Gold falls on sluggish demand; silver up

Gold prices fell by Rs 200 to Rs 31,500 per ten grams in the national capital on Monday on sluggish demand while silver climbed by Rs 470 to Rs 54,000 per kg on increased industrial offtake.

Traders said sluggish demand at prevailing higher levels amid a weak trend in Asian region mainly led to decline in gold prices while increased industrial demand helped silver to trade higher.

Gold in Singapore, which normally set price trend on the domestic front, fell by 0.27 per cent to USD 1,394 an ounce.

BSE Sensex gains; Sesa Goa surges

The benchmark BSE Sensex is up 0.7 percent, while the broader Nifty is up 0.6 percent, heading towards their third consecutive day of gains.

Larsen & Toubro Ltd
gains 2 percent after Barclays upgrades the stock to "overweight", citing a potential recovery in earnings and valuations.

Sesa Goa Ltd gains 8.7 percent ahead of its inclusion in the BSE Sensex on Tuesday.

Hexaware Technologies Ltd gains 6.63 percent after Baring Private Equity Asia agreed to buy a controlling stake in the Indian outsourcing service provider for about $420 million.

Traders however remain wary about foreign flows after overseas investors sold about $720 million of shares in the previous six sessions through Friday, ahead of June quarter GDP data and the expiry of August derivatives contracts this week.

Why IDFC shares have fallen over 9% today

IDFC shares plunged over 9 per cent on Monday after the infra lender reduced the threshold for foreign institutional investor (FII) holding from 74 per cent to 54 per cent.

The current FII holding in IDFC is 53.7 per cent, slightly lower than the new cap, but the move will bring down IDFC's weightage in the MSCI benchmark. IDFC has around 1.1 per cent weightage in the MSCI index. MSCI may also remove the stock from its global benchmark.

In both cases, passive funds are likely to sell the stock, and hence the correction.

IDFC's decision to reduce FII holding seems to be in preparation for a banking license. According to Reserve Bank guidelines, FIIs can hold 49 per cent in banks.

IDFC was the top Nifty loser and traded 8.15 per cent lower at Rs. 95.60 as of 12.55 p.m.

Sensex gives up day's gains, trades flat

Indian stock markets gave up nearly all of their gains in the afternoon trade as rupee extended its loss. A flat opening in most of the European markets and profit-taking after sharp gains on Thursday and Friday also weighed on the Sensex.

At 13: 26 pm, the Sensex was trading at 18,538.06, up just 18 points and down nearly 190 points from its day's high of 18,728.19. The Nifty was trading flat at 5,474.14, down nearly 55 points from its day's high.

In the broader markets, 1,146 stocks were up on the BSE while 948 were lower.

Among the Sensex stocks, Hindalco and JSPL added to its recent gains after positive industrial activity data from China. Hindalco was up nearly 3 per cent while JSPL rose 1.9 per cent. IT stocks were also among gainers as rupee weakened on Monday. Wipro was up 2.7 per cent while TCS rose 1.8 per cent.

Elsewhere, Hexaware shares were up 6.25 per cent to Rs 128.30. In a deal announced on Friday, Baring said will buy 27.7 per cent from Hexaware founders and 14.1 per cent from General Atlantic at a price of Rs 126 or 135 a share, with the higher price payable should the private equity firm manage to acquire 50 per cent or more.

NSEL to reconstitute board after slew of resignations

Announcement expected very soon

After a slew of resignations from the board of NSEL (a spot exchange floated by Financial Technologies) following the payment crisis, a new board will be announced very soon.

NSEL (National Spot Exchange of India Ltd) had 7 members on the board including a chairman. After resignations, including that of chairman Shankarlal Guru over a week ago, only two members remain on the board. Sources say that the new chairman and board members will be announced very soon.

Just before the exchange announced a new payment schedule on 14 August, Shreekant Javalgekar, who is MD of FT group’s commodity futures exchange  - the Multi Commodity Exchange (MCX), resigned from the NSEL board on 13 August.

After that the chairman Guru, B D Pawar and Ramanathan Devarajan had left the board.

The exchange had removed its MD and CEO Anjani Sinha last week.

Now only Jignesh Shah, who is FT group CEO &  vice chairman of NSEL, and Joseph Massey, who is MD of the group’s stock exchange MCX-SX, have remained on the board.

