Sensex down 78 points; FMCG, bank stocks major losers

Indian equities fell over 0.3 per cent at the closing session on Wednesday as investors indulged in reducing the long positions created in the recent past ahead of the expiry of September month F&O contracts tomorrow.

Domestic sentiment was also dampened due to negative global cues.

The 30-share BSE index Sensex was down 77.67 points (0.39 per cent) at 19,842.54 and the 50-share NSE index Nifty was down 21.95 points (0.37 per cent) at 5,870.50.

On the BSE, oil & gas, FMCG and banking stocks fell the most by 1.36 per cent, 1.12 per cent and 0.94 per cent, respectively.

On the other hand, power, capital goods, healthcare and metal stocks capped the Sensex losses and were up 1.84 per cent, 1.45 per cent ,1.27 per cent and 1.17 per cent, respectively.

BHEL, Hindalco, Sesa Goa, NTPC and SBI were the top five Sensex gainers, while the top five losers were M&M, RIL, HDFC Bank, HUL and Bajaj Auto.

A fall in US consumer confidence from 81.8 last week to 79.7 this week and below the expected 79.9, (an indicator assessed by factoring in business conditions employment and personal income) saw global markets turn circumspect.

The Nifty and the Sensex opened flat mirroring this sentiment. The Nifty opened at 5,902, up 10 points while the Sensex opened at 19,947, up 27 points.

An Equentis Capital report has advised investors to wait for fresh buying while asking them to exit long positions if the Nifty closes below 5,980 levels.

European stocks were down as US budget talks prevented investors from risk-taking.

Stoxx 50 was down 2.82 points or 0.1 per cent at 2,920.11, FTSE 100 was down 5.74 points or 0.09 per cent at 6,565.72 and DAX fell 11.71 points or 0.14 per cent to 8,652.89.

Asian shares were mixed as investors remained cautious due to concerns over a possible US Government shutdown and uncertainty about the US Federal Reserve's policy outlook.

Japan's Nikkei fell 112.08 points or 0.76 per cent to 14,620.50, Hong Kong's Hang Seng was up 8.02 points or 0.03 per cent at 23,187.10 and Australia's S&P/ASX 200 rose 41.78 points or 0.8 per cent to 5,275.94.

The September Ifo survey of German business sentiment showed a slight improvement from the previous month and touched a 17-month high, but still fell short of the consensus estimate.

This survey came a day after European Central Bank President Mario Draghi said the bank was prepared to do more to support the region's nascent recovery.

Reliance Life offers insurance policies in demat form

Reliance Life Insurance has launched life insurance policies in electronic demat form across all its products.

This initiative follows the inauguration of the Insurance Regulatory and Development Authority's Insurance Repository System by Finance Minister P. Chidambaram in Hyderabad last week to enable and encourage policy holders to hold their insurance policies in demat form.

Reliance Life Insurance is among the first few private insurers to offer policy holders the option to hold their insurance policies in electronic demat form.

“We are happy to announce the launch of our policies in electronic form for our customers. This green initiative is aimed at complementing the regulator’s efforts to save hundreds of crores spent on printing, dispatching and storing insurance policies by the industry. This initiative will make it easier for the customers to buy and monitor multiple life insurance policies in a single demat account,” said Anup Rau, Managing Director and Chief Executive Officer of Reliance Life Insurance.

E-Insurance Account

As per the process, a policy holder can choose to open an E-Insurance Account with any one of the five approved insurance repositories by providing their (KYC) documents, which include address and identity proof etc.

Thereafter, the policy holder would be allotted a unique EI Account number and will have the choice to dematerialise the existing policies in the EI Account.

Insurance repositories

IRDA has approved five companies — Database Management Ltd, Central Insurance Repository Ltd, SHCIL Projects Ltd, CAMS Repository Services Ltd and Karvy Insurance Ltd — as insurance repositories.

“The electronic insurance account will eliminate repetitive KYC requirements and provide one view of policies, premium paid and claim history and nominee details and bring in all the benefits of demat to the life insurance business, including automatic reminders for premium,” Rau said.

