Sensex sheds 175 points; Realty, capital goods stocks major losers

The Sensex and the Nifty fell over 0.8 per cent at the closing session on Monday as better-than-expected US jobs data fuelled speculation that the Federal Reserve will soon reduce the monetary stimulus.

Trading sentiment was also dampened as the rupee again breached the 63-mark and was trading weak at 63.30 against the dollar.

The 30-share BSE index Sensex was down 175.19 points (0.85 per cent) at 20,490.96 and the 50-share NSE index Nifty was down 61.95 points (1.01 per cent) at 6,078.80.

Barring healthcare, IT and TECk, all other sectoral indices ended in the red. Among them, realty, capital goods, PSU and power indices fell the most by 2.81 per cent, 2.43 per cent, 1.78 per cent and 1.51 per cent, respectively.

On the other hand, healthcare index was up 0.37 per cent, followed by IT 0.16 per cent and TECk 0.08 per cent.

Dr Reddy's, Tata Steel, Maruti, TCS and Infosys were the top five Sensex gainers, while the top five losers were Hindalco, L&T, ONGC, SBI and Tata Motors.

Rahul Bhandawat of Equentis Capital said: “On the domestic front, Government will release IIP data for September and inflation based on the CPI for October on November 12, 2013, data based on the Wholesale Price Index (WPI) for October will be declared on November 15, 2013. Increased CPI and WPI data may put pressure on RBI to reduce liquidity from the market by increasing the key interest rates and may become negative for auto and banking sector. Inline outcome will support consolidation in equity market.”

Most European stocks gained as China’s industrial output growth unexpectedly increased. Asian stocks were up on better-than-expected US jobs data and China’s industrial production growth.

But the better-than-expected US jobs data has given rise to fears that the US Federal Reserve could speed up its plans to prune its $85-billion-a-month stimulus programme.

SAIL Q2 net up 117% at Rs 1,180 cr on exceptional gains

State-owned steel major SAIL today reported an over two-fold jump in standalone net profit to Rs 1,180.39 crore for the quarter ended September 30, due primarily to an exceptional gain of Rs 1,056 crore for damages from foreign suppliers of coking coal.

The largest domestic steelmaker had reported net profit of Rs 543.11 crore in the July-September quarter of the previous fiscal 2012-13.

“During the current quarter/half year, the company received Rs 1,056.26 crore towards damages due to non-supply of full quantity of contracted hard coking coal by foreign suppliers. The amount has been considered as an ‘exceptional item’ by the company,” SAIL said in a filing to the BSE.

That apart, the company reported subdued sales, rise in expenditure as well as finance costs and decline in other income and taxes.

SAIL’s total income stood at Rs 11,535.51 crore, up 6.66 per cent, during the quarter vis-a-vis Rs 10,815.56 crore of Q2FY’13.

The company’s total expenditure, at Rs 11,067.42 crore, amounted to nearly 96 per cent of its total income during the quarter. In Q2 of 2012-13 fiscal, SAIL’s expenditure (at Rs 10,113.63 crore) was 93.51 per cent of its total income (Rs 10,815.56 crore).

Its finance costs were up over 16 per cent at Rs 216.48 crore, while other income declined by over 33 per cent at Rs 152.71 crore in the last quarter. The company’s tax outgo also declined by over 13 per cent to Rs 212 crore in Q2 FY’14.

SAIL’s scrip fell by 1.82 per cent to close at Rs 64.85 on the BSE today.

Five reasons why rupee crossed 63 today

1) Part of the oil companies’ demand for the dollar may be coming back to the forex market. The RBI had opened a special swap window with the oil marketing companies in July to support the rupee when it was on a free fall hitting  life-lows daily. This arrangement had taken off daily demand for $500 million from the forex market. RBI Governor Raghuram Rajan recently indicated that this demand will have to return. The government would also not want the currency to appreciate too much now. The exports have just started recovering a bit. A sharp appreciation in the local currency would serve as a disincentive for the exporters at the present juncture. A fall in exports is something that the government cannot afford now as it will nullify most of the improvement in the current account deficit. Moreover, a slight depreciation in the rupee now will help the RBI later when the US Fed actually starts the taper. The central bank will be able to manoeuvre the exchange rate in a narrower band of say 62-65 or so. So the RBI is unlikely to step in now. And the rupee may depreciate a little more now.