The resignations followed the crisis, which began when the consumer affairs ministry wrote to NSEL in the second week of July, asking it not to launch any fresh contracts and settle all contracts on maturity. This, saw the exchange announcing suspension of trading. But this in turn resulted in a payment crisis and later I-T survey of all 24 buyer parties who failed to make payment on maturity.

Forward markets commission (FMC) has been given powers to resolve the crisis and it has already threatened the NSEL board of stricter actions.

India's iron ore imports set to rise 67% in FY14

The production of iron ore in India is likely to remain around 140 million tonnes this year due to ban in Goa, slow progress in resumption of mines in Karnataka and cap in Odisha

The domestic steel industry, which is facing acute shortage of iron ore, is likely to increase its dependency on imported iron ore for this year as well. The continued ban in Goa, delay in accordance of environment and forest clearances for several mines in Karnataka and cap on iron ore mining in Odisha have resulted in a drastic decline in iron ore production.

The steel industry imported 3.05 million tonnes of iron ore during 2012-13, mainly for port-based steel mills. On account of reduced iron ore production and regional shortages of iron ore last year, major steel units like Essar Hazira, Bhushan Steel and JSW Ispat had to resort to imports of iron ore.

Compared to 0.97 million tonnes of iron ore imported in 2011-12, the imports in 2012-13 have gone up by 3.1 times. However, during the current fiscal, ion ore imports are likely to go up by 67% to around 5 million tonnes. This is mainly due to lower production of iron ore domestically, the steel industry sources said.

The country was the third largest exporter of iron ore till 2011 and lost its position owing to various factors. According to Federation of Indian Mineral Industries (FIMI) very high export duty of 30% coupled with higher freight rates on iron ore meant for exports by the Railways, iron ore exports have come down sharply during the last fiscal.

Production of iron ore has come down from 218 million tonnes in 2008-09 to 140 million tonnes in 2012-13 due to enforcement of strict environmental and other regulatory measures. The country had seen a surplus of almost 110 million tonnes in 2008-09 and 2009-10. However, this has come down to a level of just 17 million tonnes in the year 2012-13.

“The production of iron ore is expected to remain at the level of 140 million tonnes due to the cap in production in Karnataka, ban in Goa and strict enforcement of environmental regulations in Odisha. However, domestic steel industry requirement is more than 145 million tonnes in the current fiscal, and the industry is forced to import iron ore, which is not economically viable,” Sajjan Jindal, chairman and managing director, JSW Steel Limited said in his recent representation to the Prime Minister.

In Karnataka, subsequent to the order of the Supreme Court for opening of mines, the iron ore supply is not yet normalised. Out of 57 mines as approved by Central Empowered Committee, presently only 14 mines are operating with an annual production rate of 13.77 million tonnes against the total annual demand of 32-35 million tonnes.

Hexaware: Open offer a good opportunity to exit

Ending about one and a half year of speculation on stake sale by promoters and General Atlantic, Hexaware announced sale of the 41.8 per cent to Baring Private Equity Asia (Barings) late Friday. Not surprisingly, Hexaware stock has outperformed the Sensex in this period and was up about 6 per cent on Monday as well.

Hexaware has been able to bag more number of larger, long term deals thus providing improved revenue visibility in the past two years. However, this deal flow is largely driven by higher mining of its existing customers. Hence, the sustainability of these clients post the ownership change will be a key fuel for future growth of the company. Given that the current management team will continue unchanged, the deal is unlikely to have an impact on Hexaware's operations atleast in the medium term.

The last big acquisition in this sector was the takeover of Patni promoters’ stake of 83 per cent by iGate for $1.22 billion. This deal priced Patni at a Price to earnings ratio of 10.8 times. Hexaware deal too is valued at 11 times CY13 and 9 times CY14 estimated earnings - in-line with the Patni deal. Notably, Hexaware has traded at a one-year forward price/earnings band of 5-13 times historically. The deal value is higher than its average price/earnings multiple of 9 times, implying limited upsides from here on. The open offer (to garner additional 26 per cent stake) price of Rs 135 per share implies 12 per cent premium over Friday's closing price of Rs 120.

