.62%) were the major Sensex gainers.

Market breadth was negative on the NSE with 1687 declines against 1110 advances.

GoAir plans $150 million IPO: Sources

2011-05-04T17:17:00.001+05:30

Indian budget airline GoAir is planning to raise about $150 million through a public offer (IPO) to fund its operational expenses, two sources with direct knowledge of the matter told Reuters.

The airline has hired Bank of America Merrill Lynch and Edelweiss Capital to manage the offering, said the sources, who declined to be named as the information was not yet public.

The airline will file for the share sale shortly, they said. GoAir’s chief executive officer Kaushik Khona declined to comment.

GoAir is run by Go Airlines (India) Pvt Ltd, promoted by the Wadia group which also runs textiles firm Bombay Dyeing and Manufacturing Company Ltd.

Markets continue to trade lower, bankex slips

2011-05-02T11:47:00.002+05:30

Markets continue to trade in the red after opening lower due to weakness in banking and PSU shares. The Nifty declined 27 points, at 5,722 and the Sensex was down 74 points, at 19,065.

Selling pressure was witnessed in Bank Nifty; the index was down 1.8%, at 11,276 due to short build up of positions ahead of the monetary policy tomorrow. Economists expect 25-50 bps rate hike as food prices continue to remain at elevated levels.

Markets may decline further due to selling pressure in State Bank of India (down 3%), ICICI Bank (down 0.8%) and HDFC Bank (down 1.2%) which is dragging the Nifty down.
Navneet Daga, Derivative Analyst, KR Choksey Securities said, "options data is indicating a further decline on the index to sub 5629 levels and 5600 may act as support because it has maximum open interest build up." Daga added, "If Nifty fails to hold above 5750 on closing basis for next two to three sessions, we may see selling pressure getting intense in the market towards 5620 levels and a close below 5750 would lead to further long liquidation of positions."

Selling pressure was also witnessed in BSE PSU index as well, it was down 1.8%. Top losers were mainly PSU Banks-UCO Bank, down 6.7%, Bank of India declined 5.6% and United Bank dipped 4.6%.

BSE Consumer Durables shares continued to the lead the gains; the index was up 1.2%. Videocon Industries zoomed 2.2%, Titan Industries added 1.8% and Gitanjali Gems gained 1.8%. Investors are betting on the consumer driven sectors for the next led of rally. TS Harihar, Co-Head-Institutional Derivatives, ICICI Securities, “the next 10 years belong to consumer driven industries that will benefit from the spending power. Long-only fund managers are betting on consumer driven companies which will experience a multiplier effect on their bottom-line because of increasing demand and shifts in demand patterns."

From the broader markets, midcap and smallcap indices were down 0.5% each. Market breadth was negative, 1442 stocks declined for 982 stocks which advanced.

Maruti Suzuki skids on muted sales growth in April

2011-05-02T11:44:00.002+05:30

Maruti Suzuki India fell 1.78% to Rs. 1,296.25 at 11:20 IST on BSE after company's total sales registered a muted 4.4% rise to 97,155 units in April 2011 over April 2010.

The company announced the monthly vehicle sales figures during market hours today, 2 May 2011.

On BSE, 73,567 shares were traded in the counter as against average daily volume of 65,232 shares over the past one quarter.

The stock hit a high of Rs. 1333.90 and a low of Rs. 1287 so far during the day.

India's largest car maker by sales has an equity capital of Rs. 144.46 crore. Face value per share is Rs. 5.

Maruti's domestic vehicle sales rose 8.9% to 87,144 units in April 2011 over April 2010. Exports fell 23.1% to 10,011 units in April 2011 over April 2010. As per segment wise sales, total domestic passenger cars sales rose 7.6% to 73,905 units in April 2011 over April 2010. Within the passenger segment, sales of A1 segment (comprising of Maruti 800 model) rose 12% to 2528 units in April 2011 over April 2010.

Sales of A2 Segment (Alto, Wagon-R, Estilo, Swift, A-star, Ritz) rose 1.8% to 57,443 units in April 2011 over April 2010. Sales of A3 Segment (SX4, D-Zire) rose 39.1% to 13,899 units in April 2011 over April 2010. Sales of A4 segment which comprised of Kizashi model, which was launched in February 2011 stood at 35 units.

In the B segment, Multi Utility vehicles which consisting of models Gypsy and Grand Vitara, declined 69.5% to 217 units in April 2011 over April 2010. Sales of C segment, comprised of vans Omni and Eeco rose 22.2% to 13,022 units in April 2011 over April 2010.

The company's net profit fell 8.4% to Rs. 2288.60 crore on 24.60% increase in total income, net of excise, to Rs. 37522.40 crore in the year ended March 2011 over the year ended March 2010. Adverse currency movement (particularly on exports), higher commodity prices and new model launches impacted the company's profits in the year ended March 2011, Maruti said

Maruti Suzuki India's board recommended a final dividend of Rs. 7.50 per share for the year ended March 2011. The dividend will be paid on 14 September 2011 subject to the approval of the shareholders in the ensuing annual general meeting.

Reliance Industries Ltd. (RIL) may buy out Bharti from Axa JV; stock up

2011-04-29T12:59:00.004+05:30

Mukesh Ambani-controlled Reliance group is in talks to buy out Bharti in the life insurance firm Bharti Axa Life. Reliance, which has spelt out its aspirations to build a financial services empire, is understood to be in advanced stage of negotiations with the Mittals-led Bharti which has been looking for an exit for the past one year.

At 9:45 am, shares of Reliance Industries were trading 0.53% up at Rs 979 on the Bombay Stock Exchange .

According to a Reliance insider, "the group is indeed keen to enter insurance and has been approached by two to three companies, but is yet to finalise a partner." A Reliance spokesperson declined to comment on the matter while a Bharti spokesperson said, "As a policy, we do not comment on rumours or speculation".

Bharti Axa Life is one of the struggling players in the insurance industry with a market share of 1.1%. The firm, a joint venture in which Bharti owns 74% equity and the Paris-headquartered Axa group holds 26%, started operations in 2006. The company's new business premium income has dropped 17% to Rs 364 crore in 2010-11.

For Reliance, financial services and particularly insurance, are capital intensive avenues to deploy its large investible surplus generated by the petrochemicals business. A month ago, Reliance Industries, the country's largest private sector company, announced a financial services joint venture with New York-based DE Shaw .

"Life insurance with its huge opportunities is an obvious area that it will look into. Unlike general insurance where the key element is risk, the life business is a combination of savings and risk," said a senior investment banker.

At the peak of the stock market boom, the life insurance industry emerged as a formidable domestic investor. Fuelled by investor interest in Ulips, a market-linked product, insurance companies were competing with foreign portfolio investors in the local securities market. In 2007, of the total premium income earned by insurance companies, 80% was Ulip investment; of this close to 70% went into stocks.

While Ulip inflow has fallen as expenses have been capped and agents are less eager to promote the product, for investors Ulip has transformed into a more transparent product. "For a group taking up insurance business, traditional products like endownment are equally alluring with their higher margins," said a senior official of an insurance company.

Reliance's entry into financial services services is a development that is closely tracked by corporates and markets. It's perceived that the group will build businesses like non-banking financial services, insurance and asset management where entry barriers are low compared to banking.

Coal India strikes record high

2011-04-29T12:54:00.002+05:30

The key benchmark indices recovered after hitting fresh intraday lows. The BSE 30-share Sensex was down 36.59 points or 0.19% to 19,255.43, up 42.80 points from the day's low and off 101.07 points from the day's high. The market breadth turned negative from positive. Weak Asian stocks and data showing sustained selling by foreign institutional investors this week weighed on the sentiment.

Index heavyweight Reliance Industries (RIL) snapped a four-day 6.35% fall on bargain hunting. Oil exploration major Oil and Natural Gas Corporation extended Thursday's gains triggered by reports of rise in oil and oil equivalent gas production in the year ended March 2011. Coal India struck record high on reports of getting imported coal at discounted prices. Auto shares were mixed. Cement shares rose as top cement firms -- UltraTech Cement and ACC early this week forecast strong growth in cement demand at the time of announcing January-March 2011 quarter results. Most bank stocks declined as the central bank is seen raising key short-term interest rates by a minimum 25 basis points at a policy review early next week.

As per provisional data released by the stock exchanges, foreign institutional investors (FIIs) sold shares worth Rs. 832.59 crore on Thursday, 28 April 2011. Foreign funds sold shares worth a net Rs. 796.80 crore in secondary equity markets in three trading sessions from Monday, 25 April 2011 to Wednesday, 27 April 2011, as per data from the Securities and Exchange Board of India (Sebi).

At 11:25 IST, the BSE 30-share Sensex was down 36.59 points or 0.19% to 19,255.43. The index gained 64.48 points at the day's high of 19,356.50 in early trade. The Sensex fell 79.39 points at the day's low of 19,212.63 in morning trade, its lowest level since 20 April 2011.

The S&P CNX Nifty was down 6 points or 0.10% to 5,779.45. The Nifty hit low of 5,764.50, its lowest level since 20 April 2011.