Reliance Life Insurance would encourage its over nine million customers to convert their insurance policies from physical format to demat form. The novel system will also undertake changes, modifications and revisions in the insurance policy with speed and accuracy.

“Dematerialisation of policies will bring greater transparency and convenience to customers and it will also help reduce cost in issuing and maintaining life insurance policies. More importantly, it will also ease the problem of customer-contactability, which is a huge challenge faced by the industry,” he added.

Cipla stock jumps on Fitch rating

The stock of Cipla gained one per cent to trade at Rs 435.60 on the BSE on Wednesday after the company said that Fitch rated it with highest credit quality.

Meanwhile, the BSE Sensex tumbled about 75 points or 0.4 per cent.

Cipla Ltd has informed the BSE that India Ratings & Research Pvt Ltd, a Fitch group company, has assigned a Long-Term Issuer Rating of ‘IND AAA’ to the company.

‘AAA’ ratings denote the lowest expectation of default risk. They are assigned only in the case of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

Power Grid gains on getting nod for two investment proposal worth Rs 2,256 crore

Power Grid Corporation of India is currently trading at Rs. 99.50, up by 0.25 points or 0.25 % from its previous closing of Rs. 99.25 on the BSE.

The scrip opened at Rs. 99.00 and has touched a high and low of Rs. 99.95 and Rs. 98.25 respectively. So far 148488 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 122.45 on 21-Nov-2012 and a 52 week low of Rs. 86.70 on 02-Aug-2013.

Last one week high and low of the scrip stood at Rs. 103.95 and Rs. 98.10 respectively. The current market cap of the company is Rs. 46088.92 crore.

The promoters holding in the company stood at 69.42 % while Institutions and Non-Institutions held 22.26 % and 8.32 % respectively.

Power Grid Corporation of India (PGCIL) has received an approval for two investment proposal worth Rs 2,255.99 crore. The board of director at its meeting held on September 19, 2013 has approved for the same. The first investment approval is for transmission system associated with Mauda Stage-II (2x660 MW) generation project’ at an estimated cost of Rs 1,575.30 crore, with commissioning schedule of 32 months progressively from the date of investment approval.

The second investment approval is for Northern Region System Strengthening Scheme-XXV at an estimated cost of Rs 680.69 crore, with commissioning schedule of 30 months progressively from the date of investment approval.

Power Grid Corporation of India is India’s principal electric power transmission company. It owns and operates most of India’s interstate and inter-regional electric power transmission systems with inter-regional power transfer capacity of about 20,800 MW and wheels nearly 45% of total power generated across India.

PM okays setting up of 7th Pay Commission

Prime Minister Manmohan Singh has given his nod for setting up the seventh Central Pay Commission, Finance Minister P. Chidambaram said today.

Allowing about two years for the seventh pay commission to submit its report, the recommendations are likely to be implemented with effect from January 1, 2016, Chidambaram said in a statement here.

The average time taken by a Pay Commission to submit its report has been around two years.

The sixth Central Pay Commission recommendations were implemented from January 1, 2006.

Banking shares extend falls on RBI move

Bank Nifty has declined over 10% or 1,157 points in past four trading sessions as compared to nearly 5% fall in CNX Nifty.

Banking shares continue under pressure on fourth day in a row, expect State Bank of India (SBI), all remaining eleven banks from the Bank Nifty are trading lower by up to 4% on NSE.

HDFC Bank, Canara Bank, YES Bank, Bank of India, Kotak Mahindra Bank, ICICI Bank and Union Bank of India are down 2-4%.

Most of these banks are down 10-20% in past four trading sessions after the Reserve Bank of India (RBI) in a surprise move, raised its key policy rate after a monetary policy review on Friday, 20 September 2013.

The NSE banking share index Bank Nifty has slipped 1.8% or 184 points at 9,992 points in noon deals, declining over 10% or 1,157 points in past four trading sessions from Thursday’s close of 11,149. The benchmark index has dipped nearly 5% during the same period.

In an attempt to tame high inflation, which is partly fueled by the currency's recent slump against the dollar, the RBI raised the repo rate by 25bp to 7.50% from 7.25%.