2) US job growth unexpectedly accelerated in October as employers shrugged off a partial government shutdown, suggesting the economy was on firm footing and raising the prospect the Federal Reserve may soon decide to temper its bond-buying stimulus. The jitters in the Indian bond and forex market are also because of this. The dollar has gained globally because of the bullishness about the US economy. All Asian emerging currencies like Indonesian rupiah and Thai baht also fell today against the greenback.

3) Though there has been a let up in the current account deficit situation of the country, the government has not addressed the structural worries fully. For example, the finance minister has drawn a red line on the fiscal deficit. He has been reiterating it will not cross the budgeted 4.8 percent of GDP but is yet to explain how he is going to attain this. The deficit during April-September stood at Rs 4.12 lakh crore, which is 76 percent of the full-year target. Investors are worried that there are five more months to close the financial year. So the worries over the fundamentals remain. This is also impacting the investor sentiment for the rupee.

 4) Another major worry is the inflation. Projections are that the inflation rates, both retail and wholesale, are likely to go up further because the unrelenting rise in food prices. Higher inflation means higher interest rates. FIIs would not want to stay invested in the Indian bond market in such a situation. They are exiting Indian debt even as they are increasing their exposure to equities.  During Novermber 1-8, FIIs net bought Rs 2,958 crore of Indian shares, while they have sold Rs 2,916 crore of bonds.

 5) Last but not least is the impending closure of the swap facilities opened by the RBI. There are two of them: one for the oil companies (explained earlier) and the second for banks. Banks are being offered this facility in order to encourage them to raise dollar deposits from the non-residents. As per this arrangement, the RBI is allowing the banks to swap their dollar for rupee at a cheaper rate. Both the facilities will be open until this month end. Once they close, the dollar inflow through these windows, which the RBI has said is $12 billion as of 25 October, will stop.

Vijaya Bank gains on getting approval for its fund raising plan

Vijaya Bank is currently trading at Rs. 42.60, up by 0.15 points or 0.35 % from its previous closing of Rs. 42.45 on the BSE.

The scrip opened at Rs. 42.50 and has touched a high and low of Rs. 43.10 and Rs. 40.85 respectively. So far 750604 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 67.10 on 09-Jan-2013 and a 52 week low of Rs. 33.40 on 28-Aug-2013.

Last one week high and low of the scrip stood at Rs. 46.10 and Rs. 41.60 respectively. The current market cap of the company is Rs. 2098.61 crore.

The promoters holding in the company stood at 55.02% while Institutions and Non-Institutions held 17.41% and 27.57% respectively.

Vijaya Bank has received an approval for preferential allotment of equity shares to Government of India for an amount of Rs 250 crore. The board of directors at its meeting held on November 11, 2013 has approved for the same.

Suven Life Sciences net up at Rs 45 cr; scrip zooms

Suven Life Sciences Ltd’s net profit increased significantly to Rs 45 crore in the second quarter ended September 30, 2013, compared with Rs 6.48 crore in the corresponding quarter of the previous financial year.

The total revenue of the Hyderabad-based company increased to Rs 151 crore (Rs 50 crore) during the period under review.

The growth in profit and revenue was a result of one new product, in addition to two products already commercialised during the first quarter, the company said in a release issued on Monday. The earnings per shared increased to Rs 3.90 from Rs 0.56 in the year-ago period.

Suven has spent 9.8 per cent of its revenue on research and development during the half-year ended September 2013. It had 607 product patents for 18 inventions and 35 process patents.

Suven’s scrip gained 12.14 per cent and was trading at Rs 74.35 by noon on the Bombay Stock Exchange on Monday.

Bank Nifty witnesses wild swing

Bank stocks that were deeply in the red in the morning trade have recovered from their early losses with seven of the Bank Nifty constituents trading in the green in the afternoon.