The market breadth, indicating the health of the market, turned negative from positive breadth earlier in the day. On BSE, 1060 shares advanced while 1320 shares declined. A total of 99 shares remained unchanged.

The total turnover on BSE amounted to Rs. 1129 crore by 11:25 IST compared with Rs. 741 crore by 10:25 IST.

Among the 30-member Sensex pack, 16 gained while the rest declined.

Index heavyweight Reliance Industries (RIL) rose 0.68% to Rs. 980.50, halting a four-day 6.35% fall, on bargain hunting. Reportedly Mukesh Ambani-controlled Reliance group is in talks to buy the stake held by Bharti Enterprises in an Indian insurer joint venture with AXA Group. Bharti AXA is a joint venture between Bharti Enterprises, which controls India's largest listed cellular services provider Bharti Airtel, and AXA, Europe's second biggest insurer. Shares of Bharti Airtel declined 0.61%.

RIL said recently that it is drawing up a plan to raise gas production from its D6 deepwater block in the Krishna Godavari basin in the Bay of Bengal, off India's east coast. RIL said the reservoirs in the block are more complicated than previously expected and continuous and significant efforts are underway for understanding these reservoirs. RIL said it is trying to identify well locations for incremental production and sustenance.

Gas output from the block touched a peak of 60 million metric standard cubic meters a day (mmscmd) last year. Production has now fallen to 50 mmscmd as against a target of 69.8 mmscmd, S.K. Srivastava, head of India's upstream regulator, said last week. He also said that Reliance hasn't given any satisfactory response on the matter.

Integrated development plan for all other discoveries in KG-D6 is being conceptualized to augment production in the most capital efficient manner, RIL said on 25 April 2011. The company said it is studying various options such as recompletion of wells and compression to increase gas production.

India's largest oil exploration firm by market capitalization Oil and Natural Gas Corporation (ONGC) rose 0.52%. The stock extended Thursday's close to 2% gains triggered by reports the company's oil and oil equivalent gas production rose 1.8% to 62.03 million tonnes in the year ended March 2011 over the year ended March 2010.

Coal India rose 1.28% to Rs. 381.10 after striking a record high of Rs. 383.30 on reports the company has received 27 proposals from 16 companies for getting imported coal at discounted prices.

India's largest private sector bank by net profit ICICI Bank rose 0.28% on strong Q4 results. During market hours on Thursday, the bank reported a 44% jump in net profit to Rs. 1452 crore on 23% growth in net interest income to Rs. 2510 crore and an 18% growth in fee income to Rs. 1791 crore in Q4 March 2011 over Q4 March 2010. Consolidated net profit rose 16.85% to Rs. 1567.93 crore in Q4 March 2011 over Q4 March 2010.

The bank said its savings deposits increased by 26% to Rs. 66,869 crore as at 31 March 2011 from Rs. 53,218 crore as at 31 March 2010. The CASA (current & savings accounts) deposits ratio increased to 45.1% as at 31 March 2011 from 41.7% as at 31 March 2010. ICICI Bank's net non-performing asset ratio decreased to 0.94% as at 31 March 2011 from 1.87% as at 31 March 2010 and 1.16% as at 31 December 2010.

Most bank stocks declined as the central bank is seen raising key short-term interest rates by a minimum 25 basis points at a policy review early next week. India's second largest private sector bank by net profit HDFC Bank slipped 1.66% while India's largest bank by net profit and branch network State Bank of India declined 0.73%.

Auto shares were mixed. India's largest bike maker by sales Hero Honda Motors lost 2.10% to Rs. 1660.50 ahead of declaration of its year ended March 2011 result on 4 May 2011. It was the top loser from the Sensex pack.

India's largest tractor and utility vehicles maker by sales Mahindra & Mahindra (M&M) slipped 1.47%. The company on Wednesday announced the launch of its next generation passenger carrier Maxximo Mini Van priced at Rs. 3.2 lakh. Maxximo Mini Van will compete with Tata Magic and Maruti Omni in the mini van segments.

India's largest truck maker by sales Tata Motors fell 0.63%. Recent reports indicated the company has cut production in April 2011 of its sports-utility vehicles and cars--besides the Nano--by 15%-20% over March 2011. The production cut is normal balancing in production, reports said.

India's largest car maker by sales Maruti Suzuki India rose 1.12%. Chief Executive Shinzo Nakanishi said at the time of announcing Q4 results early this week that Maruti will make efforts to protect and increase margins going forward. Net profit fell 8.4% to Rs. 2288.60 crore on 24.60% increase in total income, net of excise, to Rs. 37522.40 crore in the year ended March 2011 (FY 2011) over the year ended March 2010. The company announced the FY 2011 results during trading hours on Monday, 25 April 2011. The company said adverse currency movement (particularly on exports), higher commodity prices and new model launches impacted the company's profits in the year ended March 2011.

India's second largest bike maker by sales Bajaj Auto rose 0.52%. The company announces its Q4 March 2011 result on 18 May 2011.

India's largest household products maker Hindustan Unilever gained 2.26% to Rs. 285 and was the top gainer from the Sensex pack. Reportedly the company has formed customer care teams to help boost efficiency and sales after studying product demand and customer behaviour at supermarkets.

India's second largest listed cellular services provider by sales Reliance Communications rose 0.96% on bargain hunting after sliding over 5% on Thursday on investor worries about the ongoing telecoms licencing graft case.

Reliance Infrastructure rose 0.16%. The company said after market hours on Thursday it bought back additional 2 lakh shares on Thursday, 28 April 2011, under its buyback programme of up to Rs. 1000 crore. The company has so far bought back 10 lakh shares under the buyback programme.

GVK Power Infrastructure advanced 2.07% to Rs. 24.65 after a large bulk deal of 1.5 crore shares was executed on the counter at Rs. 24.15 per share at 09:47 IST on BSE.

Crompton Greaves tumbled 9.92% on high volume of 14.49 lakh shares after consolidated net profit declined 18% to Rs. 251.43 crore on 16% rise in net sales to Rs. 2908.03 crore in Q4 March 2011 over Q4 March 2010. The result was announced after market hours on Thursday, 28 April 2011.

Cement shares rose as top cement firms -- UltraTech Cement and ACC early this week forecast strong growth in cement demand at the time of announcing January-March 2011 quarter results. ACC (up 0.26%), India Cements (up 0.23%), Madras Cement (up 1%), UltraTech Cements (up 2.15%), Shree Cement (up 0.23%), (up 8.28%), Prism Cement (up 2.66%), gained. Ambuja Cements surged 2.39% on massive volume of 5.34 crore shares on NSE.

The corporate results announced so far have been good. The combined net profit of a total of 380 companies rose 23.2% to Rs. 30693 crore on 26.3% rise in sales to Rs. 261302 crore in Q4 March 2011 over Q4 March 2010.

Nine of 14 economists polled by Capital Market expect 25 basis points (bps) hike in key short-term interest rates while five expect a 50 bps hike in short-term rates on 3 May 2011 when the Reserve Bank of India (RBI) undertakes its annual 2011-2012 monetary policy review. A cumulative hike of 75-100 bps in short-term rates is expected during the financial year ending March 2012 (FY 2012). 100 bps is one percentage point or 1 %. Economists expect inflation based on the wholesale price index (WPI) to slide to a median 7.8% in FY 2012 from 9.4% in the year ended March 2011 (FY 2011). The poll shows that economists expect inflation to remain high in the first half of the year and slide in the second half of the year.

A sharp surge in global crude oil prices over the past few months has raised macroeconomic worries. India imports majority of its crude oil requirements and high oil prices have raised concerns about widening current account deficit. High oil prices have also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position. US crude futures were down 38 cents or 0.34% at $112.48 a barrel.

The India Meteorological Department (IMD) has predicted the southwest monsoon 2011 to be 98% (normal) of the long period average (LPA) with a model error of plus/minus 5%. IMD has indicated that there is very low probability for the season rainfall to be deficient (below 90% of LPA) or excess (above 110% of LPA).

Good rains, if they arrive on time and if they are well spread, would help ease food inflation and boost rural income. Rainfall that comes within 96% to 104% of the long-term average is considered a normal monsoon season, but this alone doesn't guarantee a good crop. The timing and spread of the rains are equally important. The quantity and geographical spread of rainfall during the monsoon season is crucial for India's agriculture sector, which lacks irrigation facilities on more than half its farm land. Monsoon rains usually enter India's mainland through the southern state of Kerala in the first week of June, gradually progressing to cover most of central and northern India by July, before retreating in September.

Asian stocks declined on Friday after a report showing slowdown in US economy sparked concern whether earnings improvement can be sustained. The key benchmark indices in Singapore, South Korea, China, Taiwan, Indonesia and Hong Kong slipped by between 0.02% to 1.07%. Japanese markets are closed for a public holiday.

US stocks extended their multi-year highs on Thursday as the market clung to optimism generated by the Federal Reserve's plans to keep interest rates low. The Dow Jones Industrial Average rose 72.35 points, or 0.6%, to 12763.31, its highest close since 20 May 2008. The Nasdaq Composite index added 2.65, or 0.1% to 2872.53, its highest close since 12 December 2000 and the Standard & Poor's 500-stock index rose 4.82, or 0.4%, to 1360.48, finishing at its highest level since 9 June 2008.