Among the individual stocks, YES Bank has dipped nearly 20% in past four trading days, followed by Union Bank of India (19%), Oriental Bank of Commerce (18%), Bank of India (17%) and Central Bank of India (16%) on NSE.

NTPC shines on receiving Rs 536.30 crore from Government of India

NTPC has received Rs 536.30 crore from Government of India as towards the settlement of claims recoverable in respect of expenditure incurred on Loharinag-pala Hydro Power Project.

Recently, Prime Minister, Dr. Manmohan Singh had laid the foundation stone of 1,600 MW Stage-I of NTPC’s- Lara Super Thermal Power Project situated in Lara village in Raigarh district of Chhattisgarh. The project shall have two units of 800 MW in Stage I and shall have an ultimate installed capacity of 4,000 MW. The PM also dedicated NTPC’s 2980 MW Rajiv Gandhi Sipat Super Thermal Power Station to the Nation.

NTPC is the largest power generating company in the country. It has also diversified into hydro power, coal mining, power equipment manufacturing, oil & gas exploration, power trading & distribution.

L&T rises on plan to sell stake in Hyderabad Metro and Dhamra Port project

The institutions and non-institutions held 53.07% and 43.78% stake in the company, respectively. In a bid to fund its new projects, Larsen & Toubro (L&T), India’s largest construction and engineering major is planning to offload slew of assets to raise close to Rs 8,200 crore by this fiscal-end.

The company will garner nearly Rs 4,200 crore from selling of 26% stake in the Hyderabad Metro project and 50% stake in Dhamra Port project, while the company is looking at listing one of its infrastructure company L&T IDPL in the Singapore stock exchange via the trust route to raise another Rs 4,000 crore. 

Of the sale proceeds, L&T will deploy Rs 6,200 crore in the existing projects and will commit another Rs 2,000 crore for the new projects over the next five years.

Govt taking steps to promote infrastructure funding: Arvind Mayaram

In a move to boost the infrastructure development in the country, the Department of Economic Affairs (DEA) Secretary Arvind Mayaram has said that the government is working on various steps, including deepening of the bond market and setting up of a fund, to promote debt and equity investment in the infrastructure sector. By adding further, mayaram said that on equity front, the government will come up with Infrastructure Trust Fund (ITF) within two months, while, on debt side the government is making efforts to develop the corporate bond market and encourage Employees Provident Fund Organisation (EPFO) to invest in infrastructure projects. In the coming month there will be greater deepening of the equity and bond markets for financing the country’s infrastructure sector, he added.

Referring to Infrastructure Trust Fund (ITF), Mayaram said under the ITF structure underlying revenue of a project will be transferred to a trust which will issue units to investors, including foreign investors who want to buy the units. DEA Secretary also expressed the need to encourage overseas pension funds and sovereign wealth funds (SWFs) to make investment in infrastructure projects and once they make investment, Indian investors would also follow suit. On Infrastructure Debt Fund (IDF), Mayarm added that the government is working with the Reserve Bank to make an appropriate shift towards Infrastructure Debt Fund (IDF) under which loans given by banks would not be treated as restructuring of debt. Under IDFs framework, the interest rate should come down as the construction risk has already been borne by the banks. Further, he added that the term of IDFs should be stretched for 15-20 years to attract long-term pension funds or sovereign wealth funds.

The government has identified the development of infrastructure a most critical prerequisite to boost the economy’s growth. For the 12th Five Year Plan (2012-17), the government has set the $1-trillion investment target for the infrastructure sector.

Kolte-Patil gains on launching four projects in Pune

The promoters holding in the company stood at 74.48% while Institutions and Non-Institutions held 2.04% and 23.48% respectively.

In an endeavour to offer discerning buyers with futuristic homes incorporating new-age modern facilities, Kolte-Patil Developers (KPDL), a pioneer in lifestyle concepts, has launched four new luxury projects. Launches Tuscan Estate Signature Meadows, Downtown, 24K Glamore and 3rd Avenue at Life Republic - in Pune, to develop a total of 1.8 million sq.ft for these new projects.

