Sensex sheds over 300 pts; all sectoral indices in red

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

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

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

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)

Market continues downtrend momentum: Ashwani Gujral

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.

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

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.

Satyam-Tech Mahindra merger likely in 2012: report

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

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

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

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

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).

Sensex steady at open...SBI extends losses

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

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.

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

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.

Hold Bharti Airtel; target of Rs 410: KRChoksey

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

Maruti Suzuki skids on muted sales growth in April

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.

Mahindra takes aim at minivan market

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.

Goldman Sachs, Citigroup, Temasek rush for Muthoot Finance IPO

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 .

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

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.

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

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