In economic news, US gross domestic product grew at an annual rate of 1.8% in the first quarter compared with a 3.1% gain in the fourth quarter last year. Initial jobless claims for the week ended 23 April 2011 rose by 25,00 to 429,000, the highest level since January 2011 and pending home sales index of contract signings rose 5.1% to 94.1 in March 2011, from 89.5 in February 2011.

Trading in US index futures indicates a flat opening on Friday, 29 April 2011.

Gold hits new high of Rs 22,470

2011-04-29T12:45:00.001+05:30

Gold set a new record at Rs 22,470 per 10 grams today on brisk buying by stockists and jewellers for the upcoming ‘Akshaya Tritiya’ and marriage season, driven by a record rally in global markets. Silver also surged Rs 3,400 to Rs 72,000 per kg.

The white metal had hit a record level of Rs 74,300 on April 25.

Traders said Akshaya Tritiya festival (May 6), which is considered auspicious for buying gold, bolstered the trading sentiment for the yellow metal.

The market also received support as the gold advanced to a record high in the international markets, after the US Fed pledged to keep interest rates near zero to bolster the recovery, weakening the dollar and boosting the demand for precious metals as a store of value.

Gold in the Asian region gained 0.4 per cent to reach a never-seen-before level of $1,533 an ounce. Silver also strengthened by 0.6 per cent to $48.13 an ounce, approaching the record level of $49.79 set on April 25.

The Fed has signalled that it will maintain monetary stimulus and kept its target rate for overnight lending between banks at zero to 0.25 per cent, while ending $600 billion of bond purchases on schedule in June.

At the domestic front, gold of 99.9 and 99.5 per cent purity surged Rs 275 each to Rs 22,470 and Rs 22,350 per 10 grams, respectively. Sovereigns followed suit and rose by Rs 100 to a new peak of Rs 18,300 per piece of eight grams.

Silver ready staged a strong comeback and spurted by Rs 3,400 to Rs 72,000 per kg and weekly-based delivery jumped up by Rs 3,195 to Rs 70,695 per kg.

Silver coins, too, zoomed up by Rs 3,000 to Rs 77,500 for buying and Rs 78,500 for selling of 100 pieces.

Mahindra takes aim at minivan market

2011-04-28T11:28:00.000+05:30

Mahindra and Mahindra Ltd, the country’s largest utility vehicle maker, has launched a minivan, a derivative of its Maxximo minitruck, to compete with Tata Motors Ltd’s Magic and Maruti Suzuki India Ltd’s Omni.

With this, Mahindra hopes to capture a slice of the market for minivans in small towns and cities. Tata’s Magic is the segment leader and sells 5,000-6,000 units a month. The market for minivans is about 140,000 units a year, Mahindra said.

Minivans are emerging as the top choice for both entry-level contract and stage carriages, said Rajesh Jejurikar, chief executive of Mahindra’s automotive division.

Priced at Rs.3.2 lakh (in Navi Mumbai, excluding taxes and insurance), Mahindra’s minivan is Rs.1,500 dearer than the Magic.

In the absence of a formidable competitor except the Magic, the new offering augurs well for Mahindra, said Surjit Arora, an analyst at Prabhudas Lilladher India Pvt. Ltd. But like Tata’s Ace, a mini-truck with a payload capacity of less than 1 tonne, the Magic will continue to enjoy the first-mover advantage, he said.

Tata Motors created a new segment when it launched the Ace in 2005. Similar offerings from rivals such as Piaggio Vehicles India Pvt. Ltd, Force Motors Ltd and Mahindra have entered the market but they have not been able to dent Tata Motors’ share much. The Ace continues to sell 15,000-16,000 units a month.

Mahindra spent Rs.130 crore on its minivan project. The vans will roll out from its factory in Chakan near Pune. The line that makes the Maxximo truck has a capacity to manufacture 6,000 vehicles a month.

Mahindra has sold nearly 40,000 of its mini-truck since the launch in January 2010.

Mahindra’s minivan will reach 230 dealer outlets nationwide by June, said Jejurikar. Subsequently, the company plans to offer a CNG (compressed natural gas, a less-polluting fuel) variant.

It also plans to export the vehicle to neighbours Bangladesh and Sri Lanka, he said.

Sales of light commercial vehicles—such as Magic, Ace, Maxximo and Gio (another sub-1 tonne offering from Mahindra)—have been expanding at a healthy pace with auto makers tapping into the segment that addresses last-mile connectivity.

Sales of these light vehicles, which accounts for more than half of all commercial vehicle sales in the goods and passenger carrier segment, increased 22.88% to 353,000 units in the year that ended 31 March, according to the Society of Indian Automobile Manufacturers.

According to research by credit rating agency Icra Ltd, the light commercial vehicle segment in India is seeing a polarization towards the sub one tonne market; the demand is also shifting from the traditional three-wheeler segment to this segment. Icra estimates growth in the light commercial vehicle segment to be marginally higher than that of the medium and heavy duty segments, which are projected to expand at 9.5-11.5% over the next five years.

Sensex opens higher in early trade

2011-04-28T11:21:00.005+05:30

Snapping a three-day losing streak, the Bombay Stock Exchange benchmark Sensex recovered by over 93 points in opening trade on Thursday on the back of a fresh spell of buying by funds as well as retail investors amid a firming trend on other Asian bourses.

However, participants kept their commitments restricted, on Thursday being the last session of monthly expiry in the derivatives segment on the NSE.

The 30-share barometer, which has lost nearly 153 points in the previous three sessions, rose by 93.36 points, or 0.48 per cent, to 19,542.05.

The wide-based National Stock Exchange index Nifty also moved up by 22.50 points, or 0.38 per cent, to 5,856.40.

Brokers said the emergence of buying by funds and investors, taking positive cues from other Asian markets in line with overnight gains in the US market following the Federal Reserve’s decision to hold short-term interest rates near zero, boosted the sentiment here.

Meanwhile, in the Asian region, Hong Kong’s Hang Seng index was up by 0.54 per cent and Japan’s Nikkei by 1.13 per cent in morning trade today. The US Dow Jones Industrial Average ended 0.76 per cent higher in the previous session.

Nifty likely to trade in 5750-5950 range

2011-04-28T10:23:00.001+05:30

The Nifty traded in a volatile manner amidst the rollover pressures and finally closed at 5834, down 34 points, on Wednesday. Among the Nifty stocks, only ONGC and M&M closed with gains while most others closed in the red. Ambuja Cement, Wipro and JP Associate were among the weakest counters, recording over 3-4 % fall in the day.

In the midcap space, Bosch, Bata India and Glaxo closed on a strong note while Lanco Infra, Exide Ind and Sterlite Tech closed weaker. Sectorwise, we have correction in frontline IT stocks due to poor results and also in private bank stocks. We have seen Nifty trading in a tight range of 5800 to 5950 over the past week and the index is likely to continue trading in this range. The expiry is likely to be around 5875-5900 level.

What is encouraging in this market is the rate at which the rollovers are taking place. Last month, Nifty moved higher by over 12%. The April series was more of consolidating the gains in March in the 5700-5950 range. Both series saw strong rollovers with the Nifty being near to the monthly highs. This, along with the premium in rollovers, indicates positive bias for the markets in the May series. Going forward, Nifty is likely to trade in the range of 5750 to 5950 before taking any new course. Straddles or strangles can be written to take advantage of the range trading.

5950 is a very strong resistance level for Nifty where in the near past long unwinding was observed. One can strongly go long once that level is breached, taking into consideration the level of premium in Nifty future. Any closing above 5950 can trigger short squeeze resulting in a rally of 100-150 points rally thereon.

Nifty strategy: Short strangle in May (Sell 6100 Call at . 42 and Sell 5600 Put at . 48). The total premium inflow would be . 90. The breakeven for the strategy would be 6190 on the upside and 5510 on the downside. One can go long on Nifty futures above the resistance level of 5950.

(The author is Vice-President - Derivatives Research, Padmakshi Financial Services)

PSU OMCs gain on a likely hike in petrol prices next month

2011-04-26T10:59:00.001+05:30

Shares of three public sector oil marketing companies rose 1.28% to 2.04% on reports state-run oil marketing firms may hike petrol prices after 10 May 2011 when the state polls end.

BPCL (up 2.04%), HPCL (up 1.36%) and Indian Oil Corporation (IOC) (up 1.28%), rose.

The BSE Sensex was down 144.12 points or 0.74% at 19,440.19.

According to reports, state-run oil marketing companies (PSU OMCs) could hike petrol prices by up to Rs. 3 per litre and the hike could be announced on 15 May 2011 during the fortnightly review of prices.

PSU OMCs have the freedom to revise petrol price in tandem with international crude. But the government, which holds majority stake in the companies, had reportedly told them to hold the price line since January in view of the state polls.

Ranbir Singh Butola, chairman of IOC, was quoted by media as saying that IOC was losing Rs. 18.11 per litre on diesel, Rs. 28.33 a litre on kerosene and Rs. 315.86 per cooking gas cylinder. Butola said IOC was losing money on petrol but declined to put a number to it since the fuel was deregulated and the company was not supposed to get compensation from the government for keeping pump prices artificially low.