Financial Tech, MCX shares tumble in early trade

Jignesh Shah-promoted Financial Technologies and MCX shares tumbled in early trade on Wednesday due to trouble at NSEL.

Financial Technologies shares crashed to a low of Rs 143.25 in early trade on the BSE, as the auditors refused to authenticate the financial statement of the company due to the Rs 5,600-crore trade settlement crisis at its subsidiary, National Spot Exchange Ltd.

Financial Technologies’ Annual General Meeting is scheduled today in Chennai.

The stock, however, recovered to Rs 160 (at 10 a.m. IST), down 4.4 per cent over the previous day’s close.

Dividend payment

This (auditor) development may also delay the dividend payment to investors as the company has deferred the consideration of this proposal at the AGM.

Statutory auditor Deloitte Haskins & Sells had said the financial statement of Financial Technologies could not be relied upon due to the crisis in NSEL.

In a statement, Financial Technologies said: “Due to purported crisis at NSEL in the recent past and based on the communication of management of NSEL and the statutory auditor of NSEL on the financial statement of NSEL, the statutory auditors of the company on September 23, in accordance with Standard on Auditing 560, informed that the audit reports dated May 30 on the standalone and the consolidated financial statement of the company for the year ended March 31, 2013 should no longer be relied upon.”

Agenda items

Hence, the company has decided to defer three agenda items, including consideration of audit report, dividend payment and reappointment of Deloitte Haskins as auditor for this financial year at the AGM.

Following this development, the company said the financial accounts may undergo amendment together with the revised auditor’s report which will be approved and published once the accounts are finalised.

Similarly, MCX shares slipped three per cent to trade at Rs 424 after exchanges sought clarification from the company on its July 29 board meeting.

The company said: “We wish to state that on July 29, 2013, there was no agenda item in the matter. The board was only apprised of an impending litigation and there was no any definitive development of any substantive nature and hence in the interest of compliance by the company, the board decided to delegate the further decision to be taken by the directors committee for implementing any orders that may be passed by the court, if any. There has been no decision by the directors committee as no order had been passed in the intervening period.’’

It further said that the Hon’ble Court on August 29 had rejected the application of La-Fin to implead MCX. Hence, details of the aforesaid matter were not informed to the exchanges on July 29 in terms of Clause 36 of the listing agreement.

Tata Global Beverages rises as its JV opens Starbucks stores in Mumbai and Delhi

Tata Global Beverages is currently trading at Rs. 144.60, up by 1.30 points or 0.91% from its previous closing of Rs. 143.30 on the BSE.

The scrip opened at Rs. 144.90 and has touched a high and low of Rs. 146.85 and Rs. 144.00 respectively. So far 110984 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 1 has touched a 52 week high of Rs. 181.70 on 15-Nov-2012 and a 52 week low of Rs. 122.00 on 26-Mar-2013.

Last one week high and low of the scrip stood at Rs. 151.90 and Rs. 141.95 respectively. The current market cap of the company is Rs. 8979.15 crore.

The promoters holding in the company stood at 35.20% while Institutions and Non-Institutions held 36.36% and 27.48% respectively.

Tata Global Beverages’ 50:50 joint venture (JV) with Starbucks Coffee Company - Tata Starbucks - has continued its expansion in India, with opening of two new outlets with one each in the cities of Mumbai and New Delhi. The opening of the above stores is part of the company’s ongoing expansion to open 50 outlets this year. The JV partners have earmarked an investment of Rs 400 crore for the purpose.

The 23rd store in the country is opened at Viviana Mall, one of the biggest malls in Thane - a satellite city to Mumbai, sharing its cosmopolitan culture. While in Delhi the company opened its 24th Starbucks store in sector 29 at Gurgaon. This neighbourhood is famous for its local and international restaurants and coffee shops catering to the corporate and residential crowd.

Tata Global Beverages, formerly known as Tata Tea, is a multinational non-alcoholic Beverages Company headquartered in Kolkata, West Bengal, India and a subsidiary of the Tata Group. It is the world's second-largest manufacturer and distributor of tea. Tata Global Beverages markets tea under the major brands Tata Tea, Tetley, Good Earth Teas and JEMCA.