“Hexaware has seen mixed revenue performance in the past 2-3 quarters. While September quarter guidance is better, we would look for changes in growth trajectory with new ownership in place. We believe the stock is fully valued and advise investors to tender shares in the open offer”, says Rumit Dugar, IT analyst at Religare Capital Markets.

Out of the 13 brokerages polled by Bloomberg since August 23rd 2013, 7 are buyers while 5 have a Neutral view on the Hexaware scrip. Their average target price of Rs 131 per share though implies limited upsides from current levels. Investors should thus subscribe to the open offer.

At Infosys, Narayana Murthy overturns CEO Shibulal’s move to decentralise decision-making

 InfosysBSE 1.32 % Technologies under Chairman NR Narayana Murthy is centralising decision making, several senior executives said, in a development that has implications for the time the company takes to respond to client needs or market changes.

The chairman's office — the new power centre created after the return of retired cofounder Murthy — has to sign off on key decisions related to large technology contracts, such as pricing or the way a deal is structured that might expose Infosys to future risks, at least three senior executives told ET on the condition of anonymity.

"For all practical purposes, Murthy is the chairman, CEO, COO all rolled into one," said one of the executives.

Centralisation Drive

Before Murthy's return, Chief Executive Officer SD Shibulal was in the process of decentralising decision-making, especially those related to negotiating and signing contracts.

The intention was to empower client-facing sales executives who are aware of moves by competitors and other considerations critical in negotiating and winning large outsourcing contracts. Under that model, a business unit head would be empowered to close large deals.

For Infosys, which gets the lion's share of its over $7-billion (Rs 42,000 crore) revenues from corporations in the US and Europe, this could mean longer decision cycles when it comes to large contract negotiations.

Industry experts said the Murthy led centralisation could be an interim measure while the 67-year-old puts in place a structure for executing his plan. Murthy has said Infosys will refocus on bread-and-butter business, including managing large computer networks for corporations as well as writing and maintain software applications.

"Maybe Murthy wants to put in place people and processes before he lets go of centralised decisionmaking," said an industry analyst who did not want to be named because his firm's policy does not permit commenting on individual companies.

Murthy was recalled in June as executive chairman by the board of directors after nearly two years of industry underperformance at Infosys. For several years before that, the Bangalore-based company used to set the pace for Indian software exporters both in profitability and pace of growth. Senior executives, especially sales staff, however, are not very sure.

"It is like our hands are tied," said a senior client-facing executive about the ability of sales personnel who must now wait for information to be relayed back to the headquarters and wait for a response before they can take any decision on closing deals. "From where I sit, it looks like NRN is trying to turn the clock back," said another US-based senior executive.

Murthy returned with his son Rohan as his executive assistant and set up the chairman's office. He has been populating it with his trusted executives as he sets in motion a plan he claims will make Infosys "desirable" again.

According to a senior executive, Rohan's primary responsibilities are to raise productivity and quality of work at Infosys. However, despite this being the first job in his career, his induction at the level of a vice-president — typically attained after around a decade of professional experience — has raised eyebrows among company executives.

The fact that Rohan is engaging with senior executives and business unit heads directly and asking questions despite being brought in to assist his father is also being seen as curious. Infosys has seen some senior client-facing executives leaving the company in the recent past, especially in the banking and financial services vertical.

The latest to exit was Sudhir Chaturvedi, vice-president and North America head for financial services. Chaturvedi joins others such as senior vice-president Shaji Farooq and Balaji Yellavalli from the same vertical who left Infosys within the last one year to join rival WiproBSE 2.56 %.

Last week, Infosys elevated three senior executives to its executive council, to drive "cost-rationalisation" and "new global delivery model" initiatives from the chairman's office. Ranganath D Mavinakere, Binod Hampapur Rangadore and Nithyanandan Radhakrishnan were appointed to the council that comprises the senior-most members of the management team.

BHEL shines on emerging as lowest bidder for 1000 MW NLC unit tender

Bharat Heavy Electricals (BHEL) has emerged the lowest bidder for 1000 MW Neyveli lignite Corporation (NLC) unit tender. The 1000 MW Neyveli lignite project cost is seen at Rs 5907 crore. Further, the company is also planning to bid for NTPC’s 1600 MW Darlipali, Orissa project.