A hike in petrol prices will boost the finances of state-run firms since crude oil prices have soared to above $110 per barrel in the international market. US crude futures were down $1.12 or 1% at $111.16 a barrel today, 26 April 2011.

Sensex falls on Asian cues; Banks, IT, auto down

2011-04-26T10:49:00.005+05:30

The Indian markets have opened lower tracking global cues. The Sensex was trading 148 points lower at 19,435 and the Nifty declined 46 points to 5,828 at 9.50 am.

Realty stocks rebounded after Monday's declined. The BSE realty index rose 0.38 per cent. All other sectoral indices were trading in the red. Banking, auto and IT stocks fell close to 0.50 per cent.

Only four stocks rose on the Sensex. Reliance Com was the biggest gainer, rising 0.86 per cent. Jindal Steel, ONGC and Bharti also saw buying interest.

Among the losers, Sterlite saw the biggest cut, falling 2 per cent. The stock had seen a good run-up to the results, rising for the past few sessions. The company reported strong numbers on Monday, announcing a 35 per cent rise in net profit. Maruti declined 1.4 per cent. The stock rose on Monday after the company beat Street expectations in this quarter.

HUL, HDFC, Jaiprakash Associates, M&M, HDFC Bank and ITC declined 1-2 per cent.

The market breadth was weak with only 28 per cent stocks managing to mover higher on the BSE 500 index.

Ambareesh Baliga of Way2Wealth said, "The markets were looking to move up on account of earnings but that has not happened after Infosys and RIL punctured the rally. Earnings show that there is margin pressure coming in despite clear topline gains. 5,900-5,950 is a clear cap for markets though there is not too much downside."

Markets across Asia were trading in the red after the Wall Street saw a dip on Monday. The Nikkei in Japan was trading 1.32 per cent lower. Hong Kong's Hang Seng and South Korean Kospi were also trading in red.

Overnight, the Dow fell 26 points or 0.2 per cent on mixed earnings.

Paramount Printpackaging’s IPO gets subscribed 0.22 times on second day

2011-04-23T10:27:00.001+05:30

Paramount Printpackaging’s proposed initial public offer (IPO) has been subscribed 0.22 times on its second day. The company has fixed the price band at Rs. 32-35 per share for its IPO. The company has proposed an IPO of 1.3 crore equity shares ofRs. 10 each through 100 per cent book building process, to part finance its expansion plans. The issue has opened on April 20, 2011 and will close on April 25, 2011.

As per the NSE-BSE demand graph available on NSE website at 17.00 pm, it has received 2920500 bids against the issue size of 13094175 shares, 1183500 bids have been received at the cut off price.

The book running lead manager to the issue is Onelife Capital Advisors.

The proceeds of the issue will be used by the company for setting up new facilities for manufacturing of high end duplex board cartons, shippers and printed corrugated box in Gujarat as well as augment the company’s long term working capital requirements.

Paramount Printpackaging caters to over 100 clients in various sectors like FMCG, Pharma, Electricals, Auto ancillary and Food. The company at present has the capacity to convert about 500 tons of paper board every month, which in terms of finished products works out to an average of 20 lakh cartons a day. The company offers a packing solutions consisting of a wide range of cartons, which is complemented by print finishes such as stamping, embossing, complex varnishing and security features.

Goldman Sachs, Citigroup, Temasek rush for Muthoot Finance IPO

2011-04-22T11:24:00.001+05:30

Goldman Sachs, Citigroup and Temasek are among scores of global investors scrambling for a share of the pie in companies that are in the rapidly-growing business of lending against gold. Heightened investor interest in this segment is reflected in the fact that the 900-crore initial public offering from Muthoot Finance, the country's largest gold loan company, drew bids for at least 25 times the shares on offer.

Returns from an earlier public offering by rival Manappuram have raised investors' hopes of profiting from this issue too. That raises the possibility of pricing it at the top end of the 160-175 band.

"It is a unique business model and given Indians' obsession with gold, it is an attractive business model," said a director of a US-based fund that bid for it, but did not want to be identified for regulatory reasons. "Given these reasons, the issue is priced attractively and it is difficult to match the scale and expertise of the private players in this segment for banks as it is not their core business."

Manappuram has more than doubled while Shriram Transport Finance has gained 72% since January 2010, compared with a 21% rise for the benchmark Sensex. South Korea's Mirae, US' GMO, Jupiter, Tudor, DKR Oasis, Geosphere and Congruix and private funds such as Barings and Wellcome Trust were among the global bidders, said brokers familiar with the bids.

Attractively priced, feel investors

Domestic funds SBI, HDFC, Reliance, Birla and IDFC also bid for the Muthoot IPO. Lending against gold is seen as the best bet in secured lending, with the precious metal at a record high of $1,500 an ounce. With inflation fears, gold and silver prices are forecast to rise.

Commodities bull Jim Rogers expects gold to rise to $2,000 an ounce in the coming years. Lending about 30% of the value of such an asset ensures safety at 13% interest. If the loan value rises, then interest rate jumps without additional risk which equity investors prefer.

"Investors want to buy unique stories," says Falguni Nayar, head of investment banking at Kotak Mahindra, one of the share sale arrangers. Furthermore, investors believe the stock was priced at a reasonable valuation compared with listed peers, unlike most other issues that are overpriced.

"Muthoot will be trading at an FY12 priceto-book range of 2.2-2.4 times," says Santosh Singh, analyst at Espirito Santo Securities .

IDBI Bank –Buy- Sharekhan

2011-04-22T11:06:00.002+05:30

IDBI Banks Q4FY2011 results came in above our estimates in terms of the profit after tax (PAT), which grew by 62% year-on-year (y-o-y) to Rs. 516.3 crore. The growth in the profit was driven by a sharp reduction in the provisions and a 51% sequential growth in the non-interest income. However, the growth in the net interest income (NII) was lower than estimated at 46% y-o-y; the NII declined by about 8% sequentially. This was mainly due to the contraction in the margin (down 18 basis points sequentially to 2.1%). The gross non-performing assets (NPAs) declined to 1.76% from 2.22% in Q3FY2011 led by aggressive write-offs (Rs449 crore in Q4FY2011).

During Q4FY2011, IDBI Banks advances grew by 16.8% quarter on quarter (q-o-q) while its deposits grew by 20.1% q-o-q. However, on a year-on-year (y-o-y) basis, the advances and deposits grew by 13.7% and 7.6% respectively as the bank had grown at a slower rate till Q3FY2011.

The NII declined by 8% sequentially to Rs1,109 crore, mainly due to deterioration in the margin. The margin declined by 18 basis points Q-o-q to 2.1% led by an increase in the cost of funds (7.45% compared to 7.1% in Q3FY2011). For FY2011, the banks margin improved to 2.1% from 1.57% in FY2010.

IDBI Banks current account-savings account (CASA) ratio improved to 21% mainly contributed by the end-of-the-period (EOP) deposits. The core CASA ratio has shown an improvement of about 100 basis points on a sequential basis to about 16%.

The banks non-interest income increased by 51% y-o-y, mainly due to a strong growth in the fee income, which increased by 51% q-o-q. Further, the growth in the non-interest income was aided by earnings of Rs. 73 crore from recovery (the written-off accounts) and Rs. 48 crore from treasury profits.

The gross NPAs declined significantly to 1.76% from 2.22% in Q3FY2011 led by aggressive write-offs (Rs 449 crore) during the quarter. However, the slippages remained high (Rs 650 crore compared to Rs690 crore in Q3FY2011) which is a cause for concern. The provision coverage including the written-off accounts declined to 74.7% from 75.6% in Q3FY2011.

We expect a slower business growth ahead due to an increased focus on the qualitative parameters (margins, CASA, asset quality etc). The bank targets to increase its margin to about 2.5%, its CASA ratio to 22% and its return on asset to 1% by FY2013. Though its asset quality deteriorated in FY2011, we expect the same to improve in FY2012. Going forward, the growth in its profits will be driven by an improvement in the margin and a reduction in the NPA provisions. We maintain our target of Rs182 (1x FY2012 book value [BV] for the bank and Rs30 per share for investments) and BUY recommendation on the stock.

Sensex gains 131 points, led by RIL ahead of its results

2011-04-21T17:08:00.002+05:30

The BSE Sensex gained for the third straight day today, adding 131 points to close at 19,602, led byReliance Industries ahead of its fourth quarter results and a firm global trend.

Brokers said investor sentiment remained positive on the back of steady FII inflows and expectations of encouraging Q4 earnings from RIL, to be announced this evening.

However, lower-than-expected earnings by software major TCS and higher food inflation for the week ended April 9, capped the gains.

The 30-share Bombay Stock Exchange index, Sensex, which climbed 380 points in the previous two sessions, added another 131.25 points, or 0.67 per cent to close the day at 19,602.23.

The wide-based National Stock Exchange index Nifty also surged 33.05 points, or 0.56 per cent to close at 5,884.70. It touched the session's high of 5,912.90 and a low of 5,864.35.