Vedanta begins talks for Cairn's residual 10%

Vedanta group's Indian holding company, Sesa Sterlite, now owns 58.77% in Cairn India

Anil Agarwal's Vedanta group has begun formal talks to buy London-based Cairn Plc's 10 per cent residual stake in oil and gas producer Cairn India Ltd, valued at close to Rs 6,000 crore.

Vedanta group's Indian holding company, Sesa Sterlite, now owns 58.77 per cent in Cairn India.

Vedanta had earlier bought the company from Cairn Plc, to make an entry in the energy sector here. Talks have begun with bankers on when to buy the stake and on the price.

Vedanta had bought the Cairn India stake in 2010 for $8.7 billion. It then made an open offer at Rs 355 a share for minority shareholders and increased its stake to the present level. Other than Cairn Plc's remaining stake, the rest is owned by institutional and minority shareholders.

On Tuesday, Cairn India's shares closed at Rs 318 a share. The stock hasn't risen since January; it has been down since the takeover by Vedanta.

Vedanta, based in London, is also preparing to buy out the Union government's minority stake in Hindustan Zinc and Bharat aluminium. On Monday, department of economic affairs secretary Arvind Mayaram said there is no legal impediment for the sale.

The government currently has 29.5 per cent stake in Hindustan Zinc and 49 per cent in Balco. It is looking at exiting from the two companies by December. The sale would fetch close to Rs 20,000 crore for the government.

In an interview with Business Standard in February, Agarwal had said Vedanta was expecting $10-12 bn earnings in the next two to three years and he'd bid for oil and gas assets in India, besides some coal assets.

What to expect from Financial Technologies AGM today

Deloitte yesterday said FY13 accounts can't be relied upon due to NSEL crisis

There was more trouble for Jignesh Shah-controlled Financial Technologies a day ahead of its 25th Annual General Meeting (AGM) scheduled for September 25, 2013 with its auditor – Deloitte Haskins & Sells – saying that the company’s results for the year ended March should no longer be relied upon given the crisis at National Spot Exchange Ltd (NSEL), a group company.

Given the development, the company has deferred passing of three items that were earlier scheduled, a release to the Bombay Stock Exchange (BSE) said.

Meanwhile, NSEL Investor’s Forum is planning a protest outside the AGM venue, asking the company to payback their dues. Around 150 investors are expected to stage a protest against the firm, which owes nearly Rs 5,600 crore to investors.

Here are some of the key items that were originally listed to be discussed and adopted at the AGM today:

To appoint M/s Deloitte Haskins & Sells, the retiring Statutory Auditors of the Company, to hold office from the conclusion of this AGM until the conclusion of the next AGM and to authorise the Board of Directors / Committee to fix their remuneration.

To appoint Directors in place of Ravi K Sheth and C M Maniar, who are retiring by rotation, and being eligible, offer themselves for re-appointment

Payment of commission to non-executive directors of the company upto 1% of the company’s net profit as computed in accordance with Sections 349 and 350 of the Company’s Act, 1956.

As recommended by the Remuneration & Compensation Committee, the Board of Directors at its meeting held on 30 July 2013 has approved and recommended the Employees Stock Option Scheme (ESOP) 2013. Accordingly, the approval of members is being sought to approve Scheme – 2013.

M&M’s business unit MFCS launches first workshop in Kochi

Mahindra & Mahindra’s (M&M) business unit - Mahindra First Choice Services (MFCS) multi-brand certified used car company, has launched its first workshop in Kochi, marking its debut in the Kerala market. The facility is spread over 20,000 sq. ft with 15 bays and a monthly capacity of servicing 1000+ cars of various brands.

Mahindra First Choice Services (MFCS), a wholly owned subsidiary of Mahindra & Mahindra, is a chain of multi brand car workshops across major cities in India like Bangalore, Nasik, Hyderabad, Mumbai, Pune, Surat, Vapi, Nellore, Coimbatore, Chennai, Ludhiana and Delhi NCR. The company aims to offer a world class car servicing experience in India at value for money prices.