The extent of recovery could be judged from the fact that the Bank Nifty, that was at one time down by about 200 points, had wiped out the losses to move into the green in the afternoon trade.

Bank of India, PNB, BoB, SBI and HDFC Bank shares were trading in the green.

BoI shares were trading at Rs 225.55, up by Rs 5.65, after touching a low of Rs 211.55 and PNB shares have pulled back from a low of Rs 508.90 to trade at Rs 530.80, a gain of Rs 8.55.

Bank of Baroda shares were up by Rs 5.95 to trade at Rs 607.50, SBI shares gained Rs 3.50 to trade at Rs 1,747.80 after falling to Rs 1,711 and HDFC Bank gained Rs 7.30 to trade at Rs 659.80. This stock fell to a low of Rs 616.70 before pulling back.

But the other five shares in the CNX Bank Nifty are in the red, though they had recouped much of their losses.

ICICI Bank, which dipped to Rs 1,025.30, has bounced back to Rs 1,051.80, down by Rs 1.90, Axis Bank was trading at Rs 1,103.45 after slipping to a low of Rs 1,077.15, down by Rs 15.75, IndusInd Bank was trading at Rs 419.70 after recovering from Rs 408.30 and Yes Bank, which fell to Rs 334.25, has recovered to trade at Rs 344.20.

Bank Nifty was at 10,924.45 points, a gain of 11.30 points. The bank index had touched a high of 10,940.50 points before ceding some of its gains. At one time, the index had touched a low of 10,674.50 points before making a 250 + points recovery.

Exports in October post 13.47% growth

Increased demand from the US and the EU helped India's exports continue on the growth track for the fourth straight month. Exports posted a robust 13.47 per cent growth to $27.27 billion in October 2013 compared to a year ago.

A sharp fall in gold Imports during the month pushed overall imports down by 14.5 per cent to $ 37.82 billion bringing down trade deficit to $10.55 billion. Trade deficit in October 2012 was almost double at $20.21 billion.

"We are confident of reaching the export target of $350 billion this fiscal and significantly contain the trade deficit," Commerce Secretary S R Rao said addressing a press conference on Monday.

While exports have registered an increase across sectors, engineering goods have done specifically well in October posting a growth of 36 per cent to $ 35 billion. Petroleum exports fell to $ 5.4 billion during the month compared to $ 6.1 billion last year.

Gold and silver imports fell by 79.9 per cent during the month to $1.37 billion compared to $6.85 billion in October 2012 mostly due to an increase in import duties and other restrictions put in place by the Government.

Oil imports during October 2013 at $15.21 billion was 1.7 per cent higher than oil imports in October 2012. Non-oil imports during the month at $22.60 billion was 22.8 per cent lower than last year.

Exports during April-October period registered a growth of 6.32 per cent to $179.37 billion. Imports in the seven month period at $ 270 billion was lower by 3.8 per cent compared to the same period in the previous year.

Trade deficit in April-October 2013 at $90.68 billion was lower than $112 billion posted in the same period of 2012.

MCX Q2 net profit declines over three-fold to Rs 27 crore

The exchange clocked a net profit of Rs 81 crore in the same period last year

Leading commodity bourse MCX today reported over three-fold drop in its standalone net profit to Rs 27.04 crore in the second quarter of the current fiscal due to lower income and higher expenses.

The exchange, promoted by Jignesh Shah-led Financial Technologies India Ltd (FTIL), had clocked a net profit of Rs 81.40 crore in the same period last year, MCX said in a BSE filing.

The performance of the futures commodity exchange MCX has been affected on imposition of commodity transaction tax (CTT) since July and also due to the recent Rs 5,600 crore payment crisis at FTIL group's another bourse National Spot Exchange Ltd (NSEL).

CTT of 0.01% has been made effective from July 1 on the futures trading of non-agri commodities and processed foods. The government has exempted 23 agricultural commodities from the new tax.