The RIL stocks rose by 1.39 per cent to Rs 1,039.95. However, having failed to meet market expectations,Tata Consultancy Services fell 2.23 per cent to Rs 1,191.65. It had gained two per cent in the early trade.

A firm trend in the Asian markets and higher openings in Europe, followed by overnight gains in the US supported Indian markets.

While metals, oil and gas, realty, bank and auto sectors, pushed up the market, a weak trend in capital goods, power and IT sectors reduced the gains.

Sensex ends 110 points up; Maruti, ONGC, Hindalco gain

2011-04-21T17:01:00.002+05:30

Indian markets ended on a positive note but off highs as investors took some profits off the table ahead of truncated week-end. Metals, oil&gas and realty stocks led the upmove while capital goods, power and IT led the losers pack.

Bombay Stock Exchange's Sensex ended at 19581.67, up 110.69 points or 0.81 per cent. The 30-share index hit a high of 19695.98 and low of 19530.50 intraday.

National Stock Exchange's Nifty was at 5887.70, up 36.05 points or 0.62 per cent. The broader index touched a high of 5912.90 and low of 5866.90 in today's trade.

BSE Midcap Index was up 0.10 per cent and BSE Smallcap Index edged 0.03 per cent lower.

Amongst the sectoral indices, BSE Metal Index was up 1.57 per cent, BSE Oil&gas Index gained 1.14 per cent and BSE Realty Index moved 0.60 per cent higher. BSE Capital Goods Index slipped 1.06 per cent and BSE Power Index declined 0.91 per cent.

Maruti (3.80%), ONGC (2.78%), Hindalco (2.66%),HDFC (2.46%) and Sterlite Industries (2.30%) were the major Sensex gainers.

BHEL (-4.73%), TCS (-2.61%), Bharti Airtel (-1.38%),Tata Motors (-0.99%) and Cipla (-0.42%) were amongst the top losers.

Shares of TCS were down on profit booking after it reported better-than-expected quarterly figures. Its standalone net profit grew to Rs 7569.99 crores for the year ended March 2011 against Rs 5618.51 crores a year ago. Net sales grew to Rs 29275.41 crores from Rs 23044.45 crores.

Reliance Industries will be announcing results later in the day. Analysts are expecting the oil&gas major to report robust numbers due to higher gross refining margins. The stock ended at 1.37 per cent higher on the BSE.

Market breadth was positive on the BSE with 1364 gainers against 1510 losers.

Sensex extends weekly rally at start...Nifty eyes 5900

2011-04-21T10:14:00.003+05:30

BSE Sensex was trading at 19,602, up 133 points over the previous close. While, NSE Nifty was trading at 5,885, up 33 points over the previous close.

The Indian equity benchmarks have started the last trading of the week on solid note, joining a worldwide rally in stocks following strong results from some top US corporates. Barring Infosys, results from the Indian companies too have been largely in line with estimates with an odd one like HCL Technologies beating market expectations.

At 09:22 am (IST), the BSE Sensex was trading at 19,602, up 133 points over the previous close. While, NSE Nifty was trading at 5,885, up 33 points over the previous close.

The broader indices are also trading firm and the market breadth is positive. Most sectoral indices on the BSE are in the positive territory.

Meanwhile, shares of scam-tainted Unitech, DB Realty and the ADAG companies have recovered ahead of the High Court ruling on the bail applications of five executives allegedly involved in the 2G scam.

Hero Honda, ONGC, Jindal Steel, Hindalco, L&T, TCS, HDFC Bank, Sterlite, Tata Steel, Grasim, ACC, Sesa Goa, HDFC, HCL tech, ICICI Bank, Maruti Suzuki, DLF, Ranbaxy and DLF are among the notable leaders in the Sensex and the Nifty.

BPCL, Siemens, Tata Motors, Kotak Mahindra Bank, GAIL, Bajaj Auto, M&M, SAIL and JP Associate were among the notable losers in the Sensex and the Nifty.

In global action, markets across Asia have advanced, tracking a solid rally on Wall Street and the European markets. Crude oil has risen for a third straight day amid increasing signs that the global economy is doing well. The dollar has lost some ground against the main counterparts while gold is trading above the US$1,500 an ounce.

India Infoline

Gold breaches 22,000 mark, silver shines at 66,300

2011-04-21T10:11:00.001+05:30

Gold crossed the psychological Rs 22,000 mark on Wednesday on aggressive buying by stockists, amid a rising global trend. It rose by Rs 115 to Rs 22,060 per 10 grams. Silver also climbed to a new high and rose by Rs 1,850 to Rs 66,300 per kg on demand from industrial units.

Silver coins followed suit and shot up by Rs 1,500 to a record high of Rs 72,000 for buying and Rs 72,500 for selling of 100 pieces. Trading sentiments remained bullish as gold extended its recordmaking rally to top $1,500 an ounce in global markets as dollar fell on mounting debt in the Europe and the US, prompting investors to seek bullion as a store of value.
In international markets, gold climbed 0.3% to $1,500.43 an ounce and silver jumped 0.9% to a 31-year peak of $44.35 an ounce on Wednesday.

Besides, retail customers and jewellers buying for the coming marriage season further fuelled the uptrend. On the domestic front, gold of 99.9 and 99.5% purity shot up by Rs 115 each to a new high of Rs 22,060 and Rs 21,940 per 10 grams, respectively. Sovereigns also moved up by Rs 100 to fresh peak level of Rs 18,000 per piece of eight grams.

Silver continued its record setting spree and spurted by Rs 1,850 to new peak level of Rs 66,300 per kg and weekly-based delivery by Rs 1,530 to Rs 65,055 per kg.

Gold breaches 22,000 mark, silver shines at 66,300

Muthoot Finance IPO subscribed 10 times on QIB support

2011-04-20T18:51:00.002+05:30

Country's largest gold financing company Muthoot Finance's initial public offering, which closes on April 21, has received good response from investors - especially qualified institutional investors.

The issue has been subscribed 10 times so far, as per data available on NSE. Reserved portion of qualified institutional bidders, which closes today, has subscribed more than 23 times - QIBs put in bids for more than 41 crore equity shares as against reserved portion of 1.8 crore shares.

Non-institutional and retail investors' portion remains undersubscribed.

The non-banking finance company engaged in gold loan business plans to raise Rs 901 crore via an initial public offer of 5.15 crore equity shares at the higher end of price band of Rs 160-175 a share.

Issue proceeds will be mainly used for augmenting capital base to meet future capital requirements to provide for funding of loans to customers.

ICICI Securities and Kotak Mahindra Capital Co are the book running lead managers to the issue while HDFC Bank is the co-manager.

Muthoot Finance IPO subscribed 10 times on QIB support

Sensex ends 300 points lower; DLF, JP Asso, TCS down

2011-04-18T15:53:00.001+05:30

Indian markets ended sharply lower for second consecutive session as weak global peers and concerns of possible rate hike by the Reserve Bank of India spooked sentiments.

Bombay Stock Exchange's Sensex closed at 19095.02, down 291.80 points or 1.51 per cent. The 30-share index hit a high of 19649.22 and low of 19071.47 intraday.

National Stock Exchange's Nifty ended at 5731.60, down 92.95 points or 1.60 per cent. The broader index touched a high of 5897.90 and low of 5722.25 in today's trade.

BSE Midcap Index fell 1.30 per cent and BSE Smallcap Index moved 0.73 per cent lower.

All the sectoral indices ended lower. BSE Realty Index fell 3.48 per cent, BSE IT Index was down 2.73 per cent and BSE Capital Goods Index was declined 2.15 per cent.

DLF (-5.16%), Jaiprakash Associates (-3.33%), TCS (-3.07%), Infosys Technologies (-2.89%) and L&T (-2.88%) were the major Sensex losers.

Hero Honda (2.33%), HUL (2.10%), Bajaj Auto (0.87%),ONGC (0.80%) and Maruti Suzuki (0.44%) were the top gainers.

Market breadth was negative on the BSE with 1713 declines against 1177 advances.

economictimes.indiatimes.com

Indian stocks slip as tech worries weigh

2011-04-18T15:50:00.002+05:30

Indian stocks lost early gains to trade lower on Monday, with the information technology sector remaining under pressure after results and guidance from Infosys Technologies Ltd. disappointed investors last week.

The Sensex XX:SENSEX -1.51% fell 168.47 points, or 0.9%, to 19,218.35, led by declines of more than 2% for shares of Infosys IN:500209 -2.89% ; Cipla Ltd. IN:500087 -1.46% ; Tata Consultancy Services IN:532540 -3.07% ; and DLF Ltd. IN:532868 -5.16%

Shares of Hero Honda Motors Ltd.IN:500182 +2.33% bucked the trend, rising 3% after the auto maker last week announced an interim dividend to 70 rupees per share.

The S&P/CNX Nifty XX:NIFTY -1.64% fell 0.9% to 5,769.70.

The drop in Infosys shares follows a 9.6% slide on Friday after the firm said profit for its quarter ended March 31 rose by a smaller-than-expected 13.6% from the year-earlier period as costs outpaced growth in revenue.