Backed by a vast experience and expertise of over three decades in Power Electronics & System integration, BHEL is one of the few leading players in the field of Solar Photovoltaics, having capabilities from manufacturing of Solar Cells to System Integration of Solar PV Power Plants in India.

Govt decides to give surplus gas supplies to power plants until March 2016

Giving some respite to gas-starved power sector, the Empowered Group of Ministers (EGoM) headed by defence minister AK Antony decided that any surplus natural gas left after meeting the needs of urea plants would be supplied to fuel-starved electricity generating stations. Additional gas above 31 million standard cubic metres per day received by the fertiliser sector will be given to power projects until March 2016,

The government's move will benefit projects with a combined capacity of over 7,800 MW. The power sector would get around 12-14 mmscmd of gas in the next three years. Till now, gas-based fertiliser plants remained the government’s topmost priority in the allocation of gas, followed by LPG-extraction units, power projects, city gas, steel and refineries.

After a drop in output at Reliance Industries' KG-D6 block led to reduced domestic supplies, the power ministry had sought parity for electricity utilities with fertiliser units in the allocation of gas. Earlier, in March, electricity-generating stations stopped getting gas from KG-D6 block.

The EGoM also cleared new bidding norms for setting up ultra mega power projects (UMPPs) having capacity to produce 4,000 mw or more of electricity. As per the new norms, the ownership of UMPPs will remain with distribution companies, while qualified bidders will be contractors, and developers will be barred from importing equipment for the projects.

Ruchi Soya rises on plan to set up a processing plant in Odisha

In a bid to promote oil palm cultivation, Ruchi Soya, leading FMCG player is planning to set up a processing plant in Odisha at a cost of Rs 30 crore. The company will promote the same through a tripartite agreement with Odisha government and farmers under which the company will have exclusive rights to procure Fresh Fruit Bunches (FFB) of oil palm from farmers.

Moreover, the company will initially set up 10 tonnes per hour FFB processing mill. Presently, the company is associated directly with over 4,000 farmers and more than 6,000 persons are directly or indirectly linked with this project which has a larger employment generation potential.

Ruchi Soya is the largest player in Odisha with access to 28,000 hectares land in Mayurbhanj, Balasore, Bhadrak and Kendrapara districts.

Gail India in talks with Qatar to secure 3mt of LNG at price of $12.5 per unit

Gail India, state-run gas utility firm, is in talks with gasrich Qatar to secure 3 million tonnes of LNG at a lower than the offered price of $14 per unit. In turn, the company will help Qatar Petroleum acquire 5% equity in the nation’s largest liquefied natural gas importer, Petronet LNG, by waiving its preemptive rights on Asian Development Bank’s stake. The state run firm is seeking a price of $12.5 per unit for LNG.

Earlier, it was reported that Indraprastha Gas is also keen to buy Asian Development Bank’s 5.2% stake in Petronet LNG. Petronet’s promoter firm’s IOC, ONGC, GAIL and BPCL were originally interested in buying ADB’s 5.2% stake but the firm’s management was opposed to it as it would have led to PSU holding crossing 50%, which would turn the LNG importer into a government entity.

Emami to exit Ayush Gram project in Uttarakhand

Emami, Kolkata-based FMCG firm has decided to exit from the Ayush Gram public private partnership project in Uttarakhand claiming red-tapism as well legal and political hassles. It has also conveyed that it want to withdraw from the project launched in 2010 that envisages setting up of whole range of health facilities including a hospital, wellness centre, a hotel and a herbal garden. However, the government is likely to call a high-level meeting to take final decision on the matter.

In August, 2010, FMCG firm has inked pact with Uttarakhand Government for setting up India’s first Ayush Gram spread over 10 acres at Bhawali town. As per the agreement, it had to set up a minimum 60 bed hospital in at Bhawali. It had to make an upfront payment of Rs 2.5 crore.

Crude oil prices jump on US housing data

Oil prices climbed in Asian trade today as disappointing US housing data tempered the expectations of stimulus tapering by the Federal Reserve.

New York’s main contract, West Texas Intermediate for delivery in October, rose 36 cents to $106.78 in mid-morning trade, and Brent North Sea crude for October added nine cents to $111.13.

US housing data released on Friday put July new home sales at an annual pace of 3,94,000, down from June’s revised 4,55,000.