According to the filing, net income of MCX declined by 36% to Rs 88.02 crore in the quarter ended September 30, from Rs 137.60 crore in the same period last year. Expenses increased to Rs 77.19 crore from Rs 57.55 crore in the review period.

During the first half of the current fiscal, the standalone net profit of MCX has declined by 40% to Rs 87.16 crore from Rs 146.14 crore in the year-ago period.

"MCX's performance during H1 FY2014 was relatively good, considering the impact of Commodity Transaction Tax (CTT) effective July 1, 2013," the exchange's Deputy Managing Director P K Singhal said in a statement.

The average daily turnover on the MCX was at Rs 37,533 crore in the first half of the 2013-14 fiscal.

According to data maintained by the regulator of commodity markets in India, Forward Markets Commission (FMC), MCX's market share was 89% of the Indian commodity futures market in terms of the value of the contracts traded during H1 of the 2013-2014, the exchange said.

MCX has declared an interim dividend of Rs 7 per equity share of face value of Rs 10 each for the 2013-14 fiscal based on the unaudited financials for the six months period ended September 30, 2013, it added.

In a separate BSE filing, MCX said two shareholder directors have been appointed in order to comply with the revised guidelines issued by the regulator FMC for the national level commodity bourses in September.

M A K Prabhu, Canara Bank General Manager as well as B V Chaubal, SBI Deputy Managing Director and Group Executive, have been appointed as shareholder directors, respectively, on the MCX Board. Their appointment would be subject to FMC approval, it added.

The company's scrip was trading up by 1.93% at Rs 490.30 at 11.40 am on the BSE.

Cairn India shares rise tracking crude gains, rupee fall

Shares in Cairn India BSE 2.06 % Ltd gain 2.3 percent after Brent oil futures rebound from a nearly four-month low, while the rupee hits nearly two-month low versus the U.S. dollar. Higher crude oil prices and a weaker rupee help oil exploration firms such as Cairn India, which sells crude in dollars, analysts say.

Brent crude edged towards $106 a barrel in Asia, after gaining nearly $2 per barrel on Friday as traders covered short positions, while Iran and six world powers failed to reach a deal on Tehran's nuclear programme. 

GE Shipping gains on getting nod to increase FII limit to 33%

Great Eastern Shipping Company (GE Shipping) has received an approval for increasing the limit of shareholding by Foreign Institutional Investors (FII) under the Portfolio investment Scheme from 24% up to 33% of the paid-up equity share capital of the company, subject to approval of the members of the company. The board of directors at its meeting held on November 08, 2013 has approved for the same.

Great Eastern Shipping Company is India’s largest private sector shipping company. The company’s major businesses include shipping and offshore.

Infosys plans to invest Rs 100 crore to upgrade e-governance portal

Infosys, a global leader in consulting, technology and outsourcing solutions, is planning to invest Rs 100 crore to upgrade the Corporate Affairs Ministry's e-governance portal MCA21, in view of expected rise in load as company filings surge on account of new Companies law. In October 2013 alone, the total filings were at 14.2 lakh, an almost two-fold increase over the October 2012 filings of 6.94 lakh. Through the MCA21 online portal, corporate sector stakeholders and investors alike gained secure access to an array of services provided by the Ministry of Corporate Affairs.

Infosys is a global leader in business consulting and technology solutions. As a proven partner focused on building tomorrow’s enterprise, Infosys enables clients in more than 30 countries to outperform the competition and stay ahead of the innovation curve.

Lupin gains on its arm launching generic Aciphex Delayed-Release tablets, 20 mg in the US

Lupin’s - US subsidiary, Lupin Pharmaceuticals, has launched its generic Rabeprazole Sodium delayed‐release tablets, 20mg. The company had earlier received final approval from the US FDA for the same. Lupin’s Rabeprazole Sodium delayed‐release tablets, 20mg, are the generic equivalent of Eisai Inc.’s Aciphex delayed‐release tablets, 20mg, and are indicated for the treatment of Gastro esophageal reflux disease (GERD). Aciphex delayed‐release tablets, 20mg, had annual U.S sales of approximately $ 864.3million (IMS MAT Jun 2013).