Net profit rose to 18.18 billion rupees ($408 million) from 16.00 billion rupees in the year earlier period. Analysts polled by Dow Jones Newswires expected the company’s profit to rise to 18.81 billion rupees.

For the current financial year that started April 1, Infosys said it expects an 8% to 10% growth in earnings per share in U.S. dollar terms, to a range between $2.83 and $2.88. Current financial year revenue is expected to climb 18% to 20% to $7.13 billion to $7.25 billion.

Deutsche Bank, however, said that the quarterly miss was a “one-time phenomenon” and that the software-maker’s management was “unduly conservative” in its guidance.

Among the offsets expected by Deutsche Bank is that Infosys should continue to benefit from increased hiring at lower wages, which should bring down its overall wage inflation and cost base.

Investors worried about the information technology’s prospect will next turn to results from Tata Consultancy Services IN:532540 -3.07% due on Thursday.

The banking sector, also a key component for the market’s overall earnings growth, fell 1% , with investors awaiting quarterly results earnings from HDFC Bank Ltd.IN:500180 -1.77% later Monday.

Marketwatch

Weekly Markets: Sensex drops on Infy nos, inflation data

2011-04-16T10:55:00.001+05:30

Markets paused the last three week's rally as traders took to booking profits. Infosys' dissapointing earnings estimate did nothing to help the sentiments which were down with crude oil prices and inflation at high levels.

The holiday shortened week saw the Sensex drop 65 points to 19,386. The index opened the week at 19,383 and touched a high of 19,737 on Wednesday - Tuesday being a holiday on account of Ram Navami. Thursday market stayed shut for Ambedkar Jayanti. On the last trading day of the week index plunged after IT Major Infosys came out with its quarterly numbers.

Industrial production rose 3.6% in February 2011. However, market was expecting IIP growth to be at 4.8%. Manufacturing output rose an annual 3.5% in February 2011. January's industrial output annual growth rate was revised upwards to 3.9% from 3.7%.

The wholesale price index rose 8.9% in March 2011, higher than 8.3% rise in February 2011 and also ahead of market expectations.

Crude oil continued to hover around higher levels. High oil [prices have raised concerns of a widening current account deficit and higher oil subsidy bill.

Infosys reported marginal rise of 2% in its consolidated net profit at Rs 1,818 crore for the fourth quarter ended March 2011 on sequential basis. The company had reported a net profit of Rs 1,780 crore in the December quarter. For the quarter ending June 30, 2011 the company expects revenue to be in the range of Rs 7,311 crore and Rs 7,382 crore; growth of 18.0% to 19.1% y-o-y.

"The results were tad below expectations. At Rs 3306, if Infosys had delivered 25-30% topline and 15-20% bottomline growth, we could have seen more upside on the stock. The scrip is down 7% due to profit booking," said Gaurang Shah, AVP, Geojit BNP Paribas Financial Services.

Infosys was the biggest loser among Sensex stocks, plunging 7.3% to Rs 2,989. Other IT stocks dropped. Wipro tumbled 3.5% to Rs 450. TCS ended flat at Rs 1,190. Other losers included Core Projects, Oracle Financial Services and Tech Mahindra.

IT index, as a whole, slipped 4.5% to 6,259. BSE realty and metal indices dripped 1-2% each.

Meanwhile, FMCG index surged 2% to 3,713. Bankex gained 0.6% in the week to end at 13,383.

Among banking stocks, ICICI Bank and HDFC Bank ended on a flat note at Rs 1,101 and Rs 2,360, respectively. However, Federal Bank rallied 5% to Rs 445. Yes Bank and IndusInd Bank jumped 3% each. Canara Bank, Kotak Mahindra Bank and Bank of Baroda were up 2-3% each.

www.business-standard.com

Mohandas Pai resigns from Infosys Technologies

2011-04-16T10:45:00.004+05:30

In what comes as a major setback to Infosys Technologies, board member TV Mohandas Pai has resigned, the company said in its press release while announcing the fourth quarter earnings. Pai has requested the board to relieve him after the company's AGM on June 11.

"We all know that he is taking this painful decision, since he has much bigger projects in the horizon—nation building," NR Narayana Murthy chairman and chief mentor of the company said in the release.

"Mohan has been an early adopter and a keen anchor builder of Infosys. It is difficult to imagine Infosys without Mohan’s passion, commitment, joie-de-vivre and intellect," Murthy said.

Mohan joined Infosys in 1994 and has served as a member of the board since May 2000. He was the chief financial officer from 1994 to 2006. In 2006, he voluntarily demitted the office of CFO to lead efforts in the areas of human resources and education and research.

After Nanadan Nikelani's resignation, this is the second biggest exit of a senior member from the company. Add to this K Dinesh, one of the founder members and a member of the board, who has chosen to retire. He was head of quality, information systems and the communication design group.

India's second largest IT services exporter Infosys reported a 2.15% growth in its fourth quarter net profit at Rs 1,818 crore versus Rs 1,779.8 crore in Q4FY10. Its standalone revenues came in at Rs 6,668 crore. A CNBC-TV18 poll saw net profit at Rs 1856 crore and revenue at Rs 7447 crore.

The board of directors will meet on April 30, 2011 to finalise on the new chairman post Murthy's retirement in August 2011.

www.moneycontrol.com

Sensex, Nifty decline 0.3% this week

2011-04-15T19:06:00.002+05:30

Indian equity benchmarks ended with moderate loss this week. The 50-share NSE Nifty was down 17.45 points or 0.3%, to close at 5,824.55 and the 30-share BSE Sensex slipped 64.63 points or 0.3%, to end at 19,386.82.

However, the broader indices were marginally in the green - the CNX Midcap Index was up 0.3% and BSE Small Cap Index up 0.5%.

The BSE Auto Index was up 0.6%, Bankex up 0.7% and Capital Goods Index up 1.8%. However, Metals Index was down 0.6% and Realty Index down 2.1%.

Information Technology Index cracked 4.5% on disappointing EPS guidance from Infosys for FY12.

Infosys has guided for an earnings per share of Rs 126.05-128.21 for 2011-12, while many analysts had projected an EPS of close to Rs 145-150.

Analysts say they are likely to lower their 2011-12 (April-March) earnings expectations for Infosys Technologies since the guidance is way below what they were expecting.

Infosys plunged 7.3%. DLF tanked 5.8% and Siemens India tumbled 5%. JSPL, Wipro and Cairn India were down 2-4%.

However, Hero Honda surged 10.6% as the company declared a dividend of Rs 70 a share. Jaiprakash Associates shot up 5.1%.

ITC, Bharti Airtel, L&T and Kotak Mahindra Bank gained 3-4%.

In midcap space, Finolex Industries went up 10.4%,. Jubilant Life Sciences, Sterlite Tech and IndusInd Bank gained 3.5-5%.

However, Aftek, Voltas, Gammon India and Rolta were down 3-4%.

www.moneycontrol.com

Indian inflation rises to nearly 9%

2011-04-15T19:02:00.002+05:30

India's inflation unexpectedly accelerated in March to nearly nine percent, data showed on Friday, piling pressure on the central bank to be more aggressive as it battles to tame price rises.

Annual headline inflation, measured by the wholesale price index, India's main price measure, leapt to 8.98 percent in March from 8.31 percent the previous month, stoked by higher food, fuel and manufacturing costs.

The figure was far above market expectations of 8.30 percent and the highest of any major Asia-Pacific economy.

The commerce ministry also sharply revised upwards January's inflation reading to 9.35 percent from 8.23 percent earlier.

"With inflation numbers of this magnitude, especially core inflation, the Reserve Bank of India (RBI) may feel compelled to be a bit more aggressive next time around," said HSBC chief India economist Leif Lybecker Eskesen.

India released the data on the same day China revealed that inflation in the world's second-biggest economy had soared to a 32-month high.

The Asian Development Bank warned last week that controlling inflation was the region's "top priority" as strong growth, turmoil in the Middle East and Japan's nuclear crisis drive up food and oil prices.

The RBI has raised its key policy rates eight times since March 2010, making it the most hawkish central bank in Asia.

"Inflation is the most important short-term problem," said Montek Singh Ahluwalia, deputy head of India's Planning Commission, who urged the RBI to use "all the flexibility" at its disposal.

Price rises are a major political headache for the embattled Congress party-led government, which is also reeling from a string of corruption scandals.

Poorer households, the backbone of the party's support, have been especially hard hit by inflation which is a traditional lightning rod for political discontent in the country of 1.2 billion.

Fuel and power prices climbed 12.92 percent while food rose 9.47 percent, the commerce ministry data showed.

Economists expect the central bank to hike rates again at its next meeting on May 3, even with recent data showing industrial output slowing sharply as a result of monetary tightening.

"Today?s inflation number cements the case for a hike at next month?s meeting," said Credit Suisse economist Robert Prior-Wandesforde.

Bank policymakers have sought to minimise the risks to economic growth by raising rates in quarter point steps, but economists now say it may move more boldly with a possible half a percentage point rise in May.

Ahluwalia warned high interest rates could derail the government's nine percent growth target for this year by slowing investment and consumption.

"We may not hit nine percent," he told reporters.