Ashoka Buildcon gains on receiving letter of award worth Rs 494.50 crore from MSEDCL

Ashoka Buildcon has received letter of award worth Rs 494.50 crore from Maharashtra State Electricity Distribution Company (MSEDCL). Of the total amount, order worth Rs 115.27 crore is for Tender number T-8 for Kedgaon division, Baramati, Rs 117.79 crore worth of contract is for Tender number T-10 for Baramati division, Baramati, Rs 106.24 crore worth of order is for Tender number T-11 for Solapur (R) division, Baramati and order worth Rs 155.20 crore is for Tender number T-13 for Barshi division, Baramati.

Earlier on August 6, 2013, the company had emerged as the lowest bidder for the turnkey contracts for electrification work for Mahavitaran Infrastructure plan Phase-II aggregating to Rs 494.50 crore from MSEDCL.

Ashoka Buildcon builds and operates roads and bridges in India on a build, operate and transfer (BOT) basis. It currently operates one of the highest numbers of toll-based BOT projects in India.

Tata Global Beverages’ JV opens Starbucks stores in Mumbai and Delhi

Tata Global Beverages’ 50:50 joint venture (JV) with Starbucks Coffee Company - Tata Starbucks - has continued its expansion in India, with opening of two new outlets with one each in the cities of Mumbai and New Delhi. The opening of the above stores is part of the company’s ongoing expansion to open 50 outlets this year. The JV partners have earmarked an investment of Rs 400 crore for the purpose.

The 23rd store in the country is opened at Viviana Mall, one of the biggest malls in Thane - a satellite city to Mumbai, sharing its cosmopolitan culture. While in Delhi the company opened its 24th Starbucks store in sector 29 at Gurgaon. This neighbourhood is famous for its local and international restaurants and coffee shops catering to the corporate and residential crowd.

Tata Global Beverages, formerly known as Tata Tea, is a multinational non-alcoholic Beverages Company headquartered in Kolkata, West Bengal, India and a subsidiary of the Tata Group. It is the world's second-largest manufacturer and distributor of tea. Tata Global Beverages markets tea under the major brands Tata Tea, Tetley, Good Earth Teas and JEMCA.

Markets may open tad lower, SGX Nifty flat

SGX Nifty was down 3 points at 5,916 at 0720 hrs.

Markets are likely to start on a weak note as global uncertainties will weight on the investor sentiments. The early indicator, SGX Nifty was down 3 points at 5,916 at 0720 hrs.

The Dow and S&P 500 ended lower on Tuesday, extending their recent slide to a fourth session as worries over a possible U.S. government shutdown added to investor caution.

Though uncertainty remains over the Federal Reserve's intentions to scale back its stimulus, some of the focus for now has turned to Capitol Hill.

The Dow Jones industrial average was down 0.43 percent, at 15,335. The Standard & Poor's 500 Index was down 0.26 percent, at 1,697. The Nasdaq Composite Index was up 0.08 percent, at 3,768.

Asian shares slipped and the dollar inched higher in early Asian trade, as concerns about a possible U.S. government shutdown and uncertainty about the U.S. Federal Reserve's policy outlook made investors hesitant to take aggressive positions.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped about 0.1 percent, while Japan's Nikkei stock average was down 0.2 percent.

Stocks to Watch

Financial Tech will be under pressure after the company's auditor said the results for the year ended March should no longer be relied upon due to the crisis at group company NSEL.

Kingfisher Airlines is likely to hit the upper circuit as Vijay Mallya informed that talks are on with an investor keen on the debt-ridden carrier.

Another aviation name, SpiceJet will be in spotlight as the carrier denied it was in talks with Singapore-based low-cost airline Tigerair for a stake sale.

Jet Airways is likely to fly high as chairman Naresh Goyal will purchase over 1% stake in the airline from another promoter entity, Tail Winds, for up to Rs 45 crore.

Shipping Corporation of India might see a red tick because the company decided to shelve its plans of having shipyards due to an unfriendly business environment.