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

IT shares in demand on weak rupee

TCS, HCL Tech, Tech Mahindra, Infosys, Wipro and Hexaware Tech are up 1-3% on the BSE.

Shares of information technology (IT) companies are trading higher in otherwise weak market after the Indian rupee fell past 63 to the US dollar to an over seven-week low in early trade on Monday.

Tata Consultancy Services (TCS), HCL Technologies, Tech Mahindra, Infosys, Wipro and Hexaware Technologies from IT pack are up 1-3% on the Bombay Stock Exchange (BSE).

The BSE IT index, the largest gainer among sectoral indices, was up 1.5% as against 0.46% fall in benchmark index at 1025 hours.

IT index has outperformed the market by gaining 4.1% in past four trading sessions compared to 1.85% decline in S&P BSE Sensex.

The partially convertible rupee fell as much as 63.10 to the dollar versus its close of 62.475/485 on Friday. Since November 5, the rupee has depreciated by 2.4% from 61.63 against dollar.

IT firms show margin gains of 30-50 basis points with every percentage fall in the rupee. One basis point is one-hundredth of a percentage point.

McNally Bharat bags order worth Rs 120.53 crore

McNally Bharat Engineering Company has received an order worth Rs 120.53 crore for Civil, structural & underground piping works of Sulphur Recovery Units.

McNally Bharat Engineering Company is one of the leading engineering companies. It provides turnkey solutions in areas of power, steel, alumina, material handling, mineral beneficiation, coal washing, ash handling and disposal, port cranes, civic and industrial water supply etc.

Cyprus finance Ministry to hold talks with India over tax treaty

In an attempt to restore normality, the Cyprus’ ministry of finance, in the wake of the Indian government unilaterally notifying Cyprus as a 'notified jurisdictional area' (NJA) on November 1, has issued formal release clarifying that the tax treaty between the two countries has not been terminated. The finance Ministry seeking to allay fears of those investing in India via the Mediterranean island nation, has issued this release and has also committed itself to finalizing the 'long pending review' of the India-Cyprus tax treaty. Following the Indian government’s notification, all payments made to Cyprus will attract 30% withholding tax and will include higher disclosure requirements and applicability of transfer pricing provisions among other things.

Nevertheless, Cyprus’ finance ministry as a damage control measure in its formal press release has underlined the excellent level of political relations it shares with India and its commitment to uphold the implementation of its international agreements. Further, the release also underscores that consultations between competent authorities of the two countries will take place in November itself.

Cyprus ranks seventh on the list of countries investing in India. From April 2000 to August 2013, Cyrus has nearly invested Rs 33,836 crore in India. However, India exercising its legislative powers for promoting transparency and preventing harmful tax competition took a tough stance of notifying Cyprus as a non-cooperative tax jurisdiction with immediate effect.

Asian shares bounce back from 4-week lows

Dollar rises against euro, yen as US jobs growth signals recovery

Asian shares edged away from a four-week low on Monday, while the dollar rose against the euro and yen as a surprise surge in US jobs growth signalled the world's largest economy was on a firmer footing.

US employers took on 204,000 new employees last month, almost twice the number forecast by analysts and defying expectations that the partial US government shutdown would hamper job growth.

The strong data raised the prospect the Federal Reserve may soon decide to start winding down its $85 billion-a-month bond-buying programme.

But Fed Chairman Ben Bernanke and two other top policymakers suggested continued support for the US central bank's massive stimulus campaign.

Adding to the positive sentiment, China's factory output and investment data pointed to signs of stabilisation in the economy, though annual inflation climbed to an eight-month high in October, fuelling market worries about policy tightening.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1% after shedding 1% on Friday to a four-week low.

Australian shares firmed after the robust Chinese data, reflecting the countries' strong trade. The S&P/ASX 200 index gained 0.4%, while the Australian dollar stabilised at $0.9373, having fallen 0.8% in the previous session.