Economists now say inflation, initially fuelled by spiralling food prices, has spilled over into the general economy, pushing up wages and other costs.

Asian economies including South Korea, China, Indonesia and Taiwan are all battling inflation pressures with global prices of crude oil riding at $122 and other commodities costs rising.

China reported Friday 2011 first-quarter growth slowed slightly to 9.7 percent while inflation hit 5.4 percent year-on-year in March -- its highest since July 2008.

http://www.google.com/hostednews/afp/copyright?hl=en

'Absolute lie', Sharad Pawar says about Radia's claim

2011-04-14T12:43:00.002+05:30

Calling her statement an "absolutely lie", agriculture minister Sharad Pawar on Thursday rubbished corporate lobbyist Niira Radia's claim that he pursued the issue of spectrum with former communications minister A Raja. "This is absolutely lie and foolish statement and I have no financial or any interest in this company. The person Vinod Goenka … his father knows me from many years. He has set up a milk processing unit in my hometown 20 years back and that unit is going well," Pawar told a TV channel.

Radia in her statement to the Central Bureau of Investigation (CBI) on Wednesday claimed that Pawar may be controlling controversial company DB Reality and may have pursued the issue of spectrum and licence for Swan Telecom with Raja.

She said Shahid Balwa and Vinod Goenka were key people in DB Reality and in that context she quoted the name of Pawar.

Radia, however, said she had no documentary proof or any other evidence to back her statement.

Pawar said he has good family relations with the Goenka family.

"I have good family relations with his father and that is why I know the second generation also very well and they are doing good service for my farmers," he said.

Hindustantimes

PM says economy eager to absorb FDI

2011-04-14T12:41:00.002+05:30

India is eager to absorb foreign direct investment, Prime Minister Manmohan Singh said on Thursday in the Chinese town of Sanya in a statement at the BRICS summit, which included China, Brazil, Russia and South Africa.

Singh also said the economy was well positioned to achieve annual long-term growth of 9 percent or more.

The Prime Minister said the health of India's financial and capital markets was sound.

The economy is expected to grow 8.6 percent in the fiscal year that ended in March.

(Reporting by Abhijit Neogy; Editing by Ken Wills)

http://in.reuters.com

Reliance Industries hires McKinsey for corporate restructuring

2011-04-14T12:25:00.004+05:30

India's largest corporarte, Reliance Industries has hired business consultancy firm McKinsey to advice it on a business transformation plan which would catapult the company's enteprise value by another $ 80 billion in the next 10 years. RIL will also take help from its independent director and former dean of Kellogg's management school Dipak Jain to chart out the new business reorganisation plan.

ET NOW has learnt from three independent sources that the new corporate structure would lead to changes in the top management team. Though the current core team of Chairman Mukesh Ambani comprising of Manoj Modi, PMS Prasad and Kamal Nanavati will remain untouched, a few new faces will be hired to head new economy businesses like telecom, retail and financial services. RIL has already sounded off head hunting firms to poach talent from rival companies.

On the Bombay Stock Exchange, RIL's stock was trading at Rs 1021.70, up by over 1 percent since previous close. RIL is working in a plan to make a foray into new growth areas. The plan includes merger and acquitions apart from setting up new businesses. In the last one year, Reliance has made some big ticket acquistions in the United States to buy stake in shale gas assets.

In India , Reliance bought 14.8 per cent stake in Oberoi Hotels and spent Rs 4500 crore in taking over Infotel Broadband to launch 4G telecom services in the country. The company recently sold 30 per cent stake in its Krishna Godavari based gas assets for $ 7.2 billion to BP. The new corporate restructuring is expected to enable RIL transform itself into one of tge world's biggest conglomerates.

Last year, Mukesh Ambani's RIL and younger brother's Anil Dhirubhai Ambani Group (ADAG) dropped the earlier non-compete agreement and signed a new non-compete agreement. After this, RIL has been looking for opportunities in power sector across generation, transmission and distribution.

The company is currently looking for strategic partners, such as service providers, infrastructure providers, device manufacturers and other participants to expand its infocomm business. Last month, RIL also announced to establish a joint venture with US-based investment and technology development firm DE Shaw group to build financial services business in India. ADAG is already present in telecom, power and financial services.

RIL's main businesses under older Ambani brother have been exploration and production of oil and gas, petroleum refining and marketing, petrochemicals, textiles, retail and special economic zones. RIL has now become the world's largest producer of polyester yarn and fibre, is among the world's top ten producers of various petrochemicals and is the largest producer of gas in India.

economictimes.indiatimes

Sensex hits one-week high; ITC scales record high

2011-04-13T17:15:00.003+05:30

The key benchmark indices surged, snapping four days' losses as world stocks rose and as a slide in crude oil prices from 2-1/2-year peak helped ease macroeconomic concerns. The barometer index BSE Sensex struck one-week high. The Sensex was provisionally up 466.34 points or 2.42%, up close to 635 points from the day's low. The market breadth, indicating the health of the market, was strong.

Bank shares rose across the board on expectation of good Q4 results. Capital goods and auto stocks rose on renewed buying. IT stocks rose ahead of IT bellwether Infosys' Q4 result on Friday, 15 April 2011. Cigarette maker ITC scaled a record high.

The market recovered after hitting 2-week low at the onset of the trading session, tracking recovery in Asian stocks. The market moved into the positive zone to hit fresh intraday high in morning trade. The market extended initial gains to hit fresh intraday high in mid-morning trade. The market trimmed gains in early afternoon trade. The market struck a fresh intraday high in afternoon trade. The Sensex extended gains in mid-afternoon trade. The barometer index surged to hit one-week high in late trade.

As per provisional figures, the BSE 30-share Sensex was up 466.34 points or 2.42% to 19,728.88. The Sensex rose 468.83 points at the day's high of 19,731.37 in late trade, its highest level since 6 April 2011. The Sensex shed 168.91 points at the day's low of 19,101.63 in early trade, its lowest level since 29 March 2011.

The S&P CNX Nifty was up 136.80 points or 2.36% to 5,922.50 as per provisional figures. The Nifty hit high of 5923.60 in late trade, its highest level since 8 April 2011. The Nifty hit low of 5,735.55 in early trade, its lowest level since 29 March 2011.

The market breadth, indicating the health of the market, was strong. On BSE, 1,941 shares advanced while 977 shares declined. A total of 93 shares remained unchanged. The breadth was negative at the onset of the trading session.

Among the 30-member Sensex pack, 28 advanced while only two of them declined.

BSE clocked turnover of Rs. 3373 crore, higher than Rs. 2588.21 crore on Monday, 11 April 2011.
Index heavyweight Reliance Industries (RIL) rose 1.36% to Rs. 1020.80, off the day's low of Rs. 998 as refining margins are seen rising on the back of high crude oil prices. RIL recently bagged two blocks in the ninth round of oil and gas block auctions held by the government.

ONGC gained 1.78% after chairman A. K. Hazarika was quoted by the media as saying that the company will sign an agreement during the week-end to purchase a 25% stake in the Satpayev exploration block in Kazakhstan. The government has approved a total investment plan of $400 million. This includes a signature bonus of $13 million and $80 million as a fee for taking the stake in the block. The rest will be spent on exploration activities.

IT stocks rose ahead of IT bellwether Infosys' Q4 result on Friday, 15 April 2011. India's second largest software services exporter Infosys Technologies rose 2.29%, with the stock gaining for the second straight day. The market has been abuzz with talks Infosys will give encouraging guidance for the year ending March 2012 (FY 2012) given underlying strong demand for offshore outsourcing. Infosys will give annual guidance for FY 2012 at the time of announcing Q4 March 2011 results on Friday.

India's largest software services exporter TCS advanced 2.23%. The company will announce Q4 result on 21 April 2011. India's third largest software services exporter Wipro gained 3.19%. The company will announce Q4 result on 27 April 2011.

Cigarette maker ITC rose 2.81% to Rs. 190.15 on expectations of good Q4 results. The stock hit record high of Rs. 190.50 today.

India's largest dam builder by sales Jaiprakash Associates surged 7.58% after executive chairman Manoj Gaur was quoted as saying the company aims to maintain a growth rate of 40% and aims to scale down debt significantly in the year ending March 2012 (FY 2012). It was the top gainer from the Sensex pack.

Bank shares rose across the board on expectation of good Q4 results. India's second largest private sector bank by net profit HDFC Bank rose 3.65%. The bank will announce Q4 result on 18 April 2011. India's largest private sector bank by net profit ICICI Bank gained 2.68%. The bank will announce Q4 result on 28 April 2011.

India's largest state run bank by net profit and branch network State Bank of India (SBI) edged up 1.46%. Pratip Chaudhuri has taken over as the new chairman of State Bank of India the state-run bank said on 7 April 2011. Chaudhuri, 57, has been working with State Bank for 37 years and takes over from O.P. Bhatt. Before taking up the top role, Chaudhuri was deputy managing director in the international banking division of thebank.

Capital goods stocks rose on renewed buying. Punj Lloyd, ABB, Larsen & Toubro, BEML and Bhel rose by between 0.85% to 5.38%.