June’s number was originally reported at a five-year high of 497,000, which fuelled confidence that home-buyers were shrugging off higher mortgage rates.

“There are indications that higher rates in the recent two or three months may already be dampening the housing market,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

The Fed’s policy setting Federal Open Market Committee had earlier signalled that it would begin to taper its $85-billion-a-month bond-buying programme, starting as early as September if the economy continued to improve broadly.

“In the light of the home sales data, there might be concern from the Fed to wait a little while,” said Spooner.

Instability in West Asia also continued to support oil prices amid the political crisis in Egypt and allegations that Syrian forces used chemical weapons on civilians.

“Traders are working an increased risk premium into prices with the events in Syria and Egypt,” Spooner said.

IOC surges on inking MoU with Uttarakhand Govt and SIDCUL for gas infra development

In a bid to develop natural gas and renewable energy infrastructure in Uttarakhand, Indian Oil Corporation (IOC) has entered into memorandum of Understanding (MoU) with Uttarakhand Government and SIDCUL. The MoU will give the much-needed boost to socio-economic development in Uttarakhand.

Under the MoU, IndianOil and Uttarakhand government will jointly prepare an action plan on expanding natural gas and renewable energy infrastructure in Uttarakhand.

Earlier in June this year, a multi-day cloudburst centered on the North Indian state of Uttarakhand caused devastating floods and landslides in the country's worst natural disaster since the 2004 tsunami.

Rupee, bonds weaken at open; further falls expected

The rupee weakened in opening trade on Monday, tracking a lower rupee in the non-deliverable forward markets, while bond yields also edged up on back of the currency's fall, traders said.

Traders expect the rupee to drop further due to month-end dollar demand from importers likely later in session.

The partially convertible rupee was trading at 63.82/84 per dollar at 9:08 a.m. (0338 GMT) compared with its Friday close of 63.20/21. The one-month offshore NDF was trading at 64.60/70, sharply weaker than the onshore spot rate.

The benchmark 10-year bond yield rose as much as 4 basis points to 8.30 percent in early trade. 

Gold eases on stimulus fears after early jump over $1,400

Gold erased early gains that pushed it past the psychological $1,400 mark to an 11-week high, slipping on uncertainty over whether the U.S. Federal Reserve will wind back its stimulus measures from next month.

FUNDAMENTALS

* Spot gold was down 0.1 percent at $1,394.79 an ounce by 0027 GMT. It had gained 1.6 percent on Friday after weak U.S. home sales.

* The metal breached the $1,400 mark early on Monday, jumping to a 11-week high of $1,406.01.

* The Fed could announce a cautious first step in tapering bond purchases at its meeting next month, provided there were no "really worrisome" signs the economy was faltering, a top U.S. central banker said on Saturday.

* South Africa's National Union of Mineworkers gave gold mining companies seven days on Saturday to meet its demand for pay rises of up to 60 percent or face strike action.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.72 percent, or 6.61 tonnes, to 920.13 tonnes on Friday.

* Hedge funds and money managers boosted bullish bets in gold futures and options to their highest level since early February, buoyed by the uncertain timing of the Fed's planned unwinding of its bond-buying stimulus, a report by the Commodity Futures Trading Commission showed on Friday.


* ETF Securities, a pioneer of exchange traded funds as a tool for investors to buy into gold at a time when prices were rising, offered to let them swap shares for coins subject to a fee charged by Britain's Royal Mint.

Lupin gains as its arm receives USFDA approval for generic Rifadin capsules

Lupin’s - US subsidiary, Lupin Pharmaceuticals, Inc. (LPI) has received final approval for its Rifampin Capsules USP, 150 mg and 300 mg strengths from the United States Food and Drugs Administration (USFDA).

Lupin’s Rifampin Capsules USP, 150 mg and 300 mg are the AB‐rated generic equivalent of Sanofi Aventis’ Rifadin Capsules 150 mg and 300 mg strengths. Rifampin Capsules is indicated for the treatment of all forms of Tuberculosis and for the treatment of asymptomatic carriers of Neisseria meningitidis to eliminate meningococci from the nasopharynx.

Rifadin Capsules had annual US sales of approximately $18.5 million, as per IMS MAT March 2013. Lupin is one of the pioneers in the fight against Tuberculosis and holds global leadership positions in the Anti‐TB segment.

Lupin is an innovation led transnational pharmaceutical company producing and developing a wide range of branded and generic formulations and APIs globally.

Bright Star Investments acquires 40 lakh shares of TV18 Broadcast

Bright Star Investments has acquired 40 lakh shares of TV18 Broadcast for about Rs 7 crore. The shares were picked up at an average price of Rs 17.65 apiece from Damani Estate & Finance. This was in addition to 25 lakh shares of TV18 Broadcast acquired by Bright Star Investments for an amount of Rs 4.25 crore.

TV18 Broadcast formerly IBN18 Broadcast owns and operates one of India's leading 24-hour English language news and current affairs channel, CNN IBN. TV18 Broadcast is focused on producing high quality news programming and to capture news and events around the world.

Markets open higher as heavyweights gain

L&T, Wipro, HDFC Bank, ITC and Infosys among the top gainers

Markets started the week on a positive note with both the Sensex and the Nifty up over 0.5% each in opening deals. The gains came on the back of an uptick in names like L&T, Wipro, HDFC Bank, ITC and Infosys.

At 0916 hrs, the Sensex was up 135 points at 18,655 and the nifty gained 39 points to trade at 5,511.

In the broader markets, the midcap index added 0.7% and the smallcap index gained 0.5% in the opening trades.

All the sectoral indices started in the green with gains of at least 0.2%. Capital Goods, Consumer Durables, Power, Realty, Bankex and Health Care indices gained 1-1.7%.

Also, Asian stocks rose and gold hit a near three-month high while the dollar nursed losses on Monday, extending a move started late last week when a steep drop in U.S. new home sales tempered expectations the Federal Reserve will soon reduce stimulus.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.3%, adding to Friday's 0.8% gain. Tokyo's Nikkei climbed 0.3%.

Back home, the only stocks among the Sensex-30, in the red were ONGC, Sterlite, TCS and Reliance Industries, down 0.1-0.8%.

L&T, Wipro, Coal India, Tata Power, Hero MotoCorp, Bajaj Auto, HDFC Bank, NTPC, BHEL and Sun Pharma up 1.5-2% were the top gainers in opening deals.

The market breadth was positive. 622 stocks advanced while 178 stocks declined on the BSE.

United Bank of India to open 1,000 ATMs and about 250 branches in FY14

In a bid to increase its delivery channel, state-owned United Bank of India is planning to open 1,000 ATMs and about 250 branches during the financial year 2014. Moreover, the bank has set a target of Rs 2 lakh crore by the end of the current fiscal. The bank has CASA (current account and savings account) ratio of 40% and the business mix has already touched Rs 1.81 lakh crore by the end of June quarter.

Recently, the bank raised Rs 500 crore in bonds subscribed by Life Insurance Corporation of India under the new Basel III regime, which has come into effect from April 2013.

RBI to scrutinise all proposals for overseas direct investment by Indian firms

The Reserve Bank of India (RBI) is expected to vet all proposals for overseas direct investment by corporates , including the $2.5-billion Apollo Tyres deal with Cooper Tire & Rubber Company of the US, to see whether they are in tune with the new norms that have kicked in to curtail the outflow of foreign exchange and strengthen the rupee.

A senior finance ministry official confirmed that the new rules, which stipulate that companies will now have to seek RBI's permission if they want to invest any amount beyond their net worth abroad, will be applicable for all pending applications. Earlier, a company could invest as much as four times its net worth in an overseas venture.

The official said that the new norms were introduced as there was a sudden spurt in such proposals worth $1.7-$1.8 billion in the earlier months to $3.24 billion in July. Some of these proposals involve investment routed through tax havens such as British Virgin Islands and Mauritius.

According to sources, although the application of Apollo Tyres for buyout of Cooper Tire was filed before the announcement of the new guidelines, it would be scrutinised in the light of the changes in RBI norms. The acquisition is around 450 per cent of the net worth of Apollo Tyres. This would necessitate that the deal be covered under the approval route, sources said.

Apollo Tyres will raise $1.9 billion through bond market in the US to fund it purchase the US company. The deal was announced in June. Apollo Tyres is reported to have made an investment of $519.75 million in its wholly-owned unit in Mauritius for the deal. Investment in oil and gas exploration and those by Navratna public sector units are the sole exception to the new rule. Companies were allowed to invest up to four times their net worth (which includes reserves and profit). Indian firms had invested over $7 billion overseas in 2012-13.

Similarly, for individuals, the annual cap on automatic outflow has been slashed from $200,000 to $75,000. Besides, there is now a ban on overseas real estate purchase. With the export earnings falling far short of the import bill, the economy is saddled with a huge current account deficit that keeps the rupee under pressure. This has made the country especially vulnerable to hot overseas money moving away from emerging markets in anticipation of a winding back of the US Federal Reserve's stimulus programme.

Nasdaq halt sends Sebi into check mode

In the wake of an over three-hour technical glitch at the US bourse Nasdaq on Thursday, the Securities and Exchange Board of India (Sebi) is taking a precautionary stock of trading and risk management systems at stock exchanges in India to reassure their robustness.


While the systems in place at leading Indian bourses are considered to be very robust and can withstand any possible technical glitches, it is advisable to conduct a precautionary check after an unprecedented three-hour trading halt at a large exchange like Nasdaq, a senior Sebi official said.

The capital markets regulator and the stock exchanges in India as such conduct regular tests of various risk management systems and trading platforms to ensure their stability against technical and other glitches, he added.

Anadarko to Sell Stake in Gas Field Off Mozambique for $2.64 Billion

Anadarko Petroleum Corp. APC +0.60% said Sunday that it has agreed to sell a stake in a natural-gas field off the coast of Mozambique to a subsidiary of India's Oil & Natural Gas Corp. 500312.BY +2.61% for $2.64 billion.

The Woodlands, Texas, energy-exploration company had said for months that it was looking to sell a portion of its interests in Mozambique's deep-water Rovuma Basin, which is estimated to contain 35 to 65 trillion cubic feet of recoverable natural gas.

Sunday's all-cash sale to ONGC Videsh Ltd., which an analyst said puts the highest value yet on the Mozambique natural-gas project, will reduce Anadarko's working interest in the area to 26.5% from 36.5%.

Anadarko and its partners, as well as Italian oil company Eni SpA, ENI.MI +2.29% which operates an adjacent field, expect the project to begin delivering liquefied natural-gas cargoes in 2018. Anadarko will continue to work as the project's operator.

"This transaction demonstrates our continuing ability to create substantial value through exploration," Anadarko Chief Executive Al Walker said in a news release. ONGC Videsh representatives couldn't immediately be reached for comment.

East Africa has become one of the world's most promising areas for energy production in the wake of large natural-gas discoveries off the coasts of Mozambique, Tanzania and Kenya. Oil and gas companies that want to buy their way into the discovery have found it comes with a high price tag.

Earlier this year, Royal Dutch Shell RDSB.LN +1.03% PLC revealed that it had been in talks with Anadarko to buy a stake in the Mozambique natural-gas project, but pulled out, finding the price too high.

Last year, Shell tried to access Mozambique gas by attempting to acquire Cove Energy PLC, which also had a stake in the offshore Mozambique gas field, but was outbid by Thailand's PTT Exploration & Production PTTEP.TH +1.52% PCL.

The deal will be ONGC Videsh's second venture into Mozambique, an area the company considers to be strategically important to meeting India's demand for liquefied natural gas.

In June, ONGC Videsh said it would join with Oil India Ltd. 533106.BY +2.61% to acquire Videocon Industries Ltd.'s 10% stake in the field for $2.475 billion. ONGC Videsh said at the time that the acquisition would help boost production and reserves.

Anadarko said it will use the money to focus on extracting oil from unconventional formations in the U.S. in states such as Colorado and Texas, as well as the U.S. Gulf of Mexico, where the company has had a string of large oil finds.

RBC Capital Markets analyst Scott Hanold said Anadarko has frequently sold interests in other large projects that require years of work between discovery and production in order to earn income more quickly. The price being paid for the stake confirms the value of Mozambique's offshore natural-gas fields, he said.

"There have been a number of large successful discoveries by [Anadarko] and its partners over last few years in Mozambique, so I don't think quality was ever a question and this price certainly confirms that," Mr. Hanold said.

The price suggests that Anadarko's full stake, prior to the sale, was worth more than $9.6 billion, Anadarko said.