The dollar was up 0.1% at 99.16 yen, not far from a seven-week high of 99.41 yen reached last Thursday, and up 0.1% at $1.3353 to the euro, having gained 0.4% on Friday.

Against a basket of major currencies, the dollar stood at 81.295, not far from a two-month high of 81.482 touched on Friday.

"The full suite of new data and information balances the risk more evenly for our call for Fed tapering to begin in March. Previously it seemed March was the earliest the Fed would taper owing to the weaker hiring trends," analysts at BNP Paribas wrote in a note.

"However, neither GDP nor employment has slowed as much as we previously estimated or feared. Yet Fed speakers have emphasised the need to see an acceleration in hiring, GDP growth and inflation before it begins to taper its bond-buying programme."

NIKKEI ADVANCES

As the yen weakened, Japan's Nikkei benchmark climbed 1.5% after losing 0.8% last week.

US S&P E-mini futures dipped 0.1% after the Standard & Poor's 500 index climbed 1.3% on Friday.

US Treasury futures eased 2 ticks after the 10-year US Treasury yield rose as much as 15 basis points to a four-week high of 2.763% on Friday.

Among commodities, gold slipped 0.1% to about $1,286 an ounce, adding to Friday's 1.5% decline and languishing near a three-week low.

Brent crude prices rose 0.4% to around $105.5 a barrel, building on Friday's 1.6% rise, which broke a three-day run of losses.

Crude oil prices rise after Iran nuclear talks stall

Crude oil prices rose in Asian trade today after gruelling meetings in Geneva aimed at convincing Iran to halt its disputed nuclear programme failed to result in an agreement, analysts said.

New York’s main contract West Texas Intermediate for December delivery was up seven cents to $94.67 in mid-morning trade, while Brent North Sea crude for December rose 38 cents to $105.50.

“We see no breakthrough in the nuclear talks held between Iran and the six powers in Geneva last week,” Teoh Say Hwa, head of investment at Phillip Futures in Singapore, told AFP.

“This has deferred concerns over the influx of Iranian oil into global markets, hence supporting crude oil prices,” she said.

Diplomats yesterday insisted they were closing in on agreement to curb Iran’s nuclear programme despite the failure to clinch a long-sought deal in marathon negotiations in Geneva.

The Islamic republic has been crippled by a series of UN and US sanctions aimed at bringing an end to its nuclear drive, which the West claims is being used to develop atomic weapons. Iran denies the assertion.

The so-called P5+1 group of major powers — Britain, France, the United States, Russia, China plus Germany — plan to meet again with Iranian delegates on November 20 with the hope of securing a short-term deal that would freeze the country’s nuclear activities while both sides work on a comprehensive agreement.

Meanwhile, oil prices were also supported by strong US job and economic growth figures that topped forecasts and signalled a possible recovery in the world’s biggest economy following months of languid growth, Teoh Said.

The US Labour Department’s highly anticipated October jobs report released on Friday showed the world’s largest economy added a surprising 204,000 jobs, more than double the average analyst estimate, despite a 16-day partial federal government shutdown.

The Commerce Department’s third-quarter GDP advanced estimates came in at an annual rate of 2.8 per cent, well above the 1.9 per cent projected by analysts.

United Spirits spurts on reporting 140% rise in Q2 net profit

United Spirits is currently trading at Rs 2461.95, up by 68.00 points or 2.84% from its previous closing of Rs. 2393.95 on the BSE.

The scrip opened at Rs 2417.00 and has touched a high and low of Rs 2500.00 and Rs 2407.00 respectively. So far 59137 shares were traded on the counter.

The BSE group 'A' stock of face value Rs 10 has touched a 52 week high of Rs 2815.00 on 18-Jul-2013 and a 52 week low of Rs 1336.50 on 09-Nov-2012.

Last one week high and low of the scrip stood at Rs 2626.00 and Rs 2350.00 respectively. The current market cap of the company is Rs 34790.74 crore.

The promoters holding in the company stood at 36.15% while Institutions and Non-Institutions held 47.40% and 16.14% respectively.

United Spirits has reported results for the second quarter ended September 30, 2013.

The company has reported 140% rise in its net profit at Rs 94.27 crore for the quarter as compared to Rs 39.27 crore for the same quarter in the previous year. However, total income of the company has decreased by 3.97% at Rs 2127.80 crore for quarter under review as compared to Rs 2215.89 crore for the quarter ended September 30, 2012.

Rupee plunges to 63.07 against dollar

Continuing its slide for the fourth straight day, the rupee again breached the 63-mark against the dollar today on strong dollar demand from importers and a lower opening in the domestic equity market.

At the Interbank Foreign Exchange (Forex) market, the local currency opened sharply lower at 63 a dollar from its previous close of 62.47 and breached the 63 level to trade at 63.07.

Forex dealers said besides sustained demand for the US currency from importers and capital outflows, dollar’s strength against other overseas currencies on upbeat US jobs data weighed on the domestic currency.

The rupee had depreciated by six paise to close at an almost six-week low of 62.47 against the dollar in the previous session.

Meanwhile, the BSE Sensex dropped 183.74 points or 0.88 per cent to 20,482.41 in early trade today.

Dena Bank plans to raise Rs 600 crore through QIP

Dena Bank, the state-run lender is planning to raise Rs 600 crore through qualified institutional placement (QIP) after it receives capital from the government, which is expected to happen by December-end. The bank’s current capital adequacy ratio is 10.21%.

The bank has reported a fall of 55.19% in its net profit at Rs 107.38 crore for the quarter ended September 30, 2013 as compared to Rs 239.64 crore for the same quarter in the previous year. However, total income of the bank increased by 11.69% at Rs 2599.94 crore for quarter under review as compared to Rs 2327.84 crore for the quarter ended September 30, 2012.

Gross non-performing assets (NPAs) increased to 3.00% in the July-September quarter as against 1.97% in the same quarter previous year, meanwhile net NPAs has increased to 2.02%.

Future Retail's merger with arm under Sebi lens

Regulator seeks clarification on transfer of convertible debt after merger

The restructuring plan of Future Retail, promoted by Kishore Biyani, has come under the stock market regulator’s scanner. The Securities and Exchange Board of India (Sebi) has raised objections to the proposed deal, which involves the merger of subsidiary Future Value Retail Ltd (FVRL) with Future Retail, on concern that the step might lead to dilution of a sizeable equity in the listed parent, hurting minority shareholders.

FVRL, which runs the group’s signature retail chains Big Bazaar and Food Bazaar, has convertible debentures worth Rs 685 crore. After the merger, these would be replaced by debentures of Future Retail, formerly Pantaloon Retail.

According to people with the knowledge of the development, Sebi is opposed to the deal because there would be dilution of equity capital in Future Retail when the holders convert their debentures into shares.

FUTURE BETWEEN A ROCK & A HARD PLACE

Future Retail’s 100% arm, FVRL, issued Rs 685-crore convertible debentures After merger, these debentures are to be replaced by those of the listed Future Retail Conversion of debentures into Future Retail’s equity shares might raise financial position but lead to large dilution for minority shareholding Not converting debentures will mean Future Retail finds it difficult to finance redemption or buyback of debentures Sebi seeks clarification on the merger; Future group says has replied to Sebi queries and merger won’t lead to dilution

An email sent to Sebi on the issue remained unanswered. A spokesperson for the Future group said a response to Sebi’s queries had already been sent.

The spokesperson said FVRL’s Rs 685-crore convertible debt would get transferred to Future Retail but denied this would lead to dilution.

“As a wholly-owned operating entity is merging into a listed one, it will give better transparency in operational reporting to shareholders. Also, since there is no equity dilution, the deal is not against minority shareholders’ interest,” the spokesperson said in an email response to Business Standard’s queries.

Future Retail is said to have told Sebi there will be no dilution. This might mean the firm plans to repay debt. Sebi, which now vets all M&A transactions, has yet to issue its observations on the proposed merger. The observations, when issued, will be placed before the high court, whose approval will be taken for the merger. Future Retail shareholders approved the merger through postal ballot in June.

IFCI, Axis Bank and Brand Equity Treaties hold FVRL’s convertible debt. According to the postal ballot, IFCI is to get optionally convertible debentures in Future Retail for its FVRL debt after the merger.

Axis Bank and Brand Equity Treaties are to receive compulsorily convertible debentures. Though these debentures are compulsorily convertible, there are ‘put options’, so Future Retail can buy these debentures back.

A month after the merger proposal in May, proxy advisory firm IiAS had recommended Future Retail shareholders to vote for the merger but termed the resolution as ‘high risk’.

IiAS had said the transaction was a trade-off between equity dilution and debt reduction. “The conversion of debentures into shares in Future Retail will reduce outstanding debt and interest expenses and raise the equity base — improving the group’s financial position. But, there will be significant dilution,” it said. Future Retail, the current market capitalisation of which is around Rs 2,000 crore, has a total debt of under Rs 5,000 crore, according to analysts.

In the past two years, the Future group has undergone restructuring and sold a number of businesses to reduce its debt pile which was as much as Rs 7,850 crore in June 2011.

In May 2012, Biyani had sold its fashion chain Pantaloons to Aditya Birla Nuvo which eased Future Retail's (then Pantalooon Retail) debt by Rs 1,600 crore. This was followed by the announcement that Pantaloon Retail will sell its 53.7% stake in Future Capital Holdings to Warburg Pincus for Rs 560 crore.

This year too, Future sold 22.5% stake in Future Generali Life Insurance to IITL for Rs 300 crore and sold 50% in Future Generali India Insurance Company for Rs 560 crore to L&T Finance.

Sensex down 97 points

The Sensex and the Nifty fell over 0.5 per cent in the opening session on Monday on fresh selling by funds and retail investors despite firm Asian cues.

At 9.15 a.m., the 30-share BSE index Sensex was down 97.52 points (0.47 per cent) at 20,568.63 and the 50-share NSE index Nifty was down 40 points (0.65 per cent) at 6,100.75.

Asian stocks were up after US payrolls and China’s industrial production gained more than expected.

But the better-than-expected US jobs data has given rise to fears that the US Federal Reserve could speed up its plans to prune its $85-billion-a-month stimulus programme.

Japan's Nikkei rose 162.45 points or 1.15 per cent to 14,249.20, Hong Kong's Hang Seng was up 15.27 points or 0.07 per cent at 22,759.70, while Australia's S&P/ASX 200 was down 11.17 points or 0.21 per cent at 5,389.50.

MCX H1 net profit at Rs871.7mn

MCX’s total income stood at Rs. 263.36 crore vis-à-vis Rs. 312.88 crore during the corresponding period in the previous year.

The Multi Commodity Exchange of India Limited (MCX), India’s No.1 commodity futures exchange and the nation’s first listed exchange, announced its unaudited financial results for the half year ended Sept 30, 2013.

H1 FY 2013-14 results
For the half year ended Sept 30, 2013, MCX’s total income stood at Rs. 263.36 crore vis-à-vis Rs. 312.88 crore during the corresponding period in the previous year.
EBITDA for the half year ended Sept 30, 2013 stood at Rs. 134.41 crore
Net Profit for the half year ended Sept 30, 2013 stood at Rs. 87.17 crore
For the half year ended Sept 30, 2013, the EBITDA margin was 51% and PAT margin was 33%.

Operational Performance
The average daily turnover traded on MCX for H1FY2014 stood at Rs. 37,533 crore
According to data maintained by the regulator of commodity markets in India, Forward Markets Commission (FMC), during for H1FY2014 MCX’s market share was 89% of the Indian commodity futures market in terms of the value of the contracts traded.

P. K. Singhal, DMD (Non-Board), MCX said: “MCX’s performance during H1 FY2014 was relatively good, considering the impact of Commodity Transaction Tax (CTT) effective July 1, 2013, with the Exchange  continuing to be India’s largest commodity futures exchange with a market share of 89 per cent.”