Auto stocks rose on strong domestic demand. India's top small car maker by sales Maruti Suzuki rose 3.41%, with the stock snapping last four days' losses. The company announced last week that it would recall 13,157 diesel engine cars. The company said it would inspect the 'connecting rod bolt' for units of its Swift and Ritz model diesel cars with engines manufactured between 13 November 2010 and 4 December 2010.

Maruti Suzuki increased the prices of its products by 0.2% to 2.4% from 4 April 2011, depending on the models to offset rising costs of key inputs viz. steel, aluminum, copper and natural rubber.
India's largest truck maker by sales Tata Motors gained 2.61%, with the stock snapping last three days' slide. The company had hiked prices of some car models by Rs. 7,000 to Rs. 36,000 from 1 April 2011.

India's top tractor and utility vehicles maker by sales Mahindra & Mahindra rose 2.73% with the stock snapping last two days' fall. The company has reportedly raised prices on most of its models by 1.5% to 2% recently to offset higher commodity prices.

India's largest bike maker by sales Hero Honda Motors gained 6.34% with the stock snapping last two days' losses after company today declared an interim dividend of Rs. 70 per equity share for the year ended March 2011. Hero Honda's total sales rose 24.4% to 5.15 lakh units in March 2011 over March 2010. The monthly sales in March 2011 were record monthly sales.

India's second largest bike maker by sales Bajaj Auto rose 1.6% with the stock snapping last three days' losses. The company's total vehicle sales increased 12% to 3.07 lakh units in March 2011 over March 2010. The company announced its March 2011 sales figures on 4 April 2011.
The market was closed on Tuesday, 12 April 2011, on account of Ram Navmi. The near term major trigger for the market is Q4 March 2011 results which will start trickling in starting this week when IT bellwether Infosys unveils earnings on Friday, 15 April 2011. Investors will scrutinize post-result management commentary to gauge outlook on earnings at a time when rising salaries, raw materials prices and interest rates are pressurizing profit margins of India Inc.

European stocks rose Wednesday, boosted by strength in the auto sector and tracking gains in Asia, as investors looked to the next round of US earnings reports. The key benchmark indices in UK, Germany and France were up by between 0.78% to 0.84%.

Japanese stocks led recovery in Asian markets on Wednesday on reports Japan's Renesas Electronics Corp. would restart a key factory that was hit by last month's quake in June 2011, a month earlier than expected. The key benchmark indices in Japan, China, South Korea, Indonesia, Singapore, Hong Kong and Indonesia rose by between 0.55% to 1.56%.

Meanwhile, Japan's government on Wednesday downgraded its assessment of the economy for the first time in six months, saying it is showing weakness after a devastating earthquake and tsunami last month battered the northeast coast.

US stocks dropped on Tuesday on worries falling oil prices could set off a reversal in the high-flying energy sector, while Alcoa's leaner-than-expected revenue disappointed. US trade deficit shrank in February as a slowdown in demand both at home and abroad hit imports and exports. The trade gap totaled $45.8 billion, down 2.6% from January despite another monthly rise in oil prices to their highest since October 2008, the Commerce Department said on Tuesday.
Trading in US index futures indicated that the Dow could gain 45 points at the opening bell on Wednesday, 13 April 2011.

Back home, high global commodity prices will add to pressure on profit margins of Indian firms caused by rising salaries and higher interest rates. Investors can take some solace in a recent slide in crude oil prices from 2-1-/2-year highs.

A surge in crude oil prices over the past few months has sparked inflation and interest rate worries. The Reserve Bank of India (RBI) is seen raising key short term policy rates by 25 basis points at its annual 2011-2012 monetary policy review on 3 May 2011.

India imports majority of its crude oil requirements and high oil prices have raised concerns about widening account deficit. High oil prices have also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position. US crude futures were up 29 cents or 0.27% at 106.54 a barrel.

Industrial production rose 3.6% in February 2011, lower than market expectations of a 4.8% growth, data released by the government on Monday showed. Manufacturing output, which constitutes about 80% of the industrial production, rose an annual 3.5% in February 2011. January's industrial output annual growth rate was revised upwards to 3.9% from 3.7%.
The data of Wholesale Price Index for the month of March 2011 is due on Friday, 15 April 2011. A Capital Market poll pegs a median rate of rise in inflation at 8.4% in March 2011, higher than an annual rise of 8.3% in February 2011.

The International Monetary Fund has marginally cut its 2011 economic growth forecast for India to 8.2% from 8.4% as persistent inflation pressure forced aggressive monetary tightening.
Good monsoon this year could help ease food inflation and boost rural income. Recent reports indicate that India will receive good rains during the July-September monsoon season this year.

The India Meteorological Department (IMD) will give its first official forecast for the June to September monsoon on 19 April 2011.

India Infoline

Hero Honda declares 3,500 pc interim dividend

2011-04-13T16:20:00.003+05:30

The country's largest two-wheeler maker Hero Honda today declared a 3,500 per cent interim dividend of Rs 70 per equity share of Rs 2 each.

In its board meeting held today, the company considered and declared "an interim dividend at the rate of 3,500 per cent that is Rs 70 per equity share of Rs 2 each", Hero Honda said in a filing to the Bombay Stock Exchange (BSE).

The company, however, did not mention how much will be the capital outgo due to this exercises and other details regarding the period for the dividend.

Repeated calls to Chief Financial Officer Ravi Sud and to a company spokesperson remained unanswered.

Reacting sharply, the shares of Hero Honda were trading 6.28 per cent up at Rs 1,742 a piece on the BSE during late-afternoon.

In March last year, the company declared a Silver Jubilee Special Dividend of 4,000 per cent or Rs 80 per equity share of Rs 2 each.

In 2009, Hero Honda had said it was sitting on a huge cash reserve of over Rs 4,000 crore and the company was looking at many options to use the fund, including special dividend to its shareholders or expanding capacity.

During April-December, 2010, the company's net profit fell by 12.66 per cent to Rs 1,426.29 crore from Rs 1,633.02 crore in the same period previous year.

The total net operating income during the 9-month period increased by 19.36 per cent to Rs 14,010.22 crore from Rs 11,738.19 crore in the year-ago period.

Meanwhile, Hero Honda appointed Toshiyuki Inuma as a Non-Executive Additional Director with effect from April 13.

Besides, the company also approved resignations of its Non-Executive Director Yuji Shiga and Non-Executive and Independent Director Shobhana Bhartia from its board with effect from April 13.

In December last year, the Indian promoter of the two-wheeler maker, the B M Munjal family, had agreed to buyout the entire 26 per cent stake of the Japanese promoter Honda Motor Co in Hero Honda for Rs 3,841.83 crore. The process of Honda exiting the joint venture completed this month.

The Economic Times

With Mukesh Ambani on board, Bank of America wants RBI nod for loans to Reliance Industries

2011-04-13T09:55:00.003+05:30

Bank of America is trying to figure out the regulatory barriers in doing business with India's largest private company Reliance Industries (RIL) whose chairman Mukesh Ambani has joined the board of the parent, Bank of America Corporation .

According to Indian regulations, a bank in India is not permitted to lend to any of its directors and companies where directors have board presence.

BankAm India officials have discussed the matter once with the Reserve Bank of India and are likely to seek further clarifications soon. A bank spokesperson declined to comment on the matter.

A few legal and compliance heads of other banks that ET spoke to felt that going strictly by the law, BankAm India should have no problems in taking fund as well as non-fund exposure to RIL or any of Reliance's group companies. "In India, BankAm functions through branch offices, and Mr Ambani has been appointed as a director on the board of the bank's global holding company. So, technically, there is no problem, but RBI has to spell this out," said the legal head of a large local bank.

However, in the past, the Indian banking regulator has often favoured stern interpretations of the law. Under the circumstances, the MNC bank does not want regulatory issues to crop up at a later point.

Foreign banks, including BankAm, have business relationships at different levels with large Indian companies. Besides rupee loans from Indian branches, offshore offices of foreign banks give loans that are considered as external commercial borrowings by a company in India. Also, these banks, through their offices in other jurisdictions, fund cross-border acquisitions by Indian business groups. For some of the MNC banks, derivative transactions with Indian companies constitute a slice of their treasury operations.

A master circular of the Reserve Bank of India gives a list of the dos and don'ts. Apart from loans and guarantees, banks are also restricted from cutting complex derivatives deals with a company having a common director. Except forwards and other plain vanilla currency and money market transactions which are cash-settled, derivatives involving an extended credit period are not allowed.

"It depends on how RBI chooses to interpret the regulations. Currently, foreign banks have advisory boards in India which don't have the status of a statutory board. So, the board of a foreign bank refers to the board of the parent which is beyond RBI's jurisdiction," said a senior official of an European bank. Many foreign banks use their offices outside India to lend to Indian corporates and the central bank's rules on exposure to single company or a group doesn't apply.

In India, BankAm and Merrill Lynch (which BankAm acquired) carry out various businesses: banking through BankAm branches, investment banking and equity broking through DSP Merrill Lynch, and a non-banking finance company through DSP ML Capital . For RIL, which every bank wants as a corporate client, it makes little difference if it can't borrow from the US bank. But BankAm India will not like losing the RIL account to other